Message by Hervé Guillou, Chairman and Chief Executive Officer of Naval Group

Hervé Guillou - Naval Group

“2016 stood out for two symbolically significant events for the group and its 13,000 staff members, which illustrate two of our strategic priorities.

The first was being selected by the Australian government in April to renew its submarine fleet. This major success powerfully acknowledges our staff members’ talent and France’s ability to bring together a team with both outstanding industrial and political credentials focused on a single objective. The inter-State agreement signed at the end of December in Australia seals the partnership between our two countries for several decades. Our planned long-term presence in Australia further demonstrates our commitment to grow our industrial activity on the international stage.

“This major success powerfully acknowledges our staff members’ talent.”

The second major event in 2016 took place on 16 December and concerned the setting up of our Naval Energies subsidiary, in partnership with Bpifrance, Technip and BNP Paribas Développement. This new industrial player with global ambitions will be focusing on the industrial and commercial development of three MREs (marine renewable energies) for generating electricity. These are: wind turbine energy, thermal ocean energy and floating wind turbine energy. The new company has set itself the goal of making these three energies industrially viable.

Apart from these two outstanding milestones, 2016 also saw the first concrete results of our Progress Plan. We delivered a multimission FREMM frigate to the French Navy and two LHD (Landing Helicopter Dock) ships to Egypt on time and on budget. We also floated out another FREMM and Gowind® corvette which, for the first time, featured the single PSIM (Panoramic Sensors mast and Intelligence Module). In addition, preparations were made for the midlife overhaul of the Charles de Gaulle aircraft carrier programmed for 2017, assisted our Indian client with taking the first Scorpène® submarine produced entirely by technology transfer to its maximum operational diving depth, connected the most powerful tidal turbine in North America to the Canadian electricity grid, completed equipping the Le Triomphant ballistic missile submarine for the M51, successfully test fired the new F21 heavy torpedo and beat all nuclear attack submarine fleet availability records with over 1,000 days at sea!

Our teams are justifiably proud of their success and commitment to our clients. As demonstrated by the economic and financial results, we have reached our current operational targets thanks to the smooth running of our key programmes, particularly with regard to FREMM and Gowind® fleet maintenance, as well as the infrastructure and civil nuclear programmes.

“Our teams are justifiably proud of their success and commitment to our clients.”

Our twin missions both have a strategic character – completely and entirely satisfying our clients by providing them with the naval systems needed to preserve their vital interests, while also making the expertise and technologies drawn from our naval activities available in the fields of renewable energies. Naval Group forges close ties with its clients via long-term partnerships, resolutely committed to anticipating their needs and fully satisfying them by its operational performance and technological superiority.

In the context of ever keener competition and accelerated innovation cycles, involving far- reaching transformations in the way our products are designed and sold, Naval Group is maintaining its ambitious growth targets. This will allow it to both control its operational results and generate the means needed to maintain our industrial resources and offerings at peak efficiency and invest in profitable growth.

Naval Group has committed its essential assets to a number of large scale projects. Backed by its outstanding skills and the support of its shareholders, we are determined to provide our clients with the best possible service.”