LISI (EPA:FII) - Q1 2014: Financial information

Transparency directive : regulatory news

23/04/2014 17:45

The LISI Group reports organic growth of 5.2% in the first quarter of 2014

. Sales up 4.3% to EUR311.3 million
. Confirmation of the trends indicated at the end of last year:

>  More moderate growth at LISI AEROSPACE, particularly as a result of exchange
   rate fluctuations

>  Turnaround at LISI AUTOMOTIVE

>  Recovery at LISI MEDICAL

In EURM                                               Change
                               2014    2013   2014/2013   2014 / 2013
                                                         on a like for
                                                           like basis

Cumulative, as of March 31    311,3   298,6    + 4,3 %      + 5,2 %

. The impact of the depreciation of numerous currencies vis-a-vis the euro
  represents -1% of revenues. It is essentially attributable to the fall in the
  US dollar, which mainly impacted the aerospace division for - 1.8%, orEUR3.1
  million.

. The proportion of sales achieved outside France represents 66.3% of the total,
  or EUR206.5 million, up by 2.3% compared with 2013.

. Changes in the perimeter were limited during the first half year:

     > gradual shutdown of the Paramount plant (United States) specializing in
       car racing (EUR1.4 million of sales in Q1 2013)

     > closure of the small electrical screw fastener business in Delle
      (France), which had sales of EUR0.9 million in Q1 2013.

                       COMMENTS BY LINE OF BUSINESS

LISI AEROSPACE (57% of total consolidated revenue)

. The "European Fasteners" division maintained at a high level (+ 0.7%)

. The "US Fasteners" division catching up in dollar terms (+ 9.2%), but only
  + 2.9% in euros

. The "Structural Components" division up by + 2.6%

In EURM                                               Change
                               2014    2013   2014/2013   2014 / 2013
                                                         on a like for
                                                           like basis

Cumulative, as of March 31    175,1   172,9    + 1,3 %      + 2,6 %

Lower currencies, particularly where the US and Canadian dollars are concerned
and with the exception of the Pound Sterling, weighed significantly during this
quarter.

Quarterly Consolidated sales
In million euros

2014   311

2013   299   296   277   277
       T1    T2    T3    T4

EBIT* & Net Profit in EURM

EBIT        78,1   100,4   128,9
Net profit  59,2    57,3    74,6
            2011    2012    2013

* After participation and profit-sharing expenses

The aerospace market

At the end of February, worldwide airline traffic was still growing, with an
increase of + 2.9% in comparison with December 2013 (IATA figures), but was
slowing down in comparison with the previous three financial years, which had
posted growth above 5%. Freight and premium travel (business and first class)
also recorded positive results.

Since the start of the year, both orders and deliveries are continuing to boost
the order books of the two major aircraft manufacturers:

               Orders     Deliveries
Boeing          235          161
Airbus          103          141
Total           338          302

It should be noted that the final assembly of the A320Neo began in Toulouse
during this quarter. Concerning the other business segments, and in line with
the previously-announced trends, the helicopter and defense businesses are
slowing down.

The "European Fasteners" division remained at a good level (+ 0.7%); the good
performance of the "Engine and Special Parts" business, particularly at the
Villefranche-de-Rouergue (+ 8%) and Saint-Brieuc (+12.6%) plants, partly offset
the impact of the completion of the installation of the A350 assembly-line.

In the United States, the Torrance unit continued to benefit from demand from
Boeing and reported double-digit growth, whilst the Monadnock plant suffered a
temporary slowdown. At the Dorval (Canada) plant, production ramp-up continued
for special parts for engine applications and critical airframe structure
parts.

The 2.6% increase in the "Structural Components" division was slowed by certain
bottlenecks, following strong growth over the last three consecutive fiscal
years; ; a support plan has been deployed accordingly. The Marmande plant
nevertheless reported a significant increase in its deliveries (+ 6.5%). The
plan for the development of new products, in which the division is fully
engaged, is in an acceleration phase, particularly on the A350 and LEAP
programs.

AEROSPACE AUTOMOTIVE MEDICAL

LISI AUTOMOTIVE (37% of total consolidated revenue)

. All business segments reported solid increases in sales

. The division benefited from the recovery of the automotive market in Europe

In EURM                                               Change
                               2014    2013   2014/2013   2014 / 2013
                                                         on a like for
                                                           like basis

Cumulative, as of March 31    117,8   110,2    + 6,9 %      + 7,4 %

Currency movements have hardly affected this division at all, since most of its
sales are generated in euros.

Sales in million euros
End of March

172,9  175,1   110,2  117,8    16,0   18,6
2013   2014    2013   2014    2013   2014
  AEROSPACE     AUTOMOTIVE       MEDICAL

Although the market clearly recovered over the period, particularly in Europe
(+ 5.2% in Q1 2014) in a constantly-growing worldwide market (+ 4.7%*), volumes
in Europe were still 20% below their level of 2007. The estimated production of
LISI AUTOMOTIVE's customers in Europe is in line with these trends (+ 5%), with
a significant dynamic at VW as well as at the automotive component manufacturing
customers.

All businesses benefited from these trends, mainly the "Clipped Solutions" and
"Mechanical Safety Components" segments (respectively + 9% and + 12% in local
currency). The largest segment, specializing in threaded fasteners, enjoyed
similar growth rates in Germany as well as in France. The production
reorganization program continues in accordance with the plan and includes:

   > the extension of the plant in Dasle
   > the installation of new equipment
   > the industrial development of the transferred parts
   > the delivery of initial samples with a view to qualification by the
     customers

LEAP ("LISI Excellence Achievement Program") has now been deployed across all
plants and is already delivering significant progress in terms of productivity,
quality and safety. entire division it is performing much better, and this
despite the disruption caused by the closure and gradual transfer of production
from the Thiant plant (tooling, equipment, production costs), which should be
completed during the third quarter of 2014.

The booking of orders for new products is at a good level, namely with the
automotive equipment manufacturers such as TRW and Faurecia.

LISI MEDICAL (6% of total consolidated revenue)

. The two "Fasteners" plants are benefiting from fuller order books

. Numerous developments and projects in progress

In EURM                                               Change
                               2014    2013   2014/2013   2014 / 2013
                                                         on a like for
                                                           like basis
Cumulative, as of March 31     18,6    16,0   + 16,6 %      + 17,1 %

The first quarter confirmed the sharp recovery in the division's business, in
comparison with Q4 2013:

. "Reconstruction" segment: good activity levels with the main customer,
   Stryker. The LISI MEDICAL Orthopedics plant is gradually rebuilding its
   stocks of high-volume products. The development of generic products is
   starting to bear fruit, with two new projects in development. Orders for
   ancillary products (files) and plastic inserts are also growing.

. "Fasteners" segment: thanks to the improvement and consolidation of all the
   operating criteria in 2013, strategic positions were won on the spinal
   column, trauma treatment and extremity markets.

In the United States, the gap is closing, thus enabling high volumes to be
consolidated in the strategic segments mentioned above.

PROSPECTS AND COMMENTS ON THE FINANCIAL IMPACT OF THE BUSINESS

The solidity of its financial structure enables the LISI Group to consider
external growth operations whilst continuing an ambitious policy of capital
expenditure. In this context, the Group announced, on April 2, 2014, that it had
begun exclusive negotiations with the 100%-shareholder of the Manoir Aerospace
group. With EUR163 million of sales in 2013 and 1,100 employees, the Manoir
Aerospace group is a major player in forged parts for engine applications,
airframe structures and helicopters. This acquisition would significantly
reinforce the "Structural Components" division of LISI AEROSPACE. This
transaction, which is currently in the process of consultation with the employee
representative bodies of the companies concerned and with the competition
authority in France, could be completed during the second half of the year.

The business prospects for the LISI Group in the coming months should be in line
with the trends observed until now. In the aerospace sector, the slowdown in
Europe is being confirmed for the "Fasteners" business, whilst the US market is
having a positive impact on the business, despite the fall in the US dollar. The
"Structural Components" division must continue its efforts to meet the strong
demand and to improve its performance over time.
In the automotive sector, the prospects are fairly solid in Europe which,
combined with new projects for the "Safety Components" business, should produce
a slightly improved performance in the second half of the year.
The medical division is consolidating its order book further activity levels are
therefore expected to remain unchanged from Q1 2014.

As a consequence, the increased business levels in all the divisions should
provide for better coverage of the fixed costs. In absolute terms, key
performance indicators are continuing to improve. This validates the Group's
objective of maintaining profitability at the same level as last year, as
announced in February.

CONTACTS

Gilles KOHLER
Chairman and CEO
Mail : gilles.kohler@lisi-group.com

Emmanuel VIELLARD
Deputy CEO
Mail : emmanuel.viellard@lisi-group.com

Tel. : +33 3 84 57 00 77 - Fax : +33 3 84 57 02 00
Website: www.lisi-group.com

  The next announcements will appear after close of trading on Paris Euronext

- H1/2014 : 24 July, 2014
- Q3/2014 : 23 October, 2014

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

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LISI (EPA:FII) - Q1 2014: Financial information

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