ANNUAL
REPORT
TURBOMECANICA
2022
THE MESSAGE OF THE PRESIDENT – GENERAL DIRECTOR
Dear shareholders,
The year 2022 proved to be a challenging year marked by
the war in Ukraine and multiple uncertainties in the economic
plan, generated by inflation, interest rate, energy and raw
materials crisis.
Therefore, to achieve the results TURBOMECANICA is
grateful for the collaborations with our customers, partners
and investors. I would also like to show my deepest
appreciation to all the colleagues who carry on the tradition of
almost half a century of our Company.
As usual, we present the information from the annual report
with transparency and determination.
In 2022, we recorded total revenues of 141.5 million lei (4.5% increase compared to 2021), a turnover of 139.2
million lei (5.96% increase compared to 2021) and a net profit of 12.2 million lei (3.74% increase compared to
2021), as well as a net profit margin of 8.76%. 34,2% of the turnover for the whole year was generated in Q4, thus
emphasizingthecyclicalitythat we experience everyyear and theunderstanding of whichweconsider fundamental for
investors so that they can correctly assess the evolution of our business during the year.
The growth prospects of the industry can be appreciated in the year 2023 as the "known unknowns". That is, there are
numerous variables that we are aware of (the known ones) that could create significant variation depending on their
outcome (the unknown) such as:.
The Economy: Will Inflation and Interest Rates Stay High or Adjust to Lower Values? Many financial experts are
predicting a recession next year but only time will tell what will happen.
The ongoing war will continue to affect global oil, commodity and energy prices, most acutely in Europe, which in turn
will negatively impact the airline industry’s fragile ability to fully recover. How long the war will last is currently a known
unknown.
The current civil unrest in Iran appears to be escalating and therefore creating further instability in the Middle East,
which could create further volatility in oil prices;
The certification process and timeline for the Boeing 737 MAX 7/10 aircraft remains unknown. At the same time,
supply chain bottlenecks that have negatively affected both new engine production and MRO suppliers in urgent
need of spare parts.
The global aviation maintenance and repair (MRO) market grew by 18% in 2022 and is forecast to grow by 22% this
year, still 2% below its peak in 2019, following to reach $125 billion by 2033 at an estimated average annual growth
rate of 2.9%. These growth forecasts combined with the evolution of our business model show that our expectations
to grow our business in the coming years are objective despite the uncertain economic outlook.
ANNUAL REPORT OF THE MANAGING BOARD
INTRODUCTION
This Annual Report of TURBOMECANICA S.A. as at 31.12.2022 is written in accordance with Law 24/2017 and
Regulation no. 5/2018 of the Financial Supervisory Authority (FSA) on issuers of financial instruments and market
operations.
The Administrators’ Report as at 31.12.2022 is accompanied by the Individual Financial Statements of
TURBOMECANICA SA, in order to inform investors and stakeholders about the changes in the company’s position and
performance for 2022, as well as about the situation on the aviation and defense industry market.
The report also includes the Statement on non-financial reporting issues, the "Apply or Explain" statement,
compliant with the Corporate Governance Code of the Bucharest Stock Exchange and are attached as an annex to
the Administrators’ Report.
TURBOMECANICA prepares the individual financial statements in accordance with international IFRS
international financial reporting standards.
ABOUT TURBOMECANICA
Turbomecanica is a Romanian company, with a tradition of more than 45 years in the Romanian aviation industry,
being part of the national defense industry in accordance with law 232/2016.
Our mission began with the foundation of TURBOMECANICA Plant in 1975 as the only manufacturer of turbine
engines and mechanical assemblies for helicopters (IAR PUMA 330L), as well as engines for Romanian-made
aircraft (IAR 99) which equip the fleet of the Ministry of National Defense and Romanian Intelligence Service.
The current main activities are:
- Maintenance of licensed equipment;
- Manufacture of components for civil aviation;
- Manufacture of components for the energy field.
Nowdays, Turbomecanica continues to responsibly support the national PUMA IAR-330 helicopters fleet and
MApN IAR 99 / SOIM training aircraft (SMFA, SMFN) and SRI performing product maintenance activities.
Thus, Turbomecanica continues the tradition of collaboration with important names in the international aviation
market, such as Leonardo Helicopters, ITP Aero și Witzenmann, sau GE Ungaria in the field of energy, as well as
other customers with lower shares in the Company’s turnover.
According to the classification of activities in the national economy, the main object of activity of
TURBOMECANICA is the manufacture of aircraft and spacecraft - CAEN code 3030 and secondary CAEN code
3316
The company’s unique European identification code (EUID) is ROONRC.J40 / 533/1991, and the identification
code as a legal entity (LEI) is 529900O5AIXHHACIZH85.
The company website is www.turbomecanica.ro
On the international market, the Company continued in 2022 to deliver components and subassemblies for civil
aircraft engines. These programs have continued to run despite difficulties on the world market. In parallel, the
activity of components for gas turbines continued.
YEAR 2022 – EVENTS, INVESTMENTS AND KPI
In 2022, the Company obtained the recognition certification of the alignment of the quality and environmental
assurance system with the international standards related to the activity of aircraft and spacecraft maintenance in the
military field - CAEN code 3316. Therefore, it received the authorization number RO.AAMN.
145.0006/12.12.2022, issued by AANM (National Military Aeronautical Authority)
Another important event of the year referred to the project "Transfer of technology for the optimization of the
mechanical surface treatment of some landmarks used in the aeronautical industry" was accepted for financing by the
National Research-Development and Innovation Plan PNCDI III, project code PN-III -P2-2.l-PTE-2021-0195. The
Turbomecanica team in collaboration with a group of researchers from the Politehnica University of Bucharest will
carry out the objectives of this project, which aims to make the ecruising process more efficient by modernizing the
installation and developing the processing capability. The project is promoted at the leading MRO event in Europe
and the Middle East where airlines, MRO organizations, OEMs, lessors, suppliers and industry experts meet
annually to explore and define the aviation maintenance industry.
At the end of 2022, the prerequisites were created for ensuring the programs to be carried out during the next 3
years, the period 2023-2025. Therefore, at the beginning of 2023, these programs, in collaboration with the client IAR
Brașov, came to fruition by signing the additional documents for performing major maintenance on 12
helicopters from the UN/SAR and Helicopter L/VIP programs.
Following the same direction, TBM together with MApN continues the steps and preparations for carrying out the
major maintenance on the VIPER engines, which until now have not required any work, and it follows that in the
future TBM will carry out such works during the resource consumption, for the entire fleet of IAR 99 Falcon aircraft.
IMPLEMENTATION OF THE INVESTMENT PLAN
In 2022, the company continued investments in increasing the productivity of existing capacities and capabilities,
but also pursued the development of new ones.
Consequently, the degree of realization of the investment plan for 2022 reached the percentage of 89.35%.
From a value point of view, the Company saved approximately EUR 900,000 during the negotiations of the
purchases approved through the investment plan.
Therefore, the situation of investments related to the year 2022 is presented as follows:
Approved investment plan
Delayed investments
Approved investment value
4,385,000
467,000
1
3,918,000
Actual investment value
3,004,925
Saving
913,075
The investments made according to the approved investment plan concentrated a percentage of 99.48% for the
production facilities, namely for the modernization and efficiency of the production activity and are presented as
follows:
4 CNC equipment were purchased for grinding, mortising and 2 equipment for turning. These were contracted by
increasing the Leasing ceiling engaged with Banca Transilvania.
However, the most important purchase is the plasma spray equipment that contributes to the development of the
Company’s capabilities by adding to them 2 new techniques of surface coating by metallization, but also by the
opportunity to certify this special process at the international level, which creates the premises for reducing
subcontracting costs this service for the production of landmarks related to civil aviation.
The purchase of the cutting equipment contributes to the reduction of production/delivery terms by preparing the
raw material to the size required by the documentation, in order to launch it into manufacturing
In conclusion, 5 CNC equipment for mechanical processing and 2 equipment for carrying out special processes
(the plasma spay station and the deionization station) were purchased.
The company has also carried out 3 modernizations to the sand blasing process, to the Eltherma generator (heat
treatment) and to 2 baths related to surface coating processes.
The improvements on the line of emergency situations, routes, circulation between sections and waste storage
platforms were further postponed due to the reorganization of the assembly-test section to align the activity with the
European Military Airworthiness requirements. (EMAR/RMAR). Activity that was completed in December 2022, due to
the delayed scheduling of the certification audit, scheduled by AAMN (National Military Aviation Authority) depending
on its availability. Therefore, although this activity was estimated for completion during 2022, it will be rescheduled for
2023.
1
Din valoarea investiițiilor nerealizate de 467.000 Eur, 400.000 Eur ( 85,65%) reprezintă asfaltarea drumurilor uzinale
At the same time, the asphalting of industrial roads was also postponed (85.65% of the value of the unrealized
investments), due to the equipment relocation activities and the need to build a special construction for the
placement of the metallization equipment, contracted in 2022 with a delivery deadline of 2023 Q3.
Regarding the green spaces, the Company plants approximately 6 trees per year on the property.
ECONOMIC-FINANCIAL INDICATORS
Current liquidity
Degree of indebtedness
Flow speed - cl
Rotation rate of real estate assets
Overall solvency ratio
Financial rate of return
NET profit rate
Net treasury
2022
2.42
5.95
75.29
2.25
3.09
9.93
8.76%
46,630 K RON
2021
2.29
2.94
56.34
2.04
3.12
9.74
8.95%
39,232 K RON
4.94
4.63
5.02
4.92
4.16
5.72
MACROECONOMIC INDICATORS
Inflation
2022
13.8
2021
5.1
Average exchange rate €
Average exchange rate $
Average exchange rate ₤
EVOLUTION OF SALES BY CATEGORY
11,479,502
4,123,419
10,317,084
905,804
2022
121,992,815
2021
118,315,767
CATEGORY
Military aviation maintenance services and product
manufacturing
Manufacture of aviation products
Products manufacturing for Energy Division
80%
85%
90%
95%
100%
75%
202220212020
EVOLUTION OF SALES BY CATEGORY
MRO services for Defense
Manufacturing of aviation components
Manufacture of compnents for Energy
CONTEXT OF THE ORGANIZATION AND STAKEHOLDERS
The analysis of the context in which Turbomechanica operates revealed significant external and internal aspects
for its purpose and strategic direction that influence its capability.
These are:
Ø
legal aspects - commercial, fiscal legislation, labor legislation, environmental legislation,
regulatory requirements of the authorities, included in the applicable regulations;
Ø
customers and their specific regulations;
Ø
the market and the competitors operating in this market;
Ø
the emergence of new technologies;
Ø
personnel values, culture and knowledge;
Ø
average age of staff and availability of human resources in the labor market.
Information on these external and internal issues and how they are monitored and analyzed is documented in
specific internal regulations.
Stakeholders were also identified in the analysis of the compliance of the quality and environmental management
system with the requirements of the reference standards as follows: Customers, Regulators, Suppliers,
Shareholders, Community and Company staff.
BUSINESS MODEL
Turbomecanica adds value through 3 categories of basic activities, namely:
Maintenanceofenginesandmechanical
assemblies (main gearbox, intermediate and tail
gearboxes, main rotor head) in accordance with
AACR and AAMN authorizations, civil and military
equipment
Manufacture of high-tech and high-quality
equipment (aviation and energy), TGB (tail
gearbox)andMGB(maingearbox)
components or final TGB & MGB assemblies
which eqiup AW109 and A119 - AW119MKII
LEONARDO HELICOPTER - Italy, high
complexity engine components for General
Electric, Rolls-Royce, HONDA Aero, AVIO
customers;
A wide range of independent services: heat
treatment,chemicalprocesses, welding and
Non-Destructive testing - NDT for different
types of parts and materials, unique
component manufacturing, control services.
The model is based on the Company’s responsibilities as part of the national defense industry and was expanded in
the early 1990’s by developing the manufacture of aviation components for international OEM’s.
Subsequently, the wide range of chemical and thermal equipment and processes used in Turbomecanica began to
create value by attracting customers satisfied with the specific capabilities and quality of services delivered to them.
*The notes to the financial statements describe how the financial reporting reflects the business model adopted by
the company, according to IFRS standards.
THE IMPACT OF THE GLOBAL ECONOMIC SITUATION
The effects of the energy crisis and disruptions in supply chains, manifested as early as the second part of 2021, were
amplified at the beginning of 2022 by the geopolitical situation. Thus, it is predicted that the influence of the health
crisis caused by the Coronavirus on national economies will decrease, but that the war will affect the world economy,
especially in Europe, with many European states being dependent on Russian gas. At the European level, at the
beginning of 2022, increases in international quotations for energy products were predicted, as well as the need to
compensate for the deficit of energy resources of Russian origin with other resources. These forecasts have come
true to a large extent, the evolution of prices on the energy market leading to global inflation - inflation in the euro zone
exceeding 10%, and that of the US dollar 7%, according to preliminary statistical data for the year 2022.
The National Bank of Romania estimated at the beginning of 2022 that inflation is largely determined, namely 70%, by
the increase in energy and natural gas prices. Although Romania was more protected from the impact of Russian
supply, the explosion in energy prices brought back double-digit inflation, and the National Bank of Romania
raised the key interest rate in each monetary policy meeting and changed the forecast from one report to another.
The Romanian economy was also affected in 2022 both due to the energy crisis and as a result of its dependence
on global economic mechanisms and its integration into European and world value chains.
TBM faced several challenges during 2022:
Ø
increase in the costs of raw materials/castings, those related to transport, energy and gas. Their effect was
felt in the second part of 2021 and throughout 2022. Market estimates indicate continued pressure on
companies’ costs in 2023;
Ø
financing the formation of stocks of raw materials and critical materials, which ensure a certain
independence in the short-medium term;
Ø
judicious scheduling of all financial, material and human resources;
Ø
health crisis. Compared to the years 2020-2021, TMB’s results were no longer significantly influenced by the
health crisis, however its effects did not disappear, as part of TMB’s employees were diagnosed with COVID-
19 in the first quarter of 2022. The Company’s management adopted decisions prompt and efficient in
order to properly honor customer orders and achieve scheduled turnover;
Ø
the continuation of the activity with increased precautionary measures to reduce the risks on the human
resource;
Ø
temporary interruptions or changes in the way of carrying out the professional activity (see telework
programs in certain work areas);
Ø
the application of a policy aimed at permanently ensuring the continuity of the company’s business,
including in the potential and especially unpredictable situation of the continuation of the health crisis;
Ø
the legislative framework affected the business environment and created a lack of predictability in
extremely important areas for the business environment, such as energy policy, fiscal legislation (increase in
dividend tax, new way of calculating tax on buildings, etc.), social protection (increasing the minimum
wage for the economy, changes to the Labor Code, etc.).
Therefore, the year 2022 was a year with multiple challenges, in which TBM managed to achieve its strategic
objectives regarding the company’s sales and even exceeding the amount of turnover forecast at the beginning of the
year
COMMERCIAL ACTIVITY
BUSINESS ENVIRONMENT
The Company operates in a highly competitive environment according to the widely recognized principles of
Corporate Governance, in accordance with Romanian law, European Union law and International practices
providing to the internal and external markets products and services in both defense and civil aviation.
The business model is strongly influenced by the privileges and obligations of the Company arising from its
membership in the category of national strategic defense industry, being recognized by the Minister of Economy as
the sole Romanian supplier for manufacturing and maintenance services of engines and assemblies equipping the
IAR PUMA 330 L helicopter and VIPER engines equipping the IAR 99 aircraft.
In order to balance the risk generated by the concentration of the activity on the maintenance line specific to the
equipments endowing the national fleet, Turbomecanica is constantly preoccupied with the diversification of the
service portfolio, concentrating its efforts on creating new partnerships with international partners.
The latest decision in this regard was taken by the GMS and involves the development of maintenance to serve
civil aviation components.
At the date of approval, Turbomecanica is already certified to perform maintenance work on civil engine
components, namely CFM 56-7B, an engine that equips the national and international fleets of BOEING 737 NG
aircraft.
SALES
MAINTENANCE ACTIVITY
In 2022, Romania’s position as a NATO member
country, acting in the international political context
existing in the area, confirmed once again the strategic
importance that TURBOMECANICA holds within the
national defense industry as the only provider of
maintenance services for the PUMA helicopter fleet
and IAR 99 STANDARD / SHOIM aircraft of MApN/Air
Force General Staff, Naval General Staff and the
Romanian Information Service.
Thus, the domestic market continued to represent the main pillar of the company’s sales consolidation in 2022
(Total value of sales: 139,161,607 LEI): thus, TBM managed to achieve within the internal maintenance programs of
aeronautical products but and various industrial collaborations a total value of sales of products/services
intended for the domestic market of: 120,291,565 LEI, representing approx. 86.4% of the total value of TBM sales in
2022).
The maintenance/maintenance activity in 2022 materialized through the continuation of major programs of
repairs/maintenance/manufacture of aeronautical products, but also through new programs aimed at
collaborations within aviation programs for strategic clients: IAR Brasov, MApN/UM01836 Otopeni, Airplanes
Craiova, the Craiova Flight Research, Innovation and Trials Center, other internal clients, as detailed below:
Programs run through the IAR Brasov client (the client with the majority turnover – 67%):
Continuation of the PUMA – “NATO” helicopter modernization program (4 helicopters, sets 5-8)
Continuation of the Manufacturing Program of TURMO IVCA engines and PUMA IAR 330 helicopter
mechanical assemblies for the SMFA program (1 helicopter, SH4 set),
New program of capital repairs of PUMA SM helicopter mechanical assemblies: "PAKISTAN" (2
helicopters
New programs: "NAVAL" and "SRI" for capital repairs (with replacement of major components with TLV) and
various current repairs, technical assistance and supply of spare parts for TURMO IVC/CA engines and
PUMA IAR 330 helicopter mechanical assemblies;
For the next period 2023-2025: the Addemdum has already been signed with the client IAR Brasov regarding the two
major programs of complete overhoul of TURMO IVC/CA engines and PUMA IAR 330 helicopter mechanical
assemblies intended for MApN, respectively:
·
"UN (SAR)" Program 1-6 (6 helicopters), which will take place during 2024-2025;
·
"HELICOPTER L/ VIP" Program 1-6 (6 helicopters), running in the period 2023-2025.
·
NAVAL and SRI 2023 programs for capital repairs of TURMO IVC/CA engines and IAR330 mechanical
assemblies, according to the detailed centralized analysis below.
Programs carried out with the strategic client MApN (turnover – 14%):
Maintenance program of high and medium complexity, reconstructions of calendar potentials and current
repairs to TURMO IVCA engines, VIPER 632-41R/M engines and their aggregates, mechanical
assemblies IAR 330 PUMA, aggregates related to Allison T56 engines, manufacturing of spare parts -
through TMB’s participation in the public procurement procedure of 09.12.2022, completed with partial
success and delivered in December 2022;
Various programs for maintenance works/post-delivery services of technical assistance and supply of parts
through direct collaboration with military units: UM01961 Otopeni, UM02015 Bacau, UM01969 Campia
Turzii, UM01838 Boboc.
The implementation program for full overhoul of the strategic VIPER engine (according to Minute no.
452/16.04.2021 from the TMB-MApN working session) continued, through the arrival in 2022 in TMB of the first 2
VIPER 632-41M 605 series engines and 627, 2 pcs of VIPER thermocouple ramps and 2 pcs of VIPER
thermocouple cables also intended for the RK program - process not yet approved in TMB and started in
accordance with TMB strategic objectives; in order to carry out this program, a collaboration has already been
initiated with PIAGGIO AEROSPACE, ITALY, by signing a tripartite NDA (Piaggio-TMB-MApN), through which
TMB intends to obtain an update/completion of the constructive documentation related to the VIPER 632 engine-
41M, as well as the source for purchasing VIPER parts
Programs run with the client Avioane Craiova S.A.:
Program for transformation works from version 632-41R to 632-41M, revitalization and application of CMV
with RK to AFC for VIPER engine series 737;
Program for transformation works from version 632-41R to 632-41M, revitalization and application of CMV
with RK to AFC for two VIPER engines series 695 and 703;
Program for transformation works from 632-41R to 632-41M, revitalization and application of CMV with
RK at AFC for three VIPER engines series 699, 757 and 759 engines with delivery in 2023;
Program for the works of transformation of the afterburning engines 633-47 into 632-41M, revitalization and
applicationof CMVwith RKto AFC for two VIPER engines series 2255 and 2265, engines with delivery in
2023;
Various VIPER engine spare parts manufacturing programs, based on firm CLT orders.
At the same time, a turnover for the year 2023 of: 10,599,424.40 LEI (excluding VAT) was secured by firm
contracting and the continuation of the maintenance programs related to the fleet of IAR 99 SOIM aircraft through the
transformation, revitalization and shortening of the resource of a number of 6 more VIPER engines with
afterburner 632-41M (program that is currently under analysis for the period 2023-2024
MANUFACTURE OF HIGH TECHNOLOGY AND HIGH QUALITY EQUIPMENT
The commercial activity of TBM continued to be represented in 2022 mainly by components and subassemblies for
aviation engines, programs that, despite the difficulties on the world market, managed to maintain an
acceptable trend, existing in parallel and a continuation sales of gas turbine components.
The negative impact coming from the foreign market
was concretely reflected this year by the measures that some of
TBM’s customers had to take from a financial point of view, not only by the impossibility of accepting price
increases requested by TBM for 2022, action postponed since 2021.
However, at the end of 2022, it was possible to complete the negotiation with Leonardo Helicopters for the update of
prices for the year 2023, with margins between 12%-17%. With Witzenmann, negotiations have settled on a 5%
upgrade for 2023. New orders from ITP Aero are expected for 2023 in line with Rolls Royce’s requirement for Pearl
engines.
It is worth mentioning that during 2022 the collaboration relations with the partners with a significant
business potential on the international market were maintained (mainly the business relationship with Rolls-
Royce Germany-through ITP Aero, Witzenmann Germany, Astrofein Germany, Seko Aerospace Czech
Republic, GE Hungary in the field of Energy, other customers with lower shares in the company’s turnover).
The share of export programs in 2022 is mainly detailed as follows:
Leonardo Helicopters, Italia:4,4% (2021- 4,00 %)
Programe RR (ITP + Witzenmann + Astrofein): 5,5% (2021-3,88%)
Programe GE_ENERGY: 3,4% (2021-0,71%)
Honda Aero: 0,109% (2021-0,11%)
INTEGRATED QUALITY AND ENVIRONMENTAL ASSURANCE SYSTEM
Quality and environmental management systems are designed and organized using the process model. SMQ & M
processes are designed to provide the regulatory framework necessary for the controlled implementation of
Turbomecanica products / services and to ensure the assessment and avoidance of risks of failure to meet quality and
environmental objectives.
The objectives of quality and environmental management in TBM are:
Quality and environmental management systems are designed and organized using the procedural model.
SMQ & Mprocesses are designed to providethe regulatory framework necessary for thecontrolledimplementation of
Turbomecanica products / services and to ensure the assessment and avoidance of risks of failure to meet quality
and environmental objectives.
The objectives of quality and environmental management in TBM are:
Ø
ensuring theCompany’sabilityto provide itscustomers, in a consistentmanner, withproductsand services
that comply with their requirements and expectations and with the legal and regulatory requirements and in
compliance with the provisions of the environmental standard SR EN ISO 14001;
Ø
fulfillment of compliance obligations;
Ø
increase environmental performance;
Ø
facilitating the identification of opportunities to increase the satisfaction of its customers by continuously
improving its processes;
Ø
identifying and managing risks and implementing opportunities associated with the context and objectives of
the company.
The Quality and Environment Manual is structured in sections in accordance with the provisions of the
reference standards SR EN 9100, SR EN ISO 9001 and is correlated with SR EN ISO 14001 through the
procedures specific to this field.
During 2022, the following actions were taken in the field of quality assurance:
In order to align with the requirements of the reference standards, regulators and its customers and to
implement the organizational changes applied in TBM this year, TBM structural entities have intervened on the
following documents of quality management and environmental management systems:
In 2022, 159 regulations were elaborated / revised as follows:
REGULATION CATEGORY
General Procedures including Independent Annexes
Company Standards including Independent Annexes
Specific Working Instructions including Independent Annexes
Regulations including Independent Annexes
Human resources strategy with all Independent Annex
Quality Plans
Wage Policy
Quality and Environment Manual
Presentation Expositions
2022 2021 2020
50 80 37
31 50 31
36 49 64
7 9 6
2 1 -7
3 5 8
1 1 0
1 2 18 3
4
* Note: In 2020 the Quality Manual and the Environment Manual were separate regulations, after the integration it was transformed into an
integrated document
The Quality and Organization Department acted in 2022 to implement a continuous improvement in the
organization and design of the quality management system.
An important achievment in 2022 is the Turbomecanica certification, according to RMAR 145 requirements, by the
National Aeronautica Militara Authority as a military maintenance organization for Turmo IV C/CA products, Viper
632-41 and 633-47, Allison T56-A7B/A15, Mechanical Assemblies IAR-330, including aggregates and their
components.
In a later stage, which will take place in 2023, Turbomecanica is preparing the certification, according to RMAR 21G
requirements, by the National Aeronautica Militara Authority as a military production organization of products and
components for Turmo IV C/CA, Viper 632-41 and 633 -47, Allison T56-A7B/A15, Mechanical Assembly IAR-330,
including their aggregates.
In order to demonstrate compliance with its customers’ requirements, Turbomecanica performed second-
party audits performed by them, as follows:
In April 2022, Honda Aero performed an online supplier surveillance audit (product audit) according to the
requirements of customer specification SRM 13711-Q0A-0000. In the conducted audit, the Honda Aero audit team
found no non-conformities and maintained TBM as an authorized supplier.
In June 2022, Leonardo Helicopters performed an on-site supplier surveillance audit according to the
requirements of the internationalstandard EN 9100:2018 and thecustomer specification QRS-01. In theconducted
audit, the Leonardo Helicopters audit team found no non-conformities and maintained TBM as an authorized
supplier.
In August-September 2022, Safran Helicopters Engines performed an on-site potential supplier evaluation audit
according to the requirements of client specifications GRM-0123, GRP-0087 and G012. In the conducted audit, the
Safran Helicopters Engines audit team found no non-conformities, appreciated the existing capabilities and
indicated possibilities for future collaboration for the maintenance of more modern engines.
In October 2022, General Electric Power performed an on-site supplier surveillance audit (product audit and
special process audit) according to customer requirements extracted in a checklist. In the conducted audit, the
General Electric Power audit team found no non-conformities, but indicated some corrections and maintained
TBM as an authorized supplier.
In November 2022, IAR Brasov performed an on-site supplier surveillance audit according to the requirements of the
international standards EN 9100:2018 and AQAP 2110:2016. In the ongoing audit, the IAR Brasov audit team found 1
minor non-conformity for which 1 corrective action (completed) and 1 opportunity for improvement (in progress)
were established, TBM being maintained as an authorized supplier.
In December 2022, Rolls-Royce performed an online supplier surveillance audit (classified product audit)
according to the SABRe3 customer requirements extracted in a checklist. In the conducted audit, the Rolls-Royce
audit team found 3 minor non-conformities for which 3 corrective actions were established (all completed) and
maintained TBM as an authorized supplier.
To prove compliance with the standards and regulations applicable in its activity, Turbomecanica
supported 5 third-party audits carried out by certification/supervision authorities/bodies, as presented
below:
In February 2022, the Romanian Civil Aviation Authority (AACR) carried out an on-site scheduled audit for the
supervision of the authorization of the civil maintenance organization according to the provisions of EU Regulation no.
1321/2014, Annex II (Part 145), Subpart A. Following the audit the team audit AACR found 2 minor non-
conformities for which 5 corrective actions were established (all completed) and maintained TBM’s authorization
as a maintenance organization RO.145.051 from 03.15.2021.
In October 2022, the National Military Aviation Authority (AAMN) carried out an on-site scheduled audit for the
initial assessment and approval of the authorization of the military maintenance organization according to the
provisions of RMAR Regulation 145. Following the audit, the AAMN audit team found no non-conformities and
granted TBM military maintenance organization authorization RO.AAMN.145.00006 from 12.12.2022.
In November 2022, AEROQ performed an on-site audit for the supervision of the quality and environmental
management systems according to the provisions of the ISO 9001:2015 and ISO 14001:2015 standards. Following the
audit, the AEROQ audit team found no non-conformities, maintaining the certifications for the TBM quality and
environmental management systems (issued in April 2021 and valid until 09.11.2023).
In November 2022, TUV Nord carried out an on-site audit for the recertification of the supervision of the quality
management system according to the provisions of the ISO 9001:2015 and EN 9100:2018 standards. Following the
audit, the TUV Nord audit team found 1 minor non-conformity for which 3 corrective actions were established (all
completed), indicating the re-certification of the TBM quality management system (the current certificates are
issued in February 2020 and are valid until 22.02.2023 ).
In November 2022, the Romanian Civil Aviation Authority (AACR) carried out an on-site audit for the continuous
supervision of the civil production organization according to the provisions of EU Regulation no. 748/2012 (Part 21),
Subpart G. Following the audit, the AACR audit team found no non-conformities, maintaining TBM’s
authorization as a civil production organization (issued in December 2014 and upgraded to rev. 2 in August
2020).
In order to guarantee the management of TBM, customers and certification bodies the correct
implementation of the requirements of the quality management / environmental management system and the
maintenance of their efficiency and effectiveness, the Quality and Organization Department carried out
internal / external audits in 2022 as presented below:
Internal audits quality management system and environment management system
Internal audits for the quality management system were carried out in accordance with the PA-TBM Audit Plan
2022 ed. 1, later evolved into ed. 2, ed. 3 and ed. 4, approved by the Director General.
In 2022, 25 SMQ audits were carried out in which 49 non-conformities were found, for which 79 corrective actions
were established, which were completed in a proportion of 84.8% (67 completed).
Internal audits for the middle management system were carried out in accordance with the Audit Plan PA-TBM
2022 ed. 1, later evolved into ed. 2, ed. 3 and ed. 4, approved by the Director General.
In 2022, 2 SMM audits were carried out in which 3 non-conformities were found for which 8 corrective actions were
established which were completed in proportion to 100%.
Internal product audits
The internal audits for the products were carried out in accordance with the Audit Plan PA-TBM 2022 ed. 1, later
developed in ed. 2 and ed. 3, approved by the General Manager.
In 2022, 12 product audits were carried out, in which 14 non-conformities were found, for which 35 corrective
actions were established, which were completed in proportion to 97.1% (34 completed).
Internal process audits
The internal process audits were performed in accordance with the Audit Plan PA-TBM 2022 ed. 1, later developed in
ed. 2, ed. 3 and ed. 4, approved by the General Director.
In 2022, 15 process audits were performed in which 10 non-compliances were found, for which 23 corrective
actions were established, which were 100% completed.
External audits of suppliers
In September 2022, an external audit (product audit) was planned and carried out on-site at the supplier
Rezistoterm SRL Iasi according to the general requirements of EN 9100:2018 and the specific requirements of
TBM. In the ongoing audit, the TBM audit team (CAI, CCU, BPT) found 2 minor non-conformities for which 2
corrective actions were established (1 completed, 1 ongoing), maintaining Rezistoterm SRL Iasi as a conditionally
accepted supplier.
In order to monitor the performance of TBM processes in order to increase customer satisfaction with the
quality of products / services delivered and increase the attractiveness of these products / processes in the
aeronautical sector market, in 2022 the following actions were carried out:
The general procedure PG SMQ-05 “Management analysis” determines the indicators necessary to achieve the
strategic and quality objectives and which influence the level of customer satisfaction. The evolution of these
indicators in 2022 is presented below:
-The strategic indicator I1 (degree of compliance with the production program) has an increasing trend and falls
within the proposed target of at least 97%, with an overall value of 99.69% (2021:99.61%). This fact shows that the
production schedule is respected and the shortcomings are very small.
- The strategic indicator I2 (degree of compliance with the sales plan) has an increasing trend and falls within the
proposed target of at least 97%, with an overall value of 97.48% (2021:97.22%). This shows that the sales plan is
being complied with, with TBM delays in deliveries for external customers Leonardo Helicopters, ITP Aero, Honda and
Witzenmann, but also for internal customer IAR.
-The strategic indicator I211g + I212g (global quantitative percentage of loss due to PO changes) has a
decreasing trend and falls within the proposed target of a maximum of 3%, with an overall value of 2.52% (2021:
2.78%) (of which TBM has 2.40% and customers have 0.13%).
- The strategic indicator I3 (the degree of non-compliance with the requirements of the technical execution
documentation - non-conformities and scrap) has an increasing trend and falls within the proposed target of
maximum 0.75%, with an overall value of 0.09%. This fact reveals that the requirements of the documentation are
observed in TBM, and the deviations (transposed in non-conformities and rejects) have a small weight.
-The strategic indicator I4 (the degree of non-conformity of the delivered products / services - complaints) has a
decreasing trend and does not fall within the proposed target of maximum 1.0%, having an overall value of 0.66%
(2021:1.03%); if unconfirmed / rejected complaints are excluded, the indicator reaches the overall value of 0.56%
(2021: 0.85%), falling within the proposed target (maximum 1.0%). This reveals that TBM ensures the conformity of
the delivered products / services and the complaints have a low weight.
The strategic indicator I4pg (external percentage loss - complaints) has a downward trend and does not fall
within the proposed objective of maximum 0.5%, having a global value of 0.97%; if we exclude the 6 orders
registered as complaints/reports, with intervention costs, but not technically justified according to the maintenance
documentation, the subject products continuing to be used under supervision, the recalculated global value is
0.44% which falls within the proposed objective of a maximum of 0, 5%.
- The strategic indicator I41 (time for resolving complaints) has a decreasing trend and falls within the proposed
objective of a maximum of 30 days, having a global value of 27 days (for resolution in TBM) and 5 days (for
resolution at customers/in operation ).
- The strategic indicator I42 (the rate of warranty claims for repaired products) has a decreasing trend and falls
within the proposed objective of a maximum of 25%, having a global value of 12.83%.
- The strategic indicator I43 (recurrence rate of complained products) has a decreasing trend and does not fall
within the proposed objective of maximum 25%, having a global value of 34.38%.
- The strategic indicator I44 (median product complaint duration since delivery) has a decreasing trend and does
not fall within the proposed objective of a minimum of 250 days, having a value of 143 days at the end of 2022.
- The strategic indicator I5 (non-quality costs) has an increasing trend and falls within the proposed target of a
maximum of 600,000 RON / year, with a globalvalue of RON 1,411,753 in 2022. If we exclude the costs of handling the
6 orders registered as complaints/reports but technically unjustified according to the maintenance
documentation, then the value of the indicator is of RON 673.569 which is closer to the max objective of 600.000
RON.
- The strategic indicator I6 (turnover achievement related to the reporting period) will be calculated on 28.02.2023
and will be reported in the next management analysis meeting; after trim. III-2022, the value reached is 91,545,691
lei, being above the target of 73,714,279 lei.
- The strategic indicator I7 (degree of achievement of net profit margin) will be calculated on 28.02.2023 and will be
reported in the next management analysis meeting; after trim. III-2022, the value reached is 2.7%, being below the
target of 10%.
In the field of special processes and quality laboratories the policy of satisfying customer requirements was
continously applied, as well as increasing the level of attractiveness presented by the company for potential
customers active in the aeronautical industry through the following actions:
Accreditation of special processes
The events with the strongest significance for increasing the attractiveness of
TBM in the aeronautical industry market remain the NADCAP
accreditations of the special processes installed.
In 2022, the following special processes were re-accredited:
In January 2022, Nadcap performed a surveillance audit of NDT
processes according to AC7108 requirements. In the conducted audit,
Nadcap found 5 minor non-conformities for which 21 corrective actions
were established (all completed), and the CND TBM processes were
included in the Merit Program for 24 months, re-accreditation being
granted until 31.05.2024.
In February-March 2022, Nadcap performed a surveillance audit of TBM
welding processes according to AC7110 requirements. In the
conducted audit, Nadcap found no non-conformities, and TBM welding
processes were included in the Merit Program for 24 months, re-
accreditation being granted until 31.05.2024.
In September 2022, Nadcap performed a surveillance audit of TBM’s chemical processes according to AC7108
requirements. In the ongoing audit, Nadcap found 1 minor non-conformity for which 5 corrective actions were
established (3 completed), and the TBM chemical processes were included in the Merit Program for 24 months, re-
accreditation being granted until 30.11.2024.
Second party process certifications
Leonardo Helicopters Certifications
In 2022, the qualifications of the special TBM processes previously obtained applicable to Leonardo Helicopters
articles were maintained and the qualifications of the following special processes were extended:
- Liquid Penetrant Inspection (IT12/0193/04: valid until 11.01.2025);
- Etch Inspection of Hardened Steel Parts (IT012/0397/03: valid until 15.03.2025); -
Casting Impregnation (IT12/0475/03: valid until 01.07.2025)
- Heat Treatment of Steel Alloys (Normalizing, Hardening and Tempering for low-alloyed steels, Precipitation
hardening of PH steels (sect. IV), Hardening and Tempering for stainless steel (sect. III)) (IT12/0195/07: valid until
02.12.2025);
- Heat Treatment of De-Embrittlement and Stress Relief (IT013/0165/04: valid until 31.12.2025); -
Chromic Acid Anodizing (IT13/0148/04: valid until 31.12.2025).
PZL Swidnik Certifications
In 2022, the qualifications of the special TBM processes obtained previously applicable to PZL Swidnik articles
were maintained and no requalifications were initiated and following certificate was renewed:
- Heat Treatment of Steel Alloys (PL10/0043/04: valid until 23.09.2025);
In August 2022, Nadcap performed a surveillance audit of the TBM ecruisation process according to AC7117
requirements. In the conducted audit, Nadcap found 2 minor non-conformities for which 10 corrective actions
were established (all completed), and the TBM ecruisare process was included in the Merit Program for 18 months, re-
accreditation being granted until 31.05.2024.
