Airbus SE — Earnings Release 2011

Mar 8, 2012

News Details

Ad-hoc | 8 March 2012 07:00

European Aeronautic Defence and Space Company EADS N.V.: Increasing Growth Momentum: EADS Reports Full Year Results 2011

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

08.03.2012 07:00

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Ad-hoc release, 8 March 2012

Increasing Growth Momentum: EADS Reports Full Year Results 2011
- All key indicators significantly above guidance

• Group order backlog surges to record level: EUR 541 billion

• Revenues increase 7 percent to EUR 49.1 billion

• EBIT* before one-off up 34 percent: EUR 1.8 billion

• Net Income before one-off up 76 percent to EUR 1.1 billion

• Strong Free Cash Flow before acquisitions of EUR 2.5 billion

• Proposed dividend increases to EUR 0.45

• 2012 EBIT* before one-off guidance above EUR 2.5 billion

EADS (stock exchange symbol: EAD) announces better than expected results
for the full year 2011. Despite a volatile macro-economic context, EADS in
2011 continued to grow and to improve its financial performance,
particularly thanks to strong commercial momentum backed by resilient air
traffic figures. Defence markets in the Western world were under pressure,
as anticipated. The order intake(5) reached EUR 131 billion in 2011. EADS'
order book(5) stood at a record level of EUR 541 billion. Revenues amounted
to
EUR 49.1 billion. The EBIT* before one-off of around EUR 1.8 billion
benefited from good performance in Airbus legacy programmes and Airbus
Military as well as commercial series and services activity at Eurocopter.
The reported EBIT* amounted to EUR 1.7 billion. Cash-flow generation
remained strong and led to a Net Cash position of EUR 11.7 billion.

'In 2011, EADS achieved financials above expectation and demonstrated that
it is a healthy growth story. The order intake in commercial aircraft has
elevated our order book to record levels and I am pleased that the civilian
helicopter market has also significantly gained momentum. Our strong cash
generation protects the company and allowed us to secure important
acquisitions, mainly in the field of services. The stage is set for EADS to
turn the corner towards increased profitability', said Louis Gallois, CEO
of EADS. 'Certainly, 2012 will have challenges in store for us. We continue
to devote the highest management attention to our key programmes,
especially the A350. We will also have to monitor the uncertain economic
environment and the outcome of discussions with governments on the future
of defence procurement programmes. It is essential that these talks,
notably in Germany, show fast and sound results for both sides.'

For the full year 2011, EADS' revenues increased 7 percent to EUR 49.1
billion (FY 2010: EUR 45.8 billion). This growth is driven by volume and
mix effects at Airbus and the increase of commercial activity at
Eurocopter. These increases more than offset a slight decrease at Astrium
and Cassidian.
The overall 2011 revenue contribution from the first consolidation of the
major acquisitions was around EUR 300 million, mainly Vector Aerospace and
Satair, while the EBIT* impact was insignificant. Physical deliveries
remained high with 534 aircraft at Airbus Commercial, 503 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 1.8 billion (FY 2010: EUR 1.3 billion) for EADS and at around
EUR 0.5 billion for Airbus (FY 2010: around EUR 0.3 billion). Compared to
2010, this represents a significant rise, despite an increase in
Research & Development expenses and dollar headwind. It benefited from good
performance in Airbus legacy programmes thanks to volume, mix and price
improvements. Also, Airbus Military and especially Eurocopter contributed
to the performance improvement, the latter mainly from its commercial
series and services activity. The Headquarters EBIT* before
one-off improved in 2011, mainly due to an increased allocation of
management fees to Divisions and positive impacts from Group eliminations
in the fourth quarter.

EADS' reported EBIT* stood at EUR 1,696 million (FY 2010: EUR 1,231
million).
At Airbus Commercial, a higher number of deliveries and better pricing more
than compensated hedge rate deterioration and higher R&D. The total
one-time effects at Airbus were roughly neutral. The negative impact from
the A350 XWB provision was more than offset by the effects from the
A340 completion and by a positive foreign exchange impact on pre-delivery
payments mismatch and balance sheet revaluation. The performance of
Astrium, Cassidian and Eurocopter includes around EUR 200 million net in
negative one-time items. This is partially compensated by positive one-offs
in Other Businesses and Headquarters. The largest proportion is in
Eurocopter, which has reported roughly EUR 115 million of negative one-time
effects, driven mainly by governmental programmes and by the SHAPE
transformation programme. Cassidian booked a net charge of EUR 72 million
for restructuring and programmes. At Astrium, a charge of EUR 23 million
was booked in the fourth quarter, relating to the AGILE transformation
programme.

Net Income increased by 87 percent to EUR 1,033 million (FY 2010:
EUR 553 million), or earnings per share of EUR 1.27 (earnings per share
FY 2010: EUR 0.68). The Net Income before one-off(4) increased to
EUR 1,061 million (FY 2010: EUR 603 million). These increases are mainly
driven by the operational improvement reflected in the EBIT*, which is
flowing down to the Net Income.

The finance result amounts to EUR -220 million (FY 2010: EUR -371 million).

The interest result of EUR 13 million (FY 2010: EUR -99 million) improved
mainly due to higher interest income related to the good cash performance.
The 2011 interest result includes a positive one-time release of EUR 120
million due to the completion of the A340 programme. The other financial
result amounts to EUR -233 million (FY 2010: EUR -272 million). This line
includes, among others, a negative revaluation of EADS' foreign exchange
options for around
EUR 90 million and the unwinding of discounted provisions for an amount of
EUR -172 million.

Based on an Earnings per Share (EPS) of EUR 1.27, the EADS Board of
Directors proposes payment on 7 June 2012 of a dividend of
EUR 0.45 per share to the Annual General Meeting of shareholders (FY 2010:
EUR 0.22 per share). The record date should be 6 June 2012.

'I am pleased we can share the good performance and growth with our
shareholders through a significantly increased dividend based on a pay-out
ratio converging towards sector and industry peers', said Hans Peter Ring,
CFO of EADS. 'As the Group matures, this dividend policy shall serve as the
orientation for the future.'

Self-financed Research & Development (R&D) expenses rose to
EUR 3,152 million (FY 2010: EUR 2,939 million), driven mainly by increases
at Airbus on the A350 XWB development, at Cassidian for Unmanned Aerial
Systems (UAS) and Eurofighter radar activities as well as at Eurocopter.

Free Cash Flow for the full year 2011 benefited from good operational
performance. Free Cash Flow stood at EUR 958 million (FY 2010: EUR 2,707
million). After customer financing and before acquisitions, the Free Cash
Flow of
EUR 2,493 million is significantly above expectations thanks to higher
order intake and higher than expected deliveries at Airbus, better EBIT*
before one-off and better than expected cash inflow from government
customers. Gross cash flow from operations increased compared to one year
ago, mainly due to the improvement of profitability before depreciation and
provisioning. The working capital includes an inventory increase at Airbus
due to the progressive ramp-up on production programmes. The ramp-up in
inventories was overcompensated by higher advance payments received at
Airbus. Customer financing generated cash of EUR 135 million in 2011 as the
lessor and global banking markets continue to be active despite recent
concerns. The level of industrial capital expenditure is slightly below the
2010 level. In line with the Group's strategy, EADS pursued some
significant acquisitions in 2011 with an overall cash-out of approximately
EUR 1.5 billion.

EADS' Net Cash position amounted to a solid EUR 11.7 billion (year-end
2010:
EUR 11.9 billion) after acquisitions. It also reflects a cash contribution
to pension assets of EUR 489 million.

EADS' order intake(5) increased by 58 percent to EUR 131.0 billion (FY
2010:
EUR 83.1 billion), driven by the higher level of commercial aircraft orders
at Airbus. At the end of December 2011, the Group's order book(5) increased
by
21 percent to a record level of EUR 541.0 billion (year-end 2010: EUR 448.5
billion), underpinning EADS' top line growth into the future. The Airbus
Commercial backlog benefited from a positive revaluation impact of around
EUR 15 billion due to the US dollar closing spot rate that has strengthened
since year-end 2010. The defence order book decreased to EUR 52.8 billion
(year-end 2010:
EUR 58.3 billion).

At the end of December 2011, EADS counted 133,115 employees, including
6,505 employees from the acquisitions of Vector Aerospace, PFW Aerospace,
Vizada, Satair and several smaller acquisitions (year-end 2010: 121,691).

Outlook

As basis for EADS' 2012 guidance, the Group expects the world economy and
air traffic to grow in line with prevailing independent forecasts and
assumes an average dollar exchange rate of EUR 1 = $ 1.35.

In 2012, Airbus should deliver around 570 commercial aircraft. Gross orders
should be above the number of deliveries. EADS 2012 revenues should
continue to grow above 6 percent. Group EBIT* before one-off should improve
significantly thanks to volume increases at Airbus and Eurocopter, better
pricing at Airbus and A380 improvement. EADS expects the
EBIT* before one-off to be above EUR 2.5 billion. The EADS 2012 Earnings
per Share (EPS)* before one-off(4) should be above EUR 1.65 (FY 2011: EUR
1.39), based on the Net Income* before one-off(4).

Going forward, the reported EBIT* and EPS performance of EADS will be
dependent on the Group's ability to execute on its complex programmes such
as A400M, A380 and A350 XWB, in line with the commitments made to its
customers. Based on this EBIT* guidance, EADS should continue to generate a
positive Free Cash Flow after customer financing and before acquisitions.
As it is the most volatile item, especially during uncertain
macro-economic times, EADS will give a more precise guidance later in the
year.

* 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
2011,
the Group - comprising Airbus, Astrium, Cassidian and Eurocopter -
generated revenues of EUR 49.1 billion and employed a workforce of over
133,000.

Contacts:
Alexander Reinhardt +49 171 765 0320
Martin Agüera +49 175 227 4369
Matthieu Duvelleroy +33 629 431 564
Philipp Lehmann +49 151 151 42921

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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