BAE Systems Investor Brief - May 2007
04 Jun 2007
In This Month’s Brief:
GENERAL NEWS
- Agreement to sell Inertial Products business
- Two systems designated US Safety Act worthy
- MBDA signs accord to buy Bayern-Chemie / Protac
- Trade union learning centre
MAJOR PROGRAMMES UPDATES
- F-35 Lightning II update
- Typhoon deploys to Spain
- Third Meteor key milestone
- Major step towards PAAMS(E) qualification
- Type 45 programme
CONTRACT AWARDS THIS MONTH
- Engineering and technical services contract
- Software development contract
- Advanced Gun System (AGS) extension
- BvS10 Viking armored all-terrain vehicles
- Order for Bradley advanced training systems
- AP-3C Orion mid-life upgrade contract
- Harrier component support package
- Spanish contract
GENERAL NEWS
Agreement to sell Inertial Products business
Electronics & Integrated Solutions (E&IS) has signed an agreement with J. F. Lehman & Co. to sell its Inertial Products business, which supplies military and commercial customers inertial sensors and measurement units. It has approximately 810 employees at sites in Cheshire, Connecticut; Heath, Ohio; Wayne, New Jersey; and Plymouth, UK.
The transaction, for consideration of US$140m cash subject to customary post-closing adjustments, is expected to occur within approximately 60 days following receipt of regulatory approvals.
Two systems designated US Safety Act worthy
First Responder Interoperable Communications (First InterCommTM) and JETEYETM were designated Qualified Anti-Terrorism Technologies (QATTs) by the US Department of Homeland Security. The designations are provided under the US Safety Act to ensure liability issues don’t dissuade manufacturers from developing and delivering technologies that can reduce the risks of terrorism.
MBDA signs accord to buy Bayern-Chemie / Protac
MBDA has signed an agreement with EADS and Thales to purchase from them their 50% shareholdings in the German rocket motor company Bayern-Chemie / Protac. The agreement is subject to various competition regulation approvals. After clearance by the authorities, Bayern-Chemie / Protac will become a subsidiary of MBDA Germany. It employees nearly 300 people at sites in Aschau am Inn (east of Munich) and La Ferté St Aubin (south of Paris).
This is a decisive step in consolidating the European missile systems industry and will allow MBDA to maintain a unique know-how in missile propulsion, in particular for the Meteor ramjet.
Trade union learning centre
The Secretary of State for Work and Pensions John Hutton, MP for Barrow in Furness, has formally opened BAE Systems’ first dedicated trade union learning centre at Submarine Solutions’ Barrow site. The centre offers employees the opportunity to gain computer skills and literacy and numeracy ‘skills for life’ under the trade union learning project.
MAJOR PROGRAMMES UPDATES
F-35 Lightning II update
Good progress is being made across the F-35 Lightning II programme. BAE Systems has now delivered the aft fuselage for the first short take off and vertical landing (STOVL) variant. The vertical and horizontal tails are due for delivery in the coming weeks.
The flight test programme for AA-1, the first conventional take off and landing (CTOL) is progressing at pace. The aircraft is performing well and recently completed 2 sorties in one day with a 1 hour 30 mins turn-around - an exceptional achievement at this stage of the development programme. Flight 19 saw the aircraft fly at 35,000 ft for the first time.
Typhoon deploys to Spain
No. 3 (F) Squadron based at RAF Coningsby, UK has been on detachment to the Spanish Air Force base at Moron in Spain. This is the first overseas detachment undertaken by an operational RAF Typhoon Squadron and was a notable success for the RAF proving the deployability of Typhoon.
First e-scan antenna flight for Typhoon
Typhoon has demonstrated its potential for the introduction of new capabilities with the first flight of a Eurofighter aircraft carrying an electronically scanning radar antenna, using Development Aircraft Five (DA5) on 8 May flying from EADS Military Air Systems’ Manching facility, Germany. This feature could be built into future Tranche 3 aircraft or as a retrofit in Tranche 2 aircraft.
While maintaining the excellent performance features of the CAPTOR radar, the new antenna provides a significant reduction in operating costs as well as certain performance enhancements. Also it can be readily fitted as a replacement for the current antenna with no significant aircraft modification.
Third Meteor key milestone
Another significant step was achieved on this beyond-visual-range air-to-air missile programme, when the Meteor Integrated Joint Project Office (IJPO), which represents the six Partner Nations, formally accepted Key Milestone (KMS) 2 on 20 April 2007.
The KMSs address what the Partner Nations believe to be the major areas of technical risk and KMS 2 is the third of the four Key Milestones to have been accepted, with KMS 1 and 3 accepted in last December and January respectively. Key Milestone 4 was delivered to the customer ahead of schedule on 5 March.
Major step towards PAAMS(E) qualification
The final system qualification firing of the Aster PAAMS(E) (Principal Anti-Air Missile System(E)) naval air defence weapon, which will equip French and Italian Horizon frigates, was completed on 14 May, at the CELM test range off the French Mediterranean coast. The test fulfilled all the objectives set and, as such, was confirmed to be a complete success.
Type 45 programme
The rapid pace of progress on the Type 45 programme is continuing following the official steel cutting ceremony for the fifth ship, Defender, by Chief of Materiel (Fleet), Vice Admiral Trevor Soar on April 30.
Admiral Soar was also given a tour of the preparation and fabrication facility at Govan, which has benefited from a £2m investment programme to create one of the foremost steel centres in Europe and deliver 40% productivity improvements, as part of his comprehensive update on the Type 45 programme.
CONTRACT AWARDS THIS MONTH
Engineering and technical services contract
Technology Solutions & Services has won a US$26.1 million contract modification from the U.S. Navy to continue to provide engineering and technical services in support of identification system programs which today’s military forces rely on to distinguish friendly forces from enemy forces.
The work, to be conducted at the Naval Air Warfare-Aircraft Division, Patuxent Naval Air Station in Maryland, supplements a previously awarded cost-plus-fixed fee contract and is to be completed by April 2008.
Software development contract
BAE Systems Information Technology won a US$49.9 million contract from the Air Force Research Laboratory to provide life-cycle software development engineering for the Department of Defense Intelligence Information Systems (DoDIIS) and the U.S. intelligence community worldwide.
Advanced Gun System (AGS) extension
On 24 April, BAE Systems was awarded the AGS detail design and integration extension contract modification for US$108.9m. This cost-plus-award-fee modification is to complete the design, development and integration, and transition to production activities for the AGS in support of the DDG 1000 Program.
BvS10 Viking armored all-terrain vehicles
The UK Ministry of Defence has awarded BAE Systems a contract for an additional 21 BvS10 Viking armored all-terrain vehicles. The UK's Royal Marine Commandos took delivery of an earlier batch of 108 in July 2003. The BAE Systems Hägglunds armored all-terrain vehicles will be used for transporting equipment for the Watchkeeper unmanned aerial vehicle.
Production deliveries will commence in the second half of 2008 with prototype vehicles being delivered at the end of 2007. The BvS10 Viking is credited by the UK Ministry of Defence (UK MoD) with saving the lives of UK troops on operations in Afghanistan since its deployment there last year.
Order for Bradley advanced training systems
BAE Systems received a delivery order worth up to US$12.6m for 17 Bradley Advanced Training Systems (BATS) from the US Army Program Executive Office of Simulation, Training and Instrumentation. The contract calls for BAE Systems to produce and install the BATS devices at US Army bases. The work will be performed at BAE Systems' Orlando facility with delivery set for December 2007 through August 2008.
AP-3C Orion mid-life upgrade contract
BAE Systems Australia has signed a contract with the Royal Australian Air Force (RAAF) for the AP-3C Electronic Support Measures (ESM) System Mid-Life Upgrade. The ESM system is an integral part of the AP-3C’s electronic surveillance sensor suite.
Harrier component support package
BAE Systems has been awarded a Harrier Component Support Package (HCSP) contract by the UK MoD valued at more than £34m to provide supply chain support for the support of GR9 avionics equipment until 2014.
The contract provides the customer with a service for the support of seven major pieces of avionics equipment and the continued supply of over 4,000 other components at a reduced cost. The BAE Systems team at RAF Cottesmore, UK will expand to cope with the increased activity. The contract award is a significant milestone for Harrier in moving towards the innovative thorough-life Harrier Platform Availability Contract (HPAC).
Spanish contract
Submarine Solutions has won a highly significant contract with Navantia SA of Spain to supply pressure hull domes for the S80 submarines being built for the Spanish Navy. This is the first submarine export order in more than 30 years for Barrow and was won in the face of international competition. Submarine Solutions will fabricate and assemble fore and aft pressure hull domes for four diesel-electric S80 submarines.
