Financial Press Release – February 28, 2019
(Source: Dassault Aviation; issued Feb 28, 2019)
SAINT-CLOUD, France --- The Board of Directors met yesterday under the chairmanship of Mr. Éric Trappier and approved the 2018 financial statements. The audit procedures were performed and the audit report for certification purposes is being issued.

Éric Trappier, Chairman and Chief Executive Officer of Dassault Aviation, stated:
“Above all, 2018 will be remembered for Serge Dassault’s passing away. His passion, his tenacity, his vision, his patriotism stay in our hearts and our history. We are grateful to his memory as to our founder’s Marcel Dassault. Our task is to carry on their legacy.

Besides, 2018 was eventful for the Company, in both defense and civilian programs. The following events in particular stand out:

-- the announcement of the launch of the Falcon 6X to replace the Falcon 5X and the amicable agreement signed with Safran to settle the dispute over the difficulties encountered with the Silvercrest engine,

-- the entry into force of the option for 12 additional Rafale for Qatar,

-- the [award] of the F4 standard (firm and optional batches) announced by the French Minister of the Armed Forces during her visit in Mérignac in early January 2019 showing the ongoing efforts to improve the Rafale, which will add innovative connectivity (new satellite and intra-patrol connections, communication server, software radio), new capabilities (enhanced radar sensors and optronic frontal sector) and incorporate new weapons (Mica NG air-to-air missile and 1,000 kg modular air-to-ground weapons).

In addition to these major events, 2018 was marked by:

In defense programs:

-- the 2019-2025 French Military Procurement Law passed in 2018 shows a positive trend in the Nation’s defense efforts and gives the Company expectations for the coming years: a batch of 30 additional Rafale (reaffirmation by the French Minister of the Armed Forces on January 14th in Mérignac), notification expected for 2023 ; launch of the European MALE drone program in 2019 (cooperation between Airbus, Dassault Aviation and Leonardo) ; selection by the Ministry of the Armed Forces of the Falcon platform to carry the Universal Electronic Warfare Capacity (CUGE), studies notified ; upgrade of 18 ATL2 instead of the 15 initially planned; initialization of the ATL2 replacement program (future PATMAR); renewal of the MARitime SURveillance aircraft fleet based on the Falcon 2000LXS, first studies notified ; and confirmation of the airborne component upgrade,

-- in June 2018, in Meseberg, at the Franco-German council, in the presence of the French President and the German Chancellor, France and Germany signed a Letter of Intent materializing their will to build together the future weapons systems and act towards the construction of the Europe of Defense. This Letter of Intent was followed, on November 19 2018, by a common statement to launch the initial works of the Future Combat Air System (FCAS): on January 31, 2019, a 2-year conception and architecture study was notified under the leadership of Dassault Aviation and Airbus; demonstrators for the combat aircraft and its engine are to be launched at the 2019 Paris Air Show; Dassault Aviation being the leader of the New Generation Fighter (NGF),

-- delivery of 3 Rafale to France, bringing the total Rafale delivered to the French Forces up to 152 (the last 28 Rafale out of the 180 aircraft ordered being forecasted to be delivered from 2022 on),

-- the delivery to France of the last 2 Rafale Navy retrofitted from the F1 standard to the F3 standard; all 10 Rafale Marine now meet the F3 standard,

-- the delivery to the French Air Force of the F3-R standard,

-- the delivery of 9 Rafale to Egypt, bringing the total number of aircraft delivered to 23 out of the 24 ordered,

-- the continuation of the Egyptian Rafale support and the entry into force of the associated Maintenance in Operational Conditions contract,

-- the continued execution of the 36 Rafale contract with Qatar, including pilots training and support implementation: the official acceptance of the first Qatari Rafale took place on February 6 2019,

-- the continued execution of the 36 Rafale Indian contract. The Indian Air Force is getting ready for the entry into service of the Rafale. Considering the important needs in India for combat aircraft, we answered in July 2018 the “Request for Information” for the supply of 110 combat aircraft to the Indian Air Force (in May 2017, we had answered the “Request for Information” for the supply of 57 combat aircraft to the Indian Navy),

-- the continued upgrading works on the French Mirage 2000D (the Mirage 2000N entered into service in 1988 was discarded from French Air Forces),

-- the start of a new nEUROn flight test campaign dedicated to stealthiness demonstration with the French Procurement Agency, the French Air Force, and the French Navy, in the frame of a contract for studies and flight tests over 2018-2020,
for the “Make in India” project we:
* launched the industrial operations of the JV DRAL: 2018 being the start of the ramp-up. Production of the first Falcon 2000 subassemblies (T3 front tank) completed in December 2018, first T1 section in February 2019,
* expanded our industrial ecosystem in India for our production line, with the deployment of a Supply Chain, regarding at first primary parts, tools, pylons, containers, as well as our engineering department activities, with the establishment of an engineering center in Pune (India),

-- in MARitime SURveillance and MARitime PATrol aircraft:
* the order of a 5th SURMAR Falcon 2000 (maritime surveillance) by the Japanese Coast Guard (first deliveries scheduled in first half 2019),
the delivery of the 1st retrofitted SURMAR Falcon 50 with additional capacity for dropping SAR (Search And Rescue) chains,
regarding space programs (2018 was remarkable for on interest in the new Defense space policy), we notice:

* for space vehicles, a new bath of the study contract for the reusable orbital vehicle “Space Rider” from the European Space Agency (ESA), of which the first flight is scheduled in 2021. Dassault Aviation is in charge of the vehicle shape design,

* for the pyrotechnic, the contractualization of 2 studies with the French Defense Procurement Agency (DGA) and the French Space Agency (CNES) in order to apply the pyrodigital technology allowing a securitized digital bus to convey the pyrotechnic orders for both Callisto demonstrator and Rafale,

in civilian programs:
-- the order intake of 42 Falcon in 2018 (52 orders and cancellation of the last 10 Falcon 5X). In 2017, 38 Falcon were ordered (41 orders and 3 Falcon 5X cancellations),

-- the delivery of 41 Falcon,

-- the official launch of the Falcon 6X program, in early 2018 for an entry into service scheduled in 2022. The program development is in line with the schedule: the primarily development stage has been completed; first structural parts are being manufactured. Tests on the PW812D engine are also on time: 4 engines are being tested and 120 hours were run on a flying test bench. Design shelves have been set up in Saint-Cloud and Merignac in cooperation with our industrial partners,

-- the Falcon 8X which demonstrated its long-range capacity (Singapore – London in 14 hours) is still an unmatched aircraft in terms of comfort and is acknowledged for being the most silent aircraft on the market,

-- the certification of Electronical Flight Vision System operational gains of up to 100 feet for approaches in poor weather conditions with the FalconEye system for Falcon 7X, Falcon 8X, Falcon 2000LX and Falcon 2000LXS; FalconEye system certification for Falcon 900LX is in progress,

-- the new service offer for a broadband connectivity such as “FalconConnect”, an integrated management solution for communications and data exchanges between aircraft and ground networks,

-- in Customer Support, Dassault Aviation was first in several categories of the Aviation International News (AIN) ranking (#1 Overall Average, #1 AOG Response, #1 Warranty Fulfillment, #1 Parts Availability, #1 Overall Aircraft Reliability, #1 Technical Reps). Besides, the Falcon Response offer which includes 2 dedicated Falcon, has performed 191 missions (1,395 flight hours),

-- the future Falcon is in progress: marketing and technical studies are ongoing,

-- the development of a high-quality customer support network, by the acquisition of service centers strengthening our footprint, in Europe, Asia-Pacific, Africa and Middle-East.

In 2018 we pursued our transformation plan “Leading Our Future”.

2019 outlook

There are many strategic challenges for 2019:
-- Continue promotion and sale of our Falcon and Rafale
-- Complete FCAS studies and obtain the launch of a demonstrator for the future combat aircraft at the Paris Air Show
-- Continue the Falcon 6X development for an entry into service in 2022
-- Confirm the future Falcon launch
-- Start of the Rafale F4 standard development
-- Perform the Falcon and Rafale contracts in terms of quality, time and cost objectives
-- Participate in the response to the “Invitation To Tender” for a contract launching the MALE RPAS program
-- Continue to work on preparing the Falcon MARitime SURveillance and CUGE order with France
-- Deliver the ATL2 upgrade in 2019
-- Finalize the new Rafale France Maintenance in Operational Conditions contract
-- Increase the effectiveness of Falcon support and continue to develop a network of high-quality service centers.

-- Continue the development of the “Make in India” industrial line

-- Promote our skills in space

-- Continue to implement the Transformation Plan

The Group plans to deliver 45 Falcon and 26 Export Rafale in 2019. 2019 net sales will rise significantly.

Click here for the financial results page, on the Dassault Aviation website.


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