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: A Global Integrated Leader in Missiles and Missile Systems

Marwan Lahoud
(CEO of MBDA)
North America Investor Forum 2004 New York – December 3rd, 2004

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MBDA Presentation Summary
• MBDA – three shareholders, one global company – Uniting European guided weapons capability – Ranked number two worldwide • MBDA performance – Delivering results in 2004 – Medium-term forecast (2004 – 2008) • Outlook for the guided weapons market – Sector analysis – Future positioning

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MBDA: A Global Integrated Leader in Missiles and Missile Systems

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Restructuring of the Guided Weapons Industry EADS-LFK EADS Aerospatiale Matra Missiles Matra Défense BAe Dynamics GEC Alenia Difesa 1996 Matra BAe Dynamics Alenia Marconi Systems (missile activity) 1998 1999 2001 3 3 MBDA: A Global Integrated Leader in Missiles and Missile Systems Three Shareholders. One Global Company EADS BAE SYSTEMS FINMECCANICA 37.5% MBDA 25% EADS-CASA 100 % LFK MBDA FRANCE 100% 100% 40% 10% MBDA UK MBDA ITALIA INMIZE 40% INDRA MBDA Inc 10% IZAR 4 MBDA: A Global Integrated Leader in Missiles and Missile Systems 2 .5% 37.

60% in Technical/Engineering functions 5 MBDA: A Global Integrated Leader in Missiles and Missile Systems MBDA .Number 2 in the World 2003 position.MBDA • European centres of excellence Lostock Production UK 3.800 people worldwide.300 IT 1.20) Raytheon MBDA Lockheed Martin Boeing Thales LFK Saab SBD BGT Others EU Others ROW 0 *outlook 2004 1 2 3 4 * 6 MBDA: A Global Integrated Leader in Missiles and Missile Systems 3 .000 Stevenage Site renewed R&D Bristol Software & Systems Compiègne Electronics FR 5. sales in € billion (€1 = US$ 1.300 La Spezia R&D/Integration Paris Region New site in 2007 Management R & D Central Region France Site restructured Production/Integration R&D Rome Site restructured Management / R&D Fusaro USA 100 Westlake (CA) R&D / Production Production/Integration 9.

the largest missile contract ever placed by Europe’s defence procurement agency. OCCAR • Sales growth of 34% to €2.3 bn in 2002) – Majority of the order intake from domestic orders. • Improvement in performance from 2002 with a 3% increase in RoS 8 MBDA: A Global Integrated Leader in Missiles and Missile Systems 4 .3 bn (€3.MBDA Performance 7 MBDA: A Global Integrated Leader in Missiles and Missile Systems Financial Year 2003: Highlights MBDA: Delivering to its shareholders • Order intake during 2003 was a record €4.0 bn).4 bn (from €1.3 bn for MBDA.8 bn representing over five year’s of turnover at current levels – FSAF Phase 3 contract worth €2.8 bn in 2002) – Production commenced on key domestic programmes – 71% growth in export sales to over €800m • Structural negative operation funds employed through substantive negative working capital relating to export key contracts (net cash €2. with significant export orders signed of €700 m • Order book at €14.

Aster Storm Shadow/SCALP. Exocet constitute market leaders Significant volume increase and shift from higher risk. Aster. Storm Shadow/SCALP-EG • Maritime Superiority – Exocet • Battlefield Engagement – Eryx • Air defence – MISTRAL.Financial Year 2004: Highlights MBDA: Transition from Development to Production • Airborne Air Defence – MICA RF/IR. higher margin production 9 MBDA: A Global Integrated Leader in Missiles and Missile Systems F Year 2004: Programme Developed MBDA: Growing capability • Airborne Air defence – Meteor • Strike – Brimstone – ASMPA • Maritime Superiority – Exocet Block 3 – MARTE Mk2/S – Teseo • Air Defence – MEADS – Seawolf Block 2 – PAAMS/FSAF 10 MBDA: A Global Integrated Leader in Missiles and Missile Systems 5 . lower margin development to lower risk. MICA. Rapier Mk2. ASRAAM • Strike – APACHE.

continued good level of orders expected (despite challenging market and weak US$) • Significant sales growth confirmed in 2004 (around €3 Bn) • – Full production rate on a number of major contracts (Storm Shadow/SCALP-EG.F Year 2004: Preparing the Future MBDA: Answering customer need • GBAD • VL MICA • Small Diameter Bomb • SCALP Naval • MISTRAL RMV • SS/EG Growth • Ballistic Missile Defence 11 MBDA: A Global Integrated Leader in Missiles and Missile Systems Medium-Term Forecast Further strong growth in 2004: After successful 2003. operations and supply chain) • Significant RoS increase • 12 MBDA: A Global Integrated Leader in Missiles and Missile Systems 6 .8 bn order book • Increasing benefits coming from the Overall Efficiency Plan which has been reinforced in 2003 (organisation/structure. MICA) – Continuing increase in export sales Beyond 2004: Excellent medium-term outlook underpinned by €14. ASRAAM.

S.O. increase : Profitable growth (vs 2003) Sales increase (+600m€ ie +25%) • ASTER / PAAMS • STORM SHADOW • METEOR • MICA • EXPORT Costs savings / Efficiency • Site optimisation • Procurement savings • SG&A savings • Project margin improvements Profit / ROS growth An increase of 4 % ROS 13 MBDA: A Global Integrated Leader in Missiles and Missile Systems Outlook for the Guided Weapon Systems Market 14 MBDA: A Global Integrated Leader in Missiles and Missile Systems 7 .Significant R.

at the heart of major European air defence programmes – Aster family (PAAMS / SAAM / SAMP/T) – Extended Air Defence (GBAD. Common Missile Anti-armour (battlefield engagement) • MBDA – developing a Systems capability – Combat management system (Aster. TBMD…) – VL MICA • MBDA .Missile System Sector Market Analysis 2003 & 2008 2008: around € 12 Bn 59% 19% 4% Surface to Air to Air Surface Air to Surface Air Defence Anti Armour 6% 10% 5% Anti-ship 2003: around € 10 Bn 28% 15% 2% Surface to Air to Air Surface Air to Surface Air Defence Anti Armour 21% 25% 9% Anti-ship 15 MBDA: A Global Integrated Leader in Missiles and Missile Systems MBDA: Well Positioned in Key Sectors In line with the market. GBAD) – Integrating a range of systems (launcher + CMS) 16 MBDA: A Global Integrated Leader in Missiles and Missile Systems 8 . MEADS.maintaining a strong position in other sectors – – – – – Anti-ship – Exocet Air-to-surface – Storm Shadow/SCALP EG. ASRAAM. MBDA’s air defence activity is set to double as a proportion of sales by 2008 • MBDA . Small Diameter Bomb Air-to-air – MICA. Meteor Surface-to-surface – GMLRS.

central place to self funded R&D • Strategic partnerships in place worldwide to further strengthen market position – Partnerships already built in Europe and Asia. associated with complete product portfolio and significant financial resources ideally positions MBDA to secure identified business opportunities 18 MBDA: A Global Integrated Leader in Missiles and Missile Systems 9 .Positioned for Future Success • Strong market position in all key sectors. especially air defence – Being present in the whole range of missile systems gives MBDA a qualitative superiority and unrivalled expertise • Financially and organisationally strong and focussed on delivery to the customer – Production & Delivery given priority to integration. company is up and running and delivering to target growth and profits • Top technologies and skills. an industrial base in the US (MBDA Inc). national customer to be equally satisfied in the three countries • A company rich in technical capability to develop and deliver advanced technology to its customers worldwide – Priority given to R&D. other partnerships to be created (Middle East?) 17 MBDA: A Global Integrated Leader in Missiles and Missile Systems Summary • A world class leader in the field of missiles and missile systems • Created from the merger of national companies giving access to the three most significant European DoD budgets • After two years of integration.

and the commercial success of new products · Exchange rate and interest rate spread fluctuations between the Euro and the U. compliance with delivery schedules. new business opportunities. These statements reflect the Company‘s views and assumptions as of the date of the statements and involve known and unknown risk and uncertainties that could cause actual results. cash flow. supplier and subcontractor performance or contract negotiations · Favourable outcomes of certain pending sales campaigns Forward looking statements are subject to uncertainty and actual future results and trends may differ materially depending on variety of factors including without limitation: · General economic and labour conditions. performance against Company targets. “expect”. 1 1 . current and future markets for the Company products and other trend projections. operating margin growth. without limitation. “estimate”. revenues and revenues growth. words such as “anticipate”. Consequently the Company is not responsible for any consequencies from using any of the above statements. “may”. deliveries.S. dollar and other currencies · Legal proceeding and other economic. “believe”. When used in this document. new products. launches. political and technological risk and uncertainties “ Additional information regarding these factors is contained in the Company‘s document de référence”dated 1st April 2004. Such forward-looking statements include. including in particular economic conditions in Europe and North America. “plan to” and “project” are intended to identify forward-looking statements. “intend”. including uncertainty regarding government funding of certain programs · Consolidation among competitors in the aerospace industry · The cost of developing. performance or events to differ materially from those expressed or implied in such statements. projections for improvements in process and operations. · Legal.Safe Harbor Statement Certain of the statements contained in this document are not historical facts but rather are statements of future expectations and other forward-looking statements that are based on management‘s beliefs. This forward looking information is based upon a number of assumptions including without limitation: · Assumption regarding demand · Current and future markets for the Company‘s products and services · Internal performance including the ability to successfully integrate EADS‘ activities to control costs and maintain quality · Customer financing · Customer. The Company disclaims any intention or obligation to update these forward-looking statements. financial and governmental risk related to international transactions · The Cyclical nature of some of the Company‘s businesses · Volatility of the market for certain products and services · Product performance risks · Collective bargaining labour disputes · Factors that result in significant and prolonged disruption to air travel world-wide · The outcome of political and legal processes.