BUSINESS NEWS

Sponsored by SPX CommTech (TCI & ECS)

 

www.tcibr.com

 

www.enterprisecontrol.co.uk

 

————————————————————————-

16 Feb 24. Babcock rebounds following defence splurge.

A visit to the Devonport docks shows why the defence specialist’s outlook is improving

• The company is looking to plug ‘peace dividend’ skills gap
• Dispute with MoD over Type 31 frigate contract settled

The hive of activity at the Devonport dockyard near Plymouth is a real illustration of the hike in defence spending following Russia’s invasion of Ukraine. Devonport, which has been in operation since early in the 18th century, is Europe’s biggest naval dockyard. Yet the ‘peace dividend’ that accompanied the end of the Cold War meant successive governments cut investment in many of the UK’s defence facilities, and now the nation is playing catch-up.

Babcock (BAB), which co-owns a large part of the base, was handed a £750mn contract in November to make infrastructure upgrades over the next four years that will equip the site to carry out deep maintenance work for current and future generations of UK submarines. At 10 Dock, for instance, an old Edwardian dock is currently being reconfigured to handle both Astute and Dreadnought class submarines.

This is the biggest investment in Devonport in 30 years and the work has to take place while the yard remains operational. Currently on site, HMS Victorious – a Vanguard class nuclear submarine originally commissioned in the 1990s – is undergoing a £500mn refurbishment that will extend its lifespan for another 15 years. Several Type 23 frigates are also being upgraded and HMS Conqueror, the nuclear submarine that sank the General Belgrano ship during the Falklands War, is being decommissioned.

This is the type of “complex programme delivery” at which Babcock specialises, chief executive David Lockwood told Investors’ Chronicle on a tour of the dockyard last week.

FTSE 350 Review: The defence stocks adapting to a new world

Various asset sales in recent years show the shift to services over sales under Lockwood, resulting in higher cash flow and halved net debt between 2021 and now. Babcock has also reduced its pension deficit by £400mn to around £300mn. Another headache looks to have been solved as of this month as well: Babcock confirmed it had resolved a dispute with the Ministry of Defence over its lossmaking Type 31 frigate contract.

The company signed a deal in 2019 to build five frigates at a cost of £250mn per ship, but then steel, labour and other costs soared. It booked a £100mn loss covering the lifespan of the contracts last year and entered into a process in a bid to renegotiate terms.

Lockwood said the terms of its settlement were subject to a non-disclosure agreement, but made further disputes less likely and provided a “much more robust framework to finish the programme”.

However, the fact that there was no accompanying lift to earnings guidance meant Babcock’s shares initially plunged by 9 per cent last Wednesday, although this loss was regained in subsequent trading sessions.

Liberum analyst Joe Brent said in a note that “it seems reasonable to assume no profit” on the Type 31 contract. Lockwood told analysts there had been “a lot of noise” about Type 31, but it only represents 5 per cent of the group’s revenue.

Babcock had seen its own peace dividend in terms of recruitment. There are currently around 7,300 workers on the site, which is a decline from around 13,500 when the site was privatised in the mid-1980s but a big uplift from the 4,000 or so that were working there in the early 2010s. This means it has “lots of old people and lots of young people” among its employees, but not as many in the middle of their careers.

“Making sure we retain the experience for long enough to transfer the skills… is really important to us,” Lockwood said.

Skilling up

After its recent disposals, 80 per cent of total revenue is driven by service provision rather than products. To deliver this, “engineering know-how” is more important than intellectual property, he argued.

“You can have all of the drawings in the world but when we put a 40-year-old Warrior (armoured) vehicle in front of the engineers, how they actually approach the refit is down to the knowledge and understanding of the platform,” he said.

The company is currently recruiting around 600 trainees a year plus older ‘production support operatives’ who don’t qualify for apprenticeships but whom it is teaching through ‘on the job’ training in a bid to fill its own gap.

“We are an engineering company and haven’t always behaved like one, and that’s one of the reasons [that] on occasion we’ve got into trouble,” he said.

He was also keen to highlight an improvement in contract discipline in recent years. Although lossmaking contracts still made up 11 per cent of last year’s revenue, this should reduce as older work is delivered.

“Next year is our biggest year for [lossmaking] revenue and then that fades through to 2028,” he said.

The group’s operating margin, which stood at 6.3 per cent last year, would be 0.9 per cent higher without these contracts, Lockwood said.

Other improvements, including systems upgrades and rationalisation of overheads, will contribute towards Babcock’s medium-term goal of lifting operating margin above 8 per cent, chief financial officer David Mellors told analysts.

Brighter prospects have translated into broker upgrades and a 50 per cent increase in Babcock’s share price over the past year. Peel Hunt’s analysts think the company’s 8 per cent margin target can be beaten and says that, despite recent share price gains, Babcock still trades at a discount to peers. “We believe it is not too late to get on board,” the company’s analysts said in a note.

Not everyone agrees, though, with Liberum’s Brent arguing that a price of 11 times forecast earnings “is no longer cheap” relative to the company’s history and its peer group definition. (Source: Investors Chronicle)

 

15 Feb 24. Lockheed Martin on track to increase production of weapons systems. Lockheed Martin (LMT.N), opens new tab said on Thursday that it was on track to raise production of its weapons systems to meet increased demand amid escalating security concerns.

The Russia-Ukraine war, the Middle East crisis and the specter of Chinese aggression are driving demand for weapons systems made by U.S. defense companies.

Lockheed said it was on track to double production of its High Mobility Artillery Rocket Systems (HIMARS). HIMARS production capacity has already increased from 48 per year to 60 per year and is on track to meet the 96 per year capacity by the end of 2024.

Production of Javelin, a shoulder-fired and platform-employed antitank missile system, increased to 2,400 per year. It expects to increase Javelin production capacity to 3,960 Javelins per year by late 2026

It will deliver more than 10,000 Guided Multiple Launch Rocket Systems (GMLRS) this year and aims to increase production capacity to 14,000 per year in 2025.

Additionally, Lockheed said it had advanced funds to increase air defense missile PAC-3 MSE annual production rates to 650 by 2027. (Source: Reuters)

 

15 Feb 24. SOEs, including Denel, on a “death spiral” – DA. National Treasury’s third quarter government expenditure report confirms the apparent “death spiral” of State-owned enterprises (SOEs), including Denel, continues.

The observation by Democratic Alliance (DA) shadow deputy finance minister, Ashor Sarupen, covers six SOEs – referred to as State-owned companies (SOCs) in the National Treasury (NT) Asset Liability Management Division presentation to Parliament’s Standing Committee on Appropriations (SCA) on 14 February. They are the Land Bank, Eskom, SAA (South African Airways), Transnet, the South African Post Office (SAPO) and the Irene, Centurion-headquartered defence and technology conglomerate Denel.

The NT reports that as of 31 December last year, Denel’s year-to-date revenue was 37% behind budget amounting to R847 m compared to a year-to-date budget of R1.343bn.

“The shortfall was a result of delays in the placement of orders by SAAF (SA Air Force) as per budget, non-delivery of spares within required timelines and breakdown of critical machinery.”

The full year forecast to end of March 2024 amounts to R1.671bn against a budget of R1.972bn – a 15% shortfall.

Operating costs year-to-date are R566 m compared to a year-to-date budget of R456m ascribed to a delay in implementing cost reduction measures. The presentation further notes high under-recoveries due to reduced productivity.

“Denel’s earnings before interest and tax (EBIT) worsened to a negative R359m compared to the projected negative R179m. Consequently, net losses deteriorated further than expected. As at 31 December 2023, Denel’s realised net loss amounted to R463m, 37% worse than the projected R339m in losses. The deterioration was due to lower revenue and higher operating costs, further contributing to this is the loss from Associates, primarily RDM (Rheinmetall Denel Munition) and Barij [Dynamics, formerly Tawazun Dynamics].

“Denel,” according to the NT presentation, “remains financially vulnerable” and “delivering on the turnaround plan remains priority” with “Denel consistently urged to finalise asset disposal initiatives”.

Reacting to what he calls “alarming financial distress” in multiple SOEs, Sarupen said Denel received a R3.3bn bailout in 2022 and by the end of the third quarter last year lost R463m – R124m more than budgeted for.

Denel continues to implement its latest turnaround plan, which includes the disposal of non-core assets, consolidating core capabilities, and achieving growth through collaborations.

The turnaround plan has a funding requirement of R5.203bn, of which Denel committed to raise around R1.8 bn through the disposal of identified non-core assets. The remaining balance of R3.378bn was allocated through the Special Appropriation Act 2022, subject to meeting certain pre- and post-disbursement conditions.

To date, Denel has drawn down R2.203bn. The remaining portion of the allocated funds (R1.175bn) has been ringfenced by Denel and only to be drawn down when realising proceeds from the sale of the remaining non-core assets. This enforces accountability on Denel to follow-through on these augmenting initiatives, National Treasury stated.

Treasury’s reported noted Denel has been unable to finalise any other asset-disposal apart from unlocking the surplus funds from the Denel Medical Benefit Trust (DMBT). “This is due to stakeholder misalignment in the defence industry, given that the anticipated Memorandum of Co-operation (MoC) to outline alignment on the identified sovereign and strategic capabilities, including the funding thereof, has been delayed and still not finalised to date.”

“Despite the delays being experienced, National Treasury maintains that Denel needs to realise proceeds from the sale of non-core assets before the ringfenced portion of the recapitalisation can be accessed.”

(Source: https://www.defenceweb.co.za/)

 

15 Feb 24. Airbus plans special dividend, takes new space charge. Europe’s Airbus (AIR.PA), opens new tab unveiled a special dividend on Thursday after posting higher 2023 results, buoyed by record airplane orders and higher deliveries but dampened by a fresh charge of 200m euros ($214.62m) in its troubled Space unit.

The world’s largest commercial planemaker said core adjusted operating profit rose 4% to 5.8bn euros as revenue rose 11% to 65.4bn, and predicted core profit of 6.5 to 7.0 bn euros in 2024.

Airbus proposed an unchanged regular dividend of 1.8 euros a share, and added a special dividend of 1 euro per share as net cash topped the 10-bn-euro threshold previously identified as a potential trigger for returning cash to shareholders.

Airbus is riding a wave of orders from airlines coping with a rebound in travel demand from the pandemic, helping it to build up cash reserves in contrast with U.S. rival Boeing (BA.N), opens new tab which is mired in debts stemming from a series of crises.

Airbus, as expected, forecast around 800 jet deliveries for 2024 but announced a further delay in entry to service of its A321XLR single-aisle jet to the third quarter from the second. The first customer airplane entered final assembly in December.

The company’s forecasts are subject to no further disruption to tight global supply chains or the world economy.

The Space unit charge brings the total written off in that segment last year to 600 m euros and comes a day after Reuters reported that CEO Guillaume Faury had told staff that large, unexpected charges in the business were “not acceptable”.

Space Systems chief Jean-Marc Nasr is leaving his position from next month, with Faury telling him in a recent internal memo that “it is what it is,” Reuters reported on Wednesday. Nasr could not be reached for comment.

The charges helped push divisional Defence and Space profits down 40% to 229 m euros while Helicopters rose 15%.

Airbus is among European companies facing fierce competition from U.S. launchers and a new generation of low-cost satellites.

Faury, however, told staff in a letter last month that Airbus is better off with a high-performing Defence and Space business than without a presence in those areas. ($1 = 0.9319 euros) (Source: Reuters)

 

15 Feb 24. Airbus reports Full-Year (FY) 2023 results.

• 735 commercial aircraft delivered
• Revenues €65.4bn; EBIT Adjusted €5.8bn
• EBIT (reported) €4.6 bn; EPS (reported) €4.80
• Free cash flow before M&A and customer financing € 4.4bn; Net cash €10.7bn
• 2023 guidance achieved
• Dividend proposals: dividend of €1.80 per share; special dividend of €1.00 per share
• 2024 guidance issued

Airbus SE (stock exchange symbol: AIR) reported consolidated Full-Year (FY) 2023 financial results and provided guidance for 2024.

“In 2023 we recorded strong order intake across all our businesses and we delivered on our commitments. This was a significant achievement given the complexity of the operating environment,” said Guillaume Faury, Airbus Chief Executive Officer. “We will continue to invest in our global industrial system, while progressing on our transformation and decarbonisation journey. Our dividend proposals are a reflection of the strong 2023 financials, our growth prospects in 2024 and balance sheet strength.”

Gross commercial aircraft orders totalled 2,319 (2022: 1,078 aircraft) with net orders of 2,094 aircraft after cancellations (2022: 820 aircraft). The order backlog amounted to 8,598 commercial aircraft at the end of 2023. Airbus Helicopters registered 393 net orders (2022: 362 units), which were well spread across programmes and corresponds to a book-to-bill ratio above 1 both in units and value. Airbus Defence and Space’s order intake by value increased 15 percent to €15.7bn (2022: €13.7bn), corresponding to a book-to-bill of around 1.4 by value. Fourth quarter orders included 16 C295 aircraft for Spain.

Consolidated order intake by value increased to €186.5bn (2022: €82.5bn) with the consolidated order book valued at €554bn at the end of 2023 (year-end 2022: € 449bn). The increase in the consolidated backlog value mainly reflects the Company-wide book-to-bill of well above 1, partly offset by the weakening of the US dollar.

Consolidated revenues increased 11 percent year-on-year to €65.4bn (2022: € 58.8bn). A total of 735 commercial aircraft were delivered (2022: 661(1) aircraft), comprising 68 A220s, 571 A320 Family, 32 A330s and 64 A350s. Revenues generated by Airbus’ commercial aircraft activities increased 15 percent, mainly reflecting the higher number of deliveries. Airbus Helicopters’ deliveries were stable at 346 units (2022: 344 units) with revenues rising 4 percent, reflecting the overall performance across programmes and services. Revenues at Airbus Defence and Space increased 2 percent, mainly driven by Military Air Systems and Connected Intelligence, offset by some updated Estimates at Completion of certain Space programmes. A total of 8 A400M military airlifters were delivered (2022: 10 aircraft).

Consolidated EBIT Adjusted – an alternative performance measure and key indicator capturing the underlying business margin by excluding material charges or profits caused by movements in provisions related to programmes, restructuring or foreign exchange impacts as well as capital gains/losses from the disposal and acquisition of businesses – was €5,838 m (2022: €5,627m).

EBIT Adjusted related to Airbus’ commercial aircraft activities increased to €4,818m (2022: €4,600m), reflecting the higher deliveries and a more favourable hedge rate, partially offset by investments for preparing the future. FY 2022 included the non-recurring positive impacts from retirement obligations and compliance-related topics partly offset by the impact resulting from international sanctions against Russia, while in H1 2023 provisions were released for € 0.1 bn from compliance-related topics. The A220 ramp-up continues towards a monthly production rate of 14 aircraft in 2026, with a focus on the programme’s industrial maturity and financial performance. On the A320 Family programme, production is progressing well towards the previously announced rate of 75 aircraft per month in 2026. In 2023, construction of the second A320 Final Assembly capacities in Tianjin (China) and Mobile (US) commenced and the new A320 Family Final Assembly Line in Toulouse delivered its first aircraft in December. The first customer A321XLR entered into the Final Assembly Line in December, with entry-into-service for the aircraft type expected to take place in Q3 2024.

On widebody aircraft, the Company continues towards a monthly rate of 4 aircraft for the A330 in 2024 and rate 10 in 2026 for the A350.

Airbus Helicopters’ EBIT Adjusted increased to €735m (2022: €639m), reflecting the strong performance across programmes and services. FY 2022 also included net positive non-recurring elements.

EBIT Adjusted at Airbus Defence and Space decreased to €229m (2022: €384m).

The decrease reflects €0.6bn charges resulting from the update of Estimates at Completion of certain Space programmes, partially mitigated by the performance of the rest of the business. FY 2022 included some non-recurring elements, notably from the loss of two Pleiades Neo satellites.

On the A400M programme, development activities continue towards achieving the revised capability roadmap. Retrofit activities are progressing in close alignment with the customer. In 2023, an additional update of the contract estimate at completion has been performed and a net charge of € 41m recorded. Risks remain on the qualification of technical capabilities and associated costs, on aircraft operational reliability, on cost reductions and on securing overall volume as per the revised baseline.

Consolidated self-financed R&D expenses totalled €3,257m (2022: €3,079m).

Consolidated EBIT (reported) amounted to €4,603m (2022: €5,325m), including net Adjustments of €-1,235m.

These Adjustments comprised:

• €-1,030m related to the dollar working capital mismatch and balance sheet revaluation, of which €-224m were in Q4. This mainly reflects the phasing impact arising from the difference between transaction date and delivery date;
• €-89m related to the Aerostructures transformation, of which €-32m were in Q4;
• € 41m related to the A400M programme, of which €-41m were in Q4;
• €-75m of other costs including compliance, of which €-19m were in Q4.

The financial result was € 166 m (2022: € -250 m). It mainly reflects a positive impact from the revaluation of certain equity investments. Consolidated net income(2) was €3,789m (2022: €4,247m) with consolidated reported earnings per share of € 4.80 (2022: € 5.40).

Consolidated free cash flow before M&A and customer financing was €4,386m (2022: €4,680m), mainly reflecting the level of commercial aircraft deliveries as well as the strong performance in all businesses. Consolidated free cash flow of €3,885m (2022: €4,324m) included €-65m for M&A activities and €-436m of customer financing, mostly related to the planned execution of certain contractual obligations. The gross cash position stood at €25.3bn at the end of 2023 (year-end 2022: €23.6bn), with a consolidated net cash position of € 10.7 bn (year-end 2022: €9.4bn).

The Board of Directors will propose the payment of a 2023 dividend of €1.80 per share (2022: €1.80 per share) and a special dividend of € 1.00 per share to the 2024 Annual General Meeting taking place on 10 April 2024. The proposed payment date is 18 April 2024.

Outlook

As the basis for its 2024 guidance, the Company assumes no additional disruptions to the world economy, air traffic, the supply chain, the Company’s internal operations, and its ability to deliver products and services.

The Company’s 2024 guidance is before M&A.

On that basis, the Company targets to achieve in 2024:

• Around 800 commercial aircraft deliveries;
• EBIT Adjusted between €6.5bn and €7.0bn;
• Free Cash Flow before Customer Financing(3) of around €4.0bn.

 

16 Feb 24. Airbus’s own woes won’t stop it pulling away from Boeing.

• Both manufacturers have record order books
• Boeing’s struggles easily make Airbus the safer bet

Airbus (FR:AIR) might still be struggling with supply chain strains but ongoing safety problems at rival Boeing (US:BA) means the gap between the industry’s big two continues to widen.

Revenue at the Toulouse-based planemaker rose by 11 per cent to €65.4bn (£56bn) last year, although adjusted operating profit came in lower than consensus forecasts at €5.8bn. This was a 4 per cent uptick on the year before.

The miss against expectations was attributed to around €600mn of charges against the value of its space programmes. Chief executive Guillaume Faury said assumptions around these long-term programmes had been “too optimistic” given the challenging commercial environment in the sector.

Airbus delivered 735 commercial aircraft last year, which was slightly ahead of its initial target of 720. The company has guided for an increase to 800 this year, although with some caveats. “The supply chain is a world of bottlenecks at the moment,” Faury said. More than 3,000 suppliers are serving Airbus’s A320 narrowbody programme, and the industry is still grappling with “a very constrained environment for skilled workers” after thousands left the industry at the height of the pandemic.

Airbus has increased headcount in its supply chain management division by 150 per cent as it sends more workers out on secondment into suppliers’ firms to help clear blockages. The company remains “on track” to ramp up production of A320s to a rate of 75 per month by 2026, Faury added. Even with these difficulties, the company remains hugely cash generative: the year’s free cash flow figure of €4.5bn was almost €700mn ahead of the consensus estimate.

Airbus also announced a special dividend for the year of €1 a share, although this came alongside a normal dividend that was “slightly weaker than expectations”, in the words of Jefferies analyst Chloe Lemarie. “The total dividend would thus amount to €2.2bn, somewhat below the cash we expected would be returned to shareholders in 2024 of €2.5bn including €1bn share buyback and €1.5bn in ordinary dividend,” she added.

A booming business

Getting the supply chain moving is even more important this year and beyond, given the substantial growth in orders that both Airbus and competitor Boeing experienced over the past year as demand for air travel continues to rebound. The pair secured a combined 3,775 gross orders – more than double the number booked in 2022.

Airbus accounts for 60 per cent of these orders, extending its recent run of outperformance against its US rival, which is still struggling with safety issues relating to its competitor to the A320, the 737 Max.

“We [have had] a market share of bookings higher than 50 per cent now for several years in a row,” Faury said. “All airlines of the world are looking at both products [that] are competing for that segment. I see a lot of interest across the board for the A320.” This is a case of the apprentice remaining behind the master, given Boeing pushed development of the 737 Max to meet sector demands for more narrowbody options after the A320neo came to market at the beginning of the 2010s.

With orders continuing to outpace deliveries, Airbus’s backlog grew to 8,598 units at the end of last year, which equates to more than 10 years of work at current delivery rates. Of these, 84 per cent are for A320s.

Boeing’s backlog stood at 5,600 aircraft at the end of the year, which also equates to a decade’s worth of work at last year’s delivery rates.

Boeing last month reported a 78 per cent reduction in its operating loss to $773mn (£615mn) on the back of a 17 per cent increase in revenue to $77.8bn. At the pre-tax income level, this was its fifth consecutive lossmaking year.

The results were overshadowed by another safety incident involving the 737, which was involved in two fatal crashes in 2017 and 2018, killing 346 people. A door blew off a 737 Max-9 plane operated by Alaska Airlines in mid-air a few days before the results, leading to regulators stepping up oversight and the company suspending forward guidance.

FTSE 350 Review: The best manufacturing stocks

“Now is not the time for that,” chief executive Dave Calhoun told investors, arguing that it was focusing on safety rather than delivery targets.

The company delivered 44 aircraft per month last year and was producing 38 737s per month by year-end.

However, chief financial officer Brian West told an industry conference this week that output of 737s would probably be lower than this in the first half of this year and would “cycle into” last year’s rates in the second half.

Analysts had initially been sanguine about the impact of the Alaska Airlines incident on Boeing’s bottom line, but many have since downgraded earnings forecasts. Yet with the company’s shares also sliding by more than a fifth since the start of the year, most still rate them as a buy. The weak earnings outlook makes them look expensive at 50 times earnings, although this falls to 33 times on next year’s consensus forecast.

Airbus, understandably, looks like the much safer bet. Its shares are trading at 22 times earnings, in line with their five-year average. Earnings per share have grown at a compound rate of 14 per cent over the past decade, and the gains in market share made over Boeing don’t look as though they’ll be given up any time soon.

(Source: Investors Chronicle)

 

15 Feb 24. Jet engine maker Safran posts higher 2023 core profit. French jet engine maker Safran (SAF.PA), posted sharply higher revenues and operating profit for 2023 and predicted further growth this year, lifted by strong demand for engine services.

Recurring operating income rose 31% to 3.166bn euros as revenues rose 22% to 23.199bn, the company said, while its widely watched civil aftermarket revenues rose 33% in dollar terms.

Safran co-produces the LEAP jet engine with GE Aerospace (GE.N), opens new tab for all Boeing (BA.N), opens new tab 737 MAX jets and about half the A320neo jets sold by Airbus (AIR.PA), opens new tab, where its CFM joint-venture competes for engine sales with Pratt & Whitney (RTX.N), opens new tab.

Chief Executive Oivier Andries told reporters restrictions by the U.S. aviation regulator on Boeing’s growth plans for 737 production – resulting from flaws in production of a door plug that blew off a jet last month – could affect deliveries of LEAP-1B engines but that it was too early to quantify this.

Andries ruled out switching production from the Boeing version of the LEAP to the Airbus version, known as LEAP-1A, in 2024 or the short term, and said Airbus had not asked for this. He did not, however, rule out CFM studying the relative capacity requirements of the two versions for 2025 and beyond.

He also said he expected Boeing to wait until the results of an ongoing FAA audit of its factories before making any decisions on supplier production rates.

LEAP deliveries grew 38% in 2023, slightly below target, Safran reported.

The CEO also told journalists Safran is in talks with the Italian government over Rome’s recent decision to block part of its planned $1.8bn purchase of the flight control systems business of Collins Aerospace (RTX.N), opens new tab

Prime Minister Giorgia Meloni vetoed the acquisition of Collins’ Italian subsidiary Microtecnica under special “golden power” rules in November, citing national security concerns.

Both Safran and Collins lodged protests in Italy in January, Andries said, adding that dialogue was the preferred solution.

(Source: Reuters)

 

14 Feb 24. Curtiss-Wright Reports Fourth Quarter and Full-Year 2023 Financial Results; Issues Full-Year 2024 Guidance Reflecting Strong Growth in Sales, EPS and Free Cash Flow

Company Delivers Record FY23 Sales, Profitability, EPS, Free Cash Flow and Orders

Curtiss-Wright Corporation (NYSE: CW) reports financial results for the fourth quarter and full-year ended December 31, 2023.

Fourth Quarter 2023 Highlights:

• Reported sales of $786m, up 4%, operating income of $161m, operating margin of 20.4%, and diluted earnings per share (EPS) of $3.11;
• Adjusted operating income of $163m, up 2%;
• Adjusted operating margin of 20.8%;
• Adjusted diluted EPS of $3.16, up 8%; and
• Free cash flow (FCF) of $270m, generating 221% Adjusted FCF conversion.

Full-Year 2023 Highlights:

• Reported sales of $2.8bn, up 11%, operating income of $485m, operating margin of 17.0%, diluted EPS of $9.20 and Reported FCF of $403m;
• Adjusted operating income of $494m, up 11%;
• Adjusted operating margin of 17.4%;
• Adjusted diluted EPS of $9.38, up 15%;
• Adjusted FCF of $413m, generating 114% Adjusted FCF conversion;
• Total share repurchases of $50m;
• New orders of $3.1bn, up 5%, reflecting solid demand in Aerospace & Defense (A&D) and Commercial markets, and book-to-bill of 1.1x; and
• Backlog of $2.9bn, up 9%;

“Curtiss-Wright ended the year with a strong fourth quarter financial performance that reflected better-than-expected sales growth, record quarterly Adjusted diluted EPS of $3.16 and strong free cash flow,” said Lynn M. Bamford, Chair and CEO of Curtiss-Wright Corporation.

“Our full-year 2023 results were highlighted by another year of strong operational performance, as we delivered record high sales and operating income driven by 10% organic growth, and improved profitability while continuing to ramp up our investments in research and development across the portfolio. We achieved record Adjusted free cash flow of $413 m, driven by 15% growth in Adjusted diluted EPS as well as our continued efforts to reduce working capital. Our results also reflected strong demand across our A&D and Commercial markets, which drove record new orders exceeding $3 bn and a book-to-bill of 1.1x. Overall, these results mark the final, successful year for the three year goals we established at our May 2021 Investor Day. I’m incredibly proud of the team’s efforts to successfully execute our pivot to growth strategy and the momentum we now carry forward into 2024.”

“Looking ahead, our strong backlog entering the year supports our expectations to deliver total organic sales growth of 4% to 6% in 2024, including growth in all of our A&D and Commercial end markets. We expect to deliver continued operating margin expansion while increasing R&D investments, diluted EPS growth of 7% to 10%, and strong free cash flow generation ranging from $415 to $435m. We remain well-positioned with strong alignment of our technologies to the favorable secular growth trends in each of our end markets, and confident in our ability to deliver profitable growth and drive long-term shareholder value.”

Fourth Quarter 2023 Operating Results

• Sales of $786m increased 4% compared with the prior year period;
• Total A&D market sales increased 5%, while total Commercial market sales increased 2%;
• In our A&D markets, we experienced solid growth in the defense markets principally driven by higher defense electronics revenues and higher sales of arresting systems equipment, as well as strong sales growth in the commercial aerospace market;
• In our Commercial markets, we experienced solid growth in the power & process markets, despite the wind down on the China Direct AP1000 program, while sales in the general industrial market were in-line with the prior year period; and
• Adjusted operating income was $163m, up 2% compared with the prior year period, while Adjusted operating margin decreased 30 basis points to 20.8%, as favorable overhead absorption on higher revenues in all three segments was offset by unfavorable mix on products and higher investment in research and development.

Fourth Quarter 2023 Segment Performance

Aerospace & Industrial

• Sales of $238m, up $15m, or 7%;
• Higher commercial aerospace market revenues reflected increased OEM sales of actuation and sensors products, as well as surface treatment services, on narrowbody and widebody platforms;
• In the defense markets, higher revenue in the aerospace defense market supporting various fighter jet programs was mainly offset by lower sales on ground missile launchers in the ground defense market;
• General industrial market revenue was essentially flat, as the benefit of new product introductions addressing the electrification of vehicles was mainly offset by lower sales on off-highway vehicle platforms; and
• Adjusted operating income was $44m, up 7%, with a strong Adjusted operating margin of 18.5%, as favorable absorption on higher revenues was partially offset by the timing of development contracts.

Defense Electronics

• Sales of $240m, up $3m, or 1%;
• Aerospace defense market revenue declines principally reflected the timing of sales of our embedded computing equipment on various helicopter programs partially offset by higher sales of flight test instrumentation equipment on various fighter jet programs;
• Strong revenue growth in the ground defense market reflected higher sales of tactical battlefield communications equipment as well as higher sales of embedded computing equipment on the Stryker ground combat vehicle;
• Higher revenue in the naval defense market reflected increased sales of our embedded computing equipment supporting various domestic and international programs; and
• Adjusted operating income was $69m, down 2% from the prior year period, while adjusted operating margin decreased 90 basis points to 28.8%, as favorable absorption on higher revenues was offset by unfavorable mix and higher investments in research and development.

Naval & Power

• Sales of $308m, up $10m, or 3%;
• Higher revenue in the aerospace defense market was primarily driven by increased sales of our arresting systems equipment supporting various domestic and international customers;
• Naval defense market revenue was essentially flat, as higher revenues on Columbia-class and Virginia-class submarines were mainly offset by the timing of revenues on the CVN-80 and CVN-81 aircraft carrier programs;
• Higher power & process market revenues reflected strong growth in industrial valve sales in the process market, and solid growth in the commercial nuclear market supporting increased development on Advanced Small Modular Reactors (ASMRs); Those increases were partially offset by lower China Direct AP1000 program revenues; and
• Adjusted operating income was $59m, down 2% from the prior year period, while adjusted operating margin decreased 100 basis points to 19.3%, as favorable absorption on higher revenues was offset by unfavorable mix of products and timing of development contracts.

Free Cash Flow

• Adjusted free cash flow of $270m decreased $29m; and
• Capital expenditures increased approximately $3m compared with the prior year period, primarily due to higher growth investments within the Naval & Power segment.

New Orders and Backlog

• New orders of $685 m decreased 4% in the fourth quarter, reflecting timing in our Defense markets, partially offset by strong demand within our Commercial markets for nuclear aftermarket products as well as subsea pumps to the process market;
• Full-year 2023 new orders of $3.1 bn increased 5% and generated an overall book-to-bill of 1.1x, reflecting growth in our A&D and Commercial markets; and
• Backlog of $2.9bn, up 9% from December 31, 2022, reflects strong demand in both our A&D and Commercial markets.

Share Repurchase and Dividends

• During the fourth quarter, the Company repurchased 60,442 shares of its common stock for approximately $13 m;
• During full-year 2023, the Company repurchased 0.3m shares for $50m; and
• The Company also declared a quarterly dividend of $0.20 a share.

 

14 Feb 24. Precision Optics Corporation, Inc. (NASDAQ: POCI), a leading designer and manufacturer of advanced optical instruments for the medical and defense industries, announced operating results on an unaudited basis for its second quarter fiscal year 2024 for the period ended December 31, 2023.

Q2 2024 Financial Highlights (3 Months Ended December 31, 2023):

• Revenue decreased 18% to $4.8m, compared to $5.9m in the same quarter of the previous fiscal year, but up 12% from the most recent sequential quarter. The year ago second quarter included a one-time sale of $600,000 of technology rights relating to a single-use medical device developed for a customer.
• Engineering revenue increased 33% to $2.3m compared to $1.7m in the same quarter of the previous fiscal year, and up 19% from the most recent sequential quarter.
• Production revenue was $2.6m compared to $3.6m in the same quarter of the previous fiscal year, and $2.4m in the most recent sequential quarter.
• Gross margins were 30.1% compared to 44.2% in the same quarter of the previous year. Removing the impact of the technology rights revenue, gross margins a year ago would have been 37.8%.
• Net loss for the quarter was ($758,802), compared to a net income of $508,668 in the same quarter of the previous year.
• Adjusted EBITDA was ($269,034) for the quarter compared to $866,450 in the same quarter of the previous year.

Recent Additional Highlights:

• In November 2023, the Company announced the receipt of initial purchase orders towards a $1.4 m total program development project to develop a highly complex imaging sub-assembly for a next generation ophthalmoscope for one of the world’s largest technology-focused medical device companies.
• In December 2023, the Company announced the signing of a production and technology license agreement with a leading surgical robotics company to supply a single-use endoscope assembly used in their cystoscopy robotic surgery system.

Precision Optics’ CEO, Joseph Forkey, commented, “The Company’s results for Q2 were generally in-line with our expectations and consistent with what we have communicated previously.  While revenue was lower compared to last year due to timing differences between reorders for ongoing production, the exit of certain mature customer programs and the introduction of new customer programs, we have begun to see the rebound we expected with two new programs moving to production in the quarter and another restarting after a pandemic-related hold.  These programs contributed to a 6% quarter-over-quarter increase in production revenue, which, combined with record engineering revenue led to a 12% increase in total revenue compared to the first quarter.  Margins for the second quarter were lower than the first quarter, due to a differing sales mix, lower than normal production yields on certain programs starting or re-starting production as well as other one-time charges.  We believe these margin issues are transient and will be substantially resolved in the second half of the year, with gross margins returning to historical levels.

Dr. Forkey continued, “The growth we expect in the second half of fiscal 2024 is supported by the strength of our engineering pipeline, a leading indicator of future production volumes.  Engineering revenue was $2.3 m during the second quarter – a new quarterly record, up 33% year-over-year, and up 19% sequentially. We anticipate volumes from production orders coming on-line to lift our overall revenue to new quarterly record run-rates in this fiscal year.  Precision Optics’ core competencies — micro-optics, digital imaging, 3D endoscopy, and single-use medical devices — uniquely position us at the center of market segments that are significantly outpacing the growth of the broader medical device and defense/aerospace industries, providing us with an ongoing opportunity to significantly grow into the future. I look forward to an exciting second half of fiscal 2024.” (Source: PR Newswire)

 

14 Feb 24. CAE reports third quarter fiscal 2024 results.

• Revenue of $1,094.5m vs. $969.9m in prior year
• Earnings per share (EPS) from continuing operations of $0.18 vs. $0.24 in prior year
• Adjusted EPS(1) of $0.24 vs. $0.27 in prior year
• Operating income of $121.6m vs. $142.1m in prior year
• Adjusted segment operating income(1) of $145.1m vs. $156.8m in prior year
• Adjusted order intake(1) of $1,273.9m for an $11.7bn adjusted backlog(1)
• Net debt-to-adjusted EBITDA(1) of 3.16x vs. 3.25x at the end of the preceding quarter
• Comparative figures have been reclassified to reflect discontinued operations

(NYSE: CAE) (TSX: CAE) – CAE Inc. (CAE or the Company) today reported revenue of $1,094.5m for the third quarter of fiscal 2024, compared with $969.9m in the third quarter last year. Third quarter EPS from continuing operations was $0.18 compared to $0.24 last year. Adjusted EPS in the third quarter was $0.24 compared to $0.27 last year.

Operating income this quarter was $121.6m (11.1% of revenue(1)), compared to $142.1m (14.7% of revenue) last year. Third quarter adjusted segment operating income was $145.1m (13.3% of revenue(1)) compared to $156.8m (16.2% of revenue) last year. All financial information is in Canadian dollars and results are presented on a continuing operations basis, unless otherwise indicated.

“Our performance in the third quarter reflects strong underlying demand for our Civil market solutions, and points to the ongoing progress to transform our Defense business. We also generated strong free cash flow, enabling us to bolster our financial position in line with our leverage targets,” said Marc Parent, CAE’s President and Chief Executive Officer. “Further securing CAE’s future, we booked nearly $1.3bn in total order intake during the quarter, for an $11.7bn backlog. In Civil, orders were $845m, for a 1.36 times book-to sales ratio, including 20 full-flight simulator orders, new training partnerships with marquee airlines such as Air France KLM Group, and over $300m of business jet training orders. We have considerable headroom for growth in the civil aviation market and our continued positive momentum underscores the strong demand for CAE’s highly differentiated training and flight services solutions and our ability to win share within this large secular growth market. In Defense, performance was consistent with our expectations at this point on the path toward being able to generate higher margins. We continued to replenish our backlog with more profitable work and sought to further accelerate the retirement of outstanding program risks, mainly associated with certain legacy Defense contracts that we entered into pre-COVID and have been most impacted by economic headwinds.

As we look to the remainder of the fiscal year, we continue to expect annual Civil adjusted segment operating income growth in the mid- to high-teens percentage range. In Defense, our focus remains on completing the remaining work scope on legacy contracts and as much as possible, accelerating risk retirements in the fourth quarter and into fiscal 2025. We expect to close the sale of our Healthcare business before the end of the fiscal year, subject to closing conditions, including customary regulatory approvals. This is a milestone toward the reinstatement of cash returns to shareholders and the Board is now actively evaluating options in terms of the form, quantum, and timing of such returns.”

Civil Aviation (Civil)

Third quarter Civil revenue was $622.1m vs. $517.4m in the third quarter last year. Operating income was $101.0m (16.2% of revenue) compared to $117.2m (22.7% of revenue) in the same quarter last year. Adjusted segment operating income was $124.2m (20.0% of revenue) compared to $131.4m (25.4% of revenue) in the third quarter last year. During the quarter, Civil delivered 13 full-flight simulators (FFSs) to customers and third quarter Civil training centre utilization was 76%.

During the quarter, Civil signed training solutions contracts valued at $845.4m, including a range of long-term commercial and business aviation training agreements and 20 FFS sales, for a total of 57 as of the end of the third quarter of the fiscal year. Notable awards in the quarter included long-term training services contracts with marquee airlines including Air France KLM Group, and it renewed a flight services agreement with Azul Linhas Aereas Brasileiras. Business aviation accounted for over $300m of Civil adjusted order intake in the third quarter, driven primarily by training services agreements with U.S. based customers including, Solairus Aviation and Clay Lacy Aviation.

The Civil book-to-sales ratio(1) was a robust 1.36 times for the quarter and 1.27 times for the last 12 months. The Civil adjusted backlog at the end of the quarter was a record $6.1bn.

Defense and Security (Defense)

Third quarter Defense revenue was $472.4m vs. $452.5m in the third quarter last year. Operating income was $20.6m (4.4% of revenue) compared to $24.9m (5.5% of revenue) in the same quarter last year. Adjusted segment operating income was $20.9 m (4.4% of revenue), compared to $25.4m (5.6% of revenue) in the third quarter last year.

Additional information pertaining to Defense Legacy Contracts

Within Defense, there are a number of fixed-price contracts which offer certain potential advantages and efficiencies but can also be negatively impacted by execution difficulties and adverse changes to general economic conditions, including unforeseen supply chain disruptions, inflationary pressures and availability of labour. These risks can result in cost overruns and reduced profit margins or losses. While these risks can often be managed or mitigated, there are eight distinct legacy contracts entered into prior to the COVID-19 pandemic that are firm fixed price in structure, with little to no provision for cost escalation, and that have been more significantly impacted by these risks (the Legacy Contracts). Although they represent only a small fraction of the current business, these contracts have disproportionately impacted overall Defense profitability.

For the third quarter of fiscal 2024, the ongoing execution of Legacy Contracts had a negative impact of approximately two percentage points on the Defense adjusted segment operating income margin.

Management is closely monitoring these Legacy Contracts as a separate group and continues to be highly focused on the execution and the retirement of these Legacy Contracts and mitigating the finite cost pressures associated with them. These Legacy Contracts have completion dates mainly within the Company’s next two fiscal years and the risks associated with them will be reduced as they are substantially retired over the next 6 to 8 quarters, with variability in quarterly financial impacts resulting from the timing of program close outs, customer acceptance, and the ability to mitigate associated risks and costs as we continue to execute them.

Defense booked orders for $428.5m this quarter involving simulation-based training, support services and mission solutions. Notable awards include a maintenance contract with the U.S. Air Force for its F-16 training devices and the continuation of training services on the C-130H transport and KC-135 tanker platforms. Defense orders also include an option exercise for the U.S. Army for fixed-wing flight training and support services at the CAE Dothan Training Center.

The Defense book-to-sales ratio was 0.91 times for the quarter and 0.90 times for the last 12 months. The Defense adjusted backlog, including unfunded contract awards and CAE’s interest in joint ventures, at the end of the quarter was $5.6bn, up from $5.1 bn at the end of the third quarter of fiscal 2023. The Defense pipeline remains strong with some $9.5 bn of bids and proposals pending.

Additional financial highlights

CAE incurred restructuring, integration and acquisition costs of $23.5m during the third quarter of fiscal 2024 relating mainly to the acquisition of Sabre’s AirCentre airline operations portfolio. These expenses related to the integration of AirCentre are expected to wind down by the end of the first half of fiscal 2025.

Net finance expense this quarter amounted to $52.4m, compared to $47.1 m in the preceding quarter and $47.7m in the third quarter last year.

Income tax expense this quarter amounted to $8.2m, representing an effective tax rate of 12%, compared to 17% for the third quarter last year. The adjusted effective tax rate(1), which is the income tax rate used to determine adjusted net income and adjusted EPS, was 15% this quarter as compared to 18% in the third quarter of last year. The decrease in the adjusted effective tax rate was mainly attributable to the mix of income from various jurisdictions.

Net loss from discontinued operations was $1.9m this quarter compared to a net income from discontinued operations of $2.1m in the third quarter of fiscal 2023. The decrease compared to the third quarter of fiscal 2023 was mainly attributable to transaction costs of $2.2 m incurred in the third quarter of fiscal 2024 in relation to the expected sale of the Healthcare business.

Net cash provided by operating activities was $220.8 m for the quarter, compared to $252.4m in the third quarter last year. Free cash flow(1) was $190.0m for the quarter compared to $239.8 m in the third quarter last year. The decrease was mainly due to a lower contribution from non-cash working capital and higher payments to equity accounted investees to invest in Civil training network expansion in support of long-term customer agreements.

Growth and maintenance capital expenditures(1) totaled $85.6m this quarter.

Net debt(1) at the end of the quarter was $3,085.4m for a net debt-to-adjusted EBITDA(1) of 3.16 times. This compares to net debt of $3,184.5 m and a net debt-to-adjusted EBITDA of 3.25 times at the end of the preceding quarter. The impact of the reclassification of adjusted EBITDA from discontinued operations on the net debt-to-adjusted EBITDA ratio was an increase of 0.07 for December 31, 2023, and 0.09 for September 30, 2023.

Adjusted return on capital employed(1) was 7.0% this quarter compared to 7.1% last quarter and 5.5% in the third quarter last year.

Environmental, Social, and Governance (ESG)

During the quarter, CAE continued to demonstrate its commitment to sustainability, diversity, and ethical business practices. The company was honored to be selected as one of Canada’s Top 100 Employers and Top Employers for Young People for the 2nd and 4th consecutive year respectively, reflecting its dedication to anticipating employees’ needs, fostering an innovative and inclusive work environment, and promoting the aerospace industry as a career destination for the next generation of talent. CAE was also recognized with the Government of Canada’s 2023 Employment Equity Achievement Award sector distinction in November 2023, underscoring its commitment to diversity and inclusion, and its efforts to inspire future generations of women pilots. In terms of sustainability, CAE achieved significant improvements in its S&P CSA and CDP scores and was included in the S&P 2024 Global Sustainability index, placing it among the top 15% of its industry. CAE also strengthened its governance framework by reviewing its business performance policies and introducing a new business partner risk management policy and due diligence framework, further enhancing its ethical business practices.

For more information on how CAE supports the aviation industry’s decarbonization journey and contributes to a more sustainable future for all, the report can be downloaded at https://www.cae.com/social-responsibility/.

Management outlook

CAE is pursuing a growth strategy to become a bigger, stronger, and more profitable company. Through accretive growth capital deployments and strong execution, its Civil segment, the largest within CAE, continues to experience strong growth momentum. Management has targeted a three-year (FY22-FY25) EPS compound growth rate in the mid-20% range, expected to come from ongoing strong performance in Civil and the multi-year transformation underway in Defense. The realization of CAE’s strategic growth objectives is expected to result in a significantly larger base of business and a capital structure that affords flexibility to balance further investments in its future alongside capital returns for shareholders.

Management has a highly positive view of its growth potential over a multi-year period, underpinned by favourable secular trends across business segments. It expects Civil to continue growing at an above market rate, driven by growth and recovery in air travel, increased penetration of the existing addressable market for training and flight services solutions, and a sustained high level of demand for pilots and pilot training across all segments of civil aviation. In fiscal 2024, driven in large part by an expected strong margin in the fourth quarter, management continues to expect mid-to high-teens percentage range growth in annual adjusted segment operating income. On an annual basis, Management continues to expect the Civil adjusted segment operating income margin to be in the range of fiscal 2023. In addition to growing its share of the aviation training market and expanding its position in digital flight services, Civil expects to maintain its leading share of FFS sales and to deliver approximately 50 FFSs for the year to customers worldwide.

CAE’s Defense segment is in the process of a multi-year transformation, which is expected to yield a substantially bigger and more profitable business. Since transforming its scale and capabilities through acquisition in fiscal 2022, Defense has become the world’s leading pure-play, platform independent, training and simulation business, providing solutions across all five domains, and has grown its adjusted backlog by over 20 percent. Defense’s recent strategic program wins, $5.6bn adjusted backlog and $9.5 bn pipeline of bids and proposals outstanding demonstrate that its transformation strategy is bearing fruit. Over the long-term, CAE continues to expect superior Defense growth to be driven by the translation of its bid activity into higher margin adjusted order intake and execution of contracts with sustainably higher profits.

For the remainder of fiscal 2024, Defense expects to continue replenishing its adjusted backlog with larger and more profitable contracts and to accelerate the retirement of risks associated with the Legacy Contracts which have been an acute drag on overall Defense profitability. Management is closely monitoring these contracts as a separate group with a dedicated team that continues to be highly focused on the execution and the substantial retirement of these Legacy Contract risks over the next six to eight quarters. Despite our efforts, management notes the potential risk of additional cost overruns, reduced profit margins, or further losses arising from the Legacy Contracts, with variability in quarterly financial impacts resulting from the timing of program close outs, customer acceptance, and Defense’s ability to mitigate associated risks and costs. Through backlog replenishment and the Legacy Contract closeouts, the anticipated positive inflection in Defense performance is expected to begin to appear in the second half of the next fiscal year, and will also depend on the duration and magnitude of delays to new programs in the current environment.

Total capital expenditures in fiscal 2024 are expected to be approximately $50 m higher than last fiscal year, mainly in support of a higher amount of market-led, accretive organic investments involving Civil aviation training network expansion, simulator deployments, and customer training outsourcings. The Company usually sees a higher investment in non-cash working capital accounts in the first half of the fiscal year, and as in previous years, management expects a portion of the non-cash working capital investment to reverse in the second half. The Company continues to target a 100% conversion of adjusted net income to free cash flow for the year. The Company intends to apply a significant portion of the net proceeds from the sale of its Healthcare division, subject to closing conditions, including customary regulatory approvals, to reduce debt. Management remains focused on making organic investments in lockstep with customer demand, integrating and ramping up recent investments and continuing to deleverage its balance sheet. Management will continue to prioritize a balanced approach to capital allocation, including funding accretive growth, further strengthening its financial position, and returning capital to shareholders. CAE expects its average adjusted effective income tax rate for the remainder of the fiscal year to be approximately 22%. (Source: PR Newswire)

 

15 Feb 24. EU regulators must let defense firms merge freely, Leonardo boss urges. The Leopard 2 tank on display at the KMW (Krauss-Maffei Wegmann) + Nexter stand at the Eurosatory International Defence and Security Exhibition in June 2022 in Paris. The European Union’s anti-trust officials must stay out of the defense sector and allow local firms to merge, integrate and build a critical mass to face global competition, the CEO of Italy’s Leonardo has warned.

• Roberto Cingolani made the claim as he repeated calls for European defense firms to team up – without waiting for instructions from governments – so the continent can compete on even terms around the world.
• “Anti-trust was conceived as a way to ensure free competition in Europe, but we are talking about Europe competing with China, India, Japan and the U.S.,” he told reporters in Rome on Wednesday.
• “In that case anti-trust weakens us, it doesn’t help us. The concept has a sense in many sectors but we need to identify sectors like security and energy where the competition is global,” he said, adding that blocking defense mergers would condemn the sector to remain “marginal.”
• Since he was appointed to run Italy’s defense giant Leonard in April 2023, Cingolani has spelled out his desire to push European industry integration, telling the Italian parliament in October he was eyeing “giant” joint ventures in Europe.
• Italian industry found itself on the wrong side of European Commission anti-trust officials when shipyard Fincantieri’s bid to take over French shipyard Chantiers de l’Atlantique was nixed in 2021.
• More integration in Europe will mean more cash focused on fewer programs, Cingolani said.
• “Europe spends a little less than half as much as on defense as the United States. And the EU spends it on 30 programs and the U.S. on ten,” he said.
• He said he had been discussing team-ups with European CEOs and said that if only three out ten ideas for alliances were successful it would be “an enormous success.”
• He singled out satellite launches as a sector where European activity was too fragmented, and called for a “unified strategy” in the bloc for space launchers, services, communications and exploration.
• In December, Leonardo and KNDS – the consortium teaming France’s Nexter and Germany’s Krauss-Maffei Wegmann – announced they were forming a “strategic alliance” to build tanks. A memorandum of understanding envisions starting with Italy’s order of Leopard tanks which will be assembled in Italy, and leading into Italian participation in the European Main Ground Combat System (MGCS) – a future tank plotted by France and Germany.
• What has not been clear is what exact form the alliance will take and Cingolani said that was now being thrashed out. “The MOU gave us 12 months to decide what kind of collaboration to start, from a joint venture to other things,” he said, adding that a decision was likely in the next five weeks.
• “One idea could be an MBDA-type alliance, a consortium which each partner having a third,” he said, referring to the pan-European missile company.
• Leonardo has been reportedly mulling buying Italian military vehicle maker Iveco Defence Vehicles in order to bulk up ahead of possible European land warfare alliances. Asked about the possibility, Cingolani said the two companies had “been in contact recently” without giving any further details. (Source: Defense News)

 

14 Feb 24. Cuashub.com said today that BlueHalo and Eqlipse Combine to Enhance Global Defense. BlueHalo, the company transforming the future of global defense, today announced it will acquire Eqlipse Technologies (“Eqlipse”), a leading provider of differentiated products and solutions to the Department of Defense (DoD) and Intelligence Community (IC). Bolstered by Eqlipse’s high-end technical talent and suite of innovative products, BlueHalo will deliver enhanced scale and broader capabilities to its customers, accelerating the development and fielding of its advanced defense technologies. The combined entity will have a total employee count of nearly 2,400 across 11 states and annual revenue approaching $1B. The transaction is expected to close in Q1 2024, and the current BlueHalo Chief Executive Officer, Jonathan Moneymaker, will lead the combined company.

“The only constant in global defense is the certainty that threats will continue to evolve, new battlefields will emerge, and the landscape will change,” said Moneymaker. “Combining BlueHalo and Eqlipse–both with a shared passion for pairing innovative technology with customer intimacy–creates an enhanced organization with the proven ability to deliver on some of the most complex and challenging problems our customers face in these uncertain times. This acquisition squarely catapults us to the forefront of the industry, providing additional size and scale, and solidifying the company’s position as the top alternative to the largest government contractors. It furthers our ability to drive unbridled, rapid prototyping and innovative work our customers have come to rely on without the bureaucratic obstacles, which typically slow development and inflate budgets.”

Since forming in 2019, BlueHalo has established itself as a trusted partner to the DoD and IC. It is the prime contractor awardee on top-priority contracts such as the Space Force’s recent $1.4bn Satellite Communication Augmentation Resource (SCAR) program. BlueHalo is the first to successfully operationally field High Energy Laser Counter-Unmanned Autonomous Systems (C-UAS) with its LOCUST system. It became a Radio Frequency (RF) C-UAS leader, delivering its 1,000th system last year.  From laser communication payloads to critical Class-A satellite subsystems, BlueHalo has more than 260 systems flying in orbit.

Eqlipse offers a deep portfolio of solutions delivering industry-leading capabilities, spanning full-spectrum cyber and signals intelligence (SIGINT) engineering, Electronic Warfare (EW), digital operations and identity management, and cutting-edge R&D. Eqlipse will further enhance BlueHalo’s ability to provide next-generation products and solutions to its customers by adding world-class EW products and capabilities, adding significant depth within the company’s current cyber franchise, expanding BlueHalo’s best-in-class suite of Open Source Intelligence (OSINT) offerings, and augmenting the combined entity’s advanced R&D capabilities.

“I’m incredibly proud of what we have been able to accomplish to date with Eqlipse and am excited for the many benefits this combination will provide for both our employees and our customers,” said Dennis Kelly, CEO of Eqlipse. “With enhanced scale and capabilities, BlueHalo will remain dedicated to providing the rapid innovation needed by our customers and delivering a protective ring around everything we hold dear.”

Upon completion of the transaction, BlueHalo will hold nearly 90 patents, employ more than 200 PhDs in relevant fields, and offer 20 product lines featuring industry-leading solutions across four key mission areas: Space, C-UAS & Autonomous Systems, Cyber & EW, and Artificial Intelligence (AI)–all stated priority areas for the DoD. The company will remain headquartered in Arlington, VA, and will continue to invest in bringing the latest technological advancements to the defense industry.

BlueHalo and Eqlipse are both portfolio companies of Arlington Capital Partners, a Washington, D.C.-area private investment firm specializing in government-regulated industries.

“Unifying BlueHalo and Eqlipse’s capabilities will accelerate our development of new technologies for our defense and intelligence customers to a pace that others cannot match,” said David Wodlinger, a Managing Partner at Arlington Capital Partners. “The strategic combination of BlueHalo and Eqlipse creates a scale of innovation that establishes the combined company as one of the preeminent defense technology platforms in the industry.” (Reference)

About BlueHalo

BlueHalo is purpose-built to provide industry-leading capabilities in the areas of Space, C-UAS and Autonomous Systems, Electronic Warfare & Cyber, and AI/ML. The company develops and brings to market next-generation capabilities to support customers’ critical missions and national security. Learn more at http://www.bluehalo.com and follow BlueHalo on LinkedIn.

About Eqlipse Technologies

Eqlipse Technologies provides products and solutions to ensure its customers succeed in their most critical missions. The company’s industry-leading capabilities in electronic warfare, virtual operations, identity management, and cyber and online operations, combined with its state-of-the-art research and technology capabilities, ensure that the Department of Defense and Intelligence Community can leverage the latest technology to enhance their missions and evolve to new battlefields. For more information, visit www.EqlipseTechnologies.com.

About Arlington Capital Partners

Arlington Capital Partners is a Washington, D.C.-area private investment firm specializing in government-regulated industries. The firm partners with founders and management teams to build strategically important businesses in the government services and technology, aerospace and defense, and healthcare sectors. Since its inception in 1999, Arlington has invested in over 150 companies and is currently investing out of its $3.8 bn Fund VI. For more information, visit Arlington’s website at www.arlingtoncap.com and follow Arlington on LinkedIn.

https://cuashub.com/content/bluehalo-and-eqlipse-combine-to-enhance-global-defense/?_hsmi=294082871&_hsenc=p2ANqtz-90y5T0XFrIfTY0VWGgYT-DwmwAL6iLLaZvTpmdxAbi9dFchwq3kpFaTHLH4nPu2Ej8u4JBeHZgLruPLcNldSdInFueenSKVsSHtlmPKdpwxioSne8#utm_campaign=C-UAS%20Hub%20General&utm_medium=email&utm_content=294082871&utm_source=hs_email (Source: https://cuashub.com/)

 

14 Feb 24. Motorola Solutions Acquires Silent Sentinel, a Provider of Specialized, Long-Range Cameras. Motorola Solutions (NYSE: MSI) has acquired Silent Sentinel, a provider of specialized, long-range cameras based in Ware, United Kingdom.

Designed to operate in the harshest conditions, Silent Sentinel’s rugged, thermal cameras offer clear visibility in the complex and extreme environments associated with military, aviation, maritime and critical infrastructure. Equipped with highly accurate detection capabilities, Silent Sentinel’s cameras can identify anomalies from up to 20 miles away (30 km) to extend the perimeter of security and support a faster, more informed response.

“Long-range cameras enable advanced insights that can protect individuals and infrastructure,” said Mahesh Saptharishi, executive vice president and chief technology officer. “With Silent Sentinel, we’re broadening our video security portfolio to help secure and support essential operations and industries around the world.”

This acquisition complements Motorola Solutions’ portfolio of fixed video cameras, expanding its footprint with government and critical infrastructure customers and strengthening its position as a global leader in end-to-end video security solutions.

“On behalf of the Silent Sentinel team, we’re excited to join Motorola Solutions,” said Paul Elsey, managing director, Silent Sentinel. “We look forward to building upon Motorola Solutions’ industry-leading portfolio, offering advanced video security solutions that support our customers in the most challenging environments.”

Terms of the transaction were not disclosed.

 

14 Feb 24. Further to the announcement of 17 August 2023, BAE Systems has now received the necessary regulatory approvals and will be executing steps in the coming days to complete the acquisition of Ball Aerospace from Ball Corporation. The final transaction is expected to close at a purchase price of $5.5bn (approximately £4.4bn), which will be funded through existing cash and new external debt.

The transaction will be treated as an asset purchase for federal tax purposes, with an expected net present value tax benefit of c.$750m making the underlying economic consideration for the business c.$4.8bn.

Ball Aerospace is a leading provider of spacecraft, mission payloads, and optical and antenna systems with decades of proven success underpinned by world class advanced technologies. The business has trusted customer relationships in the Intelligence Community, US Department of Defense, civilian space agencies, and with major aerospace and defence primes, and is well positioned in highly attractive markets, including military and civil space, C4ISR, and missiles and munitions. The business is based in Colorado, with more than 5,200 employees, many of whom hold US security clearances.

BAE Systems and Ball Corporation will be executing the plan to complete the acquisition in the coming days. The newly acquired business will be called Space & Mission Systems and will map within the Electronic Systems reporting segment.

BAE Systems shall provide 2024 Group guidance at our preliminary results on 21 February 2024 incorporating the acquisition.

Commenting on today’s announcement, Charles Woodburn, Chief Executive of BAE Systems, said: “In recent years, we’ve said that we would seek out opportunities to grow our portfolio in advanced technology areas that meet our customers’ most urgent needs, and completing the acquisition of Ball Aerospace is an example of that strategy in action.

“We look forward to welcoming the employees of Ball Aerospace to BAE Systems, bringing one of industry’s most respected and capable businesses into the Group. The addition of this quality, fast-growing technology-focused business will significantly expand our presence in this increasingly critical space domain and further enhances our value compounding model of top line growth, margin expansion and high cash generation.”

 

13 Feb 24. Howmet Aerospace Reports Fourth Quarter and Full Year 2023 Results.

FY 2023: Revenue Up 17% Year Over Year; Record Profit and Record Cash from Operations

FY 2023: Approx. $800m Deployed for Debt Paydown, Common Stock Repurchase and Dividends

FY 2024: Expect Revenue Growth of Approx. 7% and Improved Cash Generation

Howmet Aerospace (NYSE:HWM):

Fourth Quarter 2023 Highlights

• Revenue of $1.7 bn, up 14% year over year, driven by commercial aerospace, up 22% year over year
• Net income of $236m versus $111m in the fourth quarter 2022; earnings per share of $0.57 versus $0.26 in the fourth quarter 2022; fourth quarter 2023 operating income margin of 18.8%
• Net income excluding special items of $218m versus $160m in the fourth quarter 2022; adjusted earnings per share excluding special items of $0.53, up 39% year over year
• Adjusted EBITDA excluding special items of $398m, up 18% year over year
• Adjusted EBITDA margin excluding special items of 23.0%
• Generated $458 m cash from operations and $403m of free cash flow; $222 m of cash used for financing activities; and $52 m of cash used for investing activities
• Cash balance at end of quarter of $610m, including impacts of debt redemption, common stock repurchases and $0.05 per share dividend on common stock

Full Year 2023 Highlights

• Revenue of $6.6bn, up 17% year over year, driven by commercial aerospace, up 24% year over year
• Net income of $765m, or $1.83 per share, versus $469m, or $1.11 per share, in the full year 2022
• Net income excluding special items of $766m, or $1.84 per share, versus $593m, or $1.40 per share, in the full year 2022
• Adjusted EBITDA excluding special items of $1.5bn, up 18% year over year
• Generated $901m cash from operations and $682m of free cash flow; $868m of cash used for financing activities; and $215 m of cash used for investing activities, $476m of debt paydown; $250 m of common stock repurchases; $73m in common stock dividends

2024 Guidance

• In the fourth quarter 2023, Howmet Aerospace entered into two senior unsecured term loan agreements totaling approximately $400m, which together with associated interest rate swaps have a weighted average fixed interest rate of approximately 3.9%.
• On December 28, 2023, the Company completed an early partial redemption of its 5.125% Notes due October 2024 (the “2024 Notes”) in the aggregate principal amount of $500m.
• In the fourth quarter 2023, the Company repurchased $100 m of common stock at an average price of $52.52 per share, retiring approximately 1.9m shares. As of February 1, 2024, total share repurchase authorization available was $69 m.
• On November 27, 2023, the Company paid a quarterly dividend of $0.05 per share on its common stock. The quarterly dividend represents a 25% increase from the third quarter 2023 dividend of $0.04 per share.
• On December 15, 2023, S&P Global Ratings upgraded Howmet Aerospace’s Long-Term Issue Credit Rating to “BBB-” from “BB+” and updated the rating outlook to stable. With this upgrade, Howmet Aerospace is now rated as investment grade by two of the three credit rating agencies.

Howmet Aerospace (NYSE:HWM) today reported fourth quarter and full year 2023 results. The Company reported fourth quarter 2023 revenues of $1.7bn, up 14% year over year, primarily driven by growth in the commercial aerospace market of 22%.

Howmet Aerospace reported net income of $236m, or $0.57 per share, in the fourth quarter 2023 versus $111m, or $0.26 per share, in the fourth quarter 2022. Net income excluding special items was $218m, or $0.53 per share, in the fourth quarter 2023, versus $160m, or $0.38 per share, in the fourth quarter 2022. Net income in the fourth quarter 2023 included approximately $18m in net benefit from special items.

Fourth quarter 2023 operating income was $326m, up 48% year over year. Fourth quarter adjusted operating income excluding special items was $330 m, up 23% year over year. Operating income margin was 18.8% in the fourth quarter 2023, up approximately 430 basis points year over year. Fourth quarter adjusted operating income margin excluding special items was 19.1%, up approximately 130 basis points year over year.

Fourth quarter 2023 adjusted EBITDA excluding special items was $398 m, up 18% year over year. The year-over-year increase was driven by volume growth in the commercial aerospace market. Adjusted EBITDA margin excluding special items was up approximately 80 basis points year over year at 23.0%, including approximately $15m of inflationary cost pass through year over year. Excluding the year over year inflationary cost pass through, adjusted EBITDA margin excluding special items was 23.2%.

Howmet Aerospace reported full year 2023 revenues of $6.6bn, up 17% year over year, primarily driven by growth in the commercial aerospace market of 24%.

The Company reported net income of $765m, or $1.83 per share, in the full year 2023 versus $469m, or $1.11 per share, in the full year 2022. Net income excluding special items was $766m, or $1.84 per share, in the full year 2023, versus $593m, or $1.40 per share, in the full year 2022. Net income included approximately $1m in net charges from special items.

Full year 2023 operating income was $1.2bn, up 31% year over year. Full year adjusted operating income excluding special items was $1.2bn, up 22% year over year. Operating income margin was 18.1% in the full year 2023, up approximately 190 basis points year over year. Full year adjusted operating income margin excluding special items was 18.6%, up approximately 70 basis points year over year.

Full year 2023 adjusted EBITDA excluding special items was $1.5bn, up 18% year over year. The year-over-year increase was driven by volume growth in the commercial aerospace market. Adjusted EBITDA margin excluding special items was 22.7%, up approximately 20 basis points year over year, including approximately $90m of inflationary cost pass through year over year. Excluding the year over year inflationary cost pass through, adjusted EBITDA margin excluding special items was 23.0% for the full year 2023.

Howmet Aerospace Executive Chairman and Chief Executive Officer John Plant said, “The Howmet Aerospace team drove very strong results in 2023. The Company exceeded the high end of its guidance range for revenue, adjusted EBITDA*, adjusted earnings per share*, and free cash flow. Total revenue grew 17% with all end markets up in 2023, led by 24% growth in commercial aerospace. Adjusted EBITDA* grew 18% with a healthy adjusted EBITDA margin* of 22.7% in full year 2023, while absorbing near-term costs associated with headcount additions to support the continued revenue ramp. Adjusted earnings per share* of $1.84 increased 31% year over year. The healthy fourth quarter adjusted EBITDA margin* of 23.0% represents a solid exit rate as we head into 2024.”

Mr. Plant continued, “The outlook for commercial aerospace continues to be strong, supported by record backlogs at the aircraft OEMs, as well as accelerating spares demand due to the increased service requirements of the newer, more fuel-efficient aircraft engines. We expect above-trend growth to continue in full year 2024, albeit with a cautious view until we see sustained achievement of build rate increases at aircraft OEMs. We expect healthy growth in 2024 in our defense aerospace and industrial end markets. In commercial transportation, softening leading indicators warrant a cautious view, though we expect a downcycle to be confined to 2024. Our 2024 outlook envisions total revenue growth of approximately 7%.”

“Howmet Aerospace’s balance sheet has never been stronger, with solid cash generation supporting $476m of debt paydown in 2023. Combined with debt refinancing in the fourth quarter 2023, these actions generate approximately $29m of annualized interest expense savings. The Company also continued to return cash to shareholders, with $250m of common stock repurchased in 2023. The 25% increase in the quarterly common stock dividend per share in the fourth quarter 2023 illustrates the Company’s confidence in cash generation ahead.”

Fourth Quarter 2023 Segment Performance

Engine Products

Engine Products reported revenue of $852m, an increase of 16% year over year, due to growth in the commercial aerospace, defense aerospace, industrial gas turbine, and oil and gas markets. Segment Adjusted EBITDA was $233m, up 22% year over year, driven by favorable volume in the commercial aerospace, defense aerospace, industrial gas turbine, and oil and gas markets. The Segment absorbed approximately 180 net headcount in the quarter and approximately 1,030 net headcount in full year 2023 in support of expected revenue increases. Segment Adjusted EBITDA margin increased approximately 120 basis points year over year to 27.3%.

Fastening Systems

Fastening Systems reported revenue of $360m, an increase of 26% year over year due to growth in the commercial aerospace market, including emerging wide body aircraft recovery, and the commercial transportation market. Segment Adjusted EBITDA was $80m, up 38% year over year, driven by favorable volume in the commercial aerospace and commercial transportation markets. The Segment absorbed approximately 50 net headcount in the quarter and approximately 435 net headcount in full year 2023 in support of expected revenue increases. Segment Adjusted EBITDA margin increased approximately 180 basis points year over year to 22.2%.

Engineered Structures

Engineered Structures reported revenue of $244m, an increase of 6% year over year due to growth in the commercial aerospace market, including emerging wide body aircraft recovery, partially offset by declines in the defense aerospace market. Segment Adjusted EBITDA was $33m, down 3% year over year, driven by unfavorable volume in the defense aerospace market, partially offset by favorable volume in the commercial aerospace market. The Segment absorbed approximately 85 net headcount in the quarter and approximately 280 net headcount in full year 2023 in support of expected revenue increases. Segment Adjusted EBITDA margin decreased approximately 130 basis points year over year to 13.5%.

Forged Wheels

Forged Wheels reported revenue of $275m, an increase of 3% year over year due to an 8% increase in volume in the commercial transportation market, partially offset by lower aluminum prices. Segment Adjusted EBITDA was $72m and remained flat year over year. Segment Adjusted EBITDA margin decreased approximately 90 basis points year over year to 26.2%.

Full Year 2023 Segment Performance

Segment performance in 2023 included the following:

• Engine Products revenue of $3.3bn, up 21% year over year; segment Adjusted EBITDA of $887m, up 22% year over year; segment Adjusted EBITDA margin of 27.2%, up 20 basis points year over year.
• Fastening Systems revenue of $1.3bn, up 21% year over year; segment Adjusted EBITDA of $278m, up 19% year over year; segment Adjusted EBITDA margin of 20.6%, down 30 basis points year over year.
• Engineered Structures revenue of $878m, up 11% year over year; segment Adjusted EBITDA of $113m, up 2% year over year; segment Adjusted EBITDA margin of 12.9%, down 120 basis points year over year.
• Forged Wheels revenue of $1.1 bn, up 8% year over year; segment Adjusted EBITDA of $309m, up 11% year over year; segment Adjusted EBITDA margin of 26.9%, up 60 basis points year over year.

Completed Debt Actions in Fourth Quarter 2023, Reducing Outstanding 2024 Notes to $205 M

In the fourth quarter 2023, Howmet Aerospace entered into two senior unsecured term loan agreements. One term loan facility is U.S. dollar denominated, and the other is Japanese yen denominated. In December 2023, the Company drew $200m from the USD term loan facility and approximately $200 m from the JPY term loan facility. The term loans are prepayable without penalties or premiums and mature in November 2026.

In December 2023, the Company also entered into interest rate swaps to exchange the floating interest rates of the approximately $400m in term loans into fixed interest rates with a weighted average fixed interest rate of approximately 3.9%.

On December 28, 2023, the Company completed an early partial redemption of the 2024 Notes in the aggregate principal amount of $500m. The 2024 Notes were redeemed with approximately $106 m of cash on hand and approximately $400m from the term loans at an aggregate redemption price of approximately $506m, including accrued interest of approximately $6m. Following this redemption, the aggregate outstanding principal amount of the 2024 Notes, which were inherited from Alcoa Inc. at an original outstanding principal balance of $1.25bn, is approximately $205m.

The combined impact of the term loans and the early partial redemption of the 2024 Notes is expected to reduce annualized interest expense by approximately $10m.

In the full year 2023, Howmet Aerospace paid down $476m of debt. The combined debt reduction and refinancing actions reduce interest expense by approximately $29m on an annualized basis.

All of Howmet Aerospace’s outstanding long-term debt continues to be unsecured and at fixed interest rates, which will provide stability of interest expense into the future.

Repurchased $100m of Common Stock in Fourth Quarter 2023, $250m in Full Year 2023

In the fourth quarter 2023, Howmet Aerospace repurchased $100m of common stock at an average price of $52.52 per share, retiring approximately 1.9m shares, which represents the 11th consecutive quarter of share repurchase activity. In the full year 2023, the Company repurchased $250m of common stock at an average price of $47.76 per share, retiring approximately 5.2m shares. As of February 1, 2024, total share repurchase authorization available was $697m.

Quarterly Common Stock Dividend Increased to $0.05 Per Share in Fourth Quarter 2023

On November 27, 2023, the Company paid a quarterly dividend of $0.05 per share on its common stock. The quarterly dividend represents a 25% increase from the third quarter 2023 dividend of $0.04 per share.

S&P Upgraded Howmet Aerospace Rating to Investment Grade

On December 15, 2023, S&P Global Ratings upgraded Howmet Aerospace’s Long-Term Issue Credit Rating to “BBB-” from “BB+” and updated the rating outlook to stable. With this upgrade, Howmet Aerospace is now rated as investment grade by two of the three credit rating agencies. (Source: BUSINESS WIRE)

 

14 Feb 24. Teledyne to Acquire Adimec. Teledyne Technologies Incorporated (NYSE:TDY) (“Teledyne”) announced today that it has entered into an agreement to acquire Adimec Holding B.V. and its subsidiaries (“Adimec”). Adimec, founded in 1992 and headquartered in Eindhoven, Netherlands, develops customized high-performance industrial and scientific cameras for applications where image quality is of paramount importance.

“Adimec possesses uniquely complementary technology, products and customers in the shared strategic focus areas of healthcare, global defense, and semiconductor and electronics inspection,” said Edwin Roks, Chief Executive Officer of Teledyne. “For decades and from our own X-ray imaging business headquartered in Eindhoven, I have watched Adimec grow to become a leader in niche applications requiring truly accurate images for precise decision making in time-critical processes.”

Joost van Kuijk, Adimec’s Chief Executive Officer, commented, “It is with great pleasure that we are able to announce publicly that Adimec will become part of Teledyne. Adimec’s success has always been built on ensuring imaging excellence in demanding applications through an unwavering focus on individual customer requirements by our expert engineers and designers.”

Adimec co- Chief Executive Officer, Alex de Boer added, “As a leader in advanced imaging technologies for industrial and scientific markets, Teledyne is the perfect company to build further on the strong foundation the founders and management have established over the past three decades. The entire Adimec team is looking forward to contributing to an exciting future with Teledyne while extending technical boundaries to support our customers with cameras — perfectly optimized to their application needs.”

About Teledyne

Teledyne is a leading provider of sophisticated digital imaging products and software, instrumentation, aerospace and defense electronics, and engineered systems. Teledyne’s operations are primarily located in the United States, Canada, the United Kingdom, and Western and Northern Europe. For more information, visit Teledyne’s website at www.teledyne.com. (Source: BUSINESS WIRE)

 

14 Feb 24. Kitron today reported record fourth-quarter sales and strong profitability, with margins consistently reaching the company’s long-term target. Kitron’s revenue for the fourth quarter was EUR 199.1m, compared to 174.6m last year. Growth was particularly strong within the Electrification and Defence/Aerospace market sectors.

Fourth-quarter operating profit (EBIT) was EUR 18.0m, compared to 15.9m last year. EBITDA was EUR 22.8m, compared to 19.6m last year.

Profitability expressed as EBIT margin was 9.1 per cent in the fourth quarter, in line with the same quarter last year.

The order backlog ended at EUR 494m, a decrease of 15 per cent compared to the previous year and a decrease of 2 per cent from the preceding quarter, reflecting European market sentiment. The exception to this trend is Defence/Aerospace, where the order backlog has grown substantially over the past year and electrical grid critical infrastructure, where growth of over 50 per cent is expected this year.

Peter Nilsson, Kitron’s CEO, comments:

“In the final quarter of 2023, we continued our streak of growth with record fourth-quarter sales, while also reporting the fifth consecutive quarter of EBIT margins above 9 per cent. Our annual revenue crossed the EUR 775 m mark, reflecting an impressive year-over-year growth of 21 per cent. Looking ahead to 2024, we anticipate stable demand in the first half, with an expectation for it to pick up in the latter half.”

Profit after tax amounted to EUR 12.3 m, compared to 9.8 m in the same quarter the previous year. This corresponds to earnings per share of EUR 0.06, up from 0.05 last year. For the full year 2023, earnings per share were EUR 0.26, up from 0.14 in 2022.

Stable capital efficiency

Operating cash flow in the fourth quarter was EUR 33.4m, compared to 7.1m in the fourth quarter of 2022. Full-year operating cash flow was EUR 59.0m compared to 18.2m in 2022.

Net working capital was EUR 193.8m, an increase of 5.5 per cent compared to the same quarter last year. Net working capital as a percentage of revenue was 24.4 per cent compared to 26.1 per cent last year.

Dividend

The board proposes an ordinary dividend of NOK 0.75 per share (NOK 0.50).

Outlook

For 2024, Kitron reiterates the outlook given at the Capital Markets Day in December and expects revenues between EUR 700 and 800m. Operating profit (EBIT) is expected to be between EUR 60 and 74m. (Source: Google/Yahoo!)

 

13 Feb 24. Leidos sees 2024 profit largely above Wall Street on defense demand. U.S. defense company Leidos Holdings Inc (LDOS.N), opens new tab on Tuesday provided a full-year profit target largely above Wall Street consensus, banking on demand for its products amid high geopolitical tensions.

The Reston, Virginia-based company, engaged in hypersonic weapons development among others, is benefiting from increased Pentagon spending.

Leidos said it expects its full-year profit at between $7.50 and $7.90 per share, while analysts on average were expecting $7.60.

The company expects its 2024 revenue in the range of $15.7bn to $16.1bn. Analysts expect $15.95bn, according to LSEG data.

Defense companies have seen robust demand for weapons from the United States and its allies following Moscow’s invasion of Ukraine and rising geopolitical tensions in Asia.

For the fourth quarter, the company’s profit rose to $1.67 per share from $1.29 a year earlier. Leidos’ revenue jumped 7.6% to $3.98bn.

(Source: Google/Reuters)

 

15 Nov 23. 13 photonics startups to watch, according to investors.

Investors highlight the sector’s future shining stars

The amount of data that both companies and scientists need is growing and becoming more complicated, meaning the processing capabilities of the computers and machinery involved have to keep up.

Photonics startups are aiming to solve this problem using products that use light or light particles — photons, rather than electrons — to transmit, detect and work with more data in a way that is faster and more energy efficient.

These startups often combine multiple threads of existing photonics technology into a single chip, reducing its size and making it cheaper for manufacturers and data centres to purchase in bulk.

But which companies are set become the frontrunners in the space?

Investors from Par Equity, Runa Capital and Amadeus Capital Partners tell us the startups on their watchlists.

Paul Atkinson, partner at Par Equity

Par Equity is a venture capital firm based in Edinburgh, investing in technology companies in the north of the UK.

M Squared Lasers — UK

Based in Glasgow, M Squared Lasers uses light technology to engineer products for quantum, such as electronics, as well as microscopes for scientific use and lasers for science and industrial applications. Applications include using lasers to detect gas and oil leaks in large plants and in developing a non-invasive diagnosis option for cancer. It also helps to further space travel potential using ion-drives, a novel technology which M Squared Lasers helped to develop.

PowerPhotonic — UK

PowerPhotonic supports engineers to create laser systems, helping industries like healthcare and defence adopt freeform optics solutions to improve the performance of lasers and optical systems, including in microscopes and data communication, or to develop processes like tattoo removal.

Vector Photonics — UK

Vector Photonics, a spinout from the University of Glasgow, produces semiconductor lasers, which are designed to be low cost, durable and high power. It’s currently focused on data communications, using its lasers to reduce the energy usage of next-generation data centres, and also plans to target the metal and plastic printing industry.

Ceres Holographics — UK

Scotland-based Ceres Holographics designs and prints precision engineered holographic optical films, which can be used in automotive displays and tech wearables like VR headsets. It also has the capability to replicate these films at scale for the mass market.

QuInAs — UK

UltraRAM is a novel memory and storage device that was spun out by QuInAs from the Physics and Engineering department of Lancaster University in collaboration with the Department of Physics at the University of Warwick. UltraRAM is designed to be exceptionally fast, non-volatile and significantly more energy-efficient than existing solutions.

Dmitry Galperin, general partner at Runa Capital

Based in Luxembourg and founded in 2010, Runa Capital invests in deeptech companies across Europe.

Siloton — UK

Siloton is a Bristol-based startup leveraging integrated photonics to make OCT technology, which is used to produce images of eyes, more accessible. The company recently reported a sub-surface image of the retina in a synthetic eye, using its photonic chip technology. OCT images serve as a key marker for retinal conditions like age-related degeneration and damage caused by diabetes.

Ephos.io — Italy

Ephos.io is commercialising years of research at the National Research Council and The Sapienza University of Rome to make high-fidelity photonic chips for the development of quantum technology. It claims to cut down the production of chips from months to days. It is joint headquartered in Italy and the US.

Photonpath — Italy

A spinout from The Polytechnic University of Milan, Photonpath provides programmable chips for use in communications, sensing and computing industries. The chips are designed to make the power consumption of processing more energy efficient and can be replicated at scale.

Luceda Photonics — Belgium

Luceda Photonics is a spinout from Belgium’s Ghent University that provides software for designers of photonics-integrated circuits. It offers a component library with specialised components and access to a wide range of process design kits to bring all of the design flow components into one platform to streamline workflow for designers.

CamGraPhIC – UK

CamGraPhIC is a startup from Cambridge with research and manufacturing based in Pisa, Italy, which is commercialising graphene photonics technology to improve optical telecommunications in 5G and data centre environments, and to enable the bandwidth required for new digital applications like the Internet of Things and cloud services.

James Baker, associate at Amadeus Capital Partners

Amadeus Capital Partners is a London-based multi-stage VC firm

Enlightra – Switzerland

Enlightra is developing mass-manufacturable small multicolour lasers for data communication and optical computing, which are also designed to be more energy efficient and lower cost than existing products. Founded in 2021, both founders have research backgrounds and have largely funded the company through contract projects for European government and research agencies.

NcodiN – France

NcodiN says that the physical nature of copper wires currently used in computing aren’t optimised for the growing demand for the processing architecture needed to support high performance computing and AI. To meet the demand for supercomputers, it is using semiconductors to make lasers that communicate information via light instead. The company is currently based in the Centre for Nanosciences and Nanotechnologies, a joint unit of the French National Centre for Scientific Research and Paris-Saclay University, where it can access high-spec R&D space.

iLoF – Portugal

iLoF is a digital health company that has developed an AI platform that accelerates personalised drug discovery and development. Using advanced AI and photonics, it collects massive amounts of data to build a digital library of biomarkers like optical fingerprints and biological profiles, which can then be used to find the right people for clinical trials and deliver patient-specific treatments quicker. (Source: Sifted)

 

13 Feb 24. Skylo Technologies, the leading direct-to-device satellite connectivity service provider, today announces that it has secured $37m in funding co-led by Intel Capital and Innovation Endeavors. New investors include BMW i Ventures, Next47, Samsung Catalyst Fund and Seraphim Space. David Johnson of Intel Capital joins the board, bringing a wealth of experience and insight to fortify Skylo’s leadership team.

This new investment expands Skylo’s scale and business operations to better support smartphones, wearables, IoT devices, and mobile network operator customers. This is a major step in Skylo’s commitment to making standards based non-terrestrial networks (NTN) more accessible and efficient for numerous sectors, including consumer, automotive, agriculture, energy, transportation, and beyond.

“We’re immensely proud to lead this new chapter in direct-to-device satellite connectivity, supported by an incredible consortium of investors. Their commitment helps make Skylo’s  standards-based service the default choice for the NTN ecosystem,” said Parth Trivedi, CEO and Co-Founder of Skylo. “This round accelerates our carrier partnerships and supports all top device makers adopting our standards-based solution.”

With this new capital, Skylo will grow its team with the brightest minds in the industry, enhance its marketing efforts and technological developments to bring online new capabilities, reach new verticals, and further its global footprint.

“As lead investors, we recognize the transformative potential of Skylo’s scalable approach for 5G satellite-to-device communications,” said David Johnson, Managing Director at Intel Capital. “Since our first meeting with Parth and the team, we’ve been impressed with the extensive industry ecosystem support they’ve received in delivering a complete end-to-end connectivity service for high volume device categories at low cost.”

“We’re proud to announce our decision to back Skylo again — a breakthrough service that is opening new markets and opportunities by connecting remote and underserved areas,” said Scott Brady, Founding Partner at Innovation Endeavors. “We’re excited to be part of this journey and are confident that Skylo’s technology will play a crucial role in shaping the future of global communication and connectivity.”

Skylo has launched its initial service across US, Canada, and Europe, in partnership with major chipset makers including Qualcomm, Samsung, MediaTek, and Sony, together with the world’s leading device OEMs and mobile carriers, such as Deutsche Telekom. Skylo has successfully partnered with satellite operators to enable the service on dedicated, fully licensed spectrum and existing satellite assets. This allows terrestrial mobile carriers to take advantage of the most economical, scalable solution for direct-to-device connectivity, without sacrificing their own spectrum or changing their behavior in any way since Skylo’s network integrates as a standard roaming partner. Skylo has built a strong ecosystem of OEMs, carriers, and supply chain partners that have brought the service to market.

Skylo and Samsung S.LSI have an ongoing partnership to bring Skylo’s service to Samsung’s flagship 5G modems. Samsung Catalyst’s investment in Skylo strengthens ongoing development efforts for mutual customers.

“We were impressed with Skylo’s global connectivity solution that enables ‘always-on, always-connected’ communication for the automotive industry,” said Kasper Sage, Managing Partner at BMW i Ventures. “Skylo has a proven solution and team that is going to make satellite connectivity a new standard for the next generation of vehicles while keeping people safe and making their experiences seamless wherever they may go.”

For carriers looking to expand network capabilities or professionals aspiring to contribute to a cutting-edge technology landscape, Skylo offers an opportunity to be part of a future where seamless, global connectivity is the norm. Reach out to learn how we can drive the future of connectivity together.

About Skylo Technologies

Skylo Technologies is a global NTN service provider based in Mountain View, CA, offering a service that allows smartphone and IoT cellular devices to connect directly over existing satellites. Devices connected over satellite are managed and served by Skylo’s commercial NTN vRAN, featuring a 3GPP standards-based cloud-native base station and core. Skylo works with existing satellite operators, network operators, and device makers to provide subscribers an anywhere, anytime connectivity solution that seamlessly roams between terrestrial and satellite networks. Skylo’s focus is on enabling connected services for people outdoors and connected workflows for machines at work across critical industries such as agriculture, maritime, logistics, mining, and others, in addition to mass-market consumer devices. For more information, visit www.skylo.tech, contact , or follow us on LinkedIn and Twitter.

Skylo is hiring! Please visit us at jobs.skylo.tech to see our open roles.

About Intel Capital

Over three decades, Intel Capital has invested more than US $20 bn in the future of compute, funding standout, early-stage startups across four key areas of the tech ecosystem; Silicon, Frontier, Devices and Cloud. Intel Capital-funded companies created more than US $150 bn in market value in the past 10 years. For more information, visit www.intelcapital.com or follow @Intelcapital.

About Innovation Endeavors

Innovation Endeavors is an early-stage venture capital firm that invests in cutting-edge technologies to drive generational change in order to solve problems that matter. The firm’s central investment thesis, the Super Evolution, combines data, computational capacity, and advanced engineering to transform a range of industries including engineering health, climate, computing infrastructure, intelligent software, the physical economy, and more. Its investments include Afresh, AlphaSense, Atom Computing, Color, Gatik, Eikon Therapeutics, Fabric, Homelight, Kong, Formlabs, Panther, Planet, Replica, SoFi, Uber, Upstart, Vicarious Surgical, and more. For more information, visit www.InnovationEndeavors.com.

 

12 Feb 24. Kromek Group plc (AIM: KMK), a leading developer of radiation and bio-detection technology solutions for the advanced imaging and CBRN detection segments, announces that further to the announcement of 5 February 2024, in which the Company announced a conversion of Loan Notes and accrued interest (the “Loan Notes”) by two Loan Note holders and the consequential admission of 23,639,520 ordinary shares of 1 penny each (“Ordinary Shares”) in the Company (the “Conversion”), the Company has since agreed to allot new Ordinary Shares to another two Loan Note Holders in consideration of them cancelling their Loan Notes that were due to expire later this month.

The two further Loan Note holders will cancel their Loan Notes, which total £1.2m of debt, including accrued interest, and the Company has agreed to conditionally allot 16,532,894 new Ordinary Shares (the “New Ordinary Shares”) in consideration of the two Loan Notes being cancelled (the “Cancellation”). This is being done at an effective price of 7.5 pence per Ordinary Share.

Following the Cancellation, the Company will only have £34,000 of outstanding Loan Notes.

Following the allotment and admission of the 23,639,520 Ordinary Shares pursuant to the Conversion, the Company does not have sufficient remaining authorities to allot the New Ordinary Shares pursuant to the Cancellation. Therefore the Cancellation is conditional, inter alia, upon Shareholders approving resolutions at a general meeting that will grant to the Directors the authority to allot the New Ordinary Shares and the power to disapply statutory pre-emption rights in respect of the New Ordinary Shares (the “Resolutions”). A general meeting is to be held at Kromek, NETPark, Thomas Wright Way, Sedgefield, TS21 3FD at 10:00am on 4 March 2024 (the “General Meeting”), where the Resolutions will be proposed.

In addition, the Company has agreed to allot 600,000 new Ordinary Shares in lieu of professional fees due (“Fee Shares”).

Application will be made to the London Stock Exchange for the New Ordinary Shares and Fee Shares to be admitted to trading on AIM (“Admission”) and it is expected that Admission will become effective and that dealings in the New Ordinary Shares and Fee Shares will commence at 8.00 a.m. on or around 5 March 2024 (being the business day following the General Meeting).

The new Ordinary Shares will rank pari passu with the existing shares of the Company. Following Admission, the Company’s issued share capital will consist of 641,019,234 Ordinary Shares, none of which are held in treasury. Accordingly, the figure of 641,019,234 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company under the FCA’s Disclosure Guidance and Transparency Rules.

The Company intends to publish and send a shareholder circular and notice of General Meeting (the “Circular”) to Shareholders in connection with the Resolutions on or around 14 February 2024. The Circular will be available from the Company’s website (https://www.kromek.com/investor-relations/) once published.

 

09 Feb 24. Saab, Kongsberg post record orders as Europe boosts defense spending. Nordic defense companies reported record levels of business last year as European countries ramped up military spending in the face of Russia’s war in nearby Ukraine.

Sweden-based Saab, the 33rd largest defense contractor in the world according to Defense News’ Top 100 list, said orders increased 23% to 77.8 bn Swedish kronor (U.S. $7.4bn) last year, lifting the order book to an all-time high of 153.4bn kronor (U.S. $14.6bn).

Norway’s Kongsberg — ranked at No. 61 in the list — took in 37.8bn kroner (U.S. $3.6bn) of orders for its defense business in 2023, raising the division’s order book to a record 65.4bn kroner (U.S. $6.2bn). That included 16 bn kroner for a coastal defense missile system for Poland, the company’s largest contract ever.

European Union members boosted their defense budgets after Russia launched its full-scale invasion of Ukraine in February 2022. The return of a large-scale war on the continent raised concern among European governments that their defense-industrial bases and armed forces were ill-prepared for high-intensity warfare.

“Defense sales have been up since Russia’s invasion of Ukraine,” Ed Arnold, a research fellow for European security at the London-based Royal United Services Institute think tank, told Defense News. “The main issue is that production lines have not yet increased sufficiently, and therefore there is a scramble by nations to get defense kit and equipment.”

EU countries were set to spend about €270bn (U.S. $291bn) on defense in 2023, European Council President Charles Michel said in November. The 27-nation bloc spent a record €240m in 2022.

Norway plans to order National Advanced Surface-to-Air Missile Systems from Kongsberg for delivery to Ukraine — an acquisition worth 3.45 bn kroner that includes 10 launch units and four fire-control centers, the country said in a statement Friday. That would be in addition to purchasing equipment to refill stocks after the country donated materiel to Ukraine. Norwegian Defence Minister Bjørn Arild Gram said he wants to reacquire air defenses “as quickly as possible.”

European countries have realized they must spend more on defense to deter Russia, Saab CEO Micael Johansson said at a meeting about the company’s full-year results. He added that “it’s quite scary to see” how the U.S. is wavering in its support for Ukraine, noting that Europe has to step up.

He called on governments to provide the continent’s defense industry with long-term commitments in return for investing in capacity and new production sites, to avoid a repeat of the dismantling of the local defense industry that followed the end of the Cold War. He acknowledged increasing capacity in Europe “will take some time.”

“I am prepared to take risk, but it has to be in some sort of handshake with governments if I’m going to do more in terms of new sites, high capacity,” Johansson said. “We can’t afford to dismantle things once more. That is what the long-term commitment is about.”

Saab’s business in the fourth quarter of 2023 included a 1.3bn kroner order for the Carl-Gustaf recoilless rifle and a 1 bn kroner order from Boeing for fuselage systems for the T-7 jet trainer.

In Finland, Patria reported orders increased 19% to €946m, while the year-end order book increased to €1.94bn. The company, whose products include armored vehicles and mine-sweeping sensors, is 49.9% owned by Kongsberg, with Finland owning the remainder. Patria is the 91st largest defense company in the world.

“Midsize companies such as Patria are doing exceptionally well, as they produce many products which can get into service immediately, as opposed to large defense programs, which often develop over decades,” Arnold said.

Meanwhile, the British Defence Ministry boosted spending with local industry and commerce by 8% to a record £25bn (U.S. $32bn) in financial year 2022-2023, when adjusted for inflation, the ministry reported Thursday. Overall spending, including with foreign suppliers, reached £28bn.

Weapons and ammunition registered the biggest increase, with spending on the domestic industry surging 76% to £2.1bn, the highest level in at least 10 years. Local spending on shipbuilding and repair rose 23% to £5.5bn, due to a £2bn investment to support the Dreadnought-class nuclear submarine project. (Source: Defense News)

 

11 Feb 24. Final sell-offs loom for UK defence giant Cobham.

• Shonnel Malani has overseen dismemberment of Cobham since taking it over
• Cobham’s operations sold off piece by piece to a series of international buyers
• Company has no manufacturing presence in UK as geopolitical tensions rise

The private equity boss behind the controversial break-up of Cobham is preparing to sell off the last remnants of the UK defence and aerospace group.

Shonnel Malani, managing partner at Advent International, has overseen the dismemberment of Cobham since taking it over for £4bn in 2019.

He told The Mail on Sunday that he has no regrets and he indicated that Advent could soon have more UK targets.

Cobham’s sprawling operations have been sold off piece by piece to a series of international buyers leaving it with no manufacturing presence in the UK at a time when geopolitical tensions are high and when military top brass are warning that the UK needs to be prepared for the possibility of war.

Malani told The Mail on Sunday: ‘We are starting to consider the exit of the last parts of Cobham, but no rush. Over the next year or two is fine.’

Lady Cobham, daughter-in-law of company founder Sir Alan Cobham, has been an outspoken critic of the takeover.

She said last night: ‘Cobham was a vital contributor to national security in the Cold War, the Falklands campaign and the Gulf Wars. It was part of national resilience in the face of crisis.

‘It is now broken up to the detriment of that resilience and many individuals have lined their pockets.

‘Is this not another case of selling off the family silverware?’

The rump of the Cobham business includes CAES, which is behind radar and electronic warfare technology, and Cobham Satcom, a Denmark-based satellite communications firm.

These are set to be sold off at a time of heightening tensions amid the Ukraine war, US-China tensions and conflict in the Middle East – all of which put a premium on defence businesses.

It is not clear who the future buyers might be. Foreign industrial giants and private equity firms have queued to snap up other parts of the business.

How extraordinary it is that at a time when command and control over Britain’s defences is so vital to our national security that critical technologies, developed at Wimborne based Cobham plc, were allowed to fall into the hands of private equity vulture Advent.

Seven other divisions have already been sold off reportedly yielding nearly £6 bn, including Paris-based Cobham Aerospace Communications, which was hived off to France’s Thales in an £850m deal agreed last summer. Advent’s takeover of Cobham was vigorously opposed by a number of politicians and military figures.

Their fears about what would happen next were confirmed when Advent started breaking up the company.

Malani said: ‘We’ve made our investors happy.’

He added: ‘Cobham was a large conglomerate, many disparate businesses, that frankly was in quite a lot of trouble.

‘Had we not bought it a year or so from then it would have probably hit a wall of some sort and inflicted some sort of break up on its own.’

Meanwhile, Boeing had been suing Cobham over delays to its aerial refuelling programme, resulting in a settlement that cost the British company more than £80m.

In 2021, Cobham Mission Systems, which makes air-to-air flight refuelling technology and is based in Wimborne, Dorset, was sold to US-Irish giant Eaton for £2bn.

Advent scooped up another British defence firm, Ultra Electronics, for £2.6bn in 2022.

Malani said there were no ‘imminent’ deals, but there may be opportunities later this year or next. (Source: Google/https://www.thisismoney.co.uk/)

 

30 Jan 24. Comtech’s $45m strategic investment and exchange of convertible preferred stock. Comtech Telecommunications Corp. (NASDAQ: CMTL), a global technology company providing terrestrial and wireless network solutions, next-generation 911 emergency services, satellite and space communications technologies, and cloud native capabilities, today announced a $45.0 m investment by current shareholders White Hat Capital Partners LP, an investment firm focused on sustainable value creation in technology companies serving mission-critical applications, and funds affiliated with Magnetar, a leading alternative investment manager with over $14 bn of assets under management. In connection with the investment, the Company exchanged all outstanding shares of Comtech’s existing convertible preferred stock for a new series of convertible preferred stock.

This strategic investment enhances Comtech’s financial flexibility and strengthens the Company’s ability to capitalize on its recent large contract awards and growing customer demand for its satellite communications technologies and next-generation terrestrial and wireless solutions. Comtech expects to apply the proceeds of this investment across a range of initiatives which not only support near-term working capital needs and general corporate purposes, including the repayment of certain outstanding indebtedness, but also its growth prospects. The issuance of the new series of convertible preferred stock demonstrates the continued commitment of White Hat and Magnetar, and is an important step towards the completion of the Company’s previously announced process to refinance its existing Credit Facility and further increase its financial and operational strength.

Mark Quinlan, who currently serves as an appointee of White Hat and Magnetar on the Company’s Board of Directors, will retain his position on the Board. Mr. Quinlan is White Hat’s Co-Founder and Managing Partner and has more than 20 years of experience in the technology sector. He has provided valuable insight and experience to the Board of Directors since January 2022.

“We are grateful for this investment and endorsement of our strategy and team by two of our existing long-term shareholders,” said Comtech’s Chairman and CEO, Ken Peterman. “Magnetar and White Hat understand our Company, our end markets, and the potential of our One Comtech vision. With White Hat’s investment experience within the technology sector and Magnetar’s breadth of investment experience in both private and public markets and across asset classes and capital structures, we value their continued support and are excited to strengthen our relationship with them at this key inflection point for the Company.”

“Under CEO Ken Peterman’s leadership, the entire Comtech team has made incredible progress on its One Comtech transformation,” said Mr. Quinlan. “We recognize Comtech’s potential and believe this investment further supports the Company’s commitment to developing and delivering mission-critical solutions for its customers.” (Source: Satnews)

————————————————————————-

SPX CommTech, part of SPX Technologies Inc, innovates specialised technologies within the Radio Frequency (RF) spectrum to ensure a smarter, more secure future for all. Formed by TCI and ECS, SPX CommTech’s Battlespace portfolio enables defence and security teams to detect, defeat and exploit RF signals to enhance communications intelligence (COMINT) and counter unmanned aerial systems (Counter-UAS). Additionally, its Tactical Data Link portfolio allows intelligence gathering agencies, special forces, emergency response, and security teams to securely and reliably transfer video and data between enabled-aircraft and ground teams over long distances for airborne Intelligence, Surveillance, Reconnaissance (ISR). For more information visit www.tcibr.com and www.enterprisecontrol.co.uk

————————————————————————-