“The Covid-19 pandemic caused the worst crisis in aviation history and severely affected ITP Aero as one of the most important companies in the world market. However, I would like to highlight the agile response triggered by our CORE 21 recovery plan that is giving us helped to overcome the challenges of the past year and to support our recovery. I would also like to take this opportunity to thank all our employees who are facing a very difficult year, as well as our customers and suppliers, and partners for their trust “, Carlos Alzola, CEO of ITP Aero.
In 2020, ITP Aero achieved sales of 735 million euros, a decrease of 25% compared to 2019. At the end of the year ITP Aero achieved a negative result, which caused losses after taxes of -13 million euros and an EBIT of 2M ?? as a result of the decline in business and despite the measures taken to overcome the crisis caused by Covid-19. This result includes extraordinary effects such as workforce adjustment and asset impairment related to civilian programs. Without these extraordinary effects, the recurring profit after taxes was EUR 25 million. (compared to € 95 million in 2019, a decrease of 73%) and a recurring EBIT of € 40 million. (Compared to € 105 million in 2019, a reduction of 61%).
The decline has particularly affected the commercial aviation business, which represents 71% of total business in 2020. This is due to lower engine volume in aviation programs, particularly double-aisle aircraft and, to a lesser extent, single-aisle aircraft.
The defense business, which includes engine maintenance services and now represents 29% of total business, has remained stable in terms of defense programs thanks to the performance of the EJ200 engine that powers the Eurofighter. while the volume of maintenance services has declined.
CORE 21 recovery plan
In response to the impact of the pandemic on the markets in which ITP Aero operates, the company launched the CORE 21 recovery plan last July with the aim of initiating a transformation process necessary to increase competitiveness and accelerate possible recovery . It should be noted that in 2020 ITP Aero put significant effort into laying the groundwork for a profound digital transformation of the company that will continue into 2021.
The CORE 21 plan includes, among other things, the adjustment of the company to a smaller market as a result of the pandemic, which is why the plan unfortunately provides for an adjustment of the workforce of around 15% worldwide, if possible with temporary adjustments in employment. These measures have been implemented in all countries where ITP Aero is present in order to reach agreements with the employee representatives. As of December 31, 2020, ITP Aero had 3,559 employees, a decrease of 11%. The restructuring will be completed in the first half of 2021.
Despite Covid-19, ITP Aero has continued to invest in technology. Investments in research and development in 2020 amounted to 34.4 million euros. During the year, the company announced projects in relevant areas related to the manufacture of 3D additives or participation in projects for hybrid electric drives.
Regarding the future UltraFan engine? From Rolls-Royce, ITP Aero completed the design and manufacture of the first IPT (Intermediate Pressure Turbine) housing in 2020. The company also announced that it is leading the TASTE project, which aims to develop key aerodynamic technologies to meet program deadlines and environmental milestones set by the EU. In defense, in 2020 ITP Aero formalized its participation as the leading representative of the engine technical pillar in Spain for the Next Generation Weapon System / Future Combat Air System (NGWS / FCAS), a key program for the company, up to the next 20 years.
One of the most important milestones of the year took place in December. As part of its commercial aviation business review, Rolls-Royce announced a proposal to improve ITP Aero’s manufacturing, engineering and supply chain capabilities. This includes the integration of the plant in Hucknall (East Midlands, UK) and its employees at ITP Aero as well as the transfer of the manufacture of aircraft engine structures. These proposals will strengthen ITP Aero’s position as a global Tier 1 aerospace company, expand its product portfolio – Hucknall’s products include complex manufacturing, combustors and OGVs – and open up new business opportunities.
“After the most complicated year in ITP Aero’s history for 2021, although uncertainty remains high and market recovery depends on the development of Covid-19, we expect results to be in line with this year with a slight decrease in terms of the sales volume and a stabilization of profit in recurring terms. However, the recovery of the main programs in which we are participating in the volumes for 2019 is not expected until 2024-25 ?? is the prospects of Carlos Alzola, CEO of ITP Aero, from 2021 .
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