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STRONG COMMITMENT FOR THE FUTURE…. A MAJOR INDUSTRY INITIATIVE DCN and Thales confirm their commitment to combining their strengths STRONG POLITICAL SUPPORT - PowerPoint PPT Presentation
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« CONVERGENCE »An important step forward in the
consolidation of the European naval sector
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STRONG COMMITMENT FOR THE FUTURE…
A MAJOR INDUSTRY INITIATIVE DCN and Thales confirm their commitment to combining their strengths
STRONG POLITICAL SUPPORTToday’s announcement by the French government about closer ties between the naval defence businesses of Thales and DCN signals strong support for the consolidation of our French naval businesses...
A SPRINGBOARD FOR EUROPE… and it is also a springboard for the consolidation of the naval industry at the European level.
A MAJOR INDUSTRY INITIATIVE DCN and Thales confirm their commitment to combining their strengths
STRONG POLITICAL SUPPORTToday’s announcement by the French government about closer ties between the naval defence businesses of Thales and DCN signals strong support for the consolidation of our French naval businesses...
A SPRINGBOARD FOR EUROPE… and it is also a springboard for the consolidation of the naval industry at the European level.
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USA General Dynamics Northrop Grumman Lockheed Martin Raytheon
France DCN THALES
UK BAES VT Group Thales UK
Germany TKMS LürssenAtlas Elektronik
Italy Fincantieri Finmecanicca
Spain Navantia
Armaris
Orrizonte
USA- 4 main players- €11.6 bn / year
Europe- 11 main players-€ 9.1 bn / year
Europe- 11 main players-€ 9.1 bn / year
Asia Daewoo Hyundai
Asia-Pacific- 2 main players- €5 bn / year
COMBINE TO GROW
Closer ties between European industry players are crucial to Europe’s ability to sustain an independent industrial capability to meet its needs over the long term.
Closer ties between European industry players are crucial to Europe’s ability to sustain an independent industrial capability to meet its needs over the long term.
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A CHANGING MARKET
New Navy requirements
Combat systems increasingly integrated with platforms
Requirement expressed in terms of capability
Budget constraints as a trigger for further cooperation
Horizon, F 124/LCF (Frigates Ge/NL), FREMM, PA2/CVF
Stronger, better organised competitors
New players, new products
Fiercer competition
NEW RESPONSE
Offer a comprehensive response in terms of complete warships or defence systems
NEW RESPONSE
Offer a comprehensive response in terms of complete warships or defence systems
COOPERATION
International cooperation can offer better use of available resources (R&D and programme execution)
COOPERATION
International cooperation can offer better use of available resources (R&D and programme execution)
CONSOLIDATION
Consolidation is vital to maintain our strategic independence in Europe
CONSOLIDATION
Consolidation is vital to maintain our strategic independence in Europe
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A SHARED EUROPEAN VISION
Objective: Thales and DCN aim to promote the emergence of a world
leader in naval systems by combining their capabilities with those of European partners who share the same vision.
That world leader will emerge progressively, according to a timetable that suits the various partners.
New milestone: combining the French naval assets of DCN and Thales
Objective: Thales and DCN aim to promote the emergence of a world
leader in naval systems by combining their capabilities with those of European partners who share the same vision.
That world leader will emerge progressively, according to a timetable that suits the various partners.
New milestone: combining the French naval assets of DCN and Thales
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THALES/DCN – SUCCESSFUL COOPERATION
Sawari I & II FremmHorizon
Joint PROGRAMMES
Joint COMPANIES 1990s: Horizon SAS, Eurosysnav, UDSI, SFCS 2002: creation of the joint venture Armaris, with responsibility for prime
contracting and sales for military products in export markets or on cooperative programmes
2005: MOPA2 joint venture for France’s second aircraft carrier
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DCN: A STRONGER PLAYER
TNFArmarisMOPA2
+ Eurotorp partnership
TNFArmarisMOPA2
+ Eurotorp partnership
WARSHIP ENGINEERING
WARSHIP ENGINEERING
Budgeted revenues: approx. €3 bn
Order book: approx. €8 bn
Employees: approx. 13,300*
Shareholders: French State: majority shareholder with
75% Thales, industry stakeholder with 25%
Budgeted revenues: approx. €3 bn
Order book: approx. €8 bn
Employees: approx. 13,300*
Shareholders: French State: majority shareholder with
75% Thales, industry stakeholder with 25%
MANAGEMENT OF ASSEMBLY AND INTEGRATION
YARDS
MANAGEMENT OF ASSEMBLY AND INTEGRATION
YARDS
DESIGN AND INTEGRATION OF
SYSTEMS AND EQUIPMENT
DESIGN AND INTEGRATION OF
SYSTEMS AND EQUIPMENT
SERVICES FOR WARSHIPS AND
SHORE FACILITIES
SERVICES FOR WARSHIPS AND
SHORE FACILITIES
* : direct employment
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DCN CAPITAL OPENED TO THALES
SHAREHOLDERS
STATE75%
STATE75%
THALES25%
THALES25%
Thales to finance its 25% interest in DCN
by transferring assets: Thales Naval France
businesses excl. radars (prime contracting, CS/CMS, services)
its 50% interest in Armaris (incl. subsidiaries)
its 35% interest in MOPA2 its 24% interest in the
Eurotorp partnership by paying an additional cash
contribution
Thales to finance its 25% interest in DCN
by transferring assets: Thales Naval France
businesses excl. radars (prime contracting, CS/CMS, services)
its 50% interest in Armaris (incl. subsidiaries)
its 35% interest in MOPA2 its 24% interest in the
Eurotorp partnership by paying an additional cash
contribution
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THALES AND DCN COMBINE THEIR STRENGTHS
The operation makes the combined company stronger:On its domestic market
stronger positioning as naval systems provider merging of combat systems activities in France optimisation of investments stronger service offering reciprocal access to know-how
On export markets access to Thales’ international marketing and sales network
In Europe greater credibility and legitimacy for subsequent consolidation
operations
Internally Solid industrial partnership
The operation makes the combined company stronger:On its domestic market
stronger positioning as naval systems provider merging of combat systems activities in France optimisation of investments stronger service offering reciprocal access to know-how
On export markets access to Thales’ international marketing and sales network
In Europe greater credibility and legitimacy for subsequent consolidation
operations
Internally Solid industrial partnership
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A FUTURE-ORIENTED PROJECT
AND INDUSTRY PROJECT THAT MAKES BOTH DCN AND THALES STRONGER Strategic unity between two major industry players
Move European consolidation forward Improve positioning in international markets
Industrial and commercial cooperation agreement Optimise bids and improve competitive performance Develop unified offering in France Benefit from complementary R&D Simplify industrial and contractual aspects of major programmes Promote adoption of DCN and Thales equipment provided it is
competitive
A project aimed to build momentum for Europe-wide consolidation in the naval sector
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St Tropez
Undersea warfare
Toulon-Le Mourillon CMS, engineeringToulon
Services
Angoulême - Ruelle Naval equipment
Nantes-Indret
Propulsion
Cherbourg Engineering and submarines
Paris Headquarters
Lorient Engineering and surface ships
Brest
Engineering
Brest
Services
OPERATIONS
Thales Naval France
Bagneux – Engineering and systems
Thales Naval France
Bagneux – Engineering and systems
Long-term future of French facilitiesLong-term future of French facilities
Paris region
Paris regionParis region
UDSI - SophiaUDSI - Sophia
EUROSYSNAV + UDSI + SFCS
Toulon – Combat systems prime
EUROSYSNAV + UDSI + SFCS
Toulon – Combat systems prime
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HUMAN RESOURCES
A future-oriented project with a place for everyone
HR practices are already similar and will be progressively harmonised
Continuation of individual work contracts
Collective agreements maintained during transition
A future-oriented project with a place for everyone
HR practices are already similar and will be progressively harmonised
Continuation of individual work contracts
Collective agreements maintained during transition
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CUSTOMER CONTINUITY
Ongoing programmes Continuation within DCN of contracts awarded to
partners (Thales Naval France, Armaris or MOPA2)
Outlook Major programmes for French Navy (FREMM, PA2,
Barracuda: €10 bn in new orders over the next 10 years)
Export opportunities represent 30% of revenues
Customer benefits Complementary areas of expertise and know-how
Purchasing policy open to competitors
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GOOD VISIBILITY ON WORKLOAD
Ongoing programmes
France FREMM Horizon frigates SSBN Le Terrible BPC Mistral and Tonnerre Overhaul of SSBN Le Téméraire SSN and BS CLS Comprehensive contracts for regular
maintenance on submarines with availability guarantees
Export Agosta Pakistan Scorpène Chile Scorpène Malaysia Scorpène India Formidable frigates for Singapore Combat system for SAN PC corvettes
for South Africa Skjold patrol boats for Norwegian Navy
Future programmes
France Barracuda SSNs
Future heavy torpedo
Overhaul of CDG aircraft carrier
Cooperative programmes PA2/CVF
Numerous export programmes
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BENEFITS OF CONVERGENCE
Fully integrated prime contracting for navies throughout the world
Major ongoing naval programmes
Promising European and world markets
Major player in the future European naval industry
Respect for individuals and corporate cultures
A dynamic of value creation
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TIMELINE
AGREEMENT FINALISATIONAGREEMENT
FINALISATION
Due diligence Shareholders’ agreement Cooperation agreement
Due diligence Shareholders’ agreement Cooperation agreement
3 to 6 months
Ultimately…
construction of a European company
Ultimately…
construction of a European company
Approval by Boards of AdministrationApproval by Boards of Administration
December 2005
PROJECT LAUNCH PROJECT LAUNCH
Information / consultation with employee representative bodies
Continued discussions with European partners
CLOSINGCLOSING
- Integration of companies- Opening of DCN capital
- Integration of companies- Opening of DCN capital
Mid-2006
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EUROPEAN VISION
OBJECTIVE: EUROPEAN NAVAL INDUSTRY CONSOLIDATION
“DCN must take part in the consolidation of the European naval industry.”
“Thales’ role in the capital structure of DCN will help to prepare the future industrial and technological capabilities of the European defence sector.”
Michèle Alliot-Marie
OBJECTIVE: EUROPEAN NAVAL INDUSTRY CONSOLIDATION
“DCN must take part in the consolidation of the European naval industry.”
“Thales’ role in the capital structure of DCN will help to prepare the future industrial and technological capabilities of the European defence sector.”
Michèle Alliot-Marie
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APPENDICESAPPENDICES
CompaniesCompanies
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DCN in brief
The DCN group is Europe’s leading prime contractor for complete warships. The company provides client navies with a broad range of value-added products and services.
DCN is conducting almost all the new construction and through-life support programmes for the French Navy. Rounding out the company’s workload, export contracts account for approximately one-third of revenues. Other DCN businesses include naval equipment, propulsion systems, combat management systems (CMS) and undersea warfare systems.
DCN’s four core areas of expertise are as follows: warship engineering; management of ship assembly and integration yards; development and integration of propulsion systems, combat systems and naval equipment; and through-life support and associated services.
The company has a workforce of 12,700* and generates average annual revenues of some €2.6 bn.
* direct employment
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LAW OF 30 DECEMBER 2004 An amendment to the 2001 Finance Law was needed to
enable DCN to open its capital to a minority shareholder, or to set up subsidiaries by contributing industrial assets or staff.
The law of 30 December 2004 authorises: Minority ownership of DCN capital Creation of subsidiaries to which DCN, as majority shareholder, may
contribute industrial assets and transfer staff
The law stipulates conditions for setting up these subsidiaries.
It guarantees the long-term status of staff transferred to these subsidiaries.
OPENING OF DCN CAPITAL
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THALES in brief
The Thales Group has a strong presence in the naval market; its naval businesses have traditionally focused on the supply and integration of equipment and systems - radars, optronic equipment, weapon systems, etc. The Group also acts as prime contractor on several naval programmes in France and export markets, and intends to expand its involvement in this area.
Thales enjoys an excellent positioning in the world market, particularly through its equity interests and subsidiaries in the Netherlands and the United Kingdom, but also in Australia, Germany, Korea and South Africa. Major Thales operations in the United Kingdom have made the Group a valued partner of the Royal Navy, as is illustrated by its selection for part of the CVF programme to build two new aircraft carriers.
The Group’s naval businesses employ 6,000 people and generate revenues of €2 bn.
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Armaris in brief
The Armaris group was set up in August 2002.
Today, Armaris is prime contractor on the submarine programmes for India and Malaysia, the Skjold patrol boat programme in Norway (with partners KDA and UMOE), the Franco-Italian Horizon frigate programme and the Franco-Italian multi-mission frigate programme with Italian partner Orizzonte Sistemi Navali.
A joint subsidiary of Thales and DCN, Armaris has responsibility for warship and naval systems sales and overall prime contracting in export markets and on international cooperative programmes in which France is participating.
Armaris employs 200 people and generates revenues of €460 m.