LISI (EPA:FII) - Q3 Financial Information

Transparency directive : regulatory news

21/10/2021 17:43

FINANCIAL INFORMATION

The LISI Group achieved consolidated sales of EURM 860.7 over the first nine
                                months of 2021

- LISI AEROSPACE :

  Gradual improvement of business in a context of end of destocking in the
  aeronautical sector,

  High demand in "Engine Structural Components", ahead of the "Fasteners"
  segment.

- LISI AUTOMOTIVE :

  Business strongly penalized by the consequences of the global shortage of
  electronic components among all manufacturers and parts manufacturers,
  Development and gradual ramp-up of new programs for hybrid and electric
  vehicles.

- LISI MEDICAL :

* Organic growth remained  positive in  the context of a return to normality
  in hospitals after the strong tensions generated by the COVID-19 pandemic.

In EURm                                         Changes
                     2021    2020    2021 / 2020    2021 / 2020 on a
                                                 like-for-like basis(1)

Q1                  309.4   397.9      - 22.2 %        - 18.8 %
Q2                  284.3   238.8      + 19.0 %        + 25.9 %
Q3                  267.1   286.7       - 6.8 %         - 7.0 %
3rd quarter ended
September 30,       860.7   923.4       - 6.8 %         - 3.6 %

At EUR 860.7 million, consolidated sales for the first nine months of 2021 were
down - 6.8 %, or - EUR 62.7 million compared to the same period of 2020, taking
the following aspects into consideration:

* a scope effect of - EUR 11.0 million resulting from the following
transactions:

o deconsolidation of LISI AUTOMOTIVE Mohr Friedrich GmbH on June 26, 2020, LISI
MEDICAL Jeropa in the United States on January 11, 2021 and LACE (LISI
AEROSPACE) on March 4, 2021, for an impact of - EUR 14.8 million (- 1.7 % of
sales);

o acquisition of B&E Manufacturing, consolidated since August 1, 2021 (see
press release of July 23, 2021), i.e. a contribution of EUR 3.8 million
(+ 0.4 % of sales);

* an unfavorable currency effect of - EUR 19.4 million (i.e. - 2.2 % of
sales), mainly tied to the weakening of average US dollar exchange rate against
the euro.

On a like-for-like basis and restated for the currency effect, the decline in
consolidated sales is only - 3.6 % over the first nine months of the year (of
which - 7.0 % in Q3).

At a consolidated level, the Group keeps adapting its fixed costs structure to
the activity level and benefits from the prolongation of the efforts initiated
since mid-2020.

Quarterly Consolidated Sales

In EURm

Q1 2021  309
Q1 2020  398

Q2 2021  284
Q2 2020  239

Q3 2021  267
Q3 2020  287

Q4 2020  307

EBIT* & Net Profit in EURM

EBIT

135.6   2018
155.1   2019
41.5   2020

Net profit

   92.1    2018
   69.8    2019
- 37.3    2020

* After participation and profit-sharing expenses

(1) The change at constant scope and exchange rates is calculated:

* by converting the sales of the companies whose financial statements are
denominated in foreign currencies at the average rate of the year N-1 or the
month M-1;
* by converting the sales invoiced in currencies other than the local
currency at the average rate of the previous year or previous month M-1;
* by restating the entries into or exits from the scope to ensure
comparability of data.

COMMENTS BY LINE OF BUSINESS
LISI AEROSPACE (47% of consolidated sales)

In EURm                                       Changes
                     2021    2020    2021 / 2020    2021 / 2020 on a
                                                 like-for-like basis(1)

Q1                   139.4   226.7     - 38.5 %       - 35.8 %
Q2                   134.7   154.3     - 12.7 %        - 7.0 %
Q3                   127.9   137.5      - 7.0 %        - 7.7 %
3rd quarter ended
September 30,        402.0   518.5     - 22.5 %       - 19.8 %

The global aeronautics market confirms the gradual return to a form of
standardization initiated at the end of Q2 2021. Traffic in number of flights
is today at 80 % of the 2019 level (it was 70 % at the end of June 2021 and
40 % at the end of December 2020). The increases in single-aisle production
rates announced by aircraft manufacturers have been confirmed and are helping
to lower the level of component stocks in the sector.

The LISI AEROSPACE division's sales pursued the inflection of the curve for the
third consecutive quarter: at EUR 127.9 million in Q3 2021, it reduced to -
7.0 % the gap with that of the previous year.

The recovery is most straightforward in the "Structural Components" segment,
which confirms the anticipated needs for basic parts intended for long-cycle
equipment (engines) to meet the increase in production rates among aircraft
manufacturers as well as the need for maintenance. This segment's sales for the
quarter were thus up + 27.0 % compared to the same period of the previous
fiscal year.

The "Fasteners" segment, which had experienced a low during the first half of
the year (- 39.6 % compared to the same period of 2020), is gradually picking
up, particularly in Europe, in the wake of "Structural Components". The -
19.2 % decline in this segment in Q3 is indeed less marked than that recorded
during the previous two quarters (- 46.7 % in Q1 and - 30.3 % in Q2,
respectively).

On a like-for-like basis and restated for the currency effect, the LISI
AEROSPACE division's sales are down -7.7 % over the quarter and - 19.8 % over
the first nine months of the year.

From an operational point of view, the division is entirely focused on a
gradual ramp-up. Controlling fixed costs, which have been sharply adjusted
downwards, makes it possible to maintain profitable operations and remains a
lever for improving future performance

AEROSPACE AUTOMOTIVE MEDICAL

LISI AUTOMOTIVE (43% of consolidated sales)

In EURm                                       Changes
                     2021    2020    2021 / 2020    2021 / 2020 on a
                                                 like-for-like basis(1)

Q1                   140.3   136.3     + 2.9 %         + 6.9 %
Q2                   119.7    60.4    + 98.2 %       + 106.1 %
Q3                   111.0   121.0     - 8.2 %         - 9.1 %
3rd quarter ended
September 30,        371.0   317.7    + 16.8 %        + 19.3 %

The global automotive market is experiencing strong disruptions throughout the
supply chain leading to repeated production chain shutdowns which were further
amplified during the quarter among all global manufacturers. The production
losses linked to the current shortage of semiconductors can be estimated at
more than 10 million vehicles during the year. Global sales are therefore down
- 12.9 % 2 over the quarter compared to the same period in 2020. All LISI
AUTOMOTIVE customers are therefore subject to very high demand volatility.

At EUR 111.0 million, the quarterly sales of the LISI AUTOMOTIVE division were
down - 8.2 % compared to the same period of the previous fiscal year after the
+ 32.2 % increase recorded in the first half of the year, which had benefited
from a favorable base effect.

Over the first nine months of the year, sales are still up + 16.8 % compared to
the same period of 2020. The division confirms market share gains for new
products intended for electrified vehicles and equipment. This explains why
LISI AUTOMOTIVE is growing faster than the market (production of + 4.3 % 2 over
the first 9 months of the year).

On a like-for-like basis and restated for the currency effect, Q3 sales were
down - 9.1 % but up 19.3 % year-to-date.
In terms of operations, the LISI AUTOMOTIVE division has to face an
unprecedented situation which imposes a two-fold challenge:

* the ongoing adaptation of production capacities in the face of the high
volatility of demand from the main manufacturer and supplier customers,

* the adjustment in costs resulting from the strong pressure on the prices of
raw materials (steel and plastics) and consumables (energy, tools, etc.).

Against this backdrop, continuing the performance and repositioning plan
launched in the early weeks of the crisis in 2020 remains a priority.

LISI MEDICAL (10% of consolidated sales)

In EURm                                        Changes
                     2021    2020    2021 / 2020    2021 / 2020 on a
                                                 like-for-like basis(1)
Q1                   29.8    35.1     - 15.1 %        - 6.0 %
Q2                   29.9    24.4     + 22.6 %       + 38.0 %
Q3                   28.4    28.4        0.0 %        + 7.0 %
3rd quarter ended
September 30,        88.2    87.9      + 0.2 %       + 10.3 %

Supported by the progress of vaccination campaigns, the global market confirms
its return to growth, driven mainly by the resumption of surgical intervention
in the United States and Europe.

At EUR 28.4 million, sales for Q3, after the sale of LISI MEDICAL Jeropa, grew
organically by + 7.0 %. The ramp-up of new products resulting from market share
gains over the past three years has reinforced the favorable market trends.

% Sales Variation per division / N-1

(2) NAFTA : zone de libre-échange entre les États-Unis, le Canada et le
Mexique

In terms of operations, the division's efforts are focused on ramping up and
increasing volumes of new products while controlling cost levels and working
capital requirements linked to such return to growth.

OUTLOOK AND COMMENTS ON THE FINANCIAL IMPACT OF BUSINESS

LISI AEROSPACE

As expected, the harbinger of recovery observed in the first half of 2021
through the strengthening of order intake for long-cycle equipment (engines and
structural parts) is also confirmed with an increase in order books in the
"Fasteners" segment. However, the recovery will be on condition of the supply
chain's ability to quickly ramp up after many months of slow-down.

From an operational point of view, and despite recruitment difficulties in
certain areas, the division is ready to respond to the rebound in activity.
This should be all the more significant in Q4 2021 as it will benefit from a
favorable basis of comparison.

LISI AUTOMOTIVE

The conditions for a return to a normalized supply of electronic components
will not be met for several months. Pressure on commodity prices will also
remain a reality in the short term.

In this context, the LISI AUTOMOTIVE division will be faced with a two-fold
necessity:

* continue to adjust its production capacities to the market's repeated "stop
and go" behavior;

* neutralize as much as possible the effects of rising raw material prices
(steel and plastics).

Meanwhile, the division will continue to focus its efforts on the development
and industrialization of new products with high added value intended for the
growing needs of the market in terms of electromobility.

LISI MEDICAL

The market for minimally invasive surgery, like that for orthopedic
reconstruction, is better oriented and is benefiting from the resumption of
more standardized activity in hospitals.

The division's priority will be to the continued development of new products
and to ramping up production volumes.

LISI CONSOLIDATED

While the business recovery is marked by greater volatility than expected, the
LISI Group, as previously announced, maintains its target of achieving EBIT(3)
in 2021 at least equal to that of 2020, positive net income, and generating a
good level of Free Cash Flow(4).

CONTACT

Emmanuel VIELLARD
CEO
Mail: emmanuel.viellard@lisi-group.com
Tel. : +33 3 84 57 00 77 - www.lisi-group.com

(3) comparable: before the extension of depreciation periods
(4) Free Cash Flow: cash flow from operations minus net capital expenditures
and changes in working capital requirements

TRADING AGREEMENT: ODDO BHF CORPORATE - +33 1 44 51 86 80

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21/05/2024 17:41

LISI (EPA:FII) - Q3 Financial Information

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