Excellent 2016 for MBDA

In June Italy and France agreed to pursue the joint development of the Aster 30 Block 1NT missile. Here MQST3 fires the Aster 30 SAMPT at the French DGA procurement agency’s missile testing centre in Biscarrosse, France (Photo credit: MBDA/Michel Hans)

2016 was an excellent year.” So began Antoine Bouvier’s remarks to the media as he unveiled MBDA’s results for 2016: a turnover of €3bn which he expects to be able to boost to €4bn by 2020.

The European missile manufacturer’s CEO said his group’s aim was to capture 25% of the global market, thereby keeping abreast of its two major U.S. competitors, Raytheon and Lockheed-Martin which each have around 25% of the market. However, he pointed out that the U.S. market alone accounts for 40% of the market “and it’s extremely difficult to break into it as it is practically closed for us,” just like Russia and China, both considered out of bounds for non-domestic defence suppliers.

In order to be able to reach the objective of a €4bn turnover by 2020 and be able to fulfill its orders and continue with vital R&D, MBDA is hiring in large numbers, and not only young graduates but also “more experienced” people. Six hundred new employees joined the group every year in 2013, 2014 and 2015. This number jumped to 1,000 last year and will be “over a thousand” in 2017, of whom about 500 in France alone. About 20% of these new employees are women “because that’s the percentage of women in engineering schools and we have no difficulties in attaining this figure,” Bouvier told FOB. Choosing his

Enforcer is a precision, lightweight compact missile for use by infantry and special forces for combatting both stationary and moving targets. The development prototype was successfully tested in Germany last November. Its compatibility with the German Army’s Wirkmittel 90 munition system supports the Bundeswehr’s standardisation approach with regard to light and shoulder-fired weapons. MBDA plans to begin qualification of the weapon over the next few years. (Image: MBDA Deutschland/Bernard Huber)

words carefully, he stated that it was important that these new employees in France, Germany, Italy, Spain and the United Kingdom, the countries MBDA considers as its domestic markets, “not only understand but have completely integrated the fact that we ensure sovereign access to critical military capacities.” In other words, and to be a bit blunt, they have to digest the fact that although they are working for a company that wins prizes for being a good employer,   the end results of the extremely high-tech products they are working on are death, damage and destruction.

These domestic markets were responsible for €3.2bn of the €4.7bn-worth of orders the group took in 2016. Of the domestic orders, France accounted for €1.3bn and the UK €1.6bn “which is absolutely exceptional”, Bouvier remarked. Part of the reason for this is the drop in the value of the pound sterling following the Brexit vote which “has had a beneficial effect because it makes our UK products more competitve against U.S. products.” Export orders include the equipment and missiles for the 36 Rafales bought by India last September. They do not include the major contracts for MCDS coastal defence systems and for arming Fincantieri’s combat ships for Qatar because even though these contracts were signed in 2016 Qatar is seeking financing schemes so these contracts will be recorded in 2017’s accounts. Bouvier noted that the drop in the price of petrol has led “clients in the Middle East to seek financing schemes” but he stressed that “these are put into place by the clients and not by MBDA. It is out of the question for MBDA to take risks.

Bouvier explained that in mid-2016 a decision was taken to “enlarge the integrated perimeter of MBDA” to include Germany from 1st January 2017. Until then MBDA Germany had been managed as a subsidiary rather than as an integral part of the group. The decision was taken following publication of Germany’s Defence White Paper in which it outlines the necessity of further integration of Europe’s defence industry.