Mercedes 1999 Annual Report Download - page 53

AEROSPACE
47
DaimlerChrysler Aerospace (Dasa) was once again one
of the most profitable companies in its sector. Key
areas of business remain our holdings in Airbus Indus-
trie and Eurocopter, the manufacture and marketing
of engines and our involvement in numerous European
aerospace projects. The merger of Dasa with the
French company, Aérospatiale Matra, and the Spanish
company, CASA, to form the European Aeronautic
Defence and Space Company (EADS) has created new
opportunities. EADS will be the largest aerospace
company in Europe and the third-largest in the world.
Dasa will also be joining forces with Matra Marconi
Space (MMS) to create Astrium, a new space-technology
company.
OUTLOOK REMAINS FAVORABLE..... Due to the high level of
orders on hand we significantly stepped up the production of
civil aircraft in 1999. Although new orders did not achieve
the extremely high level of the previous year, for the first
time Airbus received more aircraft orders than any other
manufacturer in the world. Business also continued to
develop favorably in the aeroengines sector. In the defense
sector, on the other hand, government budgetary constraints
led in some cases to a substantial decline in orders. Never-
theless, the year under review brought us the first contract
for series production of the new Tiger helicopter.
BUSINESS VOLUME AND OPERATING PROFIT RISE. .
. .
. In 1999,
the Aerospace division boosted revenues by 5% to €9.2
billion. The chief engine of growth was the Commercial
Aircraft business unit, where increased sales of aircraft and
aircraft components for the Airbus program led to an above-
average growth rate of 13%. Strong increases were also
recorded in the Military Aircraft and Aeroengines business
units. On the strength of a sharp increase in revenues,
operating profit rose 17% to €730 million, surpassing the
high figure recorded in 1998.
INCOMING ORDERS CONTINUE TO OUTPACE REVENUES.
While incoming orders (€9.9 billion) were higher than total
revenues in 1999, they were significantly down from the
figure for 1998 (€13.9 billion). This decrease was primarily
due to the fact that the previous year was exceptional: in 1998
a boom in the civil aircraft market led to a very high volume of
Airbus orders and the contracts awarded for series production
of the “Typhoon” Eurofighter were another factor which
disproportionately inflated orders for that year. As expected,
further cuts in government budgets also had an impact on the
level of incoming orders at the Defense and Civil Systems
business unit. As a result of authorization for the first series
batch of the Tiger military helicopter, incoming orders for the
Helicopters business unit doubled over the previous year.
EADS—NEW HORIZONS FOR EUROPEAN AEROSPACE. In the
fourth quarter of 1999, we signed contracts to merge Dasa,
the French Aérospatiale Matra and the Spanish CASA to form
the European Aeronautic Defence and Space Company
(EADS)—Europe’s largest aerospace company. The new
company is scheduled to begin operations in the summer of
2000. We and our French partners will each hold 30% of
EADS, with SEPI, the Spanish state holding company, taking
a 5.6% stake. Current plans call for a public offering of the
remaining 34.4% of the equity. Annual revenues of €21
billion and a workforce of more than 96,000 employees will
make EADS the world’s third-largest aerospace company.
With a 80% stake in Airbus Industrie, EADS will be the
second-largest manufacturer of civil aircraft in the world.
It will also be the world’s leading helicopter manufacturer
(holding 100% of Eurocopter). In addition, the new company
will be the market leader for carrier rockets and a leading
supplier of satellites, military aircraft and defense technology.
ASTRIUM—JOINING FORCES IN THE SPACE SECTOR.
Contracts signed between Dasa, Aérospatiale Matra and
Marconi Electronic Systems will further boost the com-
petitiveness of the European aerospace industry. Matra
Marconi Space (MMS) and Dasa are scheduled to merge their
space systems businesses in the first half of 2000. With more
than 8,000 employees and revenues of €2.25 billion,
Astrium, the new joint venture, will be the biggest space-
technology company in Europe and a leading global player.
We anticipate that Alenia Spazio, a subsidiary of the Italian
company Finmeccanica, will also join Astrium, further
strengthening the company’s position on the international
market.
735 730 623
9,255 9,191 8,770
3,363 3,340 2,962
710 705 680
1,085 1,077 957
596 592 582
461 458 645
1,736 1,724 1,729
1,754 1,742 1,660
338 336 326
2,019 2,005 2,047
46,107 45,858
99
US $
99 98
amounts in millions € €
Operating Profit
Revenues
Commercial Aircraft
Helicopters
Military Aircraft
Space Infrastructure
Satellites
Defense and Civil
Systems
Aero Engines
Investments in Property,
Plant and Equipment
R & D
Employees (Dec. 31)