H1 2012 results


Further improvement in operating margin
Positive Net Income
Offer received for the acquisition of Intelligent Transport System (ITS) Business Unit


The CS Board Meeting, held on August 31, 2012 and chaired by Mr.Yazid Sabeg, approved the Company financial statements for first half 2012.

First-half results 2012 1 & 2

M€

H1 2011

H2 2011

H1 2012

H1 2012
excluding ITS BU
(IFRS 5)

Order intake

94.0

110.4

72.4

61.7

Revenues

100.5

100.1

105.3

85.9

Operating margin
% of revenues

-1.4
-1.4%

4.1
4.1%

4.4
4,2%

3.5
4.1%

Operating income
% of revenues

-8.3
-8.2%

1.8
1.8%

3.1
2,9%

2.4
2.8%

Pre tax income from continuing operations
% of revenues

-10.2

-1.2

2.5

0.8

Net Income from discontinued operations

-2.0

-0.1

-0.2

1.3

Net income

-13.3

-2.7

0.8

0.8

 


1 The accounts have been submitted to a limited review by the auditors.
2 In accordance with IFRS 5, the ITS Business Unit was classified as “discontinued operations” as of January 1, 2012. The table above successively presents the results for H1 2001, H2 2011 and H1 2012 at constant perimeter (ie including ITS activity) and H1 2012 results restated in accordance with IFRS 5 (ie. excluding ITS activity). The detailed interim and full-year consolidated financial statements for 2011 were restated on a pro-forma basis (available on the “Investors” tab at www.c-s.fr ). In the comments below, the figures are presented including ITS Business Unit.
 
 
H1 2012 Revenues reached 105.3 M€, ie a 4.8% increase over H1 2011.
 
In France, revenues totaled € 76.3 million and € 29.0 million outside France, increasing respectively by 1.6% and 16% compared to H1 2011.
 
Given the postponement of several projects in the second half of 2012, the Group recorded an order intake of
€72.4 million, down compared to the first half of 2011 (€ 94.0 million). A rebound in orders is expected in the second half of 2012. The order book stood at 13.8 months of sales.
 
The operating margin improved in the first half of 2012 to € 4.4 million, representing 4.2% of sales, against
€ - 1.4 million in H1 2011 and € 4.1 million in H2 2011.
 
After taking into account "other operating income and expenses", operating income amounted to € 3.1 million (€ -8.3 million in the first half of 2011, taking into account the € 6.8 million provisions for the restructuring plan carried out in the first half of 2011).
 
The net income is positive at € 0.8 million against € -13.3 million in the first half of 2011 and € -2.7 million in the second half of 2011.
 
The working capital requirement is stable at -21.3 M €. Net cash amounted to € 11.8 million (€ 15.0 million at 31 December 2011 and € 17.2 million at 30 June 2011). Given the financial debt (€ 25.8 million) and the deconsolidating factoring (€ 9.5 million), total net debt amounted to € 23.5 million (€ 23.7 million at December 31, 2011).
 
As at June 30, 2012, consolidated equity was €13.8 million.
Headcount
As of June 30, 2012, there were 1,980 employees (including 231 employees for ITS Business Unit), compared with 2,006 employees as of December 31, 2011 and 2,039 employees as of June 30, 2011. The group hired 135 new employees during first half of 2012, and posted staff turnover of 9.7% (11.5% in 2011). The average occupation rate for billable employees totaled 81.5% (82.3% in 2011).
 
Performance by operating sector

Defense, Space & Security: confirmed recovery

€ million

H1 2011

H1 2012

Order intakes

32,7

26,9

Revenues

44,6

44,8

Operatin margin
% of revenues

-1,9
-4,2%

1,8
4,1%

 


As expected, Defense, Space & Security Business Unit recorded a significant improvement in operating profitability. Given the postponement of projects, the Activity is expecting a rebound of its order intake in the second half of 2012. AS of June 30, 2012, the order book stood at 22 months of revenues.

Aeronautics, Energy & Industry: favorable momentum in aeronautics

€ million

H1 2011

S1 2012

Order intakes

31,4

32,6

Revenues

34,0

33,7

Operatin margin
% of revenues

0,4
1,1%

1,1
3,3%

 


Aeronautics, Energy & Industry Business Unit recorded a growth in orders (+3.8% versus H1 2011) and an increase in operating profitability compared to the first half of 2011. This dynamic is especially favored by the launch of new projects at Eurocopter, MBDA and Pratt & Whitney, in France and Canada. In the second half, the activity should strengthen its positions.

Transportation: Profitable growth

 

€ million

S1 2011

S1 2012

Order intakes

25,6

10,7

Revenues

15,3

19,9

Operatin margin
% of revenues

0,3
1,9%

0,9
4,6%

 


The business Unit recorded strong growth in revenues (+30.4% compared to the first half of 2011) and a level of operating margin to 4.6%, similar to FY 2011. In the second half, the activity should regain a favorable business momentum.

Products (Diginext) : continued efforts in R&D

€ million

S1 2011

S1 2012

Order intakes

6,8

2,9

Revenues

7,6

7,7

Operatin margin
% of revenues

0,0
0,0%

0,5
7,0%


Diginext continues its R&D efforts in the field of training simulators as well as the industrialization of Stradivarius radar (OTH radar for maritime surveillance). In the second half, Diginext should accelerate its growth and confirm its level of profitability.
 
Outlook
 
For 2012, CS maintains its objective of operating margin improvement (versus 2011) and positive net income.
 
On the 21st of August, the Group announced it has received from Sanef Group a binding offer, subject to usual condition precedents, to acquire ITS Business Unit and for which CS has granted exclusivity until 31 October 2012. This operation, which would materialize the strategic refocusing of CS, is in line with the process of deleveraging and strengthening the Group's equity.
 
Further business development and Group transformation through the acquisition of new skills and technologies will require an additional reinforcement of the equity through a capital increase.
 
Read the detailed H1 2012 consolidated financial statements and the presentation on the website of the company: www.c-s.fr (on the “Investors” tab).
 
CS is a major actor in the design, integration and operation of mission critical systems. CS is listed on the Euronext Paris stock markets - Compartment C (Shares: Euroclear 7896 / ISIN FR 0007317813). For more information, please go to: www.c-s.fr
 
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Barbara GOARANT
Tel.: +33 (0)1 41 28 46 94