HENSOLDT

business update

Report from the Divisions

HENSOLDT International

Cross-Divisional projects

Supply Chain Management

Procurement

Digitalization

Report from the Divisions

Radar, IFF & Comms

Radar, IFF & Comms

Successful product and systems vendor
Erwin Paulus, Head of Radar, IFF & COMMS

Our business model remains tightly focused on passive radar and tactical air defence radar applications. Additionally, however, we are increasingly assuming the role of a lead systems enterprise for aircraft radar systems, which enables us to position ourselves significantly more advantageously in platform business thanks to our new role. The HENSOLDT name is thus acquiring ever greater influence – both at home and internationally. In addition to important product highlights and new product developments, some key orders contributed to our enhanced prominence in 2020:

  • One of the high points of the fiscal year under review was the closing of the contract for the development and production of a new active electronically scanned array (AESA) radar for the approximately 130 aircraft of the German and Spanish Eurofighter fleets. This is not merely on account of the order volume of around 1.5 billion euros, but also because we as the system designer are members of a Spanish-German industrial consortium under German leadership, and because the project is supported by the Eurofighter nations the UK and Italy. This enhances our international reputation and will have a positive impact on other large future projects. As the core component, the new Mk1 radar will be equipped with a new digital multi-channel receiver and the latest generation of antenna-mounted transmit/receive modules, along with other enhancements. We will create around 400 new, highly qualified jobs in development and production over the entire project period.
  • This new role in the Eurofighter also positions us ideally for the “Future Combat Air System” (FCAS), enabling us to present ourselves as an equal partner for the new radar system to be developed for this project.
  • Our excellent standing with our customers also benefited us in 2020 in other major, important projects. The best example: our TRS-4D radar, which the German Navy is already deploying in the non-rotating variant on the F125 frigate and as a rotating system on the K130 corvette. On the basis of the German Navy’s positive experience with this radar, the procurement of the radar for the future multi-role warship MKS 180 was not put out to public tender, and we have received a concrete product target as part of the MKS 180 development. This means our radar has a chance of being designated the standard radar of the German Navy.
  • At the same time, we also continued to expand our international business in 2020. One important milestone here was the contract signed in July with the South African high-tech vendor Tellumat – a manufacturer of defence and security solutions in the area of identification friend-foe (IFF) systems, tactical communications (including radio and video links), unmanned aerial systems (UAS) and data links and avionics – to acquire their Air Traffic Management (ATM) and Defence & Security business units. This lays the foundation for establishing our own radar business unit in South Africa, in which we want to develop and manufacture the successor product to our TRS-3D radar for international markets, among other ventures. This step enables us to unite competence and cost efficiency while also allowing greater flexibility in our export business.
  • Finally, we also made significant strides last year on the product level. Our new TRML-4D radar is now fully developed and has been mounted on a truck for test operation, so that we can now subject it to operational test conditions for the first time. Our new non-rotator IFF solution was delivered to its first customer, the Norwegian Navy. Our new Spexer 2000 3D antiaircraft radar is currently being integrated in a vehicle for our German customer. In the UK, we are testing the Spexer 600 radar, the successor to the Spexer 500, for both military and civilian applications. The Manta NEO, our new, integrated display and navigation system for use at sea, is also in test operation. And those are just the large-scale projects.
  • In 2020, the Sensors segment achieved revenues of more than 920 million euros. And with our well-filled product pipeline, numerous novel developments and our integration in numerous major national and international projects, we are also ideally positioned for the future.

    Spectrum Dominance & Airborne Solutions

    Spectrum Dominance & Airborne Solutions

    The Partner of choice
    Celia Pelaz, Head of Spectrum Dominance & Airborne Solutions

    Our field of competence Spectrum Dominance offers our customers modular, scalable, customised solutions for gathering, evaluating and preparing data in both the electromagnetic and cyber information spectra. Highly specialised sensors together with the evaluation of raw data using artificial intelligence deliver the information superiority that is often decisive on today’s battlefields. This makes it possible to identify dangers and neutralise threats early on – in both the civilian and military sectors. With our comprehensive airborne portfolio, we are at the forefront of the market in multiple segments today and – as for example with our mission management solutions – are increasingly positioning ourselves as an integrated sensor solution house in the field of competence Airborne Solutions. In 2020, we achieved key milestones in both sectors.

    At Airborne Solutions, we pursue our tasks in a highly integrative, cross-divisional working approach. With our eyes firmly focused on our customers’ requirements, we continually improve and optimise existing products and present new, innovative solutions.

  • In 2020, as a part of the project “Maritime Airborne Warfare System” (MAWS) – the German-French airborne naval warfare system of the future – we not only founded the civil law company German-MAWS-GbR together with ESG and Diehl Defence, but also acquired initial contracts for the study phase with the civil law company and our consortium partner Thales. This enables us as the sensor system supplier to help define the system architecture requirements, which will subsequently form the basis for the actual development of the aircraft, together with our partners.
  • We have assumed a leading role in the “Future Combat Air System” (FCAS) for developing a next-generation combat aircraft, right now Europe’s largest strategic defence programme. With our assumption of the leadership role in the German “Future Combat Mission System” (FCMS) Consortium, we can exercise a decisive influence on shaping the solutions on both the technological and programme levels, ensuring that we remain deeply integrated in the ongoing strategic development over the long term. This keeps us in close contact with our customer and ensures extensive business with stable earnings. In the FCMS Consortium with Diehl Defence, ESG and Rohde & Schwarz, we are additionally bundling all major core competences of national key technologies under a single umbrella.
  • The German-Czech exercise “Timber Express” provided one striking example of the recognition that we enjoy from our customers. At the express request of the Bundeswehr, we demonstrated our competence in the integration of datalinks and mission systems in helicopters.
  • Our modular Kalætron product family impressively showcases how successfully we at Spectrum Dominance develop and refine existing products, optimise them and create innovations for our customers. This formed a special focus in 2020:

  • Thanks to its leading-edge sensor technology, our Kalætron Integral is already able detect radar-based threats at an early stage and at great stand-off distances today. Consequently, this year our German customer asked us to present a comprehensive proposal, on the basis of the Kalætron Integral and as general contractor, for the integration of reconnaissance capability in carrier platforms.
  • In 2020, we expanded the already extensive capabilities of the Kalætron product family to include active jamming. Now, our new Kalætron Attack can, for the first time, not only localise threats but also blind or spoof them using targeted jamming signals. This means that the system can, for instance, localise anti-aircraft installations in fractions of a second and successfully jam even the most modern systems over an extreme frequency range using artificial intelligence. This significantly expands the deployment potential of combat aircraft to comprise not only an active electronic combat role (ECR) but also escort and stand-off jamming.
  • Our Kalætron radar warner for diverse helicopter platforms also successfully mastered all test scenarios in 2020. We have already submitted multiple proposals for this product in national and international projects and are receiving an extremely positive response.
  • This creates ideal prerequisites for our future business. In 2020, the Division achieved revenues of 253 million euros. For 2021 we are expecting numerous new orders both on the product level and as part of major European research and defence projects.

    Optronics

    Optronics

    Keeping an eye on everything
    Andreas Hülle, Head of HENSOLDT Optronics

    Our optronic and optical products and solutions are a part of HENSOLDT’s core competence. They deliver vital “insight” in numerous defence and security-relevant sectors. Our customers appreciate the user-friendliness, dependability and broad, individually customisable diversity of our products at sea, under water, on land, in armoured vehicles, aboard manned and unmanned airborne platforms and even in space. 2020 saw us making great strides in internationalisation and in our strategic orientation toward positioning ourselves as a systems provider with intelligent surveillance and reconnaissance sensors:

  • Our combined “Land and Security” business generates the greatest sales revenues. Our electro-optics and periscopes for military vehicles and for border surveillance are in wide use and high demand as leading-edge technology. In 2020 alone, we posted an order intake of around 100 million euros in this sector. Product highlights included a new sensor package for the Puma armoured assault vehicle and its “Very High Readiness Joint Task Force” (VJTF) upgrade programme, which delivers colour imaging for enhanced operational readiness. Additionally, all Puma assault vehicles are being upgraded with our MUSS multifunctional self-protection system. We have received orders to equip further Leopard and Marder tanks as well as the Dutch Fennek light armoured reconnaissance vehicle with optics. And we succeeded in placing our innovative “See Through Armour System” (SETAS) for armoured vehicles as an upgrade with multiple customers. SETAS will also play a major role in the future “Main Ground Combat System” (MGCS). Additionally, HENSOLDT’s US subsidiary HENSOLDT Inc. won its first major order, to deliver around 450 HENSOLDT Optronics laser range finders for the M1 Abrams tank of the US armed forces.
  • Internationalisation accelerating in the maritime sector. We acquired South Korea and Pakistan as new customers for various versions of our optronics masts. The first deliveries to Taiwan are scheduled for 2021. In addition to Germany and multiple European nations, India is also one of our customers in this segment. The German Navy placed initial orders for our surface ship surveillance system MEOS II. And together with NEXEYA, we are pursuing the development of integrated bridge systems in France.
  • In Aerospace, our “Airborne Missile Protection System” (AMPS) for helicopters is proving an unqualified success. We thus hope to be able to equip all NH90 transport helicopters and participate in the Tiger Mk3 upgrade. Additionally, we have already signed a framework contract with Airbus Helicopters to equip multiple helicopter models. This makes our system the international standard. HENSOLDT South Africa also played a substantial part in our business success by acquiring orders for around 80 of our airborne ARGOS II surveillance systems for military, border and naval patrol missions for the coming two years alone. In future, ARGOS II will be deployed in police helicopters on three different helicopter platforms – not only by the German Federal Police but by the State Police of Thuringia as well. Finally, we delivered the first models of our new infrared “Missile Approach Warning System” (MAWS) in 2020.
  • We are also impressively demonstrating our innovative capability in space. For the first time, we certified a new fabrication technology that will enable us to fabricate a 1.4 meter mirror for a key customer.
  • And of course we cannot fail to mention our targeting optics, which represent an unbroken chain of technological progress reaching back to Moritz Carl Hensoldt, our company’s founder. In this sector, we will equip MG5 machine guns of the German Bundeswehr with an additional 5,000 of our optical sights from our Wetzlar plant. With our comprehensive internationalisation strategy, we also want to continue opening up further markets for our products.
  • And finally, our industrial solutions business continues to develop extremely successfully. We are currently on track to become the preferred supplier to one of the world’s largest vendors of semiconductor photolithography systems with our “Final Focus Metrology” (FFM) systems for production control. The overhaul of our cleanroom fabrication in Oberkochen in 2020 not only enabled us to meet the extremely exacting quality standards of this industry but also made it possible to double our production at this facility.
  • In 2020, Optronics posted over 300 million euros in new orders and achieved sales of around 290 million euros. Our book-to-bill ratio is thus greater than 1, overwhelming evidence of our continuing successful growth. Our supply chain optimisation also contributed to our business success by significantly improving our cash flow.

    Customer Service

    Customer Service

    On a growth trajectory
    Temur Karbassioun, Head of Customer Service

    Traditionally a high-margin segment, Customer Service continues to grow strongly. One important driver here is our greater integration with the Divisions and the international business units. The ongoing pandemic affirmed the rightness of the focused digitalization efforts that we have been pursuing for years in many of our service activities. Here are just some of the highlights of 2020:

  • How can we better network our country subsidiaries and link the markets more effectively? In 2020, we originally wanted to tackle these questions in a large international meeting. On account of the pandemic, the in-person meeting was transformed into an online event that showed beyond a doubt how our superior digital competence can also aid us internally. Represented as avatars in digital breakout rooms, participants used virtual reality (VR) tools to prepare a comprehensive service portfolio that covers our entire global organisation and forms the foundation for our future integrated offering.
  • This foundation provides the basis for our services for our own, ever-growing product portfolio and third-party products as well as our “above and beyond” special services. We are learning a lot about the latter two from our French NEXEYA colleagues, who have always been strong in this area. We are also supported by our extensive technological expertise. Specifically, we not only possess all required certificates, but also the know-how to master the technology of products that others are afraid to touch. On account of this enormous potential, we at HENSOLDT now even operate our own sales unit to market corresponding services.
  • At the same time, we are continuing to exploit the advantages of the HENSOLDT domain approach in the Customer Service area as well. This makes it possible to present our services to customers right from the start as an integral part of our system solutions and product offerings, which enhances our reliability for customers and secures sustainable business.
  • One particularly noteworthy event in the fiscal year under review was the Bundeswehr’s participation in the NATO Baltic Air Policing mission, in which Eurofighter units were assigned to the Baltic region. We dispatched our specialists to Estonia under extremely strict pandemic safety protocols to provide consultation and support on site, fully integrated in the mission. We received a great deal of praise and recognition for this.
  • In pretty much all respects, the pandemic has once again put the spotlight on our strengths. Naturally, we were initially unable to perform many on-site call-outs. But within an incredibly short time, we developed computer-based training offerings – often using VR and AI – as well as new methods for remote maintenance and troubleshooting and, together with our IT experts, found alternatives and built digital bridges for services to our customers. We definitively showed that we are “mission-ready” and capable of finding solutions even in extreme stress situations. And in doing so we scored bonus points with a lot of our customers.
  • 2020 was thus an important year for us. It enabled us to underscore once more what makes HENSOLDT and our Services unit so special: Where others just give up, we go the extra mile. Whether a 35-year-old radar installation in Pakistan or obsolescent subsystems on the Tornado, whether on the ground, in the air or at sea, under extreme conditions on site or remotely and digitally. And even though the latter now generally works extremely well, our aim remains to further expand our on-site activities systematically and globally, in order to get even closer to our customers.

    HENSOLDT Inter­national

    HENSOLDT France

    HENSOLDT France

    VIVE LA FRANCE
    Jérome Giraud, Managing Director HENSOLDT France and NEXEYA

    The acquisition of NEXEYA in autumn 2019 marked the start of a comprehensive integration process that was completed extremely rapidly. The focus is now on realising synergies. With HENSOLDT’s sensor competence and NEXEYA’s system solutions, we can now jointly gain new customers and conquer new markets – and even more besides!

    The French defence market is among the most attractive in all of Europe. The national projects and projects planned with Germany total several billion euros in the coming years alone. Together with NEXEYA, the HENSOLDT Group can leverage its larger German-French footprint to make the decisive difference – particularly in projects such as FCAS , MGCS (see further below) and the EuroMALE UAS.

    Integration: mission accomplished

    The post-merger integration (PMI) process at NEXEYA kicked off right away. The PMI enabled us to synchronise processes in the minimum possible time and, even more importantly, brought together key employees from France with the stakeholders of the entire Group in order to enhance collaboration.

    We can now jointly leverage synergies, enhance existing products and develop new ones. HENSOLDT products are continually being adapted to meet French requirements while NEXEYA products are being integrated into the HENSOLDT world – with the Group’s global network providing NEXEYA with access to the world’s markets.

    The next step: on to new horizons

    At the same time, the merger improves HENSOLDT’s access to the French market – enabling a significantly broader industrial and technological base in the French defence sector. In this connection, NEXEYA’s portfolio of services is receiving special attention. With NEXEYA’s expertise in the areas of MRO, reproduction and repair, obsolescence management and life cycle management in the broader sense, the future joint offerings of both companies open up entirely new markets for HENSOLDT.

    Our innovativeness: powering tomorrow

    NEXEYA also brings the Group ground-breaking expertise on hydrogen-based solutions. As environmental concerns are now more critical than ever in both the defence and civilian sectors, NEXEYA’s existing solutions for generating and storing hydrogen represent a decisive competitive advantage for the Group. Aside from that, this segment plays a major role in strengthening the Group’s sustainability initiatives.

    The vision: one united system provider

    Technical complementarity is a further key advantage, as the combination of the Group’s comprehensive range of sensors with NEXEYA’s maritime battle management system and aeronautic ISR solution offers customers strong unique selling points and single-source solutions.

    All in all, the acquisition of NEXEYA levels up the HENSOLDT Group to a pivotal German-French player in the defence sector – and one that plays a key role in pioneering bilateral programmes and thus in international markets as well.

    HENSOLDT South Africa

    HENSOLDT South Africa

    SAWUBONA SOUTH AFRICA
    Rynier van der Watt, Managing Director HENSOLDT South Africa

    Introduced in 2019, HENSOLDT South Africa is playing an increasingly important role in the company’s universe. Expanded competencies have led to new products and new markets to be conquered.

    "Sawubona" is one of the typical South African greetings – it means “I see you” in Zulu, the most common language spoken as a first language in South Africa. It is certainly an appropriate greeting at a company that has made a notable impression in a very short time. The new brand – created in 2019 from the merger of GEW and Optronics – is establishing itself as the leading South African brand in defence and security electronics. With currently the largest industrial base outside Europe, HENSOLDT South Africa is already making a significant contribution to further increasing the company's global reach. And this is just the beginning.

    One brand – one strategy

    2020 was marked by the integration of the two formerly independent business units under one new brand umbrella. Now successfully transformed into a joint organisation with an overarching structure, the centralised key functions such as Finance, Human Resources, Legal & Compliance and Communications support the business. New business units are now being created within the legal entities, such as the Radar Business Unit that is being introduced. A joint development centre pools resources and expertise. New technologies are to be developed here for local and international HENSOLDT companies and customers. Today, and together as HENSOLDT SA, decades of experience and competence of GEW, HENSOLDT Optronics and the Radar Business Unit (previously Tellumat) contribute an important building block to the international growth of the company.

    Innovative products – new markets

    The foundation for this is the innovative products, which are well established in the market. As host of the “Sovereign Security Conference”, HENSOLDT SA presented its integrated security solutions in 2020 to a broad audience. Due to the pandemic situation, the conference was held purely virtually for the first time – also the first event of its kind in the South African industry. More than 300 decision makers, technology experts and business leaders from Africa informed themselves about the latest solutions in the areas of security, IT and defence. More recently, the company also presented a selection of its defence solutions at a capability demonstration day to key delegates from the industry.

    New orders also generated additional sales. The South African Air Force and the helicopter fleet of the German Federal Police were equipped with the airborne ARGOS II surveillance system. The South African Communications Regulatory Authority ICASA received an automated spectrum management system from GEW, the authority's preferred supplier since 2000. And a new fleet of armoured personnel carriers equipped with HENSOLDT SA's “Force Protection Jammer” has been delivered to the African Armed Forces for peacekeeping missions. The company’s biggest contract of its kind is also being delivered for a nationwide spectrum management system in the Middle East, establishing HENSOLDT SA’s market leadership in this domain. Already in use today throughout Africa and in many countries of the world, the innovative products and solutions of HENSOLDT SA form a solid foundation for future business.

    Further acquisition – additional division

    With the acquisition of Tellumat's Air Traffic Management (ATM) and Defence & Security divisions in 2020, HENSOLDT SA has laid the foundation for the establishment of its own radar business unit in South Africa.

    With a history of more than 50 years, Tellumat is considered one of the leading manufacturers in this field in Africa. Long-term partnerships with customers and more than 100 employees in development, production and sales at the locations in Cape Town and Pretoria form a solid basis for its integration into the HENSOLDT Group. In a joint incubation project, the company now intends to further expand its leading position with innovative 3D land and marine radars.

    Plenty of action – one goal

    In a year characterised by a lot of change, HENSOLDT SA has not only managed to successfully bring a new brand to the African market. This new brand has also reinforced its position as a heavyweight on the international market for defence and security authorities with applications for vessels, submarines, land vehicles, helicopters and jets – contributing to the global business success of the HENSOLDT Group with additional export business.

    HENSOLDT United Kingdom

    HENSOLDT United Kingdom

    RULER OF THE SEAS
    Russel Gould, Managing Director HENSOLDT UK and Head of International Business Development

    For centuries, Britain has been considered a proud seafaring nation. HENSOLDT UK continues this tradition with its maritime navigation and monitoring systems and is gradually expanding its portfolio to include land-based solutions.

    Following the acquisition of Kelvin Hughes – now renamed HENSOLDT UK – the company continues to focus on the development and production of maritime navigation and surveillance systems. In doing so, the company is pursuing a multi-level strategy. One focus is the British defence market, which is after all the second largest in the NATO world in terms of absolute expenditure. Against the background of the pandemic and Brexit, increased investment in projects for the Ministry of Defence is expected here in the coming years. In addition, HENSOLDT UK also has its sights set on the global market for maritime solutions, contributes its products to systems of the group and extends access to the UK for the parent company.

    Investing in people and markets

    2020 was a year of strategic investment. In Great Britain, HENSOLDT is already considered an established and strong market participant – also due to the acquisition of Kelvin Hughes. The foreseeable developments and the programmes already underway open up new opportunities. From a newly created management position, HENSOLDT UK is therefore specifically monitoring all current developments in the British defence market – also and especially with regard to the other products from the HENSOLDT universe.

    In addition, a further focus was placed on international growth and the related sales force was strengthened. After all, the maritime world market offers a wide range of potential, which now needs to be exploited together with the HENSOLDT parent company. After all, the UK has already proved to be a springboard to the USA on several occasions in the past.

    New products for new target groups

    One option is the proven SharpEye technology, which due to its flexibility can be used for a wider range of applications from its naval roots – for coastal surveillance and in port traffic control centres, for border surveillance, but also for the protection of critical infrastructure and other security applications on land.

    Together with the land and coastal surveillance radars of the HENSOLDT SPEXER series, which are particularly suitable for the detection of and protection against drones, a comprehensive security and surveillance portfolio is thus created for sensitive and protected areas such as warehouses, perimeters, infrastructures and borders. To this end, HENSOLDT 2020 has, for example, further developed the SPEXER 500 entry model into the SPEXER 600.

    The success of the strategy was already reflected in the first new contracts in 2020, including the protection of wind farms in the US.

    Overarching cooperation for new successes

    At the same time, HENSOLDT UK is intensifying its cooperation with the company's other locations. For example, British navigation radar was successfully integrated into the new Lyncea combat guidance system from NEXEYA in France and the MSSR2000 IFF Solution from Germany. The first units are scheduled for delivery to the French Navy in 2021, where they will enable tactical data links on six new deep-sea patrol vessels and – thanks to HENSOLDT UK – ensure enhanced situational awareness.

    Opening up new opportunities

    With participation in a large number of current tenders, a well-filled product pipeline and the necessary staffing, all signs of progress and success at HENSOLDT UK are thus clear. As a fully integrated part of the HENSOLDT group of companies, additional new opportunities and markets are opening up, which now need to be developed together.

    Cross-Divisional projects

    Eurofighter

    Eurofighter

    The Eye of the Typhoon

    With over 550 aircraft delivered, the Eurofighter Typhoon forms the backbone of numerous air forces in Europe. Starting in 2025, German and Spanish aircraft will be fitted with an essential update: the ECRS Mk1 radar from HENSOLDT. An order worth billions that paves the company’s way to the future.

    Since the 1960s, a HENSOLDT radar has been behind the nose cone of virtually every combat aircraft in Germany and in many other European nations as well. From the Starfighter to the Phantom and Tornado, and even the three Eurofighter tranches to date, they serve as the pilots’ “third eye” when flying missions. For the first time, however, HENSOLDT will not merely develop and produce the hardware components for the next iteration of the radar for the Eurofighter Typhoon, Rather, the company holds responsibility for the entire system design of the follow-on model, the “Eurofighter Common Radar System” (ECRS) Mk1. This marks HENSOLDT’s transition from a supplier to a system provider for fighter radar systems, and the ECRS Mk1 opens the door to future projects such as the “Eurofighter Long Term Evolution” (LTE), the “Future Combat Air System” (FCAS) and the “Maritime Airborne Weapon System” (MAWS).

    This is a once-in-a-century opportunity for HENSOLDT that will transform our entire radar business and unleash enormous growth potential. It will open the way to future markets that we cannot yet even begin to quantify. Our new role guarantees the growth of our radar business for the next 15 to 20 years, and thus makes a key contribution to stabilising the enterprise as a whole.

    Erwin Paulus, Head of Radar, IFF & Comms

    The project

    As soon as it became clear that the Eurofighter was to receive a new radar system, HENSOLDT began working behind closed doors to develop the system and to support the necessary political decisions. Preparations were made in collaboration with our Spanish partner INDRA, and supplementary discussions were conducted with further partners in the UK and Italy.

    In June 2020 the waiting was over: the Budget Committee of the German Bundestag granted its approval for the project. The order was awarded shortly thereafter by Airbus. Having assumed responsibility for system design, HENSOLDT immediately commenced the full-scale development of the entire radar system as a HENSOLDT product.

    The system

    The ECRS Mk1 radar system will represent a significant improvement over currently available solutions. To date, the various Eurofighter tranches have used radar systems with purely mechanically scanning antennas (CAPTOR-M) – built with radar antennas and various components from HENSOLDT from day one. The next development stage culminated in the rollout of active electronically scanning array (AESA) technology in the form of the CAPTOR-E.

    But the ECRS Mk1 will eclipse even the already significantly enhanced transmission and receiving performance of the CAPTOR-E: with its digital multichannel receiver and novel transmitter and receiver modules, the ECRS Mk1 will deliver a further dramatic increase in reconnaissance and fire control performance – even in the initial “Step 1” configuration. As a national key technology and main sensor of the Eurofighter, the significance of the new radar can scarcely be overstated.

    The mission

    Development of the new digital multichannel receiver will now continue through to 2025. This will even permit an upgrade of the “Step 0” radar systems to be delivered in advance starting from 2023.

    In a future iteration of the system (the “Step 2” radar), the digital receiver will then be able to evaluate and process data from an even greater number of channels thanks to extensive software enhancements. The result: ultra-high-resolution imaging, even further enhanced target recognition and novel functions for electronic warfare.

    As a complete HENSOLDT system, the new Eurofighter radar will impart decisive momentum to the Group’s growth strategy and lay the groundwork for a new, strategic role for the enterprise – from supplier to system provider, placing us on a par with the major players in the industry.

    FCAS

    FCAS

    Europe´s Sky Sovereign

    It is Europe’s largest strategic defence programme. The “Future Combat Air System”, or FCAS for short, is much more than merely the combat aircraft of tomorrow. It stands for cooperation between nations and partners, and between the new aircraft and other mission participants.

    The days in which individual gifted pilots like Manfred von Richthofen could single-handedly decide the outcome of aerial combat are long past. Air superiority over tomorrow’s complex mission areas will be won by tactically networked manned and unmanned aerial vehicles linked with other units on the ground and at sea via a combat cloud.

    At the heart of this vision is the “Future Combat Air System” (FCAS), one of the most significant single programmes in Europe right now, both technologically and politically. The participating countries are seeking to jointly develop an aircraft that, flanked by unmanned aerial systems and constantly exchanging data with other units, will far surpass the capabilities of any known combat aircraft and guarantee Europe’s defensive capabilities.

    Challenge 1: the political level

    None of the participating nations either can or is willing to carry out a programme of this magnitude and importance alone. Development, currently being conducted by Germany, France and Spain, must pass numerous consultations, and could also be of interest to other countries in future. Sweden and Italy have signed on with the concurrent British Tempest concept for a new stealth aircraft. Possible cooperation or pooling initiatives cannot be ruled out.

    Challenge 2: the technology

    Before the actual development can even start, the German participants have formed a consortium to tackle one of the core tasks: the interaction of networked sensors and effectors. This “Future Combat Mission System” (FCMS) consortium, led by HENSOLDT, includes the companies Diehl Defence, ESG and Rohde & Schwarz. Their mission is to jointly develop one of the key pillars of the project: detecting, localising and neutralising targets and threats so as to ensure air superiority – both nationally and jointly with allies.

    Experience: the HENSOLDT advantage

    In this connection, HENSOLDT stands out with its extensive and oft-proven experience in the area of sensor technology for combat aircraft. Whether airborne radar and signal intelligence systems, fire control sensors or identification friend-foe, target acquisition and neutralisation or combating threats – HENSOLDT sensors are already delivering the information needed by numerous manned and unmanned aircraft types, day and night, for surveillance, identification and target acquisition in the airspace and ground terrain of operation areas.

    The challenge now is to analyse this ever-swelling flood of data and make it usable in real time with the aid of artificial intelligence – not least in order to enable coordination of the planned unmanned systems. Because in future missions, milliseconds will be decisive. With its Airborne Solutions competence, HENSOLDT already possesses the necessary hardware and software, which it continually develops further.

    Right now, more than 50 employees are already working on future solutions for FCAS and the “Maritime Airborne Weapon System” (MAWS) (see chapter after the next). And these teams will continue to grow.

    The seven pillars of FCAS

    The development of the airborne weapon system of the future rests on seven pillars, for which initial orders have already been placed to define the necessary technologies:

    • 1. Aircraft platform
    • 2. Engine
    • 3. Unmanned escorts
    • 4. Networking in an air combat cloud
    • 5. Testing of concepts in virtual space
    • 6. Networked sensors
    • 7. Stealth concept

    Together with its partners, HENSOLDT is already working to make the technology needed for the sixth pillar – networked sensors – a reality in the planned sensor-effector integration. Following further defined development phases, current planning calls for the rollout of the first flying demonstrator in 2027, with FCAS itself to be mission-ready starting around 2035.

    MGCS

    MGCS

    Intelligent Advances

    In the “Main Ground Combat System” (MGCS) jointly envisioned by Germany and France, HENSOLDT aims to operate as a systems house and offer all capabilities, intelligently networked, from a single source.

    Even though it will – probably – look that way at first glance, the vision of the “Main Ground Combat System” (MGCS) is to be much more than “just” a tank. As the successor to the German Leopard 2 and the French Leclerc, its main strength will be its intelligent networking and collection of widely diverse information in a single system. This is the only way to unlock capabilities of which today’s tank crews can scarcely dream.

    Battlefield omniscience with artificial intelligence

    This is possible thanks to the diverse sensor, radar and communication technologies that are already available today along with those expected to emerge in the coming years. These deliver the information needed to allow the MGCS crews to manoeuvre their vehicles safely and effectively in enemy terrain, either alone or in combined operations.

    Highly versatile sensors and radar systems on the vehicle generate the necessary base data. Unmanned drones that autonomously self-organise as swarms deliver additional reconnaissance. The most important breakthrough: these data will not only be available to the vehicle’s crew, but will instead be fed into a central system via jamming-proof laser links and additional drones that operate as relays.

    The result: the crew of each vehicle can see what every other crew sees. And they also receive a complex complete situational picture across all vehicles made up of all available information, analysed using artificial intelligence and prepared so as to be intuitively understandable. Navigation under poor visual conditions and even autonomous driving in difficult terrain, automatic warning of impending danger and automatic combating of both physical and cyber threats could thus become a reality.

    Direct from stock

    The MGCS project plays to HENSOLDT’s strengths in many ways, as we already possess virtually all capabilities that the system requires. We can simply take what we need “direct from stock”.

    HENSOLDT Optronics can deliver the necessary sensors. From thermal imaging, night vision and targeting devices to laser range-finders and communication systems and even automatic self-protection and fire control systems. Our radar portfolio offers systems for air and ground surveillance. HENSOLDT Ventures offers protection against cyber attacks. And SETAS – the “See Through Armour System” from HENSOLDT – can pool, analyse and represent all data in a comprehensible 360-degree view.

    Implementation

    The next step is to develop technical demonstrators for the various components of the MGCS – chassis, armaments and sensor system. The last one – internally designated “Main Technology Demonstrator 12” (MTD 12) – is of special importance in ever more complex mission areas. Only those combatants who can track and analyse all targets and threats rapidly in an understandable situational picture in real time will be able to respond effectively.

    MAWS

    MAWS

    Safe at sea

    In future, the “Maritime Airborne Warfare System” will guarantee security at sea. HENSOLDT is laying the foundation for this together with German and French partners.

    In 2018, it was decided at German-French level to jointly develop a replacement for the ageing marine patrol aircraft Brequet Atlantique 2 of the French Navy and the P-3C Orion of the German Navy. What’s special: for the first time, military system vendors are to conduct a feasibility study with respect to future requirements, before the orders for the development of a suitable weapon system can be placed on the basis of the study’s results.

    New threats – new requirements

    In recent years, the threat situation has not only intensified generally due to technological advancement, but has also become significantly more complex and requires exponentially faster response times. Though proven over many decades in service, the current maritime patrol aircraft will not be able to fulfil all future requirements without restrictions. The future lies in networked operating/airborne platforms that can detect, track and neutralise threats on and below the surface across extensive maritime zones. These will collaborate and share relevant data with other manned and unmanned systems, naval and other forces as well as e.g. with satellites in real time.

    To this end, Germany and France resolved to first define the manifold requirements for the system architecture and only then begin the actual development on the basis of these requirements – an unprecedented course in the history of military aeronautics. HENSOLDT is laying the necessary groundwork together with its three consortium partners ESG, Diehl Defence and Thales.

    Two studies – one objective

    HENSOLDT and its partners were jointly awarded the contract for the first MAWS feasibility study at the end of 2020. Over the next two years, the team is, in the wording of the order, tasked to “determine the optimum combat system” that “can perform all types of missions”, on the basis of the current state of the art and the resulting possibilities.

    Concurrently, in 2020 HENSOLDT and its German MAWS partners were also commissioned to conduct a national supplementary study in 2020. Its purpose is to determine how MAWS can be integrated in the German military system environment and what national guidelines – including those relating to certification – must be complied with.

    HENSOLDT experts occupy key roles in both studies, including the MAWS Chief Engineer, a Combat Mission System Architect and the Anti-Surface Warfare Architect. Additionally, more than 20 experts from other Divisions are providing the necessary background work for this project, which is important to our enterprise on its path to becoming a military systems house.

    • 2018
      Germany + France
      Decision for the joint development of a new airborne maritime reconnaissance system
    • end of 2020
      Feasibility study
      Optimal combat system
    • end of 2020
      Supplementary study
      Integration of MAWS into German command and control systems
    • end of 2022
      MAWS
      Identification of the optimal combat system
    European projects

    European projects

    Teaming up for tomorrow

    On the European level, HENSOLDT is teaming up with other enterprises and organisations to research systems and solutions to make our future more secure.

    We can only be strong together. Only by working together can we master the complex technological challenges for a secure future. There is also broad political agreement on this across Europe. In multilateral research and development projects, HENSOLDT is working with other leading enterprises and organisations to place major projects for tomorrow’s diverse defence on a shared technological basis. For it is only through innovation and a competitive European industry that the European Defence Union can function effectively and jointly master the crises of tomorrow. To present just three examples:

    CROWN – the ultimate in electronic interaction

    How can the most critical radar and communication functions of an aircraft be optimally combined with electronic warfare capabilities in a single system? The joint EU research and technology project “Combined Radar, Communications and Electronic Warfare Functions” (CROWN) is seeking to find the answer. The objective: to define an overarching system architecture including the requisite components. This will not only offer an innovative solution for tomorrow’s aircraft that is smaller, lighter, more cost-effective and more powerful. It will also create a foundation on which future ground and maritime systems can build.

    To execute this project, eleven enterprises and research organisations, including the Fraunhofer Society, the Netherlands Organisation for Applied Scientific Research (TNO) and the Swedish defence research agency Forskningsinstitut (FOI) have formed a consortium. This project is funded with a budget of 10 million euros.

    Within this framework, HENSOLDT is primarily supporting the development of the system concept and the architecture design as well as the necessary digital radar and communication systems.

    EUDAAS (EDIDP) – safeguarding the European MALE RPAS

    UAS technology is considered one of the paramount fields of future security policy. Together with France, Italy and Spain, Germany plays a leading role in the European MALE RPAS (“Eurodrone”) project. This system will provide important real-time reconnaissance at medium altitudes.

    The “European Detect And Avoid Function Based on New Sensors” project (EUDAAS) aims to ensure that such remotely piloted systems can safely share airspace with other manned and unmanned aircraft. With a budget of 27.5 million euros, ten international enterprises and research institutions are working on the necessary technologies. The sensors that the aircraft use to constantly monitor their environment and their reconnaissance area will perform a key role here. For this undertaking, HENSOLDT offers the only fully integrated sensor for identifying and tracking potential threats.

    REACT (EDIDP) – protection through jamming

    Electronic attacks will constitute some of the most severe threats of the future. The EU’s “Responsive Electronic Attack for Cooperation Tasks” (REACT) project seeks to provide member states with the technology needed to execute such attacks themselves in order to neutralise potential threats.

    This will enable mainly unmanned combat aerial vehicles in an escort role to neutralise ground-based, maritime and airborne threats. In this project, which operates on a budget of 14.8 million euros, HENSOLDT is making an important contribution to preparing the operational concept and developing future jammers.

    HENSOLDT‘s space business

    HENSOLDT‘s space business

    An infinite frontier for new business

    HENSOLDT has been amassing experience in space since 1962, and today provides key components for optical and radar systems intended for use under space conditions.

    Whether civilian or military – space has been the object of steadily increasing interest in recent years. High-tech from HENSOLDT. has been an essential mission partner since the first manned lunar landing of Apollo 11. Today, our Space Division develops solutions for earth/planetary observation, communications, security and space exploration in collaboration with the industry’s major players. Thus, new business potential is being opened up from existing radar and optical competences – commissioned by NASA, ESA and DLR.

    From earth to orbit – and beyond

    The aim here is essentially to adapt proven technologies from terrestrial air and ground applications so that they can withstand the high demands of space environments, where they must be able to function reliably and with no maintenance for at least ten years under the most extreme conditions.

    HENSOLDT boasts two advantages here: Firstly, the technologies have already often proven their potential in military and civilian use. Secondly, only those technologies for which a potential market exists are subjected to the rigorous and time-consuming certification process required for space deployment. With its enormous expertise, HENSOLDT Space Consulting can assist in successfully implementing these space-related qualification processes.

    Serving by protecting

    In space, protection is of paramount importance.

    Our applications cover the areas of Radar, Optronics, Cyber and Spectrum Dominance. To this end, we are developing new sensor technology solutions in the areas of synthetic aperture radar (SAR), telescopes, optical instruments and hardware/software solutions to counter cyber attacks. In line with our company motto, “Detect and Protect”, innovative HENSOLDT technology helps protect satellites sometimes costing hundreds of millions of euros against a broad spectrum of threats in space. For one thing, this means protection against the 20,000 pieces of space debris larger than ten centimetres and over 700,000 pieces larger than one centimetre that currently orbit the earth at a velocity of around 25,000 kilometres per hour. Each of these tiny particles has the potential to damage or even destroy an expensive satellite. This also means protection against possible cyber attacks against the satellite’s hardware or software.

    Here too, proven HENSOLDT technology can make a decisive contribution, as is recognised by leading space agencies such as NASA, ESA and DLR.

    Current space projects

    HENSOLDT’s space business is focused on the three main areas of planet and space observation, optical communication in space and protection in space. The following are four examples of current satellite projects and missions that are realised using HENSOLDT technology:

  • Optical instruments for weather satellites (MetOp, METImage)
  • Sensors for modern SAR satellites (TanDEM-X, PAZ, KOMPSat-6)
  • Components for reconnaissance satellites
  • Instruments for exploration missions (James Webb Space Telescope, Bepi Colombo, Juice)
  • Supply Chain Management

    Supply Chain Management

    Supply Chain Management

    Cash is King

    Innovation and product cycles are becoming ever shorter, and enterprises must constantly adapt and improve if they are to secure their existence over the long term. On its path to becoming a system provider, HENSOLDT is meeting this challenge with a cultural change that strives for an integrated perspective on the product and project management within all departments and business units.

    With the rollout of an enterprise-wide, cross-functional supply chain management (SCM) system, HENSOLDT is striving to optimise the flow of information, materials and capital by integrating suppliers, internal processes and customer requirements. The key is the dynamic interaction between the various links in the supply chain that became essential due to the reduction of the production depth and the increasing division of labour. The process synchronises Sales, project management in the Divisions, Customer Service, and Purchasing with current production planning, and consequently procurement plans as well. This enables us to largely avoid inefficiencies.

    A process that has long been standard practice in the industry has now also made managing ongoing projects at HENSOLDT significantly more efficient and is strengthening the interaction between a wide range of enterprise functions. Jointly developed and optimised lean processes will in future form the basis for an integrated digital implementation of supply chain management. This also entails planning of a phased extension and expansion to institutionalise the new processes for the “HENSOLDT Management System” (HMS). The key advantage here is that the enterprise-wide supply chain management can be scaled in such a way that it can grow with us going forward.

    Developed in 2020 by an interdisciplinary HENSOLDT team, the new supply chain management concept is now being rolled out in the various Divisions – in particular with an eye toward optimising product specifications. Even the initial actions generated significant successes shortly following their deployment and had a positive impact on HENSOLDT’s net working capital and the cash situation.

    Our customers

    The current needs of our customers are always our highest priority. The Divisions align their production strictly along these needs on the basis of monthly end-to-end (E2E) planning circles. Data on production status, shortages or disruptions in the deliveries of specific contractors are also disclosed and tracked using KPIs. A digital SCM cockpit helps to avoid excessive inventories and to estimate work in progress.

    Our production

    This has enabled us to stabilise our production planning and significantly reduce the number of nonconforming parts. We can gradually reduce the necessary production buffers and thus cut throughput times. As a result, HENSOLDT reduced its fixed capital while increasing its flexibility. We are now seeking to include our supplier systems in this process in order to reduce our production throughput times by analysing them together with the suppliers’ resupply times.

    Our suppliers

    The tremendous dynamic with which HENSOLDT brings products to market today also demands exceptional flexibility from our suppliers. Renegotiated framework contracts offer the necessary adaptability for call-ups as of the requirement date. Ever more such contracts are being negotiated, which contributes not only to a culture of just-in-time deliveries but also to a gradual reduction of inventories.

    Our outcome

    HENSOLDT’s success speaks for itself: the intensive collaboration between production, suppliers and quality management also reduced incoming-goods inspections, testing and storage substantially. With savings in the high double-digit millions in 2020, supply chain management actions not only made a significant contribution to improving our company’s cash situation. The interdisciplinary collaboration of diverse specialisations was also decisively enhanced and both the flexibility and responsiveness of the enterprise were greatly increased. The supply chain management activities are now to be expanded further, with the ambitious aim of realising further cash potential amounting to several million euros. This is the only way that the company can reduce its cash conversion cycle to the target 200 days in the medium term.

    Procurement

    Einkauf

    Procurement

    Reliable partner for dependable relationships

    HENSOLDT’s rapid growth is only possible with partners we can depend on. As the pivotal player in our supply chain management, Purchasing centrally oversees and monitors project procurement as well as all direct and indirect merchandise groups. One key focus is on the selection and management of suppliers.

    HENSOLDT has grown successfully in recent years both organically and through acquisitions. The product portfolio has been continually expanded, and numerous major projects cast their shadows on our road to becoming a systems provider. The challenges which this presents for our suppliers can only be mastered through a partnering relationship on a basis of equality.

    Strategic cooperation

    This starts with the early, cross-departmental involvement of Purchasing in all procurement-relevant processes, ensuring that this unit works directly with all units within the enterprise that are important for the project. Proving the old saying that “knowledge is power”, this enables Purchasing to establish itself as a welcome partner both internally and externally. The collaboration with a network of preferred suppliers has given rise to reliable strategic cooperation relationships. A strict assessment system forms the basis for flexible, forward-looking purchasing. It enables minimisation of risks – among other ways by involving possible alternative suppliers at an early stage.

    HENSOLDT’s Purchasing unit assures the stability of the supply chain through the systematic assessment of all suppliers and their importance for production that also takes into account sustainability aspects and strict adherence to compliance guidelines.

    The whole is more than just the sum of its parts

    HENSOLDT places extremely high priority on truly partnering relationships with all suppliers. Regular planning circles ensure transparency. Long-term cooperation agreements make it possible for suppliers to grow together with HENSOLDT. This pays off, both in terms of our high quality standards and with respect to the flexibility often demanded for small quantities and short delivery times.

    Going forward, our rapid growth will make the question as to which (sub-) products are produced in-house and which ones are to be bought in ever more important. This offers dependability to both HENSOLDT and its suppliers and opens up new perspectives which ultimately benefit all parties.

    Digitali­zation

    Digitalization

    Digitalization

    Digital is the new normal

    With its comprehensive, company-wide digitalization programme at the end of 2019, HENSOLDT laid the groundwork that proved its worth in the pandemic year 2020. Our digital agenda focuses not just on internal processes, but also actively involves customers and Services.

    Much sooner than many companies, HENSOLDT recognised the opportunities that digitalization offers. The declared objective of the digitalization programme launched at the end of 2019 was to develop new products, improve customer support and implement new internal functions. Planning for the future instead of reacting to crises once again proved the wiser course in the pandemic year 2020 as HENSOLDT was able to rapidly and flexibly adapt to the sudden changes in its parameters.

    The programme

    HENSOLDT’s digitalization programme comprises multiple stages. It began at the start of 2020 with an analysis of the current state of the enterprise’s digital development. Close to 90 existing digital initiatives testified to an already impressive situation. New ideas were rapidly developed on this basis and almost 200 additional concrete application scenarios were defined.

    Ideas covered such applications as digital customer service and maintenance, the establishment of a digital partner landscape and an ecosystem, complete end-to-end processes, technology and configuration management, fabrication and logistics and even new, networked products, services and the digital workplace.

    The crisis

    Then the pandemic struck, impressively highlighting how essential digitalization has already become. Within a very short time, HENSOLDT rolled out a stable IT landscape and the digital collaboration tools needed for the sudden majority of employees that were working from home.

    New remote maintenance possibilities were explored and established. The HENSOLDT Academy also transferred concretely scheduled in-person instruction to cyberspace. For example, the customer response to the training on the helicopters of the Bulgarian Air Force equipped with HENSOLDT LTR-400 IFF transponders, shifted to virtual environments on short notice, was so positive that the new digital format will now be offered much more frequently in future.

    The vision

    The pandemic thus significantly accelerated many planned projects on HENSOLDT’s digital agenda. At the same time, however, the key elements remain and will now be implemented in further stages in all Divisions.

    On the functional level, end-to-end measurement of project and product performance will ensure greater transparency. Advanced analytics supported by artificial intelligence will contribute to automating processes and enhancing efficiency. Data and the potential of digitalization also support management in their planning and enable employees to engage in effective, loss-free collaboration.

    On the product side, new, networked and intelligent solutions will open up new markets and market opportunities. The effective utilisation of product data enhances customer orientation and our extremely secure, proprietary HENSOLDT Cyber processor, equipped with our proprietary operating system, will ensure globally unparalleled data security.

    With its close contact with and support from enterprise management, digitalization at HENSOLDT not only received a further boost in 2020: it will continue to make a substantial contribution to our business success with its medium and long-term strategy.