February 27, 2013
EADS defense division Cassidian has seen its earnings fall nearly 60% in 2012 in the face of the downturn in defense spending.
While Cassidian’s declines were offset by a successful year for the Airbus Commercial and Military businesses, its earnings fell to €142 million ($185 million) in 2012, compared to €331 million in 2011. Revenues also dipped slightly by 1% to €5.74 billion, although the company’s order intake rose to €5 billion in 2012 compared to €4.2 billion in 2011, according to EADS’ annual results, revealed in Berlin Feb. 27.
“Despite the overall defense environment, defense revenues were flat compared to 2011,” the company said. Defense revenues from across EADS increased only slightly over 2011, from €11.56 billion to €11.6 billion. The rise in the company’s order intake was thanks to the Eurofighter Typhoon and its missile export business, while the Omani order for 12 Typhoons “is yet to be recorded” in the company’s order book, it says.
EADS CEO Tom Enders told journalists that the stability of the company’s defense revenues between 2010 and 2012 were “remarkable” and attributable to a good mix of products, but work had to continue on the restructuring of Cassidian and significant personnel reductions had been made to reduce costs, which would make Cassidian a “leaner, more agile and more profitable division going forward.”
Cassidian suffered €198 million of charges booked in the last quarter of 2012. Of that total, €98 million came from the division’s restructuring costs — part of the company’s “Transformation Plus” initiative aimed at reducing costs and improving competitiveness in the changing markets — while €100 million was paid as the company carried out portfolio de-risking for its secure systems and solutions business.
“On an underlying basis, the EBIT before one-off was lower as expected due to investments in globalization and transformation despite lower R&D expenses,” Cassidian said.
For rotary-wing division Eurocopter, earnings increased 20% to €311 million, the second-best performance in the EADS group behind Airbus. Revenues were up 16% to €6.26 billion, driven mainly by increased MRO activities through the Vector Aerospace business purchased by Eurocopter in June 2011, and also by higher revenues from the sale of larger helicopter models such as the NH90 and the EC225/725 Super Puma models. The revenue boost comes despite the fact that deliveries were down slightly from 2011, with 475 aircraft sold in 2012 compared with 503 in 2011.
The company suffered a €100 million charge in the fourth quarter because of ongoing renegotiations over contracts for the NH90 and Tiger helicopters for the German and other European governments.
The company says it continues to work in close collaboration with the investigating authorities on further identifying and explaining the root cause of EC225 incidents, while the root cause of the recent AS350 B3e Ecureuil incidents has been identified and a program is in place to implement a retrofit approved by EASA.