Enabling the Enterprise

Transcription

1 Enabling the Enterprise

2 Enabling The Enterprise Kim Cohen BSc(Hons) MBA FRAeS FIoD MIET MIEEE Brunel Business School 14 th January, 2015

3 Career Experience

4 By Company & Role Lucas Aerospace (Goodrich) Performance Engineer Eli Lilly Inc. Financial Analyst BTG Ventures Senior Investment Executive Kongsberg Systems Technology Managing Director Storehouse Plc Div. Finance Director BAES Plc Group Head Strategy, Planning and M&A Lockheed Martin Inc. VP UK Business Development Deutsche Bank MD Investment Banking Rolls- Royce Plc Div. Business Development Director

5 By Sector Aerospace Manufacturing Automation (CAD/CAM) Pharmaceuticals Retail Investment Banking & Venture Capital

6 BUSINESS SNAPSHOT 1 KONGSBERG SYSTEMS TECHNOLOGY COMPANY TURNAROUND

7 Kongsberg Systems Technology Ltd. Company Turnaround Joint Venture between Kongsberg AS (Norway) and BTG Ventures UK CNC control Systems Unprofitable and negative cash flow, Customers and supplier complaints Banking credit lines stretched Innovative CAD/CAM Software Capable engineering team International customer base Large installed base of controls

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9 MD s Actions Get shareholders support for time to assess company Conduct financial audit - P&L, Balance Sheet and Cash Flow Retain banking credit lines Examine intercompany trading and charges Speak to customers Understand R&D programme and delivery Interview key staff Communicate with all staff on progress of review Stand back and look at big picture

10 MD s Resolution Establish vision for the business Set realistic Objectives and timescales Develop Strategic Options Select Preferred Strategy: - Software and Systems not Products - Licensing of products from 3 rd Parties Produce Business Plan Get Key staff on Board Present to Shareholders Get Shareholder Commitment to invest further Communicate strategy, objectives and Imperatives to all staff Communicate to customers and Stakeholders

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13 BUSINESS SNAPSHOT 2 BAE PLC CORPORATE RESTRUCTURING

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15 BAE plc Corporate Restructuring Brought into Public ownership in Combination of BAC, Hawker Siddeley, HS Dynamics and Scottish Aviation 1985 Government sold stake retained Golden Share 1987 BAe acquired Royal Ordnance, Ballast Nedam 1988 acquired 80% Rover Group (20% Honda) 1989 Arlington Securities Downturn in Civil & Military business led to strategic re- appraisal of activities - Focus on core activities - address problems of Regional Aircraft 1992 BAe announced 1bn provision for regional Jet financing arrangements & restructuring costs

16 Range Rover

17 Mini Cooper 1994

18 BAE Regional Jet

19 Jetstream 31

20 BAe Restructuring Strategy KC led Strategy and Planning review of Bae Plc Businesses sold: Corporate Jets, Ballast Nedam, 80% Rover Group (BMW), Space Systems Division New 250m provision for Turbo- prop financing losses Agreement to sell 50% of RJ business to Taiwan Aerospace Major Intellectual property review Bid for VSEL- Submarine business 1999 BAe merged with Marconi Electronic Systems(GEC) Group renamed BAE SYSTEMS

21 BUSINESS SNAPSHOT 3 DEUTSCHE BANK EADS IPO

22 US aerospace consolidation

23 Deutsche Bank EADS IPO - 10 July US consolidation follows last supper Merger of Aerospatiale Matra, Daimler Chrysler Aerospace(DASA) & Construcciones Aeronauticas (CASA) 3 rd Largest Aerospace Group, $22bn Rev, 96,000 employees Comprising: Eurocopter, 80%Airbus (20% BAe),75% Astrium,45.7% Dassault Aviation,29.5% Arianespace, 43% Eurofighter, MBDA (later) EU complications led to incorporation in the Netherlands

24 EADS IPO Challenges Operations in France, Germany and Spain Dual headquarters Munich and Paris State ownership prevailed in France, Italy and Spain Germany failed to merge with BAeS, led to friction between France and Germany. Merger of Aerospatiale/Matra paved way for EADS IPO IPO resulted in DASA 30%, French Topco 30%, SEPI 5.4% rest listed in Paris,Franfurt and Madrid. French, German and Spanish Governments retained Golden Shares Agreement on Strategy difficult due to national interests Valuation of Shares a major stumbling block Management roles fought over Issues on agreement of strategy and investment allocation IPO raised approx. 3bn

25 Airbus

26 Enabling The Enterprise CONCLUSIONS

27 Strategy Enables the Enterprise Formulation of Strategy key in any size of organisation Clearly defined Vision, Objectives and articulated Strategy Constantly reviewed and cross- compared with competition Investment and Capital Budgeting key to balancing new opportunities and protecting product regeneration Communication to staff and all stakeholders Culture and Values important in defining the entity CEO must own all aspects of Strategy All employees must understand and embrace the imperatives

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29 US aerospace consolidation Lockheed Martin Boeing Raytheon Northrop Grumman General Dynamics

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