Fokker Services announces restructuring measures

Fokker Services B.V. (FS) announces a package of restructuring measures to address the changing conditions of the Fokker aircraft maintenance, logistics and parts availability market it is operating in. The measures include a significant reduction of staff in The Netherlands, as well as cost reduction and operational improvements plans. The measures are designed to enhance growth in new (other than Fokker platform) segments and to increase efficiency.

Fokker Services saw its operational EBIT decreasing in 2013 to EUR 4 million from EUR 9.9 million in 2012, Fokker Services reports today in a trading update with non-audited figures.

The management of Fokker Services today informed employees, the Works Council and the labor organizations about the restructuring, which includes a job loss of 200 FTEs divided over its Dutch locations Hoofddorp, Oude Meer and Woensdrecht.

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Peter Somers, President of Fokker Services: “The redundancies are painful, but inevitable. The revenue derived from supporting Fokker aircraft decreases every year, recently in a speed that we were unable to offset by assignments for other aircraft types. We have to adapt to the current market circumstances and ensure a competitive and efficient organization, while there is certainly ample opportunity in the market for our aircraft maintenance skills and parts availability services. In 2013 Fokker Services still showed a positive operational EBIT, but not anymore at an acceptable margin level. The necessary cost reduction and operational measures we are announcing today will ensure a recovery of the profitability needed, which is in the interest of all our stakeholders.”

Fokker Services employs around 930 FTEs, of which around 730 in The Netherlands. All intended (200) redundancies will involve the Dutch organization. For the employees involved, the management will discuss a ‘Social Plan’ with the social partners. Starting point will be a ‘Work to Work’ approach, with external support. If and when applicable replacement to other companies within parent company Fokker Technologies will be part of the approach.

Trading update
Revenue of Fokker Services declined in 2013 to EUR 205 million, from EUR 222 million in 2012. Although revenue in projects for other aircraft is still increasing, this could not offset the decline of revenue related to assignments for the Fokker fleet. Operational profit over 2013 was positive, but at a low margin of 1.9% (2012: 4.5%). At the end of the year Fokker Services had a net cash position that increased slightly versus end of 2012.
The annual results of Fokker Services will be published in March 2014, as part of the 2013FY Report of its parent company Fokker Technologies. Next to the services company, Fokker Technologies consists of three ‘design& build’ businesses, Aerostructures, Landing Gear and Electrical Systems.

As announced in August 2011 Fokker Services is in dialogue with the US authorities regarding possible violations of US compliance rules. In 2010, Fokker Services made a voluntary disclosure to the US Authorities and has been fully cooperating with the US Authorities on the matters disclosed since 2010. The discussions with the US Authorities about a settlement are continuing. Timing and final terms of a resolution are not yet known.

Source: Fokker Services
Date: Feb 3, 2014