LATECOERE : Continued strong growth despite turbulence in sector

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(¤ millions) 2006 2005 Change
%
Revenue 432.7 355.4 + 22%
EBIT 34.7 37.7 * - 8%
EBIT margin 8.0% 10.6% -
Net income 19.2 20.5 - 6.3%
Net income margin 4.5% 5.8 % -

* Includes exceptional gain of ¤3.5 million

Results for financial 2006 were adopted by the Management Board and presented to the Supervisory Board on Friday, March 2, 2007.

Revenue and earnings

Consolidated revenue of the Latécoère group reached EUR 432.7 million in 2006, showing a rise of 22% from 2005. This reflects rises in deliveries to Embraer, to Airbus for the A320 and A 339, and to Dassault Aviation for the Falcon 7X, as well as ad hoc billings relating to development work.

Delays to the A380 program and research spending on technology for composite materials added to charges for the year, as did higher raw-material prices and continued transfers of contracts to low-cost countries.

Despite these additional costs, earnings before interest and tax (EBIT) came to EUR 34.7 million, showing little change from the previous year excluding an exceptional gain of EUR 3.5 million.

Net income came to EUR 19.2 million, 6.3% below the result for the previous year.

Research & Development

R&D outlays for programs now in progress or in the final stages of development, primarily the Airbus A380, A400, Falcon 7X and Boeing 787, total ¤84 million or 19% of revenue compared with 23% in 2005. A further ¤2 million was spent on research into composite materials.

Financial structure

Financial debt totaled ¤322 million at year-end 2006, showing a rise on 2005. The increase resulted from R&D expenditure and ¤31 million in investments during the year, as well as the impact of postponements in some programs.

Equity rose to ¤263.1 million compared with ¤257.5 million at the end of 2005.

The debt/equity ratio rose from 0.97 at the end of 2005 to 1.22 at year-end 2006.

"Objectif 2009"

A progress plan called "Objectif 2009"  has been launched in all Group entities, aimed at:

  • reinforcing competitiveness and thus facing up to the threat of lasting weakness in the dollar (cover for contracts in dollars will end in early 2008)
  • preparing our group for the use of composite materials in the aircraft fuselages of the future

Dividend

The next Annual General Meeting of Shareholders, to be held on Thursday, April 26 at 2.30 pm, will be asked to approve a dividend of ¤0.75 per share (payout: 34%). Dividends will be paid on June 30, 2007.

Outlook

The Group's backlog, which counts only firm orders announced by aircraft manufacturers, was up 13% to ¤1,500 million at December 31, 2006. This represents more than three years of revenue.

Based on production schedules announced by aircraft manufacturers, Latécoère expects sales to rise by around 10% in 2007.

2007 will mark a turning point in our industry, with the growing importance of composite materials ushering in profound changes for aerospace operations in Europe.

Against this backdrop, Latécoère is determined to make a key contribution to the process, our aims being to:

  • act as a major partner for Airbus for the future A350 XWB
  • become a leading contender in primary structures made from composite materials.

With this in mind, Latécoère is setting up a second factory for the production of composite fuselage components.

Latécoère will naturally be considering any opportunities resulting from the Airbus Power 8 restructuring program.


Latécoère business profile

With 2006 revenues of ¤432.7 million and an order backlog of ¤1,500 million, Latécoère Group is strengthening positions in three areas:

  • Aerostructures (66% of revenue): fuselage sections and doors
  • Onboard wiring and systems (29% of revenue): wiring, electrical racks/harnesses and onboard equipment
  • Engineering and services (5% of revenue): research, design and manufacture of tooling

Latécoère Group is a key partner for leading aircraft manufacturers, contributing to major international programs from the very first stages in development.
The company is listed in the B segment of the Eurolist by EuronextTM market.
It is a component of the SBF 250, CAC MID&SMALL 190, SMALL 90 and IAS indexes.
ISIN: FR0000032278 - Reuters: LAEP.PA - Bloomberg: LAT.FP


CONTACTS  
Groupe Latécoere ACTUS

Jean-Jacques PIGNERES, Chief Financial Officer
Jean-Pierre ROBERT, Vice-President of Communications
Tel.: +33 (0)561 58 77 00
jj.pigneres@latecoere.fr

Edouard MIFFRE
Analyst and Investor Relations
Tel.: +33 (0)153 67 36 36
emiffre@actus.fr
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