Dassault Aviation: 2021 first half-year results financial release

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The “book-to-bill ratio" (order intake/net sales) is 1.26 for the first half of 2021.

Backlog

The consolidated backlog as of June 30, 2021 was EUR 16, 703 million, compared with EUR 15,895 million as of December 31, 2020. It consists of:

Defense Export backlog, which stood at EUR 8,096 million vs. EUR 8,249 million as of December 31, 2020. This mainly comprised 27 new Rafale Export and 12 pre-owned Rafale Export, vs. 34 new Rafale Export as of December 31, 2020,
Defense France backlog, which stood at EUR 5,748 million, vs. EUR 5,499 million as of December 31, 2020. It notably comprises 40 Rafale aircraft, vs. 28 as of December 31, 2020. It also includes the Rafale F4 standard, the RAVEL Operational Condition Maintenance (OCM) contract for the Rafale and the OCEAN OCM contract for the ATL2,
Falcon backlog, which stood at EUR 2,8 59 million, vs. EUR 2,147 million as of December 31, 2020. This consists of 53 Falcon, compared to 34 as of December 31, 2020, including the 9 mission aircraft for the AVSIMar and Archange programs.

Adjusted results

Operating income

Adjus ted operating income for the 1^st half of 2021 came to EUR 175 million, compared to EUR 55 million in the 1^st half of 2020.

R&D expenses in the 1^st half of 2021 totaled EUR 250 million, equivalent to 8.0% of net sales, compared to EUR 262 million and 9.9% of net sales in the 1^st half of 2020.

Operating margin stood at 5.6%, vs. 2.1% for the 1^st half of 2020. This increase is due to the lower proportion of self-funded R&D, the increase in net sales, and the negative impact of Covid-19 on business in the 1^st half of 2020.

The hedging rate for the 1^st half of 2021 was $1.19/€, vs. $1.18/€ in the 1^st half of 2020.

Net financial income/expense

Adjusted financial income for the first half of 2021 was EUR -11 million, vs. EUR -19 million for the same period in the previous year. This financial loss was due to accounting principle of the long-term military contracts’ financing component.

Net income

Adjusted net income for the 1^st half of 2021 came to EUR 265 million, compared to EUR 87 million in the 1^st half of 2020. The contribution of Thales to the Group’s net income was EUR 146 million, compared with EUR 58 million during the 1^st half of 2020.

Adjusted net margin thus stood at 8.5% for the 1^st half of 2021, vs. 3.3% for the 1^st half of 2020.

FINANCIAL STRUCTURE

Available cash

The Group uses a specific indicator called “Available cash,” which reflects the amount of total liquidities available to the Group, net of financial debts. It includes the following balance sheet items: cash and cash equivalents, current financial assets (at market value) and financial debts; it excludes the impact on financial debts of the application of IFRS 16 “Leases.”

The Group’s available cash stands at EUR 3,502 million as of June 30, 2021, vs. EUR 3,441 million as of December 31, 2020. This increase is due to the result for the 1^st half, partially offset by the payment of dividend, investments during the period and the working capital requirement increase.

Balance sheet ( IFRS Data )

Total equity stands at EUR 4,833 million as of June 30, 2021, vs. EUR 4,560 million as of December 31, 2020.

Borrowings and financial debt amounted to EUR 248 million as of June 30, 2021, compared to EUR 270 million as of December 31, 2020. Borrowings and financial debt are composed of locked-in employee profit-sharing funds for EUR 106 million and lease liabilities for EUR 142 million.

Inventories and work-in-progress increased by EUR 290 million to stand at EUR 3,671 million as of June 30, 2021. The increase is due to the number of Falcon deliveries during the 1^st half of the year. The decrease in Defense Export inventories and work-in-progress due to Rafale deliveries during the period was offset by an increase in Defense France inventories and work-in-progress.

Orders down payments cashed-in net of progress payments paid to suppliers, were up EUR 228 million to stand at EUR 4,137 million. Down payments of Defense France and Rafale Greece contracts, as well as Falcon orders explain this increase partially offset by reversals of advances due to Rafale Export deliveries during the period.

The derivative financial instruments market value stood at EUR 3 million as of June 30, 2021, vs. EUR 81 million as of December 31, 2020. The decrease is essentially due to the change in the US dollar exchange rate between June 30, 2021 and December 31, 2020 ($1.1884/€ vs. $1.2271/€).

This Financial Press Release may contain forward-looking statements which represent objectives and cannot be construed as forecasts regarding the Company's results or any other performance indicator. The actual results may differ significantly from the forward-looking statements due to various risks and uncertainties, as described in the Business report.

CONTACTS

Corporate Communication
Stéphane Fort - Tel. +33 (0)1 47 11 86 90 - stephane.fort@dassault-aviation.com

Investor Relations
Armelle Gary - Tel. +33 (0)1 47 11 84 24 - armelle.gary@dassault-aviation.com

dassault-aviation.com

APPENDIX

FINANCIAL REPORTING

IFRS 8 “Operating Segments” requires the presentation of information per segment according to internal management criteria.

The entire activity of the Dassault Aviation Group relates to the aerospace domain. The internal reporting made to the Chairman and Chief Executive Officer, and to the Chief Operating Officer, as used for the strategy and decision-making, includes no performance analysis, under the terms of IFRS 8, at a level subsidiary to this domain.

DEFINITION OF ALTERNATIVE PERFORMANCE INDICATORS

To reflect the Group’s actual economic performance, and for monitoring and comparability reasons, the Group presented an adjusted income statement of:

foreign exchange gains/losses resulting from the exercise of hedging instruments which do not qualify for hedge accounting under IFRS standards. This income, presented as net financial income in the consolidated financial statements, is reclassified as net sales and thus as operating income in the adjusted income statement;
the value of foreign exchange derivatives which do not qualify for hedge accounting, by neutralizing the change in fair value of these instruments (the Group considering that gains or losses on hedging should only impact net income as commercial flows occur), with the exception of derivatives allocated to hedge balance-sheet positions whose change in fair value is presented as operating income;
amortization of assets valued as part of the purchase price allocation (business combinations), known as “PPA”;
adjustments made by Thales in its financial reporting.

The Group also presents the “available cash” indicator which reflects the amount of the Group’s total liquidities, net of financial debt. It covers the following balance sheet items:

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