Naval Group’s Board of Directors met on 20 February to review the financial statements for the 2019 reporting period closed on December 31st.
Order Intake: 5.3 Billion Euros (+44%): The order intake over the 2019 reporting period amounts to 5.3 billion Euros, boosting the order book which now stands at 15 billion Euros. Orders recorded in France and overseas for the 2019 reporting period benefited all sectors. In France, in new construction, the main notifications concerned the sixth nuclear-powered attack submarines (SSN) for the Barracuda program. The main contract awarded for new constructions internationally is the program for twelve minehunters and their toolboxes for the Belgian and Dutch navies.
Finally, regarding services, several multi-year availability contracts were notified, notably the routine maintenance contract for the ballistic-missile submarines (SSBN) for 2020-2025, as well as the maintenance contract for the Egyptian Navy.
Increased Sales: The consolidated sales amount to 3,712 million Euros. Its 3% increase over 2018 was driven by major national programs, mainly the Barracuda program, the multi-mission frigates program and the defense and intervention frigates program. The Australian program also contributed to Naval Group sales. Finally, services represented a key component, with a 41% share. For France, they include in-service support for first rank surface ships and nuclear submarines of the French Navy. Internationally, they include the periodic docking for maintenance of the Malaysian submarines, and the adaptation and modernization of the Bouchard corvette for the Argentinian Navy, delivered two months ahead of schedule.
Profitability: EBITA (earnings before interest, tax and amortization) totaled 282 million Euros. Its progress compared to 2018 drives an increase in operating profitability, which has risen from 7.4% in 2018 to 7.6% in 2019, placing Naval Group as the leader of the naval defense sector in Europe.
This progression shows the operational improvement of all naval programs and the effectiveness of the improvement plans undertaken for over five years.
Group net income is 188.2 million Euros, up by almost 10 million Euros compared to 2018. This result increases the group’s consolidated equity to 1.2 billion Euros.
Strong Prospects for 2020: In 2019, Naval Group hired more than 1,500 new staff, taking the group’s total workforce to more than 15,000, presenting an increase of nearly 10% compared to 2018 levels. This trend will continue thanks in particular to numerous initiatives such as the opening of the arrangement designer school on the Cherbourg site and the Naval Industries Campus, which has been launched last November by the French Minister for Education.
Naval Group is also accelerating its investments, worth nearly 480 million Euros, specifically targeting open and collaborative innovation, the development of international activities and trade relations, as well as industrial and IT equipment.
Lastly, thanks to its increased capacity to invest, Naval Group will pursue the internationalization of its activity. This deployment will more specifically be driven by Naviris, its joint-venture with Fincantieri, which will allow a joint response to some calls for tender and sharing of R&D activities for surface ships.
The prospects for 2020 are robust, with expected sales growth of about 5% and a rise in consolidated net income (group share) of about 10%.
Commenting on these results, Hervé Guillou (photo), Chairman and CEO of Naval Group, said: “Naval Group once again confirms the soundness of its strategic position as an industrial prime contractor, designer and integrator of whole warships and combat systems, as well as the good progress of its development plan. The operational milestones, both in France and internationally, have all been met. Among the most striking illustrations, we are proud to have launched the Suffren, the first next-generation SSN, and to have cut the first metal sheet for the defense and intervention frigate (FDI), a digital frigate intended for the French Navy.”
“Internationally, we have delivered the Khanderi to the Indian Navy but also signed the design contract for the Australian Future Submarine program. We are benefiting from a dynamic market situation and, despite increasingly fierce competition, we won bids for more than twenty ships in five new countries. We also play a pivotal role in European alliances and have set up Naviris, a joint company with Fincantieri, our long-standing Italian partner. Our operational and financial performance enables us to guarantee our ability to finance the future long-term growth of the company,” Guillou added.