Aviation supplier, FACC, has reported revenues of EUR 202.4 million in the first quarter of 2024 – a 24.4% growth – which it says is due to a strong order intake, driven by the high demand for air travel, as well as record aircraft orders placed by airlines with major aircraft manufacturers.
This growth is above the aerospace industry average, as FACC has benefited from being represented on all major aircraft platforms from Airbus, Boeing, Bombardier, COMAC, Dassault and Embraer and their respective engine families. In addition, new contracts won in recent years, which are now entering the series production phase, have positively contributed to the high growth in revenue.
FACC’s operating EBIT has also grown, to EUR 9.9 million, due to revenue growth, a ‘noticeable stabilisation’ of supply chains, the associated greater utilisation of capacities at the company’s sites, as well as cost benefits gained from the increased capacity utilisation at FACC’s new plant in Croatia.
FACC’s analysts believe the growth of the aviation industry, and consequently of FACC, is set to continue in the coming years. Airlines had a total of 14,885 passenger aircraft on order from Airbus (8,626) and Boeing (6,259) as per the end of March. In order to process these orders, all aircraft manufacturers are gradually ramping-up production rates for their major aircraft types. The business jet market, which is an important sector for FACC, is also developing positively at an above-average rate.
The company estimates that, compared to previous years, demand in individual segments will increase by around a third over the next two years.
New orders and diversification of product portfolio
In addition to the stable growth in its core business, in Q1 FACC AG also benefited from the award by Eve Air Mobility of a contract for the manufacture of key components for its eVTOL (electric vertical take-off and landing aircraft), further strengthening its position in the growth market of advanced air mobility (AAM).
The latest market analyses by FACC forecast an annual AAM market volume of US$25 billion from 2040 onwards. To date, FACC has concluded development and production contracts with various AAM manufacturers, and the company expects to generate additional revenue of around US$90 million within the next three years, for commissioned research and development services in this sector. Customers are working towards the approval of AAM solutions for logistics and passenger transport to enable the first commercial applications in the next 12-24 months.
An expanding international footprint
The expansion of FACC’s plant in Croatia, work on which started in 2023, progressed according to plan in the first quarter of 2024. This is also reflected in an increased investment volume of EUR 10 million (prior-year period: EUR 2.3 million). The construction work, due to be completed by June 2024, will triple the area of the facility. After completion, the Croatia site will offer a capacity of 1 million manufacturing hours, significantly contributing to a further increase in capacities and to sustained improvements in the Group’s cost structures.
Workforce expansion
At the end of the first quarter of 2024, the number of FACC employees grew by 602, compared to the end of the first quarter of 2023. In Q1 2024 alone the workforce increased by 156 employees, to a total of 3,612.
The company has implemented training measures for new and existing employees to ensure high quality standards in product manufacturing, and to ensure the company meets the certifications and approvals required in the aerospace industry. In order to further raise its quality standards, FACC is investing in a new Welcome & Training Center at its Reichersberg site in Upper Austria. The campus will be completed in the course of 2024 and will be available for the training of new and existing employees from the summer.
Outlook
FACC expects the upward trend in the aviation industry to continue. Based on its incoming orders, and the short- to medium-term forecasts of its customers, FACC anticipates a revenue ranging from around EUR 810 million (+10%) to EUR 850 million (+15%) for the 2024 financial year. The company is planning investments in the region of EUR 50 million, and for its employee count to reach around 4,000 worldwide by the end of the year.
