HALF-YEARLY RESULTS

30thJune 2017

PRESS RELEASE The LISI Group announces a further increase in results for H1 2017, in line with targets
  • Good overall business, year-on-year organic growth of 6.1% in the first half year

  • Improved performance indicators:

    • Current operating income up +17.6%, with operating margin up 0.9 point to 11.3%

    • Positive Free Cash Flow at € 27.5M with sustained investment pace

Belfort, July 26, 2017 - LISI today announced its results for the first six months ended June 30, 2017, presented to the Board of Directors held today.

Six months ended June 30, H1 2017 H1 2016 Change

Key elements of the income statement

Sales €M 861.7 794.2 +8.5%

EBITDA €M 140.0 121.6 +15.1%

EBIT €M 97.5 83.0 +17.6%

Current operating margin % 11.3 10.4 +0.9 pts

Income for the period attributable to holders of the company's shareholders' equity

€M 58.2 59.1 - 1.5%

Diluted earnings per share € 1.10 1.12

Key elements of the cash flow statements

Operating cash flow

€M

104.7

98.6

+

€6.1 M

Net Capital expenditure

€M

67.1

60.7

+

€6.4 M

Free Cash Flow1

€M

27.5

24.9

+

€2.6 M

Main elements of the financial situation

Net debt

€M

207.1

261.3

- €54.2 M

Ratio of net debt to equity

%

22.9

31.6

-8.7 pts

First-half highlights
  • Rebalancing of divisions' contribution to Group performance

  • Disposal of Précimétal as at January 31, 2017

1Free Cash Flow: operating cash flow minus net capital expenditure and changes in working capital requirements

Business review and results for the half year

Sales in €M

2017

2016

2017/2016

On a constant consolidation scope and exchange rate basis

Q1

444.3

388.0

+14.5%

+9.9%

Q2

417.4

406.2

+2.8%

+2.5%

Six months ended June 30,

861.7

794.2

+8.5%

+6.1%

At € 861.7 million, consolidated sales for the first half of 2017 increased by +8.5%, with all all divisions contributing.

Organic growth stood at +6.1% in the first half of 2017, confirming the acceleration recorded in 2016 (+3.6% in the first half and +5.6% in the second half). The slower increase in the second quarter (+2.5%) compared with the first (+9.9%) is mainly explained by the effect of a number of working days that is not comparable with 2016 (-5 days in France, i.e. -8%) and a high basis of comparison in 2016.

With respect to the income statement, the consumption costs increased in the same proportion as production (+8.0%). Other variable costs were down (-0.7 point) thanks to productivity gains resulting from the LISI Excellence Achievement Program (LEAP) improvement plans. Fixed costs, particularly for the structuring of activities under development, remain well under control and fall by 0.3 point in relative terms.

Given these factors, gross operating income (EBITDA) rose sharply (+15.1%) to € 140.0 million (16.2% of revenue), compared to € 121.6 million (15.3%) in the first half of 2016.

Depreciation and amortization increased by € 5.0 million due to the significant investments made in recent years but remained stable in relative terms (+0.2 point). Provision reversals increased by

€ 1.2 million, with no impact on EBIT (offsetting operating expenses).

Current operating income (EBIT) reached € 97.5 million, an increase of € 14.5 million or 17.6% compared to the first half of 2016. At 11.3%, the operating margin improved by 0.9 point compared to the same period last year.

Non-current operating income and expenses (-€ 1.6 million) mainly related to the disposal costs of Précimétal.

The financial loss amounted to -€ 10.5 million (+€ 6.5 million in the first half of 2016). The deterioration can be explained by the following:

  • The difference between foreign exchange profits and losses for approximately -€ 18.6 million (+€ 6.9 million in 2016),

  • The change in fair value of foreign exchange hedging instruments, which had a favorable impact of +€ 9.7 million (+€ 2.6 million in the first half of 2016),

  • Lower interest rates, resulting in lower financing costs and a favorable impact of € 1.4 million compared to the first half of 2016.

    Income tax amounted to -€ 28.2 million, i.e. a stable effective tax rate of 33%.

    After taking into account the negative financial result for the first half of the year, net income was

    € 58.2 million, i.e. 6.8% of sales (7.4% in the first half of 2016).

    Cash flow from operations increased by 6.2% to € 104.7 million (€ 98.6 million in the first half of 2016). It allowed for a continuation of the robust investment program (€ 67.1 million; 7.8% of sales) in the first half of 2017, including:

  • The deployment of the "robotization" plan across all divisions,

  • The development of new products, notably in Marmande ("Extrusion"),

  • The modernization of the sites of Parthenay and Bar-sur-Aube ("Forging").

    Working capital requirements remained stable compared to December 31, 2016 at 76 days, despite the increase in activity. Inventories decreased from 1 day to 84 days.

    The negative effect of the depreciation of the dollar at the end of the period (€ 12 million) did not prevent Free Cash Flow from rising by € 2.6 million to € 27.5 million.

    The Group's development continues to benefit from a solid financial structure: net financial debt decreased by € 54.2 million compared to June 30, 2016 and now amounts to only 22.9% of shareholders' equity.

    LISI AEROSPACE (62% of total consolidated sales)
  • Continued organic growth supported by a very dynamic European market with the ramp-up of new programs.

  • First signs of recovery at Boeing began in the United States, though still at the level of 2015. Free Cash Flow was still highly positive at € 35.1 million, after a € 3.5 million increase in capital expenditure to € 45.7 million.

Analysis of sales

Sales in €M

2017

2016

2017 / 2016

On a constant consolidation scope and exchange rate basis

Q1

277.5

248.5

+11.7%

+11.7%

Q2

258.3

254.1

+1.6%

+3.3%

Six months ended June 30,

535.8

502.7

+6.6%

+7.4%

LISI SA published this content on 26 July 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 26 July 2017 15:50:17 UTC.

Original documenthttps://www.lisi-group.com/telechargement/en/2017/rapport-semestriel-S1-17-gb.pdf

Public permalinkhttp://www.publicnow.com/view/672C02E3A4C692784C420A65E953C7FA63522B24