The Supervisory Board met on 4th June 2008 to consider the consequences of Airbus's decision to terminate negotiations concerning the acquisition of the Méaulte and Saint Nazaire sites (the Zéphyr project).
Reminder of events
At the start of 2007, Airbus announced its plans to dispose of its Méaulte and St Nazaire-Ville sites. Latécoère expressed interest in the acquisition of these two sites and submitted an offer on 26th July. For Latécoère, this operation was an opportunity to play a vital role in consolidating the aeronautical sector in France.
In December 2007, after several months of negotiations, Latécoère was selected as preferential bidder for the takeover of these sites. At the same time, the Group prepared a capital increase operation worth ¤300 million, to fund the acquisition of the sites and increase financing possibilities for other new programmes, such as the A350.
The new Group thus formed enjoyed an improved financial situation and its dollar exposure was cut in half. The 2008 financial year would have been positively impacted by the consequences of this operation.
On 7th May 2008, as Latécoère had just about settled the pool of investors required to carry out the operation, Airbus discontinued negotiations owing to the international financial environment and the weak dollar, signalling the end of the operation which had mobilised substantial resources within Latécoère over 16 months.
Taking into account this situation along with the new medium-term plan which, based on current production rates announced by aircraft manufacturers, forecasts sales figures enjoying continuous growth over the next three years, the Management Board put the following exceptional measures to the Supervisory Board:Revision of the partnership policy for new programmes Development of the service business. Launch of a drastic plan to cut costs and improve productivity, known as "Défi 2011". More production transferred to "low-cost"' countries. Non-renewal of temporary workers' contracts in administrative and technical departments.
2008 outlook and prospects
Business over 2008 should comply with the announced target meaning around 10% growth in sales. However, earnings will fall close to zero, once the exceptional charges related to the end of the Zéphyr project (acquisition of the Airbus sites) have been accounted for.
In these conditions, a proposal will be put to the Ordinary General Meeting on 27th June to shelve the dividend distribution of ¤0.50 per share initially planned, and to cancel the directors' fees.
In a growing market, the Group's objective is to return to profitability in spite of the international financial crisis and the weak dollar.
Annual General Meeting
The Annual General Meeting will be held on Friday 27th June at 14:30 at the headquarters, 135 rue de Périole in Toulouse. The complementary documents are available on the www.latecoere.fr website.
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:
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.
(nearly four years' total sales).
Latécoère is listed by Euronext, compartment B. SBF 250, CAC MID&SMALL 190, SMALL 90 - Codes ISIN : FR0000032278 - Reuters : LAEP.PA - Bloomberg : LAT.FPCONTACTS
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||3.62 (c)||4.02%||187 783|