Airbus SE — Earnings Release 2011

May 13, 2011

News Details

Ad-hoc | 13 May 2011 07:00

EADS Reports Results of First Quarter 2011

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

13.05.2011 07:00

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Ad-hoc release, 13 May 2011

Solid Start to the Year: EADS Reports Results of First Quarter 2011

• Successful market introduction of A320neo

• Revenues up 10 percent to EUR 9.9 billion

• EBIT* before one-off: around EUR 230 million

• Free Cash Flow of EUR 0.3 billion

• Net Income: EUR -12 million, impacted by negative dollar accounting
  revaluation

• Record Net Cash position of EUR 12.2 billion

EADS (stock exchange symbol: EAD) releases encouraging results for the
first quarter 2011 while the recovery of the global economy continues to
support the growth of passenger traffic. Based on this positive momentum,
Airbus is analysing a further increase in its single aisle production rate
which is currently scheduled to increase to 40 aircraft per month by Q1
2012. A decision is expected shortly. In the first three months of 2011,
the order intake(4) amounted to EUR 6.3 billion. EADS' order book of more
than EUR 422 billion provides a solid platform for future deliveries. First
quarter earnings reflect the usual seasonality pattern in our institutional
businesses. Revenues amounted to EUR 9.9 billion. The EBIT* before one-off
of around EUR 230 million benefited from good underlying performance on
legacy programmes and favourable phasing of costs at
Airbus Commercial. The reported EBIT* amounted to EUR 192 million. At
EUR 12.2 billion, thanks to strong cash-flow management in the first
quarter, the Net Cash position remains a key asset to foster future growth.
The impacts from events in Japan and North Africa on the commercial
aircraft market are expected to be of a temporary nature. These
developments are being actively managed, while budget pressures in
institutional markets, helicopters and defence and the currency volatility
are being monitored.

'Our first quarter financial results reflect a good start to 2011. The
early market success of the A320neo validates the significant prospects we
envisage for this programme and the acquisition of Vector Aerospace in
Canada is a major step forward in expanding our services offering. We also
signed the A400M contract amendment, which provides a solid base to further
advance this key programme', said Louis Gallois, CEO of EADS. 'While
advancing with the A350 XWB through achieving several critical milestones,
this decisive programme continues to require our closest attention.'

In the first quarter, EADS' revenues increased 10 percent to EUR 9.9
billion (Q1 2010: EUR 9.0 billion). This growth is driven primarily by mix
effects at Airbus Commercial and Astrium. Deliveries remained at a high
level with 119 aircraft at Airbus Commercial, 81 helicopters at Eurocopter
and the 42nd consecutive successful Ariane 5 launch. In the first quarter,
Airbus Military recorded revenues for the A400M programme of EUR 165
million, based on milestones. Series production has started and civil
certification is planned for 2011. On 7 April 2011, the Customer Nations
and EADS concluded the A400M contract amendment negotiations. The contract
amendment implements the changes which were agreed in principle by the
Customer Nations and EADS on 5 March 2010.

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 230 million (Q1 2010: around EUR 150 million) for EADS and at
around EUR 160 million for Airbus (Q1 2010: around EUR 80 million). It
benefited from good underlying performance in Airbus legacy programmes as
well as in core business activities in the other Divisions. It also
included favourable phasing effects, particularly of non series costs at
Airbus Commercial, which should reverse throughout the year and an
unchanged A380 impact compared to last year.

EADS' reported EBIT* stood at EUR 192 million (Q1 2010: EUR 83 million).

Net Income (loss) amounted to EUR -12 million (Q1 2010: EUR 103 million),
or earnings per share of EUR -0.01 (earnings per share Q1 2010: EUR 0.13).
The finance result amounts to EUR -197 million (Q1 2010: EUR 77 million).
The interest result of EUR -47 million is roughly stable with the 2010
level (Q1 2010: EUR -53 million). Meanwhile, the other financial result
deteriorated considerably by EUR 280 million year-on-year. It amounted to
EUR -150 million (Q1 2010: EUR 130 million). The main change comes from the
negative accounting revaluation of US dollar and British pound (GBP) cash
assets due to the deterioration of the closing spot rate at the end of
March compared to the end of December 2010. The change in time value of
EADS' hedging options has also led to a negative valuation. On the other
hand, the net change in fair value of cash-flow hedges had a positive
impact of EUR 1.8 billion on EADS equity.

Self-financed Research & Development (R&D) expenses increased to
EUR 650 million (Q1 2010: EUR 572 million), driven mainly by development on
the A350 XWB at Airbus.

Free Cash Flow before customer financing improved to EUR 208 million (Q1
2010: EUR -972 million), thanks to better operational performance. The
improvement in working capital of EUR 1.2 billion is driven by higher
advance payments received, partially reduced by a ramp-up in inventories,
particularly at Airbus. The level of capital expenditures increased
slightly compared to last year, as expected, as investment continues to
ramp-up on the A350 XWB programme. Customer financing generated cash of
around EUR 100 million in the first quarter as the lessor and banking
market appetite continues to gain momentum. Free Cash Flow after customer
financing amounted to EUR 309 million (Q1 2010: EUR -1,124 million).

EADS' Net Cash position amounted to EUR 12.2 billion (year-end 2010:
EUR 11.9 billion), remaining a solid foundation for the Group's operational
needs as well as future growth.

The Group's order intake(4) of EUR 6.3 billion was lower than one year ago
(Q1 2010: EUR 14.4 billion) which included a high level of commercial
aircraft orders for the A330 and A350 XWB at Airbus. The First Quarter 2011
order intake is net of 68 commercial aircraft cancellations and
conversions. By the end of March 2011, EADS' order book(4) stood at EUR
422.4 billion (year-end 2010: EUR 448.5 billion), providing good visibility
for the future. The Airbus Commercial backlog has been reduced by a
negative revaluation impact of around EUR 22 billion due to the
deterioration of the US dollar closing spot rate since the year-end 2010.
The defence order book is almost stable at EUR 57.0 billion (year-end 2010:
EUR 58.3 billion).

At the end of March 2011, EADS' workforce consisted of 122,899 employees
(year-end 2010: 121,691).

Outlook

EADS confirms 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 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 EUR 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, 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. Free Cash Flow is expected to be positive.

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

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Language: English
Company: European Aeronautic Defence and Space Company EADS N.V.
P.O. Box 32008
2303 DA Leiden
Niederlande
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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