Thales Sa · EURONEXT:HO
Thales Sa — Non-Deal Roadshow (March 2016)
41 slides from Thales Sa's roadshow presentation, March 2016
Slide 1: Investor meeting
Investor meeting March 2016 www.thalesgroup.com
Slide 2: Introduction to Thales
Introduction to Thales Full-Year 2015 results Key Ambition 10 initiatives Outlook
Slide 3: A strong set of focused businesses
A strong set of focused businesses Segment Sub-segment Civil Military 2015 sales(€m) Market position Aerospace Flight avionics ~1,600 #3 worldwide (commercial avionics) 38% of 2015 sales Other aerospace businesses #1 worldwide including training & simulation and microwave systems ~1,000 (microwave s
Slide 4: Increasingly diversified geographical mix
Increasingly diversified geographical mix Sales by geography Emerging market order intake Emerging market sales (and % of total order intake) (and % of total sales) €bn 6.2 €bn Asia Emerging x2 France 13% markets: 24% 28% 4.0 4.3 +49% 4.0 Middle-East 10% 3.1 3.3 Total 2.7 2.9 Other 2015 sales: 5% UK
Slide 5: Full-Year 2015 results
Introduction to Thales Full-Year 2015 results Key Ambition 10 initiatives Outlook
Slide 6: 2015 business environment
2015 business environment ▌ Aerospace Avionics: continued positive dynamics for cockpit avionics and in-flight entertainment and connectivity Space: telecom market recovering, increased demand from institutional and military segments ▌ Transport Strong demand in both emerging markets and Europe ▌ De
Slide 7: 2015 highlights: Ambition Boost delivers
2015 highlights: Ambition Boost delivers ▌ Record high order intake ▌ Return to top line growth ▌ Significant increase in profitability ▌ Challenges in transport being addressed Continued focus on profitable growth Investor meeting - 7
Slide 8: 2015 key figures
2015 key figures Order intake Sales EBIT (a) 8.6% €m +31% 18,880 €m +8% €m 14,063 7.6% +23% 1,216 14,363 12,974 985 2014 2015 2014 2015 2014 2015 Adjusted net income(a) Free operating cash-flow (a) Dividend €m €m € per +44% 809 x2.2 1,110 share +21% 1.36 562 1.12 501 2014 2015 2014 2015 2014 2015(b)
Slide 9: 2015 order intake
2015 order intake ▌ Record high order intake 18,880 €m +31% ▌ Signature of 24 contracts over €100m, including 5 “jumbo” contracts over 14,363 7,909 €500m 3,139 Unit value > €100m London underground signaling Rafale in Egypt and Qatar €10m < Australian 4x4 vehicles (Hawkei) 4,701 Unit value < €100m 4
Slide 10: 2015 organic sales growth
2015 organic sales growth Organic(a) sales growth ▌ Return to small growth in mature +16.0% markets +12.0% ▌ Further acceleration in emerging markets +4.5% +16%, after +12% in 2014 +0.5% Broad-based growth: top 10 emerging markets represent only 62% of emerging -1.1% market sales -4.9% Return to org
Slide 11: EBIT bridge
EBIT bridge • Solid operational performance • Increased R&D and marketing & sales investments €m Lower DCNS 1,216 restructuring Additional Additional Operational expenses R&D marketing performance & sales Scope, currency & +23 -32 pensions -37 +139 985 2014: -117 +113 2015: +22 +24 Transport: -84 Sc
Slide 12: Aerospace: 2015 key figures
Aerospace: 2015 key figures 2015 2014 change €m total organic Order intake 6,279 5,024 +25% +20% Sales 5,381 5,014 +7% +2% EBIT 518 505 +2% -3% in % of sales 9.6% 10.1% • High order intake in space • EBIT margin remains at a high level Investor meeting - 12
Slide 13: Transport: 2015 key figures
Transport: 2015 key figures 2015 2014 change €m total organic Order intake 2,826 1,651 +71% +66% Sales 1,519 1,402 +8% +4% EBIT (37) 32 NM NM in % of sales -2.4% 2.3% • Strong order intake momentum • Profitability significantly impacted by project execution • Action plan well underway Investor meeti
Slide 14: Defence & Security: 2015 key figures
Defence & Security: 2015 key figures 2015 2014 change €m total organic Order intake 9,704 7,608 +28% +24% Sales 7,084 6,480 +9% +7% EBIT 760 620 +23% +18% in % of sales 10.7% 9.6% • Further strong order intake in 2015: third year with book-to-bill well above 1 • Increased profitability driven by top
Slide 15: Cash conversion: from EBIT to Free operating cash-flow
Cash conversion: from EBIT to Free operating cash-flow • Increased capex to support future growth 2015, €m • High rate of cash conversion Financial Income 1,216 interest tax Other Change +9 items in WCR 1,110 137% Capex -102 -78 Equity affiliates: -56 -77 +143 Restructuring: -17 (2014: -287) 809 Pen
Slide 16: Adjusted EPS and dividend
Adjusted EPS and dividend Adjusted EPS and dividend per share € 3.89 ▌ Adjusted EPS up 10% per year 3.32(b) 2.93 3.20 since 2011 2.63 ▌ Proposed dividend : 1.36(a) €1.36 per share(a) 1.12 1.12 Pay-out ratio : 35% 0.78 0.88 ▌ Dividend up 15% per year 2011 2012 2013 2014 2015 since 2011 30% 30% 35% 34
Slide 17: Key Ambition 10 initiatives
Introduction to Thales Full-Year 2015 results Key Ambition 10 initiatives Outlook
Slide 18: Ambition 10: building on Thales strengths
Ambition 10: building on Thales strengths… ▌ Technological leadership, sustained through continued R&D investments ▌ Global footprint, combining strength in key mature markets with historical relationships in many emerging markets ▌ Leading positions in growing end-markets Avionics and in-flight ent
Slide 19: Addressing 3 key areas
…and addressing 3 key areas Building a growing, more global and more profitable Thales Growth Competitiveness People International industrial footprint Leadership and diversity Emerging markets Customer-driven Customer value and Larger contracts COMPREHENSIVE competitive innovation customer mindset
Slide 20: 2014-2015: Ambition Boost delivers
2014-2015: Ambition Boost delivers Visible acceleration in order intake Return of sustainable sales growth Focused M&A accelerating profitable growth First phase of engineering competitiveness plan Ongoing reduction in structure costs Transport recovery plan well underway Ambition Boost:
Slide 21: Second year of visible acceleration in order intake
2015, second year of visible acceleration in order intake ▌ Deployment of multiple Ambition Order intake per year (€bn) 18.9 Boost levers… Dedicated international development organization focused on emerging markets 14.3 Targeting of larger contracts and of 12.6 12.9 multi-year service agreements In
Slide 22: Return of sustainable sales growth
Return of sustainable sales growth Organic sales evolution, base 100 = 2009 sales No organic growth 105 101 100 100 2009 = 100 99 98 98 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Investor meeting - 22
Slide 23: Focused M&A accelerating profitable growth
Focused M&A accelerating profitable growth 2014: integration of 2016: integration of Live TV to enrich in-flight Vormetric as part of entertainment offer cyber-security offer Live TV bringing Internet Vormetric, leader in software- connectivity capabilities and based data protection significant cust
Slide 24: Engineering competitiveness: ongoing deployment of best practices
Engineering competitiveness: ongoing deployment of best practices ▌ Engineering: the core added value of Thales Software size evolution on board a commercial aircraft ~22,500 engineers worldwide (1/3 of group staff) Combining hardware, software and systems expertise to design differentiated solution
Slide 25: Reduction in structure costs
Reduction in structure costs ▌ Further optimization of G&A cost base General & Administrative expenses as % of sales Systematic internal and external benchmarking 4.3% Ongoing transformation plan of support functions 4.0% 4.0% ~0.5 points ~€70m 3.8% ▌ Significant rationalization of industrial footpr
Slide 26: Transport recovery plan well underway
Transport recovery plan well underway 2015: definition and 2016: completion of deployment of recovery plan operational recovery New management team Execution of projects Comprehensive contract stabilized on new baselines portfolio review Further transfer of skills from Reinforced governance to other
Slide 27: Significant improvement in profitability, in line with mid-term targets
Significant improvement in profitability, in line with mid-term targets EBIT, €m 9.5-10% EBIT margin +20% 1,216 150-200 bps 1,011 985 927 8.0% EBIT margin 749 2011 2012 2013 2014 2015 2016 2017/18 Pre IFRS 10/11 Pre IFRS 10/11 Investor meeting - 27
Slide 28: Outlook
Introduction to Thales Full-Year 2015 results Key Ambition 10 initiatives Outlook
Slide 29: Financial objectives
Financial objectives 2016 Order intake Remaining at a high level, close to 2013-14(a) Sales Mid-single digit organic growth EBIT(b) €1,300-1,330m(c) 2017/18 Sales Upgraded to mid-single digit organic growth(d) EBIT(b) margin 9.5-10% (a) Average 2013-14 order intake: €13.6 billion (b) Non-GAAP measur
Slide 30: Appendix
THALES | Appendix
Slide 31: 2015 order intake by destination
2015 order intake by destination change €m 2015 2014 total organic France 4,102 3,594 +14% +14% RoW United Kingdom 2,227 1,326 +68% +54% 2% Middle France Other European countries 3,483 3,173 +10% +9% East 22% Europe 9,812 8,093 +21% +19% 20% North America 1,364 1,036 +32% +13% Australia/NZ 1,525 967
Slide 32: 2015 sales by destination
2015 sales by destination change €m 2015 2014 total organic France 3,420 3,419 +0.0% +0.0% RoW United Kingdom 1,382 1,314 +5.2% -4.1% Middle 5% Other European countries 3,040 2,938 +3.5% +2.5% East France 10% 24% Europe 7,842 7,671 +2.2% +0.2% Asia North America 1,533 1,350 +13.6% -1.7% 13% 2015 Aus
Slide 33: 2015: 24 contracts over €100m
2015: 24 contracts over €100m ▌ Aerospace: 12 ▌ Transport: 3 In-flight entertainment for JetBlue London underground signaling ComSat military satellite (France) Doha metro signaling Ceres military satellite (France) Hong Kong metro Telecom satellite (Bangladesh) Telecom satellite (Eutelsat) ▌ Defenc
Slide 34: Main programmes in backlog
Main programmes in backlog Amount Programme London Underground signalling Rafale (Egypt) Hawkei (Australia) More than €600m Rafale (France) Rafale (Qatar) French military satellite (Comsat NG) Contact Software Defined Radio (France) Iridium (USA) Between €400m and €600m Mirage 2000 Upgrade (India) J
Slide 35: Sales and EBIT performance by segment
Sales and EBIT performance by segment Aerospace Transport Defence & security Total Group Organic sales growth Organic sales growth Organic sales growth Organic sales growth +7% +6% +4% +4.5% +2.4% +2% +1% +1% -1.1% -2% -2% -4% 2013 2014 2015 2013 2014 2015 2013 2014 2015 2013 2014 2015 EBIT margin E
Slide 36: Summary P&L: from sales to EBIT
Summary P&L: from sales to EBIT 2015 2014 change €m % of sales €m % of sales total organic Sales 14,063 12,974 +8.4% +4.5% Gross margin 3,375 24.0% 3,182 24.5% +6% +3% Indirect costs (2,205) 15.7% (2,075) 16.0% +6% +3% o/w R&D expenses (692) 4.9% (641) 4.9% +8% +5% o/w Marketing & Sales expenses (98
Slide 37: EBIT by segment
EBIT by segment • Defence & Security: very strong performance • Transport: impact of project execution • DCNS: results above breakeven change €m 2015 2014 total organic Aerospace 518 9.6% 505 10.1% +3% -3% Transport (37) -2.4% 32 2.3% NM NM Defence & Security 760 10.7% 620 9.6% +23% +18% EBIT - oper
Slide 38: Movement in net cash
Movement in net cash High net cash position driven by free operating cash-flow €m Deficit Free payment, operating UK Disposals/ cash flow pensions acquisitions Dividends Other 1,978 -101 +37 -234 +159 1,006 +1,110 Net cash Net cash at 31 Dec 14 at 31 Dec 15 Investor meeting - 38
Slide 39: Historical trend in cash conversion
Historical trend in cash conversion Adjusted net income conversion EBIT conversion into into Free operating cash flow Free operating cash flow 137% 91% 1,110 47% 51% 72% 1,216 114% 72% 1,110 51% 89% 1,011 985 74% 809 927 669 642 749 585 562 669 517 501 477 477 501 381 381 2011 2012 2013 2014 2015 20
Slide 40: Definition of non-GAAP measures and other remarks
Definition of non-GAAP measures and other remarks Rounding of amounts in euros In the context of this presentation, the amounts expressed in millions of euros are rounded to the nearest million. As a result, the sums of the rounded amounts may differ very slightly from the reported totals. All ratio
Slide 41: Thales contact details and forward-looking statements
Thales – Tour Carpe Diem – 31 Place des Corolles – 92098 Paris La Défense – France www.thalesgroup.com 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 regardin