Credit Suisse Capital Goods, Aerospace & Defence conference

Transcription

1 Credit Suisse Capital Goods, Aerospace & Defence conference London, 15 September 2011

2 2 / Agenda 1. H highlights 2. Outlook This presentation may contain forward-looking statements. Such forward-looking statements are trends or objectives, as the case may be, and shall not be construed as constituting forecasts regarding the Company s results or any other performance indicator. These statements are by nature subject to risks and uncertainties as described in the Company s registration document ("Document de référence") filed with Autorité des Marchés Financiers. These statements do not therefore reflect future performance of the Company, which may be materially different.

3 3 / Thales at a glance A world leader 68,000 people in 50 countries 22,500 engineers and researchers at the cutting edge of innovation Present in two large business sectors sharing common technologies Aerospace & Transport 43 % Defence & Security 57 % Our mission: provide commercial and government customers with the capability to decide quickly in critical and complex environments

4 H highlights

5 5 / Overview Thales transformation is steadily going on Improved operating profitability A400M amendment finalised Continued focus on project execution Probasis performance plan on track despite the environment remaining volatile Confirmed upturn of commercial aeronautics Opportunities in emerging markets vs. pressures on defence budgets in mature markets Unstable forex environment Unrest in Middle East

6 6 / Difficult programs: back under control A400M Flight Management System Meltem Maritime patrol aircraft Turkey Global agreement signed with Airbus on technical, operational and commercial issues July 2011 Amendment agreement signed with Turkish MoD March 2011 Ticketing Denmark Amendment agreement signed with Rejsekort December 2010 Avionics developments Lorads III Air traffic management - Singapore Milestones met, in line with 2010 revised schedule and cost estimates Progressing in line with 2010 revised schedule and cost estimates

7 7 / Probasis Non-quality costs Probasis target gross savings (in m) Improving project execution Supply chain Procurement: more pooled purchasing Product policy: increasing commonality of building blocks SG&A Restructuring plans ongoing Shared service centres SG&A 250m 650m Supply chain Non-quality costs 400m Confirmed 1.3bn gross savings target by % progress by the end of 2011

8 8 / H1 11 key financial figures in m Defence & Security Aerospace & Transport Other Total H1 11 H1 10 H1 11 H1 10 H1 11 H1 10 H1 11 H1 10 Order intake Revenues EBIT(*) (9) (10) in % of revenues 6,1% 6,1% 4,2% 0,3% 5,1% 3,4% (*) Before purchase price allocation (PPA) impact Defence & Security: holding firm Aerospace & Transport: confirmed growth, EBIT recovery

9 9 / Cash flow Net debt Free operating cash flow (in m) (*) Net debt (in m) H H H H /06/08 30/06/09 30/06/10 30/06/ Encouraging FOCF for a first half Strongly improved net debt vs. 30 June 2010 (*) FOCF = Operating cash flow plus changes in working capital requirement (WCR) and reserves for contingencies, less payment of pension benefits (excluding deficit payments on pensions in the UK), less tax, less net operating investments

10 Outlook

11 11 / Objectives A book-to-bill ratio around 1 Slightly growing revenues Stable in Defence & Security Stronger in Aerospace & Transport EBIT (*) 2011: objective of 5% consolidated after restructuring charges of about 1.5% 2012: objective of 6% after restructuring charges of about 1% Objectives confirmed (*) Before purchase price allocation impact (PPA)

12 12 / Leveraging our position on dual markets Civil/military dual markets Ground Transportation Aeronautics Space Security Defence Shared technologies

13 13 / Grow internationally Target growth regions Develop existing subsidiaries Set up partnerships Mexico GDP 2012: +4% Defence budget: +4% Middle East GDP 2012 : +5% Defence budget : +5% China GDP 2012 : +9,5% Southeast Asia GDP 2012: + 5,7% Defence budget: +10% Empower local management Develop Key Account Management Brazil GDP 2012: +4,1% Defence budget: +11% India GDP 2012: +7,8% Defence budget: +9% A strategy supported by the implemented organisation Sources: IMF (April 2011), Jane s, Thales estimates Sep July 2011

14 14 / Strengthen our offering Accelerate innovation Transverse technologies 4 Key Technological Domains Rationalise global product policies Comprehensive action plan across the company Developing common building blocks Reducing development risks

15 15 / Improve our performance Probasis Sustain efficiency Bridge the profitability gap with European peers Chorus 2.0 Unified, consistent processes Thales "common language" Probasis: on track, delivering results

16 16 / A value-creating strategy Grow internationally Strengthen our offering Improve our performance Develop our position on growth markets Increase local value added A consistent, customercentric commercial organisation Accelerate innovation, develop transverse technological synergies Streamline our product portfolio Keep the civil / military balance Harmonise the way we work Develop more rigorous management Foster team spirit Growth Competitiveness An integrated Group, creating value for shareholders Sep July 2011

17 Annexes

18 18 / Upcoming events Q3 and 9m revenues 8 November 2011 FY11 revenues 7 February 2012 FY11 results 6 March 2012

19 19 / Selected H1 11 key orders +2% Total: 5,144m 371m 1 710m Total: 5,241m 786m 1 409m Unit value over 100m: In-flight entertainment systems (confid.) "Balard" project new MoD complex (France) Galileo (ESA) 3 063m 3 046m H H Unit v alue < 10m 10m < Unit v alue < 100m Unit v alue > 100m Other orders: QE-class carriers (UK) Bushmaster (Australia) Munitions (US) Air traffic management (Philippines) Signalling (Poland, Hungary, Canada) Order intake holds firm

20 20 / Order intake by destination in m H H reported change organic France % +34% UK % -22% Rest of Europe % +1% Europe % +9% North America % -6% Australia % +32% Asia % -18% Middle East % -24% Rest of the world % -7% Non-Europe % -7% Total % +2% Order intake by destination RoW Middle East 4% 8% France Asia 27% 7% Australia 7% N America UK 11% 8% Rest of Europe 28%

21 21 / Revenues by destination in m H H reported change organic Revenues by destination France % +21% UK % -3% Rest of Europe % -3% Europe % +6% North America % +0% Australia % +3% Asia % +0% Middle East % -24% Rest of the world % -18% Non-Europe % -8% Total % +0% RoW Middle East 5% 8% Asia 9% Australia 5% N America 10% Rest of Europe 25% France 26% UK 12%

22 22 / EBIT margin in m H H change reported organic Order intake % +2% Revenues % +0% Gross margin % +10% (*) Before purchase price allocation (PPA) impact in % of revenues 23,2% 21,0% Indirect costs (1 002) (999) +0% +0% in % of revenues 16,8% 16,8% o/w R&D expenses (291) (274) +6% +7% in % of revenues 4,9% 4,6% o/w M&S expenses (452) (460) -2% -1% in % of revenues 7,6% 7,7% o/w G&A expenses (259) (265) -2% -2% in % of revenues 4,3% 4,5% Restructuring costs (78) (47) +67% +67% in % of revenues 1,3% 0,8% EBIT (*) % +39% in % of revenues 5,1% 3,4% Improved project execution + lower SG&A = increased EBIT margin

23 23 / EBIT bridge % 3.4% H1 10 EBIT (*) Scope & FX Negativ e cost Contract mix & Add'l P&L Impact of Add'l restruct. H1 11 EBIT (*) v ariances on other expensed R&D research tax charges projects (organic) credit reform H1 10 (**) (*) Before purchase price allocation (PPA) impact (**) A400M, Meltem, Denmark ticketing, avionics, naval EW, other ticketing/security, Lorads III Improved profitability

24 24 / R&D in m H H H P&L expense Capitalised R&D Total R&D funding Impact of capitalisation on the P&L in m H H H Capitalised R&D Amortisation charge (18) (21) (21) Net impact on EBIT (*) (16) (3) 27 Net impact on margin -0,3% -0,1% 0,5% (*) Before PPA impact

25 25 / R&D Capitalised R&D costs ( m) Total self funded R&D ( m) H H H H Net P&L impact of capitalised R&D costs ( m) 0 H H H H H vs H bp negative P&L impact H H H H Sustained R&D, supporting innovation Reduced capitalisation

26 26 / Net result in m H H EBIT (*) Impairment of non-current operating assets (4) (4) Net capital gains (losses) and others 8 (7) Income of operating activities (*) Cost of net financial debt (25) (30) Other financial results (32) (4) Other components of pension charges (37) (38) Income tax (*) (65) (12) Equity in unconsolidated affiliates (*) Net income, Group share (*) Net income per share (in ) (*) 0,88 0,71 (*) Before purchase price allocation (PPA) impact

27 27 / Free operating cash flow in m H H Operating cash flow Change in WCR & contigency reserves (575) (633) Payment of pension benefits and scheme settlements (50) (35) Income tax paid (32) (38) Net operating cash flow (157) (316) Net operating investments (108) (141) o/w capitalised R&D (2) (18) Free operating cash flow (265) (457)

28 28 / Net cash flow Net debt in m H H Free operating cash flow (265) (457) Net (acquisitions) / disposals (18) (5) Deficit payments on pensions in the UK (29) (32) Dividends (14) (98) Net cash flow (326) (592) in m (Net debt) / Net cash - 31 December Net cash flow (326) Sale / (Acquisition) of treasury shares (5) FX and others (35) (Net debt) / Net cash - 30 June 2011 (175)

29 29 / Defence & Security: H1 11 key figures in m H H change reported organic Order intake % -3% Order book at 30 June (**) -7% -5% Revenues % -4% Restructuring costs (49) (17) x3 EBIT (*) % -7% in % of revenues 6,1% 6,1% (*) Before purchase price allocation (PPA) impact (**) As of 31 December 2010 Stable EBIT margin despite higher restructuring

30 30 / Aerospace & Transport: H1 11 key figures in m H H change reported organic Order intake % +8% Order book at 30 June (**) -1% +0% Revenues % +5% Restructuring costs (26) (27) -4% EBIT (*) x15 in % of revenues 4,2% 0,3% (*) Before purchase price allocation (PPA) impact (**) As of 31 December 2010 Steady growth of orders and revenues Better project execution

31 31 / Main programmes in backlog at 30 June 2011 Amount More than 600m Between 400 and 600m Programme Iridium (USA) Rafale (France) Fremm Frigates (France/Italy) QE-class aircraft carrier (UK) Between 200 and 400m London Underground signalling (UK) Watchkeeper (UK) Sentinel 3 Satellite (France) CSO observation satellite (France) FSTA air tanker (R-U) Balard (France) IFE systems

32 32 / Details of reporting structure FY2009 reporting structure* Reporting structure since 2010* Aerospace/Space Space Avionics (commercial and military) In Flight Entertainment Electronic warfare Mission airborne systems Defence Land systems Communications and C4I systems Naval systems Air defence Missile systems ATM Space Aerospace Land & Joint Systems Naval Air Systems Defence & Security Communications and C4I systems IT security Protection systems Critical information systems Naval systems Mission airborne systems Electronic warfare Air defence ATM Land systems Missile systems Defence & Security C4I Systems Defence Mission Systems Air Operations Land Defence Security Rail signalling Supervision & communication for rail Revenue collection ("Ticketing") IT security Protection systems Critical information systems Training & Simulation TWT & Imaging Security Aerospace & Transport Space Avionics (commercial and military) In Flight Entertainment Training & Simulation TWT & Imaging Rail signalling Supervision & communication for rail Revenue Collection ("Ticketing") Space Avionics Transportation Systems * This simplified presentation does not necessarily reflect internal business lines

33 THALES - 45, rue de Villiers Neuilly-sur-Seine Cedex France