Cassidian Drivers of Business Success - · PDF fileLegal and investigatory proceedings and...

Global Investor Forum 2012

CassidianDrivers of Business Success

Bernhard GerwertChief Executive Officer Cassidian


Safe Harbour StatementDisclaimer

This presentation includes forward-looking statements. Words such as “anticipates”, “believes”, “estimates”, “expects”, “intends”, “plans”, “projects”, “may” and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements made about strategy, ramp-up and delivery schedules, introduction of new products and services and market expectations, as well as statements regarding future performance and outlook. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

These factors include but are not limited to:

Changes in general economic, political or market conditions, including the cyclical nature of some of EADS’ businesses;

Significant disruptions in air travel (including as a result of terrorist attacks);

Currency exchange rate fluctuations, in particular between the Euro and the U.S. dollar;

The successful execution of internal performance plans, including cost reduction and productivity efforts;

Product performance risks, as well as programme development and management risks;

Customer, supplier and subcontractor performance or contract negotiations, including financing issues;

Competition and consolidation in the aerospace and defence industry;

Significant collective bargaining labour disputes;

The outcome of political and legal processes, including the availability of government financing for certain programmes and the size of defence and space procurement budgets;

Research and development costs in connection with new products;

Legal, financial and governmental risks related to international transactions;

Legal and investigatory proceedings and other economic, political and technological risks and uncertainties.As a result, EADS’ actual results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see EADS’ “Registration Document” dated 12th April 2012.

Any forward-looking statement contained in this presentation speaks as of the date of this presentation. EADS undertakes no obligation to publicly revise or update any forward-looking statements in light of new information, future events or otherwise.


MBDA

Air Systems & Services

Eurofighter, combat and unmanned aircraft

Services for platforms and systems including MRO*, through life services, training, and logistics services

Missiles & missile systems for land, sea and air

Prime contractor for series of strategic multinational programmes (Meteor, Aster…)

Command and Control Systems

Border, maritime and coastal Surveillance

Secure Communications & Emergency Response

Security Systems & Solutions

Sensors

Radars, electronic warfare, IFF**, optronics and protection electronics for defence & security

~ 40% of Cassidian Revenues

~20% of Cassidian Revenues



* Maintenance, Repair & Overhaul* *Identification Friend or Foe

Cassidian Activities: € 6 bn Profitable Business

~10% of Cassidian RevenuesIncluding Mission Avonics, Test & Services, other subsidiariesOther


Secu

rity

Def

ence

HomeCountries

New Cassidian Countries Rest of World

Border/ Coastal Surveillance,

Emergency ResponseSecure Communications

and Cyber

Ministry of Interior

Combat and Unmanned Aircraft, Defense Electronics Command & Control Systems, Missiles

Ministry of Defense

Trends in Cassidian’s Key Markets

Home Countries: France, Germany, Spain, UKNew Cassidian Countries: Brazil, India, Middle East, USA

Cassidian: Market Environment


80%

20%

* pre goodwill impairment and exceptionals

2011 Revenues2007 Revenues

Transformation programme on trackIntegrated division with operational and country dimension Increased global footprint and global revenue share

Sound financial performance in recent yearsStable revenues and solid order book of nearly 3 years of revenues EBIT* performance in recent years burdened by higher R&D, restructuring costs and high investments in transformation and globalisation

Significant change in leadership team and structure mid-2012

Transformation Plus launchedSimplification of organisational structureExtended Competitiveness and Improvement programme

Cassidian: Major Achievements

70%

30%

Global

Domestic

EBIT* (€m) /RoS

Doubling Profitability Transformation andsustainable global growth


55%

45%

70%

30%

Drivers towards 10% RoS targetFocus on core

Improved competitiveness

Cost structure & headcount reduction

Improved programme delivery

Simplification: Organisation, R&D

Success in key global markets

2015 Revenues2011 Revenues

Global

Domestic

Cassidian RoS 10% by 2015

9m 2012 2015Target2015

Cassidian Target


Air Systems & ServicesProfitable Eurofighter secured deliveries until 2017

Profitable growing maintenance and support business for military platforms

Market entry for UAE and Eurofighter export campaigns enhanced through partnerships

Security Systems & SolutionsStrong national position in C4ISR* in France & Germany

Delivery on challenging LSI** programmes

Widely deployed secure communication solutions (TETRA/TETRAPOL), network renewals and follow on services

MBDALong-term projects and solid footprint in France, UK, Germany and Italy

Secure MEADS / Follow on Ballistic Missile Defence

Success in India and the Gulf, growing presence in the US

Sensors & Electronic WarfareStrong technology portfolio in electronic warfare, optronics, Radars and IFF***

Worldwide product support

% of total Revenues

~ € 6 bn ~ € 6 bn

* Command, Control , Communications, Computers, Intelligence, Surveillance, Reconnaissance** Lead Systems Integration*** Identification, Friend or Foe

Key Enablers: Focus on Core


Continuation and extension of work of existing Transformation programme until 2015

Headcount reduction mainly in management and indirect support functions

Significant annual cost reduction

MBDA Improvement Programme

Cost Structure & Headcount Reduction

Key Enablers: Improved Competitiveness (1/3)



Improved programme execution & de-risking – OTOCOQ* focus at business line level

Application of LEAN methodology e.g. Eurofighter lean management system

Optimisation of engineering architectures, establishment of global competence centres

Simplification of integrated systems delivery model by development of “standard” modules

for global re-use and increase own value add by inclusion of own products (Sensors)

* On time, on cost, on quality



More streamlined organisation – less interfaces and complexity

Leaner, more agile and international executive committee

Accelerated decision making and reduced bureaucracy

Simplification: Organisation

Simplification: R&DIncrease level of modularisation: product building blocks and family concepts

enabling re-use in other programmes globally

Modular basis can be applied flexibly in both defence and security systems



Strengthen internationalisation with new regional sales organisation: Asia Pacific, EMEA* Americas

Programme delivery as door opener: leverage strong reference customers in Eurofighter and security business

Eurofighter export, follow on support services

Operational development and training in LSI**

Larsen & Toubro (India), Emiraje (UAE)

Centres of Excellence –Engineering India, Electronic Warfare S. Africa

Strong project teams in UAE and Saudi Arabia

Local company in US (Cassidian Communications Inc., Fairchild Controls)

Regional Sales Org. Follow on Business Local Presence

* Europe, Middle East & Africa** Lead Systems Integration

Key Enablers: Success in Key Global MarketsObjective of 50% global business in 2017


Eurofighter – Lean Management System – Manching & Getafe

WIP** & Material Reductions

Standardisation of key processes

Capabilities enhancements

Mission PlanningOne architecture replacing four

Capable of supporting multiple platforms NH90; Eurofighter, Tornado, Tiger…

Data LinksReduction of solutions to 2 by combining available capabilities spread across various centres of competence

Simplification of IS* delivery modelDevelopment of “standard” modules and solutions for global re-use

R&D to mature solution portfolio for re-use in products globally

Optimisation of Engineering Architecture

* Integrated Systems** Work In Progress

Example on the Ground


Cassidian is and remains profitable in a difficult market environment

Well set to target 10% RoS in 2015

Key enablers are:

Focus on core businesses

Further headcount reduction and cost reduction

Improved competitiveness:


Simplification in organisation and R&D processes

Success in strategic key global markets

Strong order backlog and secured programmes provide stability and secure workload in the medium term

Conclusion

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