Raising our stake in DCNS Strengthening our cooperation with Nexter 15 December 2011
2 / Highlights Two important strategic moves Raising our stake in DCNS Strengthening our cooperation with Nexter Combining forces to offer more efficient and more affordable solutions to domestic and international customers to strengthen our presence on international markets A key step towards further alliances in Europe Fully supported by Thales's controlling shareholders Supporting growth and enhancing efficiency creating value
DCNS
4 / Key features of the transaction Thales has elected to exercise its call option to acquire a further 10% of DCNS equity from the French state Option price: about 260m Thales shareholding to go from 25% to 35% Increased rights for Thales Closer cooperation with DCNS
5 / Background A further step in the cooperation with DCNS 1980-90s 2002 2007 2011 > First joint export successes > Creation of Armaris, a 50-50 joint project management and sales & marketing company > Acquisition of 25% of DCNS > Thales Naval France and Thales's interest in Armaris sold to DCNS > Acquisition of a further 10% of DCNS A long standing presence of Thales in naval activities
6 / DCNS: a strong technology and product portfolio Surface ships Frigates FREMM, Horizon OPV, corvettes Gowind Aircraft carrier Helicopter carrier (BPC) Mistral Submarines Conventional (Scorpene) SSN (Barracuda) SSBN (Terrible)
7 / DCNS: a leading and efficient market player Key market positions Leading Europe s largest frigates programme (FREMM) At the heart of the French nuclear deterrence system (SSBN, SSN) Significant export positions: Brazil, Russia, India, Malaysia Strong service and through-life activities Efficiency Sound financials 5 years of backlog EBIT: 6.3% in 2009, 6.6% in 2010 Net cash position exceeding 2bn Championship performance plan being implemented
8 / A strong strategic rationale Strengthening a long standing cooperation between Thales and DCNS DCNS strategy has been approved and is supported by Thales Paving the way for further alliances Consolidating position on the international markets
9 / Financials & accounting Timetable Option exercised on 16 December Cash payment of about 260m expected in the next few weeks Accounting Up to now: 25% investment in DCNS has been equity accounted As from effective transfer of shares: within the current IFRS definition of "joint control" (IAS31) 35% of DCNS accounts to be consolidated line by line into Thales accounts
10 / Value creation Increased revenue base Supporting defence top line Strengthening the 20bn revenues target by 2020 Stronger operational efficiency EBIT (*) accretive as from 2012 Sustainable value creation for Thales shareholders (*) Before PPA impact
Nexter
12 / Key features of the proposed transaction Initiation of discussions with a view to bring together TDA Armements and Nexter Munitions while Thales would become a minority shareholder of Nexter Technological and commercial cooperation agreement between Thales and Nexter Timeline: closing expected by H2 2012 Reinforcing commercial offering and presence
Annexes
14 / DCNS: key financial figures in m 2009 2010 Order intake 4,065 6,921 Order book 9,945 14,363 Revenues 2,406 2,503 EBIT (*) 152 (6.3%) 166 (6.6%) Net cash 1,716 2,161 Workforce 12,198 12,502 (*) Before PPA impact
15 / Nexter: key financial figures in m 2009 2010 Order intake 1,286 601 Order book 2,508 2,032 Revenues 887 1,076 EBIT 137 (15.4%) 176 (16.3%) Net cash 455 585 Workforce 2,693 2,688
www.thalesgroup.com THALES - 45, rue de Villiers 92526 Neuilly-sur-Seine Cedex France 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.