Eurocopter Sales Rise to Record on Energy, Military Users

Eurocopter SAS, the helicopter unit of European Aeronautic, Defence & Space Co., said it had record sales last year on demand from energy companies and military customers, and will boost output more than 15 percent this year.

“We will continue the growth story” after the company reached 6.3 billion euros ($8.4 billion) in sales last year, Eurocopter Chief Executive Officer Lutz Bertling told reporters in Paris. Deliveries of new models, including EC175 helicopters, should start this year, he said.

Deliveries of larger models to the oil and gas sector and to military customers helped Eurocopter increase sales last year even as deliveries dipped to 475 rotorcraft from 503 in 2011. Shipments, which have fallen in recent years after order intake collapsed in 2010, are set to increase again this year.

“We have to manage the ramp-up and we have to manage the supply chain where suppliers are not always in the best shape,” Bertling said of his 2013 priorities. Some companies that manufacturer parts for Eurocopter are struggling, he said.

Building choppers accounted for 49 percent of revenue last year, with services contributing 42 percent and other activities such as making composite doors for the Airbus SAS A350 supplying the remainder, the company said.

Eurocopter also is struggling to fix the EC225, used heavily by oil and gas operators, after operational restrictions were put in place due to crashes. The U.K. and Norway have barred flights in hostile environments over water, affecting about 30 percent of the fleet.

‘Severe’ Impact

The impact on customers is “very severe,” Bertling said. Two issues have affected the fleet, he said, with the fix for one identified and the other still under investigation. A resolution may be in place in April, the CEO said.

The company also is pushing forward with efforts to improve earnings and meet a target of 10 percent return on sales before 2016, Bertling said.

New order volume rose for a third consecutive year, to 469 helicopters representing 5.4 billion euros in future business, Bertling said. Bookings could top 500 craft this year, he said.

Growth will come mainly in Asia, which is set to become the largest market in two to four years, he said. Development of the Chinese market is contingent on airspace restrictions being lifted, he said.

More Competition

Strong prospects also exist in Brazil, he said. Eurocopter faces heightened competition after Italian helicopter maker AgustaWestland this week teamed with Embraer SA, which is based in Brazil, to chase orders. Bertling said the rivals are talking about local production, while Eurocopter is moving beyond that to design helicopters in the country and export them globally.

In the military market, Eurocopter remains in protracted talks about adjusting Tiger attack helicopter and NH90 transport models. Those talks, which were supposed to conclude last year, may continue into April, he said.

In France, Bertling said he sees signs of further NH90 orders and doesn’t expect a big hit from a review of defense priorities by the government. As part of those discussions, annual shipments of NH90 troop transport helicopters may dip to six a year from eight, said Dominique Maudet, Eurocopter executive vice president.

EADS shares have advanced almost 18 percent this year, valuing the manufacturer of Airbus planes at 28.7 billion euros.

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