Drop in Services Business Keeps Astrium Revenue Flat
PARIS — Europe’s EADS aerospace conglomerate on March 8 said its Astrium space hardware and services division reported flat revenue and lower pretax profit for 2011, with increased satellite manufacturing and launch-vehicle sales offset by lower services revenue.
The company said restructuring charges associated with Astrium’s Agile performance-improvement program also weighed down profitability and likely would continue to do so in 2012.
For 2011, Astrium’s revenue totaled 4.96 billion euros ($6.4 billion), down marginally from 2010. Pretax profit was 5.4 percent of revenue, down from 5.7 percent.
In a March 8 conference call with investors, EADS Chief Financial Officer Hans Peter Ring said Astrium booked a restructuring charge of 23 million euros in late 2011 as a result of Agile, a program he said was in part responsible for Astrium Satellites’ win of orders in 2011 from satellite operators DirecTV Group of the United States and Measat of Malaysia.
“This represents Astrium’s first success in its drive to improve overall competitiveness in export markets through the Agile transformation program,” EADS said in a statement accompanying the financial results, referring to the two satellite orders. The DirecTV 14 contract represented the first major Astrium satellite award in the United States in years.
Astrium’s pretax profit was also reduced by a one-time charge related to its acquisition of mobile satellite services provider Vizada, EADS said. The $965 million transaction closed in December.
Ring said Astrium’s overall performance in 2011 was good considering what he called a “challenging institutional market and increased competition.”
Astrium’s business is divided into three divisions. Astrium Services sells Earth observation imagery as well as satellite communications services to government customers. Astrium Satellites is a major satellite builder. Astrium Space Transportation is prime contractor for Europe’s Ariane 5 heavy-lift rocket and French ballistic missiles, and is Europe’s biggest contractor for the international space station.
Astrium Services has become a key profit center for Astrium and is one of several of EADS’s attempts to balance its hardware manufacturing, led by the Airbus aircraft, with higher-margin services businesses.
But in 2011, Astrium Services faced a decline in government purchases of Earth observation imagery, a decline that was not helped by the multiple delays in the launch of the Pleiades 1A high-resolution optical Earth observation satellite. Pleiades 1A was launched in December and thus was not a big contributor to 2011 revenue. Astrium Services will market Pleiades imagery.
For 2011, Astrium Services revenue totaled 861.8 million euros, down 12.7 percent from 2010.
Astrium officials have said the services business in 2011 also suffered from the comparison with 2010, during which the division booked an exceptional milestone payment for a German satellite telecommunications system.
Astrium Services Chief Executive Eric Beranger said in late 2011 that Vizada, whose business includes providing fixed satellite services in addition to its main mobile communications business, would increase Astrium Services’ revenue by some 60 percent.
Astrium Satellites revenue in 2011 was 2.15 billion euros, up 12.2 percent as the company delivered 13 satellites, including Pleiades 1A and two of the four Galileo navigation spacecraft it is building.
Astrium Space Transportation in 2011 reported revenue of 2.18 billion euros, up nearly 4 percent from 2010. The company delivered the second Automated Transfer Vehicle and five Ariane 5 rockets during the year.
Astrium’s three divisions booked a combined 3.5 billion euros in new orders in 2011. The company’s backlog at Dec. 31 stood at 14.7 billion euros, down 7 percent from a year earlier.