Diehl Aerosystems is planning no further acquisitions after the takeover of interior equipment specialist AOA later this year.
Instead, the German group will grow its business organically, it says.
The avionics and cabin interior supplier has achieved dramatic growth in turnover over recent years, with the annual figure reaching €920 million ($1.26 billion) in 2013. Growth has been powered both by a number of work packages for new aircraft – most notably the Boeing 787 and Airbus A350 – and by acquisitions, such as the takeover of Hamburg-based galley supplier Muhlenberg in 2011.
AOA will become part of Diehl by year-end, said chief executive Rainer von Borstel at the ILA Berlin air show today. The Munich-based aerospace specialist in air and waste water management and fire protection systems is already owned by the Diehl family, but will be formally integrated into the group, he says.
With approximately 350 employees, AOA generates sales of around €80 million a year.
Following the acquisition, Diehl’s “portfolio will be absolutely complete”, says von Borstel. While seats are the only interior product line not supplied by the group, he says that Diehl will “definitely not” move into seat manufacturing.
Sales are to rise organically through the production ramp-up of existing aircraft programmes and winning work packages on new types. Diehl is eyeing the 777X for potential involvement, says von Borstel.
A key challenge for the group is the fragmented supplier market, he says. While Diehl has been part of a first-tier supplier consolidation in the interior equipment industry, no such consolidation has taken place among the second- and third-tier suppliers. So while aircraft manufacturers were able to hand extensive work packages to few large cabin equipment groups – which became risk-sharing partners – the latter are unable to spread risks to their suppliers.
Especially in Germany, von Borstel says, the supplier market is highly fragmented as there is a large number of small specialists that are unwilling to consolidate. As the market needs to change, Diehl will “certainly” push second- and third-tier suppliers for greater consolidation, he says.
Source: Cirium Dashboard
