ITP Turnover up 9% at 710 Million Euros in 2015

PRESS RELEASE

ITP turnover up 9% at 710 million euros in 2015

 All business units have recorded increases in activity: 6.6% in Commercial Aviation, 3.4% in Defence and 25.8% in In Service Support.  Investment in R&D rose to 57 million euros.  A new Strategic Plan for the period 2016-2010 was launched in 2016.

Zamudio, Spain, April 13th, 2016. ITP, a company partially owned by SENER (53.12%), recorded a turnover of 710 million euros in 2015, a 9.3% increase when compared to the previous year. Furthermore, the company has seen growth across all of its business units, with Commercial Aviation rising 6.6%, Defence 3.4% and In Service Support 25.8%.

Operating income reached 63 million euros, a 10% increase compared to the previous year, with 8.9% profitability on sales. Such increase was due fundamentally to better performance of a number of programs, both product and management cost containment initiatives and higher In Service Support sales.

Consolidated profit after tax rose to 59 million euros, 9.1% lower compared to the previous year as a result of higher investments in programmatic R&D. In addition, ITP has continued to invest heavily in R&D&I during the course of 2015, increasing expenditures in this area up to 57 million and consolidating its position as one of the leading Spanish companies in terms of R&D investment compared to sales.

According to ITP's CEO Ignacio Mataix: "2015 has been a very important year with the announcement of the expansion of our alliance with Rolls-Royce in addition to several other announcements regarding our participation in programs that will contribute to secure the future of our company in the medium and long term”. With respect to results, Mr. Mataix remarked: “They prove how ITP has been able to consolidate its strong position over the past five years and allow us to launch our new Strategic Plan, which contains ambitious growth targets, from a strong position”.

Key milestones of the year by area of activity Commercial Aviation sales rose to 373 million euros in the 2015 fiscal year compared to the 350 million euros of the 2014 fiscal year, a 6.6% increase. This segment already represents 52.5% of the company’s overall activity.

Among the most important milestones of 2015 in the commercial aviation segment is the signing of the strategic collaboration agreement with Rolls-Royce – as a result of which ITP has consolidated its position as the British group’s supplier of low pressure turbines – with further expansion of its relationship to the new Ultrafan™ turbines.

In addition, ITP has signed the contract that will make the company responsible for the supply of the low-pressure turbine of the Trent 7000 engine for all versions of the A330neo aircraft. 2015 has also witnessed the largest order of Trent engines to date, with the selection by Emirates of the Trent 900 engine for powering 50 Airbus A380s.

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Oihana Casas. Communication. SENER. Tel (+34) 91 807 73 18 / (+34) 679 31 40 85 www.sener-group.com Sales in the Defence sector rose to 184 million euros, representing a 3.4% increase with respect to the 178 million euros of the previous fiscal year. Sales of this unit represent 26% of ITP’s total sales.

With respect to the Eurofighter program, Kuwait has signed a preliminary agreement (confirmed in April of 2016) to become the third country in the region after Saudi Arabia and Oman to acquire the fighter jet. ITP is responsible for both production and in-service support activities for the EJ200 engine fleet.

As regards the TP400 program – the engine powering the A400M transport aircraft – 2015 saw the entry into service of the first aircraft destined for export in Malaysia. The first delivery of the A400M aircraft for the Spanish Air Force is planned for 2016.

The In Service Support activity has experienced strong growth in 2015, which has translated into a 25.8% increase in sales with respect to 2014, reaching 153 million euros. The fundamental outcome of this growth is the consolidation of the market re-positioning of the business toward the international commercial aviation segment.

With regard to R&D, ITP was selected as a Core Partner in the EU’s ‘Clean Sky 2’ research program, where ITP will invest an amount of over 40 million euros in the next 6 years. This program will result in a contribution that will be fundamental in terms of fuel consumption and CO2 emission reductions in the commercial aviation space.

2016-2020 Strategic Plan: the profitable growth plan In 2016 ITP has begun to execute a new Strategic Plan for the period 2016-2020 called ‘ITP 2020’. The new plan starts off of a market scenario that can be considered as stable, coupled with a favorable outlook due to the expected growth of the global aircraft fleet. The forecast of new engine programs however is limited.

The ITP 2020 Plan has as its main challenge consolidating ITP as one of the leading companies in the industry globally. To this end, the company has placed the focus on increasing its turnover substantially, establishing a sales target of around 50% over the next five years.

In order to reach this growth in sales, ITP plans to invest over 650 million euros in new programs through the expansion of its production and R&D&I capacities. Investments will mostly be geared at the Zamudio and PCB plants, both located in Spain, with additional expanded production capacities targeted for Mexico and the United Kingdom.

With respect to its areas of activity, ITP forecasts a change in the business mix that will see an increase in the weight of the commercial aviation segment due to the few new opportunities that exist in Defence, which are in line with Western nations’ Defence budget restraints.

The company seeks to consolidate its position in the commercial aviation market as a partner to the leading engine manufacturers around the world, such as Rolls-Royce, Pratt & Whitney Canada, GE and Honeywell. To this end, ITP has defined four main product families: turbines, structures, compressors and externals.

Among the main challenges facing ITP in this period is the production growth ramp that affects the entire industry due to the current number of orders in the commercial aviation segment. The company will therefore step up investments in order to generate the necessary capacity to accommodate for the growth in deliveries, including an industrial plan amounting to 84 million euros

Oihana Casas. Communication. SENER. Tel (+34) 91 807 73 18 / (+34) 679 31 40 85 www.sener-group.com in all of its plants. In this regard, supply chain management will constitute a fundamental aspect, as ITP deepens the long-term strategic relationships with its partners and suppliers.

Lastly, and in order to remain at the forefront of technology, ITP will continue to develop its technology plan, which includes an investment of 80 million euros in this period with the goal of securing its market position in the next generation of engines, the entry into service of which is planned for the beginning of 2025.

About ITP ITP is currently the ninth biggest 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, Great Britain, Malta, United States, India and Mexico and more than 3,000 employees.

ITP includes among its activities the design, research and development, manufacturing and casting, assembly and testing of aeronautical engines. It also offers a wide range of customised MRO solutions for engines, accessories, components and parts. Its experience in the MRO market includes clients operating in the civil, industrial and defence markets worldwide.

About SENER SENER is a private engineering and technology group founded in 1956. It seeks to offer its clients the most advanced technological solutions and enjoys international recognition thanks to its independence and its commitment to innovation and quality. SENER has a workforce of near 6,000 professionals distributed across its offices in Algeria, Argentina, Brazil, South Korea, Chile, China, Colombia, the United Arab Emirates, Spain, the United States, Japan, Mexico, Poland, Portugal and the United Kingdom. The group’s turnover exceeds 1.305 billion Euros (2014 data).

SENER engages in the specific activities of Engineering and Construction. It also has industrial holdings in companies involved in Aeronautics, as well as in the field of Energy and Environment. In the area of Engineering and Construction, SENER has become a world leader in Aerospace, Infrastructures and Transport, Power, Oil & Gas, and Marine.

In 2016, SENER will be celebrating its 60 th anniversary with a long track record of projects, international experience and a team comprised of thousands of professionals who are the co-creators of the innovations that have marked its past and will shape its future.

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Oihana Casas. Communication. SENER. Tel (+34) 91 807 73 18 / (+34) 679 31 40 85 www.sener-group.com