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Research Tree provides access to ongoing research coverage, media content and regulatory news on ZODIAC AEROSPACE. We currently have 10 research reports from 1 professional analysts.
|14Mar17 16:47||GNW||Zodiac Aerospace: Q2 2016/2017 sales revenues|
|19Jan17 06:21||GNW||Zodiac Aerospace : Safran and Zodiac Aerospace, a new global leader in aerospace|
|15Dec16 16:43||GNW||Zodiac Aerospace : Q1 2016/2017 sales revenues|
|22Nov16 06:00||GNW||Zodiac Aerospace: Recovery and transformation under way|
|14Jun16 16:55||GNW||Zodiac Aerospace reports a good organic growth in Q3|
|15Mar16 17:13||GNW||Zodiac Aerospace: slideshow presentation - publication of sales revenue of H1 2015/2016|
|15Mar16 17:05||GNW||Zodiac Aerospace: A year of transformation|
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Manufacturing challenges coming back, price offered still intact?
15 Mar 17
Zodiac Aerospace released yesterday weaker than expected H1 revenues, mostly due to the manufacturing issues faced by the Seats division in the UK, but also by a weaker demand in some segments and by the postponement of some programmes.
Reorganising and waiting for end-market growth
16 Dec 16
Zodiac released rather weak Q1 sales figures because of end-market weaknesses and the consequences of past difficulties on business. The company remains confident of reaching its FY target thanks to an expected better second half year which should be due to stronger demand thanks to increasing oil prices.
Take a seat for the (too) slow recovery
23 Nov 16
Showing a really mixed performance by division, Zodiac has held its Aircraft Interiors Activities’ operating result loss at a reasonable level. Moreover, the strong increase in Aircraft Systems’ operating result slightly compensated for the headwinds encountered by the company. FY revenues came in at €5.21bn, representing a 5.6% increase versus last year, and the recurring operating result decreased by 14.2% to €269.5m, now representing a 5.2% operating margin versus 6.4% last year. Also, the operating result decreased to €193.9m (-33.6% yoy), while the net result decreased by 41.5% to €107.9m. Finally, the group has announced a dividend of €0.32/share and its EPS decreased to €0.38/share.
Q3 progress undeniable
15 Jun 16
Solid +4.4% organic growth in Q3 15/16 resulting in sales for 9M up +5.9% to €3,841.8m, with organic growth of +0.4% and a forex benefit of 5.5%. During the quarter, System activities saw a continuing weakness from its Aerosafety business (-7.7% organic decline in Q3 and -6.5% for 9M 2015/16) as the contract from US airports’ arresting systems came to an end, but a recovery is expected in Q4. On the other hand, the Aircraft systems business benefited from strong traffic growth in commercial aviation but growth was dampened by sales falling in Helicopter-related activities as well as in the Business jet segment. The Aircraft interior business also posted a solid quarter with sales up 6.3% on an organic basis and 5.3% taking into account a negative 1.3% forex impact. The Seats business returned to organic growth over the course of the quarter, +3.2%, as Zodiac was able to obtain certification for business class seats and therefore was able to deliver these (Cathay Pacific business class A350 seats). Similarly, Cabin maintained its solid organic growth profile and improved on its organic growth figures (+9.9% in Q3 vs +4.1% for 9M 2015/16). The improvement in the delivery profile for the A350, as well as the acceleration at Embraer and Bombardier, is leading to a positive volume boost. In addition to a solid growth profile during the quarter, Zodiac announced reassuring commercial contracts across all its business units suggesting that its remains well placed in the market and is not suffering significantly from the issues it encountered over the last two years. The announcements include a retrofit contract with AirFrance for its A330 fleet, as well as a significant win from United Airlines which selected Zodiac’s Polaris business class seats. Reassuringly, Zodiac has confirmed its full-year guidance of a flat current operating income. The banking covenant should be respected. This puts an end to the series of profit warnings.
Zodiac turning the corner in H2?
20 Apr 16
Zodiac announced its H1 results with no surprises on the revenue front given that sales were released a month ago, H1 15/2016 revenues are up +7.1% to €2,489.1m; but down 1.7% on a lfl basis. The key information related to its current operating income over H1 15/16 which came in at €80.4m. Looking at the various segments: Together Aerosafety and Aircraft Systems (now called just Aircraft Systems) generated a current operating income of €153m, up from €142m in the previous year, whilst the Aircraft interior segment posted a negative contribution of some €66.3m, hampered by what the company estimates is €110m in excess costs due to issues in the Seats and Cabin business and the structural lower margin on product ramp-ups, while maturing high margin products are seeing volumes tail off. Importantly, the guidance for FY 15/16 has been maintained with the group expecting an improvement in its financial results in H2 and confirming its target of a current operating income for the 2015/16 fiscal year to be close to 2014/15’s (€314m), suggesting a COI of c.€220m over H2 or a margin of 8.2% based on our estimates for FY revenues. Net debt to shareholders’ equity ratio stood at 0.5x and net debt has increased to €1,621.4m vs. €1,423.3m. The group’s financing was reinforced in H1 and the group does not expect to breach its financial covenants at the year-end even excluding the hybrid equity line that management now says will be used to finance an M&A transaction if necessary and, in this case, avoid breaching the covenants.
A collapsing House of Cards?
16 Mar 16
Top-line evolution: H1 revenues at Zodiac are a mixed bag with ramp-ups of large commercial aircraft still very much the growth driver. On the Regional aircraft front, sales are stable meaning that growth at Zodiac is flat. The Business Jets segment, however, is on a downward trajectory given the softness in the market and especially the delays in entry into service of multiple platforms. The demand from the helicopter market continues to fall with the Oil & Gas segment particularly challenging. Aftermarket sales are proving resilient as air traffic remains robust. Overall, H1 revenues stood at €2,488m growing 7.1% but mainly thanks to a favourable exchange rate impact of 8.7%. On an organic basis, growth stood at a negative 1.8% with Aero-Systems (Aero Safety -6% and Aircraft systems -1.4%) revenues falling by 2.8% and Aircraft interior business (Seats -4.2% and Cabin +1.4%) revenues falling by 1.1%. Management attempted to explain the reasons for last month’s profit warning, suggesting that the first four months of the year were in line with the guidance given in December, however January and onwards saw a fall in performance that meant that guidance had to be scrapped. Zodiac was forced to realise that despite no new issues arising in either the seats or the cabin segments, the corrective measures would take significantly more time than first thought and therefore additional costs would continue for a longer period of time. Issues remain: SEATS: The backlog of seats that have been delayed has remained stable since Q1 c.300PAX. The problematic seat shell production remains an issue and Zodiac is incurring significant extra costs (excess production costs and in service support costs). While production has issues due to bad design and specifications and therefore leading to redesign costs, the supply chain is also not functioning effectively, meaning that spare parts are insufficient. The longer term fixes include adding industrial scale, redefining segment governance and responsibilities, hiring new required competencies, overhauling operations and improving the engineering capability both in design and production. The target is now to return to a normal operational performance in the next 18 months. CABIN: With many programmes ramping up fast, Zodiac was insufficiently prepared to meet the production demands and this means that catching up and delivering on time is significantly impacting the segment’s profitability. The programmes concerned include the A350 lavatories for which the production site in California did not have sufficient capacity, requiring the opening of a second line in Canada, however with some delay. An initial improvement in the production rate as well as the quality was achieved in February (rate 5) with Zodiac targeting rate 8 by August. Zodiac is incurring costs due to the retrofit programme required to fix the already delivered lavatories. On the A320 programme, Zodiac is offering the Spaceflex V2 option which is encountering significant success with airlines and means that Zodiac is looking to add additional capacity in anticipation. Overall, the various costs that are ramping up are: Cost of redesign. Non-quality costs, higher purchasing costs and late delivery penalties. Costs related to the learning curve which is not in line with expectations as a result of required additional training and excess labour. Again, looking at resolving the structural issues, Zodiac is improving the industrial processes and adopting modern enterprise resource planning systems (ERP) which are requiring additional staff training. In addition, production expertise is being transferred from EU sites to the US. Similar to the seats business, the Cabin segment’s management expects a return to a normal operational performance based on quality and on time delivery in the next 18 months. Update on Zodiac’s financial position: Zodiac maintains an overall liquidity position of €2.07bn composed of the following: A club deal from 7 banks of €1.03bn for which Zodiac has extended the maturity by an additional year to 2021. A Euro Private Placement of €230m with a 7 year maturity which will help fund the €133m July 2016 repayment part of the Schuldschein €535m and replace an existing Private Placement maturing in 2018. Zodiac has set up a hybrid financing line of €250m with no fixed maturity which will be recognised in shareholders’ funds. Commercial paper programme of €1bn of which €458m was used at 29/02/2016. The existing banking covenant on the company Club deal remains a net debt/EBITDA ratio of 3x which is tested at the financial year-end. Outlook: Following last month’s profit warning, Zodiac suggests that the 2015/16 operating income should be close to that of 2014/15. More details will be given at the group’s H1 results presentation on 24 April 2016.
N+1 Singer - Morning Song 21-03-2017
21 Mar 17
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N+1 Singer - Augean - Double digit growth in ’16, good start to ‘17
21 Mar 17
Augean reported another year of double digit growth for 2016, with profits in line with our forecasts. Sales grew by 21% excluding landfill tax, while adjusted PBT grew by 18% to £7.1m before amortisation of acquired intangibles. DPS was increased by 54% to 1.0p, 25% ahead of our estimate. The business units made further strategic progress, with revenues from their top 20 customers increasing from 42% to 43% of the total, of which 88% was under contract or a framework agreement, increasing forward visibility. There has been an encouraging start to 2017 and management is confident of delivering another year of profits growth. The shares trade on undemanding single digit multiples, offering good value.