Interview: Aeroplane parts maker FACC scouts for takeovers and ramps up Brexit production
01/02/2019 09:00
* Significantly increases delivery of parts to Britain
* 2020/21 EBIT margin target of 8-10 pct
* 2018/19 dividend higher than previous year
* Aims for 2 bln eur revenue by 2030
By Kirsti Knolle and Alexandra Schwarz-Goerlich
VIENNA, Feb 1 (Reuters) - Austrian aeroplane parts maker
FACC FACC.VI is ready to spend 500 million euros ($572
million) on acquisitions to make it less dependent on suppliers,
add new technologies and strengthen its core business, its chief
executive said.
The Chinese-owned group makes components for wings, tail
assemblies and fuselages as well as engines and cabin interiors
for planemakers including Airbus AIR.PA , Boeing BA.N and
Bombardier BBDb.TO . It expects revenue of 760-770 million
euros ($881 million) for its 2018/19 business year that ends in
February.
"Half a billion (euros), that is the amount of money we
could use to make acquisitions in the next five years," Robert
Machtlinger told Reuters in an interview.
FACC, which belongs to China's state-owned Aviation Industry
Corporation 000768.SZ , is screening the market for suitable
takeover targets but there are no negotiations yet, he said.
In recent months, the firm has been increasing production of
parts it makes for Airbus and Rolls Royce RR.L that are needed
for assembly in Great Britain, the CEO said, as it prepares for
Britain's exit from the EU.
A Brexit agreement that would secure tariff-free trade and
safeguard just-in-time cross-border supply chains still looks
elusive just two months before the divorce.
Components for about four weeks of production are being sent
to Britain, Machtlinger said. Quite a stretch for the company as
normally the buffer would be two to four days.
"The majority of the (extra) costs are borne by the
customer," the engineer said.
Airbus, which accounts for half of FACC's revenue, has
threatened to shift future wing-building out of Britain.
urn:newsml:reuters.com:*:nL8N1ZO0PA
That would not be a problem for FACC, Machtlinger said, as
the company could easily adapt delivery routes.
Machtlinger, whose company generates half its revenue from
European planemaker Airbus, a quarter from Boeing and also
equips China's planemaker Commercial Aircraft Corp of China
(COMAC), does not expect the industry to be hampered by current
U.S.-Chinese trade friction.
"Aviation is an export business for the U.S.," Machtlinger
said, adding that he did not think anybody wanted to change
that.
He noted there was no such thing as a purely American plane:
"This is a completely intertwined industry."
The manager, who has been with the company for more than 30
years, expects revenue to pick up significantly in the second
half of the 2019/20 business year with a 750 million euros order
for the new Airbus 320.
His goal for 2020/21 is to increase the margin on earnings
before interest and tax (EBIT) to 8-10 percent from 6.5 percent
last year and revenue to 1 billion euros, he said.
By 2030, he wants to make that 2 billion euros, betting that
COMAC becomes a major customer.
Asked whether shareholders can hope for a higher payout for
the current business year than the previous year's 1.11 euros
per share, Machtlinger nodded but did not elaborate.
($1 = 0.8736 euros)
(Reporting by Kirsti Knolle; Editing by Elaine Hardcastle)
((kirsti.knolle@thomsonreuters.com; +43 1 53112 255; Reuters
Messaging: kirsti.knolle.thomsonreuters.com@reuters.net
www.reuters.com))