CASSIDIAN Evolution of the Defence & Security business in EADS

CASSIDIAN Evolution of the Defence & Security business in EADS Global Investor Forum, Toulouse 15-16 November 2010 Stefan Zoller CEO Cassidian 1

2 Disclaimer Disclaimer This presentation includes forward-looking statements. Words such as anticipates, believes, estimates, expects, intends, plans, projects, may and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements made about strategy, ramp-up and delivery schedules, introduction of new products and services and market expectations, as well as statements regarding future performance and outlook. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include but are not limited to: Changes in general economic, political or market conditions, including the cyclical nature of some of EADS businesses Significant disruptions in air travel (including as a result of terrorist attacks) Currency exchange rate fluctuations, in particular between the Euro and the U.S. dollar The successful execution of internal performance plans, including cost reduction and productivity efforts Product performance risks, as well as programme development and management risks Customer, supplier and subcontractor performance or contract negotiations, including financing issues Competition and consolidation in the aerospace and defence industry Significant collective bargaining labour disputes The outcome of political and legal processes, including the availability of government financing for certain programmes and the size of defence and space procurement budgets Research and development costs in connection with new products Legal, financial and governmental risks related to international transactions Legal and investigatory proceedings and other economic, political and technological risks and uncertainties As a result, EADS actual results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see EADS Registration Document dated 22nd April 2009. Any forward-looking statement contained in this presentation speaks as of the date of this presentation. EADS undertakes no obligation to publicly revise or update any forward-looking statements in light of new information, future events or otherwise. 2

Cassidian: The EADS Defence & Security Division Cassidian s strategic axes Conclusion 3

4 EADS Defence & Security became Cassidian + Lat. Cassida = Helmet Lat. Meridian = Pointing North to South Our claim: Defending World Security Our mission: We support the people, whose mission is to protect the world 4

5 Cassidian s transformation process Past drivers Restructuring Integration Investment in product portfolio and market access Current achievements High profitability at benchmark level Balanced and renewed portfolio Strong backlog with long term product cycles Increased market presence: e.g. India, UAE, Brazil, USA Future drivers Globalization Security solutions Extended services Capture UAV market 2000 2010 2020 Globalization & product/market diversification Strong Home Country position 5

6 Major achievements High performance division EBIT* / RoS (m ) 8,4% 7,2% 500 6,2% 449 5.9% 450 408 400 4,2% 340 350 3,6% 3,3% 348 +10% 300 250 228 201 200 171 150 100 50 0 2003 2004 2005 2006 2007 2008 2009 Cassidian is a strong contributor to all EADS key performance indicators EBIT* and RoS more than doubled since 2005 Cassidian is at benchmark profitability level thanks to its successful restructuring and portfolio management: 8.4% ROS in 2009 Significant order intake in 09 (+51% vs. 08) Cassidian record backlog of 19 bn covers more than 3.6 years of revenues Global market presence increased (in m ) Order intake 7,959 Order book 18,796 Revenues 5,363 Global market access in % of total order intake 2009 61% 39% Global Domestic Significant market successes Eurofighter incl. export (Austria, Saudi Arabia) No. 1 in nationwide security solutions (Saudi Arabia, Romania, Qatar) 190 PMR** networks in 65 countries Increased global presence (e.g. India) * EBIT pre goodwill and exceptionals **PMR: professional mobile radio 6

7 The Cassidian business Electronics / Subsystems Platforms / Systems Lead Systems Integration Cassidian Electronics Cassidian Air Systems MBDA Cassidian Systems Protection Military Mission Avionics Sensors & Product Support Test & Services Combat Air Systems Mission Air Systems Services Ground Based Air Defence (GBAD) Air Dominance Maritime Superiority Battlefield Engagement Integrated Systems Security & Communication Solutions (e.g. Tetra Network) Nationwide Security Services 7

8 The Cassidian business - Electronics Cassidian offers: Airborne, ground and naval radar families Mission avionics for a range of military aircraft Protection / Electronic warfare Cassidian will enlarge its portfolio by: Security radars Protection of people & assets 2005 2010 TRM-S TRML-3D MiSAR E-Captor EF MSSR TRGS-Sec ASR-E M-Captor TRS-3D BüR Saphir 8

The Cassidian business - Air Systems Combat Aircraft 9 Eurofighter is and remains a strong pillar for Cassidian Umbrella contract signed for 620 a/c in 1997 ( 28 bn contract) with 4 Home Countries (Ge, Sp, UK, IT) 2 export contracts with Austria and Saudi Arabia 239 a/c delivered (including export) Ongoing export campaigns (e.g. India, Oman) with strong position in the competition Strong services business (maintenance, logistics, training, cooperative model) Mid-term market share potential (%) 9

The Cassidian business - Air Systems Unmanned Aerial Systems 10 UAS provide a unique opportunity for Cassidian As a result of the 500 M invested in the development of UAS and based on the existing competence and portfolio, Cassidian is able to offer tailor-made solutions for military and civil applications Flight level (thausend ft) 50 20 1 HALE UAS EUROHAWK MALE Surveillance UAS TALARION BARRACUDA HARFANG Tactical UAS Mini UAS ATLANTE TRACKER Source: Teal Group Market Study 10 HALE = High Altitude Long Endurance MALE = Medium Altitude Long Endurance 200 3,000 6,000 Reach (km) 10

11 The Cassidian business - Systems Cassidian has a strong market position in integrated systems for defence and security Secure communications (190 PMR* networks in 65 countries) World leader in border security World leader in maritime & coastal surveillance To cover the full range of nationwide security Cassidian will further enlarge its scope Cyber security Protection of critical infrastructure National Security Shield Qatar 1st fully integrated system Romania Border Security Largest EU land border Kingdom of Saudi Arabia Largest worldwide Tanger Med Port Security Morocco Biggest harbor in the Mediterranean *PMR: professional mobile radio 11

12 Home Country budget situation Germany France Spain Possible reduction of Defence budget by 8.3bn (cumulated) over 4 years; conscription to be halted Reduction of Defence budget: 3bn to 5bn (cumulated) over the next 3 years; no new programs 6.8% reduction of Defence budget from 2009 onwards Defence procurement budget reduced by 36.7% from 2009 UK Significant reduction of MoD budget, following the result of the Strategic Defence & Security Review Possible 8% reduction in Defence budgets across Home Countries Although specific details are not known yet, there is a potential for earlier budget cuts in procurement, since they can be implemented more easily and quickly. Upside: reduced force numbers and optimized structures might free resources for investment 12

Cassidian: The EADS Defence & Security Division Cassidian s strategic axes Conclusion 13

14 Strategic axes Globalization EURO zone with reduced governmental budgets India: Eurofighter Campaign Indian Parliament PMR* MILDS ** Design and Engineering Center Bangalore Brazil Expanding PMR* network of Brazilian Federal Police (PROAMATEC program) Joint Venture with Odebrechtto address South American Security and Defence market Green belt with strong macro-economic conditions offers interesting business opportunities in defence and security Saudi Arabia: Nationwide Security Project Ramp-up of Industrialization(enhance workforceto 1.000 employees Qatar Integrated National Security Shield Nationwide PMR* network *PMR: professional mobile radio **MILDS: Missile Launch Detection System 14

15 Strategic axes Security Cassidian will extend its market position in nationwide security Build on position as world leader in border and maritime security Become leader in critical national infrastructure incl. airports Strengthen position in cyber security and PMR* Develop unmanned ISR solutions bn 240 220 200 180 160 140 118 120 100 127 136 CAGR: 7 % 167 157 146 178 189 202 215 2009 2015 2020 80 60 40 20% 80% 36 % 64% 50% 50% 20 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Aviation security Martime security CBRN mitigation Counter-terror intelligence Borders& perimeters IT, C3 & Cyber 1st responders Critical infra People screenuing, RFID & Biometrics Security Private sector Defence Source: HRRC Homeland Security Research Outlook 2009-2018 *PMR: professional mobile radio 15

16 Strategic axes Services Cassidian will enlarge its service business based on an existing strong and broad portfolio Cooperative models with customer (SUZ Eurofighter) Network operations for secure communication systems Flight operations (AvDef, GFD) Professional services (Dornier Consulting, APSYS) 2009 2020 30% 70% 35% 65% Professional services Managed services / Cooperative solutions Comprehensive support Traditional systems support Professional services Consulting Managed service Total service support Outsourced services Through life support Advanced MRO Full service support Operation of own assets MRO ISS/ILS Except scale based Through Life Support & Managed Services Product based Availability based Capability based Product, Systems Services - Responsibility taken over by the industry + 16

Cassidian: The EADS Defence & Security Division Cassidian s strategic axes Conclusion 17

18 Conclusion Home Countries + Globalization Defence + Security Products & Systems + Services Growth & financial Financial Performance performance 18