Mayer asks for more export support

Yesterday we reported on the part of Nexter System CEO Stéphane Mayer’s hearing by the members of the French National Assembly’s national defence and armed forces commission concerning the alliance between his company and Germany’s Krauss Maffei Wegmann (KMW). Today we will examine his declarations on the financial health of the company and its outlook.

First however, we noted Mayer’s discreet call for greater interest and active support from the government where exports in the land defence sector are concerned. Mayer said he regretted that “contracts in land defence, doubtless less visible, seem to be a lesser priority than export contracts in the aeronautical or naval sectors.” Conceding that the stakes were different, he nevertheless reminded the parliamentarians that “the need for support is just as necessary where intergovernmental relations are concerned when what is at stake is selling strategic land defence equipment to foreign countries.

Mayer said he realised that export results “were disappointing to many observers, including inside the company itself,” even if “we are still just as active in this field.” He justified the results, explaining that “we answer a great many calls to tender and invest heavily in demonstrations and building prototypes.

His teams are currently concentrating on two contracts with India. The first, worth €1bn, concerns a contract for 1,400 towed 155mm guns for which Nexter submitted its best and final offer on 15 February with the Trajan.

The Trajan

The Trajan

There are just two competitors left for this contract; the winner should be announced at the end of this year. The second contract is for 800 truck-mounted guns. Nexter will be submitting an offer with the Caesar in about 2018.

Even if the company’s financial results for 2015 have not officially been approved, Mayer revealed that the order book at the end of 2015 was worth a little over €2bn, or €5bn if one includes conditional tranches. This “represents about five years worth of activity, given our current turnover,” he said. The latter amounts to €1.07bn, slightly higher than the €1.04bn earned in 2014.

The French Army’s Scorpion programme alone represents almost half the €1bn order book, with 200 Leclerc main battle tanks to renovate, more than 1,600 Griffons and 248 Jaguars to build. Other orders include: contracts with the United Kingdom which has bought “a hundred million euros” worth of 40mm guns developed together “with British Aerospace”, the sale of €300m worth of munitions and Aravis armoured vehicles sold to Gabon.

The Aravis

The Aravis

In the repair and maintenance sector, Mayer was proud to confirm that Nexter Systems meets its objective of “delivering any spare part less than five days after it was ordered” enabling a “performance rate of our clients which attains 90% in France and 95% on foreign theatres of operation.”

As for munitions (see FOB articles dated 21, 22 and 23 December 2015), Nexter now ranks third in Europe behind Germany’s Rheinmetall and Norway’s Nammo. “In this sector we have a very good export dynamic winning a lot of orders,” Mayer remarked.