The onset of the COVID-19 pandemic required an immediate response and shift in operating model to ensure that we could place the safety and health of our colleagues and clients at the heart of a resilient business model, whilst continuing to safely deliver on behalf of our clients.
Covering a wide range of competencies across
Materials, Technology and Innovation (MTI) and the Space &
Defence (S&D) sector, the Industry business unit showed
resilience in a volatile, uncertain, complex and
ambiguous year. Although below target for revenue, we performed
well against target for margins. The COVID-19 pandemic had a big
impact on manufacturing industries, particularly affecting our MTI
business. Margins were supported by a reduction in
travel with the S&D business delivering a
positive financial performance, exceeding 2019 performance and MTI
equalling 2019 in terms of contribution margin.
We started 2020 very well with a
realistically optimistic outlook for the coming year. The onset of the
COVID-19 pandemic required an immediate response and shift in operating model
to ensure that we could place the safety and health of our colleagues and
clients at the heart of a resilient business model, whilst continuing to safely
deliver on behalf of our clients.
In S&D, we restructured the UK team
to focus on Technical Services and Project Delivery, which gave us sustainable effectiveness
and an operational edge to see us through 2020 and beyond. We pursued
organic growth, reinforcing relationships with key clients. We
also commenced activities to identify and acquire companies that would
enrich and broaden the portfolio of services currently available to our
clients. This resulted in the analysis and due
diligence phases for the acquisition
of Interconsulting that was finalized in Q1,
2021. This will strengthen our presence in the Avionic
Market.
Although MTI continued to experience a high
volume of requests for proposals (€135M offers vs. €130M in 2019),
the implementations of many projects were slowed down. In the third and
fourth quarters, however, there was an uplift as we helped
clients access funds as part of Europe’s “NextGenerationEU”
recovery and stimuli package. Focused on
areas such as smart factories, energy transition and decarbonization, RINA
is well-placed and very capable of providing support.
Working to offset the slowdown in manufacturing,
MTI focused on different groups of clients, such as the food sector,
transferring technology and expertise to deliver new
solutions in areas such as ensuring secure quality throughout
the food production chain. We also accelerated engineering
activities in delivering working prototypes and proof of concepts
in the second half of the year.
Creating a sustainable future
Through MTI, we have strong
connections to industry in helping to increase
sustainability and decarbonization through both energy and material
efficiency and can test up to 1,000 bar of hydrogen, supporting the
test of components in readiness for energy transition. In 2020,
we assisted industrial leaders in accessing
innovation funds in areas including CO2 capture, recycling of organic
waste, plastics
recycling
and generation of energy from
renewable
resources.
The UK Defence industry is driving towards net zero
emissions by 2050 (NZ50). To support this effort, we are helping
it use data to increase fuel efficiency and reduce emissions and
presented a paper this year at the annual International Naval
Engineering Conference (INEC) on Naval
Vessel Mission Fuel Expenditure
Optimisation.
Highlights of 2020
Across the Industry business, the main highlight
for 2020 was the resilience and commitment of our people, who swiftly
adapted to new ways of working to support clients.
Our established relationship with
Thales Alenia Space Italia was reinforced as
the
first system
engineering support service
consultancy firm for the GALILEO Programme
and with
a primary focus on security governance and cybersecurity services with a growth
of 20% of revenues in 2020.
S&D successfully applied for and was awarded
the Armed Forces Employer Recognition Scheme Silver Award. This award is very
much respected in the UK Defence Industry and demonstrates that we are a
veteran friendly employer.
In March 2020, we were awarded
an important cooperation project with TKES on Grain Oriented Electrical
Steel. The results obtained during 2020 have strengthened our partnership,
with high chances of new projects going forward.
Looking ahead
COVID-19 brought Industry 4.0, energy transition
and the importance of the skills of people all into focus, helping to drive
decisions and investment going forward. RINA is ready to help in these
areas and has ambitious targets for the coming year.
Looking at ways to increase revenue, we
are actively looking to develop new digital platforms, increase resilience
and create
greater business opportunities.
Heavily
dependent upon engineering
hours, we
will enlarge our services and move to new
business models where we can
reduce time
to market and grow faster. We will grow our
prototyping business, increase competencies in advanced materials
and strive to expand our market in the space sector.