April 3, 2013 |[pic] | Finance Master Group Work [pic] Group work #76 Professor: Philippe GIVRY N° Group : 76 Section : EN Professor : Philippe GIVRY | | |First name |Last name | |Name 1 |William |AZZARIO | |Name 2 |Yuan |CHEN | |Name 3 |Alex |KIRCHEN | |Name 4 |William |FEUILLET | Summary 1. Presentation of the company3 2. Ownership structure4 3. Financing and Capital Structure7 a. Financial Structure7 b. Capital Structure8 4. Dividend policy9 Comparison to Safran, competitor of Zodiac Aerospace9 Sources for Zodiac Aerospace10 Sources for Safran (competitor)11 5. SUMMARY OF WORK14 6.
Appendices15 Appendix 1: Zodiac Aerospace ownership structure15 Appendix 2: Zodiac Aerospace financial structure17 Appendix 3: Capital Structure25 7. References27 Presentation of the company Zodiac Aerospace is the world leader in aerospace equipment and systems, intended for commercial aircraft, regional aircraft, business jets as well as helicopters and space. In its infancy in 1896, the company created by Frenchman Maurice Mallet, contributed to the development of aeronautics designing airships and airplanes. Thanks to its innovative spirit, the company invented the concept of Zodiac inflatable boat in the 30s, ancestor of the famous “Zodiac”.
In 2007, the Group focused its activity on aeronautics applications selling the Marine division and the same year Oliver Zarrouati became the actual CEO. Thanks to its strategy of growth and acquisitions, Zodiac Aerospace continues its development to ensure constant progress of its activities. With rigor and efficient management, technological know-how of Zodiac Aerospace are organized around three main areas: comfort and life on board, embedded systems, safety in flights and on the ground. Those ones are divided into five parts of activity which are: Zodiac Cabin & Structures, Zodiac Seats, Galleys & Equipment Zodiac, Zodiac AircraftSystems, Zodiac Aerosafety, completed with an activity devoted to after-sales service: Zodiac Services.
The whole activity of Zodiac Aerospace permits to employ nearly 26,000 collaborators and accompanies its worldwide customers through a complete offer that is intended to meet the new challenges of aeronautics. So It deploys a strategy based on the internal and external growth, consisting of developing « niche » markets with high technological content, generating a significant after-sales activity, and on which it can occupy the front rows. During the year 2011/2012, Zodiac Aerospace experienced another year of sustained growth, with a 25. 8% raise on the turnover which amount 3 440. 6 M €. This one can be divided as follows: – Cabin equipment for civil aircraft (61. 6%) such as passenger seats (No. 1 worldwide), health systems embedded (No. world), pilot seats (World No. 3), and else. – Security equipment and technological equipment (19. 7%) such as evacuation slides (No. 1 worldwide), parachute systems (No. 1 worldwide) systems, electrical wiring protection (No. 1 worldwide), airbags for automotive systems, data transmission. – Flight systems (18. 7%) oxygen systems (No. 1 worldwide), fuel systems (No. 1 in Europe), management systems of electrical power (n ° 1 in Europe), etc. Moreover the capitalization of Zodiac Aerospace amount 5304 M € divided into 56,874,845 shares mainly owned by shareholders at 57,21% and employees at 27,27%. Ownership structure Breakdown of capital stock (appendix 1) ZODIAC AEROSPACE |31/08/2009 |31/08/2010 |31/08/2011 | | |Number of shares |% capital |% voting rights | |Shareholder’s equity |1,591,598 |1,548,371 |1,308,043 | |Financial debt |662,667 |511,655 |512,892 | |Net debt |147,416 |167,457 |243,485 | |Total assets |3,142,272 |2,798,444 |2,561,323 | |EBIT |367,623 |231,571 |227,854 | |EBITDA |429,178 |289,694 |249,409 | |Cost of net financial debt |34,385 |25,746 |33,142 | |Financial debt/Equity |0. 42 |0. 33 |0. 39 | |Net debt/Equity |0. 09 |0. 11 |0. 19 | |Equity/Total assets |0. 51 |0. 55 |0. 51 | |Net debt/EBITDA |0. 34 |0. 59 |0. 98 | |EBIT/Cost of net financial debt |10. 70 |8. 99 |6. 87 |
From the summary of the financial statements of the company in 2009-2011 above, although the financial debt is becoming slightly increased over the three years, the net debt is decreased sharply year by year, and the net debt is decreased to an extremely low level (close to 0: 0. 09 in the year 2011, when divided by total assets. Concerning the ratio between the net debt and EBITDA, the company is improving its financial status on this since in 2009, the net debt almost equals to the EBITDA, whereas in 2011, the net debt only counts 1/3 of the EBITDA. Moreover, among the three years, the shareholders equity remains almost unchanged at the level of around 1,500,000, but the total assets increase year by year, which means that the liability is increased. Capital Structure Cash Generated From … |2011 |2010 |2009 | |Ongoing operations, held-for-sale and |326,296 |328,141 |278,927 | |discontinued operations. | | | | |Investment |(319,466) |(153,315) |(114,883) | |Financing activities |90,272 |(132,272) |(99,794) | From the above chart made according to the annual reports of the Zodiac Aerospace, a huge development can be found between the year 2011 and 2010 in terms of the investment and financing activities. From 2009 to 2010, the cash generated/used in investment and financing activities almost stay unchanged.
However, in 2011, the investment is increased tremendously by 100%, and the cash generated from financing activities became positive, with an increase of more than 150%. This may be due to that Zodiac Aerospace has buyout its rival Contour Aerospace in late 2011. Dividend policy [pic] The dividend per share has remained stable from 2009 to 2010 and then risen by 16,6% in 2011. However, the dividend per share has risen more slowly than the net income, which shows a reluctance of the society to distribute too much dividends and to reinvest more instead. The dividend yield is in average 2,6%, which is quite lower than the average yield of French societies (3% in 2008, source: DataStream).
In 2009, the dividend yield was much higher (3,78%), but a strong increase of the share price in 2010 explains the drop of the dividend yield. The payout ratio is around 30%, which mean that Zodiac Aerospace distributes about a third of its earnings to its shareholders. This is less than the average rate of distribution of traded European businesses (45% in 2008). However, this means that the company is reinvesting more money, which may lead to higher payout ratios in the future. Zodiac Aerospace has a quite constant payout ratio, which indicates a solid dividend policy. Comparison to Safran, competitor of Zodiac Aerospace [pic] Safran has a slightly higher payout ratio than Zodiac Aerospace (around 39%).
The earnings per share have risen from 2009 to 2011, but the payout ratio has remained more or less the same. Zodiac Aerospace and Safran have a very similar dividend policy. Indeed, the payout ratio and the dividend yield are nearly the same. What more is, both companies tend to reinvest the majority of the net income. This is easily explainable since there is a strong need of research in the field of aeronautics. Sources for Zodiac Aerospace 2009 [pic] See Consolidated income statement 2009 (Appendix 3). 2010 [pic] 2011 [pic] See Consolidated income statement 2011 (Appendix 2). Sources for Safran (competitor) 2009 [pic] [pic] 2010 [pic] [pic] [pic] Source: http://uk. finance. yahoo. com: [pic] [pic] [pic] SUMMARY OF WORK
Zodiac Aerospace is the world leader in aerospace equipment and systems, intended for commercial aircraft, regional aircraft, business jets as well as helicopters and space. Its ownership structure is constituted by a significant float and by families (40% voting rights). The strategy’s group is built on internet and external growth that offer high technology content. Constant payout ratio indicates that the company has a solid dividend policy. Appendices Appendix 1: Zodiac Aerospace ownership structure Breakdown of capital stock 2009 [pic]————— Breakdown of capital stock 2010 [pic] —————- Breakdown of capital stock 2011 [pic] —————- Breakdown of capital stock 2012
Appendix 2: Zodiac Aerospace financial structure For the year 2009: [pic] [pic][pic][pic] For the year 2010;2011: [pic] [pic][pic] [pic] Appendix 3: Capital Structure [pic] [pic] References • http://fr. wikipedia. org/wiki/Zodiac_Aerospace • http://www. zodiacaerospace. com • http://www. zodiacaerospace. com/en/actionnaires • http://www. reuters. com/finance/stocks/ZODC. PA/key-developments/article/2560647 • Zodiac Aerospace annual reports 2009, 2010, 2011, 2012 ———————–  FFP is a listed company controlled by the Peugeot family Group.  Fonds Strategique d’Investissement is a fund established by the French government in 2008