Analyse du secteur de l'aéronautique

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Table of contents

Introduction        2

The macro-environment        3

PESTEL Analysis        3

Overview of the aeronautic and spatial market        4

Scenarios planning        7

Industries and sector        10

The five forces framework        10

Internal analysis        15

Focus on Zodiac        15

Focus on Safran        17

Strategic Capability        18

SWOT Analysis        19

VRIO Analysis        20

Corporate level strategy        21

Finance, a tool for strategic decisions        22

Conclusion        29

Bibliography        30

Introduction

Aeronautic and spatial industry gathers all the companies which produce aircrafts, spatial engines and parts of these machines. Most of plane and other engines have a civil use while some are destined to military activity. With a commercial exceed of more than 18Md€ in 2016, aeronautic and spatial sector is the first contributor to exterior French business.

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 (XERFI Study) (% of turnover)

This sector is very concentrated since the costs of capital is very high and R&D costs are very important. Competition and increase in production rhythm force the various equipment manufacturers to unite to reach a critical size: mergers are then on a roll for this segment within this industry.

Then the acquisition of Zodiac by Safran seems perfectly embedded in the strategic evolution of that industry.

In January 2017, Safran launched a “friendly” OPA on Zodiac Aerospace. Since this company suffered from a disclaimer on its profitability, Safran lowered the offer at 8,7Md€ meaning 1Md less than initially.

If finalized, this buying will give birth to a worldwide giant of aeronautic with a global turnover of 21Md€ (without even considering the turnover implied by the symbiosis). The new company would be the third one in aeronautic ranking (without constructors) after Americans UTC and General Electric. It would be also the second worldwide in equipment manufacturers (without motors).

It would employ about 92 000 employees including 45 000 in France.

It would benefit from competencies and skills from Safran in the domain of motors, landing gear and all equipment manufacturer skills. It would also benefit from Zodiac activities in its specialization, meaning inside equipment.

However, nowadays, constructors perceive this concentration as a threat. Airbus and Boeing start feeling that manufacturers margin shouldn’t be superior to theirs. They intent to remain leaders thanks to 3 strategies:

-        Pressure on low prices

-        Development in post purchase services (activity more and more practiced by equipment manufacturers)

-        Integration of externalised activities (creation of Boeing avionics in 2017 for instance).

Consequently, we are going to see whether that acquisition of Zodiac by Safran is really a strategic move. We will then use various tools of strategic management to first assess the macro-environment of Zodiac and Safran, then zooming in on their industry and on those two actors (and their stakeholders) and finally, one of the most important part in an M&A issue: see if it is going to be financially relevant.

The macro-environment

PESTEL Analysis

Overview of the aeronautic and spatial market

Among the contracting party of the industry, Airbus Group is one of the most important, followed by other big groups such as Dassault aviation, Safran, Thales and Zodiac.

In France, Aeronautic and spatial sector is split into 2 kinds of actors: aircraft manufacturer, at the top of scale and equipment manufacturer.

Airbus group is the leader of the sector, working on all the segments of the market (civil and military aeronautic). It owns 50% of ATR, worldwide leader for regional planes. Airbus turnover was, in 2016, 66 581M€.

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