2010 Preliminary Results

Transcription

1 3 March 2011 The most important thing we build is trust 2010 Preliminary Results

2 Agenda Introduction Andy Stevens Chief Executive Officer Financial Results Warren Tucker Chief Financial Officer Business Review Andy Stevens Q&A 1

3 Summary Profit and Loss Account Year to 31/12/09 m m Year to 31/12/10 Growth Revenue 1, , % Trading Profit % Trading Margin 17.9% 18.3% 0.4pts Underlying Profit before Taxation % Underlying Earnings Per Share 18.80p 19.68p 4.7% PV Spend % 5.3% 4.5% (0.8)pts Order book 2.5bn order intake up 7% at constant translation exchange in technology divisions 2 Note: See Appendix for definitions, including underlying, used throughout this presentation.

4 Underlying Earnings Per Share Growth % (1.1)% 2.4% 1.2% 1.3% 4.7% pence % at constant translation exchange FX Translation Growth FX Transaction Other margin effects Interest, tax & other

5 Cash Flow Year to 31/12/09 m m Year to 31/12/10 Growth Trading Profit (ex. JV) % Operating Cash Flow (7.4%) Operating Cash conversion 88.6% 79.3% (9.3)pts Free Cash Flow from Business (1.3%) Decrease in Net Debt Dividend per Share 5.45p 6.00p 10.1% Net Debt 326.1m, Net Debt:EBITDA 0.8x 4

6 Technology Divisions Revenue Growth 2,000 1, ,630 1,500 CMS (1.6)% (1.2)% CMS m 1,000 CAS (1.6)% Organic Growth CAS 500 CDS CDS FX Translation Net Acquisitions Defence/ Security Commercial/ Other 2010 CDS: Cobham Defence Systems, CAS: Cobham Avionics and Surveillance, CMS: Cobham Mission Systems 5

7 Technology Divisions Organic Revenue Growth Cycle Over the Medium Term 2,000 5 Year Full Year CAGR 5.5% 10.3% 0.6% (1.6)% 1, % 13.2% (16)% (1.2)% Commercial /Other m 1,000 7% (1.6)% Defence & Security Excludes FX, Acquisitions and Disposals. 2005, 2006, 2007, 2008 and 2009 are proforma numbers for illustration purposes 6

8 Cobham Avionics and Surveillance Continued strong demand for wireless video link products and hand-held MINEHOUND mine detector Increased deliveries to Airbus of long range SATCOM antennas and successful flight test on the Boeing 787 and the Airbus A400M aircraft Selection to provide the complete avionics suite for the new SK105 Skylander commuter aircraft and first orders for new helicopter autopilot and stability augmentation system Selected to partner with Rockwell Collins to provide the passenger address system on the new C919 Chinese single aisle aircraft Excludes FX, Acquisitions and Disposals. Prior year are pro forma numbers for illustration purposes 7

9 Cobham Mission Systems Excludes FX, Acquisitions and Disposals. Prior year are pro forma numbers for illustration purposes Shipments of fifth generation refuelling equipment for Australian, UK, Saudi Arabian and UAE air forces and UK FSTA An initial order for the new Vehicle Active Gunner s Restraint System for Stryker armoured fighting vehicle 18m order for the supply of Ejector Release Units and Carrier Bomb Light Stores for 57 Hawk trainer aircraft to India Award by the US Air Force of the base year of a five year agreement, with a total estimated value of US$50m, for crewbreathing oxygen regulator overhaul kits Transfer to the new Wimborne, UK facility completed 8

10 Cobham Defence Systems Excludes FX, Acquisitions and Disposals. Prior year are pro forma numbers for illustration purposes Further orders and deliveries of electronic warfare equipment to disrupt enemy radar and communications Awarded an IDIQ contract worth up to $1.6bn to provide advisory and assistance services to the Missile Defense Agency A multi-million pound, long-term agreement to provide a suite of antennas for the indigenous Korean Utility Helicopter US$40m deal to provide major radio frequency and microwave components for Aegis surveillance and fire control radar Receipt of a delayed US$21m contract to provide vehicle intercom systems and Eagle radios to a Middle East customer 9

11 Cobham Aviation Services Excludes FX, Acquisitions and Disposals. Prior year are pro forma numbers for illustration purposes Flying hours on the Australian Sentinel programme remaining at close to 100% with the Surveillance Information Management System successfully brought into service Two new aircraft brought into service in for resource industry and air freight contracts Modification and systems integration of four B350 aircraft under the MFTS Royal Navy rear crew training contract 30 strong team of engineers in Madrid working on aircraft modifications for the first two A330s for the UK FSTA programme Contracts worth some 12m to upgrade and support key air traffic control systems and operations for the UK MoD 10

12 Excellence in Delivery Programme is on Track The Excellence in Delivery programme is about transforming our operations to provide better customer delivery and improved efficiency The programme is on track In 2010 we delivered cost savings of over 10m including Excellence in Delivery By the end of 2013, Excellence in Delivery run rate savings remain at 65m per annum, for a total implementation cost of 131m Excellence in Delivery is pivotal to our future growth 11

13 Financial Highlights Revenue momentum has been impacted by programme delays and US Government Continuing Resolution, but the cycles in commercial business and Mission Systems have turned positive Cost control has delivered earnings per share growth Cash generation remains strong We continue to invest: Excellence in Delivery, technologies and portfolio optimisation We are prudently configured with further cost savings in 2011, against the backdrop of the Continuing Resolution in the US 12

14 Agenda Introduction Andy Stevens Chief Executive Officer Financial Results Warren Tucker Chief Financial Officer Business Review Andy Stevens Q&A 13

15 Moved the Business Forward Despite 2010 Being a Challenging Year for Top Line Growth Good performance in some businesses Some order slippage and continuing softness in certain commercial markets, albeit that is now improving Improved order intake in all three Technology Divisions Aggregate 7% increase in orders received and Group order book increase to 2.5bn Generated further cost efficiencies Excellence in Delivery, procurement savings and prior year integrations 14

16 Focused on Bringing New Innovative Technology to the Market Continued focus on PV and new product development Focused on generating a good return in the current environment Selected on new programmes/platforms, winning positions in faster growing geographies Chinese C919, Skylander 105, US Missile Defence Agency Support Services (MiDAESS), Indian Air Force Hawk, Korean light utility helicopter Growing content on important existing platforms CH-53K helicopter, Aegis surveillance and fire control radar system, F-35, F-18, A350 Completed three acquisitions in homeland security markets for US$175m Further strengthening technology and routes to market Strengthening technology through targeted PV investment and acquisitions 15

17 Our Strategy 1 Focus on Defence, Security & Commercial markets Maintain an appropriately focused portfolio on the defence, security and commercial markets, such that we can add value and manage risk across the portfolio 2 Sell technically differentiated products & services Sell technically differentiated products and services that meet customer s needs in markets that have attractive characteristics, and in which we can maintain a sustainable competitive advantage Continue to provide core Tier 3 capabilities and selectively offer Tier 2 to meet customer needs 3 Build sustainable scale positions Develop and maintain top 3 positions in our markets Build or maintain scale positions in these markets to ensure we have the necessary scale to support investment, maintain market leadership and deliver long term business growth 4 Deliver operational excellence Achieve Excellence In Delivery for our customers, capturing cost synergies through simplifying and standardising processes, integrating operations and building operational capabilities Invest in our talent 5 Actively manage the portfolio Actively manage the portfolio, exiting businesses that do not fit with our strategy Acquire businesses that build scale, allow us to exploit our existing capabilities in adjacent segments or deliver distinctive technologies or capabilities to accelerate our organic growth Making good progress against the strategy 16

18 1 Focus on Defence, Security & Commercial Markets Revenue by destination & market sector remain stable - 61% USA, 77% defence & security Getting positions on contracts for US government agencies, e.g. US$1.6bn MiDAESS contract and large homeland security agency contracts Coordinating cross business programme pursuits through offices in Washington DC & India Driving aftermarket business which now accounts for 15% of technology division revenue Other EU countries 12% (2009: 12%) Australia 10% (2009: 8%) UK 9% (2009: 9%) RoW 8% (2009: 9%) Aviation Services 14% (2009: 12%) Other Communication 9% (2009: 10%) Commercial/GA 9% (2009: 9%) US Defence / Security 53% (2009: 55%) USA 61% (2009: 62%) Non US Defence / Security 15% (2009: 14%) 17

19 2 Sell Technically Differentiated Products & Services Successful trials of 5th generation AAR refuelling pods being offered into US$35bn US tanker programme & Global Hawk development contract Launch of fully portable & networked unattended ground sensor for covert surveillance Demonstration of 100 user radio system for DARPA s Wireless Network after Next Cobham s lightest, smallest and lowest cost SwiftBroadband solution already sold to 23 airlines positioned on all new major air transport aircraft with upgrade opportunities Developing US Army Multi-spectral Sea and Land Target Simulator worth up to US$56m 18

20 3 Build Sustainable Scale Positions Defence Communications business integrated with Surveillance in CAS division to focus on growing Integrated Force Protection market Antenna Systems integrated with SATCOM in CAS division to leverage cross selling Personal locator beacon & emergency locator transmitter product lines combined Mission Systems & Aviation Services management combined, bringing together major projects & systems engineering 666m 647m 594m Defence Systems Aerospace and Security Mission Systems Aviation Services Defence Communications Antenna Systems Beacons 273m Defence Systems Avionics and Surveillance Mission Systems Aviation Services 19 Intercompany eliminations not shown

21 4 Deliver Operational Excellence The Excellence in Delivery programme is about transforming our operations to provide better customer delivery and improved efficiency 14 principal locations announced which will account for 80% of manufacturing profit Announced closure of nine facilities supporting 2011 saving of 21m Investing in people, processes, tools & facilities Location of 14 principal manufacturing locations 20

22 5 Actively Manage the Portfolio Intend to divest businesses & product lines representing up to 15% technology division revenue Proceeds to date of 29m Completed three acquisitions in homeland security markets for US$175m Rvision advance electo-optical and infrared imaging systems Corp Ten tracking and surveillance devices - micro-sized satellite modem Telerob advanced bomb disposal robots and threat response vehicles 21

23 Defence, Security and Commercial Markets Growth outlook: ~2% CAGR Variation by programme (e.g., JSF) Growth outlook: ~7% CAGR Variation by country & sub-segment Growth outlook: ~4% CAGR Variation by platform (e.g., 787) ~$390bn Market size US$bn ROW UK US ~$170bn ROW Europe ~$130bn 43 Aftermarket US OE Defence Security Commercial Sources: i. U.S. DoD budget data: comprised of FY2005-FY2011 Department of Defense budget plans ii. International spending figures: Stockholm International Peace Research Institute (SIPRI), World Monetary Fund Sources: i. U.S. Government : 2011 U.S. Office Of Management And Budget Report Analytical Perspectives, Budget Of The U.S. Government ii. Third Party Research: Homeland Security Research Corporation, Society General via Cross Asset Research, Morgan Keagan, Frost and Sullivan, International Biometric Group iii. Publically available information from company annual reports: L-1 identity solutions, Smiths Detection Sources: i. OEM platform sales revenue: (Boeing, Airbus, Embraer) ii. Third party research: Ascend, Aerostrategy, Forecast International iii. Multiple News Agencies: (used to track up to date delivery orders in CSP database) Well positioned in faster growing market segments 22

24 Continuing to Strengthen Market Positions and Focus on C4ISR HIGHER MARKET GROWTH Commercial Systems (Avionics & Beacons) Analytic Solutions Sensor Systems Antenna Systems Aerospace Comms Life Support C4ISR Tactical Comms & Surveillance Mission Equipment Aviation Services Defence/ Security Commercial LOWER BUILDING SCALE IN TOP 3 We are technically diverse, innovative and agile by design because that s what our customers want Size of bubble represents Cobham revenue 23

25 Technology in Action Unmanned Ground Systems 24

26 Summary Generated earnings growth from flat Group revenue Efficiencies of over 10m, including savings from on-track Excellence in Delivery programme Configured prudently for 2011 against backdrop of Continuing Resolution Making good progress against the strategy Benefiting from strategic investments in technologies, Excellence in Delivery and portfolio optimisation Getting positions on larger contract vehicles in addition to traditional business Excellence in Delivery programme will transform and simplify operations Focused on delivering outstanding service to customers & improving efficiency It will increase Cobham s competitiveness Positioned to grow faster than our markets in the medium term Transition to a more C4ISR centric business largely complete 25

27 Appendices Investor Relations Calendar Key Performance Indicators Ship set values Surveillance and Mesh Network Capability Example US DoD Investment Spending Excellence in Delivery Shareholder returns Cash flow summary Revenue and profit Technology Divisions Revenue & Trading Profit Foreign Exchange Transaction Exposure US$/ Exchange Rates Reconciliation of IFRS to Underlying Result Restated Segmental Results Half Year Ended 30 June 2010 Restated Segmental Results Full Year to December 2010 Definitions Glossary Cautionary Statement 26

28 Investor Relations Calendar May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Announcements 6 AGM & Interim Management Statement 4 Interim Results 14 Interim Management Statement 8 Preliminary Results 26 AGM & Interim Management Statement Investor Days 7 Wimborne, UK Site Visit 27

29 Key Performance Indicators Year to 31/12/06 Year to 31/12/07 Year to 31/12/08 Year to 31/12/09 Year to 31/12/10 m m m m m 5 year CAGR Technology Divisions Organic Revenue Growth 5.8% 13.2% 10.3% 0.6% (1.6)% 5.5% Earnings Per Share Growth (constant translation) 10.7% 15.9% 13.1% 12.5% 3.8% 11.1% Operating Cash Conversion 84.3% 81.1% 106.1% 88.6% 79.3% PV Spend % * 5.1% 5.2% 5.3% 5.3% 4.5% Defence/Security (1.6)% Commercial (1.2)% (1.6)% * PV has been restated on a proforma basis for the impact of Cobham Analytic Solutions 28

30 Ship Set Values Ship Set Values US$k Programme / Platform F16 $800 - $1,100 F/A 18 E/F/G $800 - $4,600 F22 $1,400 Military Fast F35 $1,200 Jets / Trainers Eurofighter Typhoon $1,500 Hawk $600 T50 $220 Gripen $ C17 $600 Medium / Large C130 / KC130 $700 - $4,000 Military ASTOR Sentinel R $1,200 B2 $1,400 Predator/Reaper $500 AMRAAM $220 UAV / Missiles AARGM $140 PAC3/Patriot $200 Global Hawk $2,300 EH101 $230 Apache $580 Rotary CH 53K $400 MH-60 $500 V22 $1,200 A380 $220 Commercial A350 $100 B787 $150 Naval EDG 1000 $2,600 Aegis DPYIDV $2,400 US tanker valued at US$1bn over the life of the programme 29

31 Increasing Ship Set Value on F-35 $2, Ship Set Value US$k $1,600 $1,200 Ship Set Value $800 $400 $0 $20 $ $500 $700 $950 $1,000 $1, Some reduction in Estimated >3,000 aircraft to be produced - Cobham ship set value still increasing LRIP Aircraft 2040 Aircraft Production 30

32 Surveillance and Mesh Network Capability Example Key Mesh 1 Mesh 2 SOLO link out Police command SOLO Transmitter Camera Camera Camera Camera Camera Police command SOLO Transmitter Mobile surveillance Camera Camera Camera Car Camera Car Mobile surveillance

33 US DoD Investment Spending $Bn Procurement RDT&E CAGR = 4.4% CAGR = 2.3% CR 2012E 2013E 2014E 2015E Source: FY2010-FY2012 per the FY2012 Department of Defense budget proposal released February 14, FY2013-FY2015 per the National Defense Budget Estimates ( Green Book ) Note: All years exclude supplementals Note: Figures represent discretionary outlays expressed in current prices Source: JP Morgan 32

34 Why Excellence in Delivery? We have been progressively simplifying, standardising and integrating our business since 2005 We have now demonstrated substantial benefits from our new processes and systems through initial implementation activities across our business Excellence in Delivery will deliver a step change in our performance to our customers, making us more responsive and able to fully exploit our scale Excellence in Delivery will reduce our operating costs by 65m annually by the end of 2013 for a one off investment of 131m This is the next step in our development that we can now take with the capabilities and market positions we have, and one which we would undertake irrespective of the current market conditions 33

35 EiD Aims to Take us Further Towards a Simplified, Standardised and Scale Organisation 1 Roll out our Standard Operating Framework across a set of principal sites 2 Integrate some of our smaller (production) facilities into the principal sites to increase the coverage of our Standard Operating Framework 3 Lock down the standard processes with a single standard Cobham Enterprise Resource Planning (ERP) system and capture scale economies and reduce complexity further through implementation of shared services 34

36 EiD Will Deliver Significant Benefits Beyond the Immediate Cost Reductions EiD will transform our operational performance and will deliver significant non financial benefits: World class delivery and quality performance will be an additional differentiator with our customers giving us scope to accelerate revenue growth Streamlined processes will reduce product development cycles and reduce time to market providing greater flexibility to meet customer needs Improved engineering efficiency will create further capacity for new product development Lower costs will allow further pricing opportunities with customers as well as investment funds to support further product development and selling capabilities Standardised operating model will enable significantly greater synergy benefits from acquisitions, and lower risk and more rapid integration Our profitability will be improved by 65m per year by the end of

37 Shareholder Returns Year to 31/12/09 Year to 31/12/10 Growth Underlying Tax Rate 27.8% 26.5% Earnings Per Share Underlying 18.80p 19.68p 4.7% Basic 16.26p 13.27p Diluted 16.17p 13.20p Dividend Per Share 5.45p 6.00p 10.1% Free Cash Flow Per Share 19.38p 19.00p (2.0%) 36

38 Cash Flow Summary Year to 31/12/09 Year to 31/12/10 m m Trading Profit (excluding joint ventures) Depreciation and other movements Decrease/(Increase) in working capital and provisions (8.2) (71.8) Net Capital expenditure (77.3) (57.1) Operating cash flow Taxation paid (31.2) (21.6) Dividends received from JVs Interest (45.8) (37.2) Free cash flow Dividends paid (58.3) (64.6) Restructuring costs (7.8) (13.4) Acquisition payments less disposal proceeds and other related costs (32.2) (5.9) Settlement of commercial dispute (28.8) Movements in funding and exchange movements (19.4) Decrease in net debt Net Debt Net Debt : EBITDA

39 Revenue and Profit Revenue Trading Profit m Year to 31/12/09 Year to 31/12/10 Growth Year to 31/12/09 Year to 31/12/10 Growth Technology Divisions 1, ,630.1 (1.4)% % Margin 18.5% 19.0% Cobham Aviation Services % % Margin 13.6% 13.3% Operating Divisions 1, , % % Head Office and Other businesses Cobham Group 1, , % % Margin 17.9% 18.3% Intercompany eliminations not shown 38

40 Technology Divisions Revenue and Trading Profit Revenue Trading Profit m Year to 31/12/09 Year to 31/12/10 Organic Growth Year to 31/12/09 Year to 31/12/10 Cobham Avionics and Surveillance (7.4)% Margin 17.4% 16.1% Cobham Defence Systems (2.2)% Margin 18.8% 19.7% Cobham Mission Systems % Margin 17.9% 20.1% Technology Divisions 1, ,630.1 (1.6)% Margin 18.5% 19.0% Intercompany eliminations not shown 39

41 Foreign Exchange Transaction Exposure Historic average effective rate 2011 Total $199m 2007 $1.83 : $1.93 : $1.70 : $1.58 : 1 92% hedged for 2011 Hedging in place $183m Avg hedge rate $1.56: 1 Hedging in place 2012 $52m Avg hedge rate $1.60: to 2014 $83m Avg hedge rate $1.61: 1 Dollar/Euro exposure predominantly hedged for 2011 with 1.37 &

42 US$/ Exchange Rates Opening Full Year Full Year Income Statement (average rate) n/a Balance Sheet (closing rate) m PBT translation impact for every 1 cent movement 41

43 Reconciliation of IFRS to Underlying Result Year to Year to 31/12/09 31/12/10 m m Operating profit Business restructuring Unrealised losses/(gains) on revaluation of currency instruments (42.9) 2.8 Amortisation of intangible assets arising on acquisition Settlement of commercial dispute M&A related adjustments Trading profit Net finance expense (41.7) (42.3) Underlying profit before taxation

44 Group Revenue and Trading Profit Re-stated Segmental Results - Half year Revenue Trading Profit m H H Organic Growth H H Cobham Aerospace and Security (4.1)% Margin 20.7% 22.0% Cobham Defence Systems % Margin 13.4% 13.7% Cobham Mission Systems % Margin 15.9% 16.8% Technology Divisions % Margin 17.1% 17.7% Cobham Aviation Services % Margin 13.7% 12.0% Head Office and Other Businesses Cobham Group % Margin 17.0% 17.4% Intercompany eliminations not shown 43

45 Group Revenue and Trading Profit Re-stated Segmental Results Full Year Revenue Trading Profit m Year to 31/12/09 Year to 31/12/10 Organic Growth Year to 31/12/09 Year to 31/12/10 Cobham Aerospace and Security (7.7)% Margin 22.2% 22.2% Cobham Defence Systems (0.3)% Margin 14.8% 15.3% Cobham Mission Systems % Margin 17.3% 20.3% Technology Divisions 1, ,630.1 (1.6)% Margin 18.5% 19.0% Cobham Aviation Services % Margin 13.6% 13.3% Head Office and Other Businesses Cobham Group 1, ,902.6 (0.3)% Margin 17.9% 18.3% Intercompany eliminations not shown 44

46 Divisional Revenue Re-stated Analysis Full Year Commercial Aerospace/ GA 23% Aerospace and Security Other Comms 24% Non US Defence / Security 28% US Defence / Security 25% Non US Defence / Security 1% Defence Systems Commercial Aerospace/ GA 2% Other Comms 1% US Defence / Security 96% 53% revenue defence/security 44% US revenue Mission Systems Commercial Aerospace/ GA 4% Other Comms 3% 97% revenue defence/security 97% US revenue Non US Defence / Security 30% US Defence / Security 63% 93% revenue defence/security 68% US revenue 45

47 Definitions Underlying To assist with the understanding of earnings trends, the Group has included within its published statements trading profit and underlying earnings results. Trading profit and underlying earnings have been defined as operating profit from continuing operations excluding the impacts of certain transaction related costs and business restructuring costs as detailed below. Also excluded are the marking to market of currency instruments not realised in the period, impairments of intangible assets and items deemed by the Directors to be of an exceptional nature such as the settlement of a longstanding commercial dispute. Transaction related costs excluded from trading profit and underlying earnings include the amortisation of intangible assets recognised on acquisition, the writing off of the pre-acquisition profit element of inventory written up on acquisition and costs charged post acquisition related to acquired share options. Transaction related costs also include other direct costs associated with business combinations and direct costs arising from any terminated acquisitions or disposals. Business restructuring costs comprise exceptional profits or losses arising on disposals actually completed, as well as exceptional costs or profits associated with the restructuring of the Group s business and site integrations. This includes costs associated with the Excellence in Delivery programme. All underlying measures include the revenue and operational results of both continuing and discontinued businesses until the point of sale of the operation. Net debt is defined as the net of cash and cash equivalents less borrowings at the balance sheet date. Underlying Tax Rate Free Cash Flow Free Cash Flow per share Operating Cash Flow Organic revenue growth PV Investment Technology divisions The underlying tax rate is based on underlying profit before tax, excluding the share of post tax income from joint ventures. Free cash flow is cash generated by the business before movements in funding and FX, acquisitions and disposals and dividends to shareholders Defined as free cash flow/average number of shares in issue Operating cash flow is defined as cash generated from operations, adjusted for cash flows from the purchase or disposal of tangible fixed assets. Operating cash conversion is defined as operating cash flow as a percentage of trading profit, excluding profit from joint ventures. Free cash flow is operating cash flow after net interest and taxation. Organic revenue growth is defined as revenue growth stated at constant translation exchange, excluding the incremental effect of acquisitions and disposals. Company funded R&D expenditure as a percentage of technology division revenues Cobham s technology divisions comprise Cobham Avionics and Surveillance, Cobham Defence Systems and Cobham Mission Systems 46

48 Glossary AAR AARGM Acq AGM AMRAAM C4ISR CAGR CAS CAvS CDS CMS DoD DARPA EBITDA EPS ERP EW FX GA IDDQ IDIQ IED IFRS JSF MIDAESS MFTS OCI OE PBT PV R&D RDT&E RoW SATCOM SOF UAV WnAN Air-to-air refuelling Advanced Anti-Radiation Guided Missile Acquisition Annual General Meeting Advanced Medium-Range Air-to-Air Missile Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance Compound Annual Growth Rate Cobham Avionics and Surveillance Cobham Aviation Services Cobham Defence Systems Cobham Mission Systems Department of Defense Defense Advanced Research Projects Agency Earnings Before Interest Tax Depreciation and Amortisation Earnings Per Share Enterprise Resource Planning Electronic Warfare Foreig n Exchange General Aviation Indefinite Delivery Definite Quantity Indefinite Delivery Indefinite Quantity Improvised Explosive Device International Financial Reporting Standards Joint Strike Fighter Missile Defence Agency Engineering and Support Services Military Flying Training Services Organisational Conflict of Interest Original Equipment Profit Before Tax Private Venture (Company funded R&D) Research & Development Research, Development, Test and Evaluation Rest of World Satellite Communication Standard Operating Framework Unmanned Aerial Vehicle Wireless network After Next 47

49 Cautionary Statement For the purposes of the following disclaimers, references to this document shall be deemed to include references to the presenters speeches, the question and answer session and any other related verbal or written communications. This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of (Cobham) and to certain of Cobham s plans and objectives with respect to these items. Forward-looking statements are sometimes but not always identified by their use of a date in the future or such words as anticipates, aims, due, could, may, should, expects, believes, intends, plans, targets, goal, or estimates. By their very nature, forward-looking statements are inherently unpredictable, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that may or will occur in the future. There are various factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in the economies, political situations and markets in which the Group operates; changes in government priorities due to programme reviews or revisions to strategic objectives; changes in the regulatory and competition frameworks in which the Group operates; the impact of legal or other proceedings against or which affect the Group; changes to or delays in programmes in which the Group is involved; the completion of any acquisitions and divestitures and changes in exchange rates. All written or verbal forwardlooking statements, made in this document or made subsequently, which are attributable to Cobham or any other member of the Group or persons acting on their behalf are expressly qualified in their entirety by the factors referred to above. Cobham does not intend to update these forward-looking statements. 48

50 The most important thing we build is trust 49