EADS sees good results for 2010

EADS reports increased revenues and order intake for 2011, with all key indicators above guidance.

The results were helped by the recovery of the macro-economic and commercial environment which was stronger than expected. Institutional markets including helicopters, defence and public budgets still have to be monitored as well as potential risks linked to oil and commodity prices, air traffic in North Africa and continued currency issues.

In 2010, the order intake amounted to € 83.1 billion, driven by improved momentum in commercial aviation. EADS’ order book of more than € 448 billion provides a solid platform for future deliveries.

Revenues reached a new high at € 45.8 billion. Likewise, profitability and cash performance were better than expected. The EBIT before one-off of € 1.3 billion benefited from the better underlying performance than expected in Airbus legacy programmes and other core business activities. The Net Cash position of € 11.9 billion is higher than anticipated.

“2010 was a year of significant progress for EADS. Commercial aircraft orders exceeded expectations and our cash flow generation was excellent. We took huge steps forward in managing and controlling key programmes: A400M has been substantially de-risked and A380 production is improving steadily”, said Louis Gallois, CEO of EADS. “At the same time, we are paying the closest attention to the A350 programme, to the evolution of defence and space budgets and to the recovery of the helicopter market.”

Physical deliveries remained at a high level with 510 aircraft at Airbus Commercial, 527 helicopters at Eurocopter and the 41 st  consecutive successful Ariane 5 launch.

The percentage-of-completion methodology was resumed on the A400M programme based on the allocation of internal milestones. This has resulted in revenues of around € 1 billion being booked on the programme with zero margin due to the associated provision utilisation.

The Customer Nations and EADS have concluded negotiations on the overall A400M discussions. Following the approval in France and Germany, negotiations on the export levy facility (ELF) scheme are to be finalised with some Customer Nations and are targeted for completion in 2011. In the meantime, the programme is delivering results with four
development aircraft flying.

Net Income amounted to € 553 million (FY 2009: € -763 million), or earnings per share of € 0.68 (earnings per share FY 2009: € -0.94). The finance result amounts to € -371 million (FY 2009: € -592 million). The interest result of € -99 million (FY 2009: € -147 million) mainly reflects lower interest expenses. Meanwhile, the other financial result improved considerably by around € 170 million year-on-year to € -272 million (FY 2009: € -445 million) driven mainly by lower unwinding of discounted provisions in 2010 than in 2009. The unwinding of discount mainly decreases due to lower outstanding provisions.

Self-financed Research & Development (R&D) expenses reached € 2,939 million (FY 2009: € 2,825 million), driven mainly by increases at Cassidian for the Unmanned Aerial Systems (UAS) and Systems businesses and at Eurocopter across the product range. At Airbus, the increase in R&D on the A350 XWB was compensated by decreases in other programmes, especially the A380 and A330-200F.

EADS’ 2011 guidance is based on an assumption of € 1 = $ 1.35 for average and year-end closing spot rates. In 2011, Airbus should deliver 520 to 530 commercial aircraft and its gross orders should be above its deliveries. EADS’ 2011 revenues should be above the 2010 revenues. EADS expects 2011 EBIT* before one-off to remain stable compared to the 2010 level, at around € 1.3 billion. Increasing volume and price improvement at Airbus Commercial are roughly compensated by the deterioration of hedge rates, increasing R&D and less favourable mix of activities at Cassidian.

Going forward, the reported EBIT and EPS performance of EADS will be dependent on the Group’s ability to execute on the A400M, A380 and A350 XWB programmes, in line with the commitments made to its customers.

Airbus’ consolidated revenues of € 29,978 million show an increase of 7 percent compared to the same period last year (FY 2009: € 28,067 million). The Airbus consolidated EBIT* amounted to € 305 million (FY 2009: € -1,371 million). Airbus Commercial revenues amounted to € 27,673 million (FY 2009: € 26,370 million).

Airbus Military revenues increased to € 2,684 million (FY 2009: € 2,235 million), driven by higher A400M revenue recognition but lower revenues in Medium & Light (M&L) and Tankers. Deliveries amounted to 20 M&L aircraft (FY 2009: 16 aircraft). Airbus Military EBIT amounted to € 21 million (FY 2009: € -1,754 million, weighed down by the A400M provision). It reflects a favourable mix in M&L and Tankers.

In 2010, revenues for Eurocopter amounted to € 4,830 million (FY 2009: € 4,570 million). Deliveries totalled 527 helicopters (FY 2009: 558 helicopters), including 28 NH90 and 15 Tiger, double the 2009 level. The Dutch and French navies received the first NH90 naval versions. Revenues also reflect a favourable mix from higher support and governmental revenues. The Division’s EBIT decreased to € 183 million (FY 2009: € 263 million); it was impacted by higher product investment and negative one-time effects of around € 120 million, driven mainly by the NH90 and a restructuring charge.

Astrium revenues in 2010 increased by four percent to € 5,003 million (FY 2009: € 4,799 million), marking a year of strong programme execution at the Division. This resulted in revenue performance above expectations, more than compensating the one-time catch up effect for in-orbit incentive schemes booked in 2009. 2010 milestones include the start of M51 ballistic missile deliveries for the French Navy.

Revenues of Cassidian in 2010 increased by 11 percent to € 5,933 million compared to the previous year (FY 2009: € 5,363 million). This strong revenue increase reflects volume growth from core and export in Eurofighter and Missile programmes and progress in Lead Systems Integrator border security contracts. EBIT* stood stable at € 457 million (FY 2009: € 449 million). It reflects margin growth in mature programmes and significant growth in self-funded R&D for next generation products. It was weighed down by net one-time effects of around € 20 million. This includes the cancellation of the FiReControl contract by the UK government. R&D investment is focused mainly on Unmanned Aerial Systems (UAS) and secure communications.

FLUG REVUE 05/2018


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