1 2012 results
AGENDA 2012 Highlights 2012 consolidated results Outlook Note 1: The financial statements were subject to a limited review by the statutory auditors. Note 2: In accordance with IFRS 5, the Intelligent Transport System (ITS) activity was reclassified as from January 1, 2012 as a discontinued business. The 2012 and 2011 interim and 2011 annual financial statements were restated in accordance with IFRS 5 (ie excluding the Transportation activity). Hereafter, the financial statements are presented both including and excluding the Transportation activity. 2
Improved fundamentals Recap of our 2012 objectives Focus on profitability - Continue to improve the operating margin - Achieve positive net income for the year Strengthen equity 2012: results in line with our objectives Renewed operating margin growth Positive net income as of the first half Spin off project of ITS Business Unit, which will ultimately strengthen equity Strategic refocusing More value added Energy Aeronautics Space Security Less risk Defense Spin off project under way Transport ation 3
2012 Business trends Revenue growth Order intake (YoY) Postponement of projects to H2 2012 +4.8% Revenues (YoY) +0.7% 2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012 North and South America 17% Rest of Europe 10% 2012 revenues by region (incl. Transportation) Africa & Middle East 1% % Revenues France 72% Transportation 19% Aeronautics, Energy 32% 2012 revenues by activity Products 7% % Revenues Defense, Space & Security 42% 4
2012 Turnaround confirmed Renewed increase in operating margin & positive net income m Operating margin trend by 6-month period % Net income trend ( m) 5
2012- Defense, Space & Security Turnaround confirmed m Operating performances (YoY) % Growth areas 2012 highlights Postponement of projects to H2 Order book at 22 months revenues Stable revenues Air Force: Validation of ground-air radio communications system (SRSA) Significant increase in operating margin Control over project execution Reduction in SG&A Defense & ATM Strengthen our positions: Armed Forces IT systems & Logistics IT systems Market our solutions in the civilian sector either directly or through export partnerships Voice Communication Systems for civilian ATM; Distributed command and control (C2) centers for air traffic operations and crisis management Space Strengthen our positions at the CNES : CSO (Optic-Space Component) program Increase our market share with ESA (Germany & Italy ) & with Eumetsat Extend our expertise to spatial applications (GEODE 4D, GMES applications, surveillance, etc.) Security Pursue our R&D efforts and create strategic partnerships: trusted services to secure the Cloud 6
2012- Diginext Continued R&D spending m Operating performance (YoY) % Growth areas 2012 highlights Rebound in order intake expected in H2 Revenue level maintained IGN: Operational launch of Géoportail V3 that integrates Virtualgéo Operating margin up compared to 2011 R&D spending maintained at 4.2% of revenues Tactical training & data links Continue partnership with the Air Force for air training: Soltice and simulation over live Deploy our solutions abroad Combat simulation in urban areas, Air Warfare Center Detection & surveillance Market Stradivarius, surface wave OTH radar, in France and abroad 7
2012- Aeronautics, Energy Favorable trend in aeronautics Growth areas 2101 highlights Slight growth in order intake New projects following framework contracts: MBDA, Eurocopter Stable revenues Total: successful initial phase for HPC outsourcing EDF: validation of industrial IT system for the Flamanville EPR reactor Operating margin increases relative to 2011 Aeronautics Strengthen our positions at EADS and support Airbus in India (offshore center) Increase our market share at Thales, Eurocopter & MBDA Continue our growth in regions with high growth potential: Canada, United States Energy Take advantage of our HPC expertise in order to cover the growing needs of the Energy and other strategic sectors Develop value-added products and services on behalf of nuclear safety m Operating performances (YoY) % 8
2012- Transportation Profitable growth Operating performance (YoY) 2012 highlights Decrease in order intake Postponement of projects to H2 Strong growth in revenues (+30.4%) Rhode Island: operational launch of express toll lanes Chile: operational launch of Santiago electronic toll collection system Profitability confirmed m % Growth areas SANEF Group bid to acquire the business: Sanef is a global service road infrastructure provider, specialist in mobility This operation would allow CS ITS to take full advantage of a growing tolling system market With a view of closing this operation, which is subject to usual condition precedents and for which CS has granted exclusivity until 31 October 2012, CS initiated consultation with its workers council representatives 9
2012- Employee trends 1,980 employees in the Group through June 30, 2012-3% vs 6/30/11 1,582 employees in France as of 6/30/12 81.5% average occupation rate for 2012-6% vs 6/30/11-0.8 pt 1,745 employees excluding Transportation activity as of 6/30/12 398 employees abroad as of 6/30/12 +11% vs 6/30/11 Products +11% Transportation +38% Defense Space Security -0.3% By division (vs 6/30/11) Excluding administrative staff: 99 employees Aeronautics Energy Industry -7.5% +135 employees recruited in 2012 9.7% turnover in 2012 Management & administrative -8% Analysis by function (vs 6/30/11) Billable employees -2% Sales -12% 10
11 AGENDA Highlights Interim results Outlook
2012 Consolidated interim results Renewed increase in operating margin Incl. Transportation activity Excl. Transportation activity m 2011 Reported H2 2011 Reported 2012 Constant scope 2011 Pro forma H2 2011 Pro forma 2012 IFRS 5 Revenues 100.5 100.1 105.3 85.3 83.9 85.9 Operating margin -1.4-1.4% 4.1 4.1% 4.4 4.2% -1.7-2.0% 3.0 3.6% 3.5 4.1% 12
2012 Performance trends Gross margin Inprovement & control of SG&A Incl. Transportation activity Excluding Transportation activity Gross margin Net R&D expenses Selling expense General and administrative expense 13
2012- Income statement Positive net income Incl. Transportation activity Excl. Transportation activity m 2011 Reported H2 2011 Reported 2012 constant scope 2011 Pro forma H2 2011 Pro forma 2012 IFRS 5 Revenues 100.5 100.1 105.3 85.3 83.9 85.9 Operating margin -1.4-1.4% 4.1 4.1% 4.4 4.2% -1.7-2.0% 3.0 3.6% 3.5 4.1% restructurings / job savings plan -6.8-0.7-0.5-6.7-0.8-0.3 hosting and other -0.1-1.6-0.8-0.1-1.5-0.8 Operating income -8.3 1.8 3.1-8.5 0.7 2.4 translation differences, provisions & other -0.7-1.7 1.0-0.7-1.7 0.1 cost of net financial debt -1.2-1.3-1.6-1.0-0.7-1.6 Income (loss) from continuing activities before tax -10.2-1.2 2.5-10.2-1.7 0.9 Tax -0.3-0.4-0.6-0.1-0.1-0.3 CVAE tax -0.9-1.0-0.9-0.9-0.9-0.9 Net income on disposed / discontinued activities -2.0-0.1-0.2-2.1 0 1.3 Net income (loss) -13.3-2.7 0.8-13.3-2.7 0.8 14
2012- Cash flow Free cash flow before cost of financial debt / positive income tax m Free cash flow before cost of financial debt and income tax 2011 reported H2 2011 reported 2012 Incl. Transportati on 2012 Excl. Transportati on -2.4-2.8 3.7 3.3 Change in working capital requirements -21.3 6.3-2.3-2.2 Disposal / acquisition of pp&e / intangible assets -1.0-1.0-1.2-1.1 Disposal / acquisition of financial assets -2.1-3.9-4.3-4.0 Other (change in scope, taxes paid) -2.3 0.8-1.2-1.5 Free cash flow -29.1-0.6-5.3-5.5 Proceeds from borrowings 10.2-4.6 4.6 Capital increase / change in treasury shares -0.1 - - - Dividends and interest paid -1.4-3.3-1.8-1.8 Net impact of translation adjustments and other -1.2 1.7-0.7 0.1 Impact of discontinued activities - - - -3.1 Net cash flow -21.6-2.2-3.2-5.7 Cash and cash equivalents at beginning of period 38.9 17.2 15.0 15.0 Cash and cash equivalents at end of period 17.2 15.0 11.8 9.3 15
2012 Changes in IFRS consolidated balance sheet Consolidated figures ( m) 6/30/11 reported 12/31/11 reported 6/30/12 Incl. Transportation 6/30/12 Excl. Transportation Non-current assets 56.9 60.0 63.9 62.8 o/w goodwill 36.1 36.1 36.1 35.9 o/w pp&e and intangible assets 7.6 6.8 6.4 5.9 o/w research tax credit 8.0 11.7 14.9 14.9 Net assets/liabilities held for sale 0.2 0.2-3.9 WCR (16.5) (22.7) (21.3) (22.5) Cash and cash equivalents (A) 17.2 15.0 11.8 9.3 Uses 57.6 53.0 54.4 53.5 Equity 16.7 14.9 13.8 13.8 Provisions for liabilities and charges 19.7 16.5 14.8 14.2 Borrowings & other financial liabilities (B) 21.2 21.2 25.8 25.5 Resources 57.6 53.0 54.4 53.5 Deconsolidating factoring (C) 17.8 17.5 9.5 9.5 Overall debt (B+C-A) 21.8 23.7 23.5 25.7 16
17 AGENDA Highlights Interim results Outlook
Outlook CS confirms its objective of growth in operating margin relative to 2011 and positive net income Rebound in order intake expected Continued gains in growth areas of our major business lines Strengthening equity Finalization of Transportation activity disposal transaction: objective of closing before October 31, 2012 Additional reinforcement of the equity through a capital increase: business development and Group transformation through the acquisition of new skills and technologies 18