Airbus SE — Earnings Release 2003

Mar 8, 2004

News Details

Ad-hoc | 8 March 2004 07:00

EADS surpasses 2003 profit target: EBIT of Euro 1.54 billion

Ad-hoc-announcement processed and transmitted by DGAP. The issuer is solely responsible for the content of this announcement. ——————————————————————————– EADS surpasses 2003 profit target: EBIT of Euro 1.54 billion – EBIT (pre-goodwill amortization and exceptionals) up 8 percent – Revenues stable at Euro 30.1 billion – Free Cash Flow before Customer Financing much better than expected: up from Euro 0.6 billion to Euro 2.1 billion – Net Income at Euro 152 million – Better performance than expected at Airbus – Higher contributions from EADS’ defence businesses to EBIT, revenues and order book – Order intake doubled to Euro 61.2 billion – Dividend proposal of Euro 0.40 per share, up from Euro 0.30 – Following the application of IFRS rules for capitalisation of development costs, EADS raises its 2004 EBIT forecast to around Euro 1.8 billion Amsterdam, 8 March 2004 – In 2003, EADS (stock exchange symbol: EAD), the world’s second largest aerospace and defence group, has again strongly exceeded its profit target. At Euro 1.54 billion, EADS achieved an EBIT (pre-goodwill amortization and exceptionals) well above the previous target of about Euro 1.4 billion and up eight percent from 2002. EADS has beaten its EBIT forecast thanks to strong growth in its defence businesses and better than expected performance at Airbus. The EBIT improvement benefited from a 40 percent growth at the Defence and Security Systems Division with strong contributions from Military Aircraft and MBDA, the turnaround of the Military Transport Aircraft Division thanks to better performance and a 21 percent increase at the Aeronautics Division following increased profitability of Eurocopter. The Space Division recorded, in line with plan, an EBIT of Euro -400 million, after a restructuring charge of Euro 288 million. EBIT also includes a higher contribution from the 46.03 percent shareholding in Dassault Aviation. EADS Research and Development (R&D) expenditure increased, as planned, to Euro 2.2 billion in 2003 (2002: Euro 2.1 billion). Half of this was spent on R&D for the A380, the 555-seater Airbus aircraft due for first deliveries in 2006. Free Cash Flow before Customer Financing was strongly positive and was boosted from Euro 0.6 billion to Euro 2.1 billion thanks to better operating cash performance and working capital reductions due to higher customer advances. Net Income of Euro 152 million EADS achieved a positive Net Income in 2003 of Euro 152 million (2002: Euro -299 million). As a result of the original industrial integration of the EADS Group, goodwill amortization has been regularly recorded in the EADS accounts since the year 2000. Thanks to better EBIT, Net Income pre-goodwill amortization and exceptionals is up 10 percent to Euro 769 million (2002: Euro 696 million), or Euro 0.96 per share (2002: Euro 0.87). Outlook In anticipation of the legal requirement in the European Union to apply IFRS (International Financial Reporting Standards) rules strictly by 2005, EADS has changed its accounting policy regarding development costs to be fully compliant with IAS 38. Under this rule, costs that belong solely to the development phase of a project shall be capitalised as intangible assets, when certain conditions are met, while research costs are expensed in the Profit and Loss statement as incurred. The adoption of IAS 38 has no effect on the EADS Financial Statements as of 2003 and prior years. However, it is expected that approximately Euro 100 million of development costs will be capitalised in 2004. Consequently, EADS is increasing its EBIT forecast for 2004 to around Euro 1.8 billion from the previous guidance of Euro 1.7 billion. In 2004, EADS expects to continue generating a positive Free Cash Flow before Customer Financing. Indeed, the EADS management will continuously strive to offset the cash outlays from the A380 investment and the Skynet 5 construction by ongoing cash preservation initiatives. Maintaining its financial discipline, EADS also intends to pursue its control of commercial aviation customer financing with gross exposure expected not to increase by more than approximately USD 900 million. As was already announced, EADS expects 2004 revenues to remain stable, assuming an exchange rate of Euro 1 = USD 1.20. Airbus expects close to 300 aircraft deliveries in 2004. Regarding commercial activity, EADS expects to maintain a level of order intake above the level of revenues. end of ad-hoc-announcement (c)DGAP 08.03.2004 ——————————————————————————– WKN: 938914; ISIN: NL0000235190; Index: MDAX Listed: Amtlicher Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart 080700 Mär 04