US-based DRS Technologies has grown significantly in its home market in recent years, climbing four places to 37 in the top 100, thanks to a $431 million boost in aerospace revenues to $1.74 billion in 2005, writes Helen Massy-Beresford.

But now the defence electronics specialist is increasingly looking abroad - its overseas business is "a footprint we'd like to expand on", says president and chief executive Mark Newman. The latest step in its drive to increase overseas sales is the rebranding of its UK arm. The company plans to use DRS UK, formerly DRS Tactical Systems, as a "springboard" for other European markets. "The UK is a good place to start if we want to win business overseas," he says. The company currently generates around 8% of its total revenues from overseas markets and plans to grow this to 20% within five years.

Mark Newman - DRS

DRS's Mark Newnam: "The UK is a good place to start if we want to win business overseas"
In the USA, DRS is paying more attention to commercial markets and is trying to move its military deployable flight-recorder technology into the commercial airliner market. "There has been some interest from the FAA, but no airframer has applied to get it certified," says Newman, who does not rule out inclusion of the technology on commercial aircraft programmes as early as the Boeing 787. "We're starting to see the airline insurance industry put pressure on airlines for safety issues...it's about getting manufacturers and airlines attuned to this equipment."

DRS is also focusing on service and support, following its $1.97 billion acquisition of Engineered Support Systems (ESSI) in January. "We were always a company that made products but we never did a good job on support contracts because we didn't have to," says Newman. "That all changed with the acquisition of ESSI." The company now generates almost $600 million a year from service and support contracts.

Newman sees the DRS as a company that has "significant technologies and products to offer as a prime contractor to the Department of Defense and as a significant supplier to the primes too". Homeland security, intelligence and unmanned air vehicles are other areas in which DRS is poised for growth, he says, and DRS could expand its $500 million infrared sensor business further both by organic growth and acquisition. "Over time it could be a billion dollar business: it's a growth area for the future," says Newman.

The company wants to grow both organically and, eventually, through acquisitions. Newman says the company can be strengthened both through R&D investment and by adding technologies and capabilities from other companies. But there is no rush for more purchases. "This last acquisition was a large one. We decided to step back a bit for the next year or so and integrate this one," Newman says, adding that DRS is unlikely to make more acquisitions before the second half of next year.

 

Source: Flight International

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