Airbus SE — Earnings Release 2015

Jul 31, 2015

News Details

Ad-hoc | 31 July 2015 06:59

Airbus Group SE: Airbus Group Reports Solid Half-Year (H1) 2015 Results

Airbus Group SE / Key word(s): Half Year Results

31.07.2015 06:59

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Ad-hoc release, 31 July 2015

Airbus Group Reports Solid Half-Year (H1) 2015 Results

• Revenues EUR 28.9 billion, EBIT* before one-off EUR 1.88 billion: Both
  rise 6%

• Earnings per share up 34 percent to EUR 1.94

• Free cash flow EUR 549 million, including sale of Dassault Aviation
  shares

• A400M deliveries resumed, charge of EUR 290 million included

• H1 financial performance confirms 2015 guidance

Airbus Group (stock exchange symbol: AIR) reported solid half-year results
supported by an improved operational performance and confirmed its 2015
guidance.

"The half-year underlying results reflect our continued focus on programme
execution and operational efficiency," said Tom Enders, Airbus Group Chief
Executive Officer. "Revenues, profitability and cash generation all
improved, and the overall financial performance means
we are on track to deliver our 2015 guidance. We continue to see healthy
commercial momentum across the portfolio as shown by the major contracts
announced at June's Paris Air Show. We are focused on operational
priorities, including A350 and A400M ramp-up,
cost control and deliveries plus the A320neo transition, as we strive to
further enhance profits and cash."

Group order intake(1) in the first six months of 2015 increased sharply to
EUR 53.9 billion (H1 2014:
EUR 27.7 billion), with the order book(1) value rising to EUR 927 billion
as of 30 June (year-end 2014:
EUR 858 billion) taking into account a positive revaluation linked to the
strengthening of the US dollar. Airbus received 348 net commercial aircraft
orders (H1 2014: 290 net orders), including 57 A330 Family aircraft.
Demonstrating the continued strength of the commercial aircraft market, 421
firm orders and commitments were announced during the Paris Air Show.
Airbus Helicopters received 135 net orders (H1 2014: 148 units), including
29 H175s. Order intake by value rose 40 percent
at Airbus Defence and Space, with strong momentum seen across business
lines including additional Earth observation satellites and A330 MRTTs. In
June, Defence and Space was selected by OneWeb to design and manufacture an
initial 900 satellites.

Group revenues rose six percent to EUR 28.9 billion (H1 2014: EUR 27.2
billion), reflecting the strong delivery mix at Commercial Aircraft and
strengthening US dollar. Commercial Aircraft's revenues rose nine percent
with 304 commercial airplanes delivered (H1 2014: 303 units), including 4
A350 XWBs and 13 A380s. Helicopters' revenues increased five percent,
driven
by government programmes and services activities which mitigated lower
deliveries of 152 units (H1 2014: 200 units). Defence and Space's revenues
were stable despite the deconsolidation
of launcher revenues with the creation of the Airbus Safran Launchers JV's
first phase.

Group EBIT* before one-off(3) - an indicator capturing the underlying
business margin
by excluding material non-recurring charges or profits caused by movements
in provisions related to programmes and restructurings or foreign exchange
impacts - rose six percent
to EUR 1,883 million (H1 2014: EUR 1,769 million) with improvements in all
Divisions.
Commercial Aircraft's EBIT* before one-off rose to EUR 1,533 million (H1
2014: EUR 1,287 million), driven by operational improvement and some
favourable cost phasing including research and development (R&D) expenses.
Helicopters' EBIT* before one-off rose eight percent to EUR 162 million (H1
2014: EUR 150 million), with lower volumes and a less favourable mix
mitigated by higher services activity and
the Division's transformation plan. Defence and Space's EBIT* before
one-off increased
to EUR 267 million (H1 2014: EUR 223 million), reflecting good programme
execution and progress
in its transformation plan.
Group self-financed R&D expenses were EUR 1,506 million (H1 2014: EUR 1,564
million) while
the Group EBIT* before one-off return on sales was 6.5 percent (H1 2014:
6.5 percent).

The industrial ramp-up of the A350 XWB programme is gaining traction, with
Vietnam Airlines becoming the second operator in June. Development of the
A320neo is progressing with
a CFM-powered aircraft making its first flight in May and flight tests of
Pratt & Whitney-engined aircraft resuming at the end of July. Despite some
flight test interruptions, the A320neo delivery stream is still expected to
commence in 2015. The A380 programme is on track for breakeven by the
year-end. Helicopters' product renewal strategy is progressing with flight
testing
for the new H160 underway and the X6 concept phase now launched. At Defence
and Space,
four A400Ms were delivered in the first half of 2015.

Reported EBIT*(3) increased 21 percent to EUR 2,229 million (H1 2014: EUR
1,839 million),
with net one-offs totalling a positive EUR 346 million and comprising:
- A EUR 290 million additional net charge related to the A400M programme.
Following the accident on 9 May 2015, an analysis of the programme's
current status was conducted. Airbus Group
has worked with all its
partners to resume flights and deliveries. However, the accident caused
setbacks on qualifying enhanced military capability and the schedule of
planned deliveries.
The accident stopped certain flight test activity
for a number of weeks and caused bottlenecks
in the production
process. Industrial efficiency remains a challenge during the ramp-up
phase and furthermore, the escalation formulae in the contract versus
costs has gone significantly negative due to lower inflation in the
eurozone(5). Airbus Group is working with its customers
to agree the
new schedule of military capability enhancement and deliveries as well
as reviewing
the escalation formulae.

• A EUR 145 million net charge related to the dollar pre-delivery payment
  mismatch
  and balance sheet revaluation driven by the weaker euro
  versus the dollar. The second quarter included a negative impact of EUR
  36 million linked to the revaluation of the A400M provision.

• A EUR 748 million net gain from the sale of an 18.75% stake in Dassault
  Aviation(6),.

• A net gain of EUR 33 million mainly linked to the creation of the
  Airbus Safran Launchers JV's first phase.

Net income(4) increased 34 percent to EUR 1,524 million (H1 2014: EUR 1,135
million) while earnings per share (EPS) rose the same percentage to EUR
1.94 (H1 2014: EUR 1.45), driven by the improved operational performance.
Both included the Dassault Aviation capital gain and A400M charge. The
finance result was EUR -344 million (H1 2014: EUR -252 million) and
included one-offs totalling
EUR -100 million mainly from negative foreign exchange revaluation of
financial instruments.
Free cash flow before mergers and acquisitions improved significantly to
EUR -1,025 million (H1 2014: EUR -2,270 million), reflecting the delivery
performance and tight cash control while proceeds of around EUR 1.7 billion
from the sale of Dassault Aviation shares boosted total free cash flow to
EUR 549 million (H1 2014: EUR -2,244 million). The net cash position at the
end of June 2015 was EUR 8.4 billion (year-end 2014: EUR 9.1 billion) after
a 2014 dividend payment of EUR 945 million (2013: EUR 587 million) with a
gross cash position of EUR 16.8 billion (year-end 2014: EUR 16.4 billion).

Outlook
As the basis for its 2015 guidance, Airbus Group expects the world economy
and air traffic to grow in line with prevailing independent forecasts and
assumes no major disruptions.
Airbus deliveries should be slightly higher than in 2014, and the
commercial aircraft order book
is again expected to grow.
In 2015, before mergers & acquisitions (M&A), Airbus Group expects an
increase in revenues
and targets a slight increase in EBIT* before one-off.
Based on its current view of the industrial ramp-up, Airbus Group targets
breakeven free cash flow in 2015 before M&A.
Airbus Group targets its EPS and dividend per share to increase further in
2015.

* Airbus Group 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 former EADS merger and Airbus Combination, as well as impairment
charges thereon.

Airbus Group

Airbus Group is a global leader in aeronautics, space and related services.
In 2014, the Group - comprising Airbus, Airbus Defence and Space and Airbus
Helicopters - generated revenues of EUR 60.7 billion and employed a
workforce of around 138,600.

Contacts for the media:
Martin Agüera +49 (0) 175 227 4369
Rod Stone +33 (0) 6 30 521 993

Airbus Group - Half-Year (H1) Results 2015
(Amounts in euro)

Airbus Group H1 2015 H1 2014 Change
Revenues, in millions 28,893 27,200 +6%
thereof defence, in millions 4,869 4,614 +6%
EBITDA (2), in millions 3,295 2,773 +19%
EBIT before one-offs (3), in millions 1,883 1,769 +6%
EBIT (3), in millions 2,229 1,839 +21%
Research & Development expenses, 1,506 1,564 -4%
in millions
Net Income (4), in millions 1,524 1,135 +34%
Earnings Per Share (EPS) (4) 1.94 1.45 +34%
Free Cash Flow (FCF), in millions 549 - 2,244 -
Free Cash Flow - 1,025 - 2,270 -
before M&A, in millions
Free Cash Flow 612 - 2,112 -
before Customer Financing, in millions
Order Intake (1), in millions 53,919 27,708 +95%

Airbus Group 30 June 31 Dec Change
2015 2014
Order Book (1), in millions 926,978 857,519 +8%
thereof defence, in millions 38,757 42,240 -8%
Net Cash position, in millions 8,436 9,092 -7%
Employees 137,217 138,622 -1%

by Division Revenues EBIT (3)
(Amounts in millions of Euro) H1 H1 Change H1 H1 Change
2015 2014 2015 2014
Commercial Aircraft 21,081 19,429 +9% 1,424 1,357 +5%
Helicopters 2,950 2,801 +5% 162 150 +8%
Defence and Space 5,531 5,516 0% -26 223 -
Headquarters / Eliminations -669 -546 - 669 109 -
Total 28,893 27,200 +6% 2,229 1,839 +21%

by Division Order Intake (1) Order Book (1)

(Amounts in millions of Euro) H1 H1 Change 30 June 31 Dec Change
2015 2014 2015 2014
Commercial Aircraft 46,334 22,880 +103% 875,018 803,633 +9%
Helicopters 2,726 2,183 +25% 12,004 12,227 -2%
Defence and Space 5,371 3,831 +40% 41,683 43,075 -3%
Headquarters / Eliminations - 512 -1,186 - - 1,727 -1,416 -
Total 53,919 27,708 +95% 926,978 857,519 +8%

Airbus Group - Second Quarter Results (Q2) 2015

Airbus Group Q2 2015 Q2 2014 Change
Revenues, in millions 16,815 14,552 +16%
EBIT before one-offs (3), in millions 1,232 1,069 +15%
EBIT (3), in millions 988 1,120 -12%
Net Income (4), in millions 732 696 +5%
Earnings Per Share (EPS) (4) 0.93 0.89 +4%

by Division Revenues EBIT (3)
(Amounts in millions of Euro) Q2 Q2 Change Q2 Q2 Change
2015 2014 2015 2014
Commercial Aircraft 12,516 10,492 +19% 1,005 811 +24%
Helicopters 1,665 1,619 +3% 110 92 +20%
Defence and Space 2,928 2,773 +6% - 159 138 -
Headquarters / -294 -332 - 32 79 -
Eliminations
Total 16,815 14,552 +16% 988 1,120 -12%

Q2 2015 revenues rose 16 percent compared to the second quarter of 2014,
driven by a higher volume of commercial aircraft and positive foreign
exchange effects.

Q2 2015 EBIT* before one-off rose 15 percent to EUR 1,232 million,
reflecting operational improvement in all Divisions as well as some
favourable cost phasing including R&D. Q2 2015 EBIT* declined 12 percent to
EUR 988 million and included negative net one-offs mainly reflecting the
additional net charge of EUR 290 million on the A400M programme.

Footnotes:

1) Contributions from commercial aircraft activities to Order Intake and
Order Book based on list prices.

2) Earnings before interest, taxes, depreciation, amortisation and
exceptionals.

3) Earnings before interest and taxes, pre goodwill impairment and
exceptionals.

4) Airbus Group continues to use the term Net Income. It is identical to
Profit for the period attributable to equity owners of the parent as
defined by IFRS Rules.

5) Long-term contracts generally contain a contract clause which escalates
the price of the contract in line with a formula reflecting an
approximate escalation of the input costs - labour and materials.
Various indexes are used depending on the mix of input costs.

6) The remaining Dassault Aviation participation is now recorded as an
asset held for sale and the result of the period of Dassault Aviation
will no longer contribute to the Headquarters earnings line, except for
dividends to be received and the capital gain from future sales of
Dassault Aviation shares.

7)

8)

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Language: English
Company: Airbus Group SE
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: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover,
Munich, Stuttgart

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