LATECOERE

Strong growth in revenue
Over the first half of 2008, the LATECOERE group achieved revenues of €297.2 million, up by 17.3% when compared to the first half of 2007. Restated to take account of extraordinary items and the impact of changes in dollar/euro parity, organic growth comes to 13.9%, explained by the increased rate of Airbus, Dassault and Embraer deliveries

Results affected by the end of the Zephyr project
The EBIT comes to €11.1 million, a significant fall compared to that of the first half of 2007, mainly due to spending for the Zéphyr project (takeover of the Airbus Méaulte and Saint-Nazaire sites), and to a fall in the contribution from hedges on the dollar.
Non-operating revenue, including the underlying capital gains on hedging instruments, comes to €1.4 million. It brings net earnings up to €8.5 million (2.8% of revenues).

Net debt controlled
Overall net debt was kept under control over the period, reaching €361 million vs. €377 million at December 31st 2007. This improvement includes the first results of the actions designed to optimise working capital requirements. Debt reduction remains the Group’s primary objective.

Increase in the backlog
The Group’s backlog was worth €2,010 million at June 30th 2008, representing around four years’ revenues. This order book only includes firm orders placed by customers. Its increase is due to large orders placed by the aircraft manufacturers at the start of the year.

The “Défi 2011” plan
This cost-cutting plan was launched as soon as Airbus announced the end of the project to take over the Méaulte and Saint-Nazaire sites. It comes in addition to the measures already included in the previous “Objective 2009” plan. It aims to develop the engineering and services business while stepping up the rate of production transfers to “low cost” countries. At the same time, the contracts of temporary staff in the "support" functions will not be renewed, and the organisation, hierarchical structure and processes will be overhauled and simplified.
All of these actions are intended to consolidate the Group's financial situation, for a return to satisfactory profitability in a situation where the dollar is set to remain weak over the long-term.

Outlook
The activity registered since January 1st 2008 allows the Group to confirm its objective for growth in revenue exceeding 10% for the year. The second half of the year will not benefit from the non recurrent financial items which helped to maintain results over the first half. As a result, net income for the year will just manage to stay positive, with average coverage of €1=$1.35 for the financial year.

An improvement in €/$ parity over the summer made it possible to set up new hedging programmes, securing 90% of the forecasted exposure for 2009, at €1=$1.48, and 50% of the 2010 exposure at €1=$1.40, while letting the Group benefit from any revaluation of the American currency.

About Latécoère
This international group is a first-rate partner of the world's major aircraft manufacturers (Airbus, Boeing Bombardier, Dassault Aviation, Embraer). Latécoère is involved in all sectors of the aeronautical industry (commercial, regional, business and military aircraft), in three areas of activity:

• Aerostructure (66% of revenue): fuselage sections and doors
• Onboard wiring and systems (28% of revenue).
• Engineering and services (6% of revenue): research, design and realisation of tooling.

The Group employs 4,000 people in 8 different countries. Its consolidated revenue for 2007 come to €489 million and the backlog was worth €2,010 million at June 30th 2008.
Latécoère is listed by Euronext Paris, compartment B.. Indexes: SBF 250, CAC MID&SMALL 190, SMALL 90 - Codes ISIN: FR0000032278 - Reuters: LAEP.PA - Bloomberg: LAT.FP