Airbus SE — Earnings Release 2011

Nov 10, 2011

News Details

Ad-hoc | 10 November 2011 06:59

European Aeronautic Defence and Space Company EADS N.V.: Improving Performance: EADS Reports Nine-Month Results 2011

European Aeronautic Defence and Space Company EADS N.V. / Key word(s): Quarter Results

10.11.2011 06:59

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Ad-hoc release, 10 November 2011

Improving Performance: EADS Reports Nine-Month Results 2011

• Increase of full-year guidance for orders, revenues, EBIT* before
  one-off and Free Cash Flow

• Order intake up 63 percent to EUR 93.9 billion in nine-month 2011;
  order book reaches record level of EUR 503 billion

• Revenues up 4 percent: EUR 32.7 billion

• EBIT* before one-off up 29 percent: EUR 1.1 billion

• Strong Free Cash Flow before acquisition of Vector Aerospace of around
  EUR 600 million, slightly lower than last year

• Net Income before one-off up 86 percent: EUR 565 million

• Charge of EUR 200 million linked to A350 XWB Entry-into-Service now in
  H1 2014

EADS (stock exchange symbol: EAD) announces better than expected nine-month
results. The commercial aircraft momentum remains robust despite recent
turbulence in the macro environment, but the defence markets in the Western
world are under pressure as anticipated. In the first nine months of 2011,
the order intake(5) reached EUR 93.9 billion. EADS' order book stood at a
record level of
EUR 503 billion. Revenues amounted to EUR 32.7 billion. The EBIT* before
one-off of around EUR 1.1 billion was mainly driven by operational
improvement from Eurocopter and Airbus commercial activities as well as
some favourable phasing in Airbus and in Headquarters. The reported EBIT*
amounted to EUR 885 million. Cash-flow generation remained strong and led
to a Net Cash position of
EUR 11.4 billion after acquisitions.

'Our nine-month results are better than expected thanks to the Group's
efforts to improve performance. I am confident the commercial aircraft
market combined with our strong backlog will sustain our growth in the
years to come. On the basis of existing contracts, EADS is ready to enter
into discussions with the governments on the future of defence procurement
programmes. The company's services offering was further extended through
new acquisitions', said
Louis Gallois, CEO of EADS. 'Our large programme developments, especially
the A350, continue to have our highest management attention.'

Maturity of the A350 XWB main components at Final Assembly start remains
one of the Group's top priorities. Start of Final Assembly is now scheduled
for
Q1 2012 and Entry-into-Service is now scheduled for H1 2014.

In the first nine months, EADS' revenues increased 4 percent to EUR 32.7
billion (9m 2010: EUR 31.6 billion). This growth is driven by Airbus
Commercial, Eurocopter and Astrium. Physical deliveries remained at a high
level with 374 aircraft at Airbus Commercial, 323 helicopters at Eurocopter
and the 46th consecutive successful Ariane 5 launch.

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
EUR 1.1 billion (9m 2010: EUR 0.8 billion) for EADS and at around EUR 0.4
billion for Airbus (9m 2010: around EUR 0.3 billion). The increase compared
to last year is mainly driven by operational improvement at Airbus and
Eurocopter and some favourable phasing at Airbus and in Headquarters.

EADS' reported EBIT* stood at EUR 885 million (9m 2010: EUR 784 million).
With the A350 XWB Entry-into-Service now in H1 2014, Airbus Commercial
booked a charge of EUR 200 million for this programme in the third quarter.
Reported EBIT* includes a positive one-off due to the termination of the
A340 programme of EUR 192 million. The US dollar mismatch and balance sheet
revaluation had a negative impact on EADS' EBIT* result of around
EUR 50 million at the end of September. In the first nine months,
Eurocopter booked a net charge of around EUR 120 million, thereof EUR 60
million in the third quarter. These net charges mainly relate to
governmental programmes and SHAPE.

Net Income more than doubled to EUR 421 million (9m 2010: EUR 198 million),
or earnings per share of EUR 0.52 (earnings per share 9m 2010: EUR 0.24).
The improvement is driven by the Net Income before one-off(4), which
increased to EUR 565 million (9m 2010: EUR 304 million) thanks to better
operational earnings.

The finance result amounts to EUR -212 million (9m 2010: EUR -452 million).
The interest result of EUR -9 million (9m 2010: EUR -176 million) improved
thanks to a positive one-off of EUR 120 million due to the termination of
the A340 programme. Furthermore, the 2011 average net cash position is
higher than the 2010 level. Meanwhile, the other financial result amounts
to EUR -203 million (9m 2010:
EUR -276 million). This line includes, among others, a negative revaluation
of EADS' options for around EUR 60 million and the unwinding of discounted
provisions for a negative amount of around EUR 110 million.

Self-financed Research & Development (R&D) expenses increased to
EUR 2,151 million (9m 2010: EUR 2,038 million), driven mainly by
development on the A350 XWB programme at Airbus.

Free Cash Flow for the nine months benefited from good operational
performance and commercial order intake. Gross cash flow from operations
reflects the improvement of the underlying profitability. Free Cash Flow
before customer financing amounted to EUR -27 million (9m 2010: EUR 882
million). Free Cash Flow after customer financing stood at EUR 155 million
(9m 2010: EUR 791 million). Before the acquisition of Vector Aerospace,
Free Cash Flow is at EUR 587 million, slightly lower than last year due to
the working capital deterioration. The working capital reflects an
inventory ramp-up at Airbus due to the re-phasing of some deliveries in the
third quarter and the progressive ramp-up to rate 38 per month on the
Single Aisle production, which has now been achieved. This negative
inventory effect on the cash flow should decrease in the fourth quarter.
Meanwhile, the ramp-up in inventories was partially mitigated by higher
advance payments at Airbus and Astrium. Customer financing generated cash
of around EUR 180 million in the first nine months as the lessor and
banking market appetite continues to be active despite recent concerns. The
level of capital expenditure is in line with the 2010 level; however, EADS
expects it to increase by year-end.

EADS' Net Cash position amounted to a robust EUR 11.4 billion (year-end
2010:
EUR 11.9 billion). It also reflects a cash contribution to pension assets
of EUR 300 million and a cash purchase of minority shares for Dornier/DADC
from Daimler AG.

EADS' order intake(5) increased by 63 percent to EUR 93.9 billion (9m 2010:

EUR 57.7 billion), it benefited from strong ongoing commercial momentum. At
the end of September 2011, the Group's order book(5) stood at a record
level of
EUR 503.0 billion (year-end 2010: EUR 448.5 billion), underpinning EADS'
top line growth into the future. The Airbus Commercial backlog has been
reduced by a negative revaluation impact of around EUR 2.7 billion due to
the slight deterioration of the
US dollar closing spot rate since year-end 2010. The defence order book
decreased to EUR 54.5 billion (year-end 2010: EUR 58.3 billion).

At the end of September 2011, EADS' workforce consisted of 128,038
employees, including 2,426 employees from the Vector Aerospace acquisition
(year-end 2010: 121,691).

Outlook

EADS increases its latest orders, revenues, EBIT* before one-off and
Free Cash Flow guidance given in July. In 2011, Airbus should deliver 520
to 530 commercial aircraft and its gross orders should be around 1,500.
EADS 2011 revenues should increase by more than 4 percent compared to EUR
45.8 billion in 2010.

EADS now expects 2011 EADS EBIT* before one-off to increase compared to the
2010 level, at around EUR 1.45 billion thanks to better than expected
underlying commercial performance.

EADS expects 2011 Earnings per Share (EPS) before one-off to be around
EUR 0.9, above the 2010 level (EUR 0.86). Going forward, 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. Reported EBIT* and EPS also depend on exchange rate
fluctuations. As previously communicated, at EUR 1 = $ 1.35, the 2011 EPS
should be above the 2010 level of EUR 0.68 and at EUR 1 = $ 1.45, it may be
below.

Free Cash Flow before investment for acquisitions is now expected to be
significantly above EUR 1 billion.

Latest reviews confirm that in 2012, the Group expects a significant
improvement in its EBIT* before one-off thanks to higher volume, better
pricing and improvement of A380 performance at Airbus.

* EADS uses EBIT pre goodwill impairment and exceptionals as a key
indicator of its economic performance. The term 'exceptionals' refers to
such items as depreciation expenses of fair value adjustments relating to
the EADS merger, the Airbus Combination and the formation of MBDA, as well
as impairment charges thereon.

EADS is a global leader in aerospace, defence and related services. In
2010, the Group - comprising Airbus, Astrium, Cassidian and Eurocopter -
generated revenues of EUR 45.8 billion and employed a workforce of nearly
122,000.

Contacts:
Alexander Reinhardt +49 89 607 34066
Martin Agüera +49 89 607 34735
Matthieu Duvelleroy +33 1 42 24 24 25
Philipp Lehmann +49 89 607 34287

www.eads.com

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Language: English
Company: European Aeronautic Defence and Space Company EADS N.V.
P.O. Box 32008
2303 DA Leiden
Netherlands
Phone: 00 800 00 02 2002
Fax: +49 (0)89 607 - 26481
E-mail: ir@eads.net
Internet: www.eads.com
ISIN: NL0000235190
WKN: 938914
Indices: MDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Düsseldorf, Hamburg, Hannover, München, Stuttgart

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