Thursday, January 19, 2017

Saffron-Zodiac : a ticket to habs for a global race – The Echoes

The friendly TAKEOVER of Saffron on Zodiac Aerospace offers a rare opportunity in the industrial landscape French : that to reconcile the two florets of three colours to create a global leader. The future entity born out of this deal at € 10 billion (debt included) is claiming in effect the place of no. 3 in the world in the aviation sector (excluding manufacturers) with a combined turnover of over 21 billion euros to be distributed between the propulsion and aircraft equipment, and no. 2 worldwide in the aviation equipment with a combined sales (1) approximately 10 billion euros.

Portrait of two groups.


Equipementier of first rank in the fields of aeronautics and space (propulsion, equipment), Defence and security, Saffron employs 70,000 people spread over all continents. In 2015, he has made $ 17.4 billion of euros of turnover and, alone or in partnership, has spent more than € 2 billion in R&D.

The group is the world leader in engines for civil aircraft short-and medium-haul partnership with GE. N°1 worldwide in landing gear, wheels and brakes carbon systems and electrical interconnections for the aeronautical. Ditto for the turbines and the flight controls of a helicopter. It is also the european leader for the tactical drones, optronic systems or the systems of inertial navigation (see end of the article the top 100 companies in the sector in 2015 by Flightglobal).

Listed on Euronext Paris , the title Saffron rose 21.6 % year on year. It is part of the CAC 40 and Euro Stoxx 50.

Zodiac Aerospace, with 35.000 employees spread on a hundred sites worldwide and a turnover of € 5.2 billion in 2015/2016 , is a world leader in equipment and aircraft systems installed aboard commercial aircraft, regional and business as well as helicopters. It is also a major player in aviation safety and transmission. Its expertise is structured around two main activities : Aircraft Interiors, which gathers the branches Cabin and Seats, and the Systems activity, which includes the branch Aerosystems.

Its title listed on the Paris Euronext was up 25% over the last twelve months.

Video : Safran acquires Zodiac Aerospace to form a global giant


The coat of arms of Zodiac has been tarnished by two years of industrial crisis. In the oem, the abundant orders secured in recent years, coupled with several renewal models, have ended up causing a huge engorgement internal, which has caused in some cases up to two months of delay for aircraft seats.

These delivery delays have forced Olivier Zarrouati to announce several times warnings on result (“porfit warning”). In fact, its net income declined from 41.5% for fiscal year 2015-2016.

to be Difficult, however, to find weak points in Saffron. The oem aerospace military and disengaged the last year of the security to be strengthen in the field of aerospace. And it is good at what it does. Six years after having been cruelly jilted after a first attempt of taking control, Saffron says it is confident in the “upgrade” of the performance of Zodiac.

Our industry expertise will also accelerate the return of Zodiac Aerospace in its profit levels historical, in the seats and the activities cabin. But above all, the quality of management of Saffron as well as the timeline in which this acquisition would help to ensure the success of the integration of Zodiac Aerospace in our Facilities and our activities of Propulsion remain focused on the LEAP programme. I’m looking forward to driving this strategic movement“, details the director-general of Safran, Philippe Petitcolin, quoted in the press release.

The entry into service of the engine LEAP for single-aisle and who should be the successor to the CFM56 in the framework of a joint venture on a parity with General Electric, remains in effect, the priority of Saffron.

The leaders

Who will head the new habs ? The board of directors of Safran has planned to postpone the age limit of managing director 65 to 68 years at the annual general meeting scheduled for 15 June, which will allow Philippe Petitcolin to remain in office beyond 2017, the year of its 65th anniversary.

After a flawless journey with Valeo, and in the wiring specialist Labinal, this former professor of mathematics, led a good part of the subsidiaries of Safran, acquiring an intimate knowledge of the business. At the head of the group since 2015, he has been involved with the formidable development from the manufacturer, with order books filled well of the giants of the aerospace, Airbus and Boeing.

at his side, Ross McInnes will retain his position of chairman of the board of the new entity, while Olivier Zarrouati, chairman of the management board of Zodiac Aerospace, will become chief executive officer.

Olivier Zarrouati is a graduate of Ecole Polytechnique. After an early career spent at the CNES (Centre National d’etudes Spatiales (cnes), he joined Zodiac Aerospace in 1998, which he will head in 2007. The supervisory board of the group has never taken away his confidence ever since, even after “the crisis of the seats”. He has been reappointed for 4 years in October 2015.


After more than 120 years of existence, the name of Zodiac should therefore be abandoned in favour of that of Saffron. Founded by Maurice Mallet and his associates in 1896, “Mallet, Mélandri and de Pitray”, which produces airships of sport and tourism, became “Zodiac” in 1911. From 1934 onwards, the company developed the first prototypes of inflatable boat, ancestors of the famous “Zodiac” inflatable boat military and civilian. Entered into Award 1983, Zodiac multiplies the acquisitions (Air Cruisers, Metzeler, B. Kern, Europool, Pioneer…) and strengthens its aeronautical activities at the turn of the years 2000, about the creation of the branch Aircraft Systems ( ESCO, ICORE, Avox Systems, C&D Aerospace, Enertec and In-Snec). After the spin-off of its activities Marine in 2007-2008, the group renamed Zodiac Aerospace continues its strategy of acquisitions, both in the field of cabin interiors as well as in syst ems.

In the family tree of Saffron, one finds two branches. On the one hand, the national Society for the study and construction of aviation engines (SNECMA), created in 1945, is dedicated to the manufacture of aircraft engines. Hispano-Suiza joined the group in 1968, Messier and Bugatti in 1977, Turbomeca and Labinal in 2000. Of the other the Company of general applications of electricity and mechanics (Sagem), founded in 1925, with diversified activities (defence, teleprinters, aircraft equipment, inertial modules). In 2004, it has two branches : telecommunications and defense-security.The principle of the merger between Sagem and Snecma announced in October 2004, it will give birth to Safran in 2005.

September 19, 2011, Safran made his entry into the CAC 40. In June 2014, to compete with the american SpaceX in space launch, Safran and Airbus to create Airbus Safran Launchers (ASL). Since the end of 2016, ASL owns 74 % of the capital of Arianespace. In 2016, all companies in the group take the name Saffron. On the same day as the change of name, the Saffron offers the sale of its subsidiary, biometrics, Morpho (Safran Identity) . Sale to fruition in September for $ 2.4 billion to the investment fund Advent.

Jean-Michel Gradt

(1) Pro forma based on the results of Saffron on 12-month rolling period to 30 June 2016 and the results of the fiscal year 2015/2016 from Zodiac Aerospace on 31 August 2016.


No comments:

Post a Comment