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  March 2, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

  French defense firms fête formidable profits in 2019

  By: Christina Mackenzie PARIS – France's major defense companies are looking back at a strong 2019, thanks to a combination of exceptional contracts and the country's overall healthy economy, executives said this week. In the naval sector, Naval Group's orders shot up 44 percent to €5.3 billion ($5.8 billion) in 2019, taking the company's order book to a total of €15.1 billion ($16.6 billion). Of this, 38 percent is for the export market and 62 percent is for France. Roughly three quarters of the business were in the shipbuilding sector, with almost one quarter in services. These figures do not include the whole of the contract to build 12 submarines for Australia, “as this income will be shown as it is paid, tranche by tranche,” explained outgoing CEO Hervé Guillou. In addition, the group saw a 6 percent rise in EBIT (earnings before interest and taxes) to €282 million ($310 million) and a 3 percent rise in revenues to €3.7 billion ($4 billion). Guillou, who will be replaced as CEO in March by Pierre-Eric Pommellet, said his successor had four main challenges for the future: delivering the Suffren submarine; accelerating production in the face of Chinese competition; consolidating the group's international presence; and developing the workforce. In the land sector, revenues for Arquus, the French company which is the defense arm of Sweden's Volvo Group, rocketed 72.5 percent between 2017 and 2019. CEO Emmanuel Levacher said he was not allowed to give revenue and sales figures for Arquus, whose revenues are included in the Volvo “Group functions and other” column. However, those data show net sales for 2019 were SEK8.8 billion ($911.4 million), which means they are likely around the $660 million mark. Levacher was all smiles announcing “a very great year” that was “exceptionally rich,” remarking that “this is remarkable growth for an industrial company.” He said he expected the company to grow a further 10 percent in 2020. Exports accounted for 42 percent of the revenue. Levacher was able to put a figure on contracts signed in 2019: €1.2 billion ($1.3 billion) “mostly in Africa,” but also a tranche of €214 million ($235 million) in the framework of the CaMo contract with Belgium for 382 Griffon multirole armored vehicles and 60 Jaguar armored reconnaissance and combat vehicles to be delivered between 2025 and 2030. Levacher said contracts were also signed for “a few dozen” Sherpa and Dagger vehicles for the Middle East. He was optimistic for the future, remarking that “all of the French army's military trucks, whether they be 4×4s, 6×6s, 8×8s all need to be changed in the next five years.” He said the company had developed a specific truck to meet these needs as the call for tender will be published before the end of this year. In the defense-electronics sector, Thales's CEO Patrice Cain also described 2019 as “a good year in which we progressed.” Its EBIT rose 19 percent to slightly over €2 billion ($2.2 billion), “the first time we've gone over the symbolic bar of €2 billion,” he said. Defense accounts for 40 percent of the group's revenues. Order intakes in the defense and security sector rose a record 17 percent to €9.9 billion ($11 billion) while sales rose 6.4 percent, “a little higher than anticipated,” according to CFO Pascal Bouchiat, to €8.3 billion ($9 billion). These include Thales and Babcock winning the bid for the T31 frigate in the UK against BAE Systems. Bouchiat noted that “several multi-year contracts” had been signed “underpinning long-term growth” for the group. Finally, in the military-aircraft sector, Dassault Aviation recorded an order intake of €3.3 billion (against €2.7 billion in 2018), the bulk of which (€2.6 billion) was for France and includes the integrated support contract for the French Rafale over the next 10 years and an additional order for supplemental development and integration work concerning communications for the F4 standard of the aircraft. Net sales shot up 44 percent to €7.3 billion due to the record number of 26 Rafales delivered in 2019. CEO Eric Trappier said that in 2020 Dassault expected to deliver 13 Rafales and he saw a tendency of governmental authorities to buying the company's Falcon business jet for surveillance and reconnaissance missions. Trappier said that in 2020 the company would continue to try and export the Rafale and was notably working on the Finnish and Swiss fighter competitions. Both countries are expected to make their decisions in 2021. https://www.defensenews.com/global/europe/2020/02/28/french-defense-firms-fete-formidable-profits-in-2019

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  June 25, 2019 | International, Naval

  Warship selected by Canada won’t be in U.S. competition – Americans accepting only proven designs

  DAVID PUGLIESE The US Navy is moving ahead with its frigate program but the ship design selected by Canada, the United Kingdom and Australia won't be considered as the Americans are only considering proven vessels. Because the U.S. FFG(X) future frigate competition will only accept proven, at-sea designs, BAE Systems of the United Kingdom has decided not to enter its Type 26 Global Combat Ship in the competition, the U.S. Naval Institute's publication, USNI News, reports. The Canadian government plans to buy 15 Type 26 warships in a project now estimated by the Parliamentary Budget Officer to cost $70 billion. The project, known as Canadian Surface Combatant, is the largest single expenditure in Canadian government history. The Liberal government announced in February that it had entered into a contract with Irving Shipbuilding to acquire new warships based on the Type 26 design being built in the United Kingdom. With Canada ordering 15 of the warships, the Royal Canadian Navy will be the number one user of the Type 26 in the world. The United Kingdom had planned to buy 13 of the ships for its Royal Navy but cut that down to eight. Australia plans to buy nine of the vessels designed by BAE. But the Type 26 design is unproven. Construction of the first ship for the Royal Navy began in the summer of 2017 but that vessel is not expected to be accepted into service until 2025. Canada hopes to begin construction of its first Type 26 in the early 2020s. Alan Baribeau, a spokesman for U.S. Naval Sea Systems Command, told USNI News, the U.S. Navy requires a proven, in-the-water design for its future frigate program. “To promote and provide for full and open competition, the Navy will consider any hull form — foreign and domestic — that meets the requirements, will be built in a U.S. shipyard and has a parent design that has been through production and demonstrated (full scale) at sea,” Baribeau told USNI News. The entry of the BAE Type 26 warship in the Canadian competition was controversial from the start and sparked complaints the procurement process was skewed to favour that vessel. Previously the Liberal government had said only mature existing designs or designs of ships already in service with other navies would be accepted, on the grounds they could be built faster and would be less risky. Unproven designs can face challenges as problems are found once the vessel is in the water and operating. But the requirement for a mature design was changed and the government and Irving accepted the BAE design, though at the time it existed only on the drawing board. Company claims about what the Type 26 ship can do, including how fast it can go, are based on simulations or projections. The two other bidders in the Canadian program had ships actually in service with other navies so their capabilities were known. The Canadian Surface Combatant program is being run by Irving Shipbuilding to replace the navy's fleet of Halifax-class frigates and the Iroquois-class destroyers the navy previously operated. The updated estimate on the surface combatant program, compiled by the Parliamentary Budget Office and released June 21, covers the cost of project development, production of the ships, two years of spare parts and ammunition, training, government program management, upgrades to existing facilities, and applicable taxes. The previous Conservative government originally estimated the cost of the ships to be around $26 billion. The Department of National Defence now states that its estimate is between $56 billion and $60 billion. BAE Systems told USNI News that it would not be submitting any proposals for the U.S. FFG(X) program unless the U.S. Navy dumps its requirements for a proven hull design. The U.S. does not have any intention of changing its requirements. Four companies are expected to submit bids for the U.S. program– Austal USA, Fincantieri Marine, General Dynamics Bath Iron Works and Ingalls Shipbuilding – with deadlines of August 22 for technical proposals and September 26 for pricing proposals, the USNI News reported. The Canadian Surface Combatant program is currently in the development phase. The government projects the acquisition phase to begin in the early 2020s with deliveries to begin in the mid-2020s. The delivery of the 15th ship, slated for the late 2040s, will mark the end of that project. https://ottawacitizen.com/news/national/defence-watch/warship-selected-by-canada-wont-be-in-u-s-competition-americans-accepting-only-proven-designs

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  September 21, 2021 | International, Aerospace, Naval, Land, C4ISR, Security

  Contracts for September 20, 2021

  Today