Airbus Group SE / Key word(s): Half Year Results
27.07.2016 06:59
Disclosure of an inside information according to Article 17 MAR,
transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Ad-hoc release, 27 July 2016
Airbus Group Reports Half-Year (H1) 2016 Results
- Robust and diversified commercial backlog supporting ramp-up
- H1 financials driven by back-loaded aircraft delivery schedule
- Revenues EUR 29 billion; EBIT* before one-off EUR 1.7 billion;
Earnings per share EUR 2.27
- Significant progress on strategy to focus on core activities with
material capital gains
- A400M and A350 XWB programme charges recognised in Q2 2016
- 2016 guidance confirmed**
Airbus Group SE (stock exchange symbol: AIR) reported half-year 2016
results and confirmed its guidance for the full year**.
"The first-half underlying financial performance reflects our well-flagged
back-loaded aircraft delivery schedule this year," said Tom Enders, Airbus
Group Chief Executive Officer.
"We continue to see good demand for our products as shown by the brisk
order intake at the Farnborough Airshow, with the production ramp-up
supported by our robust and diversified commercial backlog. Our operational
focus remains squarely on the A320 and A350 ramp-ups and transition to the
new engine version of the A320. Unfortunately, we have to cope with new
charges on the A400M and A350 programmes. Significant capital gains from
the portfolio reshaping mitigated these programme losses but that does not
make them more acceptable! Industrial efficiency and the stepwise
introduction of the A400M's military functionalities are still lagging
behind schedule and remain challenging. But we are making good progress and
the A400M, servicing already five air forces with its impressive
performance, proves more and more to be an exceptional aircraft. In the
second quarter, we successfully finalised the Airbus Safran Launchers Joint
Venture and exited from Dassault Aviation. In summary, despite our near
term challenges, we remain committed to delivering our earnings and cash
growth story."
Group order intake(1) in the first six months of 2016 was EUR 39.1 billion
(H1 2015: EUR 53.9 billion), with the order book(1) value totalling EUR 978
billion as of 30 June 2016 (year-end 2015: EUR 1,006 billion). The order
book of Airbus Defence and Space decreased by EUR 4.6 billion due to
perimeter changes.
Airbus received 183 net commercial aircraft orders (H1 2015: 348 net
orders) with gross orders of 227 aircraft including 27 A350 XWBs. The
second half of the year started positively with 279 orders and commitments
announced at Farnborough, including firm contracts for eight A350-1000s
from Virgin Atlantic Airways and for 100 A321neos from AirAsia. Airbus
Helicopters received 127 net orders (H1 2015: 135 net orders) and was
selected as the aircraft service provider for the UK's Military Flying
Training System contract. It also signed an agreement with a Chinese
consortium for 100 H135 helicopters. Order intake was stable at Defence and
Space with good momentum seen in Space Systems driven by Earth observation
and telecommunication satellites.
Group revenues were stable at EUR 28.8 billion (H1 2015: EUR 28.9 billion).
Despite lower deliveries of 298 aircraft (H1 2015: 304 aircraft), revenues
were stable at Airbus Commercial supported by the strengthening US dollar
hedge rate. Helicopters' revenues declined nine percent, reflecting an
unfavourable mix despite higher deliveries of 163 units (H1 2015: 152
units).
Airbus Defence and Space's revenues were broadly stable.
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 - totalled EUR 1,684 million
(H1 2015: EUR 1,883 million). Airbus Commercial's EBIT* before one-off was
EUR 1,270 million
(H1 2015: EUR 1,533 million), driven mainly by the back-loaded delivery
profile, lower A330 production and transition pricing on the A320 and A330.
Helicopters' EBIT* before one-off totalled EUR 144 million (H1 2015: EUR
162 million), mainly reflecting a less favourable mix. Defence and Space's
EBIT* before one-off rose 22 percent to EUR 325 million (H1 2015: EUR 267
million), driven by good programme execution, its portfolio re-focus and
efficiency measures.
Group self-financed R&D expenses decreased to EUR 1,309 million (H1 2015:
EUR 1,506 million).
On the A380, delivery planning is being adjusted to 12 deliveries a year
from 2018 with traffic growth supporting the programme's long-term
perspective. On the A320 programme, preparation for the ramp-up continues
with temporary issues, mainly linked to the supply chain, expected to be
recovered by year-end. In the half-year, eight A320neos were handed over to
three customers while in July the first aircraft fitted with CFM engines
was delivered.
Twelve A350s were delivered in the first half of 2016 with the production
ramp-up progressing. The A350 Loss Making Contract provision has been
stable since the Full Year 2013 results - throughout the aircraft's
certification, entry-into-service and ramp-up phase. As the ramp-up
accelerates challenges are being faced on supply chain capability and
performance, with the cabin still the critical pacing item and outstanding
work causing some slower progress on recurring cost convergence than
planned. Due to this, a charge of EUR 385 million was taken in the second
quarter as an addition to the LMC provision. This also includes lower
escalation and delivery phasing. The target for a monthly production rate
of ten A350s by the end of 2018 remains unchanged.
On the A400M programme, five aircraft were delivered in the first half of
2016.
The European Aviation Safety Agency certified an interim fix to the engine
propeller gearbox (PGB) which, once available, will give air forces at
least 650 flight hours before initial inspections of the affected parts of
the PGB. The first major development milestone of the mission capability
roadmap defined with customers earlier this year was successfully completed
in June with certification and delivery of 'MSN 33', the 9th aircraft for
the French customer. Industrial efficiency and military capability remain a
challenge for the A400M programme. Furthermore, the EASA's Airworthiness
Directive, linked to the PGB on the engine, and various PGB quality issues
have strongly impacted the customer delivery programme. Management has
subsequently reviewed the programme evolution and estimated contract result
incorporating the implications at this time of the revised engine programme
and its associated recovery plan, technical issues related to the aluminium
alloy used for some parts within the aircraft, recurring cost convergence
issues and finally some delays, escalation and cost overruns in the
development programme. As a result of the review, including an updated
assumption of export orders during the launch contract phase, Defence and
Space recorded an additional net charge of EUR 1,026 million. Commercial
negotiations with OCCAR and the Nations are yet to take place with regard
to the revised delivery schedule and its implications. As of today, the
outcome of these negotiations cannot be reliably estimated. The potential
impacts on the financial statements could be significant.
At Helicopters, the investigation into April's H225 accident in Norway is
ongoing while the financial impact cannot be reliably estimated at this
stage.
Reported EBIT*(3) of EUR 1,856 million (H1 2015: EUR 2,229 million)
included net one-offs totalling
EUR 172 million which comprised:
- The net charge of EUR 1,026 million related to the A400M programme;
- The EUR 385 million net charge on the A350 programme;
- A negative impact of EUR 509 million related to the dollar pre-delivery
payment mismatch and balance sheet revaluation;
- A net capital gain of EUR 1,139 million linked to the creation of the
Airbus Safran Launchers Joint Venture;
- A net capital gain of EUR 868 million related to the sale of shares in
Dassault Aviation and a mark-to-market of the remaining shares;
- A total net capital gain of EUR 85 million related to portfolio
adjustments at
Airbus Commercial and Defence and Space.
Net income(4) rose to EUR 1,761 million (H1 2015: EUR 1,524 million) with
earnings per share of EUR 2.27 (H1 2015: EUR 1.94) further supported by an
accretion of around two percent related to the share buyback. The finance
result was EUR -148 million (H1 2015: EUR -344 million).
Free cash flow before mergers and acquisitions amounted to EUR -3,236
million (H1 2015:
EUR -1,025 million), reflecting the focus on the production ramp-up and
transition. Free cash flow was EUR -1,119 million (H1 2015: EUR 549
million) and included EUR 1.2 billion from the sale of
Dassault Aviation shares, EUR 750 million from the implementation of the
second phase of the
Airbus Safran Launchers JV and EUR 310 million from the sale of the
Business Communications activities. The net cash position on 30 June 2016
was EUR 7.2 billion (year-end 2015: EUR 10.0 billion) with a gross cash
position of EUR 19.5 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,
which assume no major disruptions.
Airbus Group confirms its 2016 earnings and free cash flow guidance based
on a constant perimeter:
- Airbus expects to deliver more than 650 aircraft and the commercial
order book is expected to grow.
- Before M&A, Airbus Group expects stable EBIT* before one-off and EPS*
before one-off compared to 2015.
- Before M&A, Airbus Group expects to deliver stable free cash flow
compared to 2015, although the A400M industrial situation and delivery
re-scheduling makes the achievement of the 2016 free cash flow guidance
more difficult. Export Credit Agency financing is targeted to resume in
the fourth quarter of 2016.
The perimeter change in Airbus Defence and Space implemented at H1 2016 is
expected to reduce EBIT* before one-off and free cash flow before M&A by
around EUR 200 million and EPS* before one-off by around 20 cents.
* 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.
** On a constant perimeter.
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 3052 1993
Airbus Group - Half-Year (H1) Results 2016
(Amounts in euro)
<pre>
Airbus Group H1 2016 H1 2015 Change
Revenues, in millions 28,755 28,893 0%
thereof defence, in millions 4,731 4,869 -3%
EBITDA (2), in millions 2,924 3,295 -11%
EBIT before one-off (3), in 1,684 1,883 -11%
millions
EBIT (3), in millions 1,856 2,229 -17%
Research & Development 1,309 1,506 -13%
expenses,
in millions
Net Income (4), in millions 1,761 1,524 +16%
Earnings Per Share (EPS) (4) 2.27 1.94 +17%
Free Cash Flow (FCF), in -1,119 549 -
millions
Free Cash Flow -3,236 -1,025 -
before M&A, in millions
Free Cash Flow -532 612 -
before Customer Financing, in
millions
Order Intake (1), in millions 39,135 53,919 -27%
Airbus Group 30 June 31 Dec Change
2016 2015
Order Book (1), in millions 978,087 1,005,864 -3%
thereof defence, in millions 37,055 38,411 -4%
Net Cash position, in 7,196 10,003 -28%
millions
Employees 136,890 136,574 0%
</pre>
<pre>
by Division Revenues EBIT (3)
(Amounts in millions H1 H1 Change H1 H1 Change
of Euro) 2016 2015 2016 2015
Commercial Aircraft 21,061 21,081 0% 421 1,424 -70%
Helicopters 2,687 2,950 -9% 144 162 -11%
Defence and Space 5,440 5,531 -2% 478 -26 -
Headquarters / -433 -669 - 813 669 +22%
Eliminations
Total 28,755 28,893 0% 1,856 2,229 -17%
</pre>
<pre>
by Division EBIT before one-off(3)
(Amounts in millions of Euro) H1 H1 Change
2016 2015
Commercial Aircraft 1,270 1,533 -17%
Helicopters 144 162 -11%
Defence and Space 325 267 +22%
Headquarters / Eliminations -55 -79 -
Total 1,684 1,883 -11%
</pre>
<pre>
by Division Order Intake (1) Order Book (1)
(Amounts in H1 H1 Change 30 June 31 Dec Change
millions of Euro) 2016 2015 2016 2015
Commercial 32,302 46,334 -30% 930,885 952,450 -2%
Aircraft
Helicopters 2,338 2,726 -14% 11,421 11,769 -3%
Defence and Space 5,189 5,371 -3% 37,665 42,861 -12%
Headquarters / -694 -512 - -1,884 -1,216 -
Eliminations
Total 39,135 53,919 -27% 978,087 1,005,864 -3%
</pre>
Airbus Group - Second Quarter Results (Q2) 2016
<pre>
Airbus Group Q2 2016 Q2 2015 Change
Revenues, in millions 16,572 16,815 -1%
EBIT before one-offs (3), in 1,183 1,232 -4%
millions
EBIT (3), in millions 1,491 988 +51%
Net Income (4), in millions 1,362 732 +86%
Earnings Per Share (EPS) (4) 1.76 0.93 +89%
by Division Revenues EBIT (3)
(Amounts in millions Q2 Q2 Change Q2 Q2 Change
of Euro) 2016 2015 2016 2015
Commercial Aircraft 12,393 12,516 -1% 131 1,005 -87%
Helicopters 1,529 1,665 -8% 111 110 +1%
Defence and Space 2,906 2,928 -1% 388 -159 -
Headquarters / -256 -294 - 861 32 -
Eliminations
Total 16,572 16,815 -1% 1,491 988 +51%
</pre>
<pre>
by Division EBIT before one-off(3)
(Amounts in millions of Euro) Q2 Q2 Change
2016 2015
Commercial Aircraft 863 964 -10%
Helicopters 111 110 +1%
Defence and Space 216 177 +22%
Headquarters / -7 -19 -
Eliminations
Total 1,183 1,232 -4%
</pre>
Q2 2016 revenues decreased by one percent compared to Q2 2015, mainly
reflecting an unfavourable mix at helicopters despite higher deliveries.
Q2 2016 EBIT* before one-off decreased slightly, driven mainly by Airbus
Commercial, and partially compensated by good momentum at Airbus Defence
and Space. Airbus Commercial EBIT* before one-off mainly reflects the back-
loaded delivery profile, lower A330 production and transition pricing,
partially compensated by a small R&D tailwind.
Q2 2016 reported EBIT* increased by 51 percent to EUR 1,491 million. It
reflects net "one-offs" of approximately EUR 300 million. Net programme
charges were booked in Q2 on A400M
(EUR -1,026 million) and A350 (EUR -385 million) and a negative one-off
from foreign exchange from the dollar pre-delivery payment mismatch and
balance sheet revaluation (EUR -0.5 billion).
In Q2, positive one-offs were recorded from the creation of the Airbus
Safran Launchers JV
(EUR 1,139 million), the sale of shares in Dassault Aviation (EUR 868
million) and other smaller portfolio adjustments mainly related to Defence
and Space. In Q2 2015, a net charge was booked related to A400M programme
(EUR -290 million).
Q2 2016 net income was positively influenced by a low Q2 effective tax rate
which reflected net programme charges and the gains from the creation of
the Airbus Safran Launchers JV, Dassault Aviation and other divestments in
Defence and Space.
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.
27.07.2016 The DGAP Distribution Services include Regulatory Announcements,
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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
End of Announcement DGAP News-Service
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DGAP-Adhoc: Airbus Group Reports Half-Year (H1) 2016 Results
| Source: EQS Group AG