Trends in A&D MRO and Aftermarket Jeff Johnston President - - PDF document
The Aerospace & Defense Forum Orange County Chapter May 5, 2016 Trends in A&D MRO and Aftermarket Jeff Johnston President & CEO Desser Holdings 5 May 2016 AGENDA Desser Holdings Company Profile Market Overview
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Founded in 1920, Desser is comprised of four business units, establishing its leadership and strong brand name to serve diverse aerospace markets Tires & Aftermarket Products Tires & Aftermarket Products Wheel & Brake Wheel & Brake Aero & Motorcycle Glass Aero & Motorcycle Glass Tire Retreading
One of the top two aftermarket distributors in the world for the three largest global tire OEMs 400+ tire SKU’s covering 98% of the world’s aircrafts Designs own private label brand, Aero Classic 25+ proprietary tires fitting 125+ aircrafts
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Founded in 1920, Desser is comprised of four business units, establishing its leadership and strong brand name to serve diverse aerospace markets
Tires & Aftermarket Products Tires & Aftermarket Products Wheel & Brake Wheel & Brake Aero & Motorcycle Glass Aero & Motorcycle Glass
Tire Retreading
One of only two independent retreaders in the U.S. Retreading requires FAA certification (by individual product type) specialized equipment, and technical cooperation from OEMs Retreads 70+ types and sizes of tires
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Founded in 1920, Desser is comprised of four business units, establishing its leadership and strong brand name to serve diverse aerospace markets Tires & Aftermarket Products Tires & Aftermarket Products
Wheel & Brake Wheel & Brake
Aero & Motorcycle Glass Aero & Motorcycle Glass Tire Retreading FAA certified repair facility Services over 460 wheel & brake assemblies, supporting 150+ aircraft platforms worldwide
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Founded in 1920, Desser is comprised of four business units, establishing its leadership and strong brand name to serve diverse aerospace markets Tires & Aftermarket Products Tires & Aftermarket Products Wheel & Brake Wheel & Brake
Aero & Motorcycle Glass Aero & Motorcycle Glass
Tire Retreading Cee Bailey’s business segment manufactures transparencies for aviation and motorcycle markets Manufactures 200+ transparencies for 100+ aircrafts
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Private Label Tire Design and Branded Tire Supply In-House Wheel & Brake Parts and Service Aviation Transparency Manufacturing FAA Certified Tire Retreading Engine Inlet/Exhaust Covers Flight Crew Seat Dress Covers Pitot and Rosemont Covers Ballistic Tire Covers for OEM Production Transparency Cleaning and Rain Repellant Chemicals
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Global footprint & international distribution presence Synergistic cross-selling opportunities Wheels, Brakes, Tires, Hoses, etc Longstanding customer relationships with major aircraft tire OEMs Strong management team with extensive knowledge and experience as global leader in specialty aerospace distribution
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Middle East / Other 11% North America 61%
Europe 27%
Australia 2% Other 13% Business Jets 47% Business Jets 33% Military 14%
ATR 41%
General Aviation 8% Moto 4% Moto 5% Military 21%
Geographic Footprint Market Segments Served
serving aircraft operators and MRO customers in all markets around the world
developing private label (PMA) alternative products to serve its end market customers
platforms enabling it to identify products, and markets available to PMA alternatives
reputation with its customers for innovative and cost effective solutions
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Capabilities Matrix & Revenue Analysis What Markets Do We Play In? What are their respective Growth Rates?
What Customers? What Platforms? What Products?
What are we Doing and Why are we Doing it?
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BGA Flight Hours
2.9%
Flight Hours/Cycles
relatively flat
drop in Piston GA operating hours
very small market
MRO/FBO channels
through MRO (AWB) services and PMA strategy
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General Aviation
to increase 0.2 % a year between 2015 and 2036
average of 1.2 % per year through 2036
airports recorded a 0.3 % decline in 2015
first decline in deliveries since 2010. Turboprop deliveries were down by 10 %, and much smaller category of multi-engine piston deliveries declined 40 %. Business Aviation
2014), TRAQPak data indicate that October 2015 posted an increase of 0.2%;
2.7%.The results by operational category continue to show growth on top of growth in the Part 135 industry, with a YoY increase of 3.2%.
from 2014, down -0.4%, while the Fractional market continued its run in the red for the third consecutive month, down -5.1%.
YoY YoY BizAv BizAv flight activity flight activity Defense spending as a share of GDP Defense spending as a share of GDP
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General / Business Aviation ATR
piston combines as a group are trending up
are in decline from 2016 on, with no recovery
Pilatus, Caravan, Quest, King Air, Biz Jet) will continue to grow in service
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Design & Certification Parts Production & Assembly Stocking & Distribution OEMs/Repair & Overhaul Owners & Operators
Suppliers Customers Business models along the value stream are in fundamental conflict
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Competitors New Entrants Customers (Buyers) Substitutes Suppliers
Substitutes:
Power Varies Broadly by Market Segment…
Upgrades
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for the near term
learned
– End users are pressing for greater value / lower costs
short lived