Dassault Aviation : Transcript EN "2023 annual results"

Dassault

Résultats annuels

2023 & 2023 Annual

results

6 March 2024

Dassault: Résultats annuels 2023 & 2023 Annual	6 March 2024
List of MAIN speakers	Company	Job title
Éric Trappier	Dassault	CEO

PRESS CONFERENCE, MARCH 6, 2024

Éric Trappier

CEO

Welcome to this press conference for 2023. As usual we're going to begin with a film summarizing the major highlights for 2023 for Dassault.

[FILM]

Dassault presented both its military and civil [inaudible 00:00:26] at the 2023 Aero India show in Bangalore from February 13th to 17th. On display at its booth were air and navy versions of the Rafale Falcon 8X and a front section of the Falcon 2000 produced at the Franco-Indian Nagpur plant. The Indian Air Force showcased the Rafale in flight. Our company took part in the IDEX show from February 20th to 24th in Abu Dhabi. The United Arab Emirates have ordered 80 Rafale fighter jets. Our combat aircraft demonstrated its efficiency, versatility, and reliability every day in many theaters of operation. It continuously integrates feedback from the armed forces and the latest innovations to stay at the cutting edge of technology. The 2023 [inaudible 00:01:18] marked another success for the Dassault group's team, which topped the leaderboard for the third year running. The 16 runners demonstrated great team spirit over the 750 kilometers covered between Paris and Les Arcs over 4 days and four nights. This sporting event is aimed at promoting organ donations.

For the third year running, Dassault has been named in the Financial Times climate leaders ranking, which rewards European companies with the best results in terms of environmental trajectories. The PAF 70th anniversary was celebrated on May 20th and 21st in Salon de Provence with our CEO. Their famous Alpha Jet aircraft is celebrating its 50 years of loyal service. Its maiden flight was on October 26th, 1973 in Istres, piloted by Jean-Marie Saget. The Falcons program celebrated its 60th anniversary in 2023. The Falcons maiden flight, then called Mystère 20, was in May 1963 in Mérignac. It marked the first of a long line of business jets, which continues with the entry into force with the Falcon 6X and the development of the 10X. Since 1963, the company has delivered more than 2700 business jets, that's more than 20 million flight hours.

The EBACE convention was held in Geneva from May 23rd to May 25th. A full-size 10X Falcon cabin was on display at our booth and attracted a number of high number of visitors impressed by the new aircraft interior and high-quality features. It was the opportunity to present the Falcon 6X to our customers and the press. The aircraft is exhibited alongside the Falcon 8X and the 2000 LX6. Dassault Aviation has supported the [inaudible 00:03:23] tours for over 20 years. The 2023 event featured 10 stages from May 19th to May 20th organized by the [inaudible 00:03:33]. It aims to give extraordinary children who are experiencing major health difficulties an opportunity to fly alongside ordinary children. The Paris Air Show, 54th edition, was a huge success, demonstrating the appeal and vitality of our sector.

On day one, French President Emmanuel Macron took in extensive presentations of Dassault Aviation's military innovations. He also visited the Falcon 6 and 10X. Prime Minister Élisabeth Borne met with the employees who were present at the careers plane area. Members of the French government were also shown the full scope of Dassault Aviation's expertise and know-how in many

2

Dassault: Résultats annuels 2023 & 2023 Annual	6 March 2024

areas. Our CEO also presented our innovations and solutions for the armed forces to our Minister of Defense and Armed Forces, Sébastien Lecornu. Many military delegations and civilian customers visited our static display and innovative exhibition booth, which was particularly popular. During the show, Bernard Charlès, the CEO of Dassault Systèmes, and Éric Trappier announced the launch of a sovereign cloud based on the 3D experience platform. The cloud is designed to ensure the highest level of security and sovereignty for major defense programs. To secure our future we need to master these data. This involves identifying and knowing what we want to do with it. We need to structure and store the data in order to use it, hence the cloud. It is a physical cloud for the storage of data internally at Dassault Aviation, but that's also how we can use the cloud and share it with other operators. That's the whole point of this program, to know we can rely on these tools that are specific to the group, made in France and therefore in Europe.

During this 54th edition, the Rafale showcased its handling qualities daily in the hands of Air France captain Bertrand Butter, also called Bubu. The Rafale continues its transformation. It is adapted to operational needs based on operating feedback, which is also taken on board by our companies to develop standards that are [inaudible 00:06:26] and successive. We are currently working on the F4 standard. The aircraft uses the F3 standards, but we are already preparing the F5 for the 2030-2040 period, so the Rafale F5 will most certainly see the development of a UCAV to reinforce the capacities of aerial welfare. The Rafale was also presented to various foreign delegations throughout the week. They had the opportunity to discover the numerous innovations in the military support customer service space. A brand new combat simulator also demonstrated Dassault Aviation's expertise in the field. The visit of the Minister of the Armed Forces saw the official announcement of the foundation of a teaching and research chair with the Institut Polytechnique de Paris1, the Architecture of Complex Systems. It involves Dassault Aviation, Dassault Systèmes' naval group and [inaudible 00:07:31] as well as France's Defense Innovation Agency, AID.

Like the Rafale, the Falcon 6X has demonstrated its handling qualities. One of our new aircraft was also presented at our static display alongside the Falcon 2000, the Falcon 8X and full-scale mockup of the Falcon 10X cabin. As part of the recruitment plan, Dassault Aviation actively participated in the careers plane area, welcoming many young visitors. The company was also present at the Paris Air Lab organized to discover the techniques for decarbonizing the industry. Our specialists explained how to optimize flight paths with FalconWays and how we can use augmented reality in production chains. The show was also an opportunity to promote the use of sustainable alternative fuels, SAFs, one of the solutions adopted by Dassault Aviation to reduce the carbon footprint of our aircrafts. We're also showcasing that these planes are already flying with alternative fuels, that's 30%, that's what is available on the market. They can then develop up to 50%, and we're working with the arrival of the techniques to reach 100% of alternative fuels. We're fully committed to decarbonization and to achieving our zero net carbon objective by 2050.

In early July, India officially selected the Rafale Marine to equip the Indian Navy. That is a decision which coincided with a conclusive test campaign as part of an international tender launched by the Indian authorities. The Rafale Marine meets the operational needs of the Indian Navy and is compatible with its aircraft carriers. Ultimately, 26 Rafale Marines aircraft will join the 36 Rafale fighter jets already used by the Indian Air Force. Dassault Aviation was the major sponsor of the ceremony celebrating the 100 years of rekindling the flame under the Arc de Triomphe on November 11th. The ceremony was marked by a monumental sound and light show and a parade of flagbearers

1 Polytechnic Institute of Paris

3

Dassault: Résultats annuels 2023 & 2023 Annual	6 March 2024

accompanied by young people. It reiterated the company's commitment to the duty of remembrance and the bond between the armed forces and the nation.

The full-scale mockup of the Falcon 10X cabin was exhibited in the Dubai Air Show in November. During this air show, the French Air and Space Force demonstrated the Rafale in flight. ADP Group and Dassault Aviation signed a memorandum of understanding to make Paris-Le Bourget a pioneering airport in sustainable aviation from promoting the use of alternative fuels to deploying decarbonized ground resources. This five-year MOU aims at reducing the platform's environmental footprint. Our company has also decided to become the main sponsor of the Mauboussin forest. The new planting campaign was launched in November 2022 and 2023 through with Valérie Pécresse, President of the Île-de-France region. One million trees of 30 different species will now grow on what used to be brownfields in [inaudible 00:10:56], very close to our new [inaudible 00:10:58] plant.

On behalf of Dassault Aviation, Éric Trappier was awarded the 2023 strategic company award as part of the [inaudible] 00:11:13] sovereignty initiatives. The institute recognizes how our group stands out for its ability to effectively mobilize resources and know-how in order to provide solutions that address national priorities. I would like to express my deepest gratitude, the gratitude of my group, the Dassault family and Dassault Aviation employees, our shareholders, leaders, engineers, technicians, and skilled operators are committed to the company's strategic role in order to ensure the superiority of French combat aircraft and the sustainability of the industry's ecosystem and we're taking incredible pride in this award. The Falcon 6X started its services since the certification granted on August the 22nd. We have made the preliminary requirement, which was approved by [inaudible 00:12:00] at the end of November. We can now deliver this magnificent aircraft to our customers. On December 15th, members of the Dassault family and GIMD visited our [illegible 00:12:12] site. Éric Trappier and [illegible 00:12:13] presented the Rafale and Falcon production lines to majority shareholders, along with a tour of the new training center, the system tense benches, and the innovation lab.

Dassault Aviation has been a strong employes brand for the past decade. We've been ranked as one of the top favorite companies for engineering school students, and in 2023 once again we were in the top five universities in France, ranking among the 130 most attractive employers for engineering students. We are also one of the top three industrial companies preferred by students and young engineering graduates according to [inaudible 00:12:52] interactive. In the list of the 500 best employers in France by Statista, Dassault Aviation is in 6th place, all sectors together, and first in the [inaudible 00:13:03] in the naval category. This ranking, published by the magazine Capital, involves a panel of 20,000 employees from companies with a headcount of over 500. We are also considered as one of the 100 French companies considered to be most responsible according to the Statista CSR ranking published in Le Point magazine.

We received the order for 42 Rafale aircraft knowns as Tranche 5 to equip the French airspace force. The French Defense Procurement Agency awarded us this contract at the end of December 2023 and these aircraft will be delivered between 2027 and 2032.The Rafale has been designed to evolve by successive standards in order to adapt to the latest technologies of users needs. Standard 4 particularly focuses on connectivity and is currently under development. Standard 5, which is also being prepared will bring new capabilities in terms of sensors, collaborative combat, and weapons for nuclear missions. The export order book plus the new Tranche 5 contract secures the long-term continuity of the Rafale production activity for the next 10 years. The third and final tranche of the 18 Rafale aircraft for Indonesia came into force on January 8th. That's 42 craft ordered by the Indonesian Air Force as per the contract signed in February 2022 in Jakarta. The technical operational and

4

Dassault: Résultats annuels 2023 & 2023 Annual	6 March 2024

commercial success of Rafale, with seven international customers today, allows France to maintain its sovereignty in combat aviation for decades to come.

CONTEXT

Éric Trappier

CEO

Now we're going to go on to the results. Just to tell you about the context, the context is very complicated with war at the doors of Europe, the war in Ukraine, the conflict in the Middle East since last October, disruptions in supply chains and global trade, all the environmental challenges that are very important to prepare for the future, and this year's elections in the United States, Europe, India, Indonesia, it's done and this could have an influence on our markets.

POST YEAR END

Éric Trappier

CEO

Now just to recall, as said in the film, 18 Rafales for Indonesia, this allowed us to have the 42 Rafale contract signed a few years ago, 18 Rafales which are not in the official figures for 2023 because they were signed after the 31st of December.

HIGHLIGHTS Éric Trappier

CEO

The highlights for this year: I think the film summarized it - the commercial success of the Rafale is being pursued. The entry into service of the Falcon 6X, which is very important for us, difficulties in our deliveries, whether for the Falcon or Rafale, mainly Falcon but Rafale too, there is a historic backlog of 38.5 billion euros and net income which is a record income 886,000,000 euros.

ACTIVITIES AND PROGRAMS

Éric Trappier

CEO

This is one of our best results in our company activities and programs.

RAFALE MOMENTUM

Éric Trappier

CEO

As we were saying, this is the Rafale moment. This is the beginning of the program - 495 aircraft have been ordered, including the eighteen from Indonesia in January. That is 234 for France, 261 for exports. We are close to the 500, we are close to what we had managed to do for the Mirage 2000, and we have many years ahead of us to pursue the success of the Rafale in exports. The decision by India to purchase 26 marine Rafale is still upcoming and we're going to keep from taking orders and we are still prospecting, so this gives us the hope to increase the number of orders. As said in the film this will allow us to have production of Rafale up to a minimum of 23 next year.

5

Dassault: Résultats annuels 2023 & 2023 Annual	6 March 2024

MILITARY PROCUREMENT LAW

Éric Trappier

CEO

The military procurement law: Dassault Aviation is part of this programming, with the production of Rafale, the delivery of Rafale to the French forces, especially the Air Force because the Navy has already been served. We have started the delivery of the 42. The 40 tranche, or batch, had been stopped for budgetary reasons, exports had taken over and now we are beginning to deliver these 42 aircraft. It began last year and will be pursued this year.

There are the 12 aircraft that were ordered and budgeted in our military programming law that have replaced the Greek aircraft. We have the 42 + 12 aircraft to replace these aircraft that will be delivered to Croatia. We are also developing, because here again we've delivered the F4 standard, so for those who know there is F4-2 and F4-3. There are three sections: the first part has been delivered, the other two still remain to be delivered. We're going to obtain study contracts, design contracts, to prepare the F5 standard that will be ordered later on, but it's part of the military programming law. We are developing definition designs for the FCAS and NGF, and in the military programming law there's going to be a second phase, first for the demonstrator flight of the NGF in 2029. There's the maritime patrol, we're going to ramp up the ATL2, and we're preparing the successor of the ATL2, we're proposing the Falcon 10X, which is in competition. These are studies and we will deliver, during this military programming law, maritime surveillance Falcons: the Falcon 2004 and the Archange electronic war Falcons. We're really part of this military programming law.

RAFALE FRANCE

Éric Trappier

CEO

As for France, in 2023 we ordered the 42 aircraft at the end of 2023, with deliveries plan between 2027 and 2032. Between now and 2027 there will be deliveries of the 42 and the 40 plus, that's the 12 to replace the ones for Greece. The deliveries for 2023: 11 Rafales were delivered for France, and as for the development of the F4 standard, this was also carried out in 2023 and we have begun the preparation of the F5 standard. We should receive a sturdy order in 2024.

RAFALE EXPORT

Éric Trappier

CEO

The commercial success in Indonesia: 18 aircraft entered into service last summer. This is not the same as the 18 that were commissioned in January. The orders for Indonesia equal 36 in 2023. India, I've already talked about this, in addition to these contracts for new aircraft, we've delivered to Greece 6 pre-owned Rafale coming from the French Air Force, and France delivered 4 Rafale aircraft to Croatia. These are Rafale aircraft that we are going to support when they are sent to Croatia from April onwards.

SUPPORT OF MILITARY FLEETS IN SERVICE

Éric Trappier

CEO

6

Dassault: Résultats annuels 2023 & 2023 Annual	6 March 2024

The support of the military fleets is keeping us busy, especially in France, considering the crisis and the war in Ukraine. There are requests to support this war economy, so therefore there are assumptions and scenarios on which we've worked with the French military to strengthen our support in this war economy. We've also enlarged, we have vertical contracts for Rafale Mirage 2000 and Atlantic 2, we've just signed one for the Alpha Jet. As for exports, we are supporting the fleets that have been delivered to Egypt, Qatar, India, and Greece.

FUTURE COMBAT AIR SYSTEM (FCAS)

Éric Trappier

CEO

As for the FCAS, we are pursuing the phase 1B studies, that is the development of a demonstrator that is supposed to fly by 2029. We are in phase 1B, that goes up to 2025, and we will need a phase two contract to realize this demonstrator in 2026. The teams are mainly working here in Saint-Cloud in a plateau, in a design office with the people from Airbus, mainly from Germany and Spain, and of course these include Dassault teams.

EURODRONE Éric Trappier

CEO

As for the Eurodrone, Airbus is the prime contractor. We are providing the air flight controls and the mission communication systems.

MISSION AIRCRAFT

Éric Trappier

CEO

As for the mission aircraft, we are pursuing our work on maritime surveillance with our friends from Thales, whether it's for the maritime surveillance or the strategic intelligence. This is all the electronic equipment for maritime surveillance. We have delivered the 7th and last modified aircraft for the new ATL 2 standard, and we've begun studies. We are in competition with Airbus, which is supposed to propose its A320 with our Falcon 10X. As for exports, we've delivered two of the four Falcons ordered in 2022 to South Korea. We will deliver them green, that is empty, and Korea will equip these aircraft with their equipment.

BACKGROUND FOR THE FALCON RANGE

Éric Trappier

CEO

The Falcon range: we have received 23 Falcon orders in 2023 and delivered 26 aircraft. This shows a slowdown in sales, especially in Europe. The United States have done well in 2023, I would like to remind you that in 2023 we had higher order intakes, 64, so there are some years that are positive and some that are not so positive. We can explain this drop because the 6X, and I'll talk about this later on, this was delayed because of the certification and because of the supply chain issues. I'll tell you more on this later on. As for deliveries, we were hit by what we call supply chain issues, especially for the aerostructure, and here again I will tell you more about this later on. We are under our

7

Dassault: Résultats annuels 2023 & 2023 Annual	6 March 2024

guidance for the delivery of Falcons, 26 instead of the 36 we had announced, the 32 we had delivered last year. In 2023 we should have delivered 6X, we delivered the first 6X last month.

Certification of the Falcon 6X: we've reached an important step. The 6X was developed after the 5X was stopped, after the Boeing accidents the certification agencies are more meticulous, and quite rightly, to make sure that passengers will be safe. Therefore things are a bit more difficult, but this is very good news that 6X is a certified. It's a full aircraft that has been certified after the problems with Boeing. Ongoing development of the Falcon 10X, I'll tell you more about this later on. This has been delayed because the delays in the 6X have had an influence on the 10X.

BUSINESS AVIATION AND TAXONOMY

Éric Trappier

CEO

As for the taxonomy, you know that we are engaged as I said in the film to reach carbon neutrality by 2050. Aviation altogether that's 2% of the CO2 emissions. Business aviation is 2% of these 2% so 0.04% of the global CO2 emissions, so we have to work on this, but everything is quite relative in life. As a comparison, a year of use of our 2000 and a few Falcons in service today, this is the equivalent of 24 hours of global video streaming, five hours of worldwide truck traffic, and it's equivalent to 2.5 days of the German thermal power plants, so here again it's all quite relative.

People are interested in aviation, especially business aviation, rather than other domains that produce a lot more carbon, but we're working on this, and before telling you more about this I just wanted to mention that the taxonomy, that's the simplification, we are having standards, standards, and standards so we are in business aviation and we are legally attacking the European Commission, I'd like to mention that, because we believe that in the wording of this taxonomy that says that those who are working on decarbonization should be included in the taxonomy. We are going faster than our friends from commercial aviation because we are using the SAFs unlike commercial aviation, and the ambitions of Europe on the use of SAF are much lower than what we are imposing on ourselves for our business aviation, so therefore we believe that the taxonomy is to encourage people to decarbonize and not punish those who use business aircraft, business jets. For us, business jets, and this is also true for general aviation, we will see the results. I'd like to recall that in the US we don't have all these problems, in the US they're trying to encourage, they're really advancing and progressing in the decarbonization of their aviation but they're doing it by inviting them to do something. We will see what will happen in our fight with the EU.

FALCON: 4 PILLARS TOWARD BUSINESS AVIATION DECARBONIZATION

Éric Trappier

CEO

More positively we are working on the SAFs, so we are working with 100% of staff in our future aircraft, whether it's with the 10X, because that's being developed so it's easier to plan for that, with our people designing the engines, but also with the other aircraft we'll be able to fly with 100% SAF in the future. We're already flying with civil aviation fuel in-house. In 2023 there were 413 flights for Dassault Aviation, and we did with 30% SAF, so therefore a great saving of CO2. It costs more of course, but we've decided to go in this direction to give an example to those who use business jets. In technology, we're working on this integration at 100% in the future. We are participating in scientific programs to see what can be done in terms of decarbonization, what can be done technologically with other things other than SAD, and the choice of clients to fly by saving fuel, this will be doable. It is programmed in

8

Dassault: Résultats annuels 2023 & 2023 Annual	6 March 2024

the aircraft, and it will be according to the choice of the client and the pilot. This is operational, it is called FalconWays, and we will optimize the CO2 emissions. We're working not to have full decarbonization. We will have to buy CO2 emissions and the storage of CO2 emissions. This is why we've begun with the philanthropic support in [inaudible 00:29:53], which is closer than the plant we're going to open soon, and will pursue this type of operation in the future.

FALCON 6X (1/2)

Éric Trappier

CEO

As for the 6X, as I said we have obtained the certification through the EASA and the FAA. The EASA is in charge. This was done on October 22nd, 2023, however, we had to modify things, and these modifications were made to enter it into service. These 6X were entered into service on November 30th, 2023, and the industrial ramp-up is being done.

FALCON 6X (2/2)

Éric Trappier

CEO

We've delivered the first aircraft to ourselves, this is our demonstration aircraft, and here on this map you can see the flights of the Falcon 6X since early December. It flew a lot, countless numbers of hours, more than 200 as Carlos said, 250 flights, demonstration flights, so we have greater experience feedback and clients have flown around the world. You can see in the United States and Europe which are the two major business markets, but also the Middle East and right up to Australia they use our aircraft and next month we've planned for a campaign for India.

FALCON 10X Éric Trappier

CEO

The first 6X was delivered last month. For the Falcon 10X we also have to postpone our program. We've also had to adjust with our suppliers because some of them also had some difficulties. Let me remind you that there is a huge research and development: development of all the parts of the aircraft, we are working on this with all our suppliers, all these definitions were made during the pandemic in 2020. Usually we work in the same office, so we had to work online with conference calls, so it was not ideal. The postponing of the 6X has obliged Falcon and Dassault and its partners to postpone our 10X, so we've worked with our suppliers and the first deliveries will be in 2027. That means manufacturing the aircraft, the first test and the certification by the authorities.

FALCON SUPPORT

Éric Trappier

CEO

Falcon support, we are striving to have a higher standard. We've improved our global software, we have merged together some tools, we had some difficulties, but now it is fully operational and we're paying great attention to this capacity to use our aircraft worldwide. We've also opened new service stations, we have update graded our center in Dubai, we've done that in Malaysia, and in Florida in for the American market. Support for a government Falcon: we now have the contracts which were

9

Dassault: Résultats annuels 2023 & 2023 Annual	6 March 2024

initially held by our competitors in Switzerland. Now we are providing maintenance to the French government fleet.

CSR: TANGIBLE RESULTS AND AMBITIONS

Éric Trappier

CEO

In terms of CSR, we have drawn up a plan and we have saved…you'll have all the details with figures in terms of energy consumption, water consumption, CO2 emissions have also been reduced, so we are saving on water and energy. Next year we are going to change the rules, we are moving on to CSRD, the European directive, which means that we will have to produce a far more comprehensive and committing report. We are all prepared for that, and as you will see in our management report we already have some results and some out outlooks for 2024.

CSR: HUMAN RESOURCES

Éric Trappier

CEO

Human resources is a big challenge for us, because the workload is greater. In 2023 we have hired 1732 people, 215 apprentices so that is almost 2000 people, so we have had to make ourselves more attractive. We're still in the top five of all the companies young people want to work for, so we've massively recruited, which means that we have to go through a strong induction program so that people feel comfortable in our development teams, but we also have to have them part of the Dassault DNA, which is part of our identity.

We are still implementing a recruitment plan, because in 2024 we also have plans to recruit another 2000 people, and we also have many people retiring, so that's one of the big challenges of our company, to recruit people, make sure that those people are well supported when induction takes place, and prepare for those who are retiring. For two reasons I'm well aware of, we need to consider the bargaining agreement for the metallurgy industry, which is imposing more guidelines for careers and jobs across entities, and we are outperforming these guidelines in some areas like health prevention programs and some support funds in case of sick people. It's difficult to change the bargaining agreement, so you have to go through a complicated changing period, but now this is up and running because it has become mandatory since January of this year.

MODERNIZING OUR INDUSTRIAL SYSTEMS

Éric Trappier

CEO

We're still upgrading our industrial sites for those of you who've had the opportunity to visit these sites you will have seen that there are new buildings replacing the older ones or coming in addition to existing ones because of the increase in our production capacity. Mérignac has changed greatly. For those of you who have visited Mérignac, you know that the tertiary teams are up there, but also in the forthcoming years for the Falcon 10X, it's a bigger plane so once you've put the wings on, it's a bigger plane, it's a bigger aircraft in terms of volumes, so the 10X is like an A320, so it's not a small aircraft once it is fully fitted so you need to have bigger buildings on top of the additional stuff. [inaudible 00:37:37] was postponed, it should have been delivered earlier this year, but we've had some construction issues. We had a shortage of material and then human resources, and then some of them went bankrupt, it's just like when you have a new house built, you have to find new providers.

10