Security Business –
a Growth Path
Hervé Guillou
Head of EADS Defence & Communications Systems
North America Investor Forum 2010
New York, 18
thMarch 2010
Safe Harbour Statement
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.
Contents
• Evolution EADS Security business
• Security market growth
• Large portfolio management
• EADS Security market positioning
• Strategic enablers
• Focus on USA
• Conclusions
Evolution EADS Security Business
EADS Security Revenues vs. Order Book
• Market started in 2001 after
09/11. Before mainly PMR
driven.
• EADS has achieved to growth
in Security following market
evolution.
• Security activities based on
the development of internal
competences (e.g. PMR, C³I,
homeland security) and
acquisitions
(e.g. Sofrelog, Plant CML).
• Profitability turnaround
achieved in 2006 and
benchmark in 2009.
2002
2009
Revenues
Order Book
€ Bn
3.5
3
2.5
2
1.5
1
0.5
0
0.3
0.3
0.9
3.0
• Whereas Defence budgets in
Europe are flat, Security
budgets are strongly growing
globally.
• Growth is driven by:
- Diversification of
conventional warfare
funding into security
programs.
- Public-media continues to
focus on economical and
terror fear of the electorate.
- Growth of security spending
in some industrial sectors
(transport, Oil & Gas,…).
Security Market Growth
Homeland security and homeland protection market evolution worldwide
0 20 40 60 80 100 120 140 160 180 200 220 240 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 Private sector
Source: HSRC -Homeland security research – Outlook 2009-2018
CAGR: 7 %
118
127
136
146
157
167
178
189
202
215
€ Bn
Security Objectives
EADS
DS
Offer
Critical
Infrastructures
& Sites Protection
• Protection of
critical assets
(oil & gas,
refineries,
energies etc..)
• Harbours
• Surveillance of
land, coastal
and maritime
borders and
checkpoints
• Airspace
surveillance
Protection of
the population
• Public safety
(police, fire,
rescue)
• Major event
security
• Coordination
of government
forces
Maritime
Security
• Port security:
control and protect
vessels, vessel traffic,
port infrastructures,
flows of persons, cargo
and industrial activities.
• Coastal security
detection of pollution,
trafficking or
immigration.
• Maritime security
Economic Exclusive
Zone (EEZ) and the
high seas surveillance.
Crisis &
Emergency
Response
• Prevention &
Plans definition
• Emergency
calls mgmt
(112)
• Major crisis
management:
Natural
disasters,
Industrial
accidents,
Blackmail, etc.
Border
Security
A mission-critical communications system is a crucial
element in all these global security solutions
Market addressed through 2 business models:
Integrated systems and mission critical communications systems
Protection of the population Border Security Critical Infrastructures & Sites Protection Crisis & Emergency Response Maritime Security
Competitors Analysis
LS
I a
ppr
oa
c
h
P
roduc
ts
a
ppr
oa
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EADS Security Market Positioning
Middle East Qatar:
• Nat. Security Shield • PMR network Saudi Arabia: • Border Security UAE: • PMR network • Critical Infrastructure Security India: • Cyberabad PMR network Morocco:
• Security System for Tangermed port
Philippines:
• PMR network
France:
Police & Fire brigade network
Spain: • PMR network Germany: • BOSNet USA: • PlantCML (emergency response solutions)
China / Hong Kong
• Beijing PMR (Olympics 2008)
• PMR Hong Kong Police • Partnership with HYT • Gungzhou PMR Asian Games 2010
• PMR Networks:
- Worldwide co-leader.
- 200 networks in 68
countries.
• Maritime security
& coastal surveillance:
- World leader (40%
market share)
- Systems in over 40
countries.
• Integrated Security
systems:
- World leader
- Romania, Firecontrol,
Qatar, Saudi Arabia,
BOSnet.
Key security positions
Romania:
Shengen Border Surveillance
Brazil:
• PMR Federal Police
UK:
• FiReControl
(*) PMR: Private Mobile Radio
Australia:
