CORPORATE & SOCIALRESPONSIBILITYREPORT 2015

This is MBDA’s seventh annual Corporate and Social Responsibility Report. This report covers calendar year2015. The previous report covered calendar year 2014.

This report has been prepared with GRI as the baseline reference standard although the report does notcontain a full set of GRI4 compliant metrics.

CopyrightThis document and the information contained herein is proprietary information of MBDA and shall not bedisclosed or reproduced without the prior authorisation of MBDA. © MBDA 2016.

Report compiled and edited by Group Directorate Business Ethics and Corporate Responsibility.

Please send comments or questions by email to: ethics-csr@mbda-systems.com

1

MBDA – WHO WE ARE 2

Our Vision, Our Mission, Our Values 3

CEO STATEMENT 4

Our 2015 Business Highlights 5

Our Wider Strategic Objectives for 2016 6

OUR CORPORATE & SOCIAL FOCUS IS ON FIVE PRINCIPLE DOMAINS 7

PROVIDING ASSURANCE TO OUR CUSTOMERS & SHAREHOLDERS 8–11

BUSINESS ETHICS 12–13

COMMUNITY ENGAGEMENT 14–15

OUR PEOPLE 16–19

ENVIRONMENTALLY RESPONSIVE 20–22

APPENDIX 23

ABBREVIATIONS 24

CONTENTS

MBDA – WHO WE ARE

2

Order Intake

Sales

Order Book

€5.2 Bn

€2.9 Bn

€15.1 Bn

2015 Strong FinancialPerformance

• A missile and missile systems engineering and manufacturing company with a worldwide workforceof over 10,000 employees situated in the UK, France, Italy, Germany, Spain and the US

• Trusted supplier to more than over 90 customers worldwide across the 4 sectors of Air Dominance,Maritime Superiority, Battlefield Engagement and Ground Based Air Defence

• Supported by three major shareholders: Airbus Group, BAE Systems and Finmeccanica

70%of the European

Market Share

MBDA at the forefront of

Industrial Integration in the European Defence Sector

3

Our VisionTo be the European Missile Systems Champion and a Global Player.

Our MissionTo operate as a trusted partner of the defence community in our homenations and with their allies, providing decisive military capability toprotect national security and enable strategic independence:

Our ValuesInnovationEnsuring operational and strategic advantage

CommitmentAlways delivering on our promises

IntegrityA reliable and trusted partner with the highest professional and ethical standards

PassionApplying all our energy and focus to every task, recognising our role in providingmission critical capabilities

Team SpiritHarnessing our diversity and collective purpose to deliver competitive advantage toall of our stakeholders

Delivering leadership in our industry

Promoting co-operation

Developing positive economic and technological advantage forour customers

Demonstrating operational excellence in everything we do

4

CEO STATEMENT

Welcome to the seventh Corporate Responsibility Report.

This year, we have decided to focus our annual CSR report on the following five main domains: providingAssurance to our customers and shareholders, Business Ethics, Community Engagement, Our People andEnvironmental Responsiveness.

Firstly, we have maintained our highest commitment to provide all our customers and shareholders, withthe full assurance of our best in class corporate governance mechanisms which have contributed todeliver an exceptional performance in 2015.

In the Business Ethics domain, key for us in 2015 was to further enforce the importance of correct ethicalconduct in our business dealings across the globe. Enhanced Business Ethics training programmes havebeen initiated across the MBDA Group and these will be completed in 2016.

In the Community engagement domain, we have pursued our policy to support important initiatives atthe national level, for example by supporting major associations which provide assistance to the familiesof military personnel injured or killed in operations. In addition, we have provided various supportinitiatives at the local level, especially those close to the locations where our companies are based.

In the Our People domain, we continue with our objective to be attractive in the marketplace in order tosecure the numerous people we need to recruit each year. We are constantly monitoring our position on awhole range of issues ranging from cultural and diversity aspects through to work/life balance andemployee well-being in addition to a competitive salary and rewards package.

We continue to embed into our Company processes the management of a solid sustainable developmentpolicy through several initiatives such as the use of scarce and rare elements, the identification of newtechnologies and materials e.g. 3D printing and robotics and compliance with all the environmentalregulations such as the new ISO 14001 – 2015 standard. In 2015, we also expanded the forum thatenvelops all these aspects to also include, in addition to our materials specialists, our Environmental andSupply Chain experts to ensure complete coverage across the discipline.

Finally, this year, we have embarked upon a new report format, with the objective of making it moreconcise and to help facilitate its reading. I personally hope that you will find this report helpful andinformative. Going forward MBDA shall continue to develop our Corporate Responsibility values with theaim of being the reference company in our field of operations for good business practice.

Antoine Bouvier

CEO MBDA

5

TyphoonAfter ASRAAM, Meteor and Storm Shadow, Brimstone 2 isthe fourth MBDA weapon to be loaded on to Typhoon.

RafaleMBDA weapons will equip the Rafale aircraft bought byEgypt and Qatar.

MarinaMilitare

MBDA receives contracts to provide the last two ItalianFREMM frigates and the new Italian Navy (PPA – PattugliatoriPolivalenti d’Altura – multi-purpose high-seas patrol ships)with the SAAM ESD surface-to-air system.

PARS3In 2015 PARSYS GmbH, a joint venture of MBDA DeutschlandGmbH and Diehl BGT Defence GmbH & Co. KG delivered thefirst PARS 3 LR munition to German Bundeswehr.

TLVSGermany decides to proceed with the Taktische LuftVerteidigungs System (TLVS) based on the developmentresults already achieved by MEADS. TLVS will be carried outunder the leadership of MBDA Deutschland.

Centres ofExcellence

A first fin actuator produced by a UK Centre of Excellence isdelivered for the French MMP missile at the same time as thefirst four test equipment units for the UK’s Brimstoneprogramme are delivered by a French Centre of Excellence,marking the start of operation of the One MBDA strategy.

ASTER B1NTThe French Ministry of Defence launches the Aster Block 1 NT(New Technology) programme aimed at modernising theSAMP/T ground based air defence system, led by theEUROSAM consortium of MBDA and Thales.

Maximise creativity and innovation within the Company through developingcollaborative ways of working, supporting and stimulating innovative networkswith external partners and promoting knowledge sharing and capitalisationwithin the Company.

6

Our Wider Strategic Objectives for 2016

Innovation

Develop and improve the Normalisation Methodology tool piloted in 2015 inorder to improve on the veracity of our data reporting and continue to focus onreducing our impact on the environment from a Company-wide perspective.

Review 2020 Vision Statement to ensure legitimacy of target objectives.

Continue to support our Supply Chain through awareness of new regulatoryproposals whilst continuing to identify and manage risks and opportunities.

Ensure resourcing of a skilled and motivated workforce to help secure both ourcurrent and future success.

Embed a risk-based approach throughout the organisation by placing riskawareness and integrated assurance at the heart of the Company’s strategicdecision making and business operations.

Further disseminate a Business Ethics culture throughout MBDA underpinned by the principles and commitments of the new Business Ethics policy.

Strengthen leadership in terms of Health and Safety management andgovernance at all levels within MBDA.Health & Safety

Environment

Supply Chain

Our People

Assurance

Business Ethics

7

Providing Assurance to Our Customers and Shareholders• Primary obligation to provide assurance through an internal network of

assurance providers

• Systematic approach assessing the effectiveness of the design and execution ofour internal controls

Business Ethics• The foundation stone upon which our business operates

• Integrity, Transparency and Honesty are central to our core beliefs

Community Engagement• We strive to be a partner in the communities in which we operate

• We provide support to good causes and society in general

Our People • We believe our people are our greatest asset

• We actively encourage an inclusive and diverse culture

• Caring for our people is a fundamental obligation to us

Environmentally Responsive• Sustained efforts to control our energy consumption and reduce our impact on the environment

• Ambitious environmental aspirations through our Vision 2020 programme and our generalbusiness operations

OUR CORPORATE & SOCIAL FOCUS IS ONFIVE PRINCIPLE DOMAINS

8

PROVIDING ASSURANCE TO OURCUSTOMERS & SHAREHOLDERSWe have a primary obligation to provide assurance to our customers and shareholders. Internal Audit undertakesindependent assurance activities across the Company, as determined by the Audit Committee. This assurance isunderpinned by numerous internal contributors such as Business Ethics, Legal, Security and Quality Assurance.Controls are embedded throughout the Company by means of a robust Business Management System.

Assurance is focused on the governance of the business and is achieved through systematic approaches thatassess the effectiveness of the design and execution of the internal controls. Recommendations are made toimplement new controls and to improve the effectiveness of existing controls.

In addition, an Enterprise Risk Management approach ensures that risks are identified and managedacross the business. These risks are also used to influence the assurance agenda.

The President Board operates The President Board

Remuneration Committee

Two Committees mandated in the ShareholdersAgreement with Shareholders’ appointees

The Executive Committee to coordinate the vision,strategy and actions of MBDA Executive Group Directors

Treasury Committee

Audit Committee

Executive Committee

Quarterly Strategic Review

The Management Committee to ensure co-ordinationamong directors with focus on business reviews,processes and organisational issues

Management Committee

Two internal Committees mandated in the ShareholdersAgreements focus on specific areas

Finance Committee

Strategic Advisory Committee

Other committees focus on specific areas for pan-directorates for governance / co-ordination

Finance Review Committee

Executive People Review

Business Ethics Committee

Audit Review Board

Resourcing Committee

Improvement Board

Global Supply Chain Committee

Company Information Systems Board

Quality Central Board

Security Committee

Internal Research and Development Committee

Other committees focus on internal co-ordination within each Directorate

Directorate Board (SBD, Programmes, Technical, Operations, etc.)

In addition France, Italy, Spain, UK and US havetheir own Boards of Directors, whilst the Germannational entity has a Supervisory Board

Governance Committees in force at MBDA MBDA’s management has establishedvarious committees whose primarypurpose is to oversee our businessresponse to all assurance activities.

Our Audit Committee mentioned in thetable (right) approves the annual auditplan on behalf of the MBDA Board.Financial audits are included every year.Other topics covered depend upon therisk they represent and includeGovernance, Culture, People, Security,Products/Programmes and BusinessEthics.

9

Assurance of QualityThe goal of Quality Assurance is to conduct audits atplanned intervals to objectively evaluate whether ourBusiness Management System:

• meets the Company’s overall strategy and objectives

• conforms to our product realisation requirements

• conforms to our customer contractual requirements

• conforms to our company certification requirements

Assurance Through Our Supply ChainThe principles of Assurance also extend to our Supply Base.

Suppliers provide a large proportion of the value in MBDA products, underscoring the importance of astrong partnership between these two parties.

To facilitate this, MBDA continually seeks better ways to work with its suppliers – aiming to integrate themmore effectively into programme development, while identifying new suppliers to support growth ininternational target markets.

Part of MBDA’s focus is on better supply chain management, which is being achieved through processesand tools that foster partnership, risk mitigation and supplier performance development.

To that end, the Supply ChainManagement and Procurementoperations work closely together toimprove supplier performance throughmonitoring of KPI’s, identifying risks andwork with suppliers to improveperformance in delivery, quality and riskmitigation.

An example of this was the PACTE PMEseminar held in MBDA France inDecember 2015 which was attended byover 60 SMEs in addition to MBDA andDGA staff.

Over 700supplier questionnaires

transmitted in 2015 coveringrisk registration, capability

and REACH surveys

MBDA, DGA and 60 SMEs attending LPR for the PACTE PMEForum in December 2015

10

Assurance in Innovation Ensuring that MBDA consistently strives for innovative solutions to tomorrow’s threats is also afundamental requirement from our customers and shareholders. MBDA’s innovation programmes areaimed at developing an innovative culture throughout the business that supports creative thinking andallows for the development of improved or more effective products, processes and technologies.

This is all underpinned with MBDA’s “IDEA” tool, the Innovation Lab, our Innovation Awards challengeand our open innovation programmes where we encourage people to develop initiatives within thebusiness, supply chain, universities and other academia.

706ideas were submittedto the innovationsdepartment in 2015

355collaborative technologicalexchanges with universitiesand academia in 2015

11

Assurance in SecurityDuring 2015, MBDA embarked on various security related initiatives.

One aspect arising in recognition of the bilateral treaty between France and the UK during 2015 was thecreation of a new security framework aligned to the newly formed MBDA Centres of Excellence.

Furthermore, Cyber Risk is now one of the top five global risks facing business leaders with the Defenceindustry continuing to experience a steep rise in cyber attacks. As part of MBDA’s significant investment toreduce the impact of cyber attacks, a Group level Security Operations Centre (SOC) has been established.The SOC allows MBDA Security and Information Management teams to quickly identify and mitigatecyber risks, and coordinate activity across the Group.

The Security and IM teams have also been addressing an Executive Committee initiative at Group levelfocusing on 20 mitigation strategies covering perimeter, infrastructure and endpoint protection, as well asmonitoring, detection and reaction capabilities.

In 2015, we embarked on an employee awareness improvement programme through knowledge guidesand the MBDA TV Media Platform. We also focussed on strengthening security links in our Supply Chainwith a pilot assessment of 20 key suppliers across the MBDA Group. This successfully identified areas forimprovement and educated suppliers on the potential scale of the cyber threats inspiring them togenerate their own cyber security policies or improve upon the policies they already have in place.

12

BUSINESS ETHICS

Our Business Ethics ValuesMBDA Business Ethics Values, already introduced in our Code of Ethics, are reminded andreinforced in our new Business Ethics Policy:

IntegrityRespect of fair competition rules and prohibitionof undue influence in all our business dealings.

TransparencyOpenness about decisions and activities withinthe framework of this Policy, to the extentallowed by our confidentiality rules.

HonestyTruthfulness and accuracy of records, whetherfinancial or else.

In addition, the following principles areunderlying fundamentals for properimplementation of the Business Ethics Policy:

ResponsibilityClear allocation of roles and responsibilitiesthrough adequate Group Procedures.

TraceabilityEnsuring key decision processes and decisionsthemselves within the framework of our BusinessEthics Policy are properly recorded.

Statement from the CEO(extract from MBDA Business Ethics Policy, published on 14th September 2015)

“…Compliance with this Policy is crucial. It forms a key element of our commitment to socialresponsibility and the strict implementation of its principles and procedures also contributesto our operational excellence and ensures MBDA’s sustainability. I’m sure I can rely on you toput these principles into practice in your daily work.”

At the heart of MBDA’s Strategy to become a global player in the missile and missile systems market is thecommitment to protect and develop our business for the benefit of all stakeholders: employees,customers, partners and shareholders. This requires us to operate to the highest standards in how weconduct ourselves as employees and representatives of MBDA and how we conduct business in both ourDomestic and Export Markets.

Our Code of Ethics continues to be the cornerstone of our commitment to ethical conduct. Nevertheless,regulatory environment and best practices in terms of business ethics are continuously evolving and theglobal trend is more and more demanding, which requires us to be constantly vigilant and always lookingto improve how we work so as to maintain and build the reputation upon which our business is based.

To this end, various actions have been completed or launched in 2015, aiming at reinforcing andcontinually promoting a business ethics culture throughout MBDA and facilitating our employees’ buy in.

13

MBDA New Business Ethics PolicyA major achievement in 2015 was the issuance of a new business ethics policy which consolidates and reinforcesMBDA’s commitment to this important subject. This policy covers all domains where main potential business ethicsrisks have been identified.

The business ethics policy is available internally on our intranet and also externally on our website to make our valuesbetter known to our external partners.

In addition, we have introduced in 2015 a new facility where employees, using a dedicated and confidential emailaddress, can also report any concerns they may have in this regard.

A Dedicated Organisation To maintain the company at the highest level of ethical standards, MBDA relies on a dedicated and independentorganisation across the company.

The MBDA Group Directorate Business Ethics & Corporate Responsibility is responsible for defining, implementing,maintaining and continually improving the business ethics policy, under the Business Ethics Committee’s authority.

The Group Director Business Ethics & Corporate Responsibility directly reports to the CEO and is accountable to theBusiness Ethics Committee and MBDA’s highest reporting structures: the Executive Committee, the Audit Committeeand the Board of MBDA.

Communication, Training and Awareness To reinforce the level of general awareness on business ethics matters across the whole company, training sessionsare regularly organised throughout MBDA.

In 2015, we focused on “face-to-face” training and awareness sessions to promote our new business ethics policyand make it known across the company. This effort will be continued throughout 2016 to reach all relevantaudiences in accordance with international standards recommendations.

In parallel, we will launch actions to provide all MBDA employees with general awareness on business ethics througha dedicated video which will be available on MBDA’s internal TV media.

A Key Contributor to International Initiatives in this AreaMBDA has been supporting initiatives within the aerospace and defence industry and also at a global level toenhance the standards of compliance for a long time, and continues to do so.

We are members of the International Forum for Business Ethical Conduct for the Aerospace and Defence Industry(“IFBEC”) and participate in all related conferences, the latest being the 6th IFBEC Annual Conference, which tookplace in Boston, USA, on 19th-20th November 2015.

We also strongly support and actively contribute to ISO (“International Organisation for Standardisation”) developedstandards in this domain, in particular the “Anti-bribery management systems” standard (ISO/DIS 37001) expectedto be published late 2016.

14

Phoenix Group for Deaf ChildrenWe are delighted to have been

nominated as a local charity by MBDA

with their generosity providing the seed

corn funding that helped give us the

financial base, confidence and

opportunity to grow into one of the UK’s

leading charities for hearing impaired

children. Over the years, MBDA and its

employees have continued to support

us, enabling Phoenix to spread its

wings and provide increasing levels of

help to our clients.

Ms Jane Shann, Teacher for the Deaf

Donation to Foundation ISAE-SUPAEROWith 5 other Indian compatriots, I have now the pleasure to be a student at

ISAE-SUPAERO with a scholarship from MBDA and the ISAE-SUPAERO Foundation. This

scholarship has provided me huge support and it feels really great studying in Toulouse the

subject I am passionate about. I am a student of the “Master of Science in Aerospace

mechanics and avionics” which focuses on expertise in aeronautical engineering and aircraft

design. I chose for my research project the subject of numerical simulation of ductile materials

damage at low triaxiality. In addition I’m a part of IMAV-2015 ISAE-SUPAERO TEAM and I am

going to represent Toulouse with two of my colleagues in EUROAVIA International this April

2015 in Spain.

Neelam Shivhare, MBDA scholarship student of Excellence Program India ISAE-SUPAERO (2014-2016)

Company GivingAs part of our Corporate and Social Responsibility, wesponsor and contribute to the activities of otherorganisations where the activities are aligned with ourprinciples of responsible business conduct.

Company Giving is a commendable way to be associatedwith environmental, cultural, educational,humanitarian/welfare or other non-profit making activitiesand we monitor and report on all these activities on anannual basis.

Help in the CommunityMBDA continues to be thoughtful about the locations andcommunities in which we operate. Our ambition is tomake all employees proud of their company through ourpositive involvement in neighbourhoods where our sitesare based. Through a variety of initiatives we strive tomake the local population regard MBDA as a positive forcewithin the community.

As a local employer MBDA provides an economic benefitto the local community. In some locations we may be thesole significant employer or a major regional employer. Butthe role of an employer needs to be much broader to earnthe respect and the support of local communities.Wherever possible we act to help local charities and goodcauses without expectation of any direct economic return.

COMMUNITY ENGAGEMENT

Donation to Association FrateliMBDA France contacted us in 2014, with a view to

performing something in the field of social diversity.

Beyond the financial support that MBDA have

provided to our students through programmes of

scholarship studies, the Company’s employees are

also involved in a programme of sponsorship with 15

employees of the Company each sponsoring one

student who has modest academic potential. This

sponsorship brings them moral support, methodical

assistance, support in their career choices and

employability tips. The company visits are organised

to make students aware of career opportunities in

the Sector. We are very happy to be able to count

MBDA

amongst our

Partners.

The following represent a few examples of our support inthis broad area of Community Engagement:

Over 200projects supported locally,nationally and internationally

15

Food DonationColletta Alimentare (Food Collection):

in partnership with the not for profit Food Bank

Foundation (Banco Alimentare) the first food

donation initiative commenced in Italy. MBDA Italy

(both the Company and individual employees)

donated over 1,200 kilos of non-perishable

packaged foods, baby food, biscuits, milk, sugar,

etc. between the Rome and La Spezia sites to

local worthy causes.

fit4futureMBDA Germany supports non-profit organisations and events in the

Schrobenhausen region. For a number of years the company is supporting the City Run

both as a participant and donor. In addition, we also finance the project “fit4future” of the

Cleven Foundation with the help of donations from MBDA. Support is provided for 3 years

in the areas of exercise, physical and mental health, with the aim to positively influence the

habits of young people, thereby contributing to a healthy childhood development and

combating rising health care costs. Since June 2014 Felix Neureuther – Germany’s best

known and most popular skier – is Ambassador of fit4future. A big thank you to the

company!

Manfred Dallmeier, Chairman of the annual Schrobenhausener City Run

Providing SupportThe Soldaten und Veteranen-Stiftung

supports soldiers, veterans and their families

in particular after foreign or wartime

deployments: “Since 2015 MBDA Germany is

an important supporter of our foundation. The

company makes financial contributions both

as donor and annual sponsor. MBDA is

represented on the board of trustees and is

thus supporting the needs of soldiers and

veterans with words and deeds. At this point I

would like to say a big thank you to the

company and its employees.

Lt. Col. Thomas Behr,

Chairman of the Foundation

Donation to ADOMBDA once again this year significantly supported the ADO to help

bereaved families and members of the military community whose families have

been injured whilst serving in the Army.

I thank you very much for this gesture of solidarity, which is a highly regarded,

and something the entire military

community is very sensitive to and

appreciative of.

General Corps (2s) - Nicolas Lardemelle

President of the ADO (Association for the

Development Works Mutual Aid in the Army)

Volunteering InitiativeIn line with the British Prime Ministers “Big Society”

pre-election pledge, MBDA UK embarked on a new

Volunteering initiative allowing employees two additional

days leave to support worthy, non-profit making local

community organisations. This new initiative is due to be

formally rolled out in the first half of 2016 and builds on

our core belief of giving something back to the

Communities within which we carry on our business.

John Head, Volunteering Policy Champion

Social HelpI would like to thank MBDA for its

contribution to our parish church activities.

The Santa Maria della Consolazione parish

church has an organisation which provides

support in several different sectors, related

to social activities dedicates to children and

teenagers, and in support of immigrants

and needy families.

Parish Priest of the S. Maria della Consolazione

parish church (Naples) Sac. Carlo Ballicu

16

OUR PEOPLE

Our People – Our Greatest Asset MBDA sets out to be a good employer for the10,000+ people we employ and attractive in themarketplace to secure the hundreds of people weneed to recruit each year. We emphasize an inclusiveand collaborative work environment with trainingand development available for all employees androles which are challenging and fulfilling.

Key to our engagement strategy is a bi-annualEmployee Opinion Survey. The last surveyconducted was completed by 73% ofemployees.

EducationMBDA continued to work hard to promote education in the disciplines of Science,Technology, Engineering and Mathematics. We firmly believe that young people need tobe inspired from an early age and to see Engineering and the Defence Industry as anexciting career choice. In each of our home countries we face a lack of young peoplechoosing to pursue these disciplines and those who do are targets for the financialservices industry, utility companies, accountancy, consultancy and media. Our apprenticeand education programmes are tailored to interest young people inengineering careers and to assist in combating skills shortages and skill gaps. Toassist this aim, we continue to develop a number of partnerships with universities inFrance, Germany, Italy and the UK.

In addition to the above and when faced with a lack of local qualified workers for itsassembly line process, MBDA made an innovative decision, in close co-operation withspecialised partners in employment and professional training to recruit and develop localunemployed people to work as fitters in the aeronautic field.

Over 30 people have been trained to date with 93% obtaining theirdiploma which is also recognised at a national level.

Given its success, MBDA are planning to extend this innovation to other jobs such asmachining and other types of assembly work meeting both our needs in this area but, asimportantly, providing a real opportunity for local unemployed people often in areas ofhigh unemployment.

The percentageof employeeswho said theyfelt engaged

working at MBDA

79%

The percentage ofemployees who felt

a strong sense of commitment

to MBDA

80%

17

New Talent Refreshing our talent is a key business driver. To ensure we have the skills and capabilities to deliver ourcurrent business plans whilst also building a workforce for the future. The table below illustrates thesignificant recruitment undertaken in 2015 to achieve these ambitions:

Although embedded within the organisation is an enormous amount of experience the active recruitmentpolicy driven by growth and replacement opportunities means that a significant percentage of ourpermanent employees are relatively new to the business.

With such a large intake of new employees’ induction and orientation training is a necessity. Skills andcapability training is also essential to continue to deliver against our commitments and to provide thenecessary levels of innovation expected from our customers and which we pride ourselves on being ableto deliver.

The following table details the level of training support provided by MBDA in 2015.

Total

Technical

Recruitment in 2015

Operations

Programmes

Business SupportThe percentageof permanent

employees withless than 5 years

service withMBDA

22%

Function

Employees Trained

Total MBDA

4,032 2,987 1,050 940

264,036

9,009

Training Hours 98,042 76,465 54,702 34,827

89 102 45 20 256

268123 94 10 41

7725 45 4 3

9738 40 4 15

275 281 63 79 698

18

Recognising Our Employment PropositionIn 2015, MBDA in France, Germany and the UK receivednationally recognised awards. MBDA France was recognised asa Top Employer by the Top Employers Institute. MBDAGermany was also recognised as one of Germany’s bestemployers in a survey carried out by Focus Magazine. MBDAUK retained its Gold standard Investors in People accreditationfollowing an extensive review of people, practices andprocesses by IiP assessors.

Recognition of Our EmployeesInternally, MBDA acknowledges the effort and talent ofemployees through various recognition schemes andawards. Externally these same skills and capabilities arealso recognised by a wide range of stakeholders.

An Inclusive and Diverse CultureDiversity remains a key focus with clear initiatives in place toensure MBDA is an equal opportunities employerand is a preferred choice to all current and prospectiveemployees whatever their age, background, gender or sexualorientation. We will continue to monitor our systems andprocesses to ensure they encourage a diverse workforce andprovide a working environment where all staff at all levels arevalued and respected, and where discrimination, bullying,promotion of negative stereotyping and harassment are nottolerated.

14The number of MBDA Italy employees recognised in2015 as Maestro del Lavoro (Master of Work)distinguished for singular merits of expertise, hardwork and good moral conduct in a ceremony presidedover by the President of the Republic of Italy

41The number of National andRegional Training Awardsawarded to MBDA UKemployees in 2015including ManufacturingApprentice of the Year

The percentage ofemployees who said

they would recommendto others MBDA as agood place to work

80%

The percentage ofemployees who said theirjob gave them a chance

to do interesting andchallenging work

83%

19

Taking care of our people – a safe and healthy work environmentHealth and Safety is a core value within MBDA and despite the existence of differingnational regulations and cultural differences, Health and Safety remains a very strongcommon value for all of our National Entities.

We will continue to invest in our employees’ health and well-being, providing flexibleworking practices wherever possible and emphasising the importance of maintaining asafe working environment.

Another indicator of the importance we attach to a safe workingenvironment is the challenge we set ourselves in 2015 of a 10%reduction in the number of reportable accidents. Although oneaccident is always one too many, we are delighted to report thatwe surpassed this objective.

Finally in 2015, we began looking to align our working practicesto more fully reflect the newly issued ISO 14001 – 2015 standardwhich, amongst other things, calls for more LeadershipEngagement in assuring the safety of the working environment.

The reduction in the number ofreportable accidents in 2015

compared to 2014

*In accordance with RIDDOR 2011Reportable Accident definition

16%

-10.81%

-39.75%

MBDA have established an ambitious environmental policy which aims to contribute proactively inpreserving the environment through its operations and through the life cycle of its products.

Our strategic approach is focused on two key objectives:

• Reducing the Company’s energy and carbon footprint

• Reducing the impact generated by its products through eco-design initiatives

2020 VisionThe MBDA 2020 environmental journey was launched in 2011 as a continual challenge against a 2009baseline for our business to reduce the impacts of our activities on the environment.

In 2015, we developed a “Normalisation Methodology” linked to energy consumption which now takesinto account many variables including the size of the business, any changes to the size and use of ourbuilding stock, the number of people working in the buildings and the outside temperatures (degree dayadjustments). With further refinements to the tool due to be carried out in 2016, the introduction of thisnew methodology still allows for a more accurate and representative indication of our position against the2020 vision. Furthermore, throughout 2016, we will be investigating the potential of expanding the usageof this tool to other related domains such as CO2 and renewable energy.

20

ENVIRONMENTALLY RESPONSIVE

Note: Energy Consumptionfigure utilisingNormalisation Tool

-69.58% Water consumption

Water discharge

CO2 emissions

Waste production

Energy consumption

Renewable energy sources+0.47%

-13.85%

-5.5%

% Changeagainst 2009benchmark

Environmental Data Collection and Recording Procedure A methodology has also been established where common data is collected from each of the NationalEntities and is recorded in a business tool which is internationally available across the MBDA Group.

Our 2015 annual performance can be seen in the table below.

Importance of Innovation to the Environment Innovation has rightly been identified as a key driver for future business success forMBDA in terms of our competitive capability. However, innovation in terms of anenabler for Environmental considerations is also a factor.

One example is Additive Manufacturing (3D printing) and its possible use infabrication and manufacture of parts. Apart from the obvious technological benefitsthis innovation presents, it has added environmental benefits with significantly lessmachining operations, less material wastage and less relianceon rare earth minerals.

21

Waste Recovery Rate

MBDA Environmental Performance Indicators

Total Water Use m³

Total Ground Water Use m³

Total Water Discharge Volumes m³

Direct Energy (Electricity, Fuel, Gas, Renewables) MWh

77%

180,747

61,268

135,793

173,657

CO2 Emissions Tonne 39,907

Hazardous Waste Tonne 1,758

Non-Hazardous Waste Tonne 3,025

2015

22

ISO 14001 – 2015MBDA are actively assessing the requirements of this latest standard which was issued in September 2015. Whilstthe detailed gap analysis against the 2004 edition continues some of the fundamental changes initially identifiedare linked to greater involvement from the top management in environmental matters, more robust reportingrequirements and addressing the entire product life cycle all of which will allow greater scope, transparency andaccountability to our stakeholders.

We will continue to go through a range of internal and external third party reviews and audits to ensure these requirementsare properly embedded within our business processes including flow down of the requirements where appropriate to oursuppliers.

Material StewardshipMaterial Stewardship encompasses all areas of our business linked to materials within our products, processes and through-lifesupport, including those in our extended supply chain.

We have an obligation to monitor changing legislation and market behaviours in addition to any specific customer requirementsincluding their risks/impacts on our core business in the following areas:

• Legislation (including REACH and Conflict Materials)

• Scarce Materials/Rare Earth Elements

• Eco-Design (Life Cycle Analysis - LCA)

• End Of Life

With the growing international awareness of environmental impacts and demands from our customers in 2015 MBDA re-brandedand expanded our Materials Stewardship forum to also involve other subject matter experts in addition to Materialspecialists including our Supply Chain and Environmental Managers in order to ensure that the diverse nature of this important subject issuitably covered.

The 21st Conference of Parties (COP 21)The 2015 annual Conference of Parties (COP) was held in Paris.

Building on year-round work from Climate Action and the UN Environment Program, this two dayForum brought together over 750 attendees from cross-sector participants from business,Government, finance, UN, NGO and civil society creating an unparalleled opportunity to bolsterbusiness innovation and bring scale to the emerging green economy.

In support and recognition of the COP 21 outcomes MBDA will continue on our own journey ofminimising the environmental impact in our day to day activities across the business.

GapAnalysis

23

This report has been prepared with GRI as a baseline reference standard although the report does notcontain a full set of GRI4 compliant metrics.

Prior Year Adjustments/Factored CalculationsNote: Due to a misinterpretation of the RIDDOR 2011 definition of a Reportable Accident an incorrectnumber of accidents was reported in the 2014 CSR Report. The actual reportable accident figure that weshould have reported was 55 instead of the actual reported figure of 11.

Reporting Boundary and SubsidiariesWhere possible this report focuses on the main operating companies in Europe i.e. France, UK, Italy,Germany and Spain. The primary objective is to report a harmonised data set across all the main operatingCompanies. However, cultural differences and National Regulations have also to be considered in certaindomains where this consistency of reporting is not viable.

Factored Calculations CO2 emissions are calculated based on fuel usage or electricity consumption multiplied by an emissionsfactor. CO2 conversion factors vary from country to country as follows:

APPENDIX

FranceElectricity : 0.084 Kg/kWhGas : 0.234 Kg/kWhFuel : 0.300 Kg/kWhThese factors are extracted from the Annex 4 of theArrêté du 15 Septembre 2006 modified by theArrêté du 11 Juillet 2013.

Germany Electricity : Ulm = 0.25 Kg/kWhElectricity : Schrobenhausen = 0.563 Kg/kWhGas : Schrobenhausen = 2.135 Kg/m3 This data is based on the municipality data(Bavarian State Office for the Environment forSchrobenhausen).

Italy Electricity : 0.323 Kg/kWhGas : 0.200 Kg/kWhThese factors are extracted from the ISPRA Reportbased on the information from Directive 87/2003(Emissions Trading Scheme - ETS), transposed intoNational Legislation by Decree April 4 n. 216.

SpainGrid Electricity : 0.385 Kg/kWhThe figure is provided by the Ministry of Industry,Energy and Commerce (IDAE department).

UKThe carbon conversions we are now using in theUK for 2015 are as follows;Grid Electricity : 0.5331 kWh/Kg/CO2 Natural Gas : 0.184557 kWh/Kg/CO2Fuel oil : 0.268442 kWh/Kg/CO2Diesel : 0.24416 kWh/Kg/CO2Petrol : 0.23191 kWh/Kg/CO2The figures are provided by a Conversion Factorstool at:http://www.ukconversionfactorscarbonsmart.co.uk/using Defra frequently Used Conversion Factors.Source – Carbon trust website and Defra CarbonConversions (rolling average).

3D 3 Dimensional

ADO Association for the Development WorksMutual Aid in the Army

ASRAAM Advanced Short Range Air-to-Air Missile

BAE BAE Systems

BMS Business Management Systems

Bn Billion

CEO Chief Executive Officer

CO2 Carbon Dioxide

COP Conference of Parties

CSR Corporate & Social Responsibility

Defra Department for Environment, Food and RuralAffairs

DGA Direction Générale de l'Armement

Eco Ecological

ETS Emissions Trading Scheme

Fax Facsimile

FREMM FREgate Multi-Missions (Multi – MissionFrigate)

GmbH Gesellschaft mit beschränkter Haftung

GRI Global Reporting Initiative - a standard forCorporate Responsibility Reporting

IDAE Instituto para la Diversificación y Ahorro de laEnergía

IDEA MBDA wide employee suggestion scheme

IFBEC International Forum on Business EthicalConduct for the Aerospace and DefenceIndustry

IiP Investors in People

IM Information Management

ISAE-SUPAERO École nationale supérieure de l'aéronautiqueet de l'espace

ISO International Organisation for Standardisation

ISPRA Istituto Superiore per la Protezione e laRicerca Ambientale

IMAV-2015 International Micro Air Vehicles

Kg Kilogram

KPI Key Performance Indicators

kWh Kilowatt hours

LCA Life Cycle Analysis

LPR Le Plessis-Robinson (MBDA France)

LR Long Range

LRQA Lloyds Register Quality Assurance

m Metre

MBDA MBDA Missile Systems

MMP Missile Moyenne Portée

MWh Megawatt hours

NGO Non-Governmental Organisation

PACTE PME An association whose primary mission is theimprovement of relations between Small andMedium Enterprises and larger Companies

REACH Registration, Evaluation and Authorisation ofCHemicals – an EU law

RIDDOR Reporting of Injuries, Diseases and DangerousOccurrences Regulations

SAAM ESD Surface Anti-Air Missile – Extended SelfDefence

SBD Sales and Business Development

SC21 Supply Chain 21

SME Small and Medium Enterprises

SOC Security Operations Centre

Tel Telephone

TLVS Taktische Luft Verteidigungs System

TV Television

UK United Kingdom

UN United Nations

US United States

USA United States of America

24

ABBREVIATIONS

MBDA Contacts

1 avenue Réaumur92358 Le Plessis-Robinson cedexFranceTel. + (0) 33 1 71 54 21 49Fax + (0) 33 1 71 54 00 80

11, StrandLondonWC2N 5RJUnited KingdomTel. +44 (0) 207 451 6000Fax +44 (0) 207 451 6089

Via Monte Flavio, 4500131 - Roma ItalyTel. +39 06 8771 1Fax +39 06 8771 4060

Hagenauer Frost 2786529 SchrobenhausenGermanyTel. +49 (0) 82 52 99 2549Fax +49 (0) 82 52 99 3871

Plaza Pablo Ruiz Picasso 1Floor 1128020 MadridSpainTel. +34 917 69 38 00

1300 Wilson BoulevardSuite 550Arlington, Virginia 22209USATel. + 1 703 387 7120

www.mbda-systems.com

Copyright

This document and the information containedherein is proprietary information of MBDA andshall not be disclosed or reproduced without theprior authorisation of MBDA. © MBDA 2016.

Report compiled and edited by Group DirectorateBusiness Ethics and Corporate Responsibility

Please send comments or questions by e-mail to:ethics-csr@mbda-systems.com

Gra

phic

s Su

ppor

t U

K G

S366

3 –

© M

BDA

– Im

age

cred

its: ©

Ber

nhar

d H

uber

201

3, D

assa

ult,

Fin

cant

ieri,

Gill

es R

olle

rea,

MBD

A, S

hutt

erst

ock,

Sid

onni

e D

esch

amps

.