Rockwell Collins, Inc.

Rockwell Collins, a spinoff of Rockwell Automation, makes aviation electronics and communication equipment for commercial and military aircraft. The company boasts that nearly every commercial cockpit contains something made by Rockwell Collins. It also provides flight simulation and training, MRO services, navigation, and surveillance systems. The company has three primary segments: commercial systems (avionics and in-flight entertainment systems for commercial aircraft); government systems (airborne/ground/shipboard communication systems with military applications and overhaul services); and information management services business (communications, systems integration and security solutions).

Geographic Reach

Rockwell Collins operates through 60 locations in some 25 countries including France, Canada, Germany, Japan, Australia, China, India, Italy, Spain, Singapore, Brazil, the United Arab Emirates, Saudi Arabia, the UK, and the US. Rockwell Collins makes about 60% of its sales in the US.

Operations

The government systems segment (44% of total sales) provides products for a variety of uses but they all have the common theme of design for use under rugged conditions constrained by challenges in relation to size, weight, and power. These products include satellite communications systems, handheld navigation devices, flight controls, helmet-mounted displays, and training systems.

The company's commercial systems segment (46%) provides systems and products for the original manufacturing, retrofitting, and upgrading of aircraft. Products include the Pro Line Fusion integrated avionics system, cabin management systems, head-up guidance systems, primary actuation systems, and simulators for crew training. The segment serves a range of customers, from the biggest aircraft makers in the world to owners of individual aircraft. Aftermarket products are sold through distributors and to regional airline operators.

Sales and Marketing

Rockwell Collins markets its systems, products and services directly to government systems and commercial systems customers through an internal marketing and sales force. The company also utilizes a worldwide dealer network to distribute its products and international sales representatives to assist with international sales and marketing.

The US government accounts for 30% of sales. Customers include the Department of Defense, US Coast Guard, civil agencies, defense contractors, foreign ministries, commercial air support manufacturers, and airlines.

Financial Performance

In 2014 Rockwell Collins' revenue increased by 8% to peak at roughly $5 billion, a new company milestone. The historic growth for 2014 was fueled by additional revenue from acquisitions and a surge in sales within its commercial systems segment.

Commercial systems growth was driven by additional product deliveries from higher aircraft production rates for the Boeing 787 and 737 aircraft, as well as higher customer funded development program sales, and aftermarket sales helped by increased service and support activities and regulatory airspace mandates. In addition, Rockwell Collins enjoyed a spike in sales for its legacy flight services business within information management services during 2014.

Rockwell Collins' profits dropped 4% from $632 million in 2013 to $604 million in 2014. This was due to higher selling, general, and administrative expenses associated with an acquisition. The company posted declines in operating cash flow until 2012, when it posted gains the next two years. In 2014 operating cash flow increased by $67 million to $660 million due to cash generated by receivables, accounts payable, accrued customer incentives, and deferred income taxes.

Strategy

Joint ventures are an important element of the company's strategy for growth. It maintains 50-50 JVs with BAE Systems for Data Link Solutions (serving the worldwide data link market); Elbit Systems for Vision Systems International (helmet-mounted cueing systems for the military fixed-wing market); Honeywell International for Integrated Guidance Systems (weapons guidance and navigation products); and Quadrant Group for Quest Flight Training (aircrew training for the UK Ministry of Defense). Throughout 2012 it established additional joint ventures with airlines and research institutes in the important country of China.

Rockwell Collins continues to execute its strategy to reshape its government systems portfolio to align with the changing dynamics of the defense environment. For 2015 it expects this business to be flat and projects it will return to low single digit growth thereafter. During 2014 Rockwell Collins divested two businesses: DataPath and KOSI. The decision was part of an overall strategy to reshape its government systems segment to focus on growing markets for the company's core products and services.

Overall, the company expects to invest 16% to 18% of sales in R&D, 3% to 4% of sales in capital expenditures, and look for complementary business acquisitions as a means for growth.

Mergers and Acquisitions

Rockwell Collins achieved a revenue milestone in 2014 with the aid of a key acquisition. In 2013 it purchased ARINC, a global provider of air-to-ground data and voice communication service, for $1.4 billion. Combining ARINC’s communication networks and services with the company's onboard aircraft information systems enhanced its ability to deliver efficiency and enhanced connectivity to aircraft operators worldwide.

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Rockwell Collins, Inc.


400 Collins Rd Ne
Cedar Rapids, IA 52498-0505
Phone: 1 (319) 295-1000
Fax: 1 (319) 2951523
www.rockwellcollins.com

STATS


  • Employer Type: Public
  • Stock Symbol: COL
  • Stock Exchange: NYSE
  • President and CEO: Kelly Ortberg
  • SVP Operations: Bruce King
  • President and CEO: Kelly Ortberg

Major Office Locations

  • Cedar Rapids, IA

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