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COBHAM – EXPLORING TECHNOLOGY OPPORTUNITIES

COBHAM – EXPLORING TECHNOLOGY OPPORTUNITIES
By Julian Nettlefold

BATTLESPACE Editor Julian Nettlefold meets Cobham Plc CEO and SBAC Chairman Allan Cook CBE

Allan Cook has had a long and distinguished career in the defence and aerospace industry. He joined Cobham in 2000 as CEO and was appointed to the Board in 2001. He joined the Group from BAE Systems where he was group managing director of programmes and managing director of Eurofighter. He was formerly group managing director of GEC-Marconi Avionics and chief executive of Hughes Aircraft (Europe). He is also President of The Society of British Aerospace Companies Ltd, President Elect of ASD, Chair of the National Skills Academy for Manufacturing, a member of the Apprenticeship Ambassadors Network (AAN), board member of the Industrial Forum and committee member of the UK Ministerial Advisory Group for Manufacturing.

“What persuaded you to take up the helm as CEO of Cobham? The Editor asked.

“When I was approached to join Cobham the decision was very simple – it gave me the opportunity to become a main board director of a fast growing major defence and aerospace Plc with a great heritage and fantastic products and services. It was a matter of days between the initial approach and my acceptance and it’s a remarkable fact that Cobham has only had four Chief Executives since the Company was founded nearly 75 years ago.”

“Why did you instigate a strategic review in 2005? ?”

“The Company has always returned an excellent return for its shareholders but what I saw was a need to slim down and refine our Operating Divisions and structure. In 2005 we embarked on a strategic review which resulted in a refocusing of our portfolio and the creation of six divisions. The fluid and air and countermeasures businesses were sold as a consequence of this review.”

“What else did your strategic review conclude?”

“The strategic review announced in September 2005 concluded that Cobham should focus more rigorously on areas where it could exploit and enhance its technological leadership in high-growth segments of the aerospace and defence market. This strategy has helped Cobham to consolidate and improve its market leadership, allow for an increase in R&D investment, reinforce the Group’s upper quartile aerospace and defence margins and increase the organic profit growth through market cycles. So 2005 was a key year and provided the road map for the future development of the company.”

The Group set out a plan which included a drive for increased collaboration across and within the divisions, a flatter simplified divisional structure and a new Chief Operating Officer function with responsibility for driving and co-ordinating efficiency improvements in procurement, integration, programme management and working capital. All six divisional heads were appointed from within the Group.

“Did this strategy boost sales and profitability?”

“Yes, Cobham has grown in turnover from £450 million when I arrived to some £1.3 billion today with a Market Cap of £2.4 billion. The strategy had an immediate impact which was reflected in our Preliminary Results for the year ended 31 December 2005 announced in March 2006. We now have partners and customers in more than 100 countries and 12,000 highly skilled people operating in five continents. The implementation of our strategy resulted in the admission to the FTSE 100 in March 2008.”

“2005 was a successful year for Cobham with double-digit growth in revenue, trading profit (formerly underlying operating profit) and earnings per share and an improvement in cash conversion to almost 100%. Across the Group contracts were won that were significant both in size and market position, and new order intake increased by 24%. The order book stood at £1.8 billion including the new Coastwatch contract in Australia. Implementation of this strategy continued to proceed very well with good progress in portfolio reshaping and value already being deriv

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