LISI Group announces a 14.5% revenue growth in Q1 2017, supported by organic growth of nearly 10%
  • LISI AEROSPACE : +11.7%

    • European market extremely dynamic

    • Sustained ramp-up of new programs

Quaterly Consolidated sale

In million euros

2017 2016

  • LISI AUTOMOTIVE : +6.6%

    • Steady European market Increased contribution from new developments launched in previous years

  • LISI MEDICAL : +103.1%

    • Organic growth: +11.5%

444,30

388,0

406,0

380,0 397,0

Cumulative as of March 31

2017

2016

2017/2016

2017 / 2016

On a like for like basis

444.3

388.0

14.5 %

9.9 %

Revenue in €m Changes

Q1 Q2 Q3 Q4

EBIT* & Net Profit in €M

EBIT Net profit

On a like-for-like basis, the 9.9% increase in revenue in the first quarter of 2017 confirms the acceleration in organic growth recorded in 2016 (+3.6% in the first half and +5.6% in the second half).

These consolidated figures are the result of the positive performance of the Group's three divisions. The aerospace division gained +11.7%, benefiting from a very dynamic European market and from the still sustained ramp-up of new programs. In the automotive division, the growth rate is solid at +6.6% and confirms the good trend of 2016. The division is also benefiting from a robust European market (+8.4%) and from the developments initiated in recent years. The medical division increased by +103.1% after the consolidation of LISI MEDICAL Remmele with organic growth at 11.5%.

131,7 **

146,5

157,5

107,0

The difference between reported revenue and organic growth can be explained by:

  • A positive impact related to the consolidation of acquisitions:

oLISI MEDICAL Remmele (USA) was consolidated as of May 1st, contributing, as expected, €17.4 million or 3.9% of consolidated revenue,

81,481,8

2014 2015 2016

* After participation and profit-sharing expenses

** IFRIC 21 restated

o Ankit Fasteners (India), following the purchase of a majority stake by the LISI Group, is contributing €1.4 million, or 0.3% of consolidated revenue

  • The favorable impact of foreign currencies (€2.8 million)

  • The disposal of Précimétal Fonderie de Précision (Belgium) on February 2nd, 2017 (-€2.9 million) in 2016.

    Consolidated revenues generated outside France account for 65% of consolidated revenue, or €287.9 million in total, stable compared to 2016 (62%; €241.7 million).

    REVIEW BY DIVISION

    LISI AEROSPACE (62% of the consolidated total)

    • Sustained organic growth in a solid European market

    • Fast ramp-up of new programs

    • First signs of recovery in businesses generated with Boeing in the United States, yet below expected levels

    • Strong prospects in the commercial aircraft market

      Revenue in €m Changes

      2017

      2016

      2017/2016

      2017 / 2016

      On a like for like basis

      Cumulative as of March 31

      277.5

      248.5

      11.7 %

      11.7 %

      At €277.5 million, Q1 2017 revenue increased by 11.7% compared to the same period in the previous financial year (€248.5 million).

      In line with 2016, the division is benefiting from the continuing rapid ramp-up of new programs on the European market. The "Fasteners Europe" segment grew by +20.1% with the completion of deliveries for the assembly line of the A350. The "Fasteners North America" segment reported an increase in shipments to Boeing over the quarter but did not return to levels recorded prior to the aircraft manufacturer's reorganization in 2016. The "Structural Components" segment, whose products are mainly for the European market, is also experiencing satisfactory growth of +8.9%.

      On a like-for-like basis, taking into account the foreign exchange effect, sales rose by +11.7%.

      248,5

      277,5

      Sales in million euros End of March

      In terms of operations, the structuring projects launched by the division are on track with the announced roadmap: service rate targets for the new programs and the modernization plan for the "Forging" segment are in line with objectives.

      Production facilities of the "Fasteners" segment benefits not only from a favorable volume effect in Europe but also from the productivity gains resulting from the implementation of the LEAP plan (LISI Excellence Achievement Program) which includes the deployment of the robotization project.

      120,9 128,9

      18,7

      37,9

      Comments on performance and outlook

      The commercial aircraft segment continues to enjoy good visibility, in particular regarding single-aisle aircraft and new programs. The confirmation that Boeing's order books are picking up still remains an area of focus. By the end of the current financial year, it should make it possible to offset the expected slowdown in the "Fasteners Europe" business after the peak of activity caused by the initial allocation phase of the

      2016 2017 2016

      2017

      2016 2017

      Airbus A350 program.

      AEROSPACE AUTOMOTIVE MEDICAL

      Other market segments served by LISI AEROSPACE, including helicopters, military and business aircraft, as well as regional aircraft, are experiencing persistent difficulties.

      The ambitious ramp-ups of the new programs initiated since 2016, although largely anticipated, raise real challenges that the LISI Group will continue to overcome. The still significant costs of non-quality and industrialization of parts with a high technical complexity dedicated to new programs (Airbus and Safran) in various sites should continue to be gradually absorbed.

      The Aerospace division is also continuing to modernize its production facilities by investing in long-term projects, such as the development of new products and the implementation of the "robotization" project.

      LISI AUTOMOTIVE (29% of the consolidated total)

      • Good trend observed in 2016 confirmed

      • Organic growth in steady European markets

      • Good dynamics in mechanical safety components and clipped solutions

Revenue in €m Changes

2017 2016 2017/2016 2017 / 2016 On a like for like basis

Cumulative as of March 31 128.9 120.9 6.6 % 6.6 %

% Sales Variation per division / N-1

60

40

LISI AEROSPACE

The division posted +6.6% growth for the first quarter compared to last year. It is the "Mechanical Safety Components" business that fully benefits from the new developments of recent years and which, therefore, is showing the strongest increase. The "Clipped Solutions" segment also contributed to this good performance, while the "Threaded Fasteners" business lagged behind.

The general level of demand is still sustained by LISI AUTOMOTIVE's exposure to Europe (market: +8.4%). One should mention in particular the dynamism of OEMs as well as of German manufacturers. Order intake for new products in the "Clipped Solutions" and "Safety Mechanical Components" segments remains strong and has represented over 10% of revenue since the beginning of the year.

20

0

-20

LISI AUTOMOTIVE

T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 T2 T3 T4 T1 2013 2014 2015 2016 2017

Comments on performance and outlook

In terms of operations, "Clipped Solutions" and "Security Mechanical Components" Business Groups are enjoying the benefits of the gradual recovery of most of the French sites in the "Threaded Fasteners" Business Group.

Improvement works to the Saint-Florent-sur-Cher site, launched in 2016, are producing encouraging initial results and will continue into 2017.

The division's logistics remains very good, enabling teams to focus on streamlining the production organization, implementing the LISI Excellence Achievement Program (LEAP), and increasing productivity, with view to improve the return on actual investments.

The level of order intake remains very high, while the site in Monterrey (Mexico) confirms the interest of LISI AUTOMOTIVE customers for this geographical area. The same goes for projects launched in China (Shanghai plant).

LISI MEDICAL (9% of the consolidated total)

  • Good level of order intake and business with existing clients and new clients (orthopedics and minimally invasive surgery)

  • Good consolidation of LISI MEDICAL Remmele

Revenue in €m

Changes

2017

2016

2017/2016

2017 / 2016

On a like for like

basis

Cumulative as of March 31

37.9

18.7

103.1 %

11.5 %

On a like-for-like basis and at constant exchange rates, first quarter revenues were up on previous quarters, confirming the development of existing products and the gradual ramp-up of clients' new programs.

In line with expectations, since May 2016 the division has benefited from the consolidation of LISI MEDICAL Remmele (United States), which contributed

€17.4 million in revenue over the period.

In terms of operations, the division's French sites confirm the progress achieved since 2016. The sites of LISI MEDICAL Remmele reach performance levels that are in line with expectations.

Comments on performance and outlook

The division is consolidating its fundamentals and its positioning as a reference supplier for its customers. The integration of LISI MEDICAL Remmele also provides higher visibility in the market and opens new prospects for organic growth.

PROSPECTS AND COMMENTS ON THE FINANCIAL IMPACT OF THE BUSINESS

All of the divisions of the LISI Group operate in buyoant markets with prospects for strong development.

For LISI AEROSPACE, the main point of attention for the coming months will be the control over industrialization costs of the "Structural Components" segment in the rapid ramp-up of new programs. The confirmation of the resumption of the Boeing business in the United States will also remain an area of focus.

LISI AUTOMOTIVE shows tangible signs of improvement in its performance and good progress in international projects.

CONTACTS

Emmanuel VIELLARD CEO

Mail:emmanuel.viellard@lisi-group.com

: +33 3 84 57 00 77 - Fax : +33 3 84 57 02 00

Website:www.lisi-group.com

LISI MEDICAL will benefit, as expected, from the full-year consolidation of LISI MEDICAL Remmele, which opens up promising prospects for organic growth with new and very dynamic markets for medical devices outside orthopedics.

After this positive first quarter, the Group confirms its objectives to grow its business and its current operating profit, as well as its Free Cash Flow1in value terms for 2017, with a more balanced contribution from all divisions.

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

TRADING AGREEMENT: ODDO CORPORATE - +33 (0)1 40 17 52 89

LISI SA published this content on 26 April 2017 and is solely responsible for the information contained herein.
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