Sponsored by TCI International Inc.
22 Oct 20. Eaton Announces Its Brightlayer™ Digital Foundation for Continued Transformation Into an Intelligent Power Management Company.
Eaton today announced the launch of its Brightlayer digital foundation, a major step in its transformation into an intelligent power management company. By leveraging Brightlayer, Eaton is enabling customers to optimize how power is used, stored and distributed through data and insights from secure, connected and intelligent assets.
“Eaton is transforming into an intelligent power management company,” said Aravind Yarlagadda, chief digital officer, Eaton. “We’re leveraging digital technologies like connected devices, cloud and mobile platforms, artificial intelligence and machine learning at scale, to transform power management. This makes power safer, more sustainable and efficient for our customers and partners. Brightlayer is the digital foundation for this transformational journey.”
With the Brightlayer foundation for intelligent power management, Eaton has leveraged its more than 100 years of power management expertise to help customers make their operations more efficient through the use of data and insights.
The Brightlayer digital foundation is comprised of 4 layers: data, platform, solutions, and experience. Customers have the ability to engage with any of the layers – whether accessing data from existing assets, leveraging Eaton’s digital platform and unique artificial intelligence and machine learning algorithms to deliver insights, or implementing Eaton’s suite of industry-focused intelligent power management solutions.
The data layer allows customers to access data from any Eaton or third-party connected device for use in existing applications. The platform layer is comprised of a set of open, extensible development components that are leveraged by Eaton and also available for customers and partners to enable the delivery of intelligent power management solutions to market. The solutions layer represents integrated suites of digital solutions that provide data and insights to industry-specific power management challenges, starting with utilities, data centers and industrial markets and expanding into adjacent industry markets. The experience layer is where customers, partners and developers can discover, buy, develop and collaborate on new value through intelligent power management solutions.
“Customers are increasingly prioritizing access to secure, real-time data, with the connected intelligent power management technologies they rely on,” said Yarlagadda. “Brightlayer makes it easier for them to realize the operational value of the intelligent, actionable insights they can get from that data.”
To learn more, visit Eaton.com/Brightlayer. To learn about Eaton’s full range of innovative power management technologies, visit Eaton.com.
Eaton’s mission is to improve the quality of life and the environment through the use of power management technologies and services. We provide sustainable solutions that help our customers effectively manage electrical, hydraulic, and mechanical power – more safely, more efficiently, and more reliably. Eaton’s 2019 revenues were $21.4 billion, and we sell products to customers in more than 175 countries. We have approximately 92,000 employees. For more information, visit Eaton.com. (Source: BUSINESS WIRE)
22 Oct 20. IFS’s recurring revenues up 41 percent YoY for Q3 YTD, now representing 82 percent of the group’s overall software revenue.
- Aerospace & Defence business unit key growth driver – significant deals closed in commercial aviation and defence sector during Q3
- Extends service management leadership with 86% growth for Q3 YTD in service licence bookings
IFS, the global enterprise applications company, today announced its financial results for Q3 year-to-date of 2020, encompassing January–September. The financial highlights reveal a strong business that continues its trajectory of hyper growth in areas such as cloud and service management software.
The company’s commitment to advancing its service management technology is projected to deliver north of 100 percent year-on-year growth in service licence software revenue by year-end. IFS’s evolution into becoming the global service solutions vendor of choice is evidenced by a number of recent customer wins, as well as the launch of new software capabilities in its customer engagement offering.
“Whether a company manufactures medical equipment, operates large energy utilities or manages a complex infrastructure, in the eyes of their customer, success or failure is realised at the moment of service – the moment when it all comes together. Organisations are transforming their businesses around this, and IFS is uniquely positioned to capitalise on this groundswell of opportunity,” IFS Chief Executive Officer Darren Roos said. “Our customer base continues to expand as we help more businesses grow, create value and improve delivery quality. IFS is the only vendor that can provide an integrated solution set across the customer’s entire operation.”
IFS Chief Financial Officer, Constance Minc added, “With our recurring revenues expanding by over 40 percent in the period and cloud revenues increasing by nearly 60 percent, we are seeing tremendous progress toward building more predictable, sustainable revenue streams against the backdrop of a volatile economic climate. This image is further enhanced by an impressive rise of 23 percent in global software revenue—as well as remarkable growth in service management and in the Americas region.”
Financial and Operational Highlights for Q3 YTD 2020:
- Net revenue was 5,111m SEK (US $544m), an increase of 12 percent versus Q3 YTD 2019
- Service management licence revenue grew 86 percent versus Q3 YTD 2019
- Recurring revenue increased 41 percent versus Q3 YTD 2019
- Cloud revenue increased 59 percent versus Q3 YTD 2019
In the third quarter, IFS’s industry focus continued to pay dividends, with the aerospace and defence (A&D) business unit not only welcoming aircraft manufacturer De Havilland Canada to the family, but also closing the largest-ever deal in the company’s history with one of the sector’s leading brands. In the construction and engineering space, IFS announced the agreement with French engineering company Ginger Group for the group-wide deployment of IFS enterprise applications supporting 2,000 staff in some 28 subsidiaries.
Note: revenue growth figures based on Swedish Krona YTD Jan–Sep 2020 versus YTD Jan–Sep 2019 and are reported in actual currency.
22 Oct 20. Rohde & Schwarz business performance remains positive despite difficult economic environment. The Rohde & Schwarz technology company ends a successful 2019/2020 fiscal year despite a difficult global economic environment and the impact of the COVID-19 pandemic. Thanks to a consistent diversification in the business fields of communications, information technology and security, the company enjoyed another successful year of growth. Rohde & Schwarz has thus proven a reliable technology partner even in difficult times. Rohde & Schwarz, the independent technology company, finished its 2019/2020 fiscal year (July to June) with EUR 2.58bn in revenue. The company has grown for the third year in a row with a 20 percent revenue increase. This proved once more that the privately owned company’s strategy focusing on sustainable business practices was the right one. The high degree of vertical integration, flexible production processes and robust supply chains helped successfully navigate the uncertain global economic environment of the past fiscal year. In addition, the clear focus on customer needs in the growth markets of connectivity, security and safety contributed to making the year a success. The number of employees grew moderately to about 12,300 worldwide.
Rohde & Schwarz benefits from large investments in wireless technologies
5G networks were set up faster than anticipated. The COVID-19 induced sales slump on the user equipment market failed to noticeably dampen investor sentiment in the first half of the year. The market size, importance and fierce competition on the device and network sides meant that both user equipment manufacturers and infrastructure providers continued to invest heavily in test and measurement solutions. Rohde & Schwarz benefited throughout the entire mobile communications value chain. The company’s T&M solutions place it in a good position for the internet of things (IoT). As part of the Industry 4.0 concept, 5G will revolutionize factory automation by connecting operating facilities wirelessly. Rohde & Schwarz has already developed a comprehensive test and measurement portfolio to set up and reliably operate 5G factory networks.
The automotive market responded positively to the company’s innovative radar sensor and vehicle connectivity solutions, putting Rohde & Schwarz in a promising position.
Mobile communications and broadcast are merging
The launch of 5G mobile communications opens up the opportunity to use terrestrial broadcast infrastructure for mobile communications. Television signals and data can be broadcast to mobile devices without burdening mobile networks. A recently sold, initial 5G TV test network set an example for the market, illustrating the potential of the technology that Rohde & Schwarz helped develop. The world market leader for TV transmitters is also driving a technological shift in satellite transmissions. The newly launched semiconductor amplifiers provide operators with a technologically and economically superior alternative to the still-dominant tube amplifiers.
Expanding connectivity in the public sector drives demand
COVID-19 clearly illustrated the value of faster and more secure internet connections – not only for private households but also in the industrial and public sectors. Germany’s digital pact for schools (DigitalPakt Schule), a well-financed federal and state program, generated a series of orders for WLAN networks at schools. Some German states also invested in the IT security of their administrative networks and equipped public authorities with BSI certified encryption technology from Rohde & Schwarz.
Security high on agenda
Despite the significant decrease in air traffic in the second half of the fiscal year, radio system sales to air traffic controllers and sales of security scanners for passenger processing remained solid. The cutting-edge CERTIUM® air traffic control portfolio from Rohde & Schwarz provides complete solutions that include hardware, software and service components. The portfolio was expanded in 2020 to include a state-of-the-art radio family.
Since their launch, security scanners from Rohde & Schwarz have conquered a significant market share and are used in airports around the world. A new walk-through model for the unregulated security market serves the growing demand for security products in the private sector. Typical applications include large events, loss prevention situations and securing data centers.
Naval forces trust communications systems from Rohde & Schwarz
On the global naval market, investments in new frigates and patrol ships contrast with increasing price pressures on equipment suppliers. Thanks to the innovative product portfolios bundled under the NAVICS® and SOVERON® brands, Rohde & Schwarz managed to grow yet again in this segment. Supplying full NAVICS® systems for the British Royal Navy’s first Type 26 frigates sent an important message to the market.
The COVID-19 pandemic confronted the world with an unprecedented challenge whose impact is virtually impossible to assess. Rohde & Schwarz business fields will be affected to varying degrees in the new fiscal year. In this context, the broad diversification of target markets that serve private and public sector customers will again prove advantageous. Rohde & Schwarz has the state-of-the-art processes and structure to face all future scenarios.
22 Oct 20. With just two weeks to go, Jefferies’ equity analyst team present sets of stocks to own for US presidential outcomes. While the polling may point quite strongly towards a Biden win, and even a Democratic sweep, polling has been wrong before. Jefferies see three major policy axes to consider across the spectrum of outcomes: 1) taxation, higher rates for the corporates and the wealthy; 2) Big tech regulation and healthcare reform; 3) infrastructure spend.
Jefferies European analysts highlight 38 stocks to position for a Biden victory and 38 stocks to position for a Trump victory, which can be found in the attached report. Key highlights for Aerospace & Defense are detailed below.
Key insights on Aerospace & Defense:
Equities analysts Sandy Morris and Hamish Dalgarno position the below in reference to a Trump Victory:
BAE Systems (BA LN, Buy)
Our base case for BAE does not incorporate a view on the Presidential election, and assumes split control of the House and Senate. As such we already discount the prospect of future defense budgets growing in line with the projections in the FY21 Budget Request; the need to address the budget deficit appeared to rule this out. Instead, we model a balance of power and assumed future Budgets fall by 5%. A Republican President and Republican control in the Senate might in contrast allow for future budgets to remain flat on the FY21 Request. Democratic control of Congress might lead to the reduction being somewhat greater, but the extent of any further reduction would be constrained by the geopolitical backdrop. Regardless, we believe BAE’s outlook would not markedly change were the reduction 5% or, say, 7%. Our forecasts assume limited top-line growth, but some increase in EBIT as contracts mature and become more profitable. We forecast FCF to remain robust as investment in additional capacity in the USA would be complete, and no additional capacity required. Our BUY recommendation on BAE is already in anticipation of a lower Defense Budget.
Ultra Electronics (ULE LN, Hold)
The political and budget backdrop is as described for BAE Systems. We believe that backdrop has already weighed on Ultra’s valuation. Since the 1H20 results on 30th July, Ultra has underperformed the FTSE 250 by c.15%. It is probable that a Republican President and continuing Republican control of the Senate would be greeted positively; the opposite would apply were the Democrats to hold power. We believe Ultra’s valuation could continue to be driven by sentiment, at least in the short-term. North America is Ultra’s most important market, accounting for 61% of FY19 revenue. After allowing for revenue in other government and para-public markets (for example, Forensic Technologies), we estimate US Defense generates around 50% of Group revenue. The recent share price underperformance may have captured the probable fundamental impact of a 5% reduction in future US Defense Budgets. US Outlays also typically lag the Budget authority by 12-24 months, meaning a lower FY22 Budget might not bear significantly on Group revenue before FY24. By that point, Ultra’s strong balance sheet should give it flexibility to enhance shareholder value, in our view.
20 Oct 20. Leonardo: Meeting of the Board of Directors, Continuity of Company Operations in Relation to the First Instance BMPS Judgment. Leonardo’s Board of Directors, which convened today, was provided with comprehensive information on the potential effects resulting from the first instance judgment in the trial of the Monte dei Paschi di Siena.
The presentation of the analysis, which also took into consideration the different reference markets of the Group, has showed an overview of the situation that does not involve specific limitations of company operations.
The Governance Committee was entrusted with the task of monitoring and analyzing every potential development of the matter, keeping the Board informed.
(defense-aerospace.com EDITOR’S NOTE: The above statement carefully avoids mentioning that Leonardo’s CEO, Alessandro Profumo, was convicted on Oct. 15 “at the end of a long-running false accounting case” to six years in jail for his role as chairman of the Monte dei Paschi di Siena bank.
Two other former bank officials were also convicted, and all plan to appeal, Reuters reported from Milan.
Italy’s 5 Star Movement, a member of the governing coalition, on Oct. 16 called for Profumo’s resignation in a post on its Twitter account: “In light of the sentence received, we expect Alessandro Profumo, in the interest of the company,” to resign as Leonardo’s CEO.) (Source: defense-aerospace.com/Leonardo)
20 Oct 20. TP Group plc (“TP Group” or the “Company” or the “Group”) Unaudited interim results for the six months ended 30 June 2020 Established client base and resilient operating model continues to support growth opportunities TP Group (AIM: TPG), the providers of mission-critical solutions for a more secure world, today announces its unaudited interim results for the six months ended 30 June 2020. These results have been prepared on the basis that the Group is in advanced discussions to dispose of its wholly owned subsidiary TPG Engineering Ltd., a manufacturer of heat exchangers, and therefore that business is treated as a discontinued operation for the purposes of these results. Financial highlights – continuing operations:
- Revenue up 33% to £27.5m (H1 2019: £20.6m) – normalising for the 6 month contribution from Sapienza of £4.3m, revenue increased organically by £2.6m (13%)
- Adjusted operating profit¹ £1.4m (H1 2019: £2.3m) – caused by adverse efficiency effects arising from COVID-19 restrictions, a change in the revenue mix and investment in the business
- Operating loss £1.7m (H1 2019: £0.9m loss) – movement as for adjusted operating profit
- Order intake up 13% to £35.2m (H1 2019: £31.1m) – a strong performance, overcoming commercial constraints arising through the COVID-19 pandemic
- Closing order book £64.4m (31 December 2019: £56.8m) – provides good visibility and continuity for the business • Established a new £7.0m three-year finance facility with HSBC Bank plc to support investment in future growth opportunities
- Cash balance, net of £7.0m drawn down from HSBC bank facility, £6.8m (31 December 2019: £6.6m) – strong working capital performance • Fully drawn down bank loan facility held on the balance sheet to mitigate any working capital effects caused by COVID-19 disruption Operational highlights
- Strong momentum from Consulting value stream o Follow-on order worth at least £5.0m from Army HQ for consulting support for its multi-billion-pound transformation programme
o Signed an extension to the European Space Agency (“ESA”) framework contract until December 2022 and secured the first tranche of orders worth c.€18.0m
- Establishing ‘clean gas solutions’ revenue base
o Carbon dioxide solution contract worth £1.0m with South-East Asian customer alongside Oxygen generation devices contract worth £1.0m
o Carried out performance trials of clean gas production technologies
- Ongoing geographic expansion o French office opened to support existing customers and to address Group-wide opportunities
o Contract signed with a German customer worth £1.7m for innovative mobile computing devices
- Strong Digital Solutions contract wins o Five-year contract to supply ECLIPSE project management software to Airbus UK o Initial contract worth £0.3m to develop an Artificial Intelligence (“AI”) solution to optimise critical equipment in the energy sector in the United Arab Emirates
- Impact of COVID-19 well managed o Maintained business continuity throughout the COVID-19 pandemic, with all engineering sites remaining open and suitable procedures in place to support customers’ critical programmes o Supported all staff, with no staff furloughed and invested in training and business methods throughout the COVID-19 period Current trading and outlook • Acquired Osprey Consulting Services Ltd., a business focused on safety and mission-critical airspace management and regulation in the defence, space and the emerging urban air mobility markets
- A strong start to H2 with multiple significant orders secured, including:
o c.€9.0m of additional work orders secured under ESA framework contract o c.£1.0m Hydrogen system contract
o c.£2.0m extension to MoD consulting contract
o c.£4.0m orders to supply MoD with oxygen generation and carbon dioxide removal devices
o Signed a three-way hydrogen fuelling partnership agreement Whilst COVID-19 continues to challenge the businesses community, the Group remains well positioned for future success. A strong core business with continued investment in new and emerging technologies and solutions allows the Group’s experienced management team to capitalise upon our position in exciting growth markets.
Phil Cartmell, Chief Executive Officer of TP Group, commented: “The first half of 2020 saw a typically resolute response from the Group with our first priority being the safety and well-being of our staff and those closest to them. “Pleasingly, we were able to maintain strong revenues in the first half of the year, as a result of our robust core business and the Group’s long-term order book, whilst making further planned investments despite the challenges of COVID-19. 3 “We remain well-positioned to capitalise on the anticipated recovery phase in our key sectors alongside our active engagement in some of the most exciting global growth markets, including clean energy, autonomous navigation and artificial intelligence.”
20 Oct 20. Microsoft Boosts Space Services, Partnerships. SpaceX CEO Gwynne Shotwell said SpaceX would, “where it makes sense,” help Microsoft Azure Space sell its data services to current and future customers.
Microsoft upped its space game today, unveiling a new cloud computing unit called Azure Space to provide access to mobile satellite data centers and and a new tool for designing large satellite constellations.
Combined with its ground-station-as-a-service business Azure Orbital, the Microsoft’s aim is “to supply a multi-orbit, multi-band, multi-vendor, cloud-enabled capability to bring comprehensive satellite connectivity solutions to meet the needs of our customers,” said Tom Keane, corporate vice president for Microsoft Azure Global, in a release today.
As Kelsey reported last month, Azure Orbital is essentially renting ground stations to small satellite operators and operators of large constellations who want to cut costs, positioning itself as a rival to Amazon Web Services. And, of course, Microsoft also is the prime contractor — having beat out Amazon in a controversial contest — for DoD’s JEDI (Joint Enterprise Defense Infrastructure) cloud. Azure Orbital is teaming with SES, KSAT, Viasat, Kratos, Amergint Technologies, KubOS and US Electrodynamics.
According to the various recordings and write ups released by Microsoft today, Azure Orbital is part of the Azure Space “ecosystem” — suggesting Orbital is another “product” being sold by Azure Space, but that relationship wasn’t spelled out in detail.
Further, Azure Space is partnering with both SpaceX and SES to link to their satellite constellations for providing global Internet broadband. SpaceX’s Starlink satellites are being orbited in Low Earth Orbit (LEO); SES’s O3b satellites operate in Medium Earth Orbit (MEO). Microsoft last September agreed to link its cloud services to SES’s communications satellites in Geosynchronous Orbit (GEO), along with those of Intelsat and Viasat. (It probably doesn’t need to be said that the partnership could be seen as yet another jab in the long-standing rivalry between SpaceX founder Elon Musk and Amazon founder Jeff Bezos.)
In addition, Azure Space is serving as a subcontractor to SpaceX under a $149m award from the Space Development Agency (SDA) to build four missile tracking and warning satellites, SpaceX CEO Gwynne Shotwell said in a pre-recorded interview with Keane. She added that SpaceX would, “where it makes sense,” help Microsoft sell its data services to current and future customers.
SDA head Derek Tournear back in June said renting ground stations would save money and speed operational capability for its planned architecture of thousands of satellites based in Low Earth Orbit.
Azure Space will be selling access to mobile cloud computing data centers, called Azure Modular Data Centers, to military users for deployment in far-flung battlefields where access communications networks may be contested. It also is aiming at commercial and civil enterprises working in areas with little communications infrastructure, Keane said in a pre-recorded message as part of Azure Space’s roll-out. Importantly, the data centers will be able to connect to terrestrial fiber (cable) networks, wireless networks and/or satellite links. The centers also provide the ability to still
The Azure Orbital Emulator allows customers to create “massive satellite constellation simulations” to “evaluate and train AI algorithms and satellite networking before ever launching a single satellite,” Keane said.
Meanwhile, another Azure Orbital partner, Kratos, announced today its OpenSpace platform and related applications for building software-defined ground stations to link with both wideband communications satellites and remote sensing satellites.
Software-defined ground stations essentially replace much of the hardware in today’s satellite ground stations with software that can easily be reprogrammed and updated over time, Phil Carrai, president of Kratos’ space, training and cyber division, explained in an interview with Breaking D.
While many ground station/terminal providers are moving to digitize functionality, Kratos is focusing on tools based on open standards and open systems architectures that allow for third-party upgrades — something that DoD is extremely keen on as it tries to revamp its stovepiped ground-segment operations.
“We’ve taken a stance that says: ‘You know what, the use cases within satellite [communications] can’t continue to be proprietary. They can’t continue to be seen as special and unique,” Greg Quiggle, Kratos’ vice president of product management, said in the same interview. “So we built our framework around many of the open and mainstream technologies and standards that you see in the terrestrial carrier markets, and in wireless with 5G.”
Quiggle said the added advantage is that Kratos’s subsystems will allow satellite networks to better integrate with future 5G networks to provide seamless connectivity via “hopping” to whichever network is available in any one place at any one time. As Breaking D readers know, this is a foundational element to Space Force head Gen. Jay Raymond’s new SATCOM Vision and the military’s efforts to develop a Joint All-Domain Command and Control network. (Source: Breaking Defense.com)
20 Oct 20. FDH Acquires Societe AHE Inc.. Acquisition Strengthens Position in Rotorcraft Market. FDH, a portfolio company of Audax Private Equity (“Audax”), announced it has acquired Societe AHE Inc. (“AHE”), a Montreal, Canada based distributor of aerospace hardware focused on the rotorcraft market. AHE expands FDH’s reach with additional product offerings in the rotorcraft segment, serving a diversified customer base across the globe.
Scott Tucker, CEO of FDH, said “Samy and the AHE team have built an outstanding business in the rotorcraft distribution market. Their industry position serving blue-chip customers provides an exciting compliment to the FDH family.”
Samy Cohen, President of AHE, said “AHE’s partnership with FDH represents the next step in our growth journey. Together with the FDH team, we are excited to leverage our combined resources to accelerate the growth of our business while continuing to provide high-quality service to our customers.”
AHE is FDH’s seventh acquisition, and fifth completed since Audax invested in the company in 2017.
FDH is a leading distributor of c-class hardware and replacement parts to commercial and defense aircraft manufacturers, subcontractors, component distributors, and MRO/aftermarket solution providers. FDH is headquartered in El Segundo, CA and has operations across North America, Europe, and Asia. For more information, please visit www.fdhaero.com.
ABOUT AUDAX PRIVATE EQUITY
Audax Group is a leading alternative investment manager with offices in Boston, New York, and San Francisco. Since its founding in 1999, the firm has raised over $26 bn in capital across its Private Equity and Private Debt businesses. Audax Private Equity has invested over $6bn in more than 130 platforms and over 875 add-on companies, and is currently investing out of its $3.5bn, sixth private equity fund. Through its disciplined Buy & Build approach, Audax seeks to help platform companies execute add-on acquisitions that fuel revenue growth, optimize operations, and significantly increase equity value. With more than 250 employees and over 100 investment professionals, the firm is a leading capital partner for North American middle market companies. For more information, visit the Audax Group website www.audaxgroup.com. (Source: BUSINESS WIRE)
19 Oct 20. Gripen maker Saab’s shares plunge as higher pandemic risks hit third-quarter profits. Shares in Swedish defence company Saab SAABb.ST slid more than 10% on Monday after it posted falling third-quarter profits and said it saw increased risks due to the coronavirus pandemic.
The maker of the Gripen fighter jet said the slow economic recovery from the pandemic was primarily affecting subcontractors and material supply for the Gripen E/F programme.
Saab said it had managed increased risks by adjusting project estimates, resulting in a 1.5bn crown ($170m) hit to operating income in the quarter, of which 1.1bn was in the aeronautics business.
Jefferies said that the charges were unexpected and initially likely to generate significant caution.
“Today’s charge is unwelcome, but we believe the key issue is whether the Gripen E/F programme is significantly delayed,” the investment bank said in a note.
Saab shares were down 11.6% at 0932 GMT, on track for their worst day since April and at the bottom of STOXX 600 index .STOXX.
The company swung to an operating loss (EBIT) of 663m crowns, with adjusted operating profit at 445 m crowns in the quarter, from a 518m profit a year ago. Order bookings increased 8% to 10.15 bn crowns.
“Due to the ongoing pandemic and drawn-out global recovery, Saab now sees an increased risk related to the effects of Covid-19,” the company, which continued to say it could not currently give a financial outlook for the year, said in Monday’s statement.
The company stood by its forecast of a high delivery rate in the fourth quarter and positive operational cash flow for this year. It also said it remained committed to its long-term financial goals for growth and profitability.
Saab’s previous full-year outlook, which it dropped in April, was for organic sales growth of 5% in 2020 and an improved operating margin compared to 2019. The company, which had cancelled its proposed dividend for 2019 in March, was originally due to post third-quarter earnings on Oct. 21. (Source: Reuters)
20 Oct 20. Lockheed Martin raises full-year outlook after profit beat. U.S. weapons maker Lockheed Martin LMT.N reported a better-than-expected third-quarter profit, helped by higher sales in its aeronautics unit which makes the F-35 fighter jet, and raised its full-year earnings forecast.
The U.S. defense sector has fared better compared with other industries amid a slump in demand due to the coronavirus pandemic, as the government has continued to purchase weapons while also providing support to defense contractors to pay the salaries of highly skilled workers.
Lockheed said deliveries of F-35 jets rose to 31 aircraft in the quarter ended Sept. 27, from 28 a year earlier.
On an earnings conference call with analysts, management said the company plans to deliver 120 to 125 F-35s in 2020.
Earlier in the year, Lockheed warned of a delay in jet deliveries due to a parts shortage as the coronavirus hampered production across the supply chain. Before the global pandemic hit, Lockheed forecast about 140 jet deliveries this year.
The company now expects 2020 earnings per share of about $24.45, compared with its previous forecast of between $23.75 and $24.05 per share.
It raised its full-year net sales outlook to $65.25bn, from $63.5bn to $65 bn previously.
Lockheed forecast sales in 2021 to increase 3% to at least $67bn with similar profit margins as it recovers from the impact of the pandemic.
Shares were off by 1.6% during midday trading at $377.60 per share due to the conservative outlook.
The Bethesda, Maryland-based company said it assumed the corporate rate would stay at 21%, something U.S. presidential candidate Joe Biden has said he would change if elected. Currently, Lockheed pays taxes at a 14.7% rate.
Net earnings from continuing operations rose to $1.75bn, or $6.25 per share, in the quarter, from $1.61bn, or $5.66 per share, a year earlier.
Analysts on average expected Lockheed to earn $6.09 per share, according to IBES data from Refinitiv. (Source: Reuters)
21 Oct 20. Kitron: Q3 2020 – Record performance continues. Kitron today reported strong growth and record profit for the third quarter driven by the Medical devices, Defence/Aerospace and Industry sectors.
Kitron’s revenue for the third quarter was NOK 1 054m, an increase of 43 per cent compared to last year. Growth adjusted for currency effects was 35 per cent.
Profitability expressed as EBIT margin was 8.6 per cent in the third quarter, compared to 5.4 per cent in the same quarter last year.
The order backlog ended at NOK 1 863m, an increase of 18 per cent compared to last year.
Peter Nilsson, Kitron’s CEO, comments, “The strong performance in the first half of 2020 continues over the rest of the year. A 43 per cent growth in the third quarter and revenue over NOK 1bn is a record for Kitron. The third quarter is characterized by exceptional revenues in medical devices. The remarkable performance of Kitron employees and partners has made this possible. Extraordinary operational execution generated a solid EBIT margin of 8.6 per cent. Earnings per share is more than doubled compared to last year. Once again, we increase our full year outlook based on strong demand in several sectors.”
Kitron’s revenue in the third quarter amounted to NOK 1 054m, compared to 738m in the same quarter last year. There was strong growth within the Defence/Aerospace and Industry sectors and very strong growth within the Medical devices sector.
Strong order backlog
The order backlog ended at NOK 1 863m, compared to 1 572m last year. The order backlog increased within all market sectors except Offshore/Marine. Growth is particularly strong in the Industry sector
Third quarter operating profit (EBIT) was NOK 90.5m, compared to 39.6m last year. EBITDA was NOK 115.7m, compared to 59.7m last year. Profit after tax amounted to NOK 60.9m, compared to 24.6m in the same quarter the previous year. This corresponds to earnings per share of NOK 0.34, up from 0.14 last year.
The strong growth has challenged operational cash flow, which ended at negative NOK 3.2 m, compared to 19.2m in the third quarter of 2019.
Capital efficiency ratios improved
Net working capital was NOK 1 134m, an increase of 28 per cent compared to the same quarter last year. However, capital efficiency ratios improved. Cash conversion cycle improved from 116 days to 96 days, and net working capital as a percentage of revenue was 25.1 per cent, compared to 29.5 per cent last year. Capital ratios are expected to improve further.
After the end of the third quarter, and pursuant to the authorisation granted by the general meeting, the Board of Directors has resolved a dividend of NOK 0.50 per share (see separate stock exchange notice dated 20 October 2020 for further details).
For 2020, Kitron has previously indicated a revenue outlook of between NOK 3 500 and 3 800m and EBIT margin between 6.7 and 7.5 percent.
Due to increased growth in the Defence/Aerospace, Industry and Medical devices sectors, overall profitability improvement and favorable currency, revenue is now expected to be between NOK 3 850 and 4 000m and EBIT margin is expected to be between 7.6 and 7.8 per cent.
As previously reported, demand within the Medical devices sector, driven by the Corona pandemic, has been particularly strong in the second and third quarter. This is expected to normalize in the fourth quarter and going forward. (Source: Google/https://www.globenewswire.com/)
20 Oct 20. Lockheed sees earnings growth in space business. Space emerged as Lockheed Martin’s business area with the highest growth, driven by hypersonic weapons programs and an anticipated next-generation interceptor award, CEO James Taiclet said Tuesday on the company’s third-quarter earnings call.
Though F-35 fighter jet deliveries and classified programs drove growth in Lockheed’s aeronautics segment, and demand for Hellfire missiles drove the missiles and fire control segment, low single-digit increases were largely Lockheed’s norm for the quarter.
“When we speak of hypersonics, I think there’s a very big upside there because there’s a very big threat. It’s getting worse out of Russia and China, and the U.S. and its allies are going to have to meet it both on offensive and defensive hypersonic systems,” Taiclet said, adding that classified space systems are a “wide-open field.”
Taiclet also said he expects the government will work with industry to counter emerging kinetic and non-kinetic threats to space assets, ground stations and the links between them. He pointed to the Space Development Agency’s selection of Lockheed, which is one of the firms building its “transport layer” — a low-Earth orbit constellation of satellites that can transfer data globally through optical intersatellite links.
Taiclet touted the satellite constellation’s eventual ability to transmit data at high speeds to aircraft, ground troops, and surface and undersea vessels as synergistic with Lockheed’s push into 5G networking, which Taiclet calls “5G.mil.” A telecom executive before he joined Lockheed in June, Taiclet speculated that the company’s toehold will give it an advantage as competition in this business area heats up.
SDA Director Derek Tournear previously stated that the transport layer will be the space component of Joint All-Domain Command and Control, or JADC2, a Pentagon effort to connect any sensor to any shooter across domains and services. The effort now has a “C” at the beginning — CJADC2 — for “Combined.”
Lockheed reported Tuesday that its space segment’s net sales in the third quarter of 2020 increased $163m, or 6 percent, compared to the same period in 2019. The segment earned $90m for government satellite programs due to higher volume (primarily Next Generation Overhead Persistent Infrared satellites), and about $60 m for strategic and missile defense programs due to higher volume (primarily hypersonic development programs).
Space’s operating profit in the third quarter of 2020 decreased $61m, or 20 percent, compared to the same period in 2019. There was a decrease there of $50m due to lower equity earnings from the corporation’s investment in United Launch Alliance ― a joint venture with Boeing.
Lockheed announced last week it will partner with Aerojet Rocketdyne to compete for the Next Generation Interceptor program, which is run by the Missile Defense Agency. The MDA plans to downselect to two companies, with an eventual winner expected to have a system ready in 2028.
On Tuesday’s call, Taiclet said Lockheed’s acquisition of Integration Innovation Inc.’s hypersonics portfolio this month was to provide a new capability in thermal management for hypersonic glide bodies.
The deal with i3 of Huntsville, Alabama, was part of a broader mergers and acquisition strategy, that includes joint ventures and commercial partnerships, to add to the company’s “technological firepower” in areas like mission systems, he said.
“We plan to be active, but we plan to be very, very prudent,” he noted.
It was disclosed last week that the Pentagon’s nascent hypersonic missile, during a March 19 test in Hawaii, hit within 6 inches of its target. The Army is developing a ground-launched capability and plans to field a battery-sized hypersonic weapon to soldiers by 2023.
Lockheed executives were upbeat about space launch. Under a recent Pentagon award, potentially worth billions of dollars, to launch national security payloads over the next five years, ULA will receive 60 percent of the contracts and SpaceX will get 40 percent.
Asked Tuesday about competition between ULA and SpaceX, Lockheed Chief Financial Officer Ken Possenriede acknowledged SpaceX as “more than an emerging threat right now.”
“Of the recent competitions we’ve had with them, we’ve been pleased with where ULA landed relative to SpaceX,” Possenriede said. “We also think we now have a price point that is compelling to customers that will allow ULA to get its fair share of awards over SpaceX.” (Source: Defense News)
21 Oct 20. Aussie cyber business CyberCX acquires Cloudten, Decipher Works. Australia-based CyberCX has agreed to acquire cloud security specialist Cloudten and identity management expert Decipher Works, bolstering its cutting-edge cloud solutions, identity and access management (IDAM), machine learning and AI, and migration services expertise.
CyberCX confirmed that it has agreed to acquire cyber and cloud security specialists Decipher Works and Cloudten from ASX-listed Vortiv.
The companies provide specialised solutions in the cybersecurity, identity, data analytics and cloud services sector and have an enterprise customer base across financial services, education, government, transport, manufacturing and services sectors.
John Paitaridis, CyberCX CEO, said, “We are committed to delivering the market-leading cloud security and identity security capability. Decipher Works and Cloudten bring expertise and synergies that complement our mature cybersecurity capabilities and which will deepen CyberCX’s identity and cloud security expertise.”
With the cloud and identity cyber security market growing at up to 25 per cent annually, Paitaridis said the acquisition will strongly position CyberCX to take advantage of growth opportunities.
“Cloud and identity security are two of the fastest-growing cyber security domains globally. We see impressive talent and capabilities in these two businesses playing a critical role in deepening and enhancing CyberCX’s services, which are vital for our business and government customers as they adopt cloud-first solutions and enhance identity security controls,” Paitaridis added.
Richard Tomkinson, Cloudten managing director, said CyberCX’s culture, values and growth ambition align closely with Cloudten’s aspirations.
“CyberCX is the perfect home for our team of cloud-focused, cybersecurity professionals. We have built a leading cloud security practice with extremely strong network, compliance and data security capability. CyberCX complements our existing domain expertise and will accelerate our growth prospects. We are proud to join Australia’s leading cybersecurity services organisation and look forward to continuing to drive outstanding results for our customers,” Tomkinson explained.
The acquisitions mark a year of exceptional growth and activity for CyberCX.
Michael Leonard and Stefan Halvarsson, Decipher Work’s executive directors, commented that the Decipher Works specialist team will enhance CyberCX’s strong identity and access management practice. Decipher Works brings some of the country’s most experienced solutions and technology developers and configuration specialists. As we join CyberCX, the scale and depth of expertise of the combined group will present one of the region’s most capable and compelling identity and access management offerings.”
Launched in October 2019, CyberCX has brought together the country’s most trusted cybersecurity companies to create comprehensive end-to-end cyber security services offering to Australian and New Zealand enterprise and government.
CyberCX has a workforce of over 600 cybersecurity professionals and a footprint of over 20 offices across Australia and New Zealand.
CyberCX has quickly established itself as the region’s leader for cyber security services. With a relentless focus on protecting Trans-Tasman organisations, CyberCX leads the industry discussion on cyber security threats and opportunities and passionately promotes rewarding cyber security careers, particularly for women.
The acquisitions mark a year of exceptional growth and activity for CyberCX. Launched in October 2019, CyberCX has brought together the country’s most trusted cyber security companies to create comprehensive end-to-end cyber security services offering to Australian and New Zealand enterprise and government. CyberCX has a workforce of over 600 cyber security professionals and a footprint of over 20 offices across Australia and New Zealand.
CyberCX has quickly established itself as the region’s leader for cyber security services. With a relentless focus on protecting trans-Tasman organisations, CyberCX leads the industry discussion on cybersecurity threats and opportunities and passionately promotes rewarding cybersecurity careers, particularly for women.
As a company, CyberCX offers a full suite of cyber security services, including: consult and advisory; governance, risk and compliance; incident response; penetration testing and assurance; security integration and engineering; cloud and identity security; and managed security services.
Led by industry experts and delivered by cyber security specialists committed to their craft, CyberCX represents Australia and New Zealand’s best cyber security talent, applying unmatched cyber security expertise to protect and defend Australian and New Zealand organisations from cyber threats.
Cloudten and Decipher Works have teams in Sydney, Melbourne, Brisbane and over 50 employees. (Source: Defence Connect)
19 Oct 20. Saab’s Results January-September 2020. Saab presents the results for January-September 2020 earlier than previously announced.
Statement by the President and CEO Micael Johansson: “The corona pandemic has continued to impact the world negatively and not least the global aviation industry. For Saab, the uncertainty surrounding Covid-19 has mainly been associated with supply chain disruptions within the company’s business areas and the market conditions for the civil business. Due to the ongoing pandemic and drawn-out global recovery, Saab now sees an increased risk related to the effects of Covid-19.”
In recent assessments, the future risks have increased foremost for business area Aeronautics. The prolonged pandemic and slow recovery is primarily affecting subcontractors and material supply for the Gripen E/F programme, with consequences for development, verification and production work.
The Gripen-programme is characterized by long lead times and small series where components must be certified for airworthiness, which means the assessment of future possible economic impact within Aeronautics has become increasingly uncertain. Saab has managed the increased risks by adjusting the project estimates, which affected the operating income negatively by SEK 1.1bn in the quarter. Our view is that the risks in the supply chain for other business areas have also increased, but to a lesser extent, why an additional SEK 0.4bn has been allocated for adjustments in other project estimates. Our assessments assumes that the effects of the pandemic will continue during 2021.
In connection with the interim report for the first quarter 2020, the outlook for organic sales growth and operating margin for the full-year could not be confirmed due to the great uncertainty caused by Covid-19. This still applies. The projection of a high delivery rate in the fourth quarter, including important milestone payments, have not changed, nor has our projection that operational cash flow for the full-year 2020 will be positive, excluding the state support package. Saab remains committed to its long-term financial goals in terms of growth and profitability.
Strong order bookings and continued internationalisation
In challenging times, Saab has continued to win important contracts. Order bookings increased by 8% in the quarter and by 27% in the first nine months of the year and amounted to SEK 24.2bn (19.1). Small orders grew by 7% in the same period. During the first nine months, the work of developing the business in a more international direction has continued. In the United States of America, the establishment of local production capacity for the T-7 aircraft is progressing, and in connection with Australia’s order for Saab’s solution for deployable health modules, a global development centre is being established in the country.
Stable sales and profitability affected by Covid-19
Sales in the first nine months of 2020 amounted to SEK 22.9bn (24.9). The lower volumes in the quarter were mainly due to Covid-19 related adjustments to project estimates and weak demand in civil aviation operations. Excluding adjustments to project estimates, sales were down 2% in the year’s first nine months. Operating income for the first nine months amounted to SEK 549m (1,739). Items affecting comparability for the quarter includes capital gain from the divestment of Vricon SEK 1,0bn, Covid-19 related adjustments to project estimates SEK 1,5bn and provisions and write-downs SEK 0,6bn. Excluding items affecting comparability, operating income amounted to SEK 1,657m, equivalent to an operating margin of 6.8% (7.0).
Cash flow improvement in the quarter
Operational cash flow showed an improvement compared to the first nine months of 2019 and amounted to SEK -128m (-4,356), thanks to several important deliveries during the year, including GlobalEye to the United Arab Emirates and Gripen E to Brazil.
Outlook statement for 2020
Due to uncertainty related to the scope and duration of COVID-19, it was stated in the first quarter interim report of 2020 that the previous forecast for the full-year 2020 could not be confirmed. Saab reiterates this assessment.
16 Oct 20. General Atomics buys RUAG’s Dornier 228 programme and German MRO business. Swiss aerospace and defence group RUAG is to sell its German-based business aviation and helicopter MRO operation, and Dornier 228 production line to US firm General Atomics.
The transaction, which the companies say was agreed on 30 September, but has only just been announced, will include the transfer of all 450 employees at the Oberpfaffenhofen site near Munich. Final regulatory approval is still needed and terms have not been disclosed.
RUAG says the divestment is “another important step… to realignment” for RUAG International, which operates in space and aerostructures manufacturing and was earlier this year split from RUAG (Switzerland), which is largely a contractor of ammunition and other equipment and services to the Swiss armed forces.
The state-owned company in July last year divested business aviation activities at Geneva and Lugano airports. It will continue to employ 800 staff at Oberpfaffenhofen in its aerostructures business, which also has a site in Emmen, Switzerland, and is not affected by the sale.
Dresden-based General Atomics Europe employs 600 in Germany and has its roots in Spezialtechnik, a technology company acquired by the San Diego-based, family-owned corporation in 1992. It operates across several industrial markets, including aerospace.
General Atomics Europe managing director Harald Robl says the acquisition will allow the division to expand its portfolio into business aviation and helicopter MRO, as well as taking over production of the Dornier 228NG, which, according to Cirium fleets data, has a backlog of four aircraft. He adds: “We want to develop Oberpfaffenhofen into the European aviation core of the General Atomics Europe Group.”
The latest FlightGlobal Top 100 ranking of aerospace companies has RUAG at number 70, with aerospace revenues of $887m in 2019.
RUAG acquired the rights to the Dornier 228 after former owner Fairchild Dornier went into insolvency in 2002. Although designed as a 19-seat passenger aircraft, it has largely positioned the latest NG version of the twin-turboprop to appeal to the special mission market. Cirium shows 10 examples as in operational use, including with the navies of Bangladesh and Germany. (Source: Google/Flightglobal)
TCI International, Inc., is a wholly-owned subsidiary of SPX Corporation. TCI provides turn-key solutions for spectrum management and monitoring, direction finding, geolocation and communications intelligence to civilian, government, military and intelligence agencies as well as antennas for communications and high-power radio broadcasting. TCI is headquartered in Fremont, California, USA. For more information, visit www.tcibr.com.