LISI 2012 FINANCIAL REPORT
25
2
Financial situation
Investments were supported and totaled €38.5 million
disbursed over the period and €47.3 million of commitments.
Among the investments made, one should mention the
extension of the new plant in Marmande (Creuzet Aerospace)
for around €8 million and the new surface treatment unit
project in Torrance (USA) for approximately $11 million.
Free Cash Flow is very positive due to the good level of
profitability but also to the significant effort onworking capital
in general and inventories in particular: these decreased by
some 18 consumption days.
OUTLOOK
While no threat can be perceived on the aerospace to date, one
should nevertheless assess the growth prospects taking into
account the foreseeable inventory effects:
• European business should see a pause in growth after the last
very dynamic 3 years and the development of the assembly
line for the A350,
• activity in the United States still has a significant growth
potential that could be put off by the B787's technical
problems,
• finally, the "Structural components" business, which is more
correlated with the assembly rates of its major customers
Airbus, Safran and GE, and driven by the industrialization
of new products and the positioning on aircraft and engine
programs for tomorrow - contracts signed for the A350,
the A320 NEO, the LEAP engine, the GE engines - should
experience a new dynamic year.
In terms of profitability, the division reaches levels that ought
to be consolidated. Business (volume effect) can not grow at
the same growth rate as in 2012, while still remaining very
strong, if production rate increases and developments of major
projects keep their promises.
The amount of investments corresponding to such new
projects and to capacity increases should be higher than in
fiscal 2012.
2.3 LISI AUTOMOTIVE
LISI AUTOMOTIVE achieved sales of €426.6m in 2012. The
decrease of 4.4% compared to the previous year reflects the
following developments:
• Continuous deceleration of business over the period, but less
rapidly than the European market, without collapsing at the
end of the period (- 5.2% in Q4 2012).
• Difficulties adjusting productivity and fixed costs (50% are
represented by labor) in the division's current structure.
• Reorganization efforts: disposal of KUT in May 2012 and
close-down of the electric screwworkshop at Delle at the end
of the year. The effects of these measures on fixed costs in
particular, should be felt from 2013.
• Slight drop in the volume of new products (10% in annualized
revenue, compared to 13% for fiscal 2011, which was a rather
busy year).
• Marked decrease in the sales revenue achieved with PSA, but
market share gained with Renault, which helped limit this
customer's decline. However, sales with VW and BMW are up
without this being sufficient to compensate for the loss of
activity from French manufacturers.
• Continued growth of the two Chinese LISI AUTOMOTIVE
plants at a rate of about 23%.
Market
European registrations are steadily decreasing with a strong
decrease in December (-16.3%) or -7.8% over the year (source
ACEA - EU 27 + EFTA). This decrease has spared neither Germany
(-16.4% in December, - 2.9% over the year) nor France (-13.9% in
December); the only European market that remains positive is
the UK (+5.3% in 2012 compared to 2011).
European sales by LISI AUTOMOTIVE customers fell sharply in
Q4 and even more in December, displaying a decrease of -8.2%
over the year and production of -7.6%. French customers are
themost affectedwith PSA (-12.9%) and Renault-Dacia (-18.9%).
In particular, the production of Renault's French factories was
halved over the last 5 years. German customers were rather
more resilient throughout the year (-1.1%), BMW (-1.4%) and
Daimler (-2.2%).
