European Aeronautic Defence and Space Company EADS N.V. / Final Results
09.03.2010 07:03
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Ad-hoc release, 9 March 2010
EADS Reports 2009 Results
- Revenues of EUR 42.8 billion - strong deliveries across all businesses
- EBIT* before one-off in line with guidance: EUR 2.2 billion despite
hedge rate deterioration
- A400M programme continues - full year charge of EUR 1.8 billion
- EBIT* of EUR -322 million impacted by A400M provision and foreign
exchange effects
- Net loss: EUR -763 million
- Net Cash at EUR 9.8 billion due to better than expected Free Cash Flow
including timing benefits from advanced payments
- Increase of Airbus single aisle production rate in December 2010
- No dividend payment recommended due to losses
EADS' (stock exchange symbol: EAD) annual results 2009 demonstrate the
Group's ability to face a challenging macro-economic and commercial
environment thanks to proactive management of the order-book and of
customer funding sources. It enabled strong deliveries across all
businesses. However, earnings are weighed down by provisions for delays on
new programmes. Revenues stood stable at EUR 42.8 billion. The EBIT* before
one-off amounted to EUR 2.2 billion. Foreign exchange effects and the
provision booked for the A400M programme in particular have weighed on
EADS' EBIT* of EUR -322 million. The order intake of EUR 45.8 billion
reflects the significantly weaker commercial momentum in 2009. At the same
time, the Group recorded strong defence and institutional business. EADS'
order book of EUR 389 billion provides a solid platform for future
deliveries. The Net Cash position is solid at EUR 9.8 billion thanks to
better than expected Free Cash Flow (see explanations on page 2) and
remains a strong asset for the Group.
'In 2009, the commercial business environment was difficult - but we
anticipated many of the challenges ahead of us and overcame them. This
illustrates the strength EADS has developed over its first ten years,' said
EADS CEO Louis Gallois. 'Beyond simply managing the economic downturn, our
objective in 2009 was to keep a strong focus on innovation across our
portfolio to lay the foundation for the next decade. I deeply appreciate
the support of the Customer Nations for the A400M. Thanks to the agreement
between the Customer Nations and EADS this programme is now back on track.
Although the Group has to take an additional significant provision, this
stabilises the programme. Apart from the A400M, we remain fully focused on
improved programme management including further ramp-up of the A380, the
development of the A350 and the Saudi Border Surveillance programme.'
Revenues of EADS stood at EUR 42.8 billion (FY 2008: EUR 43.3 billion),
supported by record commercial aircraft deliveries at Airbus (498 units
compared to 483 in 2008) but offset by lower revenue recognition in the
A400M programme, price deterioration on commercial aircraft deliveries and
negative foreign exchange impacts. In addition, revenues at Astrium grew by
12 percent.
EBIT* before one-off - 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 EUR 2.2 billion (FY 2008:
EUR 3.3 billion). Compared to 2008, higher volumes at Airbus and Power8
savings were more than offset by a degradation of hedge rates, the
deterioration of pricing on Airbus commercial deliveries and cost
increases. A380 continued to weigh significantly on the underlying
performance. The performance of Single Aisle and Long Range programmes in
Airbus as well as in other Divisions remains robust.
The EBIT* of EADS of EUR -322 million (FY 2008: EUR 2,830 million) was
burdened by A400M and A380 provisions and exceptional negative foreign
exchange impacts. In total, exchange rate impacts weighed down 2009 EBIT*
by EUR 2.5 billion compared to 2008.
EADS' Net Income amounted to EUR -763 million (FY 2008: EUR 1,572 million),
or earnings per share of EUR -0.94 (earnings per share FY 2008: EUR 1.95).
The Net Income was weighed down by the deterioration of EBIT*.
Self-financed R&D expenses slightly increased to EUR 2,825 million (FY
2008: EUR 2,669 million), assigned to spur new technologies and future
business.
Exceptionally, due to the significant loss in 2009, the EADS Board of
Directors recommends no dividend payment this year.
Free Cash Flow before customer financing of EUR 991 million (FY 2008:
EUR 2,886 million) exceeded guidance due to successful Cash Flow
management. It also benefited from payments of public customers at year-end
which were expected in 2010. Net customer financing outflow was lower than
expected during 2009 at around EUR 400 million. Free Cash Flow after
customer financing amounted to EUR 585 million (FY 2008: EUR 2,559
million). EADS refinanced its EUR 1 billion Eurobond in August. Investing
activities consumed EUR 1.9 billion, reflecting an increase in capital
expenditure as investment ramps up in the A350 programme. The Group's Net
Cash position reached EUR 9.8 billion (year-end 2008: EUR 9.2 billion).
The Group's order intake decreased to EUR 45.8 billion (FY 2008: EUR 98.6
billion). The target order intake for commercial aircraft was achieved but
as expected falls short of the 2008 level. On 31 December 2009, the order
book of EADS stood at a robust EUR 389.1 billion (year-end 2008: EUR 400.2
billion) despite the revaluation impact at the closing rate of 1.44 $/EUR
at the end of December versus 1.39 $/EUR at the end of December 2008. This
revaluation has led to a reduction of around EUR 11 billion. The defence
order book increased to EUR 57.3 billion (year-end 2008: EUR 54.9 billion).
This growth was driven by important military contracts in 2009 including
Eurofighter Tranche 3a.
At the end of December 2009, EADS had 119,506 employees (year-end 2008:
118,349).
In 2009, EADS continued improving its Group-wide efficiency. Airbus had
achieved EUR 2 billion in Power8 gross savings (different from the net
EBIT* impact) compared to the projected cost base by the end of 2009. Smart
buying, supply chain streamlining and logistics integration as well as lean
manufacturing have made solid contributions to a leaner Airbus.
Power8 plus has now started and contributions will be made from all
Divisions. Additional projects at Airbus include redesign implementation in
single aisle and long range programmes.
Regarding the Future EADS integration and savings plan, the Group is
increasing its target for gross annual savings compared to the projected
cost base from EUR 200 million to EUR 350 million at the end of 2012.
Future EADS aims to simplify, harmonise and integrate support functions in
all areas. The savings run through ten project streams from Finance to IT,
General Procurement and Facility Management.
The different cost saving initiatives are being consolidated at Division
level as they further mature like in Eurocopter where they are captured
within the SHAPE programme.
Upon evaluation of the request for proposal for the US Air Force Tanker
replacement, Northrop Grumman has decided not to submit a bid to the US
Department of Defence for the KC-X program.
As a team, serious concerns were expressed to the US Department of Defence
and the US Air Force that the acquisition methodology outlined in the
request for proposal (RFP) would heavily weigh the competition in favour of
the smaller, less capable Boeing tanker. Northrop's in-depth analysis of
the RFP reaffirmed those concerns and prompted the decision not to bid.
This decision does not diminish EADS' commitment to the US, or to its
service men and women. EADS also remains convinced that the A330 Multi Role
Tanker Transport (MRTT) aircraft would deliver added capability, lower risk
and best value for both the service men and women and US taxpayer.
It has been flown, tested and proven. The A330 MRTT has been selected over
the Boeing tanker in the last five consecutive competitions and will
shortly enter service with several US allies.
Outlook
As EADS enters into 2010, the Group remains fundamentally solid to cope
with the improving but still volatile economic environment.
This is based on a resilient, actively managed backlog of 3,488 aircraft in
Airbus, 1,303 in Eurocopter and strong backlog in the Space and Defence
businesses.
Progressive recovery in traffic and yield especially in emerging markets
should first stabilise airline financials before it leads to additional
ordering activity.
Based on a number of active campaigns, which should lead to 250-300 new
gross orders in 2010 and a stable overbooked backlog on single aisle
aircraft, Airbus decided to increase production rate from 34 to 36 aircraft
per month on single aisles starting in December 2010 while keeping the long
range programme production rates roughly stable at around 8 aircraft per
month.
In 2010, Airbus expects to deliver up to the same level of aircraft as in
2009 and new gross orders should range between 250 and 300 aircraft.
Eurocopter should deliver around 6 percent less helicopters in 2010
compared to 2009.
Therefore, using EUR 1 = $1.40 as the average spot rate, EADS revenues
should be roughly stable in 2010.
EADS' EBIT* in 2010 will be around EUR 1 billion. The deterioration of the
hedge rates will weigh by about EUR -1 billion compared to 2009. A380,
while slightly improving, will continue to weigh substantially on the EBIT*
before one-off, as in 2009. Cost savings and some improvement in aircraft
pricing should contribute positively while weaker helicopter deliveries,
some increase in Research & Development (R&D) and cost inflation will weigh
on profitability.
Going forward, the EBIT* performance of EADS will be dependent on the
Group's ability to execute on the A400M, A380 and A350 programmes in line
with the commitments made to its customers.
Provided a sustainable year-end cash inflow of institutional and government
business and subject to Pre-Delivery Payment advances for the
A400M programme, the Free Cash Flow before customer financing should be
break-even. Free Cash Flow after customer financing should be negative due
to customer financing cash-outflows of around EUR 1 billion.
* 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.
** This accounting method was used by EADS from September 2008 until the
end of December 2009 as EADS could neither finally agree with OCCAR on an
updated contract scheme for the A400M programme nor reliably assess the
related financial implications of the delayed A400M programme. (For more
details refer to the 'Year 2009 Report, Unaudited Condensed Consolidated,
Financial Information of EADS N.V. for the year ended December 31, 2009').
EADS is a global leader in aerospace, defence and related services. In
2009, the Group - comprising Airbus, Eurocopter, EADS Astrium and EADS
Defence & Security - generated revenues of EUR 42.8 billion and employed a
workforce of more than 119,000.
Contacts:
Pierre Bayle +33 1 42 24 20 63
Alexander Reinhardt +49 171 765 0320
Martin Agüera +49 175 227 4369
Philipp Lehmann +49 151 151 42921
Jaime Pérez-Guerra +34 91 585 77 89
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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, Hannover, München, Hamburg, Stuttgart
End of News DGAP News-Service
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DGAP-Adhoc: EADS Reports 2009 Results
| Source: EQS Group AG