LISI GROUP - Integrated report 2020
Renewal of contracts and market share gains LISI AEROSPACE secures several key contracts in 2020. First with Airbus Helicopters, which renews the agreement on fasteners with market share gains. In June, with Safran Aero Boosters, which extended the existing contract to compressor blades, a major event for the division. Then with General Electric, for the manufacture of compressor blades intended for replacement (Maintenance, Repair and Overhaul). Then in October with Airbus, with the renewal of the safety latches and security locks, then, in December, with Boeing, for the execution of the fasteners contract: the division will provide nearly 6,000 references for all of the aircraft manufacturer’s commercial programs (737, 747, 767, 777 and 787). This year, the division also took positions in structural components in the defense sector. On the other hand, the supply chain for the fasteners business is much longer. It works in spurts, with an adaptation cycle that can extend over several months. The reduction in activity was therefore more gradual: the decline started at -25% in Q2 to reach -40% at the end of the year. We should feel the full effect of the crisis sometime in 2021, and given the profile of the supply chain, the resynchronization with our customers’ paces will also be very gradual. Throughout the division’s activity, production rates have now stabilized at a production level of between 50% and 60% of pre-crisis volumes. The first two or three months of 2020, supported by the ramp- up of the A320 and the renewal of our fasteners contract with Boeing, made it possible to limit the decline in sales to -31% in 2020. What are the prospects for 2021? From the onset of the crisis, we focused on coordination with our customers and suppliers to discuss the best strategy to adopt to slow down or reorient production under the best conditions. This work of adjusting the upstream and downstream supply chain very quickly became a central point of our action, in order to preserve our cash while ensuring the continuity of deliveries. It will be continued in 2021. We remain confident, with some nuances however depending on the major markets in which the division operates. For single-aisle vehicles, such as the A320neo, whose delivery rate remains sustained, the resynchronization of rates could occur as early as the end of 2021. Airbus trusts there will be a recovery by then. Boeing, for its part, has decided to restart production of the 737 Max in order to retain its skills, but at low rates, mixing the manufacture and delivery of aircraft already manufactured. We therefore believe that a relatively rapid rebound scenario remains possible. On double aisles, such as the Boeing 787 or the A350, where the stock effect is very important, the recovery will be slower. It will rather occur in 2022, and we believe it will take three to four years to return to pre-crisis levels. All players are now faced with the same constraints, LISIAEROSPACE 5 _ PERFORMANCE RESULTS
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