LISI GROUP - Integrated report 2021

LISI – 2021 INTEGRATED REPORT — 37 2021 – 2024: Priority to Growth 2020 Very short term Restarting • Cash flow management • Adaptation of staff and costs to the required level • Use of available subsidy programs (partial unemployment, etc.) 2021 Short to medium term Resizing • Reviewing and optimizing the industrial system and the organization according to the new market situation • Adjusting the investment program accordingly • Improving cash and WCR management 2024 Medium to long term Repositioning • Strengthening the strategic positioning and risk resistance • Assessing opportunities for portfolio development (commercial and technical efforts, disposals, acquisitions) Interview Raphaël Vivet Chief Financial Officer LISI How is the New Deal plan evolving? The New Deal crisis management plan proceeded as planned in 2021 and is continuing strongly. As we expected, the year was again very disrupted by the consequences of the COVID-19 pandemic. Cost adjustment measures, which constitute the adaptation pillar of the plan, as well as actions to refocus on activities with high added value, which involve the repositioning component, were continued in accordance with the schedule established in 2020. What are the main effects of this adaptation? Among the most significant actions, one can note the adjustment of the workforce, which continued in 2021, the drop in fixed costs – they decrease by €19.1 million in 2021 after a €112.8 million drop in 2020 – and the start of negotiations with all customers of the LISI AUTOMOTIVE division, in order to pass on the increase in raw material prices to selling prices. The actions aimed at preserving and anticipating the short- and medium-term cash flow requirements were maintained, while preserving expenses related to innovation, the robotization of production tools and the ramp-up of new products. What are the challenges of the repositioning phase? The second pillar of the plan dedicated to repositioning is engaged until 2024. It takes the form of moves intended to continue refocusing the Group on high added value activities. This strategy materialized in 2021 with the disposals in January of Jeropa, a US subsidiary of LISI MEDICAL, in March of LACE, a French subsidiary of LISI AEROSPACE, and finally with the acquisition by LISI AEROSPACE of the US company B&E Manufacturing, consolidated since August 1, 2021.