MBDA chief executive Antoine Bouvier visited the last Paris air show just days after taking his position at the head of Europe's leading missile manufacturer. Two years on, he explains how the amalgamation of French, German, Italian and UK industrial capabilities has advanced
How would you sum up MBDA's performance last year?
For MBDA, 2008 was a positive and important year. We were able once again to demonstrate our ability in our four countries on our different programmes to deliver on contractual commitments. Our products are stretching the technical boundaries, and this ability to control the risk and deliver on time and performance is a strong asset. With the Meteor [beyond visual-range air-to-air missile] we successfully passed several programmatic milestones, and on the Aster [ship-based air defence missile] we delivered on our commitment for important firings.
The British dual-mode seeker Brimstone [air-to-surface missile] also demonstrated its combat-proven capabilities. It is a key strategic objective of MBDA to continue to be robust and efficient on programme deliveries.
MBDA recorded a turnover of €2.7 billion ($3.7 billion) in 2008 on orders worth €2.35 billion, including €1 billion in exports.
MBDA is leading the Team Complex Weapons consortium towards achieving a sustainable business relationship with the UK Ministry of Defence. Is a similar transformation being pursued in France and your other home markets?
We have been at the leading edge of the UK Defence Industrial Strategy through the formation of Team CW. We have formed around MBDA a complex weapon alliance and launched assessment phases on a number of new programmes. This is a new way to work among the defence industry, and it has been very successful. In France we have followed a very similar path with a White Paper that is also calling for a new partnership between the defence industry and the customer. We are very pleased as a European company with the very strong British/French core, where the policies are not contradictory with European co-operation. We have made a very good start. The direction is the right one, and the pace is right. The integration of our Italian activities has been implemented in a smooth and efficient way. Germany is not as integrated as the UK, France and Italy are, but we are developing transverse actions and synergies. And in other countries like Spain we have a strategy to develop our presence. We are a European integrated company.
How important are export sales to your business model?
For a number of years it has been a strategy of MBDA to develop its business with export customers. We have been in the past between 20% and 30% on export customers with respect to sales, and our objective is to grow to 40%. We are confident we can meet this objective: in terms of order intake we have been close to 40% for the last two years. This is a key change in how this company is positioning itself on the world market - it's a very significant evolution of our business model.
The company has had several false dawns in the USA. Will it be possible for you to break into the US defence market, and gain a foothold in other nations also?
The USA has been a strategic objective for this company for a long time. It is a top priority. We have continued our strategy to develop partnerships in export countries. We have set up a joint venture in the United Arab Emirates, we have developed discussions with the DRDO [Defence Research & Development Organisation] and BDL [Bharat Dynamics] in India, and we have also pursued discussions with potential partners in the USA. This is not just to promote our products, but to boost export activities. What we are looking for is to be part of major export deals linked to platforms.
The UK has delayed the in-service date for its Meteor missiles until at least July 2015. How much of a blow does this represent to your sales ambitions for the design?
Meteor, the BVRAAM in development for France, Germany, Italy, Spain, Sweden and the UK, with its high level of performance and unique capabilities, is a key element for any export customer to take a decision on a given platform, whether it is with the Eurofighter Typhoon, Dassault Rafale or Saab Gripen. What we see with our export customers is strong interest in the capabilities of Meteor. We are optimistic about the potential. There are a number of ongoing discussions, and they are very closely monitored by the six nations.
MBDA has an agreement to market Sagem's AASM air-to-surface weapon on the international stage. How has this relationship worked so far?
This is an agreement that was reached in May 2008. We will progressively take over the prime responsibility to develop new versions of the AASM, and to market it to new customers beyond the existing contracts.
This is a win-win agreement for the two parties. MBDA has all the capability in terms of design office technical expertise to be prime on the new versions, and the responsibility for marketing and sales will certainly boost the opportunities and the level of sales.
Production remains with Sagem. This is in line with the objective of MBDA to step by step pursue the process of consolidation and rationalisation of the industry in Europe. This agreement has allowed the two companies to progress in the right direction, and there is a very good spirit of co-operation.
Missile defence remains a hot topic for your industry. How do you view the wider sales potential for this sector?
We are currently discussing with the French customer a so-called Aster Block 2, which will have the capability to intercept short- and medium-range ballistic missiles in a high endo-atmospheric domain.
This will allow them to intercept new threats like the SS-26, which has a manoeuvring capability which starts at an attitude of 65,575-82,000ft (20,000-25,000m). We have made some proposals with regard to a technology and risk-reduction plan that we think will be the right answer to the concept of extended air defence.
What are your priorities for future technology investment?
A top priority for 2009 will be to prepare for the future. We have decided to increase by about 20% our research and development budget, to be sure that we do not miss any emerging technology, and to cover the capabilities that we think will be necessary to support our prime role tomorrow on new programmes.
We have identified a number of strategic programmes, covering technologies supporting guidance, navigation, warhead systems and production. We will be close to 3% of self-funded research and technology, and if we take into account capital expense and tender expense then this is close to 6%.