EADS: Strong first half hit by Dollar rate
In the first six months of 2011, EADS saw an order intakeof € 58.1 billion. EADS’ order book of more than € 453 billion remains a solid platform for future deliveries. Revenues amounted to € 21.9 billion. The EBIT before one-off of around € 720 million benefited from good underlying performance, especially at Airbus Commercial.
”Our results for the first half of 2011 mirror the strong demand in the commercial aviation sector. In terms of orders, Paris Air Show was record-breaking for us, particularly thanks to the A320neo. The recent historic order by American Airlines adds to this remarkable success story as the strong commercial momentum continues beyond Le Bourget. Meanwhile, we have extended our services portfolio and global footing by closing the acquisition of Vector Aerospace and launching an offer to acquire Satair A/S in Denmark,” said Louis Gallois, CEO of EADS. “Clearly, our large programme developments deserve our utmost management attention, especially the A350 XWB.”
In the first six months, EADS’ revenues increased 8 percent to € 21.9 billion (H1 2010: € 20.3 billion). This growth is mainly driven by volume effects at Airbus Commercial and Astrium. Deliveries remained at a high level with 258 aircraft at Airbus Commercial, 205 helicopters at Eurocopter and the 44th consecutive successful Ariane 5 launch. In the first six months, Airbus Military recorded revenues for the A400M programme of € 412 million.
EBIT before one-off (adjusted EBIT) – an indicator capturing the underlying business margin by excluding non-recurring charges or profits caused by movements in provisions or foreign exchange impacts – stood at around € 720 million (H1 2010: around € 640 million) for EADS and at around € 310 million for Airbus (H1 2010: around € 260 million). It benefited from good underlying performance in Airbus legacy programmes and at Eurocopter. It also included an unchanged A380 impact compared to last year. EADS’ reported EBIT stood at € 563 million (H1 2010: € 406 million).
Net Income amounted to € 109 million (H1 2010: € 185 million), or earnings per share of € 0.13 (earnings per share H1 2010: € 0.23). It benefited from the good EBIT* performance but was dragged down by accounting revaluations on foreign exchange. The finance result amounts to € -366 million (H1 2010: € -109 million). The interest result of € -97 million (H1 2010: € -114 million) improved thanks to a better average cash balance. Meanwhile, the other financial result deteriorated considerably to € -269 million (H1 2010: € 5 million). The main change comes from the negative revaluation of US dollar and GBP cash assets due to the deterioration of the closing spot rate at the end of June compared to the end of December 2010. On the other hand, the net change in fair value of cash-flow hedges had a positive impact of € 2.3 billion on EADS equity.
Self-financed Research & Development (R&D) expenses increased to € 1,409 million (H1 2010: € 1,301 million), driven mainly by development on the A350 XWB at Airbus.
The Group’s order intake of € 58.1 billion (H1 2010: € 30.8 billion) primarily benefited from an environment of continued strong passenger traffic combined with the strength of EADS’ enhanced product portfolio. By the end of June 2011, EADS’ order book stood at € 453.8 billion (year-end 2010: € 448.5 billion), providing a solid platform for future growth. The Airbus Commercial backlog has been reduced by a negative revaluation impact of around € 28 billion due to the deterioration of the US dollar closing spot rate since the year-end 2010. The defence order book stood at € 55.6 billion (year-end 2010: € 58.3 billion).
EADS confirms or improves the various components of its 2011 guidance based on an assumption of € 1 = $ 1.35 for the year-end closing spot rate. In 2011, Airbus should deliver 520 to 530 commercial aircraft. Thanks to the ongoing commercial momentum, Airbus now expects its gross orders to be above 1,000. EADS’ 2011 revenues should be above the 2010 revenues.