Sponsored by SPX CommTech (TCI & ECS)
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22 Mar 24. Forcit Group and DA-Group have signed an agreement whereby DA-Group sells the naval mine technology to Forcit Group. The acquisition comprehends the DA-Group’s naval mine technology business, including staff competence, technology, intellectual property rights, patents, etc.
This is a strategic step for DA-Group, which aims to focus its activities in particular on electronic warfare business and demanding space technology and industry solutions and products. DA-Group updates its strategy and continues to bringing new high-tech solutions and services to the market.
The acquisition is a strategic step for Forcit Group, that further strengthens Forcit Defence’s position as a supplier of total Defence systems for area denial on land and at sea. With this step forward Forcit Group will bring together under one roof the advanced knowledge and technology related to insensitive munitions, mechanics, electronics, and software for relevant Defence applications.
“DA-Group and Forcit have had successful cooperation in the field of underwater Defence. This acquisition is a significant leap for Forcit and will enable us to further innovate and stay in the frontline of development of advanced influence sea mine systems. With the new and strengthened team, we are well positioned to be the global technology leader and preferred partner for sea denial systems”, says Joakim Westerlund, CEO at Forcit Group.
Sami Kotiniemi, CEO at DA-Group points out that “The cooperation with Forcit has been fruitful and the close cooperation with Forcit will continue after the transaction.”
21 Mar 24. Why Seraphim’s shares have gone into space.
With Nvidia (US:NVDA) shares continuing to soar, the rewards of backing AI plays have started to show in the funds space. Microsoft (US:MSFT) and Nvidia backer Manchester & London (MNL) is already sitting on some impressive returns so far in 2024, even if its bets seem a tad punchy.
But it’s not MNL or one of the technology funds topping the charts when it comes to recent performance. MNL shareholders are up to the tune of around 20 per cent so far this year, but that’s eclipsed by Seraphim Space (SSIT). Shareholders are sitting on an enormous 80.2 per cent total return for 2024 as of 18 March. If we look at returns generated since the shares hit their last low point on 17 November, the gains come to more than 110 per cent.
What’s going on? Seraphim, which is predominantly invested in private ‘spacetech’ companies, has certainly been a beneficiary of the rally that has lifted growth investments. For context, shareholders took a bath to the tune of 64 per cent in 2022, and would still be down by around 40 per cent had they invested at the trust’s initial public offering (IPO) in the summer of 2021.
But the portfolio has enjoyed some progress. Its recent half-year results notes that ICEYE, a Finnish microsatellite manufacturer and the trust’s biggest holding, has become profitable on an Ebitda level at least. Elsewhere, D-Orbit, a space logistics and transportation specialist and the fund’s second-biggest holding, saw its fair value rise by a fifth after a €100mn funding round.
Beyond that, the trust has highlighted the fact that companies representing some 60 per cent of the portfolio by fair value have indicated they expect to have sufficient cash to reach profitability. There has also been an emphasis on the ‘judicious’ selection of companies that warrant additional capital, given that the trust has limited cash reserves.
Like other trusts with a preference for early-stage companies, such as Chrysalis (CHRY) and even Scottish Mortgage (SMT), the hope for Seraphim is that portfolio companies see their fundamentals improve but also benefit from a less savage interest rate environment. There’s also an argument that the trust’s shares still look cheap, trading as they are on a discount of around 35 per cent to portfolio NAV.
Having said that, I would extend some scepticism when shares rise so aggressively in such a short time, and Stifel analysts did downgrade the trust to a neutral rating earlier this year after its ‘rocketing’ returns.
The discount, for one, has almost halved from around 60 per cent at the turn of the year, and some might worry about whether the heavy momentum behind the shares might falter or turn. It’s also worth noting that discounts can reflect plenty of problems, be it questions about the reliability of valuations on illiquid assets or the specialist nature of a trust’s sector of focus.
Like some of its peers the trust also has some chunky position sizes, with 20.2 per cent in ICEYE, 14.4 per cent in D-Orbit and 10.7 per cent in All.space, which aims to develop an antenna capable of connecting to any other satellite. That brings risks, and reminds us caution is warranted as the shares go stratospheric. (Source: Investors Chronicle)
21 Mar 24. Dowlais hit by £449m impairment. The specialist engineer is struggling with its powder metallurgy division.
- £50m buyback announced
- Revenues expected to flatten this year
Specialist engineer Dowlais (DWL) has been dragged into a £450m operating loss by a major goodwill impairment. The group – which was spun off from Melrose Industries (MRO) last year – has reported a £449m impairment charge relating to its powder metallurgy division, following a review of its medium-term prospects. The group was further hampered by £120m of restructuring costs in the automotive business.
The powder metallurgy business is clearly under pressure, with revenue edging up by just 2.4 per cent to £1.0bn and adjusted operating margins dipping from 9.4 per cent to 9.2 per cent. The market underperformance was attributed to electric vehicle transition headwinds, engine downsizing and the impact of auto worker strikes in the US. A new divisional chief executive has now been appointed.
Elsewhere, however, the business is performing strongly. The bigger automotive division grew sales by 5.1 per cent to £4.4bn and boosted its adjusted operating margin by a whole percentage point to 6.9 per cent. This pushed the group’s total adjusted operating profit – which excludes the goodwill impairment and other one-off costs – up by 6.6 per cent to £355m.
Management certainly seems to be feeling confident, announcing a full-year dividend of 4.2p and a share buyback of up to £50m.
The outlook for 2024 is mixed. Current industry forecasts imply a slight decline in global light vehicle production this year, and Dowlais is expecting revenues to stay flat. A “modest” reduction in the first half is due to be offset by an improvement in the second half, as a result of several new programme launches. Internal improvements are expected to boost margins and free cash flow, however.
In the longer term, the global automotive market is expected to grow, with a forecast increase in global light vehicle production of 5 per cent between 2023 and 2028. Meanwhile, 2023 was the automotive division’s best ever year for new business wins. For now, however, there are too many one-off costs and unresolved issues within the metallurgy business for us to feel confident enough to buy in. Hold. Last IC View: Hold, 122p, 12 Sep 2023. (Source: Investors Chronicle)
19 Mar 24. Mindflow secures €5m to pioneer the Future of Work with Autonomous AI Agents in Cyber & IT Operations.
Mindflow raised €5M in a seed funding round with Auriga Cyber Ventures, Nauta Capital, Thales and Olivier Pomel (co-founder Datadog).
Mindflow aims at empowering any IT practitioner to leverage AI & automation so that they never have to work on any mundane boring task ever again #futureofwork.
Mindflow will expand its R&D team to develop the next generation of Generative AI models: Large Action Models (LAMs) to delegate mundane tasks to AI agents.
The rise of AI Agents that can execute tasks on their own
Mindflow is announcing €5m in funding in a seed round with Auriga Cyber Ventures,
Nauta Capital, Thales and Olivier Pomel, Co-founder of Datadog. This is a key milestone for Mindflowin its journey to redefine Cyber and IT operations through AI-powered automation.
Mindflowʼs investors not only secured robust financial backing but also invaluable insights and guidance from key figures in the IT, cybersecurity & tech ecosystem.
“From the moment I saw Mindflow’s platform, I knew it was a game-changer. Its ability to automate complex processes effortlessly is truly impressive. And with the integration of Gen-AI Large Action Models, the potential is beyond extraordinary“, says William Lecat, Partner at Auriga Cyber Ventures.
“We are convinced that multi-bn-dollar tech companies will emerge in the enterprise automation space made of AI agents and we are fully committed to being at the forefront of this race.” asserts Paul-Arthur Jonville, Co-founder & CEO.
Mindflow addresses the need for hyperautomation across IT & Cybersecurity teams
The IT & Cyber landscape is grappling with talent shortages, a rise in complex cyber alerts, and a surge in tool usage, with large companies averaging 473 tools—a 26% yearly increase (Gartner). This complexity results in an overwhelming task and alerts volume, diverting valuable human intellect to monotonous tasks.
Cybersecurity experts dedicate 30% of their time to tasks AI could automate, amidst a global shortfall of 3 m talents needed in the industry.
Thus, automating operations has become critical.
Mindflowʼs intuitive no-code automation & orchestration platform already makes it extremely easy to build, adjust, and monitor automation flows, for technical and non technical users. Major companies including Auchan, Colas, Thales, Elior and Doctolib already utilize Mindflow to automate phishing detection and neutralization, security incident response, vulnerability identification, CMDB management, IAM and employee offboarding processes…
“We have never encountered a platform like Mindflow, that allows SOC & IT teams to automate such a wide range of use cases so easily. The platform has almost no limits and can adapt to any environment”, adds Eric Lexcellent, Security Operations Director at Doctolib.
Enable the focus on high-value human expertise by automating mundane tasks
These funds will be allocated to augment its existing R&D team, already staffed with top-tier engineers and AI PhDs, by bringing in additional AI experts dedicated to advancing its cutting-edge AI capabilities and make the best of Gen-AI’s next big thing: Large Action Models (LAMs).
According to Gartner, “we are moving from what machines can do for us to what machines can be for us. Machines are evolving from being our tools to becoming our teammates. Gartner predicts that by 2025, Gen-AI will be a workforce partner for 90% of companies worldwide.”
Large Action Models (LAMs) are developed to understand complex human goals expressed in natural language, translate these intentions into actionable steps and respond in real time.
Beyond language comprehension, LAMs are also capable of learning to engage and perform actions within the whole information system, an area where Mindflow is setting the pace with an unfair advantage: a catalog of 600+ product integrations covering 100 000 actions.
The infusion of advanced LAMs technologies further elevates the platform’s capability to build autonomous AI agents, capable of executing specific tasks, under human supervision, allowing for an almost complete delegation and operational efficiency.
“Mindflow will create a new text-to-actions experience. Simply prompt what you wish to accomplish, and our AI handles the tedious parts, managing tasks across your tools and bringing in human approval for critical decisions. It’s all fully auditable to keep things transparent and compliant. It’s designed to let you focus on what truly matters.”
says Fabrice Delhoste Co-founder & CTO.
About Mindflow:
Founded in 2021, Mindflow is a revolutionary no-code enterprise automation platform designed to redefine how SecOps, ITOps, and CloudOps teams work. Its unique third-party tool integration capability enables Mindflow to be the organization’s automation backbone.
Imagine being able to automate complex workflows without writing a single line of code. Mindflow makes this possible. It connects seamlessly with a myriad of tools – from cybersecurity and IT vendors to communication channels like Slack, Microsoft Teams, and email systems. It supports cloud providers like AWS and Azure, ticketing systems such as ServiceNow, and even AI tools like OpenAI and Mistral.
The beauty of Mindflow lies in its simplicity and power. Teams with minimal programming skills can now automate repetitive tasks, saving time and focusing on high-value work. Whether it’s incident response, infrastructure monitoring, or employee onboarding, Mindflow turns these processes into efficient, automated flows in hours or days, not weeks.
With Mindflow, your team can achieve unparalleled efficiency and innovation in enterprise automation.
Our distinctions:
- Station F’s Future 40 (2023)
- 2nd place in “Most Innovative Solutions” category at Cybernight by Republik IT
- Mindflow is the European Cybersecurity Startup of the Year by European cyber Security Organisation (ECSO) (2023)
- Jury’s prize by Forum International de la Cybersécurité – FIC 2022
- Rothschild & Co Tech Night 2022: Mindflow won the “Most Promising Tech Startup of The Year” award.
- Les Assises de La cybersécurité 2022: Mindflow was selected by the Jury as one of the best startups.
With the support of:
- France 2030 – Critical Innovative Cyber Solution
- Digital Europe – Uptake on Innovative Cyber solution
20 Mar 24. Terra Drone enters US market with largest shareholding of Aloft Technologies. Japanese drone services company Terra Drone has announced an investment in US airspace management company Aloft Technologies. The investment makes Terra Drone the largest shareholder in Aloft, with Aloft becoming an affiliate company of Terra Drone. In addition, the board of directors of Aloft has appointed Yuki Ueno, Terra Drone’s executive officer in charge of domestic and international Unmanned Aerial System Traffic Management (UTM) business, to the Aloft board.
The partnership also marks Terra Drone’s official entry into the US, which is considered the world’s largest market for drones and AAMs. Together with Aloft and Unifly, a Belgium-based UTM provider that became a Terra Drone subsidiary in July 2023, Terra Drone is positioned to contribute to the development of the UTM ecosystem on a global scale, says the press release.
Compared to Japan, there are approximately 2.4 times as many registered drones and 62 times as many registered manned aircraft in the US. Additionally, a number of US companies are developing and manufacturing drones and UAMs. In July 2023, the FAA released an implementation plan “Innovate 2028” providing the steps it and others will need to take to safely enable advanced air mobility operations in the near term.
“The integration of UTM systems is pivotal for the expansion, scalability, and sustainability of global drone operations,” stated Jon Hegranes, Founder and CEO of Aloft. “Our collaboration with Terra Drone positions us at the forefront of this evolution, offering us the unique opportunity to harmonize operational standards and leverage technology to enhance the efficiency and reach of drone flights on an international scale.” For more information visit: www.terra-drone.net (Source: www.unmannedairspace.info)
18 Mar 24. Light hybrid vehicles in the portfolio: Rheinmetall acquires Dutch startup REE. Rheinmetall has acquired the Dutch startup REEQ, thereby expanding its vehicle portfolio to include innovative light hybrid vehicles. At the beginning of March 2024, the technology group’s Dutch subsidiary Rheinmetall Defence Nederland B.V., which is part of the Vehicle Systems Division, acquired 100% of the shares in the Dutch start-up REEQ. Rheinmetall is thus expanding its portfolio of lightweight tactical vehicles and also taking the step towards hybrid technology with a fully electric drivetrain in a military vehicle. Both parties have agreed not to disclose the purchase price.
With its vehicles, REEQ has developed a new generation of mobility that combines tactical transport with a mobile energy source (microgrid) and is fully prepared for autonomy. The technology was developed and is produced in the Netherlands.
Currently, REEQ’s vehicle portfolio consists of an Unmanned Ground Vehicle (UGV), a side-by-side buggy and a quad, all three with exactly the same fully electric drive train. Through the acquisition of REEQ, Rheinmetall is able to serve the Dutch and European market in the field of light tactical mobility, both manned and unmanned, in combination with a microgrid solution. Rheinmetall’s industrial strength and the innovative power of a start-up complement each other. Within the Rheinmetall Group, REEQ retains its status as a start-up in the field of development. The further development and series production of these vehicles will also take place in the Netherlands.
With this acquisition Rheinmetall is responding to the many calls from Dutch politicians and defense leaders to contribute with industrial strength and specialization to the operational user and strengthening of the defense industry. With the development and production from the Netherlands, the strategic autonomy and the Dutch position in the field of military electrification and autonomy in the international defense industry has also been strengthened.
Located in the city of Ede, Rheinmetall Defence Nederland B.V. is part of the Vehicle Systems Division and is a wholly owned subsidiary of Rheinmetall Landsysteme GmbH. Rheinmetall AG is one of the world’s leading technology enterprises.
REEQ is a Dutch start-up and has been in existence since 2018. In that year REEQ carried out a first innovation project regarding electromobility in the military sector on behalf of the Dutch Ministry of Defence. In later years, REEQ has developed further in this field of experience.
19 Mar 24. After careful consideration of all aspects of a potential acquisition of ATOS’ BDS (Big Data and Security) business line, Airbus (stock exchange symbol: AIR) has decided it will no longer pursue discussions with ATOS about this potential transaction.
15 Mar 24. Bodycote launches £60m buyback.
- Free cash flow up by 46 per cent
- £60m buyback kicked off
Bodycote (BOY) managed revenue growth of 6 per cent before energy surcharges despite “a mixed end market picture”, particularly in the second half of the year.
Its higher-margin specialist technologies business outperformed, achieving sales growth of 12 per cent. This is the sixth year in a row that it has outgrown the heat treatment side of the business and it now comprises around a third of the group’s revenue. Its greater contribution lifted the company’s headline operating margin, excluding energy surcharges, from 16.1 per cent to 17.3 per cent.
Outgoing chief executive Stephen Harris told investors that Bodycote “should continue to keep this journey going”. It has a medium-term target of reaching a margin above 20 per cent, and Harris argued the company’s “natural margins should be in the low-20s”.
The higher profit was converted into cash, with free cash flow increasing by 46 per cent to £122.5m, and even after spending £28mn on expansionary capex it finished the year with net cash (excluding leases) of £12.6mn. Although the completion of its acquisition of Indiana-based Lake City Heat Treating for £52m in January means it now has net debt of £40m, the amount of cash it is generating has allowed it to kick off a £60m buyback after a deal for a second US business, Stack Metallurgical Group, was abandoned.
The company expects to “deliver further progress” this year, even on the assumption that global industrial production remains flat. Analysts at HSBC think it will pick up and forecast an 8 per cent increase in Bodycote’s earnings per share to 52.1p. The shares trade on a forward price/earnings (PE) ratio of 12.5 times, below their five-year average of 15 times. Buy. Last IC view: Buy, 578p, 18 Jan 2024 (Source: Investors Chronicle)
18 Mar 24. Strategic changes coming at Denel, new CEO affirms. Tsepo Monaheng, Denel’s first permanent chief executive in more than three years, appraised “valued stakeholders” via an 8 March communication of “important and strategic structural changes” underway at the State-owned defence and technology conglomerate.
Monaheng, selected from 67 applicants, returned to Irene, Centurion-headquartered Denel this month (March) following a stint at SAFCOL (SA Forestry Company Limited), another State-owned enterprise (SOE) overseen by Public Enterprises Minister, Pravin Gordhan. Ahead of moving to the Pretoria East headquartered natural resources SOE he was chief executive of Denel Dynamics, whose core business, as per the Denel Group website, includes tactical missiles, precision guided weapons, unmanned aerial vehicle systems and space solutions.
Since Danie du Toit exited the chief executive suite in August 2020 just short of two years in office, Denel has been under the stewardship of acting/interim chief executives including Talib Sadik, William Hlokoane and Michael Kgobe. The interim CEO period also saw former chief executive Riaz Saloojee, seemingly sacrificed on the altar of State Capture in the Gupta years, return as chief restructuring officer in May 2022.
Monaheng’s stakeholder communication, seen by defenceWeb, has it the SOE is “migrating” to a new operating model to reflect “proven proficiencies” in the aerospace, guided weapons, landward and integrated systems (ISS) capability domains.
The Denel brand, Monaheng assures stakeholders, remains intact, after which he lists the four rationalised and consolidated trading entities that will revitalise and ensure long term sustainability for the group.
They are: Denel Aerospace, the former Denel Aeronautics and Denel Overberg Test Range (OTR); Denel Guided Weapons, the former Denel Dynamics; Denel Landwards, a consolidation of Denel Land Systems (DLS), Denel PMP, Denel Vehicle Systems (DVS) OMC and Mechatronic business units; and Integrated System Solutions (ISS). This “expands Denel’s level 4, 5 and 6 integration diversifying the ISS military system integration capability into the civil security realm”.
Facilities-wise there are no changes with Denel personnel and equipment remaining at its Centurion and Ekurhuleni campuses as well as Tshwane in Gauteng and Overberg, Bredasdorp, in the Western Cape province.
The new operating model, according to the new CEO, is designed to ensure efficient operations and “optimal service” for customers. At the same time, rationalisation of the corporate office and support services aims to “ensure dynamic leadership” of an “efficient delivery model”.
“The re-organisation will strengthen governance which is crucial to the revitalisation of Denel’s vision as the credible State-owned strategic partner for innovative defence, security and related solutions across our markets, locally and globally,” Monaheng wrote, adding transition to the new operating model was underway.
Almost coinciding with Monaheng’s arrival, Denel is on the hunt for a chief financial officer with a recruitment advertisement seeking a person to, among others, “develop a group finance strategy” based on the Denel corporate plan. Closing date for applications for the position held by Carmen le Grange, as per the last published Denel annual report (2019/20), is 31 March. (Source: https://www.defenceweb.co.za/)
18 Mar 24. Embraer Announces Results. (B3: EMBR3, NYSE: ERJ). The company’s operating and financial information is presented, except where otherwise stated, on a consolidated basis in United States dollars (US$) in accordance withIFRS. The financial data presented in this document as of and for the quarters ended December 31, 2023 (4Q23), September 30, 2023 (3Q23), and December 31, 2022 (4Q22), are derived from the unaudited financial statements, except annual financial data and where otherwise stated.
2024 GUIDANCE (does not consider EVE)
REVENUE AND GROSS MARGI
Consolidated revenue of US$5,269m in 2023 represented an increase of 16% yoy, and it was explained by Defense & Security (25%), Commercial Aviation (20%), Executive Aviation (13%) and Services & Support (12%). Total revenues were within the US$5.2 to US$5.7 bn guidance range for the year.
- Executive Aviation revenues reached US$1,408m, 13% higher yoy mainly explained by an increase in volumes. The gross margin dropped from 23.4% to 19.4% yoy because of product mix (proportionally more medium rather than light jets) and one-time tax benefits.
- Defense & Security revenues were US$516m, 25% higher yoy driven by higher C-390 volumes. Reported gross margin of 20.8% in 2022 versus 16.6% in 2023 was due to product mix and baseline adjustments of current contracts in accordance with the percentage of completion calculation methodology.
- Commercial Aviation revenues totaled US$1,847m, 20% higher yoy because of higher deliveries and product mix. Reported gross margin decreased from 10.5% in 2022 to 8.0% in 2023 due to product mix, higher freight (E2 airframes ramp-up) and one-time tax benefits.
- Services & Support revenues equaled US$1,418m, 12% higher yoy because of market growth. Reported gross margin of 28.0% in 2022 declined to 26.7% in 2023 due to services mix (more contribution from MRO and services) and one-time tax benefits.
ADJUSTED EBIT
The company’s reported results for 2023 are summarized in the table below.
In 4Q23, adjusted EBIT was US$181.7m while adjusted EBIT margin was 9.2% if we exclude the above special items. Meanwhile, in 2023, adjusted EBIT was US$350.0m and adjusted EBIT margin was 6.6%, and increase of US$79.7 m yoy because of higher volumes across all business units and other operational income (taxes efficiencies in 2023 and higher corporate expenditures in 2022).
NET INCOME (LOSS)
Net income (loss) attributable to Embraer shareholders and income (loss) per ADS were US$192.6m and US$1.0487 per share in 4Q23, compared to US$22.9m and US$0.1247 in 4Q22. If we exclude extraordinary effects, adjusted net income was US$77.6m for the quarter compared to US$43.2 m a year ago, and represented an 80% increase. In 3Q23, EVE development costs began to be capitalized as intangible assets as the program reached sufficient maturity.
¹ADJUSTED NET INCOME – US$m
¹ Adjusted Net Income (loss) is a non-GAAP measure, calculated by adding Net Income attributable to Embraer Shareholders plus Deferred income tax and social contribution for the period, in addition to adjusting for non-recurring items. Under IFRS for Embraer’s Income Tax benefits (expenses) the Company is required to record taxes resulting from unrealized gains or losses due to the impact of changes in the Real to US Dollar exchange rate over non-monetary assets (primarily Inventory, Intangibles, and PP&E). The taxes resulting from gains or losses over non-monetary assets are considered deferred taxes and are presented in the consolidated Cash Flow statement, under Deferred income tax and social contribution. Adjusted Net Income (loss) also excludes the net after-tax special items.
DEBT & LIABILITY MANAGEMENT
Embraer net debt without EVE declined to US$781m in 4Q23, compared to US$1,357m qoq and US$1,033m yoy. The significant positive free cash flow generated in the quarter helps explain the sequential improvement in the company’s net debt position, as explained below.
The average loan maturity increased to 4.6 years in 4Q23, compared to 3.4 years yoy. The term structure of loans was 96% in long-term contracts and only 4% in short-term ones. The cost of United States dollar-denominated loans was 6.33% p.a. in 4Q23, or the same as in 3Q23, while the cost of Brazilian real-denominated loans decreased to 7.11% p.a. in the quarter, compared to 10.85% in the previous one.
CAPEX
Net additions to total PP&E were US$87.3m in 4Q23, versus US$47.8m in 4Q22. Of the quarterly total, CAPEX amounted to US$59.6m, while additions of pool program spare parts reached US$30.3m, and were partially offset by US$2.6m of PP&E sales proceeds. The sequential increase in PP&E is related to growth in services training, maintenance and Executive Aviation. In 2023, the company invested a total of US$219.4m in net additions to PP&E and US$194.6m in R&D without EVE. In 3Q23, EVE development costs began to be capitalized as intangible assets as the program reached sufficient maturity.
WORKING CAPITAL
Work-in-progress inventory decreased US$417.1m qoq because of the greater number of 4Q23 deliveries, which was partially mitigated by growing contract liabilities (PDPs and deferred revenue), and supported solid cash flow generation towards year-end.
TOTAL BACKLOG
The company’s backlog rose by US$1.2bn yoy and reached a US$18.7bn total in 2023 – the highest number recorded over the past 6 years. Services & Support were the highlight with a US$3.1bn backlog, or US$400 m higher yoy and the highest level ever recorded. Meanwhile, Executive Aviation ended the year with a book-to-bill in excess of 1.3:1 and a US$4.3 bn backlog, or US$400 m higher yoy. In Defense & Security, South Korea was in the spotlight with the victory of the C-390 Millennium. Last, but not least, Commercial Aviation ended the year with a book-to-bill in excess of 1.1:1.
Embraer delivered 75 jets in 4Q23, with 49 executive jets (30 light and 19 medium), 25 commercial jets and 1 military C-390. In 2023, Embraer supplied 181 aircraft, an increase of 13% yoy when the company delivered 160 units. The company continues to face supply chain delays which have negatively impacted 2023 deliveries.
EXECUTIVE JETS
Executive Aviation delivered 30 light and 19 medium jets, totaling 49 aircraft in 4Q23 and 115 in 2023, an increase of 13% compared to the same period in 2022, when 102 jets were delivered.
The business unit continued its positive sales momentum with sustained demand across its entire product portfolio and strong customer acceptance in both retail and fleet markets. The Phenom 300 was the most delivered light jet for the 12th consecutive year and the most delivered twin-jet for the 4th consecutive year.
Embraer announced a Praetor 600, equipped with the capabilities to undertake a wide range of flight inspection tasks, was delivered to South Korea’s Flight Inspection Services Center. This is the first Praetor 600 in the country.
DEFENSE & SECURITY
In Asia, South Korea announced Embraer’s C-390 Millennium as the winner of the Large Transport Aircraft (LTA) II public tender to provide new military transport aircraft. The country is the C-390 Millennium’s 7th customer and the 1st in the region. The contract includes an undisclosed number of aircraft, as well as a services & support package that includes training, ground support equipment and spare parts.
In the Middle East, the MoU between Embraer and SAMI is geared towards expanding the operational footprint of both companies in the Kingdom of Saudi Arabia, with a focus on promoting the capabilities of the C-390 Millennium aircraft and delivering support to the kingdom’s Ministry of Defense. SAMI and Embraer will work to establish several capabilities in the country including maintenance, aircraft final assembly, mission system integration and training activities.
In Europe, Embraer and the Netherlands Industries for Defence & Security (NIDV) signed a Memorandum of Understanding (MoU) with the aim of jointly exploring opportunities in line with the Netherlands Defense Industry Strategy, with a primary focus on the C-390 Millennium and the A-29N Super Tucano.
Finally, in October, the 1st KC-390 Millennium of the Portuguese Air Force (FAP) entered service. The aircraft includes standard NATO (North Atlantic Treaty Organization) equipment, and since then it has demonstrated the same exceptional level of productivity as recorded by the Brazilian Air Force’s fleet.
COMMERCIAL AVIATION
Embraer delivered 25 commercial jets in 4Q23, and 64 aircraft in 2023, or 12% higher than in the previous year.
In North America, Porter Airlines exercised its purchase rights to place a firm order for 25 Embraer E195-E2 passenger jets, which added to its 50 existing firm orders. Porter will use the new aircraft to extend its award-winning service to destinations throughout the continent. The deal, valued at US$2.1 bn at list price, entered our backlog in 4Q23, and increased the airline’s firm orders with Embraer to 75 aircraft, with 25 purchase rights remaining.
In Asia, Embraer’s E190-E2 and E195-E2 attained type certification from the Civil Aviation Authority of Singapore (CAAS). The aircraft are the world’s quietest and most fuel-efficient single-aisle aircraft. Scoot, the low-cost subsidiary of Singapore Airlines, should begin to operate the E190-E2 in 2024.
Last, but not least, in Europe, the E195-E2 received certification for Steep Approach into London City Airport from EASA (European Aviation Safety Agency). This achievement is a significant development, which allows airlines to operate the E195-E2 at London City Airport (LCY), known for its challenging approach and short runway. Together with the E190-E2, which received Steep Approach certification in 2021, both members of the E2 family are now approved for operations from LCY.
SERVICES & SUPPORT
Services & Support reached a significant milestone in the Commercial Aviation segment in 4Q23 with the advancement of the program to convert passenger aircraft to freighters, which marked the beginning of a new phase with the unveiling of the new livery and the start of ground testing.
The business unit continued to accelerate its expansion and it has doubled the capacity for executive jet maintenance services in the United States. The expansion will support the continuous growth of its customer base through the addition of 3 Executive Aviation Maintenance, Repair, and Overhaul (MRO) facilities in Dallas Love Field, TX, Cleveland, OH, and Sanford, FL.
Embraer-CAE Training Services (ECTS) announced a strategic expansion of its training capacity with the introduction of 2 Phenom 300 flight simulators. The main objective of our joint venture remains to meet the growing demand for executive jet training in the North American and European markets, and reinforces our commitment to our Executive Aviation customers.
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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
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