ITP Aero 2018 Full Year Results

Note to the editor – ITP Aero has adopted the IFRS 15 revenue recognition accounting standard in 2018, including concepts such as long-term contracts. This means comparative data for the previous year is presented in compliance with IFRS15 to improve comparability.

ITP Aero delivered good growth in 2018 driven by its exposure to civil aerospace growth programmes, in line with the objectives set in the ITP 2020 Strategic Plan. Progress continues in Civil aerospace revenues, which saw good growth from increased volumes across Rolls-Royce and Pratt & Whitney programmes. Capacity increased to support the reported growth with a 5% higher headcount.

ITP Aero has registered a €880 million turnover, a 6% increase in comparison to 2017 (827M€ underlying revenue under IFRS15 accounting). By business areas, Civil continues growing and now totals 67% of the business, Defence is 18% and In Service Support 15%. This was delivered despite a profit headwind from the impact of the share of Trent 1000 in-service issues that was allocated to ITP Aero (as a RRSP- risk and revenue sharing partner of the programme-).

EBIT reached 79M€, showing a 4% increase over 2017 underlying figures driven by the Civil business unit’s results. Profit after tax reached 69M€.

Operating and strategic review

The long-term trends driving demand growth in passenger aircraft remain strong. Business continues to expect solid demand for aero engines across both narrow and wide body aircraft, with an increased focus on newer, more fuel efficient aircraft types. This, coupled with ITP Aero’s presence on newly launched engines that are currently ramping up, provides a solid base for ongoing growth in its civil aerospace business.

Significant milestones in 2018 in Civil included delivery of the 600th low pressure turbine for the Trent XWB 84K; entry into service of the A330neo and A350-1000, both of them powered exclusively by Rolls-Royce engines (Trent 7000 and Trent XWB-97) where ITP Aero is RRSP (risk and revenue sharing partner). Also 2018 saw the entry into service of the Gulfstream 500 business jet powered by the PW814 engine, in which ITP Aero is a RRSP.

In 2018 ITP Aero continued delivering on its key Defence programmes TP400, EJ200 and MTR390-E engines. During the year, ITP Aero delivered the last EJ200 Tranche 3A engine to the Spanish Air Force, and will continue manufacturing this engine for other nations. Overall, the Defence business slightly decreased in revenue as compared to 2017, mainly driven by the reduction in EJ200 engines production.

In Service Support business remained flat as compared to 2017. During the year, ITP Aero serviced more than 575 engines and modules.  

The production ramp-up in the year on growth programmes from both Rolls-Royce and Pratt & Whitney was supported by capacity growth. To cater for further ongoing growth, ITP Aero made good progress in 2018 on its capital investment plans, with the expansion of production plants in Spain and Mexico to support development of new products. Actions taken to improve manufacturing cost efficiency delivered good progress with a reduction in unit costs, particularly across our civil engine programmes.

ITP Aero made significant progress on the industrial plans included within its ITP 2020 Strategic Plan, announcing an investment of €14 million (2018-2021) in its new Derio (Spain) based facility, focused on the design and manufacture of engine external parts. In addition, ITP Aero’s newly built castings facility in Sestao (Spain) is now fully operational.

ITP Aero continues to execute its Research & Technology plan making good progress on the UltraFan turbine technology development and the strengthening of the CFAA (Centro de Fabricación Aeronautica Avanzada) in Biscay, with a large number of development programmes.

People

ITP Aero increased its headcount by 5% up to 3.812 employees as of December  2018, most of the new hires took place in the Zamudio (Spain) and Queretaro (Mexico) plants.

Commenting on the results, Carlos Alzola, General Manager, said:

“I am happy to say that we are on track to deliver the objectives set in our ITP 2020 Strategic Plan, in line with the expected growth rates of the company. In our first full year as a corporate entity within the Rolls-Royce Group, we have delivered strong operational performance, outstanding service to all customers and solid revenues and profitability, while we have continued investing in the future of the company both in R&T, future programmes and further extending our industrial footprint and leadership.”

2019 Outlook by Carlos Alzola, General Manager:

“Our exposure to growing civil aerospace platforms supports our expected turnover growth rate of around 10% for 2019, with stable operating margin. On the Defence market, we look forward to supporting Spain’s participation in the FCAS”.   

Notes to the editor

ITP Aero is a world leading company within its market, currently the ninth largest aircraft engine and components company in the world by revenue. Ranking among the top one hundred companies in the aerospace industry. The company employs over 3,800 people at its production centres in Spain, United Kingdom, Mexico, the United States, Malta and India.

ITP Aero includes among its activities the design, research and development, manufacturing and casting, assembly and testing of aeronautical modules and engines. It also provides MRO services for a wide range of engines for regional airlines, business aviation, helicopters, industrial and defense applications. ITP Aero operates as a corporate entity within the Rolls-Royce group. 

More information

Louis Jon Trollope                                        

M: (+34) 610 267 334

louisjon.trollope@itpaero.com

www.itpaero.com