The Walloon aeronautical group had to resolve to close four sites around the world, including its Chinese factory. He was able to limit the damage financially, thanks to economic unemployment in Belgium and layoffs abroad.
More than 7 billion losses for Air France-KLM in 2020: despite public aid, air transport, devastated by the Covid-19 pandemic, does not see the end of the tunnel and will undoubtedly emerge profoundly transformed by the crisis.
On the manufacturer side, the collapse of orders and the reduction in production rates are also being severely felt: the giant European aeronautics Airbus on Thursday published a net loss of 1.1 billion euros for the past year, when its competitor, the American giant Boeing, weighed down by the setbacks of the 737 MAX and by the first deliveries of the 777X postponed to the end of 2023, suffered a colossal loss of $ 11.9 billion.
The 737 MAX, the first black swan
European aircraft manufacturer saw its turnover fall by 29% to 49.9 billion euros. It delivered 566 aircraft, a third less than the previous year. To adapt to the decline in air traffic, Airbus lowered its production rates by 40% in the spring.
These decreases had important consequences for Belgian suppliers and equipment manufacturers, who have seen their civil activity often reduced in a similar proportion. This is particularly the case with Sonaca, the country’s largest aeronautics company. “Before the complete interruption of the production of the 737 MAX, which was our first black swan, and before the Covid, we had originally forecast for 2020 a turnover of close to 800 million and an Ebitda of up to- over 90 million “explained to L’Echo Bernard Delvaux, CEO of the Walloon group. “In May-June we re-made a forecast which served as a reference for the rest of the year. We end in line with this reference, which means that we are going to make around 430 million in sales, instead of 800 million. It is an order of magnitude and the figures are not yet fully audited, but we can say that we have almost lost 50% of our turnover for the whole group “.
No cash burned in 2020
Despite this slump, the supplier of Gosselies managed to limit the breakage financially and to arrive at a more or less neutral situation in terms of EBITDA, “with a slightly negative figure, but close to zero” continues Bernard Delvaux. “An Ebitda of this order does not look like much, but with 50% less turnover and significant fixed costs, it is very high flying. And at the operational level – I am not talking about financing – we were even able to be slightly cash positive. We did not burn cash in 2020 “.
In its factories abroad, Sonaca had to proceed with massive layoffs, in the order of 1,500 people.
If the company has succeeded in limiting the breakage, it is thanks to “cost efforts, which have been colossal, whether in Belgium or the United States. Efforts that have been made by all the factories and all categories of personnel, “notes the boss. In Gosselies, Sonaca also had recourse to economic unemployment for nearly half of the workforce. In its factories abroad, it had to carry out massive layoffs, of the order of 1,500 people out of a total of 3,000 for its locations in the USA, Brazil, Mexico, Canada and Romania. Several final closures of sites have also taken place, including that of China (Sinelson Aero), located in Tianjin, about a hundred kilometers from Beijing. “The factory had been completely shut down since September and the administration was completely dismantled in early February. At the same time, we closed three factories in the USA, two of which are already completely emptied “ deplores Bernard Delvaux.
“We hope that the federal government will agree to extend this state guarantee to at least three years.”
Thanks to these savings and the support of its shareholders (the Walloon Region and the federal holding company SFPI) and bankers, Sonaca benefits from cash that should enable it to get through the crisis. But with an Ebitda close to zero, this situation obviously cannot be prolonged in terms of solvency. The company must generate cash to repay its debts and impatiently awaits the return of the volumes. She benefited from the bazooka banking plan, a loan guaranteed by the federal government for one year. “But from June, this state guarantee disappears and the loan must therefore be repaid. It is not impossible to do it, but it is not good news “believes Bernard Delvaux. We hope that the federal government will agree to extend this state guarantee to at least three years, as it has to. elsewhere already announced that it was doing it for SMEs. Many large companies are in the same situation as Sonaca. ”
Around 45 A320s per month
For 2021, the planned budget is of the same order and based on a turnover similar to that of 2020. “It will remain an extremely weak year in terms of turnover” concludes Bernard Delvaux. It is the medium-haul activity in commercial transport that will restart first, but gradually. Airbus plans to increase the production rate of its single-aisle this year and to switch, for the A320 family, from 40 aircraft per month to 45 in the fourth quarter of 2021. For its part, Boeing was able to re-certify its 737 MAX. For long-haul, it It will probably take 3 to 5 years before returning to sales levels closer to normal.