Top 40 Defence Contractors 2012, Top 20 SMEs 2012

Extract of
ADM's Top
40 and
Top 20
2012
survey
40
top
ADM TOP 40 / TOP 20
2012 Defence Contractors
Judy Hinz | Brisbane
ADM’s Top 40
Defence Contractors
Total exceeds $8 billion
for the first time
This year’s Top 40
Defence Contractors
survey, the 18th such
survey conducted, has
surprised on the up
side, to borrow some
stockmarket parlance.
The Top 10 companies
account for 75 per cent
of the total turnover
of the Top 40
28 | ADM
The 2010 survey total topped $7 billion
for the first time. Two years later we see
the Top 40 revenue topping $8 billion
for the first time – at $8.344 billion.
At first glance that figure represents a
significant increase in a matter of two
years. The 2012 total represents a $644
million or 8.3 per cent increase on the
2011 figure of $7.7 billion, replicating
the 8.4 per cent year on year increase
from 2010 to 2011.
It is important to examine participation in this year’s survey and note the new
names appearing.
In drilling down into the Top 40 figures, we see greater participation from the
Defence Support Group (DSG) side of the
house. Year on year we’ve seen some big
names from this sector appear regularly in
the Top 40: John Holland Group, Spotless
Services, Serco Sodexo Defence Services
and Transfield Services to name just a few.
This year, however, we have five companies participating in the Top 40 survey
for the first time, or for the first time in recent years: Compass Group (Australia) Pty
Ltd – ESS, Accenture, Serco Asia Pacific,
Austal and AECOM. Apart from Austal, all
d e c e m b e r 2 012 /j a n ua ry 2 013 w w w. a u s t r a l i a n d e f e n c e.c o m . a u
of these companies are in the business of
the provision of infrastructure or support
services to defence and the defence sector.
Since our successful Defence Support
Services Summit in Melbourne in August
2012, it seems that ADM is now firmly on
the radar of this important sector just as
this sector is firmly on ADM’s radar.
The addition of these five companies
has raised the cut off figure for the Top 40
from $20.9 million in 2011 to $31.6 million
turnover in 2012.
Top 20 SMEs
It’s fair to say that the SMEs have not fared
as well as the bigger end of town but still
the total revenue of $595.7 million represents an increase of $10 million in turnover when compared with 2011.
At this point, it is important to note that
some SMEs appear in the Top 40 list so the total revenue figure across the Top 40 Defence
Contractors and Top 20 SMEs survey is not
purely a matter of adding the two total figures together. The aggregate revenue across
the two groups is, in fact, $8.577 billion
across 53 companies, compared with $7.847
billion for 2011, covering 49 companies.
ADM TOP 40 / TOP 20
Judy Hinz | Brisbane
2012 Defence Contractors
Top 40 Defence Contractors for 2012
The turnover for the Top 10 Defence Contractors totals $6.296 billion in 2012 compared with $5.867 billion for 2011 ($5.364
billion in 2010), an increase of 7.3 per cent
year on year. This means that the Top 10
companies account for 75 per cent of the total
turnover of the Top 40 (76 per cent in 2011).
Strong performers
in the Top 10
BAE Systems Australia recorded a dip in
turnover of $100 million to $1.7 billion in
revenue but remains unchallenged as the
no.1 Defence Contractor in Australia. The
company’s workforce has been trimmed
too. It now stands at 5,500, a thousand
workers less than two years ago.
Thales Australia has reclaimed second
spot with turnover of $815 million, an increase of $79 million compared with 2011.
ASC, at no.3, has recorded increased
turnover of just over $100 million while
Raytheon Australia has slipped marginally to rank at no.4.
With the first five positions in the Top
40 taken by well-known makers of weapons
systems, the no.1 position on the infrastruc-
Rank 2012
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
30
32
32
32
32
32
37
38
39
40
Company
T/O 2012 ($M)
BAE Systems Australia
1,700.0
Thales Australia
815.0
ASC Pty Ltd
796.4
Raytheon Australia Pty Ltd
735.5
Australian Aerospace Limited
600.0
John Holland Group Pty Ltd
421.222
Spotless Services Australia Ltd
350.0
Boeing Defence Australia 322.0
Serco Sodexo Defence Services Pty Ltd
314.0
Transfield Services
242.0
Lockheed Martin Australia Pty Limited
208.0
Saab Technologies Australia
166.1
DMS Maritime Pty Limited
150.0
Qantas Defence Services Pty Limited
127.0
Compass Group (Australia) Pty Ltd - ESS
110.0
IBM Australia Limited
102.5
Aspen Medical
95.9
Sikorsky Helitech
80.0
CSC Australia Pty Ltd 79.0
Babcock Pty Ltd
65.0
Adagold Aviation Pty Ltd
62.8
CAE Australia Pty Ltd
60.0
Accenture
59.265
Nova Systems 55.0
Qinetiq Pty Ltd
53.0
GHD 52.5
Australian Defence Apparel Pty Ltd
47.0
Serco Asia Pacific
45.9
CEA Technologies Pty Limited
45.5
Airbus Military
38.0
Chemring Australia
38.0
Austal
35.0
DHL Global Forwarding
35.0
General Dynamics Land Systems - Australia 35.0
Rohde & Schwarz (Australia) Pty Ltd
35.0
Safe Air Limited
35.0
Sinclair Knight & Merz Pty Ltd - SKM
34.5
AECOM
34.391
KBR 32.3
Communications Design & Management 31.6
Pty Limited
41
42
43
44
45
Rockwell Collins Australia Pty Ltd
Insitu Pacific
Hawker Pacific Pty Ltd
Marand Precision Engineering Pty Ltd
NIOA
31.01
23.0
22.72
22.263
20.2
T/O 2011 ($M)
1,800.0
736.0
695.8
761.00
600.0
256.0
200.0
300.0
308.0
210.0
198.0
200.4
130.0
135.0
–
155.8
63.8
70.0
60.0
53.0
60.266
68.9
–
41.4
50.0
40.6
32.4
–
50.5
30.0
35.0
–
30.0
38.0
35.0
35.0
27.0
–
29.9
27.1
27.1
32.0
35.26
10.137
19.50
Rank 2011
1
3
4
2
5
8
11
7
6
9
12
10
15
14
13
18
16
20
21
19
17
24
23
25
31
22
33
28
33
26
28
28
38
35
36
36
32
27
43
Top 20 Defence SMEs for 2012
SME
Rank 2012 Company
T/O 2012 ($M)
T/O 2011 ($M)
1
Sikorsky Helitech
80.0
70.0
2
Adagold Aviation Pty Ltd
62.8
60.266
3
60.0
68.9
CAE Australia Pty Ltd
4
55.0
41.4
Nova Systems 5
38.0
35.0
Chemring Australia
6
Rohde & Schwarz (Australia) Pty Ltd
35.0
35.0
7
Communications Design & Management 31.6
27.1
Pty Limited
8
Rockwell Collins Australia Pty Ltd
31.01
27.1
9
Insitu Pacific
23.0
32.0
20.2
19.50
10
NIOA
11
19.1
15.756
G H Varley Pty Ltd - Defence & Aerospace Division
12
TAE
18.9
20.9
13
18.44
17.3
Rosebank Engineering Pty Ltd
14
18.2
18.5
L-3 Communications Oceania Limited (formerly L-3 Nautronix)
15
18.0
20.0
National Aerospace Training Centre of Excellence
16
Eylex Pty Ltd
16.0
15.0
16
H.I. Fraser Pty Ltd
16.0
15.0
18
Cincom Systems of Australia
12.5
12.5
19
Providence Consulting Group Pty Ltd
11.36
10.7
20
10.6
21.7
Daronmont Technologies Pty Ltd
21
22
23
24
25
25
Able Industries Engineering Pty Ltd
Calytrix Technologies Pty Ltd
Micreo Limited
Kinetic Recruitment
Codarra Advanced Systems Pty Ltd
Owen International Pty Ltd
10.4
9.86
9.268
9.0
8.5
8.5
7.65
8.0
–
5.0
8.2
12.0
w w w. a u s t r a l i a n d e f e n c e.c o m . a u d e c e m b e r 2 012 /j a n ua ry 2 013
SME
Rank 2011
1
3
2
4
5
5
8
8
7
13
16
11
15
14
12
17
17
20
22
10
25
24
21
ADM | 29
ADM TOP 40 / TOP 20
2012 Defence Contractors
ture and support side is Top 40 fixture John
Holland Group. The company recorded a
$165 million increase to declare turnover of
$421.222 million in their defence business.
This is a remarkable result for the year
and represents a 64 per cent increase, year
on year.
John Reddie, manager, military engineering programs, for John Holland Group,
told ADM that the company is proud of its
long links to the Australian Defence Force
and its ongoing work with Defence.
“The very strong results this year have
been powered by our people and our mature and robust delivery systems. We understand Defence’s needs and ensure those
needs are always met,” he said.
Spotless Services Australia is another
company proving that there’s good business to be had in the support sector, recording a substantial increase in turnover, up
$150 million to $350 million. This good
result has rocketed the company up the
charts from no.11 last year to no.7 this year.
The growth in employee numbers in its
Defence business tells the first story: up a
total of 300 from the 600 reported in 2011
to 950 this year.
Commenting on the company’s good result for the year, Spotless Services’ general
manager defence, David McKaskill said
that the company works hard at providing
total facilities management and supporting Defence goals and objectives.
“The pressures of budgetary constraint
and increased Government regulation applied to the Defence Estate requires personal commitment and the application of
specialist estate knowledge by the Spotless
defence staff,” he told ADM.
Transfield Services has reported a good
Judy Hinz | Brisbane
John Holland Group’s newly-completed building for HQ, First Division, at Gallipoli
Barracks, Enoggera, part of the Enhanced Land Force Stage 2B project
year with turnover up $32 million to $242
million. Similarly Serco Sodexo Defence
Services continues to perform well in the
sector. The company’s turnover rose $6
million to $314 million in 2012.
Rounding out the Top 10 analysis, there
are six companies of the traditional defence mould and four on the infrastructure
and support side.
Beyond the Top 10 companies
Of the companies ranked outside the Top
10, Aspen Medical has revealed the greatest increase in turnover – up $32.10 mil-
Top 20 ANZ Defence SMEs for 2012
ANZ SME
Rank 2012 Company
T/O 2012 ($M)
T/O 2011 ($M)
1
Adagold Aviation Pty Ltd
62.8 60.266
2
Nova Systems 55.0
41.4
3
Communications Design &
Management Pty Limited
31.6
27.1
4
NIOA
20.2
19.50
5
G H Varley Pty Ltd - Defence 19.1
15.756
& AerospaceDivision
6
TAE
18.9
20.9
7
Rosebank Engineering Pty Ltd
18.44
17.3
8
National Aerospace Training Centre 18.0
20.0
of Excellence
Eylex Pty Ltd
9
16.0
15.0
9
H.I. Fraser Pty Ltd
16.0
15.0
Cincom Systems of Australia
11
12.5
12.5
12
Providence Consulting Group Pty Ltd
11.36
10.7
13
Daronmont Technologies Pty Ltd
10.6
21.7
14
Able Industries Engineering Pty Ltd
10.4
7.65
Calytrix Technologies Pty Ltd
9.86
8.0
15
16
Micreo Limited
9.268
-
17
Kinetic Recruitment
9.0
5.0
18
Codarra Advanced Systems Pty Ltd
8.5
8.2
18
Owen International Pty Ltd
8.5
12.0
20
Explosive Protective Equipment
7.9
7.99
30 | ADM
d e c e m b e r 2 012 /j a n ua ry 2 013 w w w. a u s t r a l i a n d e f e n c e.c o m . a u
ANZ SME
Rank 2011
1
2
3
7
9
5
8
6
10
10
13
15
4
21
18
24
17
14
19
lion to $95.9 million. Because of increased
participation in this year’s survey, this excellent result has only moved the company
up one place in the rankings to no.17.
For a company that is just approaching
its 10th anniversary, Aspen Medical’s rise
to prominence in the healthcare delivery
sector has been breathtaking under the
entrepreneurial direction of managing director Glenn Keys.
Expect more from Aspen Medical in
coming years. In July 2012, the company
was selected by Medibank Health Solutions (MHS) to provide medical practitioners, specialist and allied health professionals to all on-base Australian Defence
Force (ADF) facilities across Australia.
Other notable high achievers are DMS
Maritime up from $130 million to $150
million in 2012; CSC with turnover up $19
million to $79 million and Sikorsky Helitech with turnover up $10 million from
$70 million to $80 million.
Austal’s story is an interesting one too.
It’s local business at $35 million is dwarfed
by it total revenue of $653 million, which
demonstrates its global reach and ambitions. A good story for a home-grown prime.
Compass Group (Australia) Pty Ltd –
ESS is returning to the Top 40 after a six
year absence. The company was ranked
no.18 with a turnover of $80 million in
the 2006 survey.
In the infrastructure and support services sector, engineering firm GHD has
had a good year, reporting turnover of
$52.5 million.
Bernard Mills, business leader defence
ADM TOP 40 / TOP 20
Judy Hinz | Brisbane
& national security, explained the increase
from last year’s result as “a combination of
two factors: a re-baselining of the sector to
more fully reflect all defence-related revenues, and the early effects of a GHD-wide
‘step-up’ strategy focusing on delivery excellence in our core defence infrastructure
work, and targeted business growth in logistics, through-life support, training and
environmental services”.
Top 20 SME companies
2012 has been another tough year for SMEs
in our sector and yet some businesses continue to thrive.
It’s important to note that SMEs can include local offshoots of international companies. Of the top 10 SMEs, only four are
Australian owned: Adagold Aviation, Nova
Systems, Communications Design and
Management and Daronmont Technologies.
Nova Systems is a stand out example
among the Top 20 SMEs with an increase
in revenue of $13.6 million year on year
($55 million in 2012 compared with $41.4
million in 2011).
The combined revenue for the Top 10
Defence SMEs is $436.61 million ($418.5
million in 2011) or 73 per cent of the total of the Top 20 Defence SMEs revenue of
$595.7 million (71 per cent in 2011).
Top 20 ANZ SME companies
ANZ-owned SMEs include those compa-
nies in which private owners have realistically the most ‘skin in the game’.
Turnover for this sub-set of the Top
20 SMEs totalled $373.9 million in 2012,
compared with $364.3 million in 2011, a
modest increase of 2.6 per cent.
For the first time in the SME survey, we
see Micreo Limited debut at no.16 in the
ANZ SME survey and just outside the Top
20 in the SME survey.
As an emerging high technology player, Micreo managing director Tim Shaw
has real insight and knowledge of the difficulties facing high technology start ups.
We asked Tim what the major challenges are and where he sees Micreo in five
years’ time.
His response is interesting and worth
noting – see separate story below.
2012 Defence Contractors
Participation in 2012 survey
I’ve previously noted new companies that
have participated in ADM’s Top 40 Defence Contractors and Top 20 SMEs survey
for the first time. I do stress that this survey relies on the willing participation of
companies across the spectrum of defence
business in Australia and NZ.
I believe that the results this year demonstrate that more and more companies
are seeing the real value in participating
in the annual ADM survey. Inevitably,
companies showing a reduction in turnover are reluctant to highlight the fact.
It is, however, the only reliable indicator
of the economic activity undertaken in the
defence industry in Australia. As such the
annual survey plays an important role in
boosting the profile of the sector.
Disclaimer
While every effort has been made to ensure the accuracy of the information published in ADM’s Top 40 Defence Contractors and Top 20 SMEs survey, the publishers accept no responsibility for any errors or omissions
that may have occurred. Participation in the survey is voluntary, based on invitations extended to known industry participants. Companies wishing to participate in future surveys should contact Judy Hinz, Managing
Editor, judyhinz@yaffa.com.au. The survey is published for the interest of ADM readers. Participation is free.
Copyright notice
The information contained in ADM’s Top 40 Defence Contractors and Top 20 Defence SMEs survey is copyright. The copyright owner is Yaffa Publishing Group Pty Ltd. No part of this survey may be republished or
quoted in any article or report, without the express permission of the publisher. All permission requests are
to be directed to Judy Hinz, Managing Editor, Tel 07 3348 6966 e. judyhinz@yaffa.com.au
Any person or organisation given permission to quote the information published here must acknowledge Australian Defence Magazine, December 2012/January 2013 Top 40 Defence Contractors and Top 20
SMEs Survey as the source.
Big hurdles for Australian hi tech start ups
Tim Shaw
Managing Director,
Micreo Limited
“The number one difficulty facing hi tech
start-ups in Australia
today would be the
strength of the Australian dollar. Whether you
are competing against foreign suppliers selling into Australia or trying to penetrate their
markets, it is very hard to make a start when
you are already at a 20-30 per cent disadvantage in your employment costs relative to
countries like the US.
The only way is to design more efficient
and easier-to-manufacture products and to
be more productive in your manufacturing
operations. Of course, unless you are hi-tech
to start with and can find a suitable niche in
which to operate, you are doomed from the
start in trying to compete with Asian countries that have an even lower cost base.
When we started Micreo in 2002 the Australian dollar was worth 52 US cents and it is
now worth 104 US cents, so that gave us a cost
advantage at the start and gave us time to adjust to the cost disadvantage that we now face.
Over the same period, Australian Defence
has decided to buy almost all of its hi-tech
systems off the shelf from overseas primes,
which has forced us to look overseas for customers to a greater and greater extent.
Whilst doing this, Defence have assisted
companies like Micreo to at least gain an introduction to those overseas primes through
initiatives like Team Australia and the Global
Supply Chain, but only those who are able to
meet the price pressures and rigours of international competition will survive.
It is important to consider timescales and
cash flow: if you are contributing to a new aircraft type, then there are thousands of other
companies and considerations that could delay the program, so it’s much better to be part
of an upgrade to an existing system from a
business point of view.
Staying plugged-in and responsive to Australian Defence through the DSTO and initiatives like PIC have also allowed us to keep our
technology relevant.
We are “sold” on the advantages of Lean
enterprise and are putting a lot of effort to
maintaining and growing a committed and
enthusiastic workforce, as well as upgrading
skills and business processes.
Whilst we are mainly a defence technology
company, we are constantly on the lookout for
ways to apply our technology and skills to other
markets, always providing that we are not exposing ourselves to a competition that we cannot
win against low-cost business environments.
Our aim is to be the world’s best supplier
of our type of product in terms of technical
performance, as well as reliability of product
and service – overall, the best value. Although
defence budgets are being cut back, we have
been able to find some useful new areas in
which to expand and our aim is to continue
our historical growth and to more than triple
in the next four to five years.”
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ADM | 33