Bringing the disparate Meggitt brands together into one company as of January 1 this year was a seminal moment, CEO Tony Wood told AIN on the eve of the 2019 Paris Air Show. The newly combined group (Chalet 28) has seen turnover increase fivefold in 15 years, to £2.1 billion ($2.6 billion) last year and has a market capitalization of £4 billion ($2.53 billion).
It recorded a 9 percent increase in turnover last year and the recent first quarter was similar, although Wood admitted, “RPKs are slowing a bit now. Regional jets are in decline and business aviation is flat, but airlines are growing, and defense is growing—as fast in the aftermarket as in original manufacture. In fourth-quarter 2018, year-on-year our defense business grew by 30 percent.”
Under the leadership of Wood several acquisitions and divestments have seen Meggitt refocusing far more on aerospace and much less on sectors such as automotive and medical. It now has three main focus areas, namely aerospace, defence, and energy & equipment, with its aerospace and defense activities being organized into four main areas—airframe systems, engine systems, fire suppression systems, and aftermarket.
"We're on pretty much everything that flies—[some] 71,000 aircraft,” said Wood, who added Meggitt is supplier to 15 airframers and five engine manufacturers.
The UK-based company, which traces its roots back to a 19th Century inventor of altimeters for hot air balloons, is moving its headquarters from Bournemouth to Ansty Park, near Coventry, by March 2020. It started construction of the new HQ last year and Wood said it will also represent the company's engineering “center of excellence” for the UK.
Meggitt will ultimately have 43 facilities worldwide, down from 56 before the reorganization. “We’re on a consolidation journey to take that down to the mid-30s by 2021,” said Wood. “But we have built a number of new facilities and doubled in Vietnam and increased by 50 percent in both China and Mexico. We also bought a big composites business in San Diego and a services base in Miami.”
Its parts hubs are now better organized around four hubs—California, Miami, Coventry, and Singapore—all using the same, new back-office platform. This is combined with a new long-term contract approach to support, for example with Lufthansa Technik.
“It’s all about turn time,” said Wood, “and quid quo pro for the long-term agreement is getting data,” allowing visibility that helps it stock parts intelligently for its customers.
Like many other aerospace companies, Meggitt sees technology—such as materials, new processes such as additive manufacturing, and sensors—along with data and processing data as key differentiators. Wood said optical sensors represents “the next frontier,” describing them as “wonderful as they’re heat agnostic,” allowing digital data to be more easily harvested. Many Meggitt systems are in the “hot end,” he noted.
The company is also the main supplier of crashworthy fuel containment systems (fuel tank liners) and specializes in electric aircraft brakes.
Tony Wood started out as an engineer working on British Aerospace 146/Avro RJ braking systems before spending 16 years at Messier-Dowty (now Safran) and 15 at Rolls-Royce, ultimately becoming president of aerospace before he became Meggitt CEO on January 1, 2018