zodiac aerospace fy 2013/2014 results presentation · • scope : triagnosys and zodiac aeroduct...

Zodiac AerospaceFY 2013/2014 Results presentationZodiac AerospaceFY 2013/2014 Results presentation

November 25, 2014November 25, 2014

�Organic growth for sales and current operating inco me in 2013/2014� Revenue up +7.3% to €4,174.5m; up +7.7% in organic term� Current operating income up +2.1% in organic terms despite operational

difficulties affecting Aircraft Interiors activities

�A sound financial structure � Three acquisitions in 2013/2014: TriaGnoSys, PPP and GreenPoint Technologies� Debt under control: net debt to equity came to 0.43

� 2014/2015 Outlook� A market that benefits from growth in air traffic and the ramp up of civil aviation

programs� Thanks to recovery plans put in place in its Seats segment, Zodiac Aerospace

expects a steady return to a profitability level in keeping with Group standards for the full year

Summary Summary

Zodiac Aerospace - FY 2013/2014 results - November, 25th 2014

370.9 354.4

200,0

250,0

300,0

350,0

400,0

2012/2013 2013/2014

A mixed year in 2013/2014A mixed year in 2013/2014


* Excluding Greenpoint acquisition debt

Aerosafety14%

Aircraft Systems

31%

Seats 26%

Cabin & Structures

17%

Galleys & Equipment

12%

Sales breakdown

Aircraft Interiors

55%* Based on trade WCR

3,892

4,175

3700

3800

3900

4000

4100

4200

2012/2013 2013/2014

(In € million)Sales

+ 7.3%

(In € million)

- 4.4%

Net Earnings

564.9 549.9

450,0

470,0

490,0

510,0

530,0

550,0

570,0

590,0

2012/2013 2013/2014

* Excluding IFRS3 impact

Current Operating Income*(In € million)

€/$ (transaction) 1.28 1.36

14.5% 13.2%

-2.7 %

+2.0 % org

-20,0%

-10,0%

+0,0%

+10,0%

+20,0%

+30,0%

+40,0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Reported Organic

2010/2011 2011/2012 2012/2013 2013/20142009/2010

2013/2014+7.3% +7.7% organic

18 consecutive quarters of growth18 consecutive quarters of growth


2012/2013+13.1% +7.3% organic

2009/2010-2.5% -1.0% organic

2010/2011+27.9% +17.3% organic

2011/2012+25.8% +14.4% organic

€/$ transaction 1.37 1.35 1.32 1.28 1.36

Current Operating Income impacted by G&E, Seats and dollarCurrent Operating Income impacted by G&E, Seats and dollar


In € million


Current Operating Income*

240.0

389.0

487.6564.9 549.9

11.2%

14.0% 14.2% 14.5%13.2%

10%

11%

12%

13%

14%

15%

16%

17%

18%

0

100

200

300

400

500

600

09/10 10/11 11/12 12/13 13/14

� Current Operating income� +2.0% organic� Reported 549.9 M€ -2.7%

� Impacted by dollar� €41.1m impact

� And Aircraft Interiors� Difficulties in G&E in H1 and

seats in H2� Around 1 percentage point

impact on margin

Treatment of Research Tax Credit in France in future re porting. • Reported Current Operating Income will integrate the Research tax Credit which was

previously recorded in tax. • On this basis 2013/14 published COI* is €567.3m vs. €584.9m in 2012/13 (-3.1%)

Greenpoint Technologies

Pacific Precision Product (PPP)

3 acquisitions during 2013/2014 FY3 acquisitions during 2013/2014 FY�September, 2013TriaGnoSys is a German based company specialized in inflight connectivity and wireless entertainment and cabin systems

TriaGnoSys

� February, 2014PPP develops and manufactures equipment for Oxygen systems for business Jet aviation and other specialized companies such as cabin completion centers.

� June, 2014Greenpoint is a world leader in VIP Cabin Interiors for widebody aircraft and a BBJ completion center.


Traffic is still increasingTraffic is still increasing


0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

Jan Feb Mar Apr May Jun2013

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun2014

Jul Aug Sep Oct Nov Dec

Change in date ofChinese New Year

OctoberOctoberOctoberOctoberpreliminarypreliminarypreliminarypreliminary

Easter celebrations

HistoricHistoricHistoricHistoric trendtrendtrendtrendX February 2013 to February 2012 (same number of days)

Revenue Passenger Km – Raw DataPercentage change compared to same period in previous year

� Traffic is experiencing a sustained growth

�Civilian aircraft deliveries are increasing� Current programs sustain a high production rate� New program developping

� Boeing 787-8 and -9 are still ramping up� Airbus A350XWB was certified and is starting ramp up� Bombardier Cseries CS100 & CS300 pursuing their flight tests� Followed by further development of MRJ, C919, MC21

� Launch of new programs� Zodiac Aerospace selected aboard AVIC’s MA700 new

turboprop at Zuhai Airshow� Oxygen, WWS, De-icing and wipers

�Good level of aftermarket

Still a buoyant environmentStill a buoyant environment


A350XWB

CS100

B787-9

MA700

� The supervisory board will propose the distribution of a €0.32 dividend per share at the General Shareholders’ meeting on January 15, 2015

Dividend proposed at €0.32Dividend proposed at €0.32


In € per share

0.2 0.2

0.24

0.28

0.32 0.32

2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014

2008/09 to 2012/2013 figures are adjusted dividend by the split by five of the par value of Zodiac Aerospace share

• Scope : TriaGnoSys and Zodiac AeroDuct Systems (ex AC C-La Jonchère): 12 month ; NAT, IPS and PPP: 6 month ; Zodiac Inflight Innovation (ex IMS ): 4 month

• IFRS3 in COI : €-0.9m in 2013/2014 vs. €-0.6m in 20 12/13

Financial highlightsFinancial highlights


(€ million) 2013/2014 2012/2013 % change

Revenue 4,174.5 3,891.6 +7.3%

COI before IFRS3 549.9 564.9 −2.7%

COI before IFRS3 / Revenue 13.2% 14.5%

Current Operating Income 549.0 564.3 −2.7%

COI /Revenue 13.2% 14.5%

Net income attributable to equity holders of the parent 354.4 370.9 −4.4%

Net income before IFRS3 369.1 388.5 −5.0%

EPS attributable to equity holders of the parent 1.29 1.36 −5.2%

EPS before IFRS3 1.35 1.43 −5.7%

Net debt/ Equity ratio 0.43 0.39

Net debt / EBITDA 1.42* 1.26

€/$ (Transaction) 1.36 1.28

€/$ (Conversion) 1.36 1.31

*Excluding Greenpoint acquisition debt

� of sales� +7.3% to €4,174.5m� +7.7% organic growth� +2.7% from acquisitions� -3.1% from exchange rates

� COI*� +2.0% organic� -2.7% reported to €549.9m� 13.2% COI* margin� 13.6% COI* margin with integration

of the Research tax Credit

Another year of growthAnother year of growth


In € millionRevenues

*Excluding IFRS3 impact

€/$ (conversion) 1.37 1.39 1.31 1.31 1.36

€/$ (transaction) 1.37 1.35 1.32 1.28 1.36

Current Operating Income*In € million

240.0

389.0

487.6564.9 549.9

11.2%

14.0% 14.2% 14.5%

13.2%

10%

11%

12%

13%

14%

15%

16%

17%

18%

0

100

200

300

400

500

600

09/10 10/11 11/12 12/13 13/14

2,1502,735

3,4413,892 4,175

0

500

1000

1500

2000

2500

3000

3500

4000

4500

09/10 10/11 11/12 12/13 13/14

564.9 +12.6 +18.3

-43.7 -2.2

549.9

200,0

250,0

300,0

350,0

400,0

450,0

500,0

550,0

600,0

650,0

COI2012/2013

Aerosafety Aircraft AircraftInteriors

Holding COI2013/2014

� +2.0% organic growth� -2.7% reported, to 549.9 M €� 13.2% margin vs. 14.5% in 12/13

� A mixed year� Good for AeroSafety and Aircraft

Systems� A negative Dollar impact� Headwinds for Aircraft Interiors

� Galleys & Equipment in H1 � Seats in H2

Some Headwinds in 2013/2014Some Headwinds in 2013/2014


In € million

€/$(conversion): 1.36

€/$(transaction): 1.36

€/$(conversion): 1.31

€/$(transaction): 1.28


In € million

564.9

-12.2 -28.914.7 11.3 549.9

-50

50

150

250

350

450

550

650

COI2012/2013

Conversion Transaction Change inscope

OrganicGrowth

COI2013/2014

0

200

400

600

800

1 000

1 200

1 400

2012/2013 2013/2014

Data Systems

Water & WasteSystems

Entertainment &Seat Technologies

Controls

Fluid Management

Zodiac Aircraft SystemsKey Events 2013/2014Zodiac Aircraft SystemsKey Events 2013/2014


In € million

Revenues


In € million

Organic growth: +14.3%

+ 17.7%

1,297.4

1,101.9

COI / REV : 14.1%

COI / REV : 13.4%


155.1

-2.3-23.6

+9.4+34.9 173.5

0,0

50,0

100,0

150,0

200,0

COI2012/2013


OrganicGrowth

COI2013/2014

� +17.7% increase in sales� External growth +6.5pts� Forex -3.1pts� Organic growth +14.3pts

� +11.8% increase in COI*� +22.9% organic� Positive impact from acquisitions

(+€9.4m)� Offset by negative dollar impact

(€-25.9m ; -17.2pts)� COI margin 13.4% reported ; 14.6%

organic

� The segment still benefit from increases in production rates and programs ramp up

0

100

200

300

400

500

600

700

2012/2013 2013/2014

Arresting Systems

Interconnect

Elastomer

Parachute &Protection

Evacuation Systems

Zodiac AeroSafetyKey Events 2013/2014Zodiac AeroSafetyKey Events 2013/2014


� +5.2% organic growth in sales� +1.9% reported, to €574.8m� Strong negative dollar impact (-3.3pts)

�Another increase in Currentoperating income*� +12.8% to €111m� +19.9% increase organic� Negative dollar impact (€-7.0m)

�Another improvement in COI margin, to 19.3%� A good year for Emergency

Evacuation, Interconnect Systems and Arresting Systems

� Further improvement in Elastomersand Parachute & Protection

In € million

Revenues



In € million

COI / REV : 17.4%

COI / REV : 19.3%


564.0 574.8

+ 1.9 %

98.3

-3.2 +0.0

+19.7

-3.8

111.0

0,0

20,0

40,0

60,0

80,0

100,0

120,0

COI2012/2013


OrganicGrowth

COI2013/2014

0

500

1000

1500

2000

2500

2012/2013 2013/2014

Galleys & Equipment

Cabin & Structures

Seats

Aircraft Interiors activitiesKey events 2013/2014Aircraft Interiors activitiesKey events 2013/2014


�Sales up +3.4% to €2,302.3m� +5.1% before dollar (-3.0 percentage

points) and consolidation scope (up 1.3 percentage points)

� Seats: +4.6% reported and +6.8% organic� Cabin & Structures :+2.2% reported ;

+1.9% organic. Ramp up of JV with Embraer

� Galleys & Equipment: +2.6% reported and +5.7% organic. Deliveries back on track

� +COI* impacted by Seats, dollar and Galleys� -13.4% reported and -12.6% organic

� G&E difficulties in H1� Seats growth difficulties in H2

� Consolidation effect wiped out by negative dollar impact

In € million

COI / REV: 12.3%

COI / REV: 14.7%

Revenues




In € million

2,225.7 2,302.3

+ 3.4%

327.4

-6.7 -1.1

+5.3

-41.2

283.5

100,0

150,0

200,0

250,0

300,0

350,0

400,0

COI2012/2013


OrganicGrowth

COI2013/2014

Increase in financial expenses… Increase in financial expenses…


� Increase in Financial expenses � Amortization of the previous “Club Deal”

cost for € -1.1M� Increase of the average cost of the debt

to 2.71% vs. 2.33%

�Other P&L items� Income tax

� From €141.6m in 12/13 to €136.0m in 13/14� 27.7% vs 27.6% implicit rate� With restatement of research tax credit, tax is

€-153.4 vs. €-161.6m

� Non-current operating items� €-24.6m vs €-23.2m� Mainly related to IFRS 3

In € million

34.3

25.9

34.533.2

28.1

33.8

0

5

10

15

20

25

30

35

40

08/09 09/10 10/11 11/12 12/13 13/14

844

354

155

-277-82

-113

-163-80 -13 1,067

60

260

460

660

860

1 060

1 260

Net debtAug. 2013

Net Income Amortization& Provision

Change inWCR

IntangibleAssets

TangibleAssets

Acquisitions OtherFinancial (1)

Others (2) Net debtAug. 2014

Acquisitions and WCR increase result in increase in net debt compared to end 2012/2013Acquisitions and WCR increase result in increase in net debt compared to end 2012/2013


In € million

Acquisitions: TriaGnoSys (september 2013), PPP (february 2014), GreenPoint (June 2014, consolidated from 31/8/2014)

(1) Including dividends(2) Currency translation adjustments and Net Income from Equity Method

625

807

920

1,162

0

200

400

600

800

1000

1200

1400

Aug 10/11 Aug 11/12 Aug 12/13 Aug 13/14

Cash Flow is stable while working cap increases , reflecting Cabin issuesCash Flow is stable while working cap increases , reflecting Cabin issues


In € millionIn € million

Cash Flow Working capital 1

30.3%of sales2

34.3%of sales2

(1) Based on trade WCR(2) Excluding acquisitions

347

428

510 509

0

100

200

300

400

500

600

Août 10/11 Août 11/12 Août 12/13 Août 13/14

� Intangible capital expenditures� €71.4m of gross capitalized

development costs in FY 2013/2014 vs. €62,8 m in FY 2012/2013

� Amortization €-21,3 M in 2013/14 vs €-16M in 2012/13

� Mainly related to the development of the A350XWB

Capex increase linked to investment in new programs and increase in production capacities

Capex increase linked to investment in new programs and increase in production capacities


In € million

5071.6 73.9 82

62

82.695.2

113.2112.0

154.2

169.1

195.2

0

50

100

150

200

250

2010/2011 2011/2012 2012/2013 2013/2014

Intangible assets Property, Plant & Equipment, financial

� Gearing is increasing to 0.43, reflecting the acquisitions of the year

� Zodiac Aerospace has the capacity to pursue its external growth strategy

Still a significant external growth potentialStill a significant external growth potential


Gearing (1) 0.52 0.34 0.38 0.42 0.39 0.43

In € million

(1) Net financial debt / equity after dividend

Net debt

654

514

586

832 844

1067

0

200

400

600

800

1000

1200

Aug 08/09 Aug 09/10 Aug 10/11 Aug 11/12 Aug 12/13 Aug 13/14

�A strong commercial success� High book to bill ratio and strong order book � 40% global market share for linefit in the last 4 years

�Owing to a full renewal of the seat range

A strong commercial successA strong commercial success


�Many Head of Version to develop� Especially on new aircraft B787)

�Adapting rapidly our production system� A strong increase in headcount

� + 58% in Gainesville, TX� +23% in Santa Maria, CA� +97% in Chihuahua, Mexico� + 21% in Soliman, Tunisia� +18% in Issoudun, France� +12% in Cwnbran, UK

�Coping with higher barrier to entry� High level of customization� New rules for certification

� Head twist measures for new generation of seats demanded by FAA

A busy activity in development and productionA busy activity in development and production


� The FAA Requirement aims at reducing injury on passenge rsof oblique seats� Each occupant of a seat positioned at more than 18° angle (to the vertical plane

containing the airplane centerline) must be protected from head injury.� FAA invited comments from a working group (seat suppliers are part of it) in order

to freeze some of the parameters linked to:� Neck injury and Spine & torso injury

� Test Impacts� Change in HIC (head injury criteria) measurement require use of new dummy with

more neck movement possibilities� Before After

� Additional sensors on torso required for additional measurements

New tests for seatsNew tests for seats


�Development delays in H1� Owing to many Head of Version (HoV) to develop resulting in overwhelming the

engineering and design teams� Delays in certification programs

�Difficulties in ramping up production in H2 2013/20 14� Supply chain under pressure� Strong ramp up to cope with � With the priority to deliver our customers

�Resulting in extra costs / production variances� Need to set parallel production lines� Cost of supply / late ordering� Extra labor costs � Air Freight� Customer claims for penalties

�H2 13/14 and H1 14/15 under pressure� Strike at Zodiac Seats US in October

What we encounteredWhat we encountered


�Customer First� Quickly return to normal On Time Delivery

performance� Temporary extra costs for production

� Labor, shipping…

� Burn down delays

�Adapt organization� More centralization at segment level� Enhance the robustness of processes� Improve supply chain control and tackle

shortages

� Increase capacity� Additional production capacity � Extra staffing for operations� Tackle supply chain shortages

The recovery planThe recovery plan


�Good prospect growth for sales� Organic growth will continue, fuelled by traffic growth� Capability to follow external growth opportunities

�A better currency environment� 73% of net budgeted $ transaction exposure for 2014/15 is hedged at 1.28� Sensitivity to dollar (all cross) is 115 bp for 10 cents change

�COI margin to improve� Recovery plan in Seats will allow to progessively restore margin to Group

standard levels

OutlookOutlook


P&LCash Flow StatementBalance Sheet


Appendices: Income statementAppendices: Income statement


Income statement 2013/2014 2012/2013 Change %

Revenue 4,174.5 3 891.6 +7.3%

Depreciation charge 93.9 81.9

Charges to provisions 33.7 24.6

Current operating income 549.0 564.3 -2.7%

Non-current operating income −24.6 −23.2

Operating income 524.4 541.1 -3.1%

Cost of net debt −31.3 −25.7 +21.7%

Other financial income and expenses −2.5 −2.4

Tax expense −136.0 −141.6 -4.0%

Results of companies accounted for by the equity method −1.1 −0.7

Net income from continuing operations 353.6 370.7 −4.6%

Net income from discontinued operations – –

Net income 353.6 370.7 −4.6%

Net income excluding equity holders of the parent −0.8 −0.2

Net income attributable to equity holders of the parent 354.4 370.9 −4.4%

Appendices : Cash flow statementAppendices : Cash flow statement


Simplified cash flow statement

(€ million) 2013/2014 2012/2013

OPERATING ACTIVITIES

Cash flow from operations 509.2 509.5

Change in WCR −277.4 −117.9

Cash flow from continuing operations 231.8 391.6

Cash flow from operations of businesses being sold – –

INVESTMENT OPERATIONS

Acquisition of intangible fixed assets −82.0 −73.9

Acquisition of tangible and other fixed assets −121.7 −95.8

Changes to the scope of consolidation −162.7 −159.6

Cash flow from investments in continuing operations −366.5 −329.3

Cash flow from investments of operations being discontinued and

assets held for sale – –

FINANCING OPERATIONS

Change in debt 236.1 1.1

Treasury stock −0.1 −0.6

Increase in equity 8.0 11.3

Dividends −87.8 −76.1

Cash flow from the financing of continuing operations 156.2 −64.3

Currency translation adjustments, beginning of period −4.6 −8.2

Change in cash position 16.9 −10.2

Appendices: Balance sheetAppendices: Balance sheet


Simplified balance sheet (€ million) 08/31/2014 08/31/2013 08/31/2014 08/31/2013

Non-current assets 2,821.4 2,488.0 Net equity 2,561.5 2,285.5

Current assets 2,026.7 1,684.1

Provisions and

deferred taxes 362.5 293.2

Cash and equivalents 166.7 156.8 Financial liabilities 1,234.0 1,000.6

Other current liabilities 866.6 751.0

Assets held for sale 9.8 1.4 Liabilities held for sale – –

5,024.6 4,330.3 5,024.6 4,330.3

The audit of the consolidated financial statements is currently being finalized. The audit report will be issued following completio n of the review of the notes to the consolidated financial statements.

ZODIAC AEROSPACE CONTACTS

Pierre-Antony VASTRATel: +33 (0)1 61 34 25 [email protected]

Valérie AUGERTel: +33 (0)1 61 34 22 [email protected]

61 rue Pierre CurieCS2000178373 PLAISIR CEDEX

MEDIA CONTACTS – IMAGE 7

Priscille RENEAUMETel: +33 (0)1 53 70 74 [email protected]

Grégoire LUCASTel: +33 (0)1 53 70 74 61 [email protected]

Next meetings: 2014/15 Q1 sales revenue December 11, 2014 (after closing)2014/15 Q2 sales revenue March 19, 2015 (after closing)Financial results for the first half of 2014/2015 Ap ril 22, 2015 (before opening)

Access to the complete financial calendar on our website: http://www.zodiacaerospace.com/en/evenements


zodiac aerospace fy 2013/2014 results presentation · • scope : triagnosys and zodiac aeroduct...

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