Thales Sa · EURONEXT:HO
Thales Sa — H1 2010 Earnings Presentation
33 slides from Thales Sa's earnings presentation, Jul 28, 2010
Slide 1: 2010 Half Year Review
2010 Half Year Review Luc Vigneron Patrice Durand Chairman & CEO CFO 28 July 2010
Slide 2: Agenda
Agenda 1. H1 10 Highlights – Luc Vigneron 2. Financial Review – Patrice Durand 3. Way forward – Luc Vigneron 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 re
Slide 3: H1 10 Highlights
1. H1 10 Highlights – Luc Vigneron 2. Financial Review – Patrice Durand 3. Way forward – Luc Vigneron July 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%(**) In line with FY10 guidance July 2010 (*) Organic variation, i.e. on a like-for-like basis at consta
Slide 5: 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% Defence & Security: lower orders vs. exceptional
Slide 6: Financial Review
1. FY09 Highlights – Luc Vigneron 2. Financial Review – Patrice Durand 3. Way forward – Luc Vigneron July 2010 6
Slide 7: 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 8: 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 9: 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 10: 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 11: 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 Improv
Slide 12: 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 13: 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% Good performance of US and Dutch operations July 2010 (*) Be
Slide 14: 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% Orders down after exceptional orders in Saudi Arabia in 2009
Slide 15: 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 Reduced
Slide 16: 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% July 2010 Strong impac
Slide 17: 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 18: 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 19: 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 20: Way forward
1. FY09 Highlights – Luc Vigneron 2. Financial Review – Patrice Durand 3. Way forward – Luc Vigneron July 2010 20
Slide 21: A challenging environment
A challenging environment Budget pressures in our domestic markets in Europe Persistently unfavourable climate for our civil businesses Stronger price pressure in international markets July 2010 21
Slide 22: Our strategy
Our strategy Improve project management and competitiveness Seek out growth in emerging economies July 2010 22
Slide 23: Improve project management and competitiveness
Improve project management and competitiveness Increase customer satisfaction implementation of a customer-centric organisation Improve financial performance Reduce our cost base through the Probasis plan a comprehensive plan targeting €1.3bn in 2014 rollout well underway Alignment of financial perf
Slide 24: International expansion
International expansion Europe, North America Consolidate domestic operations Emerging economies: Asia, Latin America, Middle East Develop dynamic policy of local partnerships and operations Seize opportunities Russia USA Space, Avionics Defence Ground Transportation, South Korea Simulation, Avionic
Slide 25: Views for 2010
Views for 2010 Overall stability of revenues Decrease in order intake EBIT margin: between 3 and 4% In line with the expectations communicated in February July 2010 25
Slide 26: Timetable
Timetable Q3 2010 revenues 9 November 2010 FY 2010 results 24 February 2011 (post market) Q1 2011 revenues 11 May 2011 July 2010 26
Slide 27: Appendices
Appendices July 2010 27
Slide 28: 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 Limited indebtedness July 2010 28
Slide 29: 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 p
Slide 30: Orders by destination
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 Australia
Slide 31: Revenues by destination
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 272 241
Slide 32: 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 33: Details of new reporting structure
Details of new reporting structure Former reporting structure* New reporting structure* Aerospace/Space Defence & Security Space Land, Communications and C4I systems Avionics (commercial and military) Mission systems (naval systems + airborne systems + In Flight Entertainment electronic warfare) Ele