Selex ES Outlines Ambitions After Restructuring
Selex ES is attending its first Paris Air Show since its formation on January 1 from three separate companies–Selex Galileo, Selex Elsag and Selex Systemi Integrati, under parent company Finmeccanica. The new entity has three divisions, Air and Space Systems; Land and Naval Systems; and Security and Smart Systems, all three being supported by a common operations/engineering function. At the time, Selex CEO Fabrizio Giulianini said, “I am confident that the customer-oriented approach that Allan [Cook, executive chairman] and I have designed for our organization will offer focused solutions to a broad range of civil and military requirements leveraging the breadth of our dual application technologies.”
Speaking with reporters at a lunch in London before the show, Giulianini said Selex ES (Chalet A232) was still working on the transition to the new single-company structure, which had an equivalent 2012 turnover of €3.6 billion, “which makes us one of the top ten in the world in electronic defense.” It has 12,000 employees in Italy, 5,000 in the UK and “a strong presence in the U.S., Turkey, Romania, Brazil, Saudi Arabia and Germany.” At the moment the company is 70 percent defense and 30 percent civil, roughly, and about 50 percent export-oriented.
Giulianini said that the company was “putting a lot of focus” on its Security and Smart Systems division and in the civil side of the business in general, given declines in defense spending and the growing importance of these areas. “For the future we have submitted a five-year plan for shareholder approval, to increase profitability, streamline and optimize the organization,” he said, while acknowledging this was an ongoing part of the restructuring process.
He also detailed six areas of focus for the restructuring program. First and foremost was “revision of our very large product portfolio” to highlight those most worth continuing. “Some are not any more extremely attractive to the market,” he remarked, noting that even if products were discontinued the company would maintain its customer support commitment. The second focus area is site rationalization, for example reducing the number of sites in the UK from 16 to 10. This, said Giulianini, would be done partly by combining existing sites rather than just closures. “For example in Bristol four [sites] will become one, and on the [UK] south coast we will concentrate at Southhampton.” One aim will be to create “centers of excellence in manufacturing and engineering.”
He continued: “We have already launched a plan for headcount rationalization with a three-year plan, so it will be completed by 2017.” This has already been discussed with unions, he added.
Order-wise, Giulianini said, “We are expecting in the near future that 50 percent of orders will come from the export market and the rest from our legacy contracts, for example Eurofighter and EH101, where we are already on board as a partner.”
Giulianini explained how security and smart systems were becoming core activities, particularly since the company was awarded a key NATO contract last year (implementing common cybersecurity at all NATO bases). In the civil area, ATC/ATM and airports are becoming increasingly important, especially with a view to “the very large number of new airports being planned in the Middle East and Asia. We are in a position to be a technical partner for an integrated solution,” said a company spokesman, who added, “We have a strong track record in ATC and command and control systems.”