BAE Systems Investor Brief - July 2004
02 Aug 04
In this month's brief:
- BAE SYSTEMS TO ACQUIRE TWO NEW BUSINESSES
- AVIONICS SCOOPS INNOVATION AND TECHNOLOGY AWARD
- EXPORT FINANCE WINS TRADE MAGAZINE AWARD
- MANUFACTURING EXCELLENCE AWARD
- CAPABILITY GREEN OPENS FOR BUSINESS
- TYPHOON UPDATE
- REDUCTION IN NIMROD MRA4 REQUIREMENT
- CS&S AUSTRALIA SIGNS MOA
- TYPE 45 PROGRAMME
- SEA TRIALS FOR ROMANIAN FRIGATE UNDERWAY
- BULWARK JOINS THE FLEET
- FRAMEWORK PARTNERING AGREEMENT ENDORSEMENT BY THE MOD
BAE SYSTEMS CONTRACT AWARDS THIS MONTH
- $27M ARMY CONTRACT FOR INTELLIGENCE SYSTEMS
- $12.9M CONTRACT FOR US NAVY WITH RADIO COUNTERMEASURE SETS
- LINK 16 TERMINALS FOR U.S. AND ALLIED AIRCRAFT
- TORNADO SERVICING CONTRACT EXTENDED
- HARRIER SUPPORT CONTRACT WINS
- UWS WIN STING RAY CONTRACT FOR ROMANIA
- AMS TO SUPPLY SONAR RANGE PREDICTION TOOL TO SWEDISH NAVY
- AMS RECEIVES NEW ITALIAN NAVY CONTRACTS
- ASRAAM EXPORT SUCCESSES
GENERAL NEWS
BAE SYSTEMS to acquire two new businesses
BAE Systems has reached a definitive agreement to acquire Boeing’s Commercial Electronics unit, a developer and producer of avionics products and systems for commercial aircraft. The Commercial Electronics unit, which employs about 800 people and had 2003 sales of about $170 million, operates facilities in Irving, Texas, and Everett, Wash., and also maintains equipment service centers in London and Singapore. The Commercial Electronics business will become part of the Platform Solutions Sector.
BAE Systems has also reached a definitive agreement to acquire Practical Imagineering, Inc. Practical Imagineering (PI), a privately held company based in Reston, Va., focuses on signal processing systems and software development for U.S. Government defense and intelligence agencies. The 10-year-old company employs more than 30 engineers and scientists who design and build custom Digital Signal Processing (DSP) algorithms, software and hardware, and provide high-end support technology to DSP projects.
Avionics scoops Innovation and Technology award
Avionics in Edinburgh has scooped the Innovation and Technology Award in the Enterprising Scotland Business Awards for its FOTAR laser alignment innovation.
Export Finance wins Trade Magazine award
The financing of the Romanian Frigate Phase 1 programme has been awarded Trade Finance magazine’s prestigious Deal of the Year Award for 2003. The Award was shared between the participating banks, ABN AMRO (The Netherlands), Deutsche Bank (Germany) and Alpha Bank (Greece) and BAE Systems.
Manufacturing Excellence Award
Submarines' Fabrication Department has won a national award for Process Innovation in the Institution of Mechanical Engineers' (IMechE) Manufacturing Excellence Awards. The department, which has been developed into a Submarine Centre of Excellence through investment in new equipment and processes, beat strong competition from companies such as Vauxhall Motors and Corus.
Capability Green opens for business
The first Electronic Warfare (EW) employees arrived at their new offices in Capability Green, near Luton on Monday 12 July. By the middle of August over 900 employees will have moved from Stanmore and Milton Keynes.
The new location provides the EW sector of Avionics Group with a more integrated and efficient working environment, together with state of the art laboratory facilities, giving greater flexibility to accommodate future products and expand its capabilities.
MAJOR PROGRAMMES UPDATES.
Typhoon Update
The evaluation of Typhoon by Singapore was completed in mid-July. Carrying on the Typhoon Contractor Support Service (‘Case White’) concept of partnered operations, the RAF undertook the deployment of two aircraft to Singapore, handing over to BAE Systems for the evaluation itself.
Reduction in Nimrod MRA4 Requirement
The Secretary of State for Defence, in his Defence Spending Review statement of 21 July, stated that the UK's future maritime reconnaissance needs could be met by a fleet of around 12 Nimrod MRA4 aircraft, "subject to industry demonstrating satisfactory performance at acceptable prices". This represents a reduction in the previous requirement for 18 aircraft, as announced in February 2002. First flight of the MRA4 is expected within the next few weeks.
CS&S Australia signs MOA
The Electronic Warfare Systems group within Force Awareness and Protection has just signed a Memorandum of Agreement with BAE Systems North America’s Integrated Electronic Warfare Systems (IEWS) which positions CS&S Australia to act as the principal electronic warfare workshare partner for JSF in Australia.
Under the agreement CS&S Australia would provide complex electronic components, printed wiring boards and assemblies and cable assemblies in the early phases of the program.
Type 45 Programme
A multi-million pound milestone has recently been achieved at the Scotstoun yard on Type 45 01 via the successful completion of all hotwork and tank testing in the machinery space units.
Also the production team will now commence build of Type 45 02 in August, 2004.
Sea trials for Romanian frigate underway
Sea trials for the Regele Ferdinand, the ex Royal Navy Type 22 frigate, are currently taking place in Portsmouth. Regele Ferdinand is due to be handed over to the Romania Navy in September, followed by the second frigate, the Regina Maria next year.
Bulwark joins the Fleet
HMS Bulwark, the second Landing Platform Dock assault ship, has been accepted by the Royal Navy seven weeks ahead of its revised schedule. During a hand-over ceremony at Devonport Dockyard on Monday 12 July the Defence Procurement Agency's LPD Integrated Project Team leader said that the ship had set the standard for future contracts in terms of completion and trials achievement.
Framework Partnering Agreement endorsement by the MoD
At a recent briefing, Air Commodore Tim Howson, Director of the Munitions Corporate Business Unit (MCBU) of the UK MoD, described the Framework Partnering Agreement (FPA) with CS&S RO Defence as one of the major partnering agreements in action today between the MoD and Industry. The FPA has demonstrated real value for money, with gainshare savings by the end of 2004 estimated to be over £18m - £4m ahead of target.
BAE SYSTEMS CONTRACT AWARDS THIS MONTH
$27m Army contract for Intelligence Systems
Information & Electronic Warfare Systems (IEWS) has received a $27 million contract from the Department of Defense to create a tactical signals payload system for the U.S. Army that helps the soldier see and understand the enemy.
Designed for the Army’s tactical unmanned aerial vehicles, the subsystem’s intelligence payload collects and processes radio frequency energy. The data is then displayed on the payload operator’s workstation in a ground processing facility.
$12.9m contract for US Navy with Radio Countermeasure Sets
Information & Electronic Warfare Systems (IEWS) was also awarded a $12.9 million contract to supply the U.S. Navy with up to 57 radio countermeasure sets.
The USQ-113 countermeasure sets provide the communications and jamming component for the EA-6B Prowler aircraft. The system detects and jams hostile communication systems.
Link 16 terminals for U.S. and Allied Aircraft
As part of a $48.3 million contract, BAE Systems CNIR will provide Link 16 for the Multifunctional Information Distribution System (MIDS) Low Volume Terminals to the U.S. Navy Space and Naval Warfare Systems Command (SPAWAR) in San Diego, CA.
The contract was awarded to Data Link Solutions, a BAE Systems and Rockwell Collins joint venture. The MIDS terminals will provide secure, high capacity, jam resistant voice and data communications capabilities for U.S. and allied forces. These terminals will be installed on F/A-18, F-16, EA-6B, MH-60, and B-2 Aircraft in the US and aboard a variety of aircraft in Switzerland, Poland, Belgium, and Taiwan.
Tornado Servicing Contract extended
A key agreement to extend Tornado work at the Programmed Depot Maintenance facility at Alsalam Aircraft Company in Riyadh has been signed in Saudi Arabia. The initial agreement is to the end of the year with options on extensions and the possibility of other work to be carried out at Alsalam.
Harrier support contract wins
The Harrier team has recently been awarded three contracts with a total approximate value of £30m in connection with providing spares, repairs, maintenance and supply chain management for the Harrier.
UWS win Sting Ray contract for Romania
Underwater Systems has been awarded the contract to supply 18 Sting Ray lightweight anti-submarine torpedoes as part of the upgrade and regeneration of two ex-Royal Navy Type 22 Frigates being transferred to Romania under a government level agreement.
The contract worth £3.5 million includes the full refurbishment and testing of the weapons as well as training and Flight In Air Materials (FIAMs).
INTERNATIONAL PARTNERSHIPS
AMS to supply Sonar Range Prediction Tool to Swedish Navy
AMS has been awarded a contract to supply the Swedish navy with its Sonar Range Prediction capability. AMS will be delivering NECTA, to satisfy the Hydrographic Information Sound Propagation Programme (HISPP). The system will be installed on the first platform at the end of 2004.
AMS receives New Italian Navy Contracts
In June, AMS received an order for the supply of spare parts and logistic support to the Italian Navy, worth over €1m. In addition, a contract valued at €1.8m was received from the navy for the supply of technical/logistic support for the components of the naval units’ combat system at the Augusta Arsenal. A consortium comprising Elettronica, Galileo and Marconi Mobile, with AMS as prime contractor, will carry this out.
ASRAAM export successes
An ASRAAM (Advanced Short Range Air to Air Missile) support contract for the Australian customer has been signed. This will provide an in-country deep maintenance facility and software support facility, run for MBDA by BAE Systems Australia.
Furthermore, a contract to integrate ASRAAM onto the F/A 18 for the Canadian Air Force was signed on 14th July. A supply contract from the Canadians is expected by early 2005.
