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1998 : A Pivotal Year for Aerospatiale (Jan. 13)
Aerospatiale posted outstanding results in 1998, booking orders worth 86.8 billion francs ($15.8 billion), the highest total ever, and surpassing original forecasts by 42%. In 1997, Aerospatiale had already enjoyed an excellent year, with orders worth 74.7 billion francs. For the year, all group businesses generated orders exceeding annual sales.
AerospatialeÕs order book now stands at a record level of 180 billion francs ($33 billion), equivalent to a workload of three years for the groupÕs entities, and ensuring a solid outlook for the near future. Airbus delivered 229 aircraft in 1998 (49 more than in 1997) and booked firm orders for 556 aircraft worth $39 billion ?including the first direct order from British Airways, as well as major orders from Lufthansa, Iberia, United and TAM-TACA-LANCHILE.
ATR delivered 35 aircraft, compared with 37 in 1997, and logged 21 orders, versus 53 in 1997, reflecting the general slowdown of turboprop aircraft sales. Various initiatives are being examined to reenergize this business.
AerospatialeÕs other business lines also showed good results. Business at Sogerma and Socata held steady within highly competitive markets. In the aircraft sector, 1998 highlights included the certification of four new Airbus versions (A330-200 with General Electric, Pratt & Whitney and Rolls-Royce engines, and the higher MTOW A319), further progress on the 100-seat A318 and very-large-capacity A3XX projects, cutting metal for the A340-600, and rollout of the first components for the 1,000th aircraft in the A320 family.
Eurocopter booked orders worth 11.8 billion francs in 1998, compared with 13.9 billion francs in 1997, confirming the recovery in the helicopter market. In addition to the certification of three new models, Eurocopter also benefited from a Memorandum of Understanding signed by the French and German governments concerning Tiger helicopter production.
Aerospatiale booked record missile orders worth 7.2 billion francs, versus 5.3 billion in 1997. Particularly noteworthy were the success of Eryx and the Aster new-generation antimissile missile, which logged three new contracts, bringing total orders for this missile alone to nearly 2.5 billion francs. Other highlights included the final qualification firing of the Apache system, and launch of the ANF (future antiship missile) design phase and the ASMP-A (medium range air-to-surface missile) study phase.
Ten Ariane 4 launch vehicles were launched in 1998, setting a world record of 42 successful launches in a row. The launch of the new Ariane 5 heavy launcher was a total success, paving the way for commercial flights. EuropeÕs first reentry capsule, the Atmospheric Reentry Demonstrator (ARD), launched on this Ariane 5 mission, was a complete success. In addition, Aerospatiale won a 408 million euro contract as development prime contractor for the Automated Transfer Vehicle (ATV).
In the strategic missile sector, the French Ministry of DefenseÕs arms-procurement agency DGA announced the award of a 3.8 billion franc contract for Aerospatiale to continue development of the M51 submarine-launched missile.
Aerospatiale generated sales of approximately 58 billion francs ($10.5 billion) in 1998, a 10% rise over 1997 at equivalent size (excluding satellites) and dollar exchange rates. During 1998, the Aerospatiale Group launched the major strategic initiatives needed to pave the way for the consolidation of the European aerospace and defense industry. In chronological order, major developments during 1998 were:
-March: submission of the first report on the creation of a European Aerospace and Defense Company (EADC). This report was completed in November.
-April: Aerospatiale signs a cooperation agreement with Alcatel, Dassault Aviation and Thomson-CSF, leading to AerospatialeÕs transfer of its satellite activities to Thomson-CSF in June 1998, in exchange for a 4% stake in Thomson-CSF.
-May 15: the French government decides to transfer its 45.76% stake in Dassault Aviation to Aerospatiale. The transfer takes effect on December 30, 1998.
-May 27: the French government gives the Chairman of Aerospatiale a mandate to rapidly conclude strategic agreements, and to submit proposals for an initial public offering, as required.
-Under these circumstances, in July Aerospatiale and Lagard?re SCA submit a proposal to the government by which the Lagard?re group will take a 30 to 33% stake in Aerospatiale, through the transfer of Matra Hautes Technologies to Aerospatiale, along with a privatization of the group and its listing on the stock market. This operation is now underway.
-December 8: Aerospatiale, Alcatel, Lagard?re and Thomson sign an agreement concerning avionics (via Sextant Avionique), missiles (Eurosam) and space.
The Aerospatiale Group itself has been reorganized by business sector and has made preparations for the spinoffs needed to facilitate consolidation.
With business growing, Aerospatiale will continue to improve its economic efficiency during 1999. The decisions made in 1998 will also take effect this year, including the merger of Aerospatiale and Matra Hautes Technologies; privatization and initial public offering; and the strategic link-up with Dassault Aviation. The new company will have a well-balanced business portfolio, with 70% of sales generated by the civil sector and 30% by military applications. It will be the European leader in missiles, helicopters, space systems and regional transports, and Number 2 worldwide ?through Airbus ?for commercial jetliners with over 100 seats. At the same time, the new company will pursue its steady commitment to consolidation of European industry and the evolution of Airbus.
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1998 : A Pivotal Year for Aerospatiale (Jan. 13)