An all-Italian constellation of satellites, the largest in Europe. It is the project of Avio spa, an Italian company in the aerospace sector (30% owned by Leonardo, formerly of Finmeccanica) specialized in the launch of satellites, a thousand employees and revenues of 322 million euros in 2020. Soon, the project will become reality . Since October 2015, engineer Giulio Ranzo has been the company’s CEO and oversaw the listing on the stock exchange, which took place in 2017.
A big leap …
«Certainly, but it has given us financial solidity, it has allowed us to structure the equity part by collecting money from investors. In this way, we were able to eliminate the debt. Then, the listing on the stock exchange gave visibility to Avio, with the possibility of becoming more and more an international player. In short, this step has allowed us to have other opportunities. We were a bit of a forerunner in this sense. Sci are companies in the sector in the US that are doing it now ».
Effects on the accounts?
“Every year, we have contracts worth over 300 million euros. They all have quite large amounts. Let me give you an example, one of 5 million was aimed at perfecting studies for cost reduction and industrial optimization on the vectors used for the launch of satellites ».
Is it true that those satellites also serve to monitor the conditions of the environment on Earth?
“Certain. Many are satellites for monitoring various parameters, from ozone to carbon dioxide in the atmosphere. And they have a remarkable level of trustworthiness. To make you understand, two years ago we launched a Canadian satellite to measure the level of carbon dioxide emitted by industries. The data collected is used to establish the excess and shortage quotas of emissions with respect to ministerial standards and the consequent taxes to be paid ».
Speaking of standards, did the stock market listing have only positive aspects?
«Well, the downside is that the stock market is asking for a high level of transparency on the data. Right and right, but it requires a different, more complex organization and management. We knew it and we have also dealt with this aspect ».
Do you have acquisitions in mind?
«In this sector, acquisitions of majority stakes are possible, but unlikely. Many companies have public participation, direct or indirect, and this complicates the matter. Of course, there may be occasions to incorporate small or medium-sized companies, but it is not frequent. It is easier to have opportunities for minority shareholdings ».
Alliances with other big names, like NASA? Or private?
«We have a solid partnership with the French group Ariane, which in turn has joint ventures with Airbus and Safran. Traditionally, France has invested much more than others in the aerospace sector. And anyway, in the world there are 7-8 companies capable of making a complete launch into space. Avio is among these, together with Ariane. The others are in the US, Japan, Russia and China ».
So, you have entered the world market in a privileged position …
«Let’s say we have customers all over the world. We have launched satellites for the governments of Morocco, Peru, the United States. As I said, we worked for Canada, but also for South Korea ».
All public clients, but are there also some private individuals? Maybe a potential partner?
«Keep in mind that customers are a few dozen in the world, at most a hundred. Many are public, but there are also private individuals. There can be even more assiduous collaborations. To give you an idea, we have also worked with Google, but there are still clients, no structural partnerships ».
Speaking of giants like Google, the space economy is increasingly in vogue. From Elon Musk (Tesla) to Richard Branson (Virgin), to Jeff Bezos (Amazon), many are focusing on space …
«It is the business of the future, it offers growth prospects that are superior to those of other sectors. Our economy can grow, but with data and information in real time, impossible to obtain with “terrestrial” instruments. Having those elements, connecting the entire population of the globe via the internet, this would offer a prospect of prosperity and growth. Technologies are indispensable for long-term growth. The result is much more uncertain by focusing on traditional heavy industry, because it is still very much linked to fossil energy sources ».
But there won’t be only positives, I guess …
“Well, of course. The positive aspect is in the increased interest in the sector, which catalyzes attention and drives growth. But at the same time, this growing interest also increases competition, attention to prices. It’s a challenge. However, if the sector grows by 5-6 per cent over the long term, this means an increase of its times greater than that of GDP. And this is a positive aspect ».
The world of Avio
What impact has the pandemic had?
“Heavy. In 2020, the space center was closed for six months due to Covid. There was a blockage of the flight activities, only the production activities remained open. But in our industry, smart working is limited to very few administrative functions. There are jobs that can’t be done remotely and rockets can’t be done remotely. Right now, the expectation is to increase flexibility, but not all sectors. However, we have had our difficulties, but since we have been listed on the stock exchange we are more solid ».
A curiosity: is there any technology used in the space that will become of daily use?
“Of course, like the ceramic matrix composites used for the hottest parts of rocket engines and which have become a standard for car or sports bike brakes. For example, we use thermal insulation materials a few millimeters thick and capable of reducing temperatures from 3,000 to 50 degrees. An extremely important factor on our carriers, but a “terrestrial” use could be the isolation of certain engines from the structures that contain them. There are also carbon fiber composite materials used in space and required for solar-powered cars, by virtue of their mechanical properties enclosed in minimal thicknesses. The same solar panels used in space to generate electricity are part of an experimentation of materials and technologies, which sooner or later will be used on Earth ».
The world of Avio
In recent times, someone has returned to talk about nuclear power. There are fourth generation plants, which are more efficient, do not produce waste and also allow the disposal of those already stored. Do you also look at this?
“Our fuel is gas.”
A political question: the Draghi government has given Italy international credibility. Has it also affected your work?
“A painting like that can help, but it also takes time. Draghi has been in government for less than a year. To be able to do something takes time. Certainly, very focused objectives have been included in the Pnrr to give room for growth. We have a lot of confidence. Stability is an incredible treasure for our sector, hopefully it would continue for a long time. The ability to get things right in a short time, from our point of view, is an opportunity and we hope it will last. This is a government of technicians, of a very institutional nature. Our sector works on long-term projects, we need continuity, coherent government action. The historical difficulty was to have a rapid succession of different governments. A long-term vision is important for our business ».
Speaking of Pnrr, what projects are there for you?
«Italy has set itself the goal of creating an entirely Italian interacting satellite constellation, the largest in Europe. Our country already has a historical competence in ground observation, completing the picture with this project is very intelligent. In all this, we are the “launchers”, our role will be to bring those satellites into space ».
Is there a commitment to sustainability as well?
«One area is that of green engines and propellants, to accelerate the path towards the use of innovative propulsion technologies. Our rockets are powered by a mixture of liquid oxygen and methane. This is because methane leaves no waste. At the research level, we had been working on this for some years. It is the most promising ».
Nothing else?
“We also invest in re-entry technologies. We have a plan to be able to fly the satellite for landing. As if it were a small Shuttle, but without pilots ».
A sort of space drone …
“Let’s say so. An innovative concept ».