Outside of the aerospace industry, Zodiac, which has been in existence since 1896, is probably most famous for its ubiquitous inflatable boat. Initially designed as an inflatable kayak, this product saw considerable success in the years following the Second World War. However, that part of its business was spun off in September 2007, leaving Zodiac to concentrate on its aerospace interests - a literal A to Z (Adder to Zodiac Services) of businesses in the sector.
Zodiac Aerospace, as the company has been known since the divestment, is headquartered in Plaisir, to the west of Paris, but its subsidiaries operate from another nine sites across France. In all, it employs 5,543 people in the country, from a global workforce of 17,540, according to its most recent figures.
The company is split into three divisions, with these supporting a further six business units. The three main parts of its operation are aircraft cabin interiors, with turnover of €1.16 billion ($1.67 billion) in the year to 31 August 2010, aircraft systems with €481.1 million and aerosafety with €509.2 million, taking group turnover to €2.15 billion for the year. Below these sit six further segments: aerosafety and technology; aircraft systems; seating; galleys and equipment; cabin interiors; and lastly, its aftersales business.
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© Zodiac |
Zodiac's Driesser subsidiary is the sole supplier of galleys for the Airbus A320 |
Like all companies in the sector, Zodiac has seen turnover fall as aerospace entered the downward part of the cycle. In its 2009-10 annual report, chief executive Olivier Zarrouati, describes the first half of the year as "expectedly challenging". However, he notes that the business returned to growth in the second half. He attributes this resilience to the company's "long experience of the aircraft industry and proven strategy", noting that its aftersales and support businesses performed well throughout the period "to fulfil their traditional role as the shock absorber for low points in the cycle".
However, it is not as though the company stood still during the downturn. It has continued to make acquisitions - Canadian wiring loom producer Cantwell Cullen & Company, French hydraulic equipment maker Quinson and, most recently, German galley specialist Sell were all purchased during 2010. The company also points out that it retains the financial wherewithal to make further acquisitions as necessary.
Allied to the acquisitions has come preparation for a ramp-up in major airframe programmes - notably the Airbus A380 and Boeing 787 - plus models currently in the early stages of production such as Bombardier's CSeries - for which it is the sole supplier of escape chutes following a contract win in May 2010 - and the Airbus A350. In addition, the company won major deals in the period to supply what it describes as "a broad range of systems" for the Irkut MC-21 and the Comac C919 aircraft.
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As you might expect, if only from a geographical point of view, the company's links with Airbus run deep. There has been notable success for its interiors business on two of Airbus's big sellers. First, it is supplying a new lightweight overhead locker system for the A330 widebody. Then in April this year, its Driessen operation was named as the sole supplier of galleys and stowage for the best-selling A320. And its ECE subsidiary, which specialises in electrical power management systems, is dealing with Airbus as a Tier 1 supplier for work on the primary and secondary power distribution systems for the A350. It is worth pointing out, however, that similar systems from ECE are also in place on Boeing's 787.
Zodiac does not confine itself to commercial aviation programmes either - the aircraft systems business has designed the inerting system for Bombardier's G7000 business jet. It is working on a similar system for the Irkut MC-21 airliner.
Zodiac is also an equal shareholder in four-partner company OEMServices, a joint venture with fellow Tier 1 suppliers Thales, Diehl Aerospace and Liebherr. Formed in 2005, it is designed to provide door-to-door support for the Airbus A380, A330 and A320.
Zarrouati says the company is now well placed for future growth: "Zodiac Aerospace is now entering the recovery phase of the aircraft industry cycle in excellent shape. Air traffic volumes are growing once again and the financial health of airlines is improving.
"Against this background Zodiac Aerospace will benefit from the recovery in production volumes of current aircraft programmes and from increasing volumes in new programmes."
Zodiac's half-year results, for the six months ending 28 February 2011, bear this out. Revenue was up 35% on the same period a year earlier to €1.3 billion, with operating income up to €184.2m, a rise of 141% on the previous year's figure. A large chunk of the increases was, of course, down to the integration of its acquisitions. Nonetheless, all three of its business segments showed organic growth. It describes overall trading conditions as "favourable overall" and as such has revised its targets upwards for the year, forecasting sales growth of between 15% and 20%, with a margin of around 13%.
Source: Flight International
