The Meggitt DNA - engineered for growth
Meggitt’s smart engineering for extreme environments has resulted in the Group securing strong positions on the latest wave of new aircraft platforms.
Over the past four years, Meggitt has secured increased content on a new generation of large civil aircraft during a period of unprecedented product renewal by the major airframe and engine manufacturers. The value of our products that will be installed on each of these aircraft has increased between 50% and 250%.
New products are being introduced faster than ever to our manufacturing facilities, supported by the Meggitt Production System which has now been launched at all major facilities, where the furthest advanced sites are achieving significant inventory and productivity improvements.
This combination of established business improvement techniques, which can be tailored to accommodate the rich diversity of Meggitt capabilities and facilities, defines our internal processes and, increasingly, the experiences of our customers.
Three factors will drive our growth in the years to come.
Extreme environment technologies, highly regulated markets
- Our products must operate in extreme environments. An aircraft engine will sit in 45°C heat on an Abu Dhabi runway. The air temperature will drop to -60°C after take-off, while engine temperature rises to 1500°C.
- They must therefore pass rigorous customer and regulatory certification processes. Testing new aircraft wheel and brake suppliers, for example, ends with a maximum energy rejected take-off test with the total cost often running into six figures.
- The capital investment required to make our products is often significant. Our carbon disc furnaces are the product of 40 years' experience and multi-million pound investments.
- Most of the intellectual property in our products belongs to us. Our world-leading expertise in high-performance sensing, for example, is rooted in 60 years of technical research and commercial application.
- We invest continually in R&D to ensure we evolve with our customers' requirements: R&D in 2015 was approximately £158.7 million (9.6% of sales), record, expenditure, underpinning the industrialisation of products for a wealth of new programme wins from the current bid cycle.
- In the risk-averse world of aerospace, any new technology or supplier has to work very hard for acceptance. We have been working with the global leaders on many of our products since World War II.
- Our customer relationships and market knowledge rest on decades-strong foundations.
Win new platforms, secure aftermarket business
Second, we focus on securing positions on new platforms, preferably as a sole-source provider. As a result, we benefit from decades of stable aftermarket business - spares, maintenance, repair and overhaul.
We won a contract to deliver thermal management sub-systems on Pratt & Whitney's PurePower® engines which will power innovative new aircraft such as the Bombardier C-Series regional jet and the A320neo. The contract is estimated to be worth around $1 billion over the 40-year lifetime of the engine and aircraft programmes.
Third, we grow organically. We invest in technology development to ensure our products win more contracts on key platforms with long life cycles. Where appropriate, we make acquisitions to fast-track product development and grow our market.
Thanks to a generation of investment in our fire detection capability and the acquisition of aircraft fire suppression leader Pacific Scientific Aerospace in 2011, Meggitt is one of only two companies worldwide that can offer total fire protection systems. As a result, Airbus selected us as the sole-source fire protection supplier on the A320neo, one of the fastest-selling commercial aircraft in history. We continue to win full fire protection programmes, most recently for Boeing’s 737 MAX engine and auxiliary power unit.