Toulouse, 13 May 2019 – Latecoere publishes its 2018 annual report.
The document reviews the aerospace group’s 2018 activity and embodies its strategic vision and strong ambitions for the future.
See the group’s annual report here.
Since taking over as CEO of Latecoere in 2016, Yannick Assouad has driven a profound and meticulous transformation of the company. Changes are still underway, but the Group is already unrecognisable – as are the attitudes of its teams. A look back at the year’s key events and prospects for growth.
It was a year of transition characterised by major investments, particularly in our industrial facilities, to make them more productive and innovative. We now have very efficient production sites, particularly in countries where costs are competitive, but also in France with our new Toulouse 4.0 plant. We are implementing digitalisation at the very core of our industrial facilities. While it is not easy, it is a very constructive step for the future. We have also taken the opportunity to introduce stricter requirements regarding staff safety – constant vigilance is key.
Our Transformation 2020 Plan is progressing as planned, as are reductions to our cost base. For certain products we have a competitive advantage, such as Boeing 787 doors, for which the margins that were initially rather negative are now improving gradually. From an operational point of view, our Aerostructures Division had to deal with the defection of a major supplier, but 2018 was nonetheless the starting point of a commercial revival for both of our divisions.
After the trials of recent years, Latecoere is now geared up and ready to draw on its recovered force. I aim to strengthen the Group’s position in its key markets. When it comes to Interconnection Systems, the Group is already the market leader for avionics racks and in second position for onboard wiring. In the Aerostructures Division, this revival is not as stark in the absence – for the time being – of new major programs, but a number of notable successes were achieved in 2018. A feeling of renewed pride can be felt among employees.
To ensure that aircraft manufacturers and their partners continue to turn to Latecoere, we must pursue investment in our own products and strengthen our capacity for innovation. This is particularly true for the Interconnection Systems branch, which is currently experiencing technological revolutions, such as the transition from copper cabling to fibre optics for data. Our main asset, shared by both divisions, is the expertise of our design offices. Highly skilled in their respective fields, our teams are involved in everything from design to testing and certification, which is rare. It is more complex, however, on the Aerostructures side, mainly due to the large number of competitors. While the Group is the world’s leading independent door manufacturer, this is not the case for fuselage sections. This is why we are investing in new materials, particularly composite materials, in order to be at the forefront of innovation.
In the Interconnection Systems market, there are many attractive related fields, such as power supply, lighting and optics. These are technological niches, where Latecoere could grow through acquisitions.
In the Aerostructures market, competition is fiercer, with significant investments in design and tooling.
Looking to the future of aviation, Latecoere will have to participate in consolidating the sector. This is because the aeronautics industry is consolidated horizontally rather than vertically, just like Esterline was bought out by TransDigm and Zodiac Aerospace by Safran. Few synergies are produced, the objective for the buyer being to add new productions to their portfolio. This is precisely what gives them bargaining power and, above all, resistance to pressure on prices.
Current societal trends point to new generations of aircraft. It remains to be seen when they will arrive: in 2020, 2021 or 2025? Aircraft manufacturers are waiting for this opportune moment when enough progress will have been made in technology to design a new aircraft that breaks with previous models. Latecoere is hoping to generate growth from these future platforms; aeronautics is growing twice as fast as global GDP. These new programs are therefore vital in ensuring the expansion of air traffic.
Environmental protection is one of our major concerns. By the end of 2019, Latecoere should be one of the first intermediate-sized enterprises to measure its global carbon footprint and then take corrective action to reduce it. More broadly, in 2018, the Group initiated in-depth work to build a solid and coherent CSR strategy, offering a 360° view of the risks and challenges of sustainable development. Target action plans will be associated with it and undertaken from 2019. Such an approach is essential for a forward-looking Group that intends to support the major changes in the aeronautics sector.
Read more in 2018 annual report here.
