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LISI 2011 —
27
— financial report
Financial situation
These opportunities outside of the three major markets (U.S., Europe
and Japan) should generate a high level of activity over the next
decade. For their part, the developing countries improve their standard
of living and begin to access health treatments and bone surgery.
Until today, the industrial resources for bone implants are concentrated
on developed areas where the health environment has reached its
technological maturity.
Pressure on prices due to restrictions in health spending, regulatory
constraints, the evolution of social policies, combined with the
concentration of commercial players (hospitals and suppliers of
implants) and technological developments are forcing implant
distributors to profoundly rethink their business model.
Market assessment
LISI MEDICAL's positioning as a subcontractor is thereby strengthened.
In this very complex and competitive environment, the players will try
to improve their profitability by optimizing their internal resources and
outsourcing certain activities such as R&D, logistics, the sales network
and, of course, manufacturing.
LISI MEDICAL customers are seeking reliable partners that can adapt
quickly to new trends and technologies and can anticipate their
evolving needs.
The market for orthopaedic outsourcing remains buoyant and
dynamic (estimated at 7% for 2011), driven by outsourcing and the
expansion of the end market.
LISI MEDICAL's customers tend to optimize their production costs
through the selection of key suppliers that can integrate and control
the entire production line.
A majority of players ask their subcontractors to intervene earlier
in the lifecycle of the product, offering related services such as
co-development, prototyping and porting of regulatory responsibility
(EC marking, 510K, etc.).
Highlights and operational news
Differentiation strategy maintained
LISI MEDICAL's ambition is to continue to stand out from competitors
by developing new technologies and expanding its offering. The
division has established itself as a global entity that integrates the
entire production line, from raw material to packaged and sterilized
finished products.
LISI MEDICAL covers the entire market with a high added value
premium offer and an economically viable solution for generic
products targeted at emergingmarkets (through itsMoroccan facility).
By improving its services, its industrial organization and its quality
level, LISI MEDICAL strengthens its partnerships with key market
players. The latter, which have to conform to increasingly stringent
requirements frommultiple markets, are looking for partners that can
guarantee compliance with these standards.
LISI MEDICAL's ability to master these requirements will also benefit
the many very dynamic partners of medium-sized medical companies.
Setting up of a LISI MEDICAL communication initiative
In this perspective, LISI MEDICAL strengthened its external
communications in 2011: participation in several trade fairs in Europe,
(Sofcot, Efort, Eurospine, AAOS, etc.), publications in the professional
media.
Creation of a "projects and sales" structure to expand the
"reconstruction" segment
Strengthening the sales and project management team on LISI
MEDICAL Orthopaedics' site in Caen, will ensure the continuity of the
relationship with the Stryker group, while developing a new customer
base.
The objective is to expand the product range to all segments of
reconstructive surgery: reconstruction of knees, shoulders and
implant instruments.
Sustained investment policy for LISI MEDICAL Orthopaedics
In 2011, the Caen site made significant capital expenditures to the
tune of 5.3% of annual sales to develop the "Reconstruction" line of
business.
These capital expenditures have helped to internalize processes
that were previously outsourced. LISI MEDICAL Orthopaedics has
invested in latest generation machining centers that guarantee the
technological progression of the various standalone production units
(or manufacturing islets). Productivity gains are also expected to
maintain the site's competitiveness with the automation of certain
manufacturing stages (shaping and polishing for instance). The
mastery of processes was also strengthened through the acquisition
of image-based control means; the machine capacity for packaging in
a controlled environment has also been increased.
Development of lean manufacturing techniques within LISI
MEDICAL Fasteners Europe
On its Neyron site, LISI MEDICAL has increased its efforts in terms of
industrial organization by initiating several Kaizen projects. In a process
of continuous improvement and to support the industrialization of
products, a "Methods" department was created.
Various "lean manufacturing" tools were deployed on the site, such as
5S, SMED (Single Minute Exchange of Die), resulting in an organization
based on manufacturing islets.
In2011, the targets in terms of reductionof the internalmanufacturing
lead times, reduction of work in progress and increase in the versatility
of employees, were achieved in the four islets that are operational
today.