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Dassault Aviation : 2012 annual results

March 14, 2013 - Saint-cloud Cedex 300, France

|Order intake 58 FALCON compared to 36 in 2011 |

+-------------------------------------------------------------------------+|Deliveries 66 FALCON and 11 RAFALE compared to 63 FALCON and 11|| RAFALE in 2011 |+-------------------------------------------------------------------------+

+-------------------------------------------------------------------------+|Net sales EUR 3,941 million, up by 19% || ||Adjusted net income* EUR 524 million, up by 25% || ||Adjusted net margin* 13.3% (+0.6 point) |+-------------------------------------------------------------------------+

* From 2012 and on, in order to enable a better monitoring andbenchmarking ofits economic performance, DASSAULT AVIATION presents an adjusted netincome. TheGroup consolidated net income is adjusted with :

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

* neutralizing change in fair value of derivative exchangeinstruments not eligible to hedge accounting.

Cf. Appendix 1: Table of reconciliation between consolidated netincome andadjusted net income.

The Board of Directors, chaired by Mr. ÉricTRAPPIER, closed yesterday the financial statements for the year 2012.Theseconsolidated financial statements were certified by the StatutoryAuditors whoexpressed an unqualified conclusion.

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

«The year 2012 started well with the RAFALE selection by India.This choicebased on technical, operational and financial criteria confirms ouraircraftsuperiority.

The technical success of the nEUROn was added to this RAFALEselection. Wemarked the history of aeronautics with the flight of the first Europeanfurtiveaircraft. With the nEUROn, we show at the same time our technical skillsand ourknow-how as prime contractor in a multinational partnership.

These skills and this know-how are also implemented in the manner wecurrentlydevelop our SMS. Technologically and commercially very ambitious,this newbusiness jet will be released within a few months.

In France, an important Defense budget cut is announced, due to thenationaldebt crisis. This reduction of the military budgets, which is observed inmanyother countries, reinforces the aggressiveness of our competitors,especiallyAmericans.

Concerning business jets, the uncertain evolution of the world economyand inparticular of our historical markets, United States and WesternEurope,encourages us to remain vigilant.

Finally, the dollar weakness remains a strong and not easilycontrollableconstraint because of the spasms of the international financialsystem».

Order intake and backlog

2012 orders amounted to EUR 3,325 million compared to EUR 2,863millions in2011. Export represented 78 % of the total order intake.

New orders, net of cancellations, stood at 58 FALCON in 2012 comparedto 36FALCON in 2011.

Commercial activity increased compared to 2011, in particular at the endof theyear. Asia remained very active, as well as South America. North Americamarketshowed some encouraging signs, but wait and see policy still applies.

Defense orders amounted to EUR 793 million in 2012 compared to EUR 931millionin 2011 and corresponded to support and development. They decreased by15%compared to 2011 which included, in particular, the contract for theupgrade ofthe Indian Air Force's MIRAGE 2000 fleet.

As of December 31(st), 2012 consolidated backlog amounted to EUR 7,991millioncompared to EUR 8,751 million as of December 31(st), 2011, down by 9%.

Net sales

Consolidated net sales increased by 19% to EUR 3,941 million in 2012from EUR3,305 million in 2011. Export net sales represented 75% of the 2012total netsales.

FALCON net sales increased by 16% reaching EUR 2,797 million in 2012from EUR2,415 million in 2011.66 FALCON were delivered in 2012 (compared to 63 in 2011).

FALCON net sales represented 71% of the 2012 total net sales.

11 RAFALE were delivered to the French Air Force and Navy in 2012, as in2011.Defense net sales showed an upturn of 29% due to an increase inRAFALEdevelopment activity.

The book-to-bill ratio reached 0.84.

Operating income

2012 operating income reached EUR 547 million compared to EUR 377million in2011, up by 45%.

Operating margin improved to 13.9% from 11.4% in 2011.

This improvement is due to the increase of net sales and a bettercurrencyhedging.

Adjusted financial income

In 2012, adjusted financial income amounted to EUR 16 million, compared toEUR32 million in 2011. This fall-off results mainly from the following factors:

* the Group made a profit of EUR 12 million on the sale of someavailable-for-sale marketable securities compared to a profit of EUR 38million in 2011,

* borrowing costs are EUR 2 million compared to EUR 13 million in 2011.

Adjusted net income

Adjusted net income stood at EUR 524 million compared to EUR 419 million in2011, up by 25%. Adjusted net margin reached 13.3%, versus 12.7% in 2011.

THALES contribution to the Group net income, before amortization ofPurchasePrice Allocation amounted to EUR 158 million in 2012 compared to EUR 125millionin 2011.

2012 consolidated net income amounted to EUR 510 million compared to EUR323million in 2011.

Financial situation

The Group has defined a specific indicator, "Available cash", thatreflects theGroup's total liquidities net of borrowings.

Consolidated available cash reached EUR 3,760 million as ofDecember31(st), 2012 compared to EUR 3,274 million as of December 31(st), 2011,up byEUR 486 million.

This rise is notably due to consolidated net cash from operatingactivities (+EUR 500 million), and to a decrease in working capital (+ EUR 109million)partially offset by investments (- EUR 66 million) and dividends payment(- EUR86 million).

Apart from working capital, the balance sheet structure is impactedby therepayment of the EUR 400 million loan subscribed in the frameworkof theacquisition of THALES shares.

The Board of Directors will submit for approval at the GeneralMeeting ofshareholders in May 15(th), 2013, the payment of a dividend of EUR 94million,representing EUR 9.30 per share (versus EUR 8.50 per share in 2011).

Group activities

Regarding business jets, 2012 was marked by the launch at NBAA of a newFALCON2000 version, FALCON 2000LXS, and by the progress of the FALCON 2000Sflighttests, with in particular the demonstration of "low speed" performancesbetterthan expected.

Regarding military activities, 2012 was marked by the RAFALE selection byIndiaas the winner of MMRCA competition and the start of exclusive negotiationswithIndian Air Force. The contract has to be finalized.

Concerning other programs, it has to be noted :

* the maiden flight of the Unmanned Combat Air Vehicle demonstratornEUROn, in Istres (France) on December 1(st), 2012. This program, withDASSAULT AVIATION as prime contractor, involves five European industrialpartners,

* the notification by the French DGA and the UK Ministry of Defenseof the preparatory study for the launch of a FCAS (Future Combat AirSystem) demonstrator in cooperation with BAE Systems.

2013 outlook

Business jets market remains convalescent but we hope for a recovery,especiallyin the United States.

Regarding military aircraft, we have to capitalize on exportopportunitiesrelated to the RAFALE.

With the signature of the French-British UCAS agreement, the Groupaims atpreparing the future with drones.

Since the Indian authorities announced, at the end of January 2012, theRAFALEfinal selection in the frame of the MMRCA program in order to equip theIndianAir Force with 126 new aircraft, DASSAULT AVIATION keep mobilizedintofinalizing the contract.

DASSAULT AVIATION Group expects to deliver around 70 FALCON and 11RAFALE in2013. 2013 net sales should be higher than 2012 net sales.

Appendix 1: table of reconciliation between consolidated income andadjusted


In 2012, the impact of the change in fair value of derivativeexchangeinstruments adjustment and the THALES PPA amortization adjustment onincomestatement is detailed below :

+---------------+-------------+----------------+---------------+----------+| | | |Change in fair | || | 2012 | THALES PPA | value of | 2012 ||(EUR thousands)|Consolidated |amortization (1)| derivative | Adjusted || | data | | exchange | data || | | |instruments (2)| |+---------------+-------------+----------------+---------------+----------+|Financial | 97,897| | -82,154| 15,743||income | | | | |+---------------+-------------+----------------+---------------+----------+|Share of income| | | | ||of equity | 90,436| 67,967| | 158,403||affiliates | | | | |+---------------+-------------+----------------+---------------+----------+|Income tax | -225,441| | 28,286| -197,155|+---------------+-------------+----------------+---------------+----------+|Net income | 509,878| 67,967| -53,868| 523,977|+---------------+-------------+----------------+---------------+----------+

(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 hedgeaccounting under the specific rules of IAS 39 «Financial Instruments».

In 2011, the impact of the change in fair value of derivativeexchangeinstruments adjustment and the THALES PPA amortization adjustment onincomestatement is detailed below:

+---------------+------------+----------------+---------------+-----------+| | | |Change in fair | || | 2011 | THALES PPA | value of | 2011 ||(EUR thousands)|Consolidated|amortization (1)| derivative | Adjusted || | data | | exchange | data || | | |instruments (2)| |+---------------+------------+----------------+---------------+-----------+|Financial | 13,979| | 18,425| 32,404||income | | | | |+---------------+------------+----------------+---------------+-----------+|Share of income| | | | ||of equity | 41,064| 83,858| | 124,922||affiliates | | | | |+---------------+------------+----------------+---------------+-----------+|Income tax | -108,879| | -6,344| -115,223|+---------------+------------+----------------+---------------+-----------+|Net income | 322,665| 83,858| 12,081| 418,604|+---------------+------------+----------------+---------------+-----------+

(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 accountingunder thespecific rules of IAS 39 «Financial Instruments».

Readers are reminded that only the consolidated financial statements areauditedby the Group's statutory auditors. Adjusted financial data are subjectto theverification procedures applicable to all of the information provided inthispress release.

Dassault Aviation : 2012 annual results:

This announcement is distributed by Thomson Reuters on behalf ofThomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Dassault Aviation via Thomson Reuters ONE


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