(updating on sourcing targets in par 10; Ansalda Energia, M&A, orders at end)
MILAN (Thomson Financial) - Finmeccanica SpA reiterated its target for 2008 EBIT of 1.050-1.170 bln eur and sales of 14.0-14.7 bln.
In a slide presentation, Finmeccanica added to yesterday evening's target for a 2007 EBIT of 950 mln eur to 1.000 bln and sales of 13.1 to 13.7 bln.
In a new forecast, the company said it is targeting 2010 sales of around 16.5 bln eur.
Officials said the company has previously only given a value of output target for 2010.
During an analyst presentation, co-general manager Alessandro Pansa said the group is still targeting a 10 pct EBIT margin in 2010.
'We are still confident of reaching this kind of target,' he said.
Finmeccanica has launched a programme for global sourcing of its supply which will bring cost savings, he said.
'We have started a global sourcing programme to significantly cut costs, but we can't reach the target in months or one year,' he said, noting that rival companies started these companies up to four years ago.
Finmeccanica said it sees opportunities to identify new low cost suppliers in Poland, Turkey, Russia, India, and China.
Pansa said the first, two-year phase of the global sourcing programme will aim to generate about 70 mln eur costs cuts in a 700-800 mln portion of the total 6.5-7.0 bln supply costs.
AgustaWestland chairman Amedeo Caporaletti reiterated previous Finmeccanica comments about a possible re-entry into a US tender for search and rescue helicopters.
The US government accounting watchdog queried the award of the contract to Boeing Co after AgustaWestland filed a claim that some of the US equipment chosen by the airforce did not meet some aspects of the tender, he said.
The airforce is obliged to review and justify decisions to choose Boeing, he said.
If it can't find a justification it will have two options, to cancel the contract and reopen it next year or to ask final bidders to come up with new solutions, he said.
There should be 'a solution' by the end of the year, he said.
On this week's Turkey 1.2 bln eur helicopter contract award, he said the product will be heavier and include new software in comparison with the similar AW129 helicopter supplied to the Italian armed forces.
AgustaWestland selected a Turkish partner to produce parts of the helicopter while the company will have the right to export this helicopter, including to the Middle East.
In other comments on Turkey, Finmeccanica chairman and CEO Pier Francesco Guarguaglini said yesterday the company signed a contract to sell 50 mln eur of defence systems to the country.
In other order comments, Guarguaglini said Finmeccanica will take a 2 bln eur share of a Eurofighter sale to Saudi Arabia, which he said is expected to be signed by the UK by the end of the year.
On Fineccanica's loss-making train unit AnsaldoBreda, Pansa said this year's loss could rise to 90 mln eur from the previous forecast of 77 mln.
This loss will include 24 mln of restructuring charges for 300 job cuts this year which will save 7.2 mln labour costs from 2008 and the loss forecast for 2008 remains unchanged at 40 mln.
The aim is to break even in 2009, he said.
On a possible listing of Ansaldo Energia, Pansa said Finmeccanica continues to believe in this plan and that the unit will be appreciated by the market.
Noting recent market turmoil, he said companies should never list at the top of the market, though a decision will also depend on market liquidity.
'We'll see what happens in the next two months. If there is not a bad crisis and bad liquidity we will trigger the process even with some months of delay,' he said.
Given it takes 5-6 months to prepare an IPO, a possible 'window' for Ansaldo Energia would, Spring, Summer or Autumn on next year, he added.
Finmeccanica officials said they still plan to grow via acquisitions but that market prices have been too high and the company will only pay fair value.
On a tie-up with France's Thales in defence electronics is favoured by Finmeccanica, said Guarguaglini, adding that the French continue to review their strategy in this sector.
Company officials reiterated the aim of gaining a 4-5 pct share in supplying Airbus 350 parts, excluding engines, with a decision seen by year-end.
One official said delays in flight testing of Boeing's 787 Dreamliner plane are unlikely to have a long-term impact, with Finmeccanica continuing to deliver fuselages ordered for this year.
The plane will have a high delivery rate from 2010, he said, noting 700 orders for the plane. nigel.tutt@thomson.com nt/dm/ra/nt/gp COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
© 2007 AFX News
