Thales Sa · EURONEXT:HO
Thales Sa — CA Cheuvreux Autumn Conference 2010
36 slides from Thales Sa's conference presentation, September 2010
Slide 1: CA Cheuvreux Autumn Conference
CA Cheuvreux Autumn Conference Luc Vigneron, Chairman & CEO September 2010
Slide 2: Agenda
Agenda 1. H1 10 Highlights 2. Business environment 3. Way forward This presentation may contain forward-looking statements. Such forward-looking statements are trends or objectives, as the case may be, September 2010 and shall not be construed as constituting forecasts regarding the Company’s result
Slide 3: H1 10 Highlights
1. H1 10 Highlights 2. Business environment 3. Way forward September 2010 3
Slide 4: H1 2010 summary
H1 2010 summary H1 2010 actual FY10 guidance €5.14bn -14%(*) Down from FY09(*) Order intake Book-to-bill: 0.86 Book-to-bill < 1 Revenues €5.96bn +1%(*) Stable yoy(*) EBIT 3.4%(**) Between 3 and 4%(**) September 2010 In line with FY10 guidance (*) Organic variation, i.e. on a like-for-like basis at c
Slide 5: EBIT evolution
EBIT evolution in €m €173m less cost variances vs. H1 09 233 60 16 12 4 204 Improved environment offset by less favourable contract mix 17 27 68 5 H1 2009 EBIT Scope FX Contract mix Negative cost Negative cost Add'l P&L Add'l P&L Add'l restruct. H1 2010 EBIT variances on variances on expensed R&D ex
Slide 6: H1 2010 main orders
H1 2010 main orders Over €100m unit value: Gazprom Yamal satellite system (Russia) €1,209m IFE systems (Qatar) €371m Watchkeeper support (UK) Other significant orders: €967m New York metro signalling €151m €220m €4,651m €4,773m (US) €242m Eutelsat W6 satellite (France) €2,645m €2,626m Apstar satelli
Slide 7: Business environment
1. H1 10 Highlights 2. Business environment 3. Way forward September 2010 7
Slide 8: Getting our grip on difficult programmes
Getting our grip on difficult programmes Avionics / A400M Avionics development activity Base: 100 in 2005 A400M: ongoing discussions 600 with Airbus 500 400 Avionics developments: 300 200 progressive recovery 100 2005 2007 2009 2011 2013 2015 Meltem maritime patrol programme ongoing negotiation with
Slide 9: Addressing a changing environment
Addressing a changing environment Government debt - 2010e Some key challenges 140 Budget pressures in our domestic 120 100 markets in Europe % GDP 80 60 A still fragile commercial aerospace 40 20 sector 0 UK US NL Italy Spain France Portugal Ireland Germany Greece Competitive international markets S
Slide 10: Way forward
1. H1 10 Highlights 2. Business environment 3. Way forward September 2010 10
Slide 11: Our strategy
Our strategy Improve Seek out growth competitiveness in emerging markets Probasis New customer-centric performance plan international organisation September 2010 11
Slide 12: Probasis: a comprehensive performance plan
Probasis: a comprehensive performance plan Non-Quality Costs Target: €400m > Improving programme execution Supply Chain > Developing, procuring and Target: €650m producing better SG&A > Increasing competitiveness of Target: €250m support functions September 2010 Target: €1.3bn cost savings by 2014 1
Slide 13: Probasis: timing of expected benefits
Probasis: timing of expected benefits 2010 2011 2012 2013 2014 NQC Supply Chain SG&A No or very limited benefits Partial benefits Full benefits A comprehensive performance plan September 2010 targeting sustainable profitability improvement 13
Slide 14: International: leverage our extensive footprint
International: leverage our extensive footprint Revenues by destination FY09 RoW 30% of FY09 revenues Middle East 10% 6% France 23% derived from high growth countries Asia 9% Australia 4% UK Over 50% of FY09 revenues N Am erica 9% 11% generated by non-French operations Rest of Europe 28% 9,000 peopl
Slide 15: International: expanding further
International: expanding further Europe, North America Consolidate domestic operations Emerging economies: Asia, Latin America, Middle East Shift of paradigm: from export to local value added Seize opportunities Russia USA Space, Avionics Defence Ground Transportation, South Korea Simulation, Avioni
Slide 16: Conclusion
Conclusion Thales is delivering… Actively addressing contract execution issues New organisation of the Group effective Aligned with geographical priorities Renewed executive team Simpler, unified processes Probasis action plan on track, with clear focus on performance … and is preparing its future B
Slide 17: CA Cheuvreux Autumn Conference
CA Cheuvreux Autumn Conference Luc Vigneron, Chairman & CEO September 2010
Slide 18: Appendices
September 2010 18 Appendices
Slide 19: H1 2010 financial overview
H1 2010 financial overview in €m H1 2010 H1 2009 change reported organic Order intake 5,144 5,860 -12% -14% Order book at 30 June 24,903 24,731 (**) +1% -3% Revenues 5,955 5,744 +4% +1% EBIT (*) 204 68 +199% +134% in % of revenues 3.4% 1.2% Net income (Group share) (*) 138 12 per share in € 0.70 0.0
Slide 20: EBIT margin
EBIT margin in €m H1 2010 H1 2009 change total organic Revenues 5,955 5,744 +4% +1% Gross margin (*) 1,250 1,059 +18% +13% in % of revenues 21.0% 18.4% Indirect costs (999) (949) +5% +3% in % of revenues 16.8% 16.5% o/w R&D expenses (274) (255) +8% +5% in % of revenues 4.6% 4.4% o/w M&S expenses (46
Slide 21: H1 2010 summary by business
H1 2010 summary by business Defence & Aerospace & in €m Other Total Security Transport Order intake 2,605 2,514 25 5,144 Order book at 30 June 15,032 9,801 70 24,903 Revenues 3,401 2,520 34 5,955 EBIT (*) 207 7 (10) 204 in % of revenues 6.1% 0.3% 3.4% (*) Before impact of ‘PPA’ (Purchase Price Alloc
Slide 22: Defence & Security: H1 financial overview
Defence & Security: H1 10 financial overview in €m H1 2010 H1 2009 change total organic Order intake 2,605 3,104 -16% -19% Order book at 30 June 15,032 15,223 (**) -1% -5% Revenues 3,401 3,338 +2% -1% EBIT (*) 207 192 +8% +5% in % of revenues 6.1% 5.8% Lower order intake vs. exceptional H1 09 Septem
Slide 23: Aerospace & Transport: H1 financial overview
Aerospace & Transport: H1 10 financial overview in €m H1 2010 H1 2009 change total organic Order intake 2,514 2,731 -8% -9% Order book at 30 June 9,801 9,408 (**) +4% +0% Revenues 2,520 2,369 +6% +4% EBIT (*) 7 (106) ns ns in % of revenues 0.3% -4.5% Order intake up in Avionics, down in Space and Tr
Slide 24: Area A: H1 financial overview
Area A: H1 10 financial overview in €m H1 2010 H1 2009 change total organic Order intake 1,766 1,311 +35% +24% Order book at 30 June 8,960 8,441 (**) +6% -3% Revenues 2,073 1,869 +11% +3% EBIT (*) 95 75 +28% +18% in % of revenues 4.6% 4.0% September 2010 Good performance of US and Dutch operations (
Slide 25: Area B: H1 financial overview
Area B: H1 10 financial overview in €m H1 2010 H1 2009 change total organic Order intake 1,067 1,522 -30% -31% Order book at 30 June 4,399 4,393 (**) +0% -2% Revenues 1,184 1,097 +8% +6% EBIT (*) 49 70 -30% -35% in % of revenues 4.1% 6.4% September 2010 Orders down after exceptional orders in Saudi
Slide 26: France: H1 financial overview
France: H1 10 financial overview in €m H1 2010 H1 2009 change total organic Order intake 2,308 3,024 -24% -24% Order book at 30 June 11,544 11,897 (**) -3% -3% Revenues 2,695 2,773 -3% -3% EBIT (*) 62 (61) ns ns in % of revenues 2.3% -2.2% Orders down after numerous export contracts in H1 09 Septemb
Slide 27: Self-funded R&D
Self-funded R&D in €m H1 2010 H1 2009 P&L expense 274 255 Capitalised R&D 18 48 Total R&D funding 292 303 Impact of capitalisation on the P&L in €m H1 2010 H1 2009 Capitalised R&D 18 48 Amortisation charge (21) (21) Net impact on EBIT (*) (3) 27 Net impact on margin -0.1% 0.5% September 2010 Strong
Slide 28: Net income
Net income in €m H1 2010 H1 2009 EBIT (*) 204 68 Impairment of non-current operating assets (4) (5) Net capital gains (losses) and others (7) (**) 6 Income of operating activities (*) 193 69 Cost of net financial debt (30) (33) Other financial results (4) (27) Other components of pension charges (38
Slide 29: Free operating cash flow
Free operating cash flow in €m H1 2010 H1 2009 Operating cash flow 390 197 Change in WCR & contigency reserves (633) 42 Payment of pension benefits and scheme (35) (35) settlements Income tax paid (38) (46) Net operating cash flow (316) 158 Net operating investments (141) (178) o/w capitalised R&D (
Slide 30: Net cash flow – Net Debt
Net cash flow – Net Debt in €m H1 2010 H1 2009 Free operating cash flow (457) (20) Net (acquisitions) / disposals (5) (149) Deficit payments on pensions in the UK (32) (28) Dividends (98) (205) Net cash flow (592) (402) in €m Net debt - 31 December 2009 (91) Net cash flow (592) Sale / (Acquisition)
Slide 31: A strong balance sheet
A strong balance sheet in €m 3,744 3,807 595 91 31/12/09 30/06/10 Net equity Net debt September 2010 Limited indebtedness 31
Slide 32: PPA impact
PPA impact in €m H1 2010 PPA H1 2010 before PPA (*) impact published Order intake 5,144 5,144 Order book at 30 June 24,903 24,903 Revenues 5,955 5,955 EBIT 204 (41) 163 in % of revenues 3.4% 2.7% Income tax (12) 14 1 Equity in unconsolidated affiliates 29 4 25 Net income (Group share) 138 (31) 106 S
Slide 33: H1 Orders by destination
H1 10 Orders by destination Order intake by destination change in €m H1 2010 H1 2009 total organic RoW 4% France 1,074 1,154 -7% -7% Middle East France 11% 21% UK 536 555 -3% -6% Rest of Europe 1,436 1,754 -18% -19% Asia Europe 3,046 3,463 -12% -13% 8% North America 610 566 +8% +4% Australia UK Aust
Slide 34: H1 Revenues by destination
H1 10 Revenues by destination Revenues by destination change in €m H1 2010 H1 2009 RoW total organic 6% Middle East France France 1,309 1,399 -6% -7% 10% 22% UK 767 662 +16% +13% Rest of Europe 1,530 1,556 -2% -2% Asia Europe 3,606 3,617 -0% -1% 9% North America 590 546 +8% +4% Australia Australia 2
Slide 35: Main projects in order book
Main projects in order book Value Project over €600m Rafale aircraft (France) Fremm frigates (France/Italy) between €400m and €600m London Underground signalling (UK) between €200m and €400m FSAF air defence systems (France/Italy) CVF aircraft carrier (UK) Watchkeeper UAV system (UK) Yahsat satellit
Slide 36: Details of new reporting structure
Details of new reporting structure Former reporting structure* New reporting structure* Aerospace/Space Space Space Defence & Security Avionics (commercial and military) Communications and C4I systems In Flight Entertainment Aerospace IT security Defence & Electronic warfare Security C4I Protection