Statement by Mr Philippe Camus Good morning and welcome! Thank you for attending this review of Aerospatiale Matra in 1999, in particular at such an early hour of the morning.
I do not intend to speak to you about the financial performance of the business, but more importantly, I will review the events of the last year, a remarkable year in the history of Aerospatiale Matra but also for the Aeronautic, Defence and Space industry as a whole.
When I convinced Jean-Luc Lagardère to merge Aerospatiale and Matra in July 1998, I made three vital commitments:
**Firstly, to ensure the successful integration of the two companies, Aerospatiale and Matra, where we were led to believe, the respective cultures were very different.
**Secondly to improve the overall profitability of the merged entity.
**And thirdly, to position this new Group at the very heart of the restructuring of the European Aerospace and Defence Industry.
Those were the commitments I made 18 months ago. Events in 1999 and the first months of the year 2000 have clearly demonstrated that we have delivered on those commitments.
I would like to thank publicly the team that has helped me deliver in this respect, together with all those people who have performed so outstandingly by my side.
Let us reconsider in more detail those three key commitments I have just mentioned.
The first commitment : ensuring the successful integration of Aerospatiale and Matra is now completed. The progress made to date on every one of the 17 specific integration projects originally identified has exceeded initial expectations; indeed today I can report that three quarters of our objectives have already been achieved. I am particularly pleased with the example provided by the status of the human resource integration project : following a period of consultation with all the relevant bodies, we have implemented a common social and employment policy throughout Aerospatiale Matra which has provided the group with an unprecedented degree of dynamism.
I consider it is essential to highlight and promote the skills and motivation of the men and women who make up the real value of high technology businesses. Whilst this issue is of particular personal importance for me, I should stress that the other 16 projects are also well advanced.
The second commitment I provided was to improve the profitability of the merged entity. This is also very much on the right track! The results for 1999, but also longer term prospects, have given me every reason to believe that the objectives I had previously set, that is to say to double operating margins between 1998 and 2003, will be achieved.
I am happy to confirm my optimism on achieving this objective and would underline this point as follows: The fact that the 1999 operating performance is in line with 1998 is a very positive indicator : I would remind you that the 1998 result benefited significantly from an exceptional performance from the missiles division; and, therefore, the performance in 1999 should be considered as being just as remarkable.
But this performance will not detract from our objective to double operating margins and to execute the necessary measures to ensure this is achieved. In this respect, we have undertaken the following:
**We have actively pursued new orders in Europe (where I would mention the example of the Meteor programme) and export markets. In respect of the latter, I have just returned from Singapore, where the Asian economy appears to be in full recovery, offering us multiple opportunities.
**We have launched new products - two examples are the launch of the A3XX - one of the major decisions for the year 2000 - which will improve profitability beyond 2003, and in helicopters, the launch of the NH90 military transport helicopter. and of course, we are continuing to take steps which aim to optimise our industrial organisation, implementing plans to improve profitability at both Matra and Aerospatiale; these improvements will be derived from permanent cost control and the pursuit of further supplementary revenues.
**The success of the Aster missile in equipping British Frigates, is a further and remarkable example of the commercial synergy between Aerospatiale and Matra.
My third target was to ensure that the Aerospatiale Matra Group was at the core of the restructuring of the European industry. But without a doubt, the most important event has been the agreement leading to the formation of the EADS, today the leading European Defence and Aerospace company and the number three globally in the same field.
This European consolidation was indeed at the heart of our strategy and was the key argument that convinced Jean-Luc Lagardère in July 1998.
Some of our targets still eluded us: for example discussions in connection with the creation of the Airbus Single Corporate Entity as a single company were blocked. I was convinced that this restructuring of the European Aerospace and Defence industry had to happen; it was and remains the correct strategy in the light of the global competition that we face.
Some 9 months have passed between 11 June 1999, the date of the creation of Aerospatiale Matra, and today; 9 months is a short period of time, a very short period of time: and during this period of time we have not only reached a global agreement between Lagardère, Daimler-Chrysler, the French Government and the Spanish Government, but also we have put in place the operational teams and the organisational structure of the new company, EADS: in my view, the speed with which this has occurred has placed the new Group in a strong position for the future.
I should also like to stop to thank the team who helped me through all the negotiations and I also would like to thank those who are working flat out today to implement the agreements.
So, what should we expect from this Millennium year, 2000? Well, here also I have set three objectives:
**firstly, to implement the creation of the EADS and to ensure the industrial, commercial and employee integration of the businesses on a solid basis;
**my second target is to implement the action plan to improve the results of the EADS and to drive out the synergies from its formation, on the one hand from commercial initiatives, from technological improvements and finally with a plan to optimise the industrial organisation of the group; and finally,
**my third target: to continue to implement the necessary European integration and prepare the way - it will no doubt be a long term objective - for the development of a more powerful transatlantic co-operation. (ends).
