Tier 1 supplier in Aerospace, Defence & Security

Transcription

1 Tier 1 supplier in Aerospace, Defence & Security Investors meetings / November 2012 / 0 / INVESTORS Q3 REVENUE MEETINGS 2011 / OCTOBER / NOVEMBER 21, / /

2 Tier 1 supplier in Aerospace - Defence - Security 2011 revenue by activities Aircraft Equipment 26% FY 2011 Ł Revenue 11,736M Aerospace Propulsion 52% 11.7Bn 11% 11% Defence Security Ł Recurring op. income 1,189M (10.1% of revenue) Ł Net income - Group share 644M ( 1.59/share) Ł Free Cash Flow 532M Ł Net debt position (Dec. 31) 997M (20% gearing) 1 / INVESTORS MEETINGS / NOVEMBER 2012 /

3 Leading market positions Aerospace Defence Security #1 ww Single aisle engines Helicopter turbines Landing gear Wiring Power transmission #2 ww Space Propulsion Engine nacelles Wheels & brakes #4 ww Military engines #1 Europe Optronics #3 ww Inertial navigation systems #1 ww Biometric and ID solutions A leader in aviation markets Detection 2 / INVESTORS MEETINGS / NOVEMBER 2012 /

4 / 4 key themes / Civil aviation resilient growth Maturing Equipment business Capital allocation Outlook: positive momentum in 2012 and beyond 3 / INVESTORS MEETINGS / NOVEMBER 2012 /

5 Increasing OE production rates Ł Short-to medium-haul aircraft 737: up to 42 aircraft per month A320: up to 42 aircraft per month Boeing 737 Airbus A320 Main drivers: air traffic growth and fleet replacement Ł Long-haul aircraft A330: up to 120 aircraft per year 787: up to 125 aircraft per year Airbus A330 4 / INVESTORS MEETINGS / NOVEMBER 2012 / Boeing 787 (by 2015)

6 CFMI: replacing a blockbuster by another blockbuster LEAP-1A Dual source LEAP-1B Single source LEAP-1C Single western source A320neo MAX 2017 C More than 4,200 engine orders (firm orders & commitments) (as of end of September 2012) 5 / INVESTORS MEETINGS / NOVEMBER 2012 /

7 Short term volatility, short/medium term inevitable catch-up : 20,000 engines / 500 million flight hours 2020 : 30,000 engines / 1,000 million flight hours CFM56 spare parts revenue potentially to double by CFM engines Global spare parts revenue (in $ base in 2000) E 14 E 16 E 18 E 20 E / INVESTORS MEETINGS / NOVEMBER 2012 /

8 Equipment: leveraging through common technologies nose to tail Ł Innovation focus on integrated electrical systems and through targeted acquisitions (i.e. Goodrich Electrical Power Systems) Installed carbon brakes (> 100 pax aircraft) Safran carbon brakes 5000 ~1,000 units Ł Grow services (carbon brakes, landing systems, nacelles) as fleet usage continues to pick-up and as installed base continues to grow % market share E ~5,000 units 48% market share 2014E 2016E Ł Nacelles to provide positive contribution in 2012 and beyond Ł Continue to improve productivity and reduce cost base Confident to deliver improved operating margin in Aircraft Equipment by and play leadership role in More Electrical Aircraft 7 / INVESTORS MEETINGS / NOVEMBER 2012 /

9 Continuous margin improvement in aerospace Recurring operating margin by activity (in %) Propulsion Equipment 20% 15% 10% 5% 14,9% 10.1% 11.1%11.8% 20% 15% 10% 5% 2.1% 6,5% 4.5% 2.6% 0% 0% E E H margin reached 15.7% Targeting margins in the high teens by 2015 up to the best-in-class players Main drivers: OEM and spares growth, and currency hedging H margin reached 7.5% Targeting margins above 10% by 2015, closer to peer group Main drivers: OE volume and productivity, services growth, and currency hedging 8 / INVESTORS MEETINGS / NOVEMBER 2012 /

10 Portfolio management: selective M&A aiming at profitable growth Acquisitions Electrical Power Systems HLP (on-going) Divestments 22% stake 2.1bn invested in acquisitions since 2008 (excl. 310M pending on GEPS), with an average cash-out per acquisition of 350M 9 / INVESTORS MEETINGS / NOVEMBER 2012 /

11 Built a security franchise Dutch government printing office Strong lever to win new ID deals: Albania, Chili, Mauritania, Kenya Renewed contract for all travel documents in the Netherlands Achieved industrial synergies Motorola biometric activities Provided increased US footprint in the AFIS domain (notably with FBI) Strong technical synergy between Printrak (architecture) and Morpho (biometric engine) Achieved significant revenue synergies HLP General Electric detection systems Acquisition of technology and strong US installed base generating recurring revenues Positions Morpho for technology upgrade in Europe (regulatory implementation delayed to 2014) Highest contribution margin within Morpho Biometric access solutions, secure credentialing and enrolment services Proxy structure operational; on-going costs synergies ($30M target) Renewed driving licence contracts (still covering 80% of US drivers) generating recurring revenues Financial performance below expectations so far due to protracted authorization period but progressing to initial targets MorphoTrust (L-1 ID under proxy) current momentum provides confidence to achieve expected performance 10 / INVESTORS MEETINGS / NOVEMBER 2012 /

12 Established global, world-class high-tech Security business Biometric ID N. 1 worldwide in 2000 Security - Revenue ( M) Automated Fingerprint Identification Systems (AFIS) & iris/face recognition ,041 1,249 e-documents Over 600 million cards produced every year Passports, ID cards, driving licenses Detection N. 1 worldwide in Explosive 0 Detection Systems (EDS) E for Hold Baggage 2011 revenue of 1.2bn; 7,500 employees 11 / INVESTORS MEETINGS / NOVEMBER 2012 /

13 Complementary add-ons to reinforce Safran position SNPE Matériaux Energétiques Created a world leader in solid propulsion combined with Safran SPS assets Provides very long term visibility and benefits from external funding On-going synergies Electrical wiring systems Extended customer presence in the US (civil/military, aircraft/helicopters) Fully integrated in to Labinal and producing high returns Electrical Power Systems Goodrich electrical power systems Creating a European-based world leader in aerospace electrical power systems Strong installed base and recurring aftermarket revenues Closing expected late 2012/early 2013 HCM and GEPS contribute to position Safran in the More Electrical Aircraft domain 12 / INVESTORS MEETINGS / NOVEMBER 2012 /

14 Expected R&D profile In M Total R&D effort Ł Total self-funded R&D to top c. 1.1bn by 2013 which could represent up to 8% of revenue at peak (normative level is 6-7%) Ł Capitalized R&D to increase accordingly (applying IFRS rules) M 800 Total self-funded R&D M Capitalized R&D E 2013E 2014E 2015E Ł Main development programs New single aisle (A320neo, 737MAX, C919): 3 LEAP engine variants (jointly with GE), nacelles, landing systems Business jets: 2 Silvercrest engine variants Widebody: GE9x engine Helicopters: X4 engine Electrical aircraft: Embraer KC390, green taxing (jointly with Honeywell) And R&T demonstrators to prepare the futur 13 / INVESTORS MEETINGS / NOVEMBER 2012 /

15 Dividends Ł Dividend payments rose with strong FCF generation 40% payout on adjusted net income since Dividend per share ( ) Dividend distribution ( M) Ł No share buy-back programme intended Limited to the animation of the share (Contrat de liquidité) 14 / INVESTORS MEETINGS / NOVEMBER 2012 /

16 Capital allocation - Net debt position (in M) Change in WC Tangible capex & R&D Cash flow from ops 637 (2,496) Net debt at Dec 31, ,261 Dividend (753) Acquisitions net of divestments (2,070) Others Net debt at Dec 31, 2011 (169) (407) (997) 2,402M Free Cash Flow Operating cash flows paid R&D, capex, dividends and acquisitions 15 / INVESTORS MEETINGS / NOVEMBER 2012 /

17 FY 2012 outlook is confirmed The on-going performance of the business is such that the 2012 guidance is confirmed while absorbing the increased cost of social contributions on employee profit sharing in the recurring operating income. Ł Revenue expected to increase at a rate in the low 2-digit at an estimated average spot rate of USD 1.30 to the Euro Ł Recurring operating income expected to increase by around 20% at a hedge rate of USD 1.32 to the Euro Ł The objective for free cash flow to represent about a third of the recurring operating income remains achievable, yet challenging, due to the significant working capital requirements to cope with rising production rates and uncertainty on the rhythm of French MoD payments in the fourth quarter. 16 / INVESTORS MEETINGS / NOVEMBER 2012 /

18 Healthy prospects beyond 2012 as well Revenue Recurring operating income ~ 15bn ~15 % of revenue 10bn 12bn +10 % 7 % of revenue 0.7bn 10 % of revenue 1.2bn +20 % E 2015E E 2015E Healthy investment (capex/r&d) opportunities 17 / INVESTORS MEETINGS / NOVEMBER 2012 /

19 Share price evolution (entered in CAC40 index in September 2011) Total Shareholder Return of 12.8% per annum (including dividends received) 18 / INVESTORS MEETINGS / NOVEMBER 2012 /

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