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1

9

9

9

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Contents

M e s s a g e f ro m t h e C h a i r m a n
o f t h e S u p e r v i s o r y B o a rd
M e s s a g e f ro m t h e C h a i r m a n
o f t h e M a n a g e m e n t B o a rdStrategy/Management
C o r p o r a t e G ove r n a n c e
Financial and Operating Highlights
T h e Ae ro s p a t i a l e M a t r a G ro u p
19 9 9 H i g h l i g h t s
S h a re p e r fo r m a n c e

A i rc r a f t

2
4
6
8
10
12
14
16

Space
Missile Systems
S y s t e m s , S e r v i c e s a n d Te l e c o m s

18
20
22
24
26
30
34

Re s e a rc h & D eve l o p m e n t
H u m a n Re s o u rc e s
F i n a n c i a l Po l i c y
O f f i c e s a n d Fa c i l i t i e s

38
40
42
44

AirbusO t h e r Av i a t i o n O p e r a t i o n s
H e l i c o pt e r s

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Aerospatiale Matra is a world-classaerospace and defense enterprise.
Strategic vision and innovation are the cornerstonesof our corporate philosophy. Aerospatiale Matra
has always excelled in creating new concepts andproducts. As the driving force behind alliances withother majors, Aerospatiale Matra has initiated some ofEurope's most striking successes: Airbus, Arianespace,
Euromissile, Astrium in the space sector and New MBD
in the missile sector.

Sales

84.6 billion francs
12.9 billion euros
Order book251.9 billion francs
38.4 billion euros
Operating income

3.15 billion francs
0.48 billion euros
Workforce

52,387
Breakdown of 1999 sales

72.8% Aircraft
11.5% Space
9.0% Missile Systems
6.7% Systems, Services and Telecoms

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Page 2Message fromthe Chairmanof theSupervisoryBoardRA 99 - COUV à P.13 - ANGLAIS

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Page 3Jean-Luc Lagardère
Chairman of the Supervisory BoardYour company was created on June 11, 1999 and Aerospatiale Matra has been
listed on the Paris Bourse since June 4. Less than a year has passed since then,and this period has been particularly rich in events that bode well for our
future.
When we created the Aerospatiale Matra Group in June, we clearly indicatedthat it signaled a start to the restructuring of the European aerospace anddefense industry – a development in which we were determined to take theleading role. European consolidation is a reality and I have always believed that
it is up to businesses to lead the way rather than follow in the path of others.
Our teams worked exceptionally hard to ensure the success of the merger.
The excellent results we achieved in 1999 stand as a testimony to their efforts.
The corporate cultures of Aerospatiale and Matra Hautes Technologies turned
out to be extremely close.
The Aerospatiale Matra share was added to the CAC 40 stock market index
on November 5. This reflects the importance of the enterprise and is a key factor both in its valuation and the share’s liquidity.
We are committed to meeting three strategic objectives:• First, we must continue to consolidate our leadership positions, as in 1999.
In the key commercial jetliner market, we have now attained parity with our
main competitor.
• Next, we must improve our profitability. We have already implemented
several major action plans to achieve our goal of doubling operating margins by
2003.
• And we must be a pivotal player in the ongoing consolidation of ourindustry.
On October 14, 1999 in Strasbourg and on December 2 in Madrid we formalized
our relationship with our German and Spanish partners to create EADS, the European
Aeronautic, Space and Defense Company. This historic development is much morethan a symbol. As you all know, it was front page news around the world. The merger is the logical conclusion of over thirty years of partnership and also set the stage
for the agreement with Finmeccanica, signed on April 14, 2000. EADS will be oneof three global leaders in the aerospace and defense industry and will take a premier
position in all its markets.
I look forward to the future with great confidence, and with rock-solid faith in
the abilities of our people and our extensive technological expertise.
Jean-Luc Lagardère23

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Message fromthe Chairmanof theManagement
BoardRA 99 - COUV à P.13 - ANGLAIS

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Philippe Camus
Chairman of the Management Board

Nineteen-ninety nine was a watershed year in the history of both Aerospatiale
Matra and the aerospace and defense industry as a whole.
Our company was created in June 1999 and I would like to take thisopportunity to review the three commitments I made on the occasion of themerger between Aerospatiale and Matra Hautes Technologies:• Make a success of the merger.
• Improve the profitability of the new enterprise.
• Put the new group at the heart of the European aerospace and defense
industry consolidation, critical to its survival in a hotly contested global
market.
Our excellent performance in 1999 and the first few months of 2000 is aclear indication that these commitments have been honored.
The reorganization of Aerospatiale Matra was achieved in record time and has
proved a great success. I am particularly pleased with the rate of progresson 17 consolidation initiatives, started last summer, and found this aparticularly eloquent testimony to the truly dynamic spirit of the enterprise.
Our 1999 results and long-term outlook demonstrate that we are well on
the way to achieving our goal of significantly improving our profitability.
As for our third goal, it is clear that the agreements reached for European
consolidation of the satellite and missile sectors — and in particular theagreement between Aerospatiale Matra, DaimlerChrysler Aerospace and
CASA leading to the creation of EADS — have put Aerospatiale Matra at thecore of European industry restructuring. The enterprise has reenergized thesector and created the conditions for the success of European aerospace anddefense consolidation. We intend to maintain this dynamic spirit, since 2000
will undoubtedly be a year of major decisions that will shape the future of
the enterprise and enable us to continue our development.
Philippe Camus

4
5

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Page 6StrategyManagement

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Page 7

A significant breakthrough. The creation of EADS
constitutes a major step forward in Aerospatiale
Matra's strategy. Large-scale cross-border consolidation, Europe’s objective for many years to reduce
overcapacity, has finally been achieved.
Rupture and continuity. The creation of EADS represents both rupture and continuity:• Rupture in that EADS is the first genuinely
large-scale cross-border merger in the aerospaceand defense industry;• Continuity, because the creation of EADS
cements the alliance of three partners who haveworked together for over thirty years across mostof their businesses, patiently building up a powerful pan-European aerospace and defense industry.
Economic efficiency. The creation of EADS will
above all generate economic benefits. The merger of these major aerospace companies will generate synergies in a number of areas, notably
procurement, R&D, international sales and production.
At an operational level, as a majority shareholder
in a number of joint ventures, EADS will also be ina position to boost their efficiency and profitability through rationalization and restructuring.
Opening up to the world. However, EADS shouldin no way be seen as the embodiment of a"Fortress Europe" mentality. The new Group will
maintain close relations with BAE Systems, its key
partner in a number of programs, as well as with
Thomson-CSF and Finmeccanica. In addition, developing transatlantic partnerships remains a prime
strategic goal for EADS in the years to come.
Future developments. The creation of EADS lastyear marked a watershed in Aerospatiale Matra's
strategy. In 2000, new initiatives will be launchedto achieve the Group's near-term strategic goals:• Create value for our shareholders by increasing
profit margins.
• Ensure the rapid consolidation of all our businesslines and disciplines into single high-performance
entities.
• Strengthen Airbus business through the creation of the Airbus Integrated Company (AIC),
by consolidating EADS and BAE Systems’ Airbus
operations in an independent company offeringsuperior profitability, efficiency and responsiveness.
• Strengthen EADS's position in the military aircraft segment, based on the agreement with
Finmeccanica.
• Develop our portfolio of defense systems andconsolidate the European missile sector around
MBD, one of the world’s top two companies in thissegment.
• Consolidate the European space industry
through the creation of Astrium, which will be
expanded to include Finmeccanica and other
European and U.S. partners, and by reorganizing
the launcher business around Ariane.
• Forge partnerships in the United States, meeting the common aspirations of all governments
and manufacturers concerned, building on promising contacts such as those with Lockheed Martin.

6
7

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Corporate

governanceSupervisory Board
Jean-Luc Lagardère - Chairman
General Managing Partner, Lagardère SCA
Chairman of the Board of Directors of Lagardère SCA

Executive Committee
1

Chairman of the Management Board, Chief Executive Officer

2

Chairman of the Board of Directors of Sogepa

Bernard Attali

3

Philippe Coq

4

Head of University/Industry Relations, Aerospatiale Matra Airbus

5

Pierre Graff

6

Equity Investments Department Manager, Treasury Division

7

Arnaud Lagardère
Senior Vice President and Chief Operating Officer of Arjil, Managing
Partner of ARCO

8

François Roussely

9

Chief Tax Inspector

10Jean-Yves Helmer
Representing the State’s golden share

Joseph Mailloux
Government Commissioner, Controller

Philippe Simon
Secretary of the Board

Marwan Lahoud
Co-Group Managing Director, Defense and Space Transport

11

Jean Barrio
Co-Group Managing Director, Strategic Coordination

Christian Saulnier
Foreman Aerospatiale Matra Airbus

Pierre Bayle
Corporate Vice President, Communications and External Relations

Chairman of EDF

Philippe Rouvillois

Jean-Marie Mir
Corporate Secretary

Raymond H. Lévy
Chairman of the Supervisory Board of Lagardère SCA

René Chabod
Corporate Executive Vice President, Human Resources

Daniel Jalouzet
Head of Internal Communications, Matra BAe Dynamics

Denis VerretGroup Managing Director, Business Development

Director General of Civil Aviation

Nicolas Jachiet

Jean-Louis Gergorin
Group Managing Director, Strategic Coordination

Dominique D'Hinnin
Chief Financial Officer, Lagardère SCA

Jean-Paul Gut
Group Managing Director, Defense and Space Transport
Chairman, Aerospatiale Matra Lagardère International

Didier Dernoncourt
Purchasing, Logistics and Sales & Marketing Department Manager,
Aerospatiale Matra Airbus

Jean-François Bigay
Member of the Management Board
Group Managing Director, Aircraft

Assistant Director, Aircraft, Missiles and Space
Cooperation and International Affairs DivisionJoël Danto

François Auque
Member of the Management Board
Chief Financial Officer
Group Managing Director, Satellites

Philippe Pontet - Deputy Chairman

Vice President, European Investment Banking, Deutsche Bank

Philippe Camus

12

Frédéric d’Allest
Special Advisor to the Management Board for SpaceRA 99 - COUV à P.13 - ANGLAIS

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Page 9Corporate Governance
Company Management

Beyond legal obligations, shareholders demonstrated theircommitment to establishing statutory principles of operation for the Management and the Supervisory Boards.

The overall governance of Aerospatiale Matra is based on a dual
system which separates management and supervision.
The Management Board comprises three members, including the
Chairman. It is responsible for the management and administration of company affairs. The Supervisory Board, appointed
by the General Meeting of Shareholders, supervises the actionsof the Management Board. No member of the Management
Board may be a member of the Supervisory Board.

The Management Board must request the opinion of theSupervisory Board on certain operations which modify theshare capital, impact on the Group's strategy, change theGroup's financial structure or its scope of activity, or concern
industrial or financial strategic alliance or cooperation agreements.

This supervision is notably based on a report on company
operations by the Management Board, which is presented to
the Supervisory Board at least quarterly.

In addition, the Supervisory Board has created three
Commissions:

Each year, the Supervisory Board presents to the General
Meeting of Shareholders a review of the Management Board
report and the financial statements.

• The International Strategy Commission studies theGroup's international environment and analyzes the projects
developed by the enterprise. This Commission meets at least
twice a year. Chaired by Jean-Luc Lagardère, it also includes
Philippe Coq, Arnaud Lagardère and François Roussely. It
reports to the Supervisory Board.

The Supervisory Board comprises:• Four members representing the French State as shareholder.
• Two members representing the public sector.
• Four members appointed by the General Meeting of
Shareholders on the recommendation of Lagardère SCA, thecore private shareholder.
• An independent member, appointed by the shareholders andexercising no management responsibilities in any Group company, nor representing any major shareholder in or a significant
or regular manufacturing, commercial or financial partner of theGroup.

• The Remuneration Commission makes recommendations
to the Supervisory Board concerning the remuneration ofmembers of the Management and Supervisory Boards. It also
issues recommendations on remuneration policies across theGroup. It meets regularly under the chairmanship of Jean-Luc
Lagardère. The other members of this commission are Bernard
Attali, Nicolas Jachiet, Raymond H. Lévy and Philippe Rouvillois.

In addition, in accordance with the provisions of French Law
86-912 of August 6, 1986, three members are elected to theSupervisory Board by all Group employees and another member is elected by employee shareholders, designated by theGeneral Meeting of Shareholders from a list of candidates
elected by shareholder employees.

89• The Accounts and Audit Commission comprises Philippe
Pontet (Chairman), Dominique D'Hinnin, Pierre Graff, Nicolas
Jachiet and Raymond H. Lévy. The Commission examines:
annual and half-year accounts • annual budgets• Groupaccounting principles and methods • auditors’ schedules• the Group's internal audit program• reports of the external
and internal auditors and the Group's action programs.

A representative of the French state, because of the golden
share, and a State Controller also attend Board sessions.
Listed in the financial section are the responsibilities and termsof each member of the Management and Supervisory Boards,
along with their age and the number of shares they hold in
the company.

8

4
5

11
9

7
2

1
3

* Not pictured: Marwan Lahoud (10) and Frédéric d’Allest (12).

6

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Financial andOperating Highlights
Sales (millions)AirbusOther aviation operations
Dassault Aviation (45.76%)
Eurocopter
Space
Missile Systems
Systems, Services and Telecommunications
Other
Total

Orders (millions)AirbusOther aviation operations
Dassault Aviation (45.76%)
Eurocopter
Space
Missile Systems
Systems, Services and Telecommunications
Total

1998
FrancsEuros
28,626
4,364
5,084
775
9,217
1,405
11,139
1,698
9,910
1,511
10,931
1,666
5,651
862
76
12
80,634
12,293
1998
FrancsEuros
54,818
8,357
4,428
675
15,0872,300
12,201
1,860
12,7191,939
15,212
2,319
3,437
524
117,902
17,974

1999
Francs
35,887
5,581
8,648
11,500
9,719
7,567
5,643
63
84,608

Euros
5,471
851
1,318
1,753
1,482
1,154
860
10
12,899
1999

Francs36,943
6,452
10,233
20,761
8,999
12,412
5,635
101,435

Euros
5,632
984
1,560
3,165
1,372
1,892
859
15,464

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Page 11

Sales

Operating income

millions of euros

millions of euros
AirbusOther aviation operations
Dassault Aviation**
Eurocopter

12,293

12,899Space
Missile Systems
Systems, Services
and Telecommunications
Other

494

480

second half-year
1998* 1999
274

1998*

Orders

351

1999

1998*

1999

Operating margin

millions of euros(%)
AirbusOther aviation operations
Dassault Aviation**

17,9744

3.7

15,464

Eurocopter
Space
Missile Systems
Systems, Services
and Telecommunications

second half-year
1998* 1999
4.1
1998*

1999

1998*

Civil/Military share of sales

Sales by geographic area

(%)

(%)

76

10
11

South
America

Europe

24

Civil

4.9

1999

59

21

Militairy

North
America

3 9
Asia/
Pacific

Internally-financed* R&D to sales ratio
(%)

6

6

1998*

1999

* IAS

Net cash (debt) position

Net income, excluding minority interests

millions of euros

millions of euros

673
436
30
1998*
1999

1998*

1999

(28)
* 1998 data: pro forma.

** Aerospatiale Matra holds a 45.76% equity stake in Dassault Aviation.

Africa/Middle East8

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Page 12The
Aerospatiale Matra GroupRA 99 - COUV à P.13 - ANGLAIS

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Page 13Group
The Aerospatiale Matra Group is organized into four core businesses
at December 31, 1999

AEROSPATIALE MATRA
DEFENSE AND
SPACE TRANSPORT

AIRCRAFTSYSTEMS, SERVICESAND
TELECOMMUNICATIONSSATELLITESAEROSPATIALE MATRA
AIRBUSAEROSPATIALEMATRAMISSILESAEROSPATIALE MATRA
LANCEURSSTRATEGIQUES ETSPATIAUXAIRBUS INDUSTRIE GIEEUROSAMEUROMISSILE

ARIANESPACESTARSEMAEROSPATIALE MATRA
ATR

CELERGMATRA DATAVISIONATR GIE

MATRA BAeDYNAMICSMATRA NORTELCOMMUNICATIONSEUROCOPTER

MATRA
DEFENSEMATRA SYSTEMESINFORMATIONMATRA MARCONI SPACEMCN SATDASSAULTAVIATION

SOGERMA

SOCATA

Aerospatiale Matra: unrivaled expertise and a pivotal European partnership
The Aerospatiale Matra Group boasts a unique medley

To facilitate the necessary consolidation of the French andof competencies encompassing the design, development

European aerospace and defense industries in 1999,

and integration of complex aerospace systems. For overAerospatiale Matra reorganized its operations into subsidiaries

30 years, it has been an integral part of strategic European

based on core businesses.

alliances.

The Group will pursue its development in 2000:
Creation of New MBD
in the Missile sector

Creation of Astrium
in the Space sector

Merger withDASA and CASA to create EADS

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Page 141999 Highlights
At the 1999 Paris Air Show

Aerospatiale Matra is born
CASA joins EADS on December 2, 1999

A340-600

Successful merger and privatization
On January 13, the French government issued a decree providing forthe privatization of Aerospatiale.
On January 15, the French State andLagardère SCA signed an agreement
defining the procedures for the merger of Aerospatiale and Matra Hautes
Technologies.
On June 4, Aerospatiale Matra waslisted for the first time on thePremier Marché, the Paris Bourse's
monthly settlement market. June 11
saw the official birth of the new
Aerospatiale Matra Group. The official opening of the Paris Air Show
took place on the following day, with
the new group making its first
appearance as a united entity. On
November 18, the first General
Meeting of Shareholders took place.
By the end of the year, most integration steps had been completed toensure a successful merger in record
time.

European aerospace anddefense industry integration
accelerates
On October 14, Aerospatiale Matraand DASA announced in Strasbourg
the merger of their aerospace anddefense businesses within a newgroup dubbed EADS. They are joinedby CASA of Spain on December 2.

On October 18, the Astrium agreement was signed by Aerospatiale Matra,
DaimlerChrysler Aerospace andMarconi Electronic Systems. On
October 20, a strategic agreement
was signed by Aerospatiale Matra,
BAE Systems and Finmeccanica forthe creation of an integrated operating company for missiles and missile
systems.

Development of transatlantic
alliances
During the Paris Air Show, twoAerospatiale Matra/Lockheed Martin
agreements were signed. On
October 25, Aerospatiale Matra,
Dassault Aviation, Snecma andThomson-CSF signed an agreementwith Embraer to take a 20-percent
equity stake in the Brazilian company.

First year of existence features
major successes
Aerospatiale Matra booked 15.5 billion euros worth of orders in 1999,
an excellent level after the record
year of 1998. Exports accounted for
71 percent of the total.
Excellent order intake (20 percent
above sales) bolstered the order
book, which reached 38.4 billion
euros at December 31, 1999, equal
to three years of business.

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Ariane 5

Aircraft• Airbus leads market in 1999
Airbus is going from success to success, as it moved ahead of its directcompetitor in 1999 with 55 percent
of orders for commercial jetliners over
100 seats. In 1999, Airbus delivered
294 aircraft, a 28-percent increase on
the previous record year. Firm orders
were booked for 476 aircraft, including
120 for the new A318, which waslaunched in April and has proved an
instant hit with airlines. The orderbook continues to grow, reaching
1,445 aircraft by December 31, 1999
– fully half of the global market.

• Special-mission aircraft
January 1999 saw the creation of the
Airbus Military Company and thesubmission of their proposal for
the FLA/A400M military transport
to the seven countries concerned.

• ATR: a promising year
Objectives were met with the delivery of 35 aircraft and 30 orders. A
commercial agreement with Embraer
opens up new business opportunities.

• Eurocopter, the global leader
with rising market share

Helicopter order intake reached an
excellent 3.2 billion euros — 65 percent in export markets — comparedwith 1.9 billion euros in 1998. The firstflight demonstration of the EC 155
took place at the 1999 Paris Air Show.
France and Germany placed a firstorder for two lots of 80 Tigers. A totalof 382 helicopters were ordered during
the year, and Eurocopter delivered 241
aircraft, including the 100th EC 135,
the 500th Super Puma and the very
first EC 155, the most recent member of the Dauphin family. This impressive performance demonstrates that
Eurocopter's product line perfectly
matches the needs of its customers.

Helios• Dassault: 48 Rafale fightersorderedDespite the transitional phase experienced in the defense market (with amajor export contract being completed in 1998), Dassault maintained goodbusiness levels, with 1.6 billion euros
worth of orders in 1999. This waslargely thanks to excellent performancein the civil market (Falcon business jetsin particular) and the French government order for 48 Rafale fighters, ofwhich 28 were firm orders.

Space
Orders worth 1.4 billion euros werebooked, with a little over 60 percent
in export markets.

• Ariane and Starsem launchers:
success in a difficult market

Highlights of the year included theremarkable achievements of both
Ariane 4, with 53 successful consecutive launches by the end of the year,
and Ariane 5, with its first commercial flight on December 10, carrying
the XMM scientific satellite.
Ariane feted its 20th anniversary inDecember and retains its leadership in
the commercial satellite launch market.
In the same month, Arianespace awarded a contract for 20 Ariane 5 launchers.
Starsem, in which the Group holds a
35-percent equity stake, clocked up
six successful launches in 1999 for the
Globalstar constellation.

• Matra Marconi Space: Astrium
launched

Nineteen-ninety-nine was a pivotal year
in the restructuring of the European
space industry, with the agreement tocreate the integrated space company
Astrium signed on October 18. Major
contracts in 1999 underline the keyrole played by MMS in all space segments:
Earth observation: contract for the
Helios 2 ground user segment.
Commercial telecommunications: sec-

Tiger

ond Nilesat satellite for Egypt (March
1999).
Military communications: design studies for the British MoD on the newgeneration Skynet 5 satellite system.
Science: contract with the European
Space Agency (ESA) for Mars Express,
Europe's first Mars exploration vehicle.
Weather forecasting: Metop contract(three satellites).

Missiles: a record order book,equal to 5 years of businessAt year-end 1999, orders stood at 1.9
billion euros. Business wins included thePrincipal Anti-Air Missile System(PAAMS) contract for around 1.1 billion
euros, announced on August 11 by the
British MoD, and covering the needs of
the United Kingdom, France and Italy.
Following France and Germany, theBritish gave the green light in June for
the European antitank missile program,
Trigat. In October, the Italian government signed a major contract with
Matra BAe Dynamics to equip theEurofighter and Tornado fighter aircraftwith Storm Shadow cruise missiles.
On October 20, Aerospatiale Matra,
British Aerospace and Finmeccanica
signed an agreement to create a single missile company.
This new entity will be the leading
European and second-largest global
manufacturer of tactical missile systems.

Systems, Services andTelecoms: at the heart of
tomorrow's technologies
September 1 saw the creation of a
new business unit, dubbed Systems,
Services and Telecommunications. Its
new organization was finalized in
December, based on the creation of
an Integrated Systems Division and thegrouping of all telecoms and Internet
subsidiaries with strong growth potential. Highlights this past year included
a business recovery in the telecoms
segment and implementation ofcivil/military synergies.

14
15

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Page 16

Aerospatiale Matra
share performance
Shareholding structure

48% French State
33% Lagardère
17% Public
2% Employees

Stock ExchangeMonthly Settlement

SICOVAM code

18379
Number of shares403,687,775
Capitalization at December 31, 1999

8.6 billion euros

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Page 17

Investor relations
The
Investor
RelationsandFinancial
Communications Division was created in mid-1999
to provide information to retail and institutional
investors, current and former employees, or simply anyone who has a passion for air and space.
Led by Marc Paganini, its mission is to listen to you
and discover your needs in order to better respondto your questions.
To keep you up to date on all Group developments,
the division has developed a range of communications resources, including newsletters and regularpublications in the financial press. It has also
launched a program of roadshows for shareholders in several French cities.
A financial information section has also been added
to the Group's corporate website(www.aeromatra.com).
For more specific questions please don't hesitate
to contact us:

Share performance outpaces competitors
The privatization of Aerospatiale Matra was a huge
success: the share offering was seven times oversubscribedamong retail investors and more than 35 times
oversubscribed by institutional investors. Privatization andlisting on the Paris Bourse also met with success among
Group employees – over 82 percent now own shares inthe enterprise.
Since June 4, 1999, the Aerospatiale Matra share has been
listed on the Premier Marché, the monthly settlement
market of the Paris Bourse. The share was added to the
CAC 40 stock market index on November 5, 1999.
At December 31, 1999, the share closed at 21.33 euros, up
11 percent on its IPO level of 19.20 euros. This increase isless than the average increase registered by CAC 40
companies (up 36 percent). However, the CAC 40 index
was bolstered by strong growth in telecoms, media andInternet shares in the last two months of 1999.
Aerospatiale Matra is on the other hand one of the top
performers in its market. Over the same period, Thomson
progressed by only 5 percent, and all other international
aerospace and defense companies were significantly down:
BAE Systems (down 1 percent), Boeing (down 6 percent)and above all Lockheed Martin (down 50 percent).

French Hotline: 0 800 01 2001
Email: comfi@aeromatra.com

For 2000, most analysts issued a buy recommendation,
based on the enterprise's key strengths:
Large order backlog at year-end, equal to three years ofbusiness• The commercial success of Airbus, which now
boasts an order book equal to that of its directcompetitor• The success and speed of the merger between
Aerospatiale and Matra• Significant synergies generated
through the merger of Aerospatiale Matra, DASA and CASA
in EADS, and its strong positions in all markets.

Share performance140

CAC 40130
120

Aerospatiale Matra
110
Index 1009080
Sector Index*
70
60
June 1999

July 1999* BAe, Boeing, Lockheed

August 1999

September 1999

October 1999

November 1999

December 1999

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Page 18

476

294

1,445

30

48

9.5

AirbusAirbusAirbusATR

Rafalebillion euros

aircraft orderedaircraft delivered

aircraft in order bookaircraft orderedaircraft orderedin salesAircraft
The sustained growth of Aerospatiale Matra's
aircraft business was confirmed in 1999.
With 476 firm orders, Airbus pulled ahead ofits direct competitor.
Eurocopter retained its status as the world's
leading helicopter maker and won a first order

AirbusATR
Eurocopter
Dassault Aviation
SocataSogermafor 160 Tiger combat helicopters from Franceand Germany, worth over 3 billion euros. Other
aircraft subsidiaries — ATR, Socata, Sogerma —improved their earnings and made significant
progress in their markets.
Thanks to its complete offering of high-tech
products that perfectly match market requirements, Aerospatiale Matra enjoys a global reputation as a benchmark company in all aircraft
segments.

58% Airbus
19% Helicopters
14% Dassault Aviation (45.76% interest)
9% Other aviation operations

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19

EC 155

AIRBUSRAFALE

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Aircraft

AirbusFavorable market and airline traffic
growthThe global economy is marked by renewed
confidence in growth. After a flattening off in1998 (+ 2.1 percent) due to the Asian crisis,
global GDP growth reached 2.8 percent in 1999
and should exceed 3 percent in 2000.
After bottoming out at only 2 to 3 percent
growth in 1998 following the Asian crisis,
global passenger traffic (outside the CIS) has
returned to annual growth of 5 to 5.5 percent.
Asian airline traffic swung back to growth of
9 percent (following a one-percent decline in1998), while the major American carriers continued to progress, posting traffic growth of
2.3 percent in 1998 and 4.5 percent in 1999.
European airlines performed even better, withtraffic growth of 7.5 percent. This growth was
supported by a sustained 71-percent passenger
load factor.
Air cargo traffic has recovered strongly, especially in Asia where the economic turnarounddrove growth of over 10 percent in 1999, following the fall of 2 percent in 1998. The cargobusiness in Europe has also returned to growth,rising 4 percent after a decline of 1 percent in1988. In the United States, growth remains
steady at 3 percent.
Airline operating profits should decline
compared with the previous record years (over$16 billion in 1997 and 1998). This decline islargely linked to rising costs (fuel and payroll)and lower per-passenger revenues (price war
following overcapacity linked to the Asian crisis).
However, the passenger load factor remained high.
Following record levels in 1998 (1,222 orders),
the market for jetliners with over 70 seatsremained extremely buoyant and performed
better than expected: 875 orders were placed,with over 80 percent for single-aisle aircraft.
In 1999, 52 percent of all orders were placedby leasing companies (versus 15 percent in 1998),

underscoring their growing importance in airtransport and their confidence in medium-term
demand. Representing 26 and 12 percent of totalorders booked, respectively, American andEuropean airlines continue to modernize theiraging fleets. The Asian market (7 percent oforders) also seems to be improving despite
continuing cancellations by airlines still on theroad to recovery.

Airbus: best seller in 1999
Aerospatiale Matra holds a 37.9-percent stakein the Airbus Industrie consortium, equal to thestake of DaimlerChrysler Aerospace of Germany.
The other partners are BAE Systems (20 percent) of the United Kingdom and CASA (4.2 percent) of Spain.
Aerospatiale Matra's broad-based technological and industrial expertise, pooled within its
subsidiary Aerospatiale Matra Airbus, make up
the core of the Airbus system. Aerospatiale
Matra Airbus's role as “industrial architect”
means that it is responsible for the entire industrial process concerning the aircraft family, fromdesign through to the final commercial flight.
Aerospatiale Matra Airbus enjoyed a string of
successes in 1999.
55 percent of global orders
With 476 firm orders placed by 34 customers,
order intake was at its second-highest level everin 1999, following the extraordinary performance of 1998. Once again, orders largely
outpaced deliveries (294 aircraft).
Airbus consolidated its positions in the global
market and was the world market leader fororders booked in 1999.
Airbus attracted 17 new customers in 1999, andunderscored the soundness of its family concept
by booking additional orders from major clientssuch as British Airways. This performance is quite
remarkable considering the significant slowdown
in the global market (down 25 percent in a year).

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A340 cockpit

A400M
The Airbus family

Innovation and enhanced productivity
The A320 family accounted for 408 firm orders,bolstered by the considerable success of theA318, for which 120 orders were placed in thefirst year since its introduction. Sixty-eight
A330/A340 aircraft were ordered, despitea flat global market for medium/long-haul
jetliners.
At December 31, the aggregate total of
Airbus orders stood at 3,633 aircraft from 169
customers.
Intents to purchase 103 additional aircraftIn addition to the 476 firm orders, this past year
customers signed letters of intent to purchasea further 103 Airbus aircraft, underscoring the
dynamic commercial performance of Airbus andits perfect match with market requirements.
Deliveries up 28 percent compared to 1998
The 294 aircraft delivered in 1999 — including
222 single-aisle aircraft — represent an increaseof more than 28 percent compared with theprevious year. This performance reflects the success of the Group's production policy based oncontinuous improvement in terms of quality,
costs and lead times. At December 31, 1999,
the aggregate total of deliveries stood at 2,188
Airbus aircraft. The number of Airbus users now
stands at 178.
Order book:49 percent of the global market
Airbus's order book has reached record levels
thanks to sustained performance. It now counts
1,445 aircraft to deliver, equal to more than four
years of production. In five years, Airbus's orderbook has almost doubled (615 aircraft in 1994),
while that of its direct competitor only increased
by 35 percent over the same period.

Strategic goals this past year included production ramp-up, meeting contractual delivery deadlines and the implementation of the CAP
productivity improvement program. Meetingthese goals was the focus of 13,000 employees
at Aerospatiale Matra Airbus's four production
sites: Saint-Nazaire, Toulouse, Méaulte and Nantes.
Aerospatiale Matra also pursued studies for the
A3XX and A400M programs and ongoing development of the A318. Development and production phases for the first subassemblies of thelatest A340/500-600 were accelerated throughthe implementation of significant technologicalinnovations, such as the carbon keel beam, aworld first.
Thanks to a management policy tailored to professional skills and human resources, as well as awork organization based on concurrent engineering, the SAP integrated management tooland integrated work teams involving over 400 specialists and airline representatives, Aerospatiale
Matra Airbus reduced the development cycle forthe 340/500-600 program by over 30 percent.
Aerospatiale Matra Airbus, a subsidiary of
Aerospatiale Matra since 1999, is now gearing up
for the integration of Airbus activities within
EADS and the creation of an independent
Airbus company.
Our management principles are anchored inmeeting customer expectations by being thebest in all our core businesses, creating value
for our shareholders by continuously improving our financial results, and providing our
employees with long-term security by preparing for the future.

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Page 22Flight deck maintenance

TBM 700

Aircraft
Falcon 900EX

Other Aviation Operations
ATR: meeting objectives
Aerospatiale Matra is a key player in the ATR
regional aircraft consortium formed with
Alenia/Finmeccanica in 1981.
Its wholly-owned subsidiary Aerospatiale MatraATR is responsible for this business and is incharge of final assembly and wing structures.
The ATR consortium, in which Aerospatiale Matra
has a 50-percent stake, markets the aircraft andprovides customer support. The new ATR 42500 and ATR 72-500 versions boast significantly
improved performance and passenger comfort.
Since the beginning of the program, ATR has
recorded 613 orders and delivered 591 aircraft,making the ATR regional aircraft fleet the largest
in the world.

The market. The regional aircraft market is
growing strongly across the globe, driven largely by regional jet sales. The complementary
turboprop market also remains healthy, representing some 60-70 aircraft per year, in line with
ATR’s planned deliveries of 30 aircraft in 2000.

Market share. With 30 aircraft sold and
35 delivered, ATR met all its objectives for 1999.
In the 40-70 seat segment, ATR's market sharereached 69 percent of turboprop aircraft and30 percent of the combined jet/turboprop market.

Market potential. ATR continues to revamp
its organization and develop new cooperative
projects (thanks notably to its alliance with
Embraer). Asia and Europe both harbor significant business opportunities.

Aircraft maintenance:a growth business
Through Sogerma and its subsidiaries, the Group
offers global repair and maintenance services forairline fleets and air forces. It also handles conversions and major modifications, such as cargoconversions. The Group's maintenance businesses
are based in Bordeaux, Le Bourget, Rochefort,
Toulouse and Caudebec-en-Caux in France, withfurther operations in the United Statesand Morocco. Sogerma and its subsidiaries
employ 3,630 people and posted sales of
3.7 billion francs in 1999, a significant advanceon 1998, thanks to growth in Airbus and turboprop engine business.
The Group met all its objectives in 1999. The
outlook is for continued growth in sales andincome, in line with corporate strategic goals.
Sogerma will notably develop its Airbus support
activities, which constitute a core competency.
Construction of two hangers in 2000 should further bolster large jetliner capacity and keep pacewith market growth.

Markets. Sogerma’s maintenance business isdeveloping in all maintenance and modification/
upgrade markets for both civil and military aircraft, and includes global support, engineeringand fleet technical management, as well as computer-aided design and manufacturing tools(CAD/CAM). Competition is therefore highly
diversified and segmented, and includes major airlines, independent maintenance firms, state-owned
workshops, equipment suppliers and airframe
manufacturers.

Civil market. This concerns the maintenanceand modification of airframes for Airbus, MDD,
ATR, Lockheed L100 and other aircraft, as wellas cargo conversions and equipment/engine
maintenance and repair for regional aircraft, business jets and helicopters.

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RafaleFalcon 2000

TB20

ATR 42-500

Military market. This concerns the maintenance and modification of military aircraft(Lockheed Hercules C130, Transall) and combat
aircraft (Mirage, Jaguar, F5, etc.).

It maintained its market share in the rest of theworld, notably in the government market, where
it has strong positions (for pilot training in particular).

Sogerma is also a manufacturing company:

Industrial reorganization continued on schedule, and should be completed in 2000.

Interior installations: pilot seats, first-class passenger seats, rest areas and galleys for Airbus
and Boeing.
Aerostructures: Airbus, Galaxy (Israeli businessjet), Dassault, AST assembly (Airbus Super
Transporter/Beluga) and cargo conversion kits.
Equipment: test suitcases, smoke detectors, composite materials for aircraft, rail and ballistic applications.

Light aircraft:
Socata confirms recovery
Socata confirmed its recovery in 1999.
For the first time ever, the company posted
sales in excess of 1 billion francs and swung into
the black, with income in line with objectives.
It significantly reduced its debt load, thanks tosolid results and a reduction in working capitalrequirements despite a significant increase in its
operations (production cycles reduced throughindustrial reorganization). The company also
received a capital injection from its shareholder
Aerospatiale Matra.
The aerostructure business saw a rise of
8 percent in 1999 thanks to increased businessfrom the A320 and A330/340 programs (up 12
to 18 percent), and stable Dassault business. The
light aircraft business grew very strongly (up50 percent), particularly the TBM 700 program(up 80 percent) and the TB range.
At December 31, 1999, the order book for lightaircraft represented 200 million francs.
In line with its strategy, Socata bolstered its
presence in the United States (70-80 percentof the global market) and is developing a distribution network in the country.

As part of its reorganization, Socata has started
to install a SAP information system, which should
be on line by the end of 2001.

Dassault Aviation:
an exceptional
year for Falcon jets
Aerospatiale Matra holds a 45.76-percent stakein Dassault Aviation — listed on the Paris
Bourse — along with Groupe Industriale Marcel
Dassault (49.9 percent) and public investors(4.34 percent).
Dassault Aviation won a French government
order for 48 Rafale aircraft (of which 28 werefirm orders) and sold 72 Falcon jets, underscoring the company's status as the world's
leading supplier of high-end business jets. This
was the third consecutive year of extremely
robust business levels for corporate aircraft,enabling Dassault Aviation to post excellent
sales and operating profits despite the hiatus
in major military export contracts.
Along with Aerospatiale Matra, Snecma andThomson-CSF, Dassault Aviation took a
20-percent equity stake in the Brazilian
manufacturer Embraer in November 1999.

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Page 24

Tiger

Cougar-SAR AS 532

EC 135

AircraftHelicopters
Eurocopter, No. 1 worldwide
The Eurocopter Group, owned 70 percent
by Aerospatiale Matra of France and 30 percent
by DaimlerChrysler Aerospace of Germany,
designs and manufactures a wide range of civil
and military helicopters. The world’s leadingmaker of helicopters, it further strengthened
this position in 1999.
Eurocopter offers helicopters from the 2-ton to
the 10-ton class, covering virtually all international
demand. The range is constantly upgraded andincorporates a number of advanced technologies,
including the Fenestron shrouded tail rotor, wideuse of composite materials, advanced avionics,
fly-by-wire controls, etc.
Eurocopter has two plants in France (LaCourneuve and Marignane) and two in Germany(Ottobrünn and Donauwörth). It also has 14
subsidiaries around the world, in the UnitedStates, Brazil, Singapore, Canada, etc., including
several production facilities.
The civil helicopter market (including sales tostate agencies) was generally stable in 1999,
despite the significant impact of the Brazilian
financial crisis. Thanks to the success of its
expanded product range, Eurocopter increased
its market share by 6 percent over 1998.
This past year also saw the start of a new growthtrend in the military helicopter market, driven
by attack helicopter acquisition programs andabove all by the need to replace several aging
fleets. Eurocopter is particularly well positioned
in these markets, with its Tiger and NH 90
helicopters. A large proportion of these militarycontracts should be in Europe. For example,
Eurocopter logged the first orders from Franceand Germany for 160 Tiger helicopters, giving
it world leadership in the military helicopter
market (in both quantity and value).

Exceptional order intake
and 3 percent sales growth
The Eurocopter Group enjoyed an exceptional
year in 1999, booking orders for 382 helicopters:
160 Tigers, 22 Super Pumas, 18 Dauphins,
95 single-engine Ecureuils, 10 twin-engine
Ecureuils, 11 BK 117s, 30 EC 135s, and 36 EC 120s.
Total orders amounted to 20.8 billion francs,
including new helicopters (15.3 billion francs),
R&D contracts (500 million francs), customer
services (3.9 billion francs) and miscellaneous(1.1 billion francs).
Eurocopter posted sales of 11.5 billion francs
in 1999, up 3.3 percent on 1998. The civil/stateagency sector accounted for 52 percent of sales,
and the military sector 48 percent. Sales toexport markets accounted for 84 percent of thetotal.

Income stable despite heavy investments
Operating income for 1999 remained steadyat FF 499 million, while Eurocopter invested in
new SAP computer management systems, plus
the service entry and production ramp-up of its
new-generation helicopters (EC 120, EC 135, EC 155).
As in previous years, it invested extensively indeveloping new products and improving current
products, independently financing part of theseinvestments.
At the same time, Eurocopter continued to
improve its cash position, which stood at nearly
one billion francs at the end of the year.

Focus on partnerships
While continuing its joint arrangements withinternational partners (on the EC 120, with China
and Singapore, and the BK 117, with Kawasaki
Heavy Industries, for example), Eurocopter also
actively focused on other international
collaboration initiatives to grow its market shareand provide solid foundations for the future.

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EC 155

NH 90

Ecureuil B3
EC 120 B

Building on its long teaming experience,
Eurocopter successfully implemented several
overseas co-production programs, for the Cougar
in Turkey, and for the BO 105 in South Korea.
In addition, several new projects are now being
negotiated as part of major acquisition programs,
most notably in Spain, Australia and Poland.
Last year also saw Eurocopter confirm its
intention of assessing in-depth the tilt-rotor
aircraft concept. Along with several European
partners it launched a joint initiative aimed at
the construction of a tilt-rotor demonstrator.

A modernized, renewed range
The success of the Eurocopter product line, now
largely modernized, was confirmed worldwide in
1999.
Over 2,900 Ecureuil helicopters have been soldsince the start of this very popular program. Its
success was further consolidated with the higher
performance B3 version, certified in 1997. The
100th B3 was delivered in 1999.
The EC 155 was off to an excellent start, witheight ordered in 1999. At the same time, interestin the high-performance N3 version of the
Dauphin was confirmed, with orders for ten
aircraft.
The EC 135 was certified for single-pilot IFR
operation and production was stepped up to
meet demand. A contract for nine aircraft at theend of the year by the Portuguese army enabled
Eurocopter to launch the military variant,designated EC 635.
An order by the French air force in 1999 enabled
Eurocopter to launch the enhanced performance“MK2+” version of the Super Puma. This new
version is especially well suited to civil and military
missions requiring higher payload capacity andlonger range.

Dauphin A365

AS 350Market demand for an EC 145 type (BK 117C2)
helicopter was also confirmed during the year,with a second major order. The French
Gendarmerie ordered eight of these enhanced
versions.
Eurocopter also tripled deliveries of the EC 120,
produced jointly with Singapore Technologies
Aerospace and Catic/Hamc of China.

Tiger
France and Germany placed an order with
Eurocopter for a first batch of 160 Tiger
helicopters (80 + 80) at the 1999 Paris Air
Show. Development tests of the weapon systems
were successful for both the antitank and escortversions of this helicopters. The antitank version
carried out successful day/night firing tests offour Hot missiles.

NH 90
Five NH 90 prototypes are now flying. This past
year saw the maiden flight of the PT4 prototype(TTH tactical transport version) in Germany,and the PT5 prototype (NFH naval version) in
Italy.
The four partner nations in this program also
renewed their commitment to launchingproduction of a first batch of aircraft, increased
from 151 to 196, within the scope of an agreement signed in Bonn in March 1999.

Customer support and production
resources
The results of Eurocopter’s customer support
business were positive in 1999, in terms of bothrevenues and customer satisfaction. From a
production standpoint, Eurocopter continued to
improve its facilities and optimize its skills base,for example, by increasing production staff andstreamlining its organization.

2425

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9

First

20

6

Creation

Ariane 4

Ariane 5

Ariane 5

Soyuz

of Astrium

launchescommercial
launchorderedlaunchesSpace
1999 was a pivotal year for the European space industry.
Ariane 5, with Aerospatiale Matra Lanceurs as industrial architect,made its first commercial flight in 1999, and MMS and DASA merged
operations to create a new satellite company, Astrium.
The merger of Aerospatiale Matra, DASA and CASA in 2000 will makethe new entity, EADS, the European space industry leader. But weare aiming even higher, by capitalizing on our technological excellence, greater economic efficiency and expanded partnerships.

Commercial launchers
Ballistic missiles
Satellites

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26
27

HELIOS IIARIANE 5

METOP

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SpaceInternational Space Station

World leader in commercial launchers
Aerospatiale Matra’s launcher business was very
successful in 1999, with the launch of nine Ariane
4 rockets and the first Ariane 5 commercial flight.
Operating in a market shaken by the uncertain
future of constellations and shrinking businessvolumes, Arianespace nonetheless bolstered its
leadership by winning 12 out of the 15 satellite
launch contracts up for bid worldwide in 1999.
This performance was underpinned by
Arianespace’s service excellence, reliability andflexibility. At December 31, 1999, Arianespace’s
backlog stood at 40 satellites to be launched.
Aerospatiale Matra Lanceurs Stratégiques etSpatiaux (Aerospatiale Matra Lanceurs), a wholly-owned subsidiary, is industrial architect for
Ariane 4 and 5, with responsibility for the design
and manufacture of the main stages. Aerospatiale
Matra Lanceurs is also prime contractor for
space vehicles, such as the Automated Transfer
Vehicle (ATV), the “cargo ship” for the international space station.
During the year, Aerospatiale Matra signed a
production contract with Arianespace for theP2 batch of 20 Ariane 5 launchers. This contract
also includes a cost reduction clause to enable
Ariane 5 to maintain its competitive edge over
American launchers.
Starsem, the joint Franco-Russian subsidiary of
Aerospatiale Matra (35 percent), Arianespace(15 percent), the Samara Space Center (25 percent)and the Russian space agency RKA (25 percent),
successfully launched six Soyuz rockets from the
Baikonur cosmodrome for Globalstar.

Strategic ballistic missiles
Aerospatiale Matra Lanceurs is the prime contractor for French strategic ballistic missiles, incharge of design, production, installation andmaintenance. The M51 program successfully
passed its No. 2 preliminary system design
review, while two M4/M45 acceptance firing tests
were also successful.

Soyuz

M51

In addition to these major domestic programs,
Aerospatiale Matra Lanceurs sells space products to outside customers. For example, its dispensers operated flawlessly on the six Starsem
launches this past year for Globalstar. These dispensers are designed to carry and release clusters of satellites for constellations.
Aerospatiale Matra also signed a multiyear agreement with Alcatel Space to supply antenna reflectors and other composite satellite structures.
Aerospatiale Matra Lanceurs’ industrial facilities
are grouped at Les Mureaux near Paris and in the
Aquitaine region near Bordeaux, and employ atotal of 3,450 people.

Satellites: creation of Astrium
On October 18, 1999, the two equal shareholders in Matra Marconi Space, Aerospatiale
Matra and BAE Systems, signed an agreementwith DASA to create a new company, Astrium,by transferring the satellite operations of DASA
to MMS. On December 2, 1999, this agreement
was extended to encompass CASA of Spain, making Astrium a quadrilateral company. Alenia
Spazio was immediately invited to join Astrium.
MMS’s business was jolted in 1999 due to difficulties – since resolved – with the solar panels
produced by one of its subcontractors. Working
closely with customers and suppliers, and with aconstant focus on the customers’ interests, MMS
was able to develop solutions to limit as much as
possible the impact of this incident on satellites
in orbit, and guarantee zero defects for satellites still to be launched.

The space business signed a number of contracts
in 1999, including scientific spacecraft (signatureof the Metop contract, selection as prime contractor for Mars Express), the military sector(Helios 2 ground segment) and commercial
telecommunications (signature of the Intelsat
102 contract, and in early 2000, signature of
the N1 Alpha contract with Intelsat, launching
the Eurostar 3000 platform).

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Metop

Matra Marconi Space offers three main productlines: Earth observation satellites (62 percent
of 1999 sales), telecommunications satellites(19 percent) and launchers and orbital infrastructures (19 percent).

Leadership in scientificand observation satellites
MMS produces both civil and military observation
satellites, as well as the associated ground segments. The civil sector accounted for about 70
percent of business in 1999, and the military sector the remaining 30 percent.
MMS won several major French and international

competitions in 1999, reflecting its technological excellence and confirming its leadership.

Promising satcom contracts
Not only is the communications satellite market
highly competitive, but it was affected in
1998-99 by the Asian crisis and the failure ofvarious constellation programs. However, MMS
has been selected as prime contractor forIntelsat’s N1 Alpha satellite. This is the launch
contract for the new-generation Eurostar 3000
platform, which augurs well for the technical andcommercial competitiveness of this platform.
Egypt also placed an order with MMS for a second direct broadcast satellite.
MMS is the leader in the military satcom

market, and was chosen by the British Ministryof Defence to carry out a major design study
for Skynet 5.
It was also chosen by the Turkish Ministry of
Defence to develop the complete military
telecommunications satellite system ground segment, the largest in the world to date.

ATV - Automated Transfer Vehicle

Space transport and orbital infrastructure:technological expertise
MMS is in charge of the design and productionof Ariane’s vehicle equipment bay, the “brains” ofthe launcher. Production continued at a sustained
pace, as it supplied VEBs for the nine Ariane 4launches during the year.
Matra Marconi Space is also involved in the construction of the international space station, as
supplier of the computer systems for the
Columbus Orbital Facility and the ATV cargovehicle, both financed by the European Space
Agency. MMS is also developing advanced space
rendezvous technologies for this program.

Astrium: No. 1 in Europe
The creation of Astrium took effect on March
21, 2000, when the project was approved by
the European Commission.
It is the third largest space company in the world,with operations in three countries, France, theUnited Kingdom and Germany. It will soon
expand to five countries, following the additionof the space businesses of CASA (Spain) and theFinmeccanica group (Italy). Astrium is the culmination of a process that began back in 1990,
and the reflection of an unrelenting commitment
by its shareholders to develop their presence inthis sector.
Astrium will be a space industry “major”, withthe enabling technologies and vast experienceneeded for continued growth. Furthermore,this merger should generate major commercial, industrial and human synergies.

28
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Page 30

6.1

1.1

240

200

Launchbillion euros

billion euros

million euros

million euros

of “New MBD”

order book

PAAMS contract

Storm Shadow contract

Rapier contract

Missile Systems
The merger creating the new Aerospatiale Matra Group took place in June
1999. This merger also led to the consolidation of the missile systems operations of Aerospatiale Matra
Missiles (AMM) and Matra British Aerospace Dynamics (an equally-owned joint venture of Aerospatiale
Matra and BAE Systems). The new entity logged sales of 1.2 billion euros in 1999, down 30 percent on 1998,
as expected, because of an exceptional export contract that was completed in 1998.
Business was sustained however, ensuring excellent long-term viability. Orders were booked for 1.9 billion euros,
bringing the year-end order book to a new record of 6 billion euros, equal to five years of work. Furthermore,
the new orders booked in 1999 were fundamental, since they enabled the launch of key European programs,in particular PAAMS, an air defense system using Aster missiles, to be deployed by new-generation British,
Italian and French frigates. Major export contracts included Rapier missiles for the U.K. and Turkey, andthe Storm Shadow for Italy. In domestic markets, contracts were signed for new phases of programs alreadyunder way (Aster FSAF, upgraded Roland, ASMP, etc.).
With the advent of EADS, and the agreement providing for the creation of a new joint missile systems company by Aerospatiale Matra, BAE Systems and Finmeccanica, temporarily dubbed “New MBD”, this newcompany will be the leading missile-maker in Europe and Number 2 worldwide, just behind Raytheon. With
New MBD, Aerospatiale Matra – and soon EADS – will be able to offer a real alternative to U.S. missiles.

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Page 3130
31

PIVER CL 289

METEOR

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MissileSystems

Apache

The group’s Missile Systems business includes
Matra BAe Dynamics, in which it has a 50-percent
stake, and the former Aerospatiale Missiles.

Sustained orders ensure future growth
Following exceptional deliveries and orders in
1998, especially export orders, this past year
once again saw healthy orders. Missile Systems
orders totaled 1.9 billion euros, outpacing sales
by 58 percent.
Although there were no major new domestic
programs, the group garnered additional fundingfor existing programs, in particular for countermeasure systems and development contracts formissile integration on Rafale and Mirage 2000-5
aircraft.
Business in Britain, on the other hand, was buoyant, and the group is now a key player in major
pan-European programs. The highlight was theannouncement by the British MoD on August 11of the PAAMS contract for 1.1 billion euros, covering requirements by France, the U.K. and Italy.
This contract is the first concrete reflection of
the successful integration of MBD and the former
Aerospatiale Missiles. The organization set up forthis program provides for a clear distribution of
responsibilities and cooperation on cost reduction.
The British government awarded another major
contract, worth 320 million euros, for RapierMark 2 short-range surface-to-air missiles.
Two major export contracts were signed in 1999.
The Italian government selected Storm Shadow
cruise missiles for its Eurofighter and Tornado
aircraft in a contract worth 240 million euros.
In addition to the supply of a substantial number of missiles, along with ground support equipment and maintenance systems, the contract
provides for the establishment of a wide-ranging partnership with Italian industry on the Storm
Shadow/Scalp-EG program. The second contract was awarded by Turkey: an order for Rapiermissiles worth 200 million euros.

AS 30 Kaiser

Order book expected to expand in 2000
Several major contracts are expected this year,
in particular the Medium Range Trigat antitank
weapon and especially the future air-to-air missile
for the Eurofighter. The British government has
already issued a request for proposals (RFP) for
this missile, and MBD has responded by setting up
the Meteor consortium along with Marconi,
Alenia, LFK, CASA and Saab. The objective of thisconsortium is to focus European energies andprovide a common solution for the air forces of
the U.K., Germany, Italy, Spain and Sweden, as
well as the French air force, which recently joined
the program. In a major development at the endof 1999, Boeing also joined the consortium,
which should facilitate American market access.

Improved productivity
Missile Systems productivity continues toimprove, driven by two major factors:• Synergies generated by the merger of theformer Aerospatiale Missiles with MBD.
• The continuation of productivity enhancement initiatives launched in each company
before the merger.
In particular, the profitability of the former
Aerospatiale part of this business has improved
substantially due to restructuring and cost reduction actions implemented in recent years. These
productivity improvement initiatives are pursued
within the scope of the “Perf 2001” plan.
Restructuring of the workforce also continued,
with the number of employees reduced from
3,184 at the beginning of the year to 2,964 at
December 31, 1999 (full-time equivalent, including consortiums). Profitability will continue to augment in 2000 and beyond, based on thecontinuation of these restructuring plans and productivity improvement measures. New synergies
are expected starting in the second half of 2000,
due to the creation of EADS, and above all to theintegration of Aerospatiale Matra Missiles within
the future European missile company.

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TrigatTechnical milestones• Demonstration of the trouble-free operationof equipment in the Vesta ramjet, intended for
the ASMP-A missile.
• Start of qualification firing tests for the Aster 15
system, to be installed on the Charles-de-Gaulle
aircraft carrier.
• Integration of the first upgraded Roland firing
station, equipped with the Glaive sight.
• Success, on schedule, of all functional integration operations and on-wing carriage tests of
the Storm Shadow/Scalp-EG cruise missile.
•The operational effectiveness of the second
version of the Mica missile, with infrared guidance, was proven in flight tests.
Other milestones are expected in 2000,
including:•Start of volume production of Apache,

Europe’s first cruise missile.
•First flight of the Storm Shadow/Scalp-EG
cruise missile.
• Qualification of the French Aster antimissile
missile.

The No. 2 missile company in the world
Right from the time of its creation in 1996, MBD
shareholders intended it to be the consolidation
hub for the European missile industry. These
partners’ own growth paths – creation of
Aerospatiale Matra, then the advent of EADS
and BAE Systems in 1999 – created the conditions necessary for a new expansion of Matra
BAe Dynamics. On October 20, 1999,
Aerospatiale Matra, BAE Systems and the Italiangroup Finmeccanica announced that they werecreating a jointly owned missile and missile
systems company, to be called “New MBD”.

The NSM medium-range antiship missile

Starting this year, the company will encompass thefollowing entities: Aerospatiale Matra Missiles,
Alenia Marconi Systems-Missiles and Matra
BAe Dynamics. Once consolidated, stock in the
new company will be owned by Aerospatiale Matraand BAE Systems, each with 37.5 percent, and by
Finmeccanica, with 25 percent. It may also incorporate LFK, in which it already has a 30 percent
stake, with the remaining 70 percent held by DASA.
Once completed, this consolidation will create
the world’s second largest missiles company. A
full-fledged missile systems prime contractor, it willoffer an attractive alternative to American competitors. The new entity will have annual salesof about 2.5 billion euros, a solid order bookand 10,000 skilled employees. It will be either
prime contractor or main partner in all main
joint European programs. In addition, it will offer
products for all segments of the market, and allbranches of the armed forces, and will have theresources needed to ensure sustained competitiveness. Furthermore, “New MBD” will enjoy
structural access to the four largest European
markets: France, the United Kingdom, Italy andGermany.

p a ge s

3233

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860

67

5,936

million euros

million euros

employees

sales

independently-financed
R&D

Systems, Services andTelecommunications
The Systems, Services and Telecommunications(SST) Sector was created on September 1,
1999, reflecting the Group's commitment to energizing andorganizing its internal telecoms, services, test and Internet
capabilities. These activities put Aerospatiale Matra at theheart of the dynamic New Economy and enables the enterprise
to offer its traditional military customers leading-edge
technologies from the civil sector.
To leverage synergies between civil and military activities, a
new organization was implemented in the last quarter of 1999,

62% Telecoms

based on five core businesses: C4ISR (secure transmission sys-

12% C4 ISR

tems in particular for armed forces), Services & Tests,

11% Services & Tests

Computer-aided Design and Manufacturing ( CAD/CAM),
Internet Services and Telecommunications.
These units will enable the Group to leverage the synergies
created by blending the assets of Aerospatiale and Matra Hautes
Technologies and to benefit from the strong growth potentialof new information technologies.

10% CAD/CAM
5% Internet

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Systems,
ServicesandTelecommunications
Services & Tests: meeting growing
demand by armed forces and airlines
for outsourced services
Leveraging civil/military synergies
Defense markets offer remarkable growthpotential for SST, but the technologies used(telecoms, secure Internet networks, etc.) areoften developed in the civil sector. Aerospatiale
Matra's objective is to leverage civil expertise inGroup subsidiaries — such as Matra Nortel
Communication, Sycomore, Matranet andMatra-Datavision — to develop new applications
for traditional clients, notably armed forces. It
was this dual military/civil strategy which drove
the reorganization of the business.
From January 1, 2000, all Systems, Services andTelecoms activities were grouped into fivebusiness units and rounded out by an Integrated
Systems Division, the aim of which is to crossfertilize disparate skills to develop a unified
service offering.

C4ISR: secure telecommunications
systems for armed forces
The C4ISR business unit (Command, Control,
Communications, Computers, Intelligence,
Surveillance, Reconnaissance) constitutes thecore of SST for information technologies andcontrol systems. It encompasses the subsidiaries
MS&I, APIC, Fleximage and ISTAR.
As the defense market continues to shrink acrossthe globe, the C4ISR segment is experiencing
relative growth, as demonstrated by recent
multinational military operations (Kosovo inparticular) that count on C3I and observation
systems (satellites, drones, etc.). Aerospatiale
Matra is a key player in this market segment inFrance, with a 15 to 20 percent market sharedepending on the application. It also boasts
promising growth potential in the global
marketplace.

This business unit offers outsourced testing andother services, and is based on specializedengineering companies such as APSYS, CRIS
and G2I.

• The advent of professional armies is now a global

reality. In Europe, this has led chiefs-of-staff to
outsource a number of tasks to industry. The aimof SST's Outsourced Services Division is to build its
business in the aviation and defense segments forgovernments, state agencies and private customers.
The target market is experiencing burgeoning
growth, with annual sales in France of over
10 billion francs. Aerospatiale Matra boasts thecomprehensive expertise needed to offer
outsourced services, since it benefits not only fromthe technical resources of the SST sector, but isalso the preferred partner of airlines and armed
forces across the globe.

• Aerospatiale Matra is also a leader inequipment test stands, notably for avionics
equipment. Test stands and benches are sold toairlines, armed forces, aircraft and equipment
manufacturers, etc. In the civil sector,
Aerospatiale Matra's Services & Tests unit holds
an 80-percent share of the global market withsales of 150 million francs, including to 19 of the
20 largest airlines. In the military sector, theunit is a European leader with 40 percent of themarket and 450 million francs in sales. This
segment harbors strong consolidation potential
in Europe and is moving towards comprehensive
full-service offerings. Our leadership in test stands
and our understanding of customer needs puts
us in an excellent position in this market.

CAD/CAM: strengthening
our leadership in a market growing
by 20 percent per year
The global market for computer-aided design
and manufacturing (CAD/CAM) and data
management services and software is estimatedat $5 billion, and the services business is growing
at over 20 percent per year. While the software
segment is being rapidly consolidated and isrestricted to a few suppliers, the service offering

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remains highly scattered. Matra Datavision, awholly-owned subsidiary of Aerospatiale Matra,
is a European leader in this market with
720 employees in 12 countries.

Internet and Operator Services:a booming market with significant
opportunities in aerospace and defense
This business unit is based around Internet
Protocol services and includes subsidiaries
Sycomore (secure Internet network architecture),
Matranet (software for Internet network security
and e-business applications), MGN (hosting of
websites) and Multicom (Internet protocol
applications via satellite services).
In 1999 these subsidiaries posted relatively
modest sales of 45 million euros. However, they
enjoy excellent growth potential, with the largestof them, Sycomore, doubling its sales in two
years. Originally developed for civil applications,
their offer essentially targets major civil groups.
However, a contract in 1999 for a secure email
system for the French army demonstrates thepotential for developing applications for its
traditional clientele in the aerospace and defense
sectors.
For each of these subsidiaries, Aerospatiale Matrais currently reviewing the most appropriate
means of financing development, from alliances
to the total or partial listing of certain subsidiaries.

Telecoms: huge potential, particularlyin the secure digital radio market

In 1999, Matra Nortel Communications returned
to break-even following the sale of its loss-making
GSM terminal business, and maintained revenue
levels despite the divestment.
On March 30, 2000, Aerospatiale Matra andNortel announced the creation of twin
companies spun off from MNC:
• A company specialized in professional mobile
radio (PMR) held 55 percent by Aerospatiale
Matra and 45 percent by Nortel;• A company grouping MNC's other civilcommunications activities, held 55 percent by
Nortel and 45 percent by Aerospatiale Matra.
This reorganization reflects Aerospatiale
Matra's strategic ambitions in the telecoms
sector.

Integrated Systems Division:leveraging synergies between
the five business units
An Integrated Systems Division has been createdto handle more general "systems system"
responsibilities, as opposed to the moreconventional C31 missions of the other SSI
business units. This Division proposes a holistic
approach for the coordination, integration andoptimization of technologies and systems
management services.
Within this new context, the Systems, Services
and Telecommunications sector is pursuing thefollowing objectives:

This business unit comprises Intecom (a whollyowned subsidiary) and Matra Nortel
Communications (50-percent stake, along with
Nortel). It operates in the following segments:• establish itself as a major supplier of operating
and telecom systems;• Professional mobile radio: MNC is a global• seize opportunities to develop outsourcing

leader in secure digital networks with 30
networks in 15 countries. MNC currently holds
a 17-percent share of the global digital market,
and aims to boost this figure to 25 percent by
2003. Growth of the global PMR market isestimated at 5 percent per year. The digitalsegment in which MNC operates should growfourfold between 1999 and 2003.

• Operators, transmission and voice/data accesstechnologies for fixed and wireless networks.
MNC is the leading supplier of telecom
equipment in France, following the deregulationof the national market. It holds an 8-percent
market share, with a target of 15 percent by 2002.
In the business communications systems segment,
MNC enjoys a 30-percent share of the Frenchmarket and a 10 percent share in Europe. This
market is characterized by burgeoning growth invoice-over-IP and high-value-added services.

• develop C4ISR systems and services, byleveraging leading-edge information technologies;

services for the armed forces;• capitalize on the growth opportunities of thismarket to boost profit margins.

To prepare for the future growth of thesebusinesses, Aerospatiale Matra significantly
boosted independently-financed R&D expenditures in 1999, up 65 percent on the previous
year, and representing 8 percent of sales in this
sector.

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37

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futureAerospatiale Matra's Research and Development
efforts focus on four strategic goals:•reduce product development costs and cycles•respect the environment•improve product performanceand competitiveness•maintain the Group's technological lead andstrengthen areas of excellence.

Sustained efforts and effective
organization
The Group spent 13 billion francs on R&D in 1999,
equivalent to 15 percent of sales. R&D
expenditure was up 20 percent (pro forma) on
the previous year.
Research and technology (R&T), the upstream partof R&D, grew by 10 percent in 1999, reaching
1.5 billion francs, or 2 percent of Group sales.
An organization based on networked research
initiatives enhances synergies between different Group
entities and with the Joint Research Center.
By rationalizing R&D actions, this organization unites
the strengths of Aerospatiale and Matra Hautes
Technologies.
Research is also carried out in cooperation withpublic and private bodies offering highly
complementary skills. R&D is increasingly a panEuropean affair, particularly under the auspices of theEuropean Commission.
The Group's substantial R&D efforts reflect theimportance it attaches to staying on the cusp oftechnological innovation, the key to long-term
viability.

Significant achievements in 1999

• Flight tests of a new-concept silent helicopter
demonstrator.

•Structural integration of a composite keel beamon the Airbus A340-500/600 (weight reduction
combined with enhanced performance).

• Fiberoptic guidance of new-generation multimission missile (winner of the "Ingénierie General
Chanson" Award).
• Development of a new flight control system, toupgrade Ariane 5’s payload capacity and for certain
strategic missiles.

• Deployment of new non-destructive testing

concepts for the production of new-generation
fuselages, leading to lower costs by significantly
reducing scrap.

38
39

New information technologies• Development of a new server for high-speed
video and multimedia IP transmission.

• Development of technologies for voicerecognition in environments subject to interference.

• New telephony concept with innovative switchingarchitectures.

Long-range research goals

technoly

RA 99 - P34• Digital enterprise, concurrent engineering, newproduction methods.

• Technologies for a tilt-rotor system.
• Technologies for very large jetliners (A3XX).
• Scramjet technologies for hypersonic air-breathing
propulsion systems.

• New concepts for data fusion and synthetic

images for Earth observation, medical and military
applications, etc.

• Space-borne optical instruments with extremely
high resolution.

• Design of secure software for electroniccommerce applications.

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Human
Resources
Aerospatiale Matra experienced majorchanges in 1999. This included the spinoff of its businesses in April, theAerospatiale/Matra Hautes Technologies
merger and privatization in June, agreements on the creation of EADS in
October and December, and negotiations on the reduction of the work week,
another key issue in 1999. These milestone events engendered deep organizational changes, successfully accomplishedthrough careful Human Resources management. The Group's approach has
been to combine respect for its people
with a future-focused dynamic, anchoredin high-quality labor relations.

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Employee shareholding,a major new development
Aerospatiale Matra's IPO included a share offeringreserved for Group employees, constituting a powerful lever for staff motivation.
Employees greeted Aerospatiale Matra's businessplan with enthusiasm and subscription levels
reached 82.25 percent, the highest level ever forthe privatization of a manufacturing company(nearly 95 percent subscription for management,over 80 percent for supervisory staff and 67 percent
for line workers).
These remarkable results demonstrate the motivation of Aerospatiale Matra employees and theirsense of attachment to their enterprise.
Integrating people and cultures
The successful integration of Aerospatiale and Matra
Hautes Technologies teams constituted a key management commitment and a particularly important
challenge. This integration was accomplished inrecord time and almost all integration initiatives
have been completed well ahead of schedule.
Rising to the challenge of the deep changes wrought
in 1999, the Human Resources Division coordinated all the social, cultural and industrial integration
processes fundamental to any merger project. The
network approach nurtured over several years within the enterprise proved to be an effective means ofblending cultures.
Seventeen integration initiatives were launched
in 1999, with the Human Resources Division playing a pivotal role in three major projects: integration of General Management, harmonization of
Human Resources values and practices, and internal
communications. The first project is now completed and 70 people from the Lagardère group havebeen integrated in the newly-merged enterprise.
Over 80 people from the two cultures worked on
harmonizing Human Resources values and practices, reviewing and proposing innovative, high-performance solutions. The implementation of workgroup recommendations should provide an excellent
theoretical base from which to launch EADS. Lastly,
the internal communications project continues tomake solid progress, resulting in several articles in
in-house publications and a dedicated "integration"
intranet site, featuring information from the different work groups and initiatives.

Dynamic, flexible employment policy
Within the context of ongoing integration,
Aerospatiale Matra has deployed specific resources
geared to the quantitative and qualitative management of Group employees. The merger of the twogroups has in no way impinged upon continuous
skills-building initiatives within the enterprise, noron the career development of its people, notably
through internal mobility.

The total number of consolidated Group employees, expressed in equivalent full-time positions,rose from 46,841 at December 31, 1998, to
47,078 a year later.
A total of 2,212 people were hired in 1999.
Opportunities for career development within theGroup attracted the interest of a large number ofyoung graduates.
At the same time, around 500 people moved tojobs in new locations, as part of the restructuring
program implemented in previous years. Positions
to be filled throughout the Group, including in exMHT subsidiaries, are now open to everyone via
the intranet. These restructuring efforts are also
supported by numerous training initiatives aimed
at developing employee versatility.

Reduction in the work week
and contractual policy
Four meetings of the Group employee-management
committee and 12 meetings of the Central
Committee were held in 1999. Eleven agreements
were signed, including the Aerospatiale frameworkagreement on March 30, 1999 on the reductionof the work week, and the agreement signed on July
7 on the new group employee-management committee and Aerospatiale Matra union delegates,
both signed by five unions. The agreement on the
reduction of the work week applies to all Groupsubsidiaries and provides a framework for the implementation of the 35-hour work week as of Augustin Launcher and Missiles subsidiaries. The actions
implemented from this period led to the establishment of a new remuneration system applicable fromJanuary 1, 2000.

40
41

Aerospatiale Matra InstituteFor a number of years the Aerospatiale Matra
Institute has deployed a progress-oriented strategy to support high-quality performance and competitiveness.
During 1999, Institute initiatives enabled the Groupto achieve several objectives:
1. Develop the professionalism of managers andspecialists: 1,956 people trained, of whom 328 in
1999.
2. Enhance competitiveness in global markets andstrengthen European integration:1,282 people
trained, of whom 289 in 1999.
3. Strengthen the strategic function through functional networks: 4,500 people trained to date, ofwhom 301 in 1999.
4. In addition, the Aerospatiale Matra Institute has
established a knowledge network and flexible training
systems based on multimedia applications, involving
2,000 people in 1999.
These initiatives bring together managers from all entities and foster the creation of internal networks to
improve the efficiency and profitability of the Group.

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PolicyFinancial

Aerospatiale Matra's financial policy is anchoredin one key objective: create value for shareholders. To achieve this, the Group is focusing on
three strategic goals:• Improve profitability while reducing capital
employed.
• Manage the various financial risks to which theGroup is exposed, in particular exchange rate risks.
• Efficiently manage the economic factors involved inlaunching new programs.

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profitability

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Improving profitability and reducing
capital employed

The savings plans are a direct outgrowth of ongoing optimization of production processes, renegotiations of procurement contracts with our suppliers,
synergies generated by the merger, and amortization of fixed costs due to sales growth. To date,these plans are on schedule and we should start tosee the concrete benefits of synergies in 2000.
We are ahead of schedule in meeting our objective of an 8-percent operating margin by 2003. On
the occasion of our IPO in June 1999 we indicatedthat operating income in 1999 would be significantly
lower than the previous year, when income wasboosted by a defense export contract with exceptional profit margins. In fact, operating income in1999 was on a par with 1998, despite the hiatus
in major defense contracts and technical difficulties(since resolved) in the satellite business.

In addition, we have pursued our efforts to reduce
capital employed, where we also exceeded objectives, since the Group's net cash position improvedby more than 700 million euros in 1999, largely
due to a 504 million euro improvement in working capital requirements.

Managing exchange rate risk
Faced with exchange rate risks, due primarily tofluctuations in the value of the dollar, Aerospatiale
Matra has established a hedging strategy which isdesigned to guarantee dollar flows at rates higher
than the industrial break-even point (5 francs). In
1999, the Group spent 401 million euros torestructure its hedging arrangements, in line with
its strategy. Recorded under extraordinary items,
this expenditure was designed to provide
shareholders with maximum visibility. The Group
does not expect to make any additional expenditure
for at least four years.
Market conditions and scrupulously following ourstrategy enabled the Group to cover dollar flows at
a much higher rate than the industrial break-evenpoint: 5.50 francs in 1999 and between 5.50 and5.60 francs for 2000 and 2001. In 2002, the hedging
rate will be 0.40 francs higher than the market
dollar, with a ceiling of 5.60 francs. For 2003, wehave begun to cover projected dollar fluctuations at
higher levels of between 6.20 and 6.30 francs.

Managing economic criteria for program launches
Faced with an increasingly competitive and fast-evolving technological environment, constant productrenewal is required to sustain long-term development and market leadership. This involves the launchof core programs harboring significant growth potential, such as Ariane 5, the NH 90 or the A3XX.
For each new program we have established very strict decision criteria for technical feasibility, return on
investment and market potential. The role of the Financial Division is to evaluate return on investment
and to seek the means of reducing impact on capital employed. For a program such as the A3XX, thereturn on investment required is in line with the Group's capital costs after tax and the risk premium
inherent to this type of project. In addition we have sought to reduce the independently financed partas much as possible by bringing in venture capital partners to cover 40 percent of total costs. The A3XX
program, for which a decision is expected in 2000, will only be launched if we are convinced that it will
create value for the Group.

42
43

growthAt the time of Aerospatiale Matra's listing on the
Paris Bourse, we set a clear and ambitious targetof achieving an 8-percent operating margin by 2003,
double that of 1998 on a pro forma basis (excluding the costs of launching the A3XX). To meet thistarget, we have deployed measures aimed atachieving 600 million euros in annual savings on arecurrent basis, including 450 million euros linked
to productivity improvement plans. A further 150
million euros in savings derives from a reduction in
independently financed research and development
expenditures, since we are currently in the completion phase of a major upgrade effort for productranges in all our activities.

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les adresses

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FRANCE

Paris (Corporate headquarters)
Aerospatiale Matra
37, boulevard de Montmorency
75781 Paris Cedex 16

Suresnes

Centre Commun de Recherche
12, rue Pasteur - B.P. 76
92152 Suresnes cedex

Paris

AMLI (GIE)
6, rue Laurent Pichat
75016 Paris

AIRCRAFT

Toulouse

Aerospatiale Matra Airbus
316, route de Bayonne
31060 Toulouse cedex 03

Marignane

Eurocopter
Aéroport International MarseilleProvence
13725 Marignane

Toulouse

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SYSTEMS, SERVICES AND
TELECOMMUNICATIONS

VélizyMatra Systèmes et Informations
6, rue Dewoitine - B.P. 14
78142 Vélizy Villacoublay

VélizyM C N SAT Service
6, allée Latécoère - B.P. 280
78147 Vélizy Villacoublay

Les Ulis
Matra Datavision
31, avenue de la Baltique
Parc d'activité de Courtabœuf
91954 Les Ulis Cedex

Bois d'Arcy
Matra Nortel Communications
Rue Jean-Pierre Timbaud B.P. 26
78392 Bois d'Arcy

Asnières
Matra Grolier Network
42, rue Gallieni - 92601 AsnièresWORLDWIDE

Aerospatiale Matra ATR
316, route de Bayonne
31060 Toulouse cedex 03

SUBSIDIARIESAND OFFICES

Bordeaux

Aerospatiale Matra
Level 1, 10 Moore Street
GPO Box 3221
Canberra Act 2601

SogermaAéroport International de
Bordeaux Mérignac - B.P. 233701 Mérignac Cedex

Le Bourget

SocataLe Terminal Bât. 413
93362 Aéroport du Bourget

Page 44

AUSTRALIA

Eurocopter International Pacific
616 Comper Street
Bankstown Airport
P.O. Box 51
Bankstown NSW 2200

BELGIUM
DEFENSEAND SPACE TRANSPORT

Châtillon
Aerospatiale Matra Missiles
2-18, rue Béranger - B.P. 84
92323 Châtillon Cedex

Aerospatiale Matra
53, avenue des Arts
1000 Brussels

Fontenay

Matra Datavision
Parc Astrid
224, rue Isidore Meyskens
1780 Wemmel

Euromissile (GIE)
12, rue de la Redoute
92260 Fontenay aux Roses

Matra Nortel Communications
Rue de la Grenouillette 2B
B 1130 Brussels

VélizyMatra BAe Dynamics
20-22, rue Grange Dame Rose
B.P. 150
78141 Vélizy Villacoublay

Les MureauxAerospatiale Matra Lanceurs
Sratégiques et Spatiaux
Route de Verneuil - B.P. 96
78133 Les Mureaux

SATELLITES
VélizyBRAZIL
Aerospatiale Matra
SCS, Q.3. B1. A.lj 74/78
1° andarA/C Banco Cidade
70300-500 Brasilia-DF
Helibras (Helicopteros do Brasil)
Rua Santos Dumont n° 200
Distrito Industrial de Itajuba
Caixa Postal 184
37500 Itajuba Minas Gerais

CANADA

Matra Marconi Space
37, Avenue Louis Bréguet B.P.1
78146 Vélizy Villacoublay

Aerospatiale Matra Canada Inc.
275 Sparks Street - Suite 902
Ottawa - Ontario K1R 7X9

Toulouse

Eurocopter Canada Ltd
1100 Gilmore Road
P.O. Box 250
Fort Erie - Ontario

Matra Marconi Space31, rue des Cosmonautes
31402 Toulouse Cedex 4

Matra Datavision Inc.
Bureau 500 7575 routeTranscanadienne
Saint-Laurent Québec H4T1V6

CHINA
Aerospatiale Matra
Jing Guang Centre Bureau 3108
HU JIN LOU Chao Yang District
Beijing 100020

EGYPT
Aerospatiale Matra
5 Dar El Shifa,
Garden City
Cairo

GERMANY
Aerospatiale Matra Deutschland
Schieffelingsweg 12
D 53123 Bonn
Eurocopter Deutschland
Donauwörth Ottobrünn
81663 Munich
Matra Datavision GmbH
Schatzbogen 62
81829 Munich
Matra Marconi Space
P.O. Box 286156
D-28361 Bremen
Matra Nortel Communications
Wilhem Runge Strasse 11
D-89081 Ulm

GREECE
Andromeda Hotel
22 Timoléontos Vassou Street
Mavili Square - 11521 Athens

INDIA
Aerospatiale Matra India
Liaison Office
Aerospatiale House
10 A, Prithviraj RoadNew Delhi 110011

INDONESIA
Level 43 Wisma 46 Kota BNIJL Jend Sudirman Kav 1
10220 Jakarta

ITALY
Aerospatiale Matra
35 Via Ludovisi
00187 RomeMatra Datavision SPa
Corso Svizzera 185
10149 Turin

JAPAN
Aerospatiale Matra
Akimoto Minami Aoyama
Bldg 5f
1-9 Minami Aoyama 4-Chome
Minato-Ku - Tokyo 107

MALAYSIA
Aerospatiale Matra
19A-14/3
UOA Business Suite
19 Jalan Pinang
50450 Kuala Lumpur

MEXICOTAIWANEurocopter Mejico S.A.
Hangar n°1 Zona G
Hangares Aeropuerto
Internacionales
15620 Mexico City D.F.

14, Floor Bank Tower
Suite 1403
205 Tuan Hua North Road
Taipei

MOROCCOMatra Hachette
Development International
2/4 Nailert Tower 5th
Floor WirelessLumpini Pathumwan
Bangkok 10330

Maroc Aviation
12, rue Lécrivain
Casablanca

POLAND
Aerospatiale Matra
Ilmet Business Center
Jana Pawla II 15
00828 Warsaw

RUSSIA
Aerospatiale Matra
66/20 Zemlyanoy Val
109004 Moscow
Matra DatavisionDom 27, Kv10 - Ulitsa Arbat
121002 Moscow

SAUDI ARABIA
Aerospatiale Matra
P.O. Box 50602
Riyadh 11533

SINGAPORE
Aerospatiale Matra
14-04 Liat Towers
541, Orchard Road
Singapore 0923
Eurocopter
South East Asia Pte Ltd
48, Loyang Way
Tampines South
P.O. Box 0326
Singapore 9152

SOUTH AFRICA
Aerospatiale Matra
Hartfield Gardens
Cnr Arcadia& Grosvenor Streets
Block E, 3rd Floor
Hatfiel 0028 Pretoria

SOUTH KOREA
Aerospatiale Matra
Suite 1104, Sung-Jee
Heights Building
702-13, Yeoksam-Dong
Kangnam-KU - Seoul

THAILAND

TURKEY
Aerospatiale Matra
Turan Emeksiz Sok A3/3
GOP - 06700 Ankara

UAE ABU DHABI
Aerospatiale Matra
P.O. Box 46429
Abu Dhabi

UNITED KINGDOM
Aerospatiale Matra Ltd
16, Old Bond Street
London W1X 3DB
Matra BAe Dynamics
11 Strand - London
WC 2 N 5 HR
Matra Datavision UK Ltd
University of Warwick
Science Park
Sir William Lyons Road
Coventry CV47EZ
Matra Marconi Space UK
Gunnels Wood Road
HertfordshireSG1 2AS Stevenage

UNITED STATES
Aerospatiale Matra Inc.
1101 15th Street NW
Suite 800
Washington DC 20005
A.E.C. American Eurocopter
Corporation
2701 Forum Drive
Grand Prairie, 75051
Texas
Fairchild Matra Aerospace
540 Highland St Frederick,
Maryland, MD21701

Matra Datavision Inc.
1 Tech. Drive AndoverAerospatiale Matra
Tech Centre
Calle Serrano Jover n°5 - Planta 1810 Andover
6A
Matranet Inc.
28015 Madrid
1172 Castro Street
Helicopteros Eurocopter
Mountain View, CA 940040
General Peron, 38
Intecom
Edificio Master's 1 - Planta 155057 Keller Springs
28020 Madrid
Dallas Texas
Matra Datavision
Barfield
C/Orense 70-Piso 11
4101 NW 29th Street
28020 Madrid
Miami, Florida 33142
Matra de Comunicaciones
City Parc Ronda de Dalt
Edif C- Carretera de Hospitalet
147-149 8940 -Cornella di
Llobregat
Barcelona

SPAIN

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Investor Relations
www.aeromatra.com

Design and production/Phénix Communication.

Photos: Aerospatiale Matra Lanceurs - Aerospatiale Matra Missiles - Airbus Industrie - ATR - Ariaplan: F. Robineau - Bechennec - Eurocopter: G. Deulin - Fotogram-Stone: Tim Brown, John Chard, Myrleen Cate, K. Horgan, Derke O’Hara
Stuart Westmorland - Guigui - Jullien - Kongsberg - Knapp - McCann - Matra BAE Dynamics - Matra Marconi Space - Matra Systèmes Information - Penna - Pix: Steve Bloom, Gérard Fritz, Fruchet - Erhardt Maurice - Sirpa Air
Socata - Starsem - Stock Image - Tokunaga - Toineau.

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Investor Relations and Financial Communications
37, boulevard de Montmorency
75781 Paris cedex 16