2013 fiscal year end results


Focused drive on the development strategy to renew with organic growth as early as 2014

The CS Board meeting, held on April 29, 2014 and chaired by Mr. Yazid Sabeg, approved the company consolidated financial statements for the 2013 fiscal year.


 

Fiscal Year End Results1

€ million

2012

H1 2013

H2 2013

2013

Order intake

165.3

71.3

73.9

145.2

Revenues

172.8

84.2

77.9

162.0

Operating margin
% of revenue

7.2
4.2%

4.0
4.7%

2.0
2.6%

6.0

3.7%

Pre-tax income from continuing operations

-5.6

1,4

0,9

2.3

Net income from discontinued operations

10.5

-

-

-

Total Net Income

2.6

0.2

(0.1)

0.1

[1 Audited accounts pending issuance of the final report.]


Over fiscal year 2013, CS group recorded revenues of € 162.0 million, down 6.2% compared to last year at constant perimeter. At December end 2013, the order intake reached € 145.2 million, backlog remaining at a robust at 15.2 months of revenue (versus 15.8 months of revenue at December end 2012 at constant perimeter).
Despite difficult economic conditions, the Group developed its R&D while maintaining its operating margin at 3.7% of its revenues against 4.2% in 2012.

"Other operating income and expenses" amounted to € -5.5 million against € -5.2 million in 2012. Operating income is positive at € 0.5 million against € 1.9 million in 2012.

As the result of the implementation of the agreement in June 2013 with banks and financial partners, a € 15 million capital increase was carried out in August, allowing the strengthening of the group equity to € 30.5 million (versus € 17.6 million at June 30th, 2013) and, the reduction of its total debt (including deconsolidated factor) to € 22.8 million versus € 29.7 million at 30 June end 2013. Net cash amount at€ 4.4 million versus € 2.7 million at June end 2013.
 
 
 

 
RESULTS BY OPERATING SEGMENTS :

Defense, Space & Security

€ million

2012

H1 2013

H2 2013

2013

Order intake

76.4

27.9

34.8

62.7

Revenue

89.0

44.1

40.4

84.5

Operating margin

3.6

2.9

1.5

4.4

% of revenue

4.0%

6.6%

3.7%

5.2%

 


The restrictions of public expenditure have adversely impacted the growth of the group in the field of Defense & Homeland Security. In the space field, the activity was dynamic, especially in Europe where the group is increasing its market share with ESA, particularly in Germany and Italy.

The R&D investments dedicated to the development of products and voice communication/ data systems for critical infrastructure will allow addressing the high potential growth cybersecurity market. The voice equipment for civilian air traffic control have also benefited from these new developments.

At end-December 2013, the order book for this Activity amounted to 20.5 months of sales (22.4 months of sales at end-December 2012)

Over fiscal year, this activity registered a further improvement in operating margin to 5.2% of sales (versus 4.0% in 2012 and -1.2% in 2011).

  Aeronautics, Energy & Industry

€ million

2012

H1 2013

H2 2013

2013

Order intake

77.2

35.7

29.0

64.7

Revenue

67.5

32.1

29.9

62.0

Operating margin

1.6

1.1

0.8

1.9

% of revenue

2.4%

3.5%

2.7%

3.1%

 


Over fiscal year 2013, CS has intensified its efforts to consolidate its positions with key customers in Aeronautics (Airbus Group, Pratt & Whitney) and Energy (CEA, IRSN and EDF).
 
To compensate the new programs slowdown announced by Airbus Aircraft, CS has deployed an international collaborative organization of its service centers in embedded systems (Europe, North America and India) which enables it to capture the growth potential of the North American market, where CS benefits from an established position. CS is also based on its expertise in the development and certification of safety and critical real-time software, as well as in Product Lifecycle Management and information industrial systems, to address new customers in the Aeronautics, Energy and Industry.

The closer monitoring of projects allowed improving operational profitability of the exercise to 3.1% (versus 2.4%).

Diginext (Products)

€ million

2012

H1 2013

H2 2013

2013

Order intake

11.2

9.2

10.6

19.8

Revenue

16.3

8.4

8.3

16.8

Operating margin

1.6

0.4

-0.2

0.2

% of revenue

9.8%

4.2%

-1.8%

1.2%

                 

Diginext’s European position acknowledged in the field of tactical data links, both for training and operations, allowed it to record a strong growth in order intake at € 19.8 million (versus € 11.2 million in 2012) and in its revenues to € 16.8 million (+3.2% versus 2012), thus bringing the ratio book-to-bill of 1.2. The Operational profitability was impacted by difficulties on a project for which improvement actions have been deployed.
Diginext has increased its R&D efforts to strengthen its technological leadership in the fields of training, crisis management and area surveillance.
 
Perspectives

Financial statements were closed under the going concern principle as a consequence of discussions that CS entertained to get additional resources. These resources are deemed to cover the needs of its operations and to accelerate the deployment of its transformation Plan.
 
The objective of an early 2014 organic growth recovery, and a return to a normative level of operating profitability , lead CS to deploy its transformation plan in three axes : accelerate the implementation of a focused strategy to strengthen the positions in its core markets and capture new growth opportunities ; streamline and focus the R&D efforts to increase the share of its own products in the mix of group activities ; carry out specific actions to improve  cost efficiency  (including accommodation costs) and productivity improvement (process simplification).
 
In Q1 2014, the group has contained the decrease of its revenues (-2.4% compared to Q1 2013) and begin to reverse the trend observed over the last two quarters.

Consolidated Financial statements as of December 31, 2013 and Q1 2014 revenues press release are available on the website of the company: www.c-s.fr
 
 
 
CS is a major actor in the design, integration and operation of mission-critical systems. CS is listed on the Euronext Paris stock exchange – Compartment C (Shares: Euroclear 7896 / ISIN FR 0007317813). For more information, please go to: www.c-s.fr
                                                                                        
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