by Richard Pettibone, Aerospace & Defense Companies Analyst, Forecast International.
SABCA’s three-year restructuring plan, begun in early 2017, is already showing signs of success, with the company returning to profitability following a string of annual losses.
While deep backlogs at Airbus have fueled revenues, SABCA had struggled to match the increased production required to meet these orders. Exacerbating the situation have been low market prices and the increasing costs of materials and labor. To meet these challenges, the company began to restructure and reform its operations under its “One SABCA” effort to meet the technical and economic demands of the current environment.
As part of this effort, SABCA completed a consolidation of its four industrial sites (Brussels, Charleroi, Lummen, and Casablanca) under a single management team. The new structure should help increase consistency, responsiveness, and efficiency throughout the operations.
Production for Airbus has reached very high volumes on a variety of programs, and this trend is expected to continue for a while. Here the company put a program-centric policy in place that aims to accelerate efficiency in meeting customer needs.
In addition, SABCA benefits from the support of its major shareholder, Dassault, whose new bizjet programs are currently ramping up.
In the defense sphere, SABCA is involved in the maintenance and overhaul of several aircraft, including the Mirage 5, Northrop F5, Fairchild-Republic A-10, Lockheed Martin F-16, and several helicopters. In fact, maintenance and overhaul work generates about 30 percent of the company’s revenue. Looking ahead, Belgium is planning to upgrade its F-16 fleet with a newer-generation aircraft. Regardless of the platform ultimately selected, SABCA will share in any coproduction agreements.
SABCA is well balanced between its three operations in defense, space, and civil aviation. The company is attuned to the global marketplace, with exports accounting for more than 80 percent of its turnover. So long as the commercial aerospace boom continues, so too will the fortunes of Belgium’s largest aerospace concern.
For over 15 years, Richard has authored Forecast International’s Defense & Aerospace Companies series, Volume I (North America) and Volume II (International) services. The two books provide detailed outlines and analyses of major aerospace and defense contractors.