Italian aerospace and defence giant Finmeccanica is becoming ever more international
Holding its annual results presentation on 11 March in London rather than Rome (though, slightly incongruously, in Italian) fits with how Finmeccanica wants the world to see it: a cosmopolitan aerospace and security giant in markets from defence electronics to aerostructures, military jets, helicopters and space.
At the start of the decade, Finmeccanica looked as if it had missed the consolidation boat that created the great European aviation and defence houses, BAE Systems and EADS. State-run and with an unwieldy legacy structure, a fire sale of many of the group's key assets or mergers with European or transatlantic partners looked likely.
Fast forward to 2009 and - despite the global downturn - Finmeccanica is a force to be reckoned with, its ambition reflected in the Ferrari-red corporate branding introduced a few years ago. A flurry of acquisitions and series of successful deals have seen its revenues more than double to €17.1 billion ($21.8 billion) between 2002 and 2008, if a full year's turnover of DRS Technologies, the US defence electronics company it bought last year is included. Around four-fifths of that revenue is from aerospace, defence and security (Finmeccanica also has transport and energy businesses).
The annual results - at which Finmeccanica reported revenues up 12% to €15 billion and profits (before interest and tax) up a quarter to €1.3 billion - were in London because the company considers the UK as one of its home markets. Based around the British half of AgustaWestland as the Ministry of Defence's helicopter provider of choice and a defence electronics business, the country is Finmeccanica's second largest single market, representing 13% of revenues.
However, on that logic, future such events may be held in New York. North America made up 12% of its revenues in 2008, but Finmeccanica expects this to rise on the back of the DRS acquisition to 21% of more than €17 billion in 2009. The New Jersey-based business is a big supplier to the Pentagon and law-enforcement agencies, but Finmeccanica also hopes - like BAE - that a major industrial presence in the USA will open doors for the rest of its portfolio, including helicopters and Alenia Aermacchi military jet trainers.
The robust defence and security sectors are likely to protect Finmeccanica from the worst ravages of the civil downturn, where partnerships by its Alenia Aeronautica division with Boeing and Sukhoi on the 787 and Superjet are vulnerable. The majority of its revenues come from defence and security, where chief executive Pier Francesco Guarguaglini expects orders to hold up, especially in the emerging border control, infrastructure protection and homeland security markets - with interest in everything from border surveillance to anti-hijack countermeasures for shipping. It also has high hopes for increases in European spending on space, transport and nuclear energy.
Not that Finmeccanica has had its way with everything. Its landmark deal to supply AW101s through partner Lockheed Martin as the platform for the new VH-71 presidential helicopter has run into cost overruns and President Obama has thrown doubts over the whole programme.
On the whole, however, a string of contract successes has given a huge boost to its product portfolio. These include an agreement with the United Arab Emirates for 48 Alenia Aermacchi M-346 lead-in fighter trainers, which will include a joint venture to establish a final assembly line in Abu Dhabi. Finmeccanica is one of several Western manufacturers working with Abu Dhabi's Mubadala to produce composite aeronautical structures in the emirate. It signed a co-operation deal with Oboronprom to build the AW139 helicopter and develop other joint projects in Russia.
DRS - the acquisition was completed in October - makes Finmeccanica a powerful player in the USA, still by far the biggest prize in the defence and security sector. With a growing foothold in the Middle East and other emerging markets and a robust balance sheet, Finmeccanica's decision to stay clear of turn of the century merger mania may be proving very sensible.