A message from Hervé Guillou, Chairman and CEO of the Group
A closely-knit partnership built on confidence with the DGA and French Navy
DCNS and its staff of 13,000 have just experienced a highly eventful year, distinguished by commercial successes, both in France and abroad. In particular, we finalised the sale of a FREMM frigate and two projection and command vessels to Egypt. In partnership with Piriou, we were awarded a contract for the delivery of four Offshore Support and Assistance Vessels for the French Navy. We also consolidated our position in the services sector during 2015 by winning a contract for the Malaysian Navy’s Scorpène® submarines, renewing the support contract for the nuclear attack submarines and front-line frigates. Altogether, DCNS now has an order book worth €12.3 billion. The year was also highly eventful from an industrial viewpoint. Particularly with the construction of the first of four Gowind® corvettes acquired by the Egyptian Navy at Lorient, the ongoing Barracuda programme to build six nuclear attack submarines for the French Navy as well as the launch of the experimental Marine turbine farm at Paimpol-Bréhat. For DCNS, 2015 was a year involving a great deal of enterprise, innovation and investment.
« For DCNS, 2015 was a year involving a great deal of enterprise, innovation and investment. »
The Progress Plan is bearing its first fruit
After the loss-making year of 2014, it was essential for the Group to become profitable again. The Progress Plan, which resulted from a broad in-house consultation, is now beginning to show results. In 2015, figures returned to positive territory with net profits of €58.4 million and a stable income of €3.04 billion. Finally, in 2015, DCNS successfully implemented an initial savings plan of €100million and launched its three-year Progress Plan for 2016-2018. The teams can now be proud of what they have achieved. This recovery has resulted from the commitment and involvement of all staff members, focused on six transformational approaches.
« There is still much to be done to make the most of the Group’s outstanding technologies and expertise. »
International markets provide powerful leverage for growth
We have also made changes in our organization with the aim of reducing manufacturing costs and lead times. However, there is still much to be done to make the most of the Group’s outstanding technologies and expertise. In 2015, DCNS devoted almost 10% of its income to R&D, which is above average for actors in the European naval defence construction sector. In order to optimise our development and production costs, while maintaining the high quality and performance on which our reputation is founded, we build modularity and adaptability into all our products’ designs, so that they can be customised to meet the specific needs of any navy. We also invest in extending our range of services (through-life support, training, technical assistance, etc.), an approach which gives us a genuine competitive edge. Finally, DCNS is continuing to extend its industrial presence abroad. The Group is now established in some 15 countries, enabling it to provide support and construct infrastructures, as well as the local services required throughout the life and implementation of these programmes.
In France, our partnership with the Defence Procurement Agency (DGA) is constantly being strengthened, particularly with the acceleration of the intermediary sized frigates programme, which should be easy to adapt to the needs of our international clients. Finally, in the field of marine renewable energies, we are working on three technologies: tidal turbines, floating wind turbines and thermal ocean energy. Markets of the future where our expertise will find new fields of application.
« We are all focused on sustainably achieving profitable growth. »
Income of 5 billion euros in 2025
This demonstrates how the Group is engaged in value generating projects. In the short-term, we are all focused on sustainably achieving profitable growth by perfectly completing the major construction programmes currently Under way, improving our competitivity and moving into new markets. In the longer term, looking towards 2025, we are aiming for an income of €5 billion, half of which will be generated by international markets and a further significant proportion by marine renewable energies. This is an ambitious target, in line with the Group’s level of expertise. European leader in naval defence, DCNS is one of the world’s very few shipbuilders to design, construct and maintain high technology naval systems, covering all aspects of the fleet, from corvettes right through to aircraft carriers and nuclear or conventional submarines. This comprehensive expertise places us in a unique position. One which makes me highly confident in our ability to successfully take up the major challenges it involves.