Quarterly Report • Jul 20, 2022
Quarterly Report
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The English language version of this report is a free translation from the original, which was prepared in French language. All possible care has been taken to ensure that the translation is an accurate presentation of the original. However, in all matters of interpretation, views or opinion expressed in the original language version of the document in French take precedence over the translation. xxxxxxxxxxxxxxxxxxxxxxxx
| Declaration of the person responsible for the report |
2 | 5 | Financial structure | 16 | |
|---|---|---|---|---|---|
| Group structure | 3 | 6 | 2022 guidance | 16 | |
| Business report | 7 | Risk factors and management | 16 | ||
| 1 | Key figures for the 1st half 2022 |
7 | 8 | Shareholder information | 17 |
| 2 | Group activities | 8 | 9 | Related-party transactions | 17 |
| 3 | 1st half 2022 adjusted consolidated results |
12 | 10 | Conclusion | 18 |
| 4 | 1st half 2022 consolidated results under IFRS |
15 | Consolidated financial statements | ||
| Condensed interim financial | 21 |
| Declaration of the person responsible for the report |
2 | 5 | Financial structure | 16 |
|---|---|---|---|---|
| Group structure | 3 | 6 | 2022 guidance | 16 |
| Business report | 7 | Risk factors and management | 16 | |
| Key figures for the 1st half 2022 |
7 | 8 | Shareholder information | 17 |
| Group activities | 8 | 9 | Related-party transactions | 17 |
| 1st half 2022 adjusted consolidated results |
12 | 10 | Conclusion | 18 |
| 1st half 2022 consolidated results under IFRS |
15 | Consolidated financial statements | ||
| Condensed interim financial statements as of June 30, 2022 |
21 | |||
| Auditors' report | 51 |
I hereby certify that, to my knowledge, the interim condensed financial statements in this report have been prepared in accordance with the applicable accounting standards and give a true and fair view of the assets and liabilities, financial position and income or loss of the Dassault Aviation Group, and that the half-yearly activity report presents a fair representation of the important events of the first six months of the financial year and their effect on the half-yearly financial statements, the main transactions between related parties and a description of the main risks and uncertainties for the remaining six months of the financial year.
Paris, July 20, 2022
Eric TRAPPIER Chairman and Chief Executive Officer
The Dassault Aviation Group is an international group that encompasses most of the aeronautical business of the Groupe Industriel Marcel Dassault. The main Group companies are as follows:
The list of consolidated entities is presented in Note 2, "Scope of consolidation", of the Appendix to the condensed interim consolidated financial statements.
| H1 2022 |
H1 2021 |
|
|---|---|---|
| € 16,290 M |
€ 3,913 M | |
| Order intake (new aircraft in units) |
80 Rafale UAE 6 Rafale Greece 41 Falcon |
6 Rafale Greece 12 Rafale France 25 Falcon |
| € 3,098 M | € 3,107 M | |
| ( ) Adjusted net sales * |
7 Rafale Export 14 Falcon |
13 Rafale Export 6 Falcon |
| as of June 30, 2022 | as of December 31, 2021 | |
| € 34,085 M |
€ 20,762 M | |
| Backlog (new aircraft in units) |
165 Rafale of which 125 Rafale Export 40 Rafale France 82 Falcon |
86 Rafale of which 46 Rafale Export 40 Rafale France 55 Falcon |
| H1 2022 |
H1 2021 |
|
| ( ) Adjusted operating income * |
€ 200 M | € 175 M |
| Adjusted operating margin | 6.5% of net sales | 5.6% of net sales |
| Research & Development | € 278 M 9.0% of net sales |
€ 250 M 8.0% of net sales |
| ( ) Adjusted net income * |
€ 318 M |
€ 265 M |
| Adjusted net margin | 10.3% of net sales | 8.5% of net sales |
| as of June 30, 2022 | as of December 31, 2021 | |
| Available cash | € 6,276 M | € 4,879 M |
Note: Dassault Aviation recognizes Rafale Export contracts in their entirety (including the Thales and Safran parts).
Main aggregates under IFRS in EUR million (see table of reconciliation below)
| 3,107 | 3,106 |
|---|---|
| 218 | 177 |
| 272 | 212 |
The major event of the first half of 2022 was the war in Ukraine launched by Russia on February 24. Everything points to it being a long conflict that will have a lasting impact on the Company, its partners, its sub-contractors and its customers.
The sanctions adopted by the European Union and the United States are strictly enforced by the Company (especially the ban on commercial transactions and the restriction on financial transactions with sanctioned persons or entities). A dedicated crisis unit has been set up. Our locations in Russia, our Moscow office and DFS service center subsidiary have stopped all commercial activities. The sanctions have had a particular impact on the service station business in Europe, especially TMS.
The Company remains also constrained by the effects of the Covid 19 pandemic: although the main health measures were able to be lifted in March 2022, vigilance is still needed.
The impact of these two major crises has led to uncertainty over the supply of energy, electronic components and materials. This has stoked an increase in inflation due to actual or potential shortages and weakened the supply chain, now an even acute risk given the increase in our production rate.
In recent weeks, France has held both presidential and legislative elections. The French President has talked about the country entering a war economy. The latter will be further explored by the French Armed Forces Ministry.
On the export side, the 1st half of 2022 saw:
In France:
The FCAS consists of creating a combat system built around a New Generation Fighter (NGF), combining piloted platforms (current and future generation fighters, tankers, AWACS) and drones: France has been designated lead nation on the project and Dassault Aviation lead contractor on the NGF.
Launched in February 2020, work on phase 1A of the FCAS demonstrators—including the New Generation Fighter—was completed in the first quarter of 2022 and is currently being delivered. This is also the case with the Joint Concept Study (JCS).
The next phase of the work, phase 1B, was not awarded in the absence of an agreement with Airbus Defence and Space.
Dassault Aviation is prime contractor for pillar 1. The prime contractor/main partner relationship is still to be clarified. Dassault Aviation is seeking a clear statement of acceptance of its role as prime contractor by Airbus Defence and Space for the NGF (in symmetry with Eurodrone).
Regarding the Eurodrone, a medium-altitude, long-endurance drone, the contract for 20 systems and five year support was signed on February 24th, 2022 between the OCCAR (Organization for Joint Armament Cooperation) and Airbus Defence and Space (the prime contractor).
The contracts between Airbus Defence and Space, which is the program's "strong prime contractor", and its main partners, Leonardo and Dassault Aviation, were signed on the same day. Dassault Aviation is a subcontractor of Airbus Defence and Space on this program, specifically responsible for flight control systems and mission communications (with Thales).
The 1st half of 2022 saw:
The market was buoyant during the 1st half 2022, particularly in the United States and Europe.
We delivered 14 Falcon and booked 41 new aircraft orders (net of cancelled Russian aircraft) vs. 6 deliveries and 25 orders in the 1st half of 2021.
The highlights of the 1st half of 2022 included:
As expected, the Falcon 6X program completed all the technical stages for its mid-2023 entry into service.
aircraft #4 was unveiled with its cabin fitted out at the EBACE airshow. First series aircraft are currently in the completion phase in Little Rock, Arkansas, USA,
a four-week "World Tour" is taking place this summer with 50 stops and 150 flight hours,
Entry into service is scheduled for late 2025: this schedule is tight because of difficulties related to Covid and its consequences on supply chain and collaborative works.
The aircraft has been very well received by the market and the first orders have already been placed.
The Company is pushing ahead with the continuous improvement of the aircraft in service, notably with the new Falcon 8X cabin, unveiled at EBACE in Geneva.
The highlights in the 1st half of 2022 were:
the implementation of the integrated support contract for the Mirage 2000 (BALZAC). Our teams are now installed at the Luxeuil and Nancy air bases,
continued support for the use of Egyptian, Qatari, Indian and Greek Rafale,
With regard to Falcon support, in the 1st half of 2022:
Deployment of a SAP-based solution for global Falcon spare parts management: globalization of an organization based on this solution is ongoing and faces difficulties.
In early 2022, the Group continued to expand its network of excellence by:
Sanctions against Russia particularly impacted the service station business in Europe, especially Tag Maintenance Services.
(see reconciliation table in appendix)
Order intake for the 1st half of 2022 was EUR 16,290 million, vs. EUR 3,913 million in the 1st half of 2021. Export order intake stood at 97%.
Order intake was as follows, in EUR million:
| H1 2022 | % | H1 2021 | % | |
|---|---|---|---|---|
| Defense | 14,318 | 88% | 2,500 | 64% |
| Defense Export | 13,897 | 1,907 | ||
| Defense France | 421 | 593 | ||
| Falcon | 1,972 | 12% | 1,413 | 36% |
| Total order | 16,290 | 3,913 | ||
| intake | ||||
| % Export | 97% | 82% |
The order intake is entirely composed of firm orders.
During the 1st half of 2022, 86 Rafale Export were booked.
Defense Export order intake totaled EUR 13,897 million in the 1st half of 2022, vs. EUR 1,907 million in the 1st half of 2021. Order intake for the 1st half of 2022 notably includes 80 Rafale for the UAE (contract signed in 2021, receipt of the first down payment in the 1st half of 2022), as well as the additional order for 6 new Rafale for Greece.
Defense France order intake stood at EUR 421 million in the 1st half of 2022, compared with EUR 593 million in the 1st half of 2021, when the order intake included 12 Rafale.
During the 1st half of 2022, 41 Falcon orders (net of cancelled Russian aircraft) were received, compared with 25 in the 1st half of 2021. This explains the increase in Falcon order intake to EUR 1,972 million in the 1st half of 2022, vs. EUR 1,413 million in the 1st half of 2021.
Adjusted net sales for the 1st half of 2022 totaled EUR 3,098 million, compared with EUR 3,107 million for the 1st half of 2021. Export net sales stood at 77% in the 1st half of 2022.
Consolidated sales were as follows, in EUR million:
| H1 2022 | % | H1 2021 | % | |
|---|---|---|---|---|
| Defense | 2,137 | 69% | 2,405 | 77% |
| Defense Export | 1,452 | 2,061 | ||
| Defense France | 685 | 344 | ||
| Falcon | 961 | 31% | 702 | 23% |
| Total adjusted net sales |
3,098 | 3,107 | ||
| % Export | 77% | 87% |
7 Rafale Export were delivered during the 1st half of 2022, compared with 13 Rafale Export for the 1st half of 2021.
This led to a fall in Defense Export net sales, which totaled EUR 1,452 million in the 1st half of 2022, vs. EUR 2,061 million in the 1st half of 2021.
Net sales for Defense France stood at EUR 685 million in the 1st half of 2022, compared with EUR 344 million in the 1st half of 2021. The increase is largely due to the delivery of the standard for the mid-life upgrade of the Mirage 2000.
14 Falcon were delivered in the 1st half of 2022, compared with 6 in the 1st half of 2021.
Falcon net sales for the 1st half of 2022 amounted to EUR 961 million, vs. EUR 702 million for the 1st half of 2021. The increase is primarily due to the number of Falcon delivered (14 vs. 6).
****
The "book-to-bill ratio" (order intake/net sales) is 5.3 for the first half of 2022.
The consolidated backlog as of June 30, 2022 (determined in accordance with IFRS 15) was EUR 34,085 million, vs. EUR 20,762 million as of December 31, 2021. The sharp increase is due to the high level of order intake in the 1st half of 2022. The backlog trend is as follows:
| 06/30/2022 | 12/31/2021 | |||
|---|---|---|---|---|
| Defense | 29,814 | 87% | 17,633 | 85% |
| Defense Export | 22,319 | 9,874 | ||
| Defense France | 7,495 | 7,759 | ||
| Falcon | 4,271 | 13% | 3,129 | 15% |
| Total backlog | 34,085 | 20,762 | ||
| % Export | 75% | 58% |
Adjusted operating income for the 1st half of 2022 came to EUR 200 million, compared with EUR 175 million in the 1st half of 2021.
R&D expenses in the 1st half of 2022 totaled EUR 278 million, equivalent to 9.0% of net sales, compared with EUR 250 million and 8.0% of net sales in the 1st half of 2021. These figures reflect the self-funded R&D effort focused on the Falcon 6X and Falcon 10X programs.
Operating margin was 6.5%, as against 5.6% in the 1st half of 2021, up despite the increase in R&D expenses.
The hedging rate for the 1st half of 2022 was \$1.19/€, as in the 1st half of 2021.
Adjusted financial income for the 1st half of 2022 was EUR -13 million, vs. EUR -11 million for the same period in the previous year. This financial loss was due to accounting principle of the long-term military contracts' financing component.
Adjusted net income for the 1st half of 2022 was EUR 318 million, compared with EUR 265 million in the 1st half of 2021. The contribution of Thales to the Group's net income was EUR 180 million, compared with EUR 146 million during the 1st half of 2021.
Adjusted net margin thus stood at 10.3% for the 1st half of 2022, vs. 8.5% for the 1st half of 2021.
Adjusted net income per share for 1st half 2022 was EUR 3.82 versus EUR 3.19* for 1st half 2021.
*2021 proforma following the stock split.
Consolidated operating income for the 1st half of 2022 came to EUR 218 million, compared with EUR 177 million in the 1st half of 2021.
R&D expenses amounted to EUR 278 million in the 1st half of 2022 and accounted for 9.0% of consolidated net sales, vs. EUR 250 million and 8.0% of consolidated net sales in the 1st half of 2021.
Consolidated operating margin was 7.0%, compared with 5.7% in the 1st half of 2021, up despite the increase in R&D expenses.
Consolidated net financial expense for the 1st half of 2022 came to EUR -37 million, vs. EUR -31 million in the 1st half of 2021. This negative financial result is due to the recognition of the financing component under long-term military contracts and the fall in market value of hedging instruments which do not qualify for hedge accounting under IFRS. The market value of these instruments, purchased because of the efficient economic hedge they offer the Group, were adversely impacted by movements in the US dollar rate in the 1st half (\$1.0387/€ at June 30, 2022, versus \$1.1326/€ at December 31, 2021).
Consolidated net income for the 1st half of 2022 was EUR 272 million, compared with EUR 212 million in the 1st half of 2021. The contribution of Thales to the Group's net income was EUR 139 million, compared with EUR 105 million during the 1st half of 2021.
Consolidated net margin thus stood at 8.7% for the 1st half of 2022, vs. 6.8% for the 1st half of 2021.
Consolidated net income per share for the 1st half of 2022 was EUR 3.36, vs. EUR 2.55* for the 1st half of 2021.
* 2021 proforma following the stock split.
The Group uses a specific indicator called "Available cash", which reflects the amount of total liquidities available to the Group, net of financial debts. It includes the following balance sheet items: cash and cash equivalents, current financial assets (at market value) and financial debt, excluding lease liabilities. The calculation of this indicator is detailed in the consolidated financial statements (Note 7 of the interim condensed consolidated financial statements).
The Group's available cash stands at EUR 6,276 million as of June 30, 2022, vs. EUR 4,879 million as of December 31, 2021. This increase is mainly due to the receipt of the first down payment under the contract for 80 Rafale for the UAE and the dynamism of the Falcon business. It is partially offset by the increase in inventories and work-in-progress. Investments and dividends paid during the period are offset by the operating cashflow generated during the 1st half of 2022.
Total equity stood at EUR 5,737 million as of June 30, 2022, vs. EUR 5,300 million as of December 31, 2021.
Borrowings and financial debt amounted to EUR 227 million as of June 30, 2022, compared with EUR 226 million as of December 31, 2021. Borrowings and financial debt are composed of locked-in employee profit-sharing funds for EUR 103 million and lease liabilities recognized for EUR 124 million.
Inventories and work-in-progress increased by EUR 500 million to stand at EUR 3,980 million as of June 30, 2022. The increase is attributed to the Falcon business, particularly with the increased production rate on the Falcon 6X and future Defense deliveries.
Advance payments received on orders net of advance payments paid to suppliers, were up EUR 1,703 million to stand at EUR 5,890 million. This is mainly due to the receipt of the first down payment under the contract for 80 Rafale for the UAE and the dynamism of the Falcon business.
The derivative financial instruments market value stood at EUR -189 million as of June 30, 2022, vs. EUR -81 million as of December 31, 2021. The decrease is mainly due to the change in the US dollar exchange rate between June 30, 2022 and December 31, 2021 (\$1.0387/€ vs. \$1.1326/€).
The Group's 2022 guidance remains unchanged:
The health crisis and the war in Ukraine have had a major impact on the supply chain. Over the past three years, across all industrial sectors, global supply chains have been weakened first by the health crisis, and then by the war between Russia and Ukraine.
The Aerospace industry is likewise affected and is currently in crisis, with shortages and severe supply pressures in the market, particularly for electronic components and raw materials (titanium, aluminum, etc.). We need to safeguard existing sources or urgently find reliable alternatives. We are endeavoring to build up inventories to secure production for the coming years. We have placed orders, but we will need to monitor physical deliveries over the next few weeks. This is a major risk given the increase in our production rate.
We are also finding that some suppliers are extremely vulnerable.
To add to this complex supply chain situation, we are experiencing difficulties in recruiting.
The other risks and uncertainties described in the 2021 Annual Report still apply.
The Company's share capital totaled EUR 66,789,624 as of June 30, 2022. It is divided into 83,487,030 equities, each with a par value of EUR 0.8. The equities are listed on the regulated "Euronext Paris" market – Compartment A – International Securities Identification Numbers (ISIN Code): FR0014004L86. They are eligible for deferred settlement. Following the increase in its free float, Dassault Aviation joined in 2016 the following stock market indices: Sociétés des Bourses Françaises 120 (SBF 120) and the Morgan Stanley Capital International World (MSCI World).
As of June 30, 2022, the shareholding of Dassault Aviation is as follows:
| Shareholders | Number of shares |
% | Exercisable voting rights (2) |
% |
|---|---|---|---|---|
| GIMD | 51,960,760 | 62.3% | 103,921,520 | 76.8% |
| Airbus SE | 8,275,290 | 9.9% | 8,275,290 | 6.1% |
| Float | 22,970,550 | 27.5% | 23,081,176 | 17.1% |
| Treasury shares (1) | 280,430 | 0.3% | 0 | 0.0% |
| TOTAL | 83,487,030 | 100.0% | 135,277,986 | 100.0% |
(1) Treasury shares recorded in the "fully registered shares" account, without voting rights.
(2) Pursuant to the "Florange" Law, and in the absence of contrary provisions in the bylaws of Dassault Aviation, shares held in a registered account for more than two years are entitled to double voting rights.
The related parties in 1st half 2022 are identical to those identified as of December 31, 2021 and the transactions during the period are of the same type.
First half 2022 saw a record-breaking order intake amounting EUR 16.3 billion (86 Rafale and 41 Falcon) amid supply chain difficulties and a tight and competitive job market, result of the war in Ukraine launched by Russia on February 24 and the persistence of the Covid 19 epidemic.
In the military sector, the year began with the sale to Greece of 6 additional new Rafale. The first down payment under the contract for 80 Rafale for the United Arab Emirates was received in April 2022, with this order entering the backlog as a result. The Rafale order intake for the first half is therefore 86 units. The Rafale backlog is 165 units.
Indonesia signed a contract for 42 Rafale (6+36). The contract will enter into force upon receipt of the first down payment and therefore it is not included in the backlog as of June 30, 2022.
During the six-month period, we delivered 7 Rafale Export and provided support to the French and export fleets. We also continued the development work on the F4 Standard and the negotiations and business development for the Rafale.
For the FCAS, of which Dassault Aviation is lead contractor for the New Generation Fighter demonstrator, work on phase 1A was completed in the 1st half of 2022.
The next phase of the work, phase 1B, was not awarded to the parties in the absence of an agreement with Airbus Defence and Space. Dassault Aviation is prime contractor for pillar 1. The prime contractor/main partner relationship is still to be clarified. Dassault Aviation is seeking a clear statement of acceptance of its role as prime contractor by Airbus Defence and Space for the NGF (in symmetry with Eurodrone).
Work has begun on the Eurodrone contract. Dassault Aviation is responsible in particular for flight control systems and mission communications, as a subcontractor of Airbus Defence and Space.
Regarding the Falcon mission aircraft, development work is continuing on the Archange and Albatros programs. Our business development efforts resulted in order intake for 4 Falcon 2000LXS for the South Korean Air Force.
In the civil sector, the Falcon market was buoyant during the 1st half of 2022.
We delivered 14 Falcon and booked 41 new Falcon orders in the 1st half of 2022, vs. 6 deliveries and 25 orders in the 1st half of 2021.
Development efforts on the Falcon 6X and 10X are continuing:
Our 2022 guidance remains unchanged: delivery of 13 Rafale and 35 Falcon; fall in net sales compared with last year.
***
The Board of Directors would like to thank all personnel for their commitment, efficiency and expertise in ensuring the commercial success and implementation of our programs.
IFRS 8 "Operating Segments" requires the presentation of information per segment according to internal management criteria.
The entire activity of the Dassault Aviation Group relates to the aerospace sector. The internal reporting made to the Chairman and Chief Executive Officer, and to the Chief Operating Officer, as used for the strategy and decision-making, includes no performance analysis, under the terms of IFRS 8, at a lower level to this domain.
To reflect the Group's actual economic performance, and for monitoring and comparability reasons, the Group presented an adjusted income statement of:
The Group also presents the "available cash" indicator which reflects the amount of the Group's total liquidities, net of financial debt. It covers the following balance sheet items:
The calculation of this indicator is detailed in the condensed consolidated financial statements (see Note 7).
Only consolidated financial statements are audited by statutory auditors. Adjusted financial data are subject to the verification procedures applicable to all information provided in the half-yearly report.
The impact of the adjustments of income statement aggregates for the 1st half 2022 is set out below:
| Consolidated income |
Foreign exchange derivatives |
Adjustments | Adjusted | |||
|---|---|---|---|---|---|---|
| (in EUR thousands) | statement | Foreign | Change in | PPA | applied by Thales |
income statement |
| H1 2022 | exchange gain/loss |
fair value | H1 2022 | |||
| Net sales | 3,106,839 | -6,930 | -1,499 | 3,098,410 | ||
| Operating income | 217,563 | -6,930 | -12,296 | 1,563 | 199,900 | |
| Net financial income/expense |
-37,437 | 6,930 | 17,891 | -12,616 | ||
| Share in net income of equity associates |
141,910 | 1,566 | 39,739 | 183,215 | ||
| Income tax | -50,525 | -1,445 | -318 | -52,288 | ||
| Net income | 271,511 | 4,150 | 2,811 | 39,739 | 318,211 | |
| Group share of net income | 272,511 | 4,150 | 2,811 | 39,739 | 318,211 | |
| Group share of net income per equity (in euros) |
3.26 | 3.82 |
The impact of the adjustments of income statement aggregates for the 1st half 2021 is set out below:
| Foreign exchange Consolidated derivatives income |
Adjustments | Adjusted | ||||
|---|---|---|---|---|---|---|
| (in EUR thousands) | statement H1 2021 |
Foreign exchange gain/loss |
Change in fair value |
PPA | applied by Thales |
income statement H1 2021 |
| Net sales | 3,106,206 | - 368 | 883 | 3,106,721 | ||
| Operating income | 177,224 | - 368 | - 3,865 | 1,688 | 174,679 | |
| Net financial income/expense |
- 31,154 | 368 | 19,442 | - 11,344 | ||
| Share in net income of equity associates |
108,527 | 1,501 | 39,152 | 149,180 | ||
| Income tax | - 42,798 | - 4,255 | - 342 | - 47,395 | ||
| Net income | 211,799 | 0 | 11,322 | 2,847 | 39,152 | 265,120 |
| Group share of net income | 211,799 | 0 | 11,322 | 2,847 | 39,152 | 265,120 |
| Group share of net income per share (in euros) (1) |
2.55 | 3.19 |
(1) proforma following the stock split.
| (in EUR thousands) | Notes | 06.30.2022 | 12.31.2021 |
|---|---|---|---|
| Goodwill | 3 | 65,957 | 65,957 |
| Intangible assets | 60,871 | 62,377 | |
| Property, plant and equipment | 1,165,011 | 1,139,299 | |
| Equity associates | 4 | 2,373,511 | 2,095,582 |
| Other non-current financial assets | 5 | 198,785 | 191,081 |
| Deferred tax assets | 15 | 395,559 | 389,443 |
| Non-current assets | 4,259,694 | 3,943,739 | |
| Inventories and work-in-progress | 6 | 3,980,217 | 3,480,409 |
| Contract assets | 11 | 12,279 | 6,489 |
| Trade and other receivables | 2,016,737 | 2,416,299 | |
| Advances and progress payments to suppliers | 11 | 2,473,514 | 1,390,293 |
| Derivative financial instruments | 18 | 0 | 802 |
| Other current financial assets | 7 | 1,012,595 | 955,281 |
| Cash and cash equivalents | 7 | 5,366,006 | 4,022,551 |
| Current assets | 14,861,348 | 12,272,124 | |
| Total assets | 19,121,042 | 16,215,863 |
| (in EUR thousands) | Notes | 06.30.2022 | 12.31.2021 |
|---|---|---|---|
| Capital | 8 | 66,790 | 66,790 |
| Consolidated reserves and retained earnings | 5,583,072 | 5,240,191 | |
| Currency translation adjustments | 114,944 | 23,894 | |
| Treasury shares | 8 | -27,482 | -30,393 |
| Total attributable to the owners of the parent company | 5,737,324 | 5,300,482 | |
| Non-controlling interests | 0 | 0 | |
| Equity | 5,737,324 | 5,300,482 | |
| Long-term borrowings and financial debt | 9 | 188,812 | 185,502 |
| Deferred tax liabilities | 15 | 3,478 | 4,482 |
| Non-current liabilities | 192,290 | 189,984 | |
| Contract liabilities | 11 | 9,717,285 | 7,289,333 |
| Trade and other payables | 1,130,247 | 1,201,204 | |
| Tax and social security liabilities | 432,697 | 326,328 | |
| Short-term borrowings and financial debt | 9 | 38,313 | 40,852 |
| Provisions for contingencies and charges | 10 | 1,684,298 | 1,786,231 |
| Derivative financial instruments | 18 | 188,588 | 81,449 |
| Current liabilities | 13,191,428 | 10,725,397 | |
| Total equity and liabilities | 19,121,042 | 16,215,863 |
| (in EUR thousands) | Notes | H1 2022 | H1 2021 | 2021 |
|---|---|---|---|---|
| Net sales | 12 | 3,106,839 | 3,106,206 | 7,246,197 |
| Other revenue | 50,558 | 34,179 | 105,779 | |
| Change in work-in-progress | 218,041 | 141,416 | 98,869 | |
| Purchases consumed | -2,173,088 | -2,297,697 | -4,967,165 | |
| Personnel expenses | -746,074 | -689,521 | -1,276,437 | |
| Taxes | -40,707 | -35,410 | -60,805 | |
| Depreciation and amortization | -83,286 | -72,571 | -151,835 | |
| Net allocations/reversals to provisions | -116,013 | -13,825 | -454,640 | |
| Other operating income and expenses | 1,293 | 4,447 | 5,106 | |
| Operating income | 217,563 | 177,224 | 545,069 | |
| Cost of net financial debt | -4,336 | -932 | -3,889 | |
| Other financial income and expense | -33,101 | -30,222 | -64,623 | |
| Net financial income/expense | 14 | -37,437 | -31,154 | -68,512 |
| Share in net income of equity associates | 4 | 141,910 | 108,527 | 271,611 |
| Income tax | 15 | -50,525 | -42,798 | -142,776 |
| Net income | 271,511 | 211,799 | 605,392 | |
| Attributable to the owners of the parent company | 271,511 | 211,799 | 605,392 | |
| Attributable to non-controlling interests | 0 | 0 | 0 | |
| Earnings per share (in EUR) (1) | 16 | 3.26 | 2.55 | 7.28 |
| Diluted earnings per share (in EUR) (1) | 16 | 3.26 | 2.55 | 7.28 |
(1) the par value of Dassault Aviation shares was divided by 10 on September 29, 2021. In order to ensure the comparability of the information, the data reported for H1 2021 take into account the 10-for-1 stock split.
| (in EUR thousands) | Notes | Fully consolidated companies |
Equity associates |
H1 2022 |
|---|---|---|---|---|
| Net income | 129,601 | 141,910 | 271,511 | |
| Derivative financial instruments (1) | 4, 18 | -90,050 | -27,020 | -117,070 |
| Deferred taxes | 4, 15 | 23,260 | 6,641 | 29,901 |
| Currency translation adjustments | 73,169 | 17,881 | 91,050 | |
| Items to be subsequently recycled to P&L | 6,379 | -2,498 | 3,881 | |
| Other non-current financial assets | 5 | -10,721 | -5,087 | -15,808 |
| Actuarial adjustments on pension benefit obligations | 4, 10 | 168,713 | 296,491 | 465,204 |
| Deferred taxes | 4, 15 | -38,720 | -18,620 | -57,340 |
| Items that will not be recycled to P&L | 119,272 | 272,784 | 392,056 | |
| Income and expense recognized through equity | 125,651 | 270,286 | 395,937 | |
| Recognized income and expense | 255,252 | 412,196 | 667,448 | |
| Owners of the parent company | 255,252 | 412,196 | 667,448 | |
| Non-controlling interests | 0 | 0 |
(1) the amounts stated represent the change in the market value over the period for instruments that qualify for hedge accounting. They are not representative of the actual gain/loss that will be recognized when the hedges are exercised.
| (in EUR thousands) | Notes | Fully consolidated companies |
Equity associates |
H1 2021 |
|---|---|---|---|---|
| Net income | 103,272 | 108,527 | 211,799 | |
| Derivative financial instruments (1) | 4, 18 | -58,386 | -8,268 | -66,654 |
| Deferred taxes | 4, 15 | 15,248 | 4,345 | 19,593 |
| Currency translation adjustments | 21,757 | 5,054 | 26,811 | |
| Items to be subsequently recycled to P&L | -21,381 | 1,131 | -20,250 | |
| Other non-current financial assets | 5 | 11,182 | 1,684 | 12,866 |
| Actuarial adjustments on pension benefit obligations | 4, 10 | 102,088 | 100,425 | 202,513 |
| Deferred taxes | 4, 15 | -28,633 | -2,897 | -31,530 |
| Items that will not be recycled to P&L | 84,637 | 99,212 | 183,849 | |
| Income and expense recognized through equity | 63,256 | 100,343 | 163,599 | |
| Recognized income and expense | 166,528 | 208,870 | 375,398 | |
| Owners of the parent company | 166,528 | 208,870 | 375,398 | |
| Non-controlling interests | 0 | 0 |
(1) the amounts stated represent the change in the market value over the period for instruments that qualify for hedge accounting. They are not representative of the actual gain/loss that will be recognized when the hedges are exercised.
| (in EUR thousands) | Notes | Fully consolidated companies |
Equity associates |
2021 |
|---|---|---|---|---|
| Net income | 333,781 | 271,611 | 605,392 | |
| Derivative financial instruments (1) | 4, 18 | -131,784 | -38,094 | -169,878 |
| Deferred taxes | 4, 15 | 34,189 | 9,451 | 43,640 |
| Currency translation adjustments | 59,777 | 18,451 | 78,228 | |
| Items to be subsequently recycled to P&L | -37,818 | -10,192 | -48,010 | |
| Other non-current financial assets | 5 | 25,508 | 10,738 | 36,246 |
| Actuarial adjustments on pension benefit obligations | 4, 10 | 108,863 | 181,885 | 290,748 |
| Deferred taxes | 4, 15 | -31,837 | -2,502 | -34,339 |
| Items that will not be recycled to P&L | 102,534 | 190,121 | 292,655 | |
| Income and expense recognized through equity | 64,716 | 179,929 | 244,645 | |
| Recognized income and expense | 398,497 | 451,540 | 850,037 | |
| Owners of the parent company | 398,497 | 451,540 | 850,037 | |
| Non-controlling interests | 0 | 0 |
(1) the amounts stated represent the change in the market value over the period for instruments that qualify for hedge accounting. They are not representative of the actual gain/loss that will be recognized when the hedges are exercised.
| Consolidated reserves and retained earnings |
Total | |||||||
|---|---|---|---|---|---|---|---|---|
| (in EUR thousands) | Capital | Additional paid-in capital, consolidated income and other reserves |
Derivative financial instruments |
Currency translation adjustments |
Treasury shares |
attributable to the owners of the parent company |
Non controlling interests |
Total equity |
| as of 12.31.2020 | 66,790 | 4,531,018 | 49,230 | -54,334 | -32,753 | 4,559,951 | 0 | 4,559,951 |
| Net income for the year | 605,392 | 605,392 | 605,392 | |||||
| Income and expense recognized through equity |
292,655 | -126,238 | 78,228 | 244,645 | 244,645 | |||
| Recognized income and expense |
898,047 | -126,238 | 78,228 | 850,037 | 850,037 | |||
| Dividends paid | -102,308 | -102,308 | -102,308 | |||||
| Share-based payment (1) | 2,388 | 2,388 | 2,388 | |||||
| Movements on treasury shares (1) |
-2,360 | 2,360 | 0 | 0 | ||||
| Other changes (2) | -9,586 | -9,586 | -9,586 | |||||
| As of 12.31.2021 | 66,790 | 5,317,199 | -77,008 | 23,894 | -30,393 | 5,300,482 | 0 | 5,300,482 |
| Net income for the year | 271,511 | 271,511 | 271,511 | |||||
| Income and expense recognized through equity |
392,056 | -87,169 | 91,050 | 395,937 | 395,937 | |||
| Recognized income and expense |
663,567 | -87,169 | 91,050 | 667,448 | 667,448 | |||
| Dividends paid | -207,184 | -207,184 | -207,184 | |||||
| Share-based payment (1) | 2,317 | 2,317 | 2,317 | |||||
| Movements on treasury shares (1) |
-2,911 | 2,911 | 0 | 0 | ||||
| Other changes (2) | -25,739 | -25,739 | -25,739 | |||||
| As of 06.30.2022 | 66,790 | 5,747,249 | -164,177 | 114,944 | -27,482 | 5,737,324 | 0 | 5,737,324 |
(1) see Note 8.
(2) for Thales, this mainly represents the impact of changes in consolidation scope, change in treasury shares, employee share issues and share-based payments. In 2021, other changes also included the impact of including Dassault Reliance Aerospace Ltd entry in the scope of consolidation.
| Consolidated reserves and retained earnings |
Total | |||||||
|---|---|---|---|---|---|---|---|---|
| (in EUR thousands) | Capital | Additional paid-in capital, consolidated income and other reserves |
Derivative financial instruments |
Currency translation adjustments |
Treasury shares |
attributable to the owners of the parent company |
Non controlling interests |
Total equity |
| As of 12.31.2020 | 66,790 | 4,531,018 | 49,230 | -54,334 | -32,753 | 4,559,951 | 0 | 4,559,951 |
| Net income for the year | 211,799 | 211,799 | 211,799 | |||||
| Income and expense recognized through equity |
183,849 | -47,061 | 26,811 | 163,599 | 163,599 | |||
| Recognized income and expense |
395,648 | -47,061 | 26,811 | 375,398 | 375,398 | |||
| Dividends paid | -102,308 | -102,308 | -102,308 | |||||
| Share-based payment (1) | 1,789 | 1,789 | 1,789 | |||||
| Movements on treasury shares (1) |
-2,360 | 2,360 | 0 | 0 | ||||
| Other changes (2) | -2,209 | -2,209 | -2,209 | |||||
| As of 06.30.2021 | 66,790 | 4,821,578 | 2,169 | -27,523 | -30,393 | 4,832,621 | 0 | 4,832,621 |
(1) see Note 8.
(2) for Thales, this mainly represents the impact of changes in consolidation scope, change in treasury shares, employee share issues and share-based payments. In H1 2021, other changes also included the impact of including Dassault Reliance Aerospace Ltd in the scope of consolidation.
| (in EUR thousands) | Notes | H1 2022 | H1 2021 | 2021 |
|---|---|---|---|---|
| I –Net cash flows from operating activities | ||||
| Net income | 271,511 | 211,799 | 605,392 | |
| Elimination of net income of equity associates, net of dividends received |
4 | -33,382 | -32,935 | -164,021 |
| Elimination of gains and losses from disposals of non-current assets | 1,684 | 46 | 2,906 | |
| Change in the fair value of derivative financial instruments | 18 | 17,891 | 19,442 | 29,604 |
| Change in fair value of other current and non-current financial assets | 5, 7 | 4,141 | 1,531 | 3,080 |
| Tax expense (including deferred taxes) | 15 | 50,525 | 42,798 | 142,776 |
| Allocations to and reversals of depreciation, amortization and provisions (excluding those related to working capital requirement) |
134,407 | 64,188 | 615,251 | |
| Other items | 2,317 | 1,789 | 2,388 | |
| Net cash from operating activities before working capital changes and taxes |
449,094 | 308,658 | 1,237,376 | |
| Income taxes paid | 15 | -68,772 | -22,031 | -191,846 |
| Change in inventories and work-in-progress (net) | 6 | -464,298 | -276,261 | -67,224 |
| Change in contract assets | 11 | -5,289 | -12,699 | 3,840 |
| Change in trade and other receivables (net) | 411,430 | 92,996 | -1,014,383 | |
| Change in advances and progress payments to suppliers | 11 | -1,083,104 | -38,797 | 358,632 |
| Change in contract liabilities | 11 | 2,401,195 | 71,787 | 1,050,452 |
| Change in trade and other payables | -71,065 | 31,899 | 273,075 | |
| Change in tax and social security liabilities | 104,065 | 42,344 | 12,905 | |
| Increase (-) or decrease (+) in working capital requirement | 1,292,934 | -88,731 | 617,297 | |
| Total I | 1,673,256 | 197,896 | 1,662,827 | |
| II - Net cash flows from investing activities | ||||
| Change, as acquisition cost, of other current financial assets (1) | 7 | -63,606 | 37,538 | -90,031 |
| Purchases of intangible assets and property, plant and equipment | -78,696 | -82,152 | -172,781 | |
| Increase in other non-current financial assets | 5 | -17,056 | -1,327 | -1,660 |
| Disposals of or reductions in non-current assets | 1,349 | 53,328 | 54,409 | |
| Net cash from acquisitions and disposals of subsidiaries (2) | 0 | 0 | -3,573 | |
| Total II | -158,009 | 7,387 | -213,636 | |
| III - Net cash flows from financing activities | ||||
| Increase in financial debt | 9 | 21,203 | 43,715 | 43,647 |
| Repayment of financial debt | 9 | -34,901 | -78,338 | -100,881 |
| Dividends paid during the year | -207,184 | -102,308 | -102,308 | |
| Total III | -220,882 | -136,931 | -159,542 | |
| IV - Impact of exchange rate fluctuations | 49,090 | 13,702 | 36,619 | |
| Change in net cash and cash equivalents (I+II+III+IV) | 1,343,455 | 82,054 | 1,326,268 | |
| Opening net cash and cash equivalents | 7 | 4,022,551 | 2,696,283 | 2,696,283 |
| Closing net cash and cash equivalents | 7 | 5,366,006 | 2,778,337 | 4,022,551 |
(1) the change, as acquisition cost, of other current financial assets, classified as net cash flows from financing activities in the financial statements to June 30, 2021, is now classified as net cash flows from investing activities.
(2) in 2021, the amount corresponds to the capital increase of Dassault Reliance Aerospace Ltd, which the Group accounts for using the equity method.
$$
\rightarrow \rightarrow \rightarrow
$$
2.2. Changes in scope 15 Taxes
4.1. Group share in net assets and net income of equity associates
7.2. Available cash
2 Scope of consolidation 14 Net financial income/expense
Assets 15.1. Income tax 15.2. Reconciliation of theoretical and recognized
17.1.Financial instruments (assets) 17.2.Financial instruments (liabilities)
On July 20, 2022, the Board of Directors closed and authorized the publication of Dassault Aviation's condensed consolidated financial statements as of June 30, 2022.
Dassault Aviation Group prepares its condensed interim consolidated financial statements in accordance with IAS 34 "Interim Financial Reporting." The consolidated financial statements are in accordance with the IFRS standards, amendments, and interpretations, as adopted by the European Union and applicable at the closing date.
The half-yearly financial accounts are prepared in accordance with the accounting rules and methods used to prepare the 2021 consolidated financial statements.
The Russia-Ukraine conflict has had an impact on the Group's business. The sanctions adopted by the European Union and the United States are strictly enforced by the Company (especially the ban on commercial transactions and the restriction on financial transactions with sanctioned persons or entities). A dedicated crisis unit has been set up. Our operations in Russia, our Moscow office and the DFS service center subsidiary have stopped all commercial activities. The sanctions have had a particular impact on the service station business in Europe, especially TMS.
The impact of this major crisis has led to uncertainty over the supply of energy, electronic components and materials. This has stoked an increase in inflation due to actual or potential shortages and weakened the supply chain, now an even accurate risk given the increase in our production rate.
As of June 30, the effects of the Russia-Ukraine conflict had no material impact on the Group's financial statements.
Seasonality
In previous fiscal years, a recurring seasonality phenomenon has been observed. As a result, the interim results as of June 30, 2022 are not necessarily representative of what might be expected for fiscal year 2022.
Pension costs for the half-year are calculated on the basis of the actuarial valuations performed at the end of the previous fiscal year. If necessary, these valuations are adjusted to take into account curtailments, settlements or other major non-recurring events during the period. Furthermore, amounts recognized in equity and liabilities in respect of defined benefit plans are adjusted, if necessary, in order to reflect material changes impacting the yield of investment-grade corporate bonds issued in the geographic area concerned (the benchmark used to determine the discount rate) and the actual return on plan assets.
Goodwill is tested for impairment at each year-end and whenever there is evidence of impairment.
For the half-year closing, the Group's tax expense is calculated by applying the estimated annual average tax rate for the year to the accounting result for the period.
IFRS 8, "Operating Segments," requires the presentation of information according to internal management criteria. The entire activity of the Dassault Aviation Group relates to the aerospace sector. The internal reporting made to the Chairman and Chief Executive Officer, and to the Chief Operating Officer, as used for strategy and decision-making, includes no performance analysis, under IFRS 8 terms, at a level lower than this sector.
Dassault Aviation is a French group that designs and manufactures military aircraft, business jets and space systems. The Group mainly operates in France.
The consolidated financial statements comprise the financial statements of Dassault Aviation and the following entities:
| % interest (1) | ||||
|---|---|---|---|---|
| Name | Country | 06.30.2022 | 12.31.2021 | Consolidation |
| Dassault Aviation (3) | France | Parent company |
Parent company |
method (2) |
| Dassault Aviation Business Services | Switzerland | 100 | 100 | FC |
| Dassault Falcon Jet | United States | 100 | 100 | FC |
| - Dassault Falcon Jet Wilmington |
United States | 100 | 100 | FC |
| - Dassault Aircraft Services |
United States | 100 | 100 | FC |
| - Dassault Falcon Jet Leasing |
United States | 100 | 100 | FC |
| - Aero Precision |
United States | 50 | 50 | EM |
| - Midway |
United States | 100 | 100 | FC |
| - Dassault Falcon Jet Do Brazil |
Brazil | 100 | 100 | FC |
| Dassault Falcon Service | France | 100 | 100 | FC |
| - Falcon Training Center |
France | 50 | 50 | EM |
| Dassault Reliance Aerospace Ltd | India | 49 | 49 | EM |
| ExecuJet | ||||
| - ExecuJet MRO Services Australia |
Australia | 100 | 100 | FC |
| - ExecuJet MRO Services New Zealand |
New Zealand | 100 | 100 | FC |
| - ExecuJet MRO Services Belgium |
Belgium | 100 | 100 | FC |
| - ExecuJet Services Malaysia |
Malaysia | 100 | 100 | FC |
| - ExecuJet Handling Services Sdn Bhd | Malaysia | 49 | 49 | FC |
| - ExecuJet MRO Services |
South Africa | 100 | 100 | FC |
| - ExecuJet MRO Services Middle East |
Dubai | 100 | 100 | FC |
| Sogitec Industries | France | 100 | 100 | FC |
| TAG Maintenance Services | Switzerland | 100 | 100 | FC |
| - TAG Maintenance Services Le Bourget |
France | 100 | 100 | FC |
| - TAG Maintenance Services Farnborough |
United Kingdom | 100 | 100 | FC |
| - TAG Maintenance Services Portugal |
Portugal | 100 | 100 | FC |
| Thales | France | 25 | 25 | EM |
(1) the equity interest percentages are identical to the percentages of control for all Group companies except for Thales, in which the Group held 24.62% of the capital, 24.79% of the interest rights and 29.84% of the voting rights as of June 30, 2022.
(2) FC: full consolidation, EM: equity method.
(3) identity of the parent company: Dassault Aviation, a Société Anonyme (limited company) with capital of EUR 66,789,624, listed and registered in France, Paris Trade and Companies Register No. 712 042 456 – 9, Rond-Point des Champs-Élysées Marcel Dassault – 75008 Paris.
There were no changes in scope in the first half of 2022. As a reminder, in 2021, Dassault Reliance Aerospace Ltd joined the scope of consolidation of the Dassault Aviation Group.
Goodwill at June 30, 2022 amounted to EUR 65,957 thousand, unchanged from December 31, 2021.
For the half-year closing, cash-generating units (CGUs) were tested for impairment where there was evidence of an impairment loss.
On the basis of those tests, the Group did not recognize any impairment losses as of June 30, 2022.
In accordance with IFRS, goodwill relating to Thales, which is accounted for by the equity method, is included in "Equity associates" (see Note 4).
As of June 30, 2022, Dassault Aviation held 24.79% of the interest rights of the Thales Group, compared with 24.67% as of December 31, 2021. Dassault Aviation has significant influence over Thales, especially with regard to the shareholders' agreement between Dassault Aviation and the Public Sector.
| Equity associates | Share in net income of equity associates | ||||
|---|---|---|---|---|---|
| (in EUR thousands) | 06.30.2022 | 12.31.2021 | H1 2022 | H1 2021 | 2021 |
| Thales (1) | 2,342,669 | 2,064,714 | 138,646 | 105,221 | 265,604 |
| Other | 30,842 | 30,868 | 3,264 | 3,306 | 6,007 |
| Total | 2,373,511 | 2,095,582 | 141,910 | 108,527 | 271,611 |
(1) The Group share in Thales net assets and net income is detailed in Note 4.3.
| (in EUR thousands) | H1 2022 | 2021 |
|---|---|---|
| As of January 1 | 2,095,582 | 1,753,928 |
| Share in net income of equity associates | 141,910 | 271,611 |
| Elimination of dividends paid (1) | -108,528 | -107,590 |
| Income and expense recognized directly through equity | ||
| - Securities at fair value | -5,087 | 10,738 |
| - Derivative financial instruments (2) | -27,020 | -38,094 |
| - Actuarial adjustments on pension benefit obligations | 296,491 | 181,885 |
| - Deferred taxes | -11,979 | 6,949 |
| - Currency translation adjustments | 17,881 | 18,451 |
| Share of equity associates in other income and expense recognized directly through equity |
270,286 | 179,929 |
| Other movements (3) | -25,739 | -2,296 |
| At end of period | 2,373,511 | 2,095,582 |
(1) in H1 2022, the Group received EUR 102,962 thousand in dividends from Thales for 2021. In 2021, Thales paid the Group EUR 71,443 thousand in dividends for 2020 and EUR 31,519 thousand in interim dividends for 2021.
(2) the amounts stated correspond to the change in the market value of the portfolio over the period. They are not representative of the actual gain/loss that will be recognized when the hedges are exercised.
(3) for Thales, this mainly represents the impact of changes in consolidation scope, change in treasury shares, employee share issues and share-based payments. In 2021, other changes also included the impact of including Dassault Reliance Aerospace Ltd in the scope of consolidation.
The breakdown between the net assets, attributable to owners of the parent company, published by Thales and the carrying amount of the Group share in Thales is shown in the table below:
| (in EUR thousands) | H1 2022 | 2021 |
|---|---|---|
| Share of Thales equity, attributable to owners of the parent company | 7,588,800 | 6,480,100 |
| Homogenization restatements and PPA | -2,581,247 | -2,574,885 |
| Thales restated equity, attributable to owners of the parent company | 5,007,553 | 3,905,215 |
| Group share | 1,241,372 | 963,417 |
| Goodwill | 1,101,297 | 1,101,297 |
| Share in net assets of Thales | 2,342,669 | 2,064,714 |
The breakdown between the net income, attributable to owners of the parent company, published by Thales and the Group share is as below:
| (in EUR thousands) | H1 2022 | H1 2021 | 2021 |
|---|---|---|---|
| Thales net income (100%) | 565,600 | 432,600 | 1,088,800 |
| Group share in Thales net income | 140,212 | 106,722 | 268,607 |
| Post-tax amortization of the purchase price allocation (1) | -1,566 | -1,501 | -3,003 |
| Dassault Aviation share in net income of equity associates | 138,646 | 105,221 | 265,604 |
(1) amortization of identified assets for which the modes and periods of amortization are identical to those used for the year ended December 31, 2021.
Based on the Thales share price as of June 30, 2022 (EUR 117.05 per share), Dassault Aviation's stake in Thales is valued at EUR 6.149 million. In the absence of any objective indication of impairment, the Thales investment was not subject to an impairment test as of June 30, 2022.
| (in EUR thousands) | 12.31.2021 | Increase | Decrease | Change in fair value |
Other | 06.30.2022 |
|---|---|---|---|---|---|---|
| Non-listed securities (1) | 124,180 | 138 | 0 | 1,446 | -21 | 125,743 |
| Embraer shares (1) | 26,242 | 0 | 0 | -12,167 | 0 | 14,075 |
| Other financial assets | 40,659 | 16,918 | -768 | 2,151 | 7 | 58,967 |
| Receivables from equity investments | 21,853 | 981 | -73 | 0 | 0 | 22,761 |
| Advance lease payments | 16,352 | 953 | -595 | 0 | 7 | 16,717 |
| Other | 2,454 | 14,984 | -100 | 2,151 | 0 | 19,489 |
| Other non-current financial assets |
191,081 | 17,056 | -768 | -8,570 | -14 | 198,785 |
(1) non-consolidated, non-listed investments and Embraer shares are measured at fair value, with a corresponding entry in other recognized income and expense under equity, which cannot be recycled in profit or loss. The risk analysis relating to all other non-current financial assets of the Group is described in Note 18.
| 06.30.2022 | ||||||
|---|---|---|---|---|---|---|
| (in EUR thousands) | Gross | Impairment | Net | Net | ||
| Raw materials | 307,144 | -87,274 | 219,870 | 180,219 | ||
| Work-in-progress | 2,631,948 | -19,360 | 2,612,588 | 2,374,841 | ||
| Semi-finished and finished goods | 1,493,583 | -345,824 | 1,147,759 | 925,349 | ||
| Inventories and work-in-progress | 4,432,675 | -452,458 | 3,980,217 | 3,480,409 |
The increase in inventories and work-in-progress is due to the Falcon business, notably with the increase in production rate on the Falcon 6X, and to future Defense deliveries.
| (in EUR thousands) | 06.30.2022 | 12.31.2021 |
|---|---|---|
| Cash equivalents (1) | 3,868,202 | 2,784,943 |
| Cash at bank and in hand | 1,497,804 | 1,237,608 |
| Cash and cash equivalents | 5,366,006 | 4,022,551 |
| Bank overdrafts | 0 | 0 |
| Net cash in the cash flow statement | 5,366,006 | 4,022,551 |
(1) mainly time deposits and cash equivalent marketable securities. The corresponding risk analysis is described in Note 18.
The Group uses an alternative performance indicator, referred to as "Available cash", which reflects the total liquidities available to the Group, net of any financial debt, except for lease liabilities. It is calculated as follows:
| (in EUR thousands) | 06.30.2022 | 12.31.2021 |
|---|---|---|
| Other current financial assets (market value) (1) | 1,012,595 | 955,281 |
| Cash and cash equivalents (market value) | 5,366,006 | 4,022,551 |
| Sub-total | 6,378,601 | 4,977,832 |
| Borrowings and financial debt, excluding lease liabilities (2) | -102,671 | -98,374 |
| Available cash | 6,275,930 | 4,879,458 |
(1) other current financial assets, which include in particular Group cash plan assets in the form of listed marketable securities, are measured at fair value through profit or loss. Given their liquidity, the latter could be disposed of in the short-term.
(2) see breakdown of financial debt in Note 9.
A comprehensive analysis of the performance of listed marketable securities, classified in other current financial assets and in cash equivalents, is carried out at each closing date. The investment portfolio does not show, line-by-line, any objective indication of significant impairment as of June 30, 2022 (as was the case on December 31, 2021). The corresponding risk analysis is described in Note 18.
The share capital amounted to EUR 66,790 thousand and consisted of 83,487,030 common shares of EUR 0.80 each as of June 30, 2022, just as for December 31, 2021. The distribution of share capital as of June 30, 2022 is as follows:
| Shares | % Capital | % Voting rights |
|
|---|---|---|---|
| GIMD (1) | 51,960,760 | 62.3% | 76.8% |
| Float | 22,970,550 | 27.5% | 17.1% |
| Airbus SE | 8,275,290 | 9.9% | 6.1% |
| Dassault Aviation (treasury shares) | 280,430 | 0.3% | - |
| Total | 83,487,030 | 100% | 100% |
(1) the parent company, Groupe Industriel Marcel Dassault (GIMD), located at 9, Rond-Point des Champs-Élysées - Marcel Dassault - 75008 Paris, fully consolidates the Group financial statements.
Movements on treasury shares are detailed below:
| (in number of shares) | H1 2022 | H1 2021 | 2021 |
|---|---|---|---|
| Treasury shares as of January 1 | 310,130 | 334,210 | 334,210 |
| Share-based payment | -29,700 | -24,080 | -24,080 |
| Treasury shares at the closing date | 280,430 | 310,130 | 310,130 |
| Amount recognized in less from equity (in EUR thousands) | -27,482 | -30,393 | -30,393 |
The par value of Dassault Aviation shares was divided by 10 on September 29, 2021. In order to ensure the comparability of the information, the data reported for treasury shares take into account the 10-for-1 stock split.
The impact of treasury shares on the Group's consolidated financial statements is detailed in the statement of changes in equity.
The 280,430 treasury shares held as of June 30, 2022 were allocated to potential performance share awards and to a potential liquidity contract to guarantee market activity.
| Note 9 - | Borrowings and financial debt | ||||
|---|---|---|---|---|---|
| ---------- | -- | ------------------------------- | -- | -- | -- |
| (in EUR thousands) | Bank borrowings |
Lease liabilities | Other borrowings and financial debt (1) |
Borrowings and financial debt |
|---|---|---|---|---|
| As of December 31, 2021 | 0 | 127,980 | 98,374 | 226,354 |
| Increase | 0 | 10,435 | 21,203 | 31,638 |
| Decrease | 0 | -18,495 | -16,906 | -35,401 |
| Other | 0 | 4,534 | 0 | 4,534 |
| As of June 30, 2022 | 0 | 124,454 | 102,671 | 227,125 |
(1) other financial liabilities mainly includes locked-in employee profit-sharing funds. Employee profit-sharing corresponds to "other long-term benefits," and should be valued and discounted according to the principles of IAS 19 (revised). However, in view of the low historical differences between remuneration rate and discount rate, the Group considers that the valuation method by amortized cost constitutes a reasonable approximation of the profit-sharing liability.
| (in EUR thousands) | 12.31.2021 | Allocations | Reversals | Other | 06.30.2022 |
|---|---|---|---|---|---|
| Warranty (1) | 920,634 | 97,303 | -46,820 | 2,827 | 973,944 |
| Other risks related to contracts (1) | 618,095 | 51,287 | -43,618 | 5,803 | 631,567 |
| Retirement severance payments (2) | 229,122 | 18,371 | -16,153 | -164,170 | 67,170 |
| French companies | 149,560 | 16,912 | -15,901 | -117,191 | 33,380 |
| US companies | 79,562 | 1,459 | -252 | -46,979 | 33,790 |
| Other operational risks | 18,380 | 418 | -7,715 | 534 | 11,617 |
| Provisions for contingencies and charges |
1,786,231 | 167,379 | -114,306 | -155,006 | 1,684,298 |
(1) provisions are updated to reflect changes to the fleet in service, deliveries during the period and contractual obligations induced by the execution of contracts.
(2) the actuarial adjustments contributed to the decrease in provisions for retirement severance payments in the amount of EUR -168,713 thousand. The breakdown is as follows:
| French companies | -117,191 |
|---|---|
| US companies | -51,522 |
| Total actuarial adjustments | -168,713 |
The discount rate used to calculate the provision for retirement severance payments for French companies (determined by reference to the yield for high-quality corporate long-term bonds rated AA) was 3.20% as of June 30, 2022, compared with 1.00% as of December 31, 2021. The rate used to calculate the provision for retirement severance payments for U.S. companies was 4.45% on June 30, 2022, compared with 3.10% as of December 31, 2021.
A 0.50 point decrease in the discount rate would increase the total commitment by EUR 57,455 thousand, while a 0.50 point increase would reduce it by EUR 51,470 thousand.
| (in EUR thousands) | 06.30.2022 | 12.31.2021 |
|---|---|---|
| Unbilled receivables | 24,392 | 72,566 |
| Deferred income | 0 | -8,290 |
| Advances and progress payments received from customers | -12,113 | -57,787 |
| Contract assets | 12,279 | 6,489 |
| Unbilled receivables | 395,340 | 292,176 |
| Deferred income | -1,761,602 | -2,062,261 |
| Advances and progress payments received from customers | -8,351,023 | -5,519,248 |
| Contract liabilities | -9,717,285 | -7,289,333 |
For a given contract, a contract asset (liability) represents the unbilled receivables, less deferred income and advances and progress payments received from the customer.
The increase in contract liabilities is essentially due to the increase in advances and progress payments received from customers, including the first progress payment received from the United Arab Emirates under the contract for 80 Rafale and the dynamism of the Falcon commercial business.
As Dassault Aviation acts as "principal" on the Rafale Export contracts, the progress payments received include the cocontractors' share. The progress payments paid reflect the repayment of the co-contractors' share:
| (in EUR thousands) | 06.30.2022 | 12.31.2021 |
|---|---|---|
| Advances and progress payments received | -8,363,136 | -5,577,035 |
| Advances and progress payments paid | 2,473,514 | 1,390,293 |
| Advances and progress payments received net of advances and progress payments paid |
-5,889,622 | -4,186,742 |
Net sales by region breakdown are as follows:
| (in EUR thousands) | H1 2022 | H1 2021 | 2021 |
|---|---|---|---|
| France (1) | 699,038 | 391,498 | 794,465 |
| Export (2) | 2,407,801 | 2,714,708 | 6,451,732 |
| Net sales | 3,106,839 | 3,106,206 | 7,246,197 |
(1) mainly the French government, with whom the Group generated more than 10% of its net sales in H1 2022 and H1 2021.
(2) more than 10% of the Group's net sales were generated with Qatar and India in H1 2022, H1 2021 and 2021 overall. The net sales from the Rafale Export contracts are recorded on a gross basis (including the co-contractors' parts).
Net sales by activity are as follows:
| (in EUR thousands) | H1 2022 | H1 2021 | 2021 |
|---|---|---|---|
| Falcon | 969,995 | 701,135 | 1,965,248 |
| Defense | 2,136,844 | 2,405,071 | 5,280,949 |
| Defense France | 684,579 | 344,376 | 731,940 |
| Defense Export | 1,452,265 | 2,060,695 | 4,549,009 |
| Net sales | 3,106,839 | 3,106,206 | 7,246,197 |
Non-capitalized research and development costs are recognized as an expense for the period in which they are incurred and represent:
| (in EUR thousands) | H1 2022 | H1 2021 | 2021 |
|---|---|---|---|
| Research and development costs | -278,417 | -250,064 | -551,366 |
The Group's research and development strategy and initiatives are described in the directors' report.
| (in EUR thousands) | H1 2022 | H1 2021 | 2021 |
|---|---|---|---|
| Income from cash and cash equivalents | 2,003 | 2,072 | 3,134 |
| Change in fair value of other current and non-current financial assets |
-4,141 | -1,531 | -3,080 |
| Cost of gross financial debt | -2,198 | -1,473 | -3,943 |
| Cost of net financial debt | -4,336 | -932 | -3,889 |
| Dividends and other investment income | 0 | 0 | 0 |
| Interest income and gains/losses on disposal of other financial assets |
2,333 | 1,477 | 3,742 |
| Foreign exchange gain/loss (1) | -24,821 | -19,810 | -42,609 |
| Other (2) | -10,613 | -11,889 | -25,756 |
| Other financial income and expense | -33,101 | -30,222 | -64,623 |
| Net financial income/expense | -37,437 | -31,154 | -68,512 |
(1) the foreign exchange loss for the period includes the change in market value and the loss associated with the exercise of foreign exchange hedging instruments not eligible for hedge accounting as defined in IFRS 9 "Financial Instruments." The amounts are not representative of the actual gain/loss, which will be recognized when the hedges are exercised.
(2) the line item "Other" includes the financing component of long-term Defense contracts. The latter, classified as the cost of net financial debt in the financial statements to June 30, 2021, is now classified as other financial income and expenses.
| (in EUR thousands) | H1 2022 | H1 2021 | 2021 |
|---|---|---|---|
| Corporate tax | -68,772 | -22,031 | -191,846 |
| Deferred tax | 18,247 | -20,767 | 49,070 |
| Income tax | -50,525 | -42,798 | -142,776 |
| (in EUR thousands) | H1 2022 | H1 2021 | 2021 |
|---|---|---|---|
| Net income | 271,511 | 211,799 | 605,392 |
| Less income tax | 50,525 | 42,798 | 142,776 |
| Less share in net income of equity associates | -141,910 | -108,527 | -271,611 |
| Income before tax | 180,126 | 146,070 | 476,557 |
| Theoretical tax expenses calculated at the current rate (1) | -46,527 | -41,498 | -135,390 |
| Effect of tax credits (2) | 4,289 | 4,601 | 11,009 |
| Effect of differences in tax rates (3) | -1,785 | -2,295 | -18,937 |
| Other | -6,502 | -3,606 | 542 |
| Income tax recognized | -50,525 | -42,798 | -142,776 |
(1) a rate of 25.83% applies for H1 2022. The rate applied for H1 and FY 2021 was 28.41%.
(2) includes the impact of the Research Tax Credit, recorded as other revenue in the amount of EUR 15,449 thousand in H1 2022, compared with EUR 15,150 thousand in H1 2021 and EUR 33,651 thousand for 2021.
(3) in 2021, includes the impact of the decrease in the corporate tax rate in France.
| Consolidated balance sheet | |||
|---|---|---|---|
| (in EUR thousands) | 06.30.2022 | 12.31.2021 | |
| Provisions (profit-sharing, pensions, etc.) | 276,764 | 293,415 | |
| Other current and non-current financial assets and cash equivalents | -3,714 | -3,376 | |
| Derivative financial instruments | 47,483 | 19,988 | |
| Other temporary differences | 71,548 | 74,934 | |
| Net deferred taxes | 392,081 | 384,961 | |
| Deferred tax assets | 395,559 | 389,443 | |
| Deferred tax liabilities | -3,478 | -4,482 |
| Earnings per share | H1 2022 | H1 2021 | 2021 |
|---|---|---|---|
| Net income attributable to the owners of the parent company (in EUR thousands) (1) |
271,511 | 211,799 | 605,392 |
| Average number of shares outstanding (2) | 83,196,427 | 83,168,650 | 83,172,810 |
| Diluted average number of shares outstanding (2) | 83,213,677 | 83,182,150 | 83,186,310 |
| Earnings per share (in EUR) | 3.26 | 2.55 | 7.28 |
| Diluted earnings per share (in EUR) | 3.26 | 2.55 | 7.28 |
(1) net income is fully attributable to income from continuing operations (no discontinued operations).
(2) the par value of Dassault Aviation shares was divided by 10 on September 29, 2021. To ensure the comparability of the information, the number of shares outstanding was restated to reflect the new par value of the shares.
Earnings per share are calculated by dividing the net income attributable to the owners of the parent company by the weighted average number of common shares outstanding during the year, minus treasury shares.
Diluted earnings per share correspond to the net income attributable to the owners of the parent company divided by the diluted weighted average number of shares. This corresponds to the weighted average number of common shares outstanding, increased by performance shares granted.
The valuation method used in the balance sheet (cost or fair value) of financial instruments (assets or liabilities) is detailed in the tables below.
The Group used the following hierarchy for the fair value valuation of the financial assets and liabilities:
| Balance sheet value as of 06.30.2022 | ||||
|---|---|---|---|---|
| (in EUR thousands) | Cost or | Fair value | ||
| amortized cost (1) |
Impact on net income |
Impact on equity |
Total | |
| Non-current assets | ||||
| Other non-current financial assets | 40,865 | 18,102 | 139,818 | 198,785 |
| Current assets | ||||
| Trade and other receivables | 2,016,737 | 2,016,737 | ||
| Derivative financial instruments | 0 | 0 | 0 | |
| Other current financial assets | 1,012,595 | 1,012,595 | ||
| Cash equivalents (2) | 3,868,202 | 3,868,202 | ||
| Total financial instruments (assets) | 2,057,602 | 4,898,899 | 139,818 | 7,096,319 |
| Level 1 (2) | 4,898,899 | 14,075 | ||
| Level 2 | 0 | 0 | ||
| Level 3 | 0 | 125,743 |
(1) the carrying amount of the financial instruments (assets) recognized at cost or at amortized cost corresponds to a reasonable approximation of the fair value.
(2) including time deposits as of June 30, 2022: EUR 1,838,707 thousand.
As of December 31, 2021, the data were as follows:
| Balance sheet value as of 12.31.2021 | ||||
|---|---|---|---|---|
| Cost or | Fair value | |||
| (in EUR thousands) amortized cost (1) |
Impact on net income |
Impact on equity |
Total | |
| Non-current assets | ||||
| Other non-current financial assets | 39,674 | 985 | 150,422 | 191,081 |
| Current assets | ||||
| Trade and other receivables | 2,416,299 | 2,416,299 | ||
| Derivative financial instruments | 0 | 802 | 802 | |
| Other current financial assets | 955,281 | 955,281 | ||
| Cash equivalents (2) | 2,784,943 | 2,784,943 | ||
| Total financial instruments (assets) | 2,455,973 | 3,741,209 | 151,224 | 6,348,406 |
| Level 1 (2) | 3,741,209 | 26,242 | ||
| Level 2 | 0 | 802 | ||
| Level 3 | 0 | 124,180 |
(1) the carrying amount of the financial instruments (assets) recognized at cost or at amortized cost corresponds to a reasonable approximation of the fair value.
(2) including time deposits as of December 31, 2021: EUR 1,336,396 thousand.
| Balance sheet value as of 06.30.2022 | |||||
|---|---|---|---|---|---|
| Cost or | Fair value | ||||
| (in EUR thousands) amortized cost (1) |
Impact on net income |
Impact on equity |
Total | ||
| Non-current liabilities | |||||
| Bank borrowings | 0 | 0 | |||
| Lease liabilities | 101,009 | 101,009 | |||
| Other financial liabilities (2) | 87,803 | 87,803 | |||
| Current liabilities | |||||
| Bank borrowings | 0 | 0 | |||
| Lease liabilities | 23,445 | 23,445 | |||
| Other financial liabilities (2) | 14,868 | 14,868 | |||
| Trade and other payables | 1,130,247 | 1,130,247 | |||
| Derivative financial instruments | 25,168 | 163,420 | 188,588 | ||
| Total financial instruments (liabilities) | 1,357,372 | 25,168 | 163,420 | 1,545,960 | |
| Level 1 | 0 | 0 | |||
| Level 2 | 25,168 | 163,420 | |||
| Level 3 | 0 | 0 |
(1) the carrying amount of the financial instruments (liabilities) recognized at cost or at amortized cost corresponds to a reasonable approximation of the fair value.
(2) mainly locked-in employee profit-sharing funds.
As of December 31, 2021, the data were as follows:
| Balance sheet value as of 12.31.2021 | ||||
|---|---|---|---|---|
| Cost or | Fair value | |||
| (in EUR thousands) amortized cost (1) |
Impact on net income |
Impact on equity |
Total | |
| Non-current liabilities | ||||
| Bank borrowings | 0 | 0 | ||
| Lease liabilities | 99,546 | 99,546 | ||
| Other financial liabilities (2) | 85,956 | 85,956 | ||
| Current liabilities | ||||
| Bank borrowings | 0 | 0 | ||
| Lease liabilities | 28,434 | 28,434 | ||
| Other financial liabilities (2) | 12,418 | 12,418 | ||
| Trade and other payables | 1,201,204 | 1,201,204 | ||
| Derivative financial instruments | 7,277 | 74,172 | 81,449 | |
| Total financial instruments (liabilities) | 1,427,558 | 7,277 | 74,172 | 1,509,007 |
| Level 1 | 0 | 0 | ||
| Level 2 | 7,277 | 74,172 | ||
| Level 3 | 0 | 0 |
(1) the carrying amount of the financial instruments (liabilities) recognized at cost or at amortized cost corresponds to a reasonable approximation of the fair value.
(2) mainly locked-in employee profit-sharing funds.
The Group has no significant risk in relation to its financial debt. The features are described in Note 9.
The Group has a solid financial structure and works only with top-tier banks.
The Group investment portfolio is primarily composed of money market investments with no significant risk of impairment.
| (in EUR thousands) | Market value | As % |
|---|---|---|
| Cash at bank and in hand, money market investments and time deposits | 5,471,133 | 86% |
| Investments in bonds (1) | 170,860 | 3% |
| Unspecified investments (1) | 736,608 | 11% |
| Total | 6,378,601 | 100% |
(1) the bond investments subscribed by the Group are mainly investments with a short-term management horizon. Unspecified investments, as defined by the AMF classification, are mainly invested in short-term and money mutual funds.
A full analysis of the performance of listed marketable securities is conducted at each period end closing. The investment portfolio does not show, line-by-line, any objective indication of significant impairment as of June 30, 2022 (as was the case on December 31, 2021).
Cash resources and its portfolio of marketable securities allow the Group to meet its commitments without any liquidity risk. The Group is not faced with restrictions with regard to the availability of its cash and its portfolio of marketable securities.
Fair value classification:
| 06.30.2022 | ||||
|---|---|---|---|---|
| (in EUR thousands) | Impact on net income |
Impact on equity |
Total | |
| Cash at bank and in hand, money market investments and time deposits |
5,471,133 | 0 | 5,471,133 | |
| Investments in bonds | 170,860 | 0 | 170,860 | |
| Unspecified investments | 736,608 | 0 | 736,608 | |
| Total | 6,378,601 | 0 | 6,378,601 |
The Group allocates its plan assets and performs its cash and foreign exchange transactions with recognized financial institutions. The Group has no investments or accounts with financial institutions presenting a significant risk of default.
The Group limits counterparty risk by completing most of its sales in cash and ensuring that the loans are secured by export insurance guarantees (Bpifrance Assurance Export) or collateral. The share of receivables not covered by these procedures is subject to regular individual monitoring and, if necessary, a provision for impairment.
Given the arrangements in risk mitigation that are in place, and the provisions made in its accounts, the Group's residual exposure to the risk of default by a customer in a country subject to uncertainties is limited.
The Bpifrance Assurance Export guarantees and collateral obtained and not exercised as of the closing date are of the same nature as those as of December 31, 2021.
Manufacturing risk is also covered by Bpifrance Assurance Export for major military export contracts.
The Group hedges its foreign exchange risk and interest rate risk by means of derivative financial instruments, the carrying amount of which is presented below:
| 06.30.2022 | 12.31.2021 | ||||
|---|---|---|---|---|---|
| (in EUR thousands) | Assets | Liabilities | Assets | Liabilities | |
| Foreign exchange derivatives | 0 | 188,588 | 802 | 81,449 | |
| Net derivative financial instruments | 188,588 | 80,647 |
The Group is exposed to a foreign exchange risk through the parent company in relation to its Falcon sales, which are mainly denominated in US dollars. This risk is partially hedged by using forward currency contracts and foreign exchange options.
The Group partially hedges its cash flows that are considered highly probable. It ensures that the initial future cash flows will be sufficient to use the foreign exchange hedges in place. The hedged amount may be adjusted in accordance with changes over time in expected net cash flows.
This risk is permanent, taking into account exchange rate fluctuations and volatility. This is a significant risk for the Group, since the measures put in place to limit this risk are not sufficient to make the net risk zero (periods not covered by hedges, possible financial impact of hedges already taken out the event of reversal of market assumptions).
The foreign exchange derivatives subscribed by the Group are not all eligible for hedge accounting under IFRS 9 "Financial instruments." The breakdown is presented in the table below:
| (in EUR thousands) | Market value as of 06.30.2022 |
Market value as of 12.31.2021 |
|---|---|---|
| Instruments which qualify for hedge accounting | -163,420 | -73,370 |
| Instruments which do not qualify for hedge accounting | -25,168 | -7,277 |
| Exchange rate derivatives | -188,588 | -80,647 |
The counterparty risk on foreign exchange derivatives (CVA/DVA) is based on the current exposure method and on the historical default probabilities per rating class communicated by the rating agencies. As of June 30, 2022, this counterparty risk is insignificant.
The breakdown of the fair value of the derivative financial instruments by maturity rate is as follows:
| (in EUR thousands) | Within one year |
In more than one year |
Total |
|---|---|---|---|
| Exchange rate derivatives | -69,412 | -119,176 | -188,588 |
The impact on net income and equity of the changes in fair value of hedging instruments for the period is as follows:
| (in EUR thousands) | 12.31.2021 | Impact on equity (1) |
Impact on net financial income (2) |
06.30.2022 |
|---|---|---|---|---|
| Exchange rate derivatives | -80,647 | -90,050 | -17,891 | -188,588 |
(1) recognized directly through equity, share of fully consolidated companies.
(2) change in fair value of foreign exchange hedging instruments that do not qualify for hedge accounting under IFRS 9 "Financial Instruments."
The change in fair value of foreign exchange derivatives is mainly due to the change in the closing rate between December 31, 2021 (USD/EUR 1.1326) and June 30, 2022 (USD/EUR 1.0387).
A sensitivity analysis was performed to determine the impact of a 10 cent increase or decrease in the US dollar/euro exchange rate.
| Market value of the portfolio | ||
|---|---|---|
| (in EUR thousands) | 06.30.2022 | |
| Net balance sheet position | -188,588 | |
| Closing US dollar/euro exchange rate | \$ 1.0387/€ | |
| Closing US dollar/euro exchange rate +/- 10 cents | \$ 0.9387/€ | \$ 1.1387/€ |
| Change in net balance sheet position (1) | -221,532 | 177,651 |
| Impact on net income | -33,040 | +22,266 |
| Impact on equity | -188,492 | +155,385 |
(1) data calculated based on existing market conditions on the period end. They are not representative of the actual gain/loss to be recognized when hedging is carried out.
On June 30, 2022, Embraer shares were valued at EUR 14,075 thousand (see Note 5). The Group is exposed to a currency risk on its stake in Embraer, which is listed in reals on the Brazilian market, and a price risk related to the fluctuation in the stock market price. A 10% upward or downward variation in the exchange rate and/or share price would not have a significant impact on the Group financial statements.
There are no contingent assets or liabilities as of June 30, 2022.
The related parties as of June 30, 2022 are identical to those identified as of December 31, 2021 and the transactions during the period are of the same type.
No other events likely to have a material impact on the financial statements occurred between June 30, 2022 and the date the financial statements were approved by the Board of Directors.
For the period from January 1, 2022 to June 30, 2022
________
To the Shareholders
In compliance with the assignment entrusted to us by your Shareholders' Meeting and in accordance with the requirements of article L. 451-1-2 III of the French Monetary and Financial Code ("Code monétaire et financier"), we hereby report to you on:
These condensed half-yearly consolidated financial statements are the responsibility of the Board of Directors. Our role is to express a conclusion on these financial statements based on our review.
We conducted our review in accordance with professional standards applicable in France.
A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with professional standards applicable in France and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-yearly consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34- standard of the IFRSs as adopted by the European Union applicable to interim financial information.
We have also verified the information presented in the half-yearly management report on the condensed half-yearly consolidated financial statements subject to our review.
We have no matters to report as to its fair presentation and consistency with the condensed half-yearly consolidated financial statements.
Neuilly-sur-Seine and Paris-La Défense, July 20, 2022
The Statutory Auditors
PricewaterhouseCoopers Audit Mazars
Edouard Demarcq Mathieu Mougard
This is a free translation into English of the statutory auditors' review report half-yearly financial information issued in French and is provided solely for the convenience of English-speaking users. This report includes information relating to the specific verification of information given in the Group's half-yearly management report. This report should be read in conjunction with, and construed in accordance with, French law and professional standards applicable in France.
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