ITP recorded turnover of 780 million euros in 2016, representing year on year growth of 9.9% and in-line with the company's forecast outlined in ITP's 2020 Strategic Plan.
During the year, ITP's Commercial Aviation segment saw a 20.5% increase in activity, while Defence activity remained in line with 2015 and In Service Support recorded a slight 3.8% decrease.
Operating income reached 67 million euros, an increase of 5.5% over the previous year, with 8.6% profitability on sales. The increase was mainly due to Commercial Aviation programmes in the production stage. In addition, an effort was made to optimise unit costs and work has been undertaken to contain fixed costs.
Profit after tax amounted to 69.7 million euros, an increase of 19.1% over the previous year.
During 2016, ITP increased its R&D investment, with expenditure up to 67 million euros (57 euros in 2015). This continues to position ITP as one of the top Spanish companies in terms of R&D investment as a proportion of sales. During the year, ITP also purchased the outstanding stakes in its ITP Externals India and PCB subsidiaries, in order to take full ownership.
Finally, ITP increased its overall workforce by more than 9% during the year, with 3,346 employees as of 31 December 2016. This increase follows the positive performance of Commercial Aviation programmes, especially in relation to the Rolls-Royce Trent engine family. In the Zamudio plant, Biscay, for instance, production rates for Trent engine low pressure turbines have increased by 64%.
Key milestones of the year by area of activity
Commercial Aviation sales in 2016 rose to 449 million euros compared to 373 million euros in 2015, an increase of 20.5%. Sales represent 58% of ITP's total activity, a segment that is expected to continue to grow, as forecasted in the current Strategic Plan.
Regarding the Rolls-Royce Trent family of engines, in which ITP participates as a Risk and Revenue Sharing Partner (RRSP), 2016 saw a Trent 1000 TEN power a Boeing 787 Dreamliner for the first time, as well as the maiden flight of the Airbus A350-1000, a model exclusively powered by Rolls-Royce Trent XWB-97 engines.
In the single-aisle and regional aircraft segment, within the Pratt & Whitney PurePower® PW1000G family, certification was obtained from the Federal Aviation Administration (FAA) for PW1400G-JM engines that power the Irkut MC-21 aircraft, and from the European Aviation Safety Agency (EASA) for the PW1500G engine, which powers the Bombardier C-Series aircraft.
Within business aviation, ITP signed an agreement with Honeywell to extend its participation as an RRSP in the HTF7700L, the sixth application of the HTF7000, the engine that will power the Cessna Citation Longitude aircraft.
In Defence, sales stood at 184 million euros, representing 23% of ITP's global turnover. In this segment, the entry into service of the first A400M aircraft for the Spanish Air Force in November was a highlight, with Spain becoming the sixth operating nation. As a member of the EPI consortium, ITP is responsible for the design, development, manufacture and maintenance of the TP400 engine.
Furthermore, within the Eurofighter programme, an agreement to manufacture engines for a new export country, Kuwait, was reached.
The In Service Support business unit continued the international expansion of the last few years, consolidating a global client portfolio, having repaired more than 400 engines from over 100 operators in 40 countries. Consolidated sales amounted to 147 million euros, a decrease of 3.8% compared to 2015.
The company expects stable growth from its commercial aviation activities for 2017, in a positive context of stable long-term growth prospects in the aeronautical market and in line with ITP's current 2020 Strategic Plan. An increase in commercial programme deliveries is expected, as well as the consolidation of ongoing development programmes.
The new PCB plant in Sestao is due to open in 2017. It will perform the final process activities for the casting products produced in the current PCB plant in Barakaldo.
In July 2016, it was announced that Rolls-Royce is to acquire SENER's 53.1% stake in ITP, a transaction whose completion remains subject to regulatory clearances and is expected in the next few months.
According to ITP's CEO Ignacio Mataix: "We are pleased and proud with the financial results achieved in 2016, as we continue to grow in an orderly way: an average annual growth of 8.5% since 2010 and a workforce increase last year of 9%, driven by growth in Rolls-Royce Trent engine programmes, amongst others. The aeronautical industry and the trustworthy relationships reached with our clients, will bring us opportunities that will enable us to meet the expected growth within our current Strategic Plan 2020."
ITP is currently the ninth largest aircraft engine and components company in the world by revenue. Ranking among the top one hundred companies in the aerospace industry (Top 100 Aerospace Companies, PwC and Flight International, 2015), the company has production centres in Spain, United Kingdom, Mexico, the United States, Malta and India with over 3,300 employees.
ITP includes among its activities the design, research and development, manufacturing and casting, assembly and testing of aeronautical engines. It also provides MRO services for a wide range of engines for regional airlines, business aviation, helicopters, industrial and defence applications.