Zodiac Aerospace earnings rise by 33.3%
The Zodiac Aerospace Supervisory Board has approved its group financial statements for the first half of 2011/2012 (September 1 to February 29), revealing healthy operations.
During the first half of 2011/2012, Zodiac Aerospace continued to benefit from a buoyant business environment, in which one of the major trends was growth in air traffic. Group sales revenue grew by 19.7% to €1,567.3 million. At like-for-like consolidation scope and exchange rate, overall revenue grew by 15.9%, with the group‟s aerospace businesses delivering growth of 19.2% (excluding rail and airbags).
Current Operating Income (COI) before IFRS 31 rose by 20.3% in the first half of 2011/2012, compared with the same period of the previous fiscal year. Currency exchange rate changes imposed a negative overall impact of €7.4 million on COI growth, whilst consolidation scope effects contributed €3.1 million to COI. At like-for-like consolidation scope and exchange rate, and excluding the impact of IFRS 3 compliance, COI rose by 22.6% during the first half of 2011/2012.
Growth in cabin interiors
Notable among the group's activities was the Cabin Interiors segment, which continues to deliver sustained growth. Sales revenue from this segment grew by 22.6% during the first half of the fiscal year. At like-for-like consolidation scope and exchange rate, this segment reported growth of 15.8%. Excluding rail, which continues to lose ground significantly, organic growth for the half-year was 21.2%, driven largely by sustained business volumes in the Seats division. External growth contributed 6.6 points of segment revenue growth.
In the second half of the year, this segment will benefit from the consolidation of Contour Aerospace. Acquisition of this company was finalized during Quarter 2, and Contour Aerospace has been consolidated in the financial statements as of February 29, 2012.
Current Operating Income for the Cabin Interiors segment (before IFRS 3) rose by 20.7% to €158.6 million (17.7% at like-for-like consolidation scope and exchange rate). Its current operating margin rate was 16.7%, compared with 16.9% in the first half of 2010/2011.
Total non-current operating items represented a loss of -€0.7 million, compared with -€6.6 million for the first half of 2010/2011. Operating Income was up by 25.6% to €223 million. Income from assets previously held for sale (the Issy Les Moulineaux building and Driessen Services) was €11 million, net of related taxes.
Financial expenses remained stable at €14.6 million, compared with €14.2 million in the previous fiscal year, despite higher levels of borrowing following the Heath Tecna and Contour acquisitions. All in all, net earnings rose by 33.3% to €152.4 million, compared with €114.3 million.
In 2011/2012, the group states that its financial results are likely to benefit from a currency exchange effect more favourable than that seen in 2010/2011. The Group has hedged 90% of its forecast net exposure to transaction currency rates during the 2011/12 fiscal year at a €/$ rate of 1.33. For the 2012/2013 fiscal year the Group has hedged 25% of its forecast net exposure to transaction at a €/$ rate of 1.274.
On the basis of the good results reported for the first half, the Group expects revenue growth to continue in the second half of the year although the comparison basis shall be more demanding with a H2 2010/2011, which grew significantly. Zodiac Aerospace will also benefit from the consolidation of Contour Aerospace.
All in all, for the full year 2011/2012, Zodiac Aerospace forecasts double-figure organic revenue growth and a current operating margin of at least 14%, despite a negative impact from the non aerospace businesses.