LISI 2012 FINANCIAL REPORT
26
2
Financial situation
Activity
In €m
2012
2011**
Changes
Sales revenue
426.6
446.3
-4.4%
EBIT
2.3
23.7
-90.2%
Operating cash flow
22.3
28.7
-22.2%
Net CAPEX
-28.0
-35.6
-21.3%
Registered employees at period end
3,213
3,312
-3.0%
Full time equivalent head count*
3,263
3,406
-4.2%
* Including temporary employees
** The Group anticipated as at January 1, 2012 the implementation of the revised IAS 19. The 2011 statements have been restated accordingly.
The drop in volumes weighs heavily on the absorption of
fixed costs and especially productivity. Selling prices suffer
inertia from the price reductions granted and negotiated in
2011, while wage increases have a chisel effect of more than
€2 million.
In addition, the disposal of KUT deprives the division of
€4.8 million in sales compared to 2011 and of a fixed charge
coverage. One should also note a surcharge of €750k compared
to 2011 to launch new products that will produce their effect
in 2013.
The adjustment of variable costs (-9.6%) is correct, excluding
the payroll (+0.7%). However, the drop in volumes affects
the coverage of fixed costs that are down by only -2.2%. The
adjustment efforts, which began to take effect at the end of
the year, must accelerate in 2013.
Average annual manpower was down 143 out of a total
of 3,263 (-4.2%), which is insufficient to accommodate the
decrease in activity.
As a result, EBIT amounted to €2.3 million, compared to
€23.7 million achieved in 2011. The operating margin is only
0.5%, against 5.3% in the previous year. This collapse is mainly
due to the decrease in activity, the persistence of operating
difficulties at Puiseux, the non-adjustment of fixed costs and
significant accounting entries (non-monetary) in 2011 related
to the integration of the Bonneuil and La Ferté-Fresnel sites
(-€11.5 million compared to 2011).
Investment remained strong in terms of disbursements
at €28.0 million in 2012 against €35.6 million in 2011.
Commitments are at the same level of €29.3 million to address
the significant efforts put forth to improve productivity and
the necessary renewal of equipment (cold stamping), as well as
the deployment of the Movex 3 management system.
However, Free Cash Flow was resilient (-€4.1 million) due to
lower inventories, cash consumption remaining confined to the
division's debt.
OUTLOOK
No recovery was perceptible in January and one should rather
expect a stabilization of demand compared to the level of Q4.
If the firm JD Power (LMCA) expects a further decline in
the European market in 2013 (-3.2%), it considers that the
production of LISI AUTOMOTIVE customers in Eastern Europe
and Asia should remain strong.
Orders for the new PSA platform, the ones captured from
German manufacturers and from certain parts manufacturers,
will help amortize the market decline expected especially in
H1 2013.
The plan to adapt the "Focus" structures should help lower
fixed costs in the second half of 2013. The "Albatros" plan
aims to reduce by 40% the production surfaces at Puiseux
(Val d'Oise) and reduce costs in significant proportions. Finally,
concerning the "Nuts" plan, an analysis of the situation reveals a
structural, sustainable decline in one of the division's activities,
namely the manufacture of nuts for automobiles.
Therefore, in order to safeguard its competitiveness, LISI
AUTOMOTIVE Former introduced an industrial and commercial
project in the field of nuts.
An initial briefing and consultation of the Central Works
Council of LISI AUTOMOTIVE Former was held February 13,
2013. Management presented there the plan to gradually
consolidate the production of nuts on a limited number of
sites, whichwould eventually imply the shutdown of the Thiant
(Nord) site.
Aware of the social and human consequences that would result
from stopping the activities of the Thiant site (107 employees
concerned), LISI AUTOMOTIVE Former also introduced a Job
Protection Plan reflecting its commitment to do its best to
support its employees to the extent possible.
