Dassault Aviation: 2020 first half-year results financial release

All our subsidiaries adjusted to their local situation with the implementation of sanitary measures, a large use of remote working and temporary furlough when unavoidable. Some sites were temporarily shut down.

As of April 1, the Board of Directors canceled the dividend proposal and we suspended our 2020 guidance.

The Business Continuity Plan prioritized our efforts; we focused on customer support (Armed Forces in priority), on production and delivery of Rafale and Falcons, and on the development of the Falcon 6X. Despite remote working and except for Falcon 6X and Rafale India, programs have been delayed.

Covid-19 crisis results in a decrease of Falcon deliveries which leads to a new forecast for 2020 of 30 Falcons whereas 40 were initially guided. Beyond this lag in net sales, costs associated with unworked hours and sanitary measures have harshly affected the 1st half results and were partially offset by government support, alleviated charges and SG&A reduction at Dassault Aviation Group.

Throughout this crisis, we have supported and assisted our sub-contractors and suppliers. The Aeronautics Support Plan announced by the French government on June 9, drafted in collaboration with GIFAS, structures support to the sector’s ecosystem and investment in the future, among which the future “decarbonized” aircraft within the frame of the Civil Aviation Research Council (CORAC).

In terms of activity, in the military domain, we delivered 7 Rafale Export, continued works on the F4-standard for Rafale France, delivered an upgraded ATL2, and continued to support our military customers. The first half also saw the award to Dassault Aviation, Airbus and their partners, of the initial framework contract for the launch of the Future Combat Air System (FCAS) demonstrators, specifically the New Generation Fighter (NGF) demonstrator.

In the civil domain, we continued to support our customers, delivered 16 Falcons, pursued the Falcon 6X program development keeping it in line for a maiden flight in early 2021 and an entry into service in 2022, and continued the development works on the future Falcon.

The effects of the crisis are likely to be long-lasting as numerous economic sectors are impacted. Our Falcon market is directly impacted (the lag in Falcon deliveries and orders leads to a lowering adjustment of Falcon production rates) and a potential new Rafale Export contract is postponed.

In a harsh and uncertain economic environment, our objectives are to:

  • Sell and deliver Falcons,
  • Falcon 6X: comply with our schedule (entry into service in 2022),
  • Rafale: negotiate an additional batch for France and pursue export prospection,
  • Pursue the development of the future Falcon,
  • Pursue developments in the frame of multi-mission Falcon,
  • Contribute to CORAC technologies of environmental transition,
  • Bring forward the FCAS/NGF program and contribute to the MALE program.

This will be performed in the context of:

  • High self-financed Research and Development,
  • continuity of the Transformation Plan (digital, collaborative engineering platform and sites): rescheduled,
  • Adjustment of workforce to the planned workload rescheduled in accordance with our backlog.

In an uncertain Covid-19 context and its economic consequences, new Dassault Aviation full year 2020 guidance is the following:

  • delivery of 30 Falcons (vs 40 planned before the Covid-19) and 13 Rafale aircraft (equal to the pre-Covid-19 forecast),
  • decrease in net sales .

The Board of Directors would like to thank all the personnel for their involvement, efficiency and skills in executing our programs.

Éric TRAPPIER,
Chairman and Chief Executive Officer of Dassault Aviation.

 

1.     FIRST HALF 2020 ADJUSTED CONSOLIDATED RESULTS

      (see reconciliation table in appendix)

1.1      ORDER INTAKES

Order intake for the first half of 2020 was €984 million, compared to €2,900 million for the first half of 2019.  The Export order intake component stood at 80%.

The change in order intake was as follows, in € million:

  H1 2020 % H1 2019 %
Defense 315 32% 2,273 78%
  Defense Export 132     180  
  Defense France 183   2,093  
         
Falcon 669 68%  627 22%
         
Total order intake 984   2,900  
  % Export 80%   27%  

The order intake item is entirely composed of firm orders.

Defense programs

Defense order intake stood at €315 million during the first half of 2020 vs €2,273 million during the first half of 2019.

The Defense Export component stood at €132 million for the first half of 2020 vs €180 million for the first half of 2019.

The Defense France component stood at €183 million for the first half of 2020, vs €2,093 million for the first half of 2019, which mainly included notification of the RAVEL contract for the Operational Condition Maintenance of Rafale France over 10 years.

Falcon programs

During the first half of 2020, 5 Falcon orders were made vs 7 in the first half of 2019.

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