LISI : Q1 2010 : Financial Information

PR Newswire/Les Echos/

LISI RESUMES ORGANIC GROWTH IN Q1 2010: UP 3.1% ON 2009

 • First quarter of organic growth following two-digit falls in sales for 
   5 quarters,
 
 • Recovery confirmed in the Automotive Division,
  
 • Stabilization of the Aerospace Division as compared with end 2009,
Maintenance of management priorities, particularly in cash flow generation.
 
 • During Q1 of the 2010 financial year the LISI Group achieved sales of 
EUR 181.4M, up 3.1% on a like-for-like basis and constant exchange rate basis. 
The variance is -0.9% on published figures, which takes into account the 
unfavorable change in the dollar exchange rate with the euro (impact of -0.6% 
on sales revenues).

In EURM      31 March                   Change
                                          2010/2009 on a like-for-
                                            like and constant
           2010   2009      2010/2009      exchange rate basis
Q1        181.4   183.1     - 0.9 %             + 3.1 %

LISI AEROSPACE

•  Decline of -26.3% on Q1 2009, but stabilization when compared with Q3 and Q4
   2009,

•  North American market still depressed among distributors and equipment
   manufacturers,

•  Medical has held up well.

LISI AUTOMOTIVE

•  Acceleration of recovery, up 51.3% (on a like-for-like basis), with the
   continuation of a still vigorous European automobile market,

•  Drop in market expected in the second half of the year.

LISI COSMETICS

•  Recovery right at the end of the period (+10.8%), helped by the end of
   inventory reduction and new products.

Quarterly Consolidated sales
In million euros

2010 2009
     183
          182
181
			   166
                 165

   Q1      Q2     Q3        Q4

EBIT* & Net Profit in EURM

100.1            98.9        34.2
      67.6           56.2        9.4

   2007            2008       2009

* After participation and profit-sharing expenses

NOTES BY SECTOR

LISI AEROSPACE (42 % of the consolidated total)

• Decline of -26.3% on Q1 2009, but stabilization when compared with
  Q3 and Q4 2009,

• North American market still depressed among distributors and equipment
  manufacturers,

• Medical has held up well.

In EURM        31 March                 Change
            2010    2009     2010/2009  on a like-for-
                                       like and constant
                                      exchange rate basis
Q1          76.2   104.6     - 27.2 %     - 26.3 %

About the market

Aircraft manufacturers remain well positioned in Q1 thanks to good order books.
Production rates have been maintained as compared with the 2009 average. Boeing
delivered 108 planes and Airbus 122. The two manufacturers have announced their
intention to increase production rates for the end of 2010.

Since air traffic is up (+9.5% for passenger traffic and +26.5% for cargo to end
February), the entire sector has to get organized for a gradual increase in
business. Nevertheless, there is real inertia in demand for primary components
such as fasteners.

As far as equipment manufacturers and distributors are concerned, there are
visible signs of the end of inventory reductions, especially in Europe. In the
USA the turnaround will be real when the inventories put in place for the start
up of the B787 in 2008 and the start of 2009 start to go down.

Operations

* The drop of -27.2% in sales revenues was mainly due to the USA, and to a
lesser extent to Europe.
   - In the USA LISI AEROSPACE has suffered from several factors:

     •  A drop in the requirements of Boeing and its subcontractors on account
     of delays in the B787 program and the suspension of the assembly lines 
     until Q2 2010,
     
     •  A collapse in requirements for regional planes, to adjust inventories
     to production rates,

     •  Higher inventory levels held by distributors until mid-2009.

   - In Europe deliveries at Airbus and its subcontractors have been stable as
compared with 2009. Other clients have all ratcheted downwards.

* The drop in sales at LISI MEDICAL has been only -1.4%. As a result,
quarterly sales activity has settled at slightly higher than Q4 2009. Starting
from Q3 of the previous financial year, the increase in the order book has been
confirmed (+37%), especially in Europe; it has been focused more in orthopedics
than in dentistry.

* Implementation of the prototyping phases of the A350XWB has stimulated
steady activity in the development and manufacture of the first series of new
products such as titanium nuts, of which the Saint-Ouen l'Aumône plant is the
beneficiary.

* Supported by Europe, order taking at LISI AEROSPACE returned in March to a
"book-to-bill" ratio of greater than 1 for the first time in over a year.

(1) Source IATA

Sales in million euros

End of March

120    104.6
                             94.4
80          76.2
                       68.6
40
                                            11.2
 0                                    10.1

       2009 2010      2009  2010      2009  2010
       AEROSPACE      AUTOMOTIVE       COSMETICS

LISI AUTOMOTIVE (52 % of the consolidated total)

• Acceleration of recovery, up 51.3% (on a like-for-like basis), with the
  continuation of a still vigorous European automobile market,

• Drop in market expected in the second half of the year..

In EURM            31 March                     Change
                                      2010/2009 on a like-for-
                                         like and constant
               2010   2009   2010/2009  exchange rate basis
Q1             94.4   68.6    + 37.6 %          + 51.3 %

About the market

* New registrations remained strong in Q1, +9.5% , following March 2010 up
11.2%. Nevertheless, some manufacturers have started slowing down the production
of secondary components such as gearboxes, in anticipation of gradually
adjusting the level of overall production to the expected level of new
registrations in Europe, -9% for the 2010 financial year and cars exported
outside EFTA.

* Our clients' production in Europe is doing even better with a 30% growth
rate in Q1 2010 as compared with the corresponding quarter in 2009. Major
differences have been noted at PSA +70%, Renault +51% and Daimler +48%, which
augur adjustments to come in the second half of 2010. The product mix is
improving with the new Mercedes E Class and Audi's success.

Operations

* Sales revenues are sharply up (+37%) in all segments except those to do
with trucks. Without that segment and with the deconsolidation of SDU in 2009,
growth would have been over 50%.

* Notwithstanding a favorable basis for comparison with Q1 2009, production
levels nevertheless remain down by 15% (-10% without SDU) on Q1 2008, prior to
the onset of the world economic crisis.

* The integration process of the two Acument France sites (Bonneuil and La
Ferté-Fresnel), taken over by the Group at the end of March, is proceeding
according to plan.

* The increase in raw materials has been confirmed at about +20% from Q2
2010, with a tightening appearing in the longer term.

(2) Source ACEA – EFTA 27

% Sales Variation per division / N-1

 50
 40                          LISI AUTOMOTIVE    
 30
 20                    LISI AEROSPACE
 10
  0                         
-10
-20                        
-30     LISI COSMETICS                        
-40
-50    Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4   Q1
       2007         2008       2009      2010

LISI COSMETICS (6 % du total consolidé)

• End of reduction in inventories,

• Recovery right at end of period (+10.8%).

In EURM            31 March             Change
                                       2010/2009 on a like-for-
                                          like and constant
                2010  2009    2010/2009   exchange rate basis
Q1              11.2  10.1     + 10.8 %        + 10.8 %

About the market

As had been expected, the division has done very well in the strength of its
recovery, with orders both for existing products and new development projects.

Three factors explain this turnaround:

   •  Final demand has dropped very little in volume and even increased in
      value,

   •  Fully adjusted, inventories are now being rebuilt,

   •  The division is in a position to take advantage of past investments,
   especially in metal packaging, while the crisis prevented several players 
   from increasing their production capacity for when orders started flowing
   again.

It should be noted that market is showing a return to players in close proximity
to the clients, at the expense of Asian production sources in particular.

Operations

* March was the first month to see a real take-off after quite a weak start
to the year. LISI COSMETICS now needs to track demand and gradually increase its
production capacity. As a result the recruitment of temporary workers has
resumed (+36 full-time equivalent in March).

* Among the new products launched during the period, LISI COSMETICS was
selected for the launch of Oriens by Van Cleef & Arpels and the Chanel N°5
rechargeable.   
   
FORECAST AND NOTES ON THE FINANCIAL IMPACT OF BUSINESS ACTIVITY

While the Group is fully benefiting from the automobile recovery, it is still
too early to be certain about a recovery in aerospace in the USA, which remains
the largest unknown for the second half of the year, while a drop in automobile
production is expected. In terms of profits, it is clear that the recovery in
the Automotive Division will help Group profits to improve, however, without yet
achieving what had been normal levels prior to the crisis. A focus on cash flow
generation therefore remains very much a priority.
   
LISI AEROSPACE

* The recovery in the aerospace industry sector is not yet reflected in the
figures from LISI AEROSPACE, which nevertheless ought to benefit from the end of
reduction in inventories towards the end of 2010. Therefore margins will remain
under pressure while cash flow generation remains the priority for the 2010
financial year.

* The dates provided for terminating the Stryker deal have been pushed back
due to a requirement to furnish information - consultations with the Works
Committee at Benoist-Girard that require more time than expected.
At this point, closure of the deal is still set for the end of the first half of
2010.

LISI AUTOMOTIVE

* The gradual downward adjustment of car production volumes together with an
increase in materials leaves some uncertainty about maintaining the
profitability levels of Q1 2010 for the rest of the financial year. As
previously stated, this level will remain under pressure though generally
positive, with the possibility of generating good Free Cash Flow for the entire
LISI AUTOMOTIVE Division.

LISI COSMETICS

* The LISI COSMETICS Division can clearly see the horizon brightening with
business level forecasts significantly above that of 2009. Financial
performance, while improving, will remain affected by the many new launches in
progress.

Q1 2010 has confirmed that the Group enjoys good industrial capacity suited to
taking advantage of the economic recovery. However, since this is not the case
in all its sectors of activity and in all the geographic areas in which it
operates, it will continue to maintain its priorities concerning operational
flexibility and cash flow generation. Its growth strategy remains unchanged and
will continue to combine the development of new products within the company and
the acquisition of skills and market share through external growth.

CONTACT
Gilles KOHLER
Chairman and CEO
email : [e-mail]

Emmanuel VIELLARD
Deputy CEO
email : [e-mail]
Phone : [phone] - Fax : [phone]
Website : www.lisi-group.com
   
The next announcements will appear after close of trading on Paris Euronext
   
* Half-yearly results: July 27, 2010
* Q3 2010: October 27, 2010
   
    TRADING AGREEMENT: ODDO Midcap - LYON Tel. [phone]
                      
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