The Ordinary General Meeting of the shareholders of Latécoère group was held last Friday 27th June. In this interview, François Junca sums up the answers to the numerous questions being asked by shareholders in these turbulent times.
Q1/ Does the end of negotiations with Airbus regarding the acquisition of the Méaulte and St. Nazaire sites mean that the consolidation of the French aeronautical sector is now doomed?
I don't think it is doomed for good, but given the adverse international context, this project will not be pursued for the time being.
The consolidation of the aerostructure sector is practically over in the USA and in Japan, but is still underway in Europe. If France wants to continue to play a major role in consolidation, this great project will be resumed at a later date.
Q2/ What is the impact of the world economic climate on aeronautics?
Oil prices, close to $150 per barrel, will most certainly have an impact on the global economy and on our area of business. High forecasts for aircraft production rates will undoubtedly be revised.
A ¤/$ parity of 1.58 in a market where a great majority of transactions take place in dollars penalises the European aeronautical sector and will force companies to take drastic measures to cut costs.
Q3/ Your group is involved in the major aeronautical programmes, incurring very heavy investments in development, which have resulted in growing debt. What measures do you intend to take?
We have already taken some very substantial measures. We shall not be participating financially in the development of new aircraft programmes until our financial situation is restored. However, we are offering our customers the benefit of our technical capacities and production facilities to contribute to new programmes currently being launched.
We have also implemented a drastic cost-cutting plan entitled "Defi 2011", which complements the first "Objectifs 2009" plan to help resist against a durably weak dollar.
Q4/ What about your short-term cash position?
In the framework of our partnerships, we are taking action with our customers to improve our cash position. Certain negotiations have already reached a conclusion, others are still underway and I'm confident about their positive outcome.
Q5/ Does the "Defi 2011" plan involve redundancies?
No, as far as Latécoère group is concerned, given the level of activity forecast today. However, with the dollar remaining weak over the long-term, production transfers to low-cost countries will inevitably increase and could affect nearly a thousand jobs in France, with the highest losses in the Midi-Pyrénées region.
Q6/ With Latécoère share prices at a record low, are you pessimistic about the future?
All aeronautical sector share prices have been affected, we are not the only ones caught up in this turbulence. The market always tends to excessively reward or sanction our area of business. As for our share, it seems to have been very harshly penalised, with regard to our position in the international aeronautical industry and the Group's future prospects.
Indeed, we have an order backlog equivalent to 4 years of sales and we are involved in all the future programmes.
We have an international set-up with production subsidiaries in Tunisia, the Czech Republic and Brazil, and sound partnerships in Korea and Poland.
This whole set-up provides a highly-competitive global production tool.
It is widely acknowledged that the aeronautical industry goes through cycles of strong development followed by phases of recession, but, if we take a closer look, average growth remains.
We have now been in this business for 90 years, and have undergone many different crises, but at the same time have acquired substantial experience in the management of these cycles. This is another reason why I remain convinced that we will get through this difficult period, as we have always done in the past.
It will require great efforts from everyone, in terms of organisation, challenging our day-to-day working procedures, our habits and so on.
We would be pessimistic if we were not doing anything about it, but the measures taken will help us to get through this difficult period. I know we will make it and I'm confident in the future.
N.B.: During this Ordinary General Meeting, the shareholders of Latécoère adopted all the resolutions submitted for their approval, including the annulment of the dividend distribution of ¤0.50 per share and the cancellation of directors' fees.
This international group is a first-rate partner of the world's major aircraft manufacturers (Airbus, Embraer, Dassault, Boeing, Bombardier). Latécoère is involved in all sectors of the aeronautical industry (commercial, regional, business and military aircraft), in three areas of activity:Aerostructure (68% of sales): fuselage sections and doors Onboard wiring and systems (27% of sales): onboard wiring, electrical fixtures and equipment. Engineering and services (5% of sales): research, design and realisation of tooling.
The Group employs 3,800 people in 8 different countries.
Its consolidated sales figures for 2007 come to ¤489 million and the order backlog is worth ¤1,820 million.
Latécoère is listed by Euronext NYSE Paris, compartment B.. Indexes: SBF 250, CAC MID&SMALL 190, SMALL 90 - ISIN Codes: FR0000032278 - Reuters: LAEP.PA - Bloomberg: LAT.FP
|Jean-Jacques PIGNERES / V.P. Finance
Jean-Pierre ROBERT / V.P. Communication
Tel.: +33 (0)561 58 77 00
Analyst & Investor Relations
Tel.: +33 (0)153 67 35 74
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|LATECOERE||Euronext Paris||3.36||0.30%||11 756|