Fokker Technologies Studies IPO as Aircraft Demand Lifts Profit
Fokker Technologies Holdings BV, the Dutch aerospace company supplying parts to the Airbus SAS A350 long-range jet, is exploring an initial public offering or sale to another investor as higher demand boosts profitability.
The privately held company’s future will likely be determined in the next 12 months, with current owners exiting in the next two years, Chief Financial Officer Remco Smit said. Fokker Technologies has already been carved out of Dutch manufacturer Stork NV, which bought the company in 1996 before itself being taken over by Candover Investments Plc (CDI) in 2007.
Production increases will largely begin next year and should lead to a profitability boost, with a return on sales of 8 percent to 10 percent targeted in two to three years, from 5.8 percent last year, Smit said. This year’s figure will be little changed with many programs still in the late development stage.
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“We make good use of our assets but the return on sales margin is still at the lower end,” Smit said in a telephone interview ahead of the Paris Air Show, which started today. “We need to improve on that side.”
Fokker, whose offerings includes landing gear, wiring and aerostructures, as well as support services, increased sales 12 percent last year to 769 million euros ($1 billion), with higher revenue targeted this year, Smit said.
The company secured financing last year, with 150 million euros in senior debit and a 50 million revolving line. Fokker is preparing for higher output to support new airplane programs.
“We have quite a big portfolio in the ramp up,” Smit said. The company is targeting new business on the Boeing 737 Max short-haul plane, the U.S. planemaker’s planned 777X wide-body, and the Airbus A350-1000, the largest model, he said.
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