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April 20, 2016
Aerospace and Manufacturing Forum
Confidential – Cronus Aerospace Forum | April 2016 1
Capital Market ConditionsPublicly Traded Equities – Valuation Multiples
EV/EBITDA EV/Revenue
Debt Market Rates
0.0x
0.2x
0.4x
0.6x
0.8x
1.0x
1.2x
Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
CP Aerospace Index - Average CP Aerospace Index - Adjusted Average
5.0x
6.0x
7.0x
8.0x
9.0x
10.0x
Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15
CP Aerospace Index - Average CP Aerospace Index - Adjusted Average
Source: Thomson Reuters Eikon; net adjustment is 30%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16
10-yr Treasury Yield US Fed Target Rate Linear (10-yr Treasury Yield)
Confidential – Cronus Aerospace Forum | April 2016 2
Speaker Introduction: Richard Brown
• Principal at ICF International, one of the world’s largest and most experienced aviation and aerospace consulting firms, forecasting industry production and demand and providing advisory support to MROs, operators, and OEMs
• 15+ years’ experience in the aerospace industry, including 10 consulting with ICF (formerly Aero Strategy) managing projects with a broad global client base, including airlines, manufacturers, and suppliers
• Extensive aerospace market forecasting experience leading to the development of the Aero Strategy business aviation maintenance market forecast
• Specialties: • Asia and Middle East market• Business aviation• Pilot and mechanic training• Aircraft component manufacturing• Engine and component maintenance and support
• Previous experience includes various market analysis roles at TRW Lucas Aerospace and Goodrich Corporation
Confidential – Cronus Aerospace Forum | April 2016
Cronus Partners, a recipient of the ACG Boutique Investment Bank of the Year award, is a middle market focused independent investment bank headquartered in New York City
While Cronus works on investment banking mandates for companies across a broad spectrum of industries, weare unrivaled in our knowledge and experience with specific industries. We understand the drivers of changewithin each industry and nurture relevant and meaningful corporate and private capital market relationshipstherein. Cronus combines Wall Street expertise with the agility and attentiveness of a boutique firm. Ourinvestment bankers are highly experienced professionals who combine in-depth industry knowledge withtransactional execution skills and an intimate understanding of issues facing middle market companies. Cronus’focused attention and guidance through each step of the process enables each client to accomplish its goals.
3
Cronus Partners Overview
Firm Profile
Sales, divestitures, spinouts Mergers and acquisitions Bank facilities, senior,
subordinated and other debt financing (asset based, cash flow based, transaction oriented)
Private placements of equity and debt
Management buyouts Fairness opinions Corporate finance advisory
services
Investment Banking Services
Aerospace and Defense Alternative Energy Business Services Environmental Services Maritime Transportation
and Logistics Oilfield Technology Specialty Manufacturing
Sector Coverage
Confidential – Cronus Aerospace Forum | April 2016 4
Contact Us
Cronus Partners LLCwww.CronusPartners.com
850 Third Avenue20th FloorNew York, NY 10022
Charles CarsonSenior [email protected]
John [email protected]
Ken LeungManaging [email protected]
Paul NowakManaging [email protected]
Jeffrey RubinManaging [email protected]
Andrea [email protected]
Britt BarclayAssociate
Conor WilliamsAnalyst
Jenni SingerManager, Administration
Lisa JohnsonMarketing Associate
00
What's Happening with Aircraft Engine and MRO Demand?
20 April 2016 - Hartford, CT
Presented by:Richard BrownPrincipal, ICF International [email protected]
© ICF International 2016ICF International | icfi.com
Market Context
MRO Forecast &The Battlegrounds
What’s Happened To MRO?
Agenda MRO Market Forecast & Key Battlegrounds
ICF International | icfi.com © ICF International 2016
Aftermarket is significant at $135B, equivalent to 75% of the value of current production
© ICF International 2016ICF International | icfi.com 2
MARKET CONTEXT
Air Transport, 61%
Business & General
Aviation, 14%
Civil Rotary Wing, 3%
Military Rotary Wing, 10%
Production:$180.3B
Business & General
Aviation, 9%
Civil Rotary Wing, 3%
Air Transport, 48%
Military, 12%
Military, 27%
Military Rotary Wing,13%
Aftermarket:$135.1B
Source: ICF International
Aftermarket and Production Market Size (2015 $B)
Boeing 20%
Airbus20%
Bombardier 6%
Embraer Cessna 6% 6%
Finmeccanica Helicopters…
Gulfstream 4%
Sikorsky 5%
Bell5%
Other 23%
Air Transport37%
BGA25%
Civil Rotary Wing 12%
Military Rotary Wing 16%
10%
Nearly 5,000 aircraft were produced in 2015 in all markets; air transport accounts for one-third of all production
© ICF International 2016ICF International | icfi.com 3
MARKET CONTEXT
2015 Aircraft Production Total = 4,466 Units
Military FixedWing
By Market By OEM
Source: ICF International
Single Aisle 59%
TwinAisle 13%
Regional Jet9%
Next Gen TwinAisle
9%
Regional Prop 7%
Large Twin Aisle 3%
Boeing 46%
Airbus 38%
Embraer 5%
ATR 5%
Bombardier 4%
Sukhoi 1%
Xian 1%
The Boeing-Airbus duopoly in air transport accounts for 84% of all production units
© ICF International 2016ICF International | icfi.com 4
MARKET CONTEXT
2015 Air Transport Aircraft ProductionTotal = 1,674 Units
By OEM By Category
Source: ICF International
A combination of high fuel prices and low cost of capital has createdfavorable aircraft buying conditions…..
© ICF International 2016ICF International | icfi.com 5
MARKET CONTEXT
Oil Prices and US Federal Funds Rate
Sources: EIA; US Federal Reserve, Teal Group
Airbus and Boeing have record backlogs, approaching 8 years even at increased production rates
© ICF International 2016ICF International | icfi.com 6
MARKET CONTEXT
0 1000 5000 6000 7000
CSeriesCRJ
Q400
EJets EJets E2
737NG/MAX787
777X777-300ER/F
767747-8
A320ceo/ neoA350
A330ceo/ neoA380
Airb
us
Source: ICF Research, Boeing, Airbus, Bombardier, Embraer
Boei
ngEm
bBo
mb-
ardi
er
Air Transport Aircraft Backlogs
8 years6 years
5 years
5 years
7 years
5 years
4 years
2.5 years
3 years
2 years
3 years
3 years
4 years
3 years
<2 years
2000 3000 4000
Units in Firm Backlog
Through 2025, air transport production will grow 3.5% annually, along withtotal value at 3.1% per annum
© ICF International 2016ICF International | icfi.com 7
MARKET CONTEXT
2015-2025 Air Transport Aircraft Production By OEM
#Aircraft
Total CAGR = 3.5%
Type, CAGR $B USD
$0
$20
$40
$60
$80
$100
$120
$140
$160
2015 2020 2025
Others, 13.9%
Bombardier, 1.3%
Embraer, 2.0%
Airbus, 3.5%
Boeing, 2.2%
Total CAGR = 3.1%
Type, CAGR
0
500
1,000
1,500
2,000
2,500
2015 2020 2025
Other, 11.6%
Bombardier, -1.9%
Embraer, 2.0%
Airbus, 3.5%
Boeing, 2.4%
Source: ICF Research & Analysis, Figures in Constant 2015 Dollars
ICF’s anticipates mostly re-engine programs in the near-term
© ICF International 2016ICF International | icfi.com 8
MARKET CONTEXT
MOM
A380neo
777-X
A350-1100
737MAX-10
C919
MOM
C929
CS500*
E3
E2
New Aircraft Outlook
A322neo
* Assumes companysurvival
2020 2025 Airbus will prioritize the A350-1100; it may follow with a stretch A322neo and A380neo; a new single aisle (SA) likely ~2030
Boeing will stretch and re-wing the MAX in lieu of a MOM white sheet to fend off the A321neo; the MOM will wait until the mid-late 2020s…possibly in a family concept with a new single aisle similar to the 757/767
Bombardier will just survive after more government aid and/or entering a JV; it will launch the CS500 later this decade
Embraer and Comac will bring new aircraft to the market in the late 2020sSource: ICF analysis
Will end production ~ 2020
New SA
MARKET CONTEXT
Aircraft OEMs are substantially less profitable than most Tier 1 suppliers…
© ICF International 2016ICF International | icfi.com 9
Aircraft OEMs perceive the risk-reward equation to be out of balance relative to more profitable Tier 1 and aeroengine OEMs
Airbus’s profitability is steadily improving from low single digits earlier this decade
Boeing would be less profitable ifit did not use program accounting(cumulative ~$30B loss on 787)
0.00%
5.00%
10.00%
15.00%
20.00%
2010 2011 2012 2013
Aircraft OEM Profitability
Tier 1 suppliers
(15%average)
Figures are EBIT (Airbus) and Operating Profit (Boeing)
Source: Airbus, Boeing.
Boeing Commercial
Airbus Commercial
2014 2015
MARKET CONTEXT
…and are engaging in several cost reduction initiatives to increase profitability
Source: ICF
Initiative ActivityNew commercial terms
• Unilateral price reductions and revised terms• “No fly” lists for suppliers that don’t participate
Part redesigns• Value engineering• Material substitution
New processes• Shift to lower cost process• Leverage new processes
Selective vertical integration
• Expand role in profitable product segments• Assume system integration role• Gain access to lucrative aftermarketrevenue
Aggregation& Dual Sourcing
• Aggregate fragmented segments (e.g. fasteners, interiorparts• Shift to dual sourcing
Capture revert• Where possible, capture revert fromsuppliers• Work with supply chain integrators to close loop on material
ICF International | icfi.com 10© ICF International 2016
Market Context
MRO Forecast &The Battlegrounds
What’s Happened To MRO?
Agenda MRO Market Forecast & Key Battlegrounds
ICF International | icfi.com © ICF International 2016
MRO MARKET FORECAST
The current commercial air transport fleet consists of over 27K aircraft
Narrowbody Jet
Widebody Jet
Turboprop
RegionalJet
27,110Aircraft
14%
53%14%
19%
By Aircraft Type By Global Region
North America
Asia Pacific
Europe
Latin America
Middle East
31%
Source: ICF International; Forecast in 2015 $USD, exclusive of inflation
© ICF International 2016ICF International | icfi.com 12
27%
25%
8%
5% 5%
27,110Aircraft
The combination of strong air travel demand and the need toreplace ageing aircraft will drive fleet growth at 3.4% annually
© ICF International 2016ICF International | icfi.com 13
MRO MARKET FORECAST
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2015 2025
Africa Middle EastSouth America EuropeAsia PacificNorth America
27,100
27%
32%
37,900
31%
25%
8%
26%
23%
8%
# Aircraft
3.8%
Source: ICF International; Forecast in 2015 $USD, exclusive of inflation
2.5%
1.6%
5.2%
5.3%
5.1%
CAGR
3.4% Avg.
Current air transport MRO demand is $64.3B; with Asia equivalentto North America and Europe in market size
© ICF International 2016ICF International | icfi.com 14
MRO MARKET FORECAST
Engines
Components
Line
Airframe
Modifications
14%
17%
22%
40%
7%North
America
Asia Pacific
Europe
Middle East
Latin America
Africa
29%
28%
26%
8%6%4%
$64.3B$64.3B
By MRO Segment By Global Region
Source: ICF International; Forecast in 2015 $USD, exclusive of inflation
The global MRO market is expected to grow by 4.1% per annum to$96B by 2025
© ICF International 2016ICF International | icfi.com 15
MRO MARKET FORECAST
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
2015 2025
Modifications AirframeLine Component Engine
40%
22%
14%
17%
$64.3B
$96.0B
2.8%
Source: ICF International; Forecast in 2015 $USD, exclusive of inflation
3.6%
4.3%
4.4%
CAGR
4.1% Avg.
5.3%
41%
22%
16%
13%
CFMInternational
30%
GE Aircraft Engines
26%
Rolls-Royce 19%
Pratt & Whitney 12%
International Aero Engines
9%
Pratt & Whitney Canada
3%Other
1%CFM56-7B
15%
V2500-A59%
CFM56-5B<1
Trent 7008%
GE90-115B 8%
CF6-80C2 7%
PW4000-94 5%
AE3007A 2%
Trent 8002%
CFM56-3 3%
Other 32%
The air transport engine MRO market stands at $25 billion; the topfive platforms account for about half of the total demand
© ICF International 2016ICF International | icfi.com 16
2015 Engine MRO Market
Total = $25.5 Billion
MRO MARKET FORECAST
By OEM By Engine Group
Source: ICF International
Engine MRO demand will grow about 4.4% annually through 2025, aperiod that will witness production ramp-ups and new engines
© ICF International 2016ICF International | icfi.com 17
MRO MARKET FORECAST
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
2015 2025
Other, -10.9%
IAE, 3.5%
Rolls-Royce, 3.9%
GE, 5.4%
CFM, 4.8%
OEM, CAGR Group, CAGR
Total = 4.4% Total = 4.4%
$ Billions
2015 – 2025 Air Transport Engine MRO Forecast By Engine OEM & Engine Group
$ Billions
$0
$5
$10
$15
$20
$25Pratt & Whitney, 1.2%
$30
$35
$40
$45
2015 2025
Other, 3.8%
Genx-1B, 39.8%
CF6-80C2, -7.3%
Trent 700, 3.0%
V2500-A5, 3.4%
CFM56-5B, 4.0%
GE90-115B, 8.6%
CFM56-7B, 5.3%
Source: ICF International
The aftermarket has evolved from being an afterthought to amarket of significant importance and a revenue opportunity
© ICF International 2016ICF International | icfi.com 18
THE BATTLEGROUNDS
Airlines Maintenance mainly a cost
centre
LCC’s drive new approach tomanaging maintenance
Increased outsourcing
US airline bankruptcies and restructuring
Limited focus on aftermarket;Rolls-Royce ahead of thegame
Significant growth of point-of-aircraft sale MRO contracts byengine OEMs
Increasing economic imperative forComponent OEMs given design investment on new programmes
OEMs
MROs Supply mostly in-house – fewlarge airline MRO suppliersand hugely fragmentedindependent sector
Growth of integrated component
Source: ICF International
services
Globalization of demand
The aftermarket has evolved from a cost centre to a highly competitive market1980 – 2000 Post-2000s
Engine OEMs have the most mature and strongest OEM positionacross the main air transport aftermarket segments
© ICF International 2016ICF International | icfi.com 19
THE BATTLEGROUNDS
55%
35%
2% 0%
20%
25%
44%
82%
25%40%
54%
18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Engine overhaul
Component O&R
Airframe Heavy
Line maintenance
Non-OEM MRO
Airline in-house
OEM
Highlights
Source: ICF International
OEMs tend to have the strongest share in the more material intensive markets (e.g. engine overhaul)
Component OEM market sharelower than engine OEMs
Aircraft OEMs have an almost non-existent position in the airframe-related aftermarket
Air Transport Supply (2015)
The ramp up and introduction of new generation aircraft creates theopportunity to change the aftermarket supply chain
© ICF International 2016ICF International | icfi.com
THE BATTLEGROUNDS
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Aircraft deliveries (units)Highlights
New aircraft with higher reliability, lower manhours and complex technology change the business case for establishing MRO capability
…especially with greater airlinefocus on financial returns
This is a catalyst to change the MRO supply model….
Creating new opportunity for OEMs and aftermarket providers
Mature Aircraft
New Generation
Source: ICF International
20
Aircraft
Agenda MRO Market Forecast & Key Battlegrounds
ICF International | icfi.com © ICF International 2016
Market Context
MRO Forecast &The Battlegrounds
What’s Happened To MRO?
MRO demand growth is considerably lower than global capacitygrowth…
© ICF International 2016ICF International | icfi.com 22
WHAT HAPPENED TO AFTERMARKET DEMAND?
Global YoY ASK Growth
MRO Demand Growth vs Global Capacity (ASK) Growth
Sources Canacord Genuity, ICAO
The conundrum
…And airlines are enjoying lower fuel prices
© ICF International 2016ICF International | icfi.com 23
WHAT HAPPENED TO AFTERMARKET DEMAND?
$0.8
$1.1
$3.2
$2.9
$2.6
$2.3
$2.0
$1.7
$1.4
~67% Decline
U.S. Gulf Coast Jet Fuel Price per Gallon
Continued lower fuel prices may encourage airlines to keep older in service for longer… as has already started to happen
© ICF International 2016ICF International | icfi.com 24
WHAT HAPPENED TO AFTERMARKET DEMAND?
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
0
200
800
# Retirements
1,200
1,000
Retirement as %of installed fleet
% Installed Fleet
1990-99 Average: 191
600
4002000-09 Average: 473
Potential Impact:
Airline capacity increases
Reduced part-out feed stock for surplus market
Increase in airframe and engine MRO spend onolder airframes
Less pressure OEM new parts sales
Higher used part values / pricing
ICF believes that four major trends are behind the aftermarketshortfall
© ICF International 2016ICF International | icfi.com 25
WHAT HAPPENED TO AFTERMARKET DEMAND?
4Used & Serviceable
Material
RONA-DrivenAirlines
Currency Exchange Fluctuations
New Age Provisioning
Historically, airlines have not generated investor returns, and someairlines are intent to improve this…
WHAT HAPPENED TO AFTERMARKET DEMAND?
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
WACC
ROIC
Source: McKinsey / IATA
2004-2013 Global Airline ROIC vs. WACC
RONA-DRIVEN AIRLINES
© ICF International 2016ICF International | icfi.com 26
…and for these airlines, capacity management and asset utilizationare replacing market share as key metrics
WHAT HAPPENED TO AFTERMARKET DEMAND?
70%
72%
74%
76%
78%
80%
82%
0
0.5
1
1.5
2
2.5
3
3.5
2004 2005
ScheduledPassengers
Load Factor
Billions of Passengers
2006 2007 2008 2009 2010 2011 2012 2013 2014F
The airlines have historically been run by operationally-minded people, who tended tothrow planes onto routes in a fight for market share. The name of the game is nowcapacity management, and the decision makers are the finance people.
Derek Kerr, CFO, American Airlines
Source: ICF Research / IATA
2004-2014 Global Airline Scheduled PassengersLoad Factor
RONA-DRIVEN AIRLINES
© ICF International 2016ICF International | icfi.com 27
Delta Airlines is at the vanguard of this sea-change in airlinemanagement philosophy…
WHAT HAPPENED TO AFTERMARKET DEMAND?
It’s been about changing themindset and the approach to theindustry, and really treating theairline industry like any otherindustrial business. For thatreason, we target 15% ROIC justlike other high-quality industrialtransports.
Richard Anderson, CEO, Delta Airlines
RONA-DRIVEN AIRLINES
© ICF International 2016ICF International | icfi.com 28
Delta’s approach to up-gauging results in the same capacity with 14% fewer aircraft…
WHAT HAPPENED TO AFTERMARKET DEMAND? RONA-DRIVEN AIRLINES
© ICF International 2016ICF International | icfi.com 29
Source: Delta Airlines
…Delta’s philosophy results in reduce maintenance expenditureswith OEM purchases as a last resort
WHAT HAPPENED TO AFTERMARKET DEMAND?
Aircraft impacted• MD80• 767s• 757s• 747-400s
• Delta has a group dedicated to parting out aircraft and has purchased aircraft from other operators to cannibalize (e.g. SAS MD80s)
• Actively cannibalizes its own retired aircraft
• Recent repair volume fell by 20% partly through use of USM• Leverages its internal engineering capability to develop DER repairs
and modified repair scopes (e.g. hard time on condition)• Buys from OEMs only as last resort
RONA-DRIVEN AIRLINES
“Opportunities to acquire older airplanes and harvest them forparts has provided significant savings for us going forward interms of a lower-cost basis for the overhauls that we have”
Paul Jacobson, Delta CFO, Delta Airlines
“Historically in this industry, management teams becameinfatuated with new airplanes. Instead, we look at airplanes notas emotional decisions but as investment decisions. Each assethas to have a return on capital”
Richard Anderson, CEO, Delta AirlinesSource: ICF International
© ICF International 2016ICF International | icfi.com 30
The share of integrated programs in component support isincreasing, which is limiting initial provisioning sales
WHAT HAPPENED TO AFTERMARKET DEMAND?
Component Support Buying Behaviour
Growth Drivers Small fleet size
• Perceived technology risk
• Improved ROIC
• Maintenance no longer coreactivity
• Predictable outgoings
• Attractive value propositions
• Lower investment, less infrastructure
0%
10%
20%
30%
40%
50%
60%
70%
80%
100%
90%
Integrated*
Traditional
Integrated Component Programs Penetration
777 787/A350
~20% 55%-70%
9%
2004 2014 2024
30%45%
Control of assets enables aftermarket players to support integrated programs moreeffectively:The more inventory held by a supplier, the lower the inventory cost per aircraftsupported
New Age Provisioning
Source: ICF International
© ICF International 2016ICF International | icfi.com 31
Pooling results in greater asset productivity…and less demand forinitial provisioning
WHAT HAPPENED TO AFTERMARKET DEMAND?
• The ”start-up” inventory for the first aircraft is very high.
• When more aircraft are added to fleet, the start-up inventory is spread on more aircraft, and the required investment per aircraft is reduced.
• The scale effect flattens outwhen the pool reaches critical size.
• Inventory management firms with sufficient size and fleet size can take advantage of their scale and effectively move an operator down the inventory holding curve
Notional Inventory Holding Curve
Number of aircraft
Req
uire
dIn
vent
ory
($pe
rairc
raft) Traditional In-House
Inventory Management
Large Scale Inventory Management Programs
New Age Provisioning
© ICF International 2016ICF International | icfi.com 32
The availability of used and serviceable material (USM) has grownwith aircraft retirements in recent years…
WHAT HAPPENED TO AFTERMARKET DEMAND?
Air Transport Annual Aircraft Retirements
Includes TurbopropsSource: FlightGlobal ACAS June 2015, Airline Monitor, ICF International Analysis
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
0
200
400
600
800
1,000
1,200
# Retirements
Retirement as % of installed fleet
% Installed Fleet
ICF International forecast
1990-99 Average 191
2000-09 Average 473
2010-24 Average 825
Used & Serviceable Material
© ICF International 2016ICF International | icfi.com 33
OEM New
Partsrepair, incl.
DER
USM Parts
PMA Parts, 1%
Total commercial aircraft material related spend is estimated to be$37.5B with OEM new parts accounting for about two-thirds
WHAT HAPPENED TO AFTERMARKET DEMAND?
Air Transport MRO Material Related Spend
Total parts demand consists of OEM New + USM parts + PMA: Repair activity is outside this parts demand. Source: ICF analysis
$37.5B 67%
22%
9%
Alternative (to OEM new) parts choices today account for one-third of total material spend
USM parts market is $3.5B – and nine times greater than PMA
Parts repair, including DER, is even higher
Used & Serviceable Material
Engine Parts
Component
Airframe
5% 65%
30%
Air Transport Surplus PartsMarket*
$3.5B
Over 80% of airlines have an active surplus parts strategy (up from 71% in 2013) according to Oliver Wyman
© ICF International 2016ICF International | icfi.com 34
WHAT HAPPENED TO AFTERMARKET DEMAND? Currency Fluctuations
• The USD has strengthened 20-35% since January for important currencies
• MRO material is typically priced in USD, thereby increasing input costs considerably to non-US MROs
• Anecdotal evidence suggests that MRO expenditures dropped in regions with large shifts in exchange rates
-55.1% -41.1% -34.1%Russian Ruble Brazilian Real S. African Rand Mexican Peso
-25.9%CanDollars
-23.1%AusDollars
-20.8%Euro
-20.0%British Pound JapaneseYen
-12.8% -11.9%Indian Rupee ChineseYuan
-7.8% -7.2%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
Finally, the dramatic strengthening of the USD is weakeningaftermarket results from some regions
Exchange Rates: January 2014 - present% Value Change
Jan. 2014 – Jan. 2016
B
R
C
S
I
Source: Source: Oanda historical exchange rates, ICF International Analysis
The “CRABS”: Countries with economies
© ICF International 2016ICF International | icfi.com 35
that are heavily dependent on commodity exports
ICF is one of the world’s largest and most experienced aviation and aerospace consulting firms
© ICF International 2016ICF International | icfi.com 36
51 years in business (founded 1963)
100+ professionalstaff− Dedicated exclusively to aviation and aerospace
− Blend of consulting professionals and experienced aviation executives
Specialized, focused expertise and proprietary knowledge
Broad functional capabilities
More than 10,000 private sectorand public sector assignments
Backed by parent company ICF International ($937M 2013 revenue)
Global presence –– officesaround the world
Airports • Airlines • Aerospace & MRO • Asset Advisory
joined ICF in 2012
joined ICF in 2011
joined ICF in 2007
New York • Boston • Ann Arbor • London • Singapore • Beijing • Hong Kong
Thank you!For questions regarding this presentation, please contact:
Richard Brown PrincipalAerospace & MRO Advisory
+44 (0)7718 893 [email protected]
icfi.com/aviation
ICF International | icfi.com © ICF International 2016