Dassault Aviation: 2020 First Half-Year Results Financial Release
(Source: Dassault Aviation; issued July 23, 2020)
SAINT-CLOUD, France --- The Board of Directors met yesterday under the chairmanship of Mr. Éric Trappier and approved the 2020 half year financial statements. The statutory auditors performed a limited review of these consolidated financial statements and the audit report for certification purposes is being issued.

The Covid-19 epidemic triggered an unprecedented global crisis as to its sanitary and economic consequences, its magnitude, its geographic scope and its duration.

First of all, I would like to thank, from the bottom of my heart, the healthcare workers who took care of all the patients with an admirable devotion, as well as all the employees of the Group for their involvement and the team spirit they made proof of on a daily basis.

We contributed to the national effort in France by providing our Falcons. Dassault Aviation took part in the operation called “Résilience”, with the French Ministry of Armed Forces, our Falcons flew healthcare workers and medical equipment within France and worldwide. Besides, in the frame of the operation organized by Aviation Without Borders (ASF), our Falcon repatriated and transported healthcare personnel or medical equipment on request.

During this period, Dassault Aviation Group adapted and reorganized its operations to ensure employee safety, and launched a Business Continuity Plan.

Regarding Dassault Aviation Parent Company, after production activities were suspended on March 18, followed by tertiary activities on March 23, business gradually resumed in successive steps from April 3, in an ongoing dialogue with staff representative bodies (including the Central Economic and Social Committee and the Health, Safety and Working Conditions Committee), in accordance with health and social constraints by focusing on remote working and by deploying temporary furlough measures when this was unavoidable. On June 8, further to the national lockdown lifting, on site presence became the norm, together with remote working to cope with the workspace occupancy rate.

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.

Chairman and Chief Executive Officer of Dassault Aviation.

Click here for the full financial statement (9 PDF pages), on the Dassault website.


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