• Revenues: € 34.2 billion - up   8 percent
  • EBIT*: € 2.85 billion - up 17 percent
  • Net Income: € 1.7 billion - up 39 percent
  • Net cash: € 5.5 billion - up 39 percent
  • Dividend proposal: € 0.65 - up 30 percent
  • 2006 revenues expected to exceed € 37 billion
  • 2006 EBIT* expected to grow to between € 3.2 billion and € 3.4 billion
  • 2006 EPS expected to increase to between € 2.35 and € 2.55

EADS (stock exchange symbol: EAD) exceeded its financial targets for the sixth consecutive year in 2005. EBIT* (pre-goodwill and exceptionals) stood at € 2.85 billion for the year, up 17 percent over 2004 with the EBIT* margin also increasing from 7.7 percent to 8.3 percent.

Strong EBIT* improvement

In 2005, EADS clearly outperformed its previous record year. The outstanding result is mainly due to the continued strong revenues and earnings of Airbus as well as of the Group’s space and defence businesses. The EBIT* grew in spite of a less favourable FY 2005 average hedge rate of € 1 = US$ 1.06 (FY 2004: € 1 = US$ 0.99).

In 2005, EADS expensed € 2.1 billion on Research and Development (R&D), representing a decline of two percent compared to 2004. In the same period, € 293 million were capitalized, of which € 259 million related to the A380 programme (FY 2004: € 169 million, of which € 152 million was for the A380). EADS' R&D expenditure, remaining high in 2005, reflecting the Group's continued emphasis on technological investment.

Net Income soars

EADS’ Net Income rose sharply by 39 percent to € 1.68 billion (FY 2004: € 1.20 billion), or € 2.11 per share (FY 2004: € 1.50) reflecting the strong operational performance and an increased financial result. It also benefits from a different accounting treatment of BAE Systems’ minority stake in Airbus. Revised application of IAS 32 standards required changes regarding the accounting for the put option granted to BAE Systems as a minority shareholder of Airbus (20 percent). These changes contributed € 289 million to Net Income (FY 2004: € 185 million) or € 0.36 to earnings per share (FY 2004: € 0.23). These changes also resulted in the recognition of the put option in the balance sheet as a liability for puttable instruments (€ 3.5 billion). The liability replaces the minority interest for BAE Systems’ 20 percent Airbus stake in EADS’ balance sheet.

Strong increase in cash after continuing investment

EADS’ net cash position was boosted 39 percent to € 5.5 billion (2004: € 4.0 billion). EADS’ active cash management policies are prudent and provide flexibility for further business development.

Free Cash Flow (FCF) before Customer Financing was again strongly positive, reaching € 2.2 billion (2004: € 1.8 billion). This performance reflects the positive cash contribution from operations, driven by contributions from working capital, higher Net Income and lower capital expenditures on the A380 development. FCF including customer financing grew even stronger and reached € 2.4 billion (FY 2004: € 1.6 billion) due to the sell-down of customer financing exposure to the financial markets.

Dividend proposal up 30 percent to € 0.65 per share

EADS' 2005 results have confirmed the Group's financial strength. The growth in the dividend reflects EADS' continued success. The Board of Directors is recommending to the Annual General Meeting of shareholders an increased dividend of € 0.65 per share (dividend per share 2004: € 0.50).

Order intake up 110 percent

Mirroring the strong business momentum of EADS’ operational units order intake more than doubled to € 92.6 billion over the previous year (FY 2004: € 44.1 billion).

At € 253.2 billion, the EADS order book (contributions from commercial aircraft activities based on list prices) grew to a record amount at year-end 2005 (2004: € 184.3 billion). On top, this outstanding EADS order book benefited from a more favourable US Dollar closing spot rate of € 1 = US$ 1.18 (2004: € 1 = US$ 1.36) displaying a positive dollar impact on the non-hedged part of the Airbus order book (around € 10 billion).
To date, EADS’ order book is the strongest in the global aerospace and defence industry.

Outlook 2006

EADS expects its 2006 revenues to grow to more than € 37 billion (FY 2005: € 34.2 billion), powered by the progression of Airbus deliveries and higher volume from its combined defence businesses. Airbus deliveries are expected to grow by at least ten percent in 2006. EADS uses a planning rate of € 1 = US$ 1.30.

EBIT* is expected to grow to between € 3.2 billion and € 3.4 billion (FY 2005: € 2.85 billion), mainly under the influence of the higher Airbus volume, but also due to better operational efficiencies across all divisions, despite higher R&D costs and the continuing US Dollar headwind arising from the maturity of less attractive hedges.

Consistent with the strong cash flow generation in 2005, Free Cash Flow before Customer Financing is expected to remain robust in 2006, despite the build up of inventories related to the delivery ramp-up, particularly for the A380.

2006 EPS are expected to grow to between € 2.35 and € 2.55 (FY 2005: € 2.11), based on an expected average of around 795 million shares and on a US Dollar year-end closing rate similar to 2005.


EADS uses EBIT pre-goodwill impairment and exceptionals as a key indicator of its economic performance. The term “exceptionals” refers to income or expenses of a non-recurring nature, such as amortization expenses of fair value adjustments relating to the EADS merger, the formation of Airbus S.A.S. and the formation of MBDA, and impairment charges.