Morningstar | Faury Tales: Airbus' New CEO Prepared to Write the Next Chapter
Following the abrupt departure of new sales chief, Eric Schulz, coupled with news of the impending dual retirements of the less well known (but arguably more important) COO, Tom Williams, and EVP of Programs, Didier Evrard, we became increasingly convinced that an insider would takeover from Airbus CEO Tom Enders when he steps down in April 2019. Conventional wisdom held that this insider would be Airbus Commercial Aircraft President, Guillaume Faury, and based on recent reports (still unconfirmed by Airbus) this looks increasingly likely.We think Faury will need to call on all his management and industrial skills to navigate an ongoing corruption investigation, a steep production ramp-up, and a broad and deep management shake-up. We're not changing our fair value estimate of EUR 104 for narrow-moat Airbus because we think he's a skilled operator and his appointment is already contemplated in our base-case valuation.
Faury spent a good chunk of his career in the automotive sector and led the Airbus Helicopters unit from 2013 to early 2018, which means he isn’t tainted by suspect commercial aircraft sales practices. His Grande École and engineering background makes him the prototypical French CEO. Given this background we don’t envision Airbus becoming more shareholder-friendly with Faury than under Tom Enders, who jettisoned the old government shareholding structure and instituted a dividend, but we also don't anticipate a return to a government-run company. He’s a bit more understated than Enders, but we don’t think this means he’s a pushover. Indeed, Schulz may have left the chief sales role so quickly after losing in a power struggle with Faury. Finally, we think Faury's track record in the highly competitive automotive sector and at Airbus Helicopters where he reorganized and rationalized the development pipeline bode well for his ability to concomitantly handle Airbus' production ramp and its response to a Boeing next-generation midsize aircraft.
Airbus is an European Aeronautic Defense and Space company whose core business is the manufacturing of commercial aircraft, civil and military helicopters, commercial space launch vehicles, missiles, military aircraft, satellites and defense systems and defense electronics and the rendering of services related to these activities. Co. organizes its businesses into the following five operating divisions: Airbus Commercial, Airbus Military, Eurocopter, Cassidian and Astrium. In addition, Co.'s Other Businesses division engages in the development, manufacturing, marketing and sale of regional turboprop aircraft and aircraft components.
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