Two weeks after the Group press conference, where Eric Béranger, the MBDA CEO, illustrated the 2021 results and his view on the future in these difficult moments, it was the turn of the Italian branch of the company to detail the 2021 activities and the road ahead.
Lorenzo Mariani, Managing Director of MBDA Italy and Executive Group Director Sales and Business Development, started from numbers. For the first time split numbers concerning MBDA Italy were provided, results showing the doubling of both orders intake and revenues, respectively 629 and 685 million Euro, compared to 366 and 371 millions in 2020, although we must consider the heavier impact of COVID on 2020 results. The orders book remained nearly constant, 3,033 billion compared to the 3.09 billions of the previous year, as well as EBIT 35 million versus 36 millions. As for manpower, 2021 marked a net increase of nearly 100 personnel, confirming the growth of the Italian branch of the European missile company, which had a similar increase in the previous year.
Detailing the successes obtained in 2021, Lorenzo Mariani underlined the development contract of the Teseo Mk2/E for the Italian Navy, signed in late 2020 that became effective in 2021, and the importance of the decision of the customer to go for an AESA (Active Electronically Scanned Array) seeker, which is being developed together with Leonardo, the two companies working respectively on the back-end and front-end. EDR On-Line understood that an early demonstrator was already tested in the HWIL (Hardware-In-The-Loop) test facility in Rome. The Albatros NG aiming at replacing the old Albatros in service with a foreign Navy will be the first naval system based on the CAMM-ER, the contract having also been filed in 2021. The SAMP/T NG contract signed by Italy in March was followed by the contract for the integration in the system of a new radar. However all three nations, France, UK and Italy, needed to carry out the MLU (Mid-Life Upgrade) of their existing Aster missiles, the total number being estimated at around 1,000. France already signed such contract in 2020, while in 2021 Italy and the UK followed, these accounting for around two thirds of that number. A contract defined as vital for the Italian Air Force by Mr. Mariani is the one for the MLU of the Storm Shadow, which is integrated in the Eurofighter Typhoon as well as in the Tornado.
Two programmes marked a major step forward in 2021. The CAMM-ER was launched for the first time against a manoeuvring target, while the Marte-ER MQ4 launch was a formal test and was part of the qualification process. “This allowed us to start the missile production in 2022,” Mariani said; these missiles will be provided to Qatar, that country having already received the first MCDS (Marte Coastal Defence System) batteries. “The delivery of the first batch is scheduled at the turn of the summer,” the MBDA Italy Managing Director said, explaining that the customer needs to get the systems operational in order to ensure protection during the FIFA World Cup Qatar that will take place from 21 November to 18 December 2022.
Switching to 2022, in the first quarter the contract with Greece concerning the weapons packages for the FDI frigates and the 18 add-on Rafale became effective, which includes respectively Aster 30 Block 1 and Exocet MM40 Block 3C, and Meteor, Scalp, Mica and AM39 Exocet. MBDA Italy is involved in the Meteor, providing the seeker and the radome, the missile being in the final delivery stage for the six partner nations, and in the second export delivery phase for export customers, namely for Saudi Arabia and Qatar. “The contract for the weapon packages that will arm the United Arab Emirates Rafale is signed, and we are waiting for the advance payment,” Mariani stated. Considering domestic contracts, France started 2022 with a number of French-eyes only contracts, to which we must add the contract, through OCCAR, for the Tiger MkIII missiles, Mistral 3 and MHT (Missile Haut de Trame), Spain having joined the contract for the Mistral 3 only. “For Italy Q1 was quite promising, and we have important targets as we aim at an around 1 billion Euro revenue figure by year-end, mostly based on backlog,” he stated. Q1 2022 saw deliveries ahead of schedule for most programmes, mostly weapon packages for Qatar and for Italian Navy PPAs.
The increasing work and that of the manpower required a facility development programme that is underway, not only in terms of expanding the premises but also in terms of acquisitions. The Fusaro facility, dedicated to seekers design and manufacturing, was acquired some years ago and its refurbishment is nearly completed. In 2021 MBDA Italy put an option for acquiring the facility in Rome, and it should be acquired not earlier than 2025. In 2022 MBDA Italy acquired the facility in La Spezia, where most of the activities concerning naval missiles are carried out. “The manpower growth, from less than 200 people we will reach over 300 by late 2023, led us to acquire not only the building from Leonardo but also a nearby one, refurbishing work starting now. The ongoing work on the Marte-ER and the Teseo Mk2/E require new R&D laboratories and new digital production facilities,” Mr. Mariani said.
Talking about short-term export campaigns Mr. Mariani mentioned cited the contracts with Kuwait and Egypt, both contracts having been signed but still waiting them to become effective, the same customer that in 2021 acquired the CAMM-ER naval system being now close to sign the contract for the missiles. Looking at the Italian market, the last two years saw some openings in the multi-year planning programme that led to the Aster B1NT programme for the naval PAAMS system which order is being negotiated, the contract signature being expected in the coming months. Remaining in the Aster world, Italy will acquire the major share of a multi-year contract being currently negotiated with OCCAR concerning Aster 15, B1 and B1NT, which will include some hundreds of missiles, deliveries being spread until 2030. MBDA is also proposing its offer to OCCAR for the MLU of the Horizon air defence frigates, where Italy has a more urgent need compared to France; the upgrade will include modifications of the command and control system and the possible replacement of the current radar, discussions with France being underway. The Aster will also become part of the Italian Air Force inventory; a fully authorised programme being under discussion for the same number of batteries currently in service with the Army, five, their configuration being quite similar to the Army one.
Another air defence programme close to be launched is the EMADS (Enhanced Modular Air Defence Solutions), the CAMM-ER based systems for the Italian Air Force and Army, the acquisition being presumably done through OCCAR, according to Mr. Mariani. “It will be a considerable production for the two services, and it might be split in two batches, the first for the Air Force where all authorisations are already in place, the second one for the Army following closely, which numbers are greater than those of the Air Force.”
MBDA also made a proposal to Leonardo, the national Tier 1 player in the UK-led Tempest sixth-generation fighter aircraft programme, the company proposing itself for the support to system definition activities and in the identification of technology lines of developments. “We have a considerable list of such technologies, some being developed together with Leonardo, some with other players such as i.e. Elettronica,” Mr. Mariani said.
Concluding his speech, Mr. Mariani mentioned some of the export campaigns that will be pursued in 2022 and might impact the MBDA Italy business. Among them the CAMM-ER for the Army and Navy Polish programmes, respectively the NAREW and the Miecznik, this campaign being led by MBDA UK on the basis of a UK-Poland government-to-government agreement. The programme includes a considerable delocalisation for the production of both systems and missiles, as well as a considerable transfer of technology, which would include also Italy. Mar. Mariani also foresees possibilities for further contracts on the Marte-ER for foreign customers, in the naval and helicopter version, although he stated that these might become a reality in 2023 rather than in 2022.