Airbus SE — Earnings Release 2016

Apr 28, 2016

News Details

Ad-hoc | 28 April 2016 06:59

Airbus Group SE: Airbus Group Reports First Quarter (Q1) 2016 Results

Airbus Group SE / Key word(s): Quarter Results

28.04.2016 06:59

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Ad-hoc release, 28 April 2016

Airbus Group Reports First Quarter (Q1) 2016 Results

• 2016 guidance maintained, commercial aircraft order backlog robust

• Revenues EUR 12 billion; EBIT* before one-off EUR 501 million; Earnings
  per share EUR 0.51

• Q1 financials driven by back-loaded delivery schedule

• Continued focus on programme ramp-up and NEO transition

Airbus Group SE (stock exchange symbol: AIR) reported first quarter 2016
results and maintained its guidance for the full year.

"2016 turns out to be the challenging year we anticipated. Overall, we
expect a stable financial performance but deliveries, cash and earnings
will be heavily loaded towards the end of the year. And that already shows
in our first quarter performance," said Tom Enders, Airbus Group Chief
Executive Officer. "Operationally, we continue to focus on the production
ramp-ups of our Airbus A350 and A320 programmes and on the change-over to
the new engine versions of the A320 and A330. On the military side, we are
now facing a serious challenge for production and customer deliveries of
the A400M due to new, unexpected issues on the engine propeller gearbox.
It's very frustrating but we'll have to work through this with our engine
partners. So, in a nutshell, despite these challenges we maintain our 2016
guidance and also our earnings and cash growth story for the coming years
based on our strong commercial order backlog and the robust, well-resourced
production ramp-ups underway."

Group order intake(1) in the quarter was EUR 7.2 billion (Q1 2015: EUR 21
billion), with the order book(1) value totalling EUR 957 billion as of 31
March 2016 (year-end 2015: EUR 1,006 billion).
Airbus received 10 net commercial aircraft orders (Q1 2015: 101 net orders)
with gross orders of
32 aircraft including 14 A330neos and two A380s for Emirates Airline.
Fourteen of the
22 cancellations in the quarter were CEO (current engine option) to NEO
(new engine option) conversions for the A320 and A330. Airbus Helicopters
received 51 net orders (Q1 2015: 86 units), including 38 Ecureuil light
rotorcraft. Order intake by value rose five percent at Airbus Defence and
Space, driven mainly by earth observation satellites and defence contracts.

Group revenues were stable at EUR 12.2 billion (Q1 2015: EUR 12.1 billion).
Despite lower deliveries of 125 aircraft (Q1 2015: 134 aircraft), revenues
were stable at Commercial Aircraft supported by the strengthening average
U.S. dollar rate. Helicopters' revenues declined 10 percent, reflecting
lower deliveries of 56 units (Q1 2015: 62 units) and an unfavourable mix.

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 - was EUR 501 million
(Q1 2015: EUR 651 million). Commercial Aircraft's EBIT* before one-off
totalled EUR 407 million
(Q1 2015: EUR 569 million), driven mainly by the back-loaded profile of
deliveries and A330 rate adjustment but partly compensated by lower
research and development (R&D) costs. Helicopters' EBIT* before one-off
declined to EUR 33 million (Q1 2015: EUR 52 million), mainly reflecting
lower volumes and an unfavourable mix. Defence and Space's EBIT* before
one-off increased 21 percent to EUR 109 million (Q1 2015: EUR 90 million),
supported by programme execution, portfolio focusing and efficiency
measures.
Group self-financed R&D expenses declined to EUR 547 million (Q1 2015: EUR
701 million).

The A350 XWB ramp-up is progressing with the focus on bottlenecks in the
supply chain, reducing outstanding work and controlling recurring costs.
This is increasingly challenging.
The target for a monthly production rate of 10 A350s by the end of 2018
remains unchanged. Five A320neos were delivered in the first quarter to two
customers. Pratt & Whitney is committed to supplying new engines for
aircraft delivery from the summer of 2016. The engines are expected to be
delivered to the right level of maturity to enable the NEO ramp-up in the
second half of 2016. Overall, the A320 ramp-up preparation continues
despite temporary supply chain challenges that are expected to be recovered
by year-end.

In the context of its internal compliance improvement programme, Airbus
Group discovered certain mistakes and omissions relating to information
provided in respect to consultants and other third parties in applications
for export credit financing for Airbus customers and as a result has
informed the relevant U.K. authorities. Some Export Credit Agency (ECA)
financing has been temporarily suspended. The Group is cooperating with the
relevant ECAs to resolve this issue as soon as possible and hopes to obtain
financing or refinancing in the near future.

On the A400M, following a recent Airworthiness Directive from the European
Aviation Safety Agency linked to the propeller gearbox on the engine, a
thorough technical and industrial evaluation has been launched to secure
both short- and long-term solutions. The expected impact on aircraft in
service and how they can be supported, implications on the delivery
schedule and ongoing discussions with customers are under assessment.
Furthermore, industrial efficiency and military capability remain a
challenge during the ramp-up phase.
The Company is working with customers to agree a schedule of military
capability enhancement and deliveries. Overall, the cost at completion
assessment will need to be adapted accordingly, but at this stage there is
not a sufficiently mature view of the technical, commercial and industrial
consequences and their potential impact on the financial statements, which
could be significant.

As part of the portfolio reshaping, an agreement was signed during the
first quarter regarding the sale of the Defence Electronics business.

Reported EBIT*(3) of EUR 365 million (Q1 2015: EUR 1,241 million) included
net one-offs totalling EUR -136 million, representing the negative
impact from the dollar pre-delivery payment mismatch and balance sheet
revaluation. The first quarter of 2015 included a net gain of EUR 697
million from the sale of shares in Dassault Aviation.
Net income(4) in the first quarter of 2016 was EUR 399 million (Q1 2015:
EUR 792 million) with earnings per share of EUR 0.51 (Q1 2015: EUR 1.01).
The finance result of EUR 193 million (Q1 2015: EUR -366 million) included
a positive revaluation of over EUR 280 million mainly linked to the
strengthening of the euro. In the first quarter of 2015, this revaluation
had a negative impact.

Free cash flow before mergers and acquisitions amounted to EUR -2,986
million (Q1 2015:
EUR -1,136 million), reflecting the back-loaded delivery profile in 2016
and the ramp-up preparation for the A320, A320neo and A350. Free cash flow
was EUR -3,131 million (Q1 2015: EUR 452 million). The net cash position on
31 March, 2016 was EUR 6.4 billion (year-end 2015: EUR 10.0 billion) with a
gross cash position of EUR 18.0 billion (year-end 2015: EUR 19.1 billion).

Outlook
As the basis for its 2016 guidance, Airbus Group expects the world economy
and air traffic to grow in line with prevailing independent forecasts and
assumes no major disruptions.
2016 earnings and free cash flow guidance is based on a constant perimeter.
In 2016, Airbus expects to deliver more than 650 aircraft and the
commercial order book is expected to grow.
In 2016, before M&A, Airbus Group expects stable EBIT* before one-off and
EPS* before one-off compared to 2015.
In 2016, before M&A, Airbus Group expects to deliver stable free cash flow
compared to 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.

About Airbus Group

Airbus Group is a global leader in aeronautics, space and related services.
In 2015, the Group - comprising Airbus,
Airbus Defence and Space and Airbus Helicopters - generated revenues of EUR
64.5 billion and employed a workforce of around 136,600.

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

Airbus Group - First Quarter (Q1) Results 2016
(Amounts in euro)

Airbus Group Q1 2016 Q1 2015 Change
Revenues, in millions 12,183 12,078 +1%
thereof defence, in millions 2,290 2,284 0%
EBITDA (2), in millions 874 1,757 -50%
EBIT before one-offs (3), in millions 501 651 -23%
EBIT (3), in millions 365 1,241 -71%
Research & Development expenses, 547 701 -22%
in millions
Net Income (4), in millions 399 792 -50%
Earnings Per Share (EPS) (4) 0.51 1.01 -50%
Free Cash Flow (FCF), in millions -3,131 452 -
Free Cash Flow -2,986 -1,136 -
before M&A, in millions
Free Cash Flow -2,876 483 -
before Customer Financing, in millions
Order Intake (1), in millions 7,245 20,994 -65%

Airbus Group 31 March 31 Dec Change
2016 2015
Order Book (1), in millions 956,980 1,005,864 -5%
thereof defence, in millions 38,151 38,411 -1%
Net Cash position, in millions 6,438 10,003 -36%
Employees 135,801 136,574 -1%

by Division Revenues EBIT (3)
(Amounts in millions of Euro) Q1 Q1 Change Q1 Q1 Change
2016 2015 2016 2015
Commercial Aircraft 8,668 8,565 +1% 290 419 -31%
Helicopters 1,158 1,285 -10% 33 52 -37%
Defence and Space 2,534 2,603 -3% 90 133 -32%
Headquarters / Eliminations -177 -375 - -48 637 -
Total 12,183 12,078 +1% 365 1,241 -71%

by Division EBIT before one-offs(3)
(Amounts in millions of Euro) Q1 Q1 Change
2016 2015
Commercial Aircraft 407 569 -28%
Helicopters 33 52 -37%
Defence and Space 109 90 +21%
Headquarters / Eliminations -48 -60 -
Total 501 651 -23%

by Division Order Intake (1) Order Book (1)
(Amounts in millions of Euro) Q1 Q1 Change 31 March 31 Dec Change
2016 2015 2016 2015
Commercial Aircraft 4,311 17,217 -75% 904,589 952,450 -5%
Helicopters 1,004 1,428 -30% 11,615 11,769 -1%
Defence and Space 2,515 2,390 +5% 42,596 42,861 -1%
Headquarters / Eliminations -585 -41 - -1,820 -1,216 -
Total 7,245 20,994 -65% 956,980 1,005,864 -5%

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.

Safe Harbour Statement:

Certain statements contained in this press release are not historical facts
but rather are statements of future expectations and other forward-looking
statements that are based on management's beliefs. These statements reflect
Airbus Group's views and assumptions as of the date of the statements and
involve known and unknown risk and uncertainties that could cause actual
results, performance or events to differ materially from those expressed or
implied in such statements.

When used in this press release, words such as "anticipate", "believe",
"estimate", "expect", "may", "intend", "plan to" and "project" are intended
to identify forward-looking statements.

This forward looking information is based upon a number of assumptions
including without limitation: assumption regarding demand, current and
future markets for Airbus Group's products and services, internal
performance, customer financing, customer, supplier and subcontractor
performance or contracts negotiations, favourable outcomes of certain
pending sales campaigns. Forward looking statements are subject to
uncertainty and actual future results and trends may differ materially
depending on variety of factors including without limitation: general
economic and labour conditions, including in particular economic conditions
in Europe, North America and Asia, legal, financial and governmental risk
related to international transactions, the cyclical nature of some of
Airbus Group's businesses, volatility of the market for certain products
and services, product performance risks, collective bargaining labour
disputes, factors that result in significant and prolonged disruption to
air travel worldwide, the outcome of political and legal processes,
including uncertainty regarding government funding of certain programs,
consolidation among competitors in the aerospace industry, the cost of
developing, and the commercial success of new products, exchange rate and
interest rate spread fluctuations between the euro and the U.S. dollar and
other currencies, legal proceeding and other economic, political and
technological risk and uncertainties. Additional information regarding
these factors is contained in the Company's "Registration Document" dated 5
April 2016. For more information, please refer to www.airbusgroup.com.

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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; Terminbörse EUREX

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