Airbus SE — Earnings Release 2011

Jul 29, 2011

News Details

Ad-hoc | 29 July 2011 07:00

European Aeronautic Defence and Space Company EADS N.V.: Strong Commercial Momentum: EADS Reports Half-Year Results 2011

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

29.07.2011 07:00

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Ad-hoc release, 29 July 2011

Strong Commercial Momentum: EADS Reports Half-Year Results 2011
- Order intake up 89 percent to EUR 58.1 billion

• Key success: American Airlines endorses A320 and A320neo families

• Revenues up 8 percent: EUR 21.9 billion

• EBIT* before one-off: EUR 720 million

• Free Cash Flow before acquisition of Vector Aerospace of around EUR 250
  million

• Net Income: EUR 109 million

EADS (stock exchange symbol: EAD) publishes solid results for the half year
2011 in an environment of continuing strong commercial momentum. In the
first six months of 2011, the order intake(4) amounted to EUR 58.1 billion.
EADS' order book of more than EUR 453 billion remains a solid platform for
future deliveries. Revenues amounted to EUR 21.9 billion. The EBIT* before
one-off of around
EUR 720 million benefited from good underlying performance, especially at
Airbus Commercial. The reported EBIT* amounted to EUR 563 million. Net Cash
stood at
EUR 11.0 billion. Large programme developments, budget pressure in
institutional markets, helicopters and defence as well as currency
volatility are being monitored.

'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 EUR 21.9
billion
(H1 2010: EUR 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 EUR 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
EUR 720 million (H1 2010: around EUR 640 million) for EADS and at around
EUR 310 million for Airbus (H1 2010: around EUR 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 EUR 563 million (H1 2010: EUR 406 million).

Net Income amounted to EUR 109 million (H1 2010: EUR 185 million), or
earnings per share of EUR 0.13 (earnings per share H1 2010: EUR 0.23). It
benefited from the good EBIT* performance but was dragged down by
accounting revaluations on foreign exchange. The finance result amounts to
EUR -366 million (H1 2010: EUR -109 million). The interest result of EUR
-97 million (H1 2010: EUR -114 million) improved thanks to a better average
cash balance. Meanwhile, the other financial result deteriorated
considerably to EUR -269 million (H1 2010: EUR 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 EUR 2.3 billion on EADS
equity.

Self-financed Research & Development (R&D) expenses increased to
EUR 1,409 million (H1 2010: EUR 1,301 million), driven mainly by
development on the A350 XWB at Airbus.

Free Cash Flow before customer financing improved to EUR -286 million
(H1 2010: EUR -470 million), thanks to better operational performance
despite unfavourable phasing at Eurocopter and Cassidian. The improvement
is driven by the working capital. A higher level of customer advances
received, particularly at Airbus and improved working capital management is
partially reduced by a ramp-up in inventories, particularly at Airbus and
Astrium. The level of capital expenditure is in line with the 2010 level.
Customer financing generated cash of around
EUR 100 million in the first six months as the lessor and banking market
appetite continues to be active. Free Cash Flow after customer financing
stood at
EUR -184 million (H1 2010: EUR -737 million). Before the acquisition of
Vector Aerospace, Free Cash Flow is positive at around EUR 250 million.

EADS' Net Cash position amounted to EUR 11.0 billion (year-end 2010:
EUR 11.9 billion), remaining a solid foundation for the Group's operational
needs as well as future growth. It also reflects a cash contribution to
pension assets of
EUR 300 million and a cash purchase of minority shares in Dornier/ DADC.
EADS purchased these minority shares from Daimler AG.

The Group's order intake(4) of EUR 58.1 billion (H1 2010: EUR 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(4) stood at EUR 453.8 billion
(year-end 2010: EUR 448.5 billion), providing a solid platform for future
growth. The Airbus Commercial backlog has been reduced by a negative
revaluation impact of around EUR 28 billion due to the deterioration of the
US dollar closing spot rate since the year-end 2010. The defence order book
stood at EUR 55.6 billion (year-end 2010: EUR 58.3 billion).

At the end of June 2011, EADS' workforce consisted of 123,975 employees
(year-end 2010: 121,691).

Outlook

EADS confirms or improves the various components of its 2011 guidance based
on an assumption of EUR 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.

EADS still expects 2011 EBIT* before one-off to remain stable compared to
the 2010 level, at around EUR 1.3 billion. H2 EBIT* before one-off at
Airbus will be clearly positive but lower than in H1 due to higher R&D
expenses and a less favourable mix.

Going forward, reported EBIT* and Earnings Per Share (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.
At EUR 1 = $ 1.35, EADS expects 2011 EPS to be above the 2010 level of EUR
0.68;
it may be below the 2010 level at EUR 1 = $ 1.45.

EADS is increasing its Free Cash Flow guidance. Free Cash Flow is now
expected to be around EUR 1 billion before any investment for acquisitions.

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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