French satellite maker Astrium is integrating with the military units of its parent EADS as the aerospace giant scraps plans to be equally split between civil and defence operations.
EADS, which is also renaming itself after its commercial plane-making…
French satellite maker Astrium is integrating with the military units of its parent EADS as the aerospace giant scraps plans to be equally split between civil and defence operations.
EADS, which is also renaming itself after its commercial plane-making subsidiary Airbus, said pooling the space and defence entities will combat ‘flat or even shrinking’ budgets in these sectors in the Western Hemisphere.
The move will next year see Astrium join transport aircraft specialist Airbus Military and defence firm Cassidian in a new division called Airbus Defence & Space.
The other two divisions of the new EADS will be Airbus, responsible for commercial aircraft activities, and Airbus Helicopters, which will comprise commercial and military helicopter assets.
Implementation will begin gradually from the start of next year, with the aim of being completed in the second half of 2014.
Group CEO Tom Enders said: “What we are unveiling today is an evolution, not a revolution. It’s the next logical step in the development of our company.
“We affirm the predominance of commercial aeronautics in our group and we restructure and focus our defence and space activities to take costs out, increase profitability and improve our market position. The renaming simply gathers the entire company under the best brand we have, one that stands for internationalisation, innovation and integration – and also for some two thirds of our revenues. It reinforces the message that ‘we make things fly’.”
EADS had been working hard to reach a 50/50 balance between Airbus’ revenues and those of its other divisions, under its so-called Vision 2020 strategy.
First outlined in January 2008, EADS said it had set aside approximately US$15bn in available cash to bolster its non-Airbus businesses in order to reach this goal by 2020.
Since then it has made a number of bolt-on acquisitions, such as the US$960m takeover of satellite communication services company Vizada in late 2011.
The strategy came to a head last year when EADS proposed its ill-fated US$45bn merger with UK defence group BAE Systems.
The move would have given EADS the parity in its business that it had been looking for, but the deal ultimately fell through after being scotched by the German state.
As well as forcing the company to think twice about Vision 2020, the failure emboldened it to negotiate a cap on its total government shareholding of 28%. Germany and France subsequently diluted their ownership to hold a 12% stake each, with Spain owning a 4% share.
In gearing the business around the predominance of its main Airbus subsidiary, EADS is focusing on its strengths to compete with its US-based arch rival Boeing.
EADS reported a 6% rise in revenues in the first half to €26.3bn, compared with the same period last year, thanks mainly to its commercial aircraft operations. EBIT before one-off rises leapt 21% to €1.6bn.
Restructuring prompts management reshuffle
The new Airbus Defence & Space division will have an annual turnover of around €14bn and will be headquartered in Munich, Germany, with about 45,000 employees.
Cassidian CEO Bernhard Gerwert and CFO Julian Whitehead are being promoted to assume the same roles for the entire division, which will be broken down further into four business segments.
These segments will be Space Systems; Communication, Intelligence & Security Systems; Equipment; and Military Aircraft.
Space Systems will be led by Astrium CEO François Auque.
Evert Dudok, currently CEO of Astrium Services, which is its end-to-end satcoms and network arm, will be CEO of Communication, Intelligence & Security Systems.
Thomas Müller, who heads Astrium’s satellite products unit, will lead Equipment, while Domingo Ureña-Raso, chairman of Spanish aircraft manufacturer EADS CASA, will be CEO of Military Aircraft.
EADS plans to announce further nominations in September and October.
