14 May 13. EADS suffers €3bn cash outflow. EADS on Tuesday reported a 56 per cent rise in underlying operating profit for the first quarter, but it also recorded a €3bn cash outflow because of increased aircraft production and problems with some programmes. The European aerospace and defence company’s first-quarter revenue and underlying earnings exceeded analysts’ expectations, but so did the negative free cash flow of €3.2bn. EADS sought to reassure investors about its performance by confirming existing guidance that it would seek to achieve cash flow break-even for the full year. Harald Wilhelm, EADS’s finance director, also expressed optimism that the group could reach its target of a 10 per cent underlying operating margin in 2015, after reporting 6 per cent at this level in the first three months of this year.
“It’s our target and we are working hard to make that work,” he said. “The first quarter gives confidence we are on the right track.” (Source: FT.com)
16 May 13. Faced with a new budget reality, industry and the Pentagon are looking for ways to streamline contracting and pursue new innovations, a panel of CEOs said. John Jumper of SAIC, Frank Mendicino of SKYDEX Technologies and Kevin Miller of Sciolex Corp. also outlined how outside factors are causing a financial crunch for their companies. The panel was intentionally mixed, with the head of SAIC, a Fortune 500 company with offices around the country, sitting next to the heads of two companies with fewer than 40 employees apiece. SKYDEX develops protective materials for military and commercial use, including gear designed to protect soldiers from IED attacks, while Sciolex handles engineering, integration and operations support for the intelligence community. All three men agreed that the drop in spending levels itself is not the biggest challenge.
“We’ve been fed on filet — and it’s been a requirement to sustain the marathon we’ve been running since 9/11 — and it’s probably time to think more about hamburger,” Jumper said.
The way the cuts are spread across the entire industry, instead of targeted at specific areas, means that small companies and large primes alike find themselves unable to work together to recover. (Source: Defense News)
10 May 13. Cobham plc has acquired the entire share capital of Axell Wireless Limited (‘Axell’), a privately-owned supplier of wireless communications for commercial and public safety markets, for a total consideration of up to £85m on a cash and debt-free basis. Cobham has paid an initial £60m for the business, with a further conditional cash consideration of up to £25m in total being payable during 2014 and 2015, contingent on future performance. Axell is a leading global provider of Distributed Antenna Systems (DAS) and wireless solutions for the public safety and cellular markets, with a specific focus on communication systems for buildings and critical infrastructure applications. It has supplied coverage solutions for some high profile global infrastructure projects including the London 2012 Olympic Stadium, the Beijing and Singapore metros, the Burj Khalifa in Dubai, the Brisbane Airport tunnel and the Shard in London. The company designs, develops and supplies innovative technology products including digital repeaters, fibre optical master units, multi band remotes and network management tools all of which are complementary to the technology in Cobham’s existing Antenna Systems and Tactical Communications and Surveillance businesses.
The acquisition of Axell presents significant opportunities to sell products to the respective customer bases of each company and provide larger system solutions for future customer requirements.
Axell’s markets have been growing strongly, driven by rapidly increasing demand for indoor mobile data traffic and more stringent public safety regulations, which support the ability of emergency services to communicate within large buildings and at international events.
The company