Dassault Aviation: 2013 first half-year results

Marketwired

SAINT-CLOUD, FRANCE--(Marketwired - Jul 25, 2013) -



+-------------------------------------------------------------------------+
|Order intake 27 FALCON compared to 25 in the first half-year 2012 |
+-------------------------------------------------------------------------+

+-------------------------------------------------------------------------+
|Deliveries 29 FALCON and 5 RAFALE compared to 34 FALCON and 4 RAFALE|
| in the first half-year 2012 |
+-------------------------------------------------------------------------+

+-------------------------------------------------------------------------+
|Net sales EUR 1,826 million |
| |
|Adjusted net income* EUR 165 million |
| |
|Adjusted net margin* 9.0% |
+-------------------------------------------------------------------------+

* In order to enable a better monitoring and benchmarking of itseconomicperformance, DASSAULT AVIATION presents an adjusted net income. TheGroupconsolidated net income is adjusted with :

- neutralizing amortization of THALES purchase price allocation (PPA),

- neutralizing change in fair value of derivative exchangeinstruments noteligible to hedge accounting.

Cf. Appendix : Table of reconciliation between consolidated income andadjustedincome.

Saint-Cloud, 25 July 2013 - The Board of Directors, chaired by Mr.ÉricTrappier, closed yesterday the financial statements for the firsthalf-year2013. These consolidated condensed interim financial statements werereviewed bythe Statutory Auditors who expressed an unqualified opinion.

Éric TRAPPIER, Chairman and CEO of DASSAULT AVIATION, stated :

« We are going through times of hopes and uncertainties :

- after its maiden flight, last December, nEUROn demonstrated theexceptionalknow-how of France and Europe, but the Public Authorities are lookingoverseasto purchase MALE drones. We have to obtain the launching of a UCAS(UnmannedCombat Air Systems) program and a European MALE (Medium Altitude LongEndurance)program.

- RAFALE carries our hopes with export and its operational successes,especiallyin Mali. However, interrogations weigh on budgetary policies concerningFrenchprograms. It is important to sign the RAFALE contract with India,

- FALCON market, subject to worldwide macro-economic evolutions, shows anuncertain recovery.

Thus, we must keep on fighting in three fields : sales, support andinnovation.By innovation, we mean completion as well as on-going modifications in ourcurrent fleet and, of course, the SMS.

We must maintain and even intensify efforts to sell RAFALE and FALCON,whilepreparing the future with the new RAFALE standards, drones, the SMS and thenextFALCONs. »

Order intake and backlog

2013 first half-year orders amounted to EUR 1,410 million compared to EUR1,424million in the first half-year 2012. Export represented 93% of the totalorderintake.

New orders, net of cancellations, stood at 27 FALCON in the firsthalf-year2013 compared to 25 FALCON in the first half-year 2012. FALCON orderintakereached EUR 1,242 million in the first half-year 2013 compared to EUR1,048million in the first half-year 2012.

Defense orders include support and development contracts. 2012 firsthalf-year was marked by a significant order of simulators.

As of June 30, 2013, consolidated backlog amounted to EUR 7,517 millioncomparedto EUR 7,991 million as of December 31, 2012, down by 6%.

Net sales

Consolidated net sales amounted to EUR 1,826 million in the firsthalf-year2013 compared to EUR 1,929 million in the first half-year 2012, down by5%.Export net sales represented 74% of total net sales.

FALCON net sales decreased by 8%, reaching EUR 1,329 million in the firsthalf-year 2013 from EUR 1,437 million in the first half-year 2012. 29FALCON weredelivered in the first semester 2013, compared to 34 in the firsthalf-year 2012.

FALCON net sales represented 73% of the total net sales.

5 RAFALE were delivered to French Air Force and Navy in the firsthalf-year2013 vs. 4 in the first half-year 2012. Nevertheless, net sales remainstablebecause of a decrease in support and development activities.

The book-to-bill ratio reached 0.77.

Operating income

2013 first half-year operating income amounted to EUR 187 millioncompared toEUR 244 million in the first half-year 2012.

Operating margin stood at 10.3% compared to 12.7% in the first half-year2012.This decrease is mainly due to the increase of research and developmentcosts.

The increase of research and development costs (EUR 237 million in thefirsthalf-year 2013, corresponding to 13.0% of net sales, compared to EUR 206millionin the first half-year 2012, corresponding to 10.7% of net sales)contributes toa decrease of the operating margin.

Adjusted financial income

2013 first half-year adjusted financial income amounted to EUR 2 millionvs. EUR1 million in the first half-year 2012.

Adjusted net income

Adjusted net income (excluding THALES) amounted to EUR 122 millioncompared toEUR 164 million in the first half-year 2012. Adjusted net margin(excludingTHALES) reached 6.7% vs. 8.5% in the first half-year 2012.

THALES contribution to the Group net income, before amortization ofPurchasePrice Allocation, amounted to EUR 43 million in the first half-year2013compared to EUR 41 million in the first half-year 2012.

Adjusted net income amounted to EUR 165 million compared to EUR 205million inthe first half-year 2012. Adjusted net margin reached 9.0% vs. 10.6%in thefirst half-year 2012.

In IFRS, 2013 first half-year net income amounted to EUR 135 millioncompared toEUR 187 million in the first half-year 2012.

Financial situation

The Group has defined a specific indicator, « available cash», that reflectsthe Group's total liquidities net of borrowings.

Consolidated available cash reached EUR 3,577 millions as of June 30,2013compared to EUR 3,760 million as of December 31, 2012, down by EUR 183million.

This decrease is mainly due to an increase in working capital (EUR -271million)and dividends payment (EUR - 94 million), partially offset by the firsthalf-year consolidated net cash from operating activities (EUR + 192million).

Attributable equity amounted to EUR 4,792 million as of June 30, 2013comparedto EUR 4,747 million as of December 31, 2012 restated.

Group activities

Regarding business jets, FALCON 2000LXS and FALCON 2000S have bothbeencertified in the first half-year 2013. FALCON 2000S deliveries alsostarted onthe first half-year.

Defense programs were marked by the publication of the French Government"LivreBlanc" on Defense and National Safety which in the long term reduces thefleetof fighters in the French Air and Navy Forces from 300 to 225. FrenchMilitaryProgram Law will be enacted in the coming months with its budgetarytranscription. They will have a direct impact on our Defense programs.

RAFALE program was marked, in the first half-year 2013, by the negotiationsofthe contract following on RAFALE selection in 2012 by the Government ofIndia.Prospecting continues in other countries.

In addition, the Indian MIRAGE 2000 modernization program is on track.Firstflight is planned in the second half of 2013.

Concerning UCAV (Unmanned Combat Air Vehicles), it has to be noted :

- the « Radar Cross Section » measurement campaign of the nEUROndemonstratorand the display of the aircraft at the Paris Air Show. DASSAULT AVIATION isprime contractor of this program, with five European industrial partners,

- the pursue of the preparatory study for the launching of an UnmannedCombatAir System (UCAS) demonstrator, in cooperation with BAE Systems.

Concerning MALE (Medium Altitude Long Endurance) UAV, we have starteddiscussions with European industrial partners to examine the possibilitiesofdesigning and producing together a European MALE drone. A commondeclaration ofintent was made at the opening of the Paris Air Show.

2013 outlook

DASSAULT AVIATION Group expects to deliver around 70 FALCON (compared to66 in2012) and 11 RAFALE in 2013. 2013 net sales should be higher than2012 netsales.

Appendix : table of reconciliation between consolidated income andadjustedincome

The impact in the first half-year 2013, of the THALES PPA amortization andthechange in fair value of derivative exchange instruments adjustments onincomestatement is detailed below :


+----------+----------------+----------------+---------------+------------+
| |1(er) half-year | |Change in fair |1(er) half- |
| (EUR | 2013 | THALES PPA | value of | year2013 |
|thousands)| |amortization (1)| derivative | |
| | Consolidated | | exchange | Adjusted |
| | data | |instruments (2)| data |
+----------+----------------+----------------+---------------+------------+
|Financial | | | | |
|income / | - 799| | 2 797| 1 998|
|expense | | | | |
+----------+----------------+----------------+---------------+------------+
|Share of | | | | |
|income | | | | |
|of equity | 14 329| 28 269| | 42 598|
|affiliates| | | | |
+----------+----------------+----------------+---------------+------------+
|Income tax| - 66 311| | - 963| - 67 274|
+----------+----------------+----------------+---------------+------------+
|Net income| 134 699| 28 269| 1 834| 164 802|
+----------+----------------+----------------+---------------+------------+

(1) neutralization of THALES Purchase Price Allocation (PPA) amortization,net of income tax.

(2) neutralization of the change in fair value, net of income tax, of derivative exchange instruments which do not qualify for hedge accounting under the specific rules of IAS 39 « Financial Instruments ».

The impact in the first half-year 2012, of the THALES PPA amortization andthechange in fair value of derivative exchange instruments adjustments onincomestatement is detailed below :


+----------+----------------+----------------+---------------+------------+
| |1(er) half-year | |Change in fair |1(er) half- |
| (EUR | 2012 | THALES PPA | value of | year2012 |
|thousands)| |amortization (1)| derivative | |
| | Consolidated | | exchange | Adjusted |
| | data (*) | |instruments (2)| data (*) |
+----------+----------------+----------------+---------------+------------+
|Financial | 23 922| | -22 506| 1 416|
|income | | | | |
+----------+----------------+----------------+---------------+------------+
|Share of | | | | |
|income | | | | |
|of equity | 8 288| 32 702| | 40 990|
|affiliates| | | | |
+----------+----------------+----------------+---------------+------------+
|Income tax| -89 203| | 7 749| -81 454|
+----------+----------------+----------------+---------------+------------+
|Net income| 187 109| 32 702| -14 757| 205 054|
+----------+----------------+----------------+---------------+------------+

(*) IAS 19 revised restated data.

(1) neutralization of THALES Purchase Price Allocation (PPA) amortization,netof income tax.

(2) neutralization of the change in fair value, net of income tax, ofderivativeexchange instruments which do not qualify for hedge accounting under thespecific rules of IAS 39 « Financial Instruments ».

Readers are reminded that only the consolidated financialstatements arereviewed by the Statutory Auditors as of June 30, 2013. Adjusted financialdataare subject to the verification procedures applicable to all of theinformationprovided in this press release.

Dassault Aviation : 2013 first half-year results:http://hugin.info/143388/R/1718577/571732.pdf

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Source: Dassault Aviation via Thomson Reuters ONE

[HUG#1718577]

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Contact :
Stephane Fort
Corporate Communication
Tel.: + 33 (0)1 47 11 86 90
More information on : www.dassault-aviation.com

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