ECA Group awarded Belgian-Dutch naval contract

The Belgium Naval & Robotics consortium, composed of Naval Group and ECA Group, a Groupe Gorgé company, were today awarded the contract to supply twelve mine-hunting vessels to the Belgian and Dutch navies. Equipped with a total of approximately 100 drones, constituting approximately ten drone (toolbox) systems, six ships are destined for the Belgian Navy, while the other six will be delivered to the Dutch Navy. The Belgium Naval & Robotics consortium as well as the Naval Group and ECA Group teams are honored by the confidence of the Belgian and Dutch navies and look forward to this upcoming partnership.

An innovative solution for robotic mine warfare

Belgium Naval & Robotics, with Naval Group's recognized expertise, offers a 2800-ton militarized ship specialized in mine warfare with military characteristics (acoustic and electromagnetic discretion, shock resistance) perfectly adapted to the operational use targeted by the Belgian and Dutch navies. In particular, this vessel incorporates a launch and recovery system for ECA Group's inspector 125 unmanned surface vehicles (USV). This innovative, robust and reliable system ensures the safety of operators and maneuvers to protect the ship, the USV and its payloads, while offering a high level of mission availability.

The drone systems on board these innovative vessels are the latest generation of drones developed by ECA Group over the past four years. They are integrated into the C2 MCM UMISOFT system connected to the Naval Group's I4drones® system to form the mine-warfare mission system integrated into the ship's combat system.

The solution includes among others A18-M autonomous underwater vehicles (AUV), T18-M towed sonars and Mine Identification & Destruction Systems (MIDS) composed of SEASCAN and K-STER C remotely operated vehicles (ROV). All these drones can be operated autonomously from the USV Inspector 125. The drone system also includes unmanned aerial vehicles (UAVs) and influence sweeps.

The program provides for the supply of drone systems that can also be projected. Containerized and equipped with handling and communication systems, mine-hunting drone systems can be airlifted and deployed directly from the coast without a ship.

A transforming contract for the group

ECA Group's share of this program represents approximately 450 million euros. The 10-year program will start with a design phase that will last approximately 3 years before the production and delivery phases of the drone systems. The turnover recorded by ECA Group should be above 5 million euros by 2019, reach between 15 and 20 million euros in 2020, be around 40 million euros in 2021 and eventually reach between 50 and 100 million euros per year over the following 5 years. This contract is the largest ever won by ECA Group. However, it does not include any maintenance services that the customer may subsequently entrust to ECA Robotics Belgium, nor any sales of consumables. ECA Group's order book is currently at a historic level of well over half a billion euros. ECA Group has sufficient equity and financial resources to deliver it. Its objective of a turnover growth of 5% in 2019 should thus be significantly exceeded.

As the Belgian Navy is a reference in underwater mine clearance within NATO, this contract is a major asset for export. As with the tripartite mine-hunter program 40 years ago which generated sales of self-propelled PAP robots in several dozen navies in 20 years, this success in Belgium should generate many commercial export benefits in the coming years. ECA Group is already in discussions with several navies for the supply of robotic mine-hunting systems.

Next release:

Second-quarter revenue to be published on 25 July 2019

Forward-looking statement

GROUPE GORGE press releases may contain forward-looking statements regarding GROUPE GORGE's targets. These forward-looking statements reflect GROUPE GORGE's current expectations. Such forward-looking statements and targets depend on known and unknown risks, uncertainties and other factors that could cause actual results, performance or events to differ materially from those anticipated herein. The risks and uncertainties that could affect the Group's future ability to achieve its targets include, in addition to those indicated in the press release: the strength of competition; the development of markets in which the Group operates and notably the 3D printing division; currency fluctuations; obtaining the export authorizations that may be required for certain activities; control of costs and expenses; changes in tax legislation, laws, regulations or their enforcement; our ability to successfully keep pace with technological advances; our ability to attract and retain qualified personnel and key staff; the evolution, interpretation and uniform application and enforcement of International Financial Reporting Standards (IFRS), according to which we prepare our financial statements; manufacturing and supply chain bottlenecks; the performance of our business partners (subcontractors, agents, suppliers, etc.). Some of these risk factors are set forth and detailed in our Registration document filed with the French Autorité des Marchés Financiers, available on our website www.groupe-gorge.com. This list of risks, uncertainties and other factors is not limitative. Other unanticipated, unknown or unforeseeable factors, such as changes in the economic situation or financial markets, could also have a material adverse effect on our targets.

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