MBDA Italia: a key asset for the group growth
On March 27 2023, MBDA Italia organised its annual press conference, during which Lorenzo Mariani, the NATCO Managing Director and the Group Executive Director Sales and Business Development, discussed the 2022 results and the perspectives for the current year.
While numbers at Group level were already discussed two weeks ago in Paris by Eric Béranger, MBDA Chief Operating Officer, Lorenzo Mariani detailed the achievements of the Italian branch of the Group.
Compared to 2020, orders intake have nearly trebled, shifting from 366 to 629 million Euro in 2021 to reach 1,179 million in 2022. This is mostly due to the domestic and in-cooperation achievements, in particular the OCCAR-assigned production contract for the Italian MoD’s CAMM ER and the two ground based air defence (GBAD) missile systems which use the missile, the Army Grifo and Air Force MAADS (Medium Advanced Air Defence System) that will replace legacy Skyguard-based SAM batteries. The order backlog remained nearly constant at slightly more than 3 billion, intakes being balanced by the considerable number of deliveries linked to previous programmes, 3,187 millions being the current one compared to 3,033 millions of last year. Mariani highlighted that he considers directly connected to the Ukrainian conflict only one contract, that related to the procurement of CAMM missiles by Poland, while the situation is expected to change in 2023.
Revenues followed the orders trend, and in 2022 they exceeded 1 billion, 1,025 million to be precise, compared to 685 in 2021 and 371 in 2020. EBIT more than doubled compared to last year, reaching 75 million versus 35 million. As for profitability, the Italian NATCO aims at reaching the same level of the MBDA Group in the coming years.
He then considered the manpower issue. This is also a figure that is constantly increasing, with nearly 100 net intake every single year in the last two years, MBDA Italia headcount overcoming the 1,700 mark at the end of 2022. “In 2023 we want to enlist 250 people, with the aim of increasing our manpower by over 200 people,” Mariani stated, underlining that he considers that MBDA Italia should reach the 2,000 manpower target as soon as possible.
Detailing the Group orders, Mariani underlined how 2022 was marked by a nearly two third coming from export versus one third from domestic markets, highlighting however that even the domestic share has increased in absolute terms, as it used to be around 2 billion. The Italian contribution has increased considerably, France remaining around a 1 billion orders, with the UK marking a slight decrease. In the export domain, the UAE has closed Qatar as the main backlog customer for MBDA.
“For the first time MBDA Italy provided a clear contribution to the Group numbers,” Mariani stated, confirming that the trend should continue in 2023.
Coastal batteries were delivered to Qatar in time to operate during the FIFA World Cup, the first tranche of Marte ER missile also being delivered for both coastal- and helicopter-based applications. Moreover two corvettes and one offshore patrol vessels armed with Aster, Exocet and VL MICa and again Exocet were also delivered.
Looking to domestic contracts, MBDA Italia has delivered the SAAM ESD PPA missile systems based on the Aster family for the Italian Navy PPAs and is working on all the activities to conduct the first PPA Light Plus equipped with the system toward the entry into service.
MBDA Italia is part of the team working at the SAMP/T NG more capable GBAD missile, and according to Mariani the development is in line with the contract, the same being true for the MAADS, as the latter is approaching the last system qualification firing, to be conducted soon. To this end, as MBDA stressed during a visit to its La Spezia and Aulla facilities, the company is improving its missile production capacity in order to cope with an increased production pace, while ensuring support to ground- and naval-based systems using the Aster munition. Last but not least, the Teseo Mk 2/E development is proceeding as scheduled, the AESA seeker being co-developed by MBDA and Leonardo. In the MRO and upgrade fields, MBDA Italia has ensured the support for the Italian Armed Forces’ Aster-equipped air defence systems with satisfaction of the customers and the mid-life refurbishment of Italian Air Force Storm Shadows, which deliveries have been ramped up on demand and with appreciation of the Italian Air Force, surpassing the contracted scheduled numbers, according to Mariani.
Lorenzo Mariani aims at increasing the domestic market that in 2022 accounted for 820 million orders, main programmes being the aforementioned ones including CAMM ER EMADS, Teseo Mk2/E, Aster in a new telemetry version, as well as the overhaul of the Italian Navy’s Marte Mk 2/S helicopter-launched missile and the first technology-development contracts for the GCAP (Global Combat Air Programme) between UK, Italy and Japan, the latter awarded as second tier supplier in the last quarter 2022. The remaining orders to reach the 1,179 million figure are directly or indirectly obtained export contracts, as for the case of other MBDA NATCOs successes such as the UAE Rafale armament package with Meteor missiles, these including key components produced by MBDA Italia.
Commenting the mega contract in different tranches for new Aster munitions signed by Italy and France in early 2023, and the SAMP/T NG production for France and Italy, he expects to sign the contract for the Italian Air Force batteries soon. Mariani also mentioned additional production lots of the CAMM ER munitions and related systems for both the Italian Army and Air Force. The framework systems and missiles production contract for both services worth around 1 billion has been signed; the first of two tranche (worth 600 million) were already activated, and will be followed by the second ones by late 2023/early 2024.
A new programme was officially announced, although hints were provided earlier by the customer, the Italian Army; dubbed for the time being VSHORAD NG, for Next Generation, we leave this topic to a specific article.
Mariani also highlighted the Mid-Life Update (MLU) of the Horizon class destroyers and namely for MBDA the MLU for onboard PAAMS air defence systems. Italy and France have finally reached an agreement regarding the configuration of the combat system and in particular France has accepted the Leonardo and Thales Nederland radar package. As a consequence, the global MLU contract is expected in 2023, EDR On-Line understood in the first half of the year, with tranches to be activated in different moments depending on customers’ requirements, in the specific case with Italy coming first.
An important achievement obtained by MBDA days before the Rome press conference is the one regarding the missile defence against hypersonic threats. Following last year award by the European Union under the EDF (European Defence Fund) umbrella of the HYDEF (European Hypersonic Defence Interceptor) programme to a competing industrial team led by Spanish group Sener, and the following strong campaign in support of the renewed MBDA-led industrial team proposal for an alternative solution, “the European Commission announced on 24 March that it approved the launch of a second programme on the same topic, led by MBDA, of comparable importance, which we aim to be awarded under the same EDF umbrella in the incoming months, and assigned in terms of procurement management to OCCAR as already done for the other programmes,” Mariani stated. Looking the future, he hopes that the two programme will finally merge as the required funding for the defence against hypersonic threats is huge and cannot be economically afforded by European countries following two separate developments.
MBDA Italia will also gain from the Meteor missile programme in terms of both mid-life update of the in-service munitions and procurement of new tranches and export orders. “Speaking about the MLU, the proposal currently being examined is a study that does not involve high-risk issues but rather important upgrading activities for the seeker and the propulsion. We are looking for additional 18 months on top of current timeline, in order to reach a development contract award by the end of 2024, this in order to reach an in-service date in 2030. On the other side, additional orders are expected by the programme’s six nations with new tranches under discussions”.
He expects further contracts coming from the GCAP programme, which current phase is expected to last one-two more years to define the system and the specific technological streams to be exploited.
Mariani also gave a hint on this year export campaigns where the MAADS and the SAMP/T NG are encountering increased interest by European countries, especially in the east due to the geopolitical situation, while the CAMM ER GBAD is actively promoted in the Asian area and in particular the Middle East. MBDA is also following the weapon system campaign for the Eurofighter in Kuwait and others being promoted by Leonardo, alongside the proposal of the Marte ER missile for NH90 and Sea King operators in Europe and Asia. Finally regarding naval platforms, MBDA is involved with its Albatros NG/CAMM ER solution in Fincantieri-lead campaigns in Europe as well as in various Asian countries, including already covered customers as a win-win Italian package, and is also proposing the Marte ER on naval platforms in North Africa and Middle East.
