• Revenues of € 9.0 billion supported by high level of deliveries
  • EBIT* of € 89 million due to Power8 restructuring provision
  • Power8 restructuring is progressing
  • Continued momentum in order intake

In the first quarter of 2007, EADS (stock exchange symbol: EAD) produced an EBIT* (pre goodwill and exceptionals) of € 89 million, including an Airbus restructuring provision with regard to the Power8 transformation programme. Presented in detail at the end of February, Power8 entails tough measures to bring Airbus once again to the forefront of the industry. In the first quarter of 2007, the high level of deliveries led to revenues of € 9.0 billion.

Revenues remained roughly stable at € 9.0 billion (Q1 2006: € 9.1 billion). Airbus handed over 115 aircraft to the customers (Q1 2006: 101) and increased its revenues, as did EADS Astrium and Eurocopter.

Group revenues were burdened by less A400M milestone recognition than in the first quarter of 2006 and by a negative US Dollar impact.

The Group’s EBIT* decreased to € 89 million in the first quarter of 2007 (Q1 2006: € 791 million). The EBIT* was mainly affected by Airbus through a restructuring provision of € 688 million for Power8 at Airbus, by costs to support the A380 programme and by fewer gains from one-timers than in the first quarter of 2006. Eurocopter increased its EBIT* contribution and EADS Astrium showed continued benefits from its successful restructuring. Additionally, EADS Sogerma, now reshaped, delivered a positive EBIT*.

The Group realised a Net Loss of € -10 million (Net Income Q1 2006: € 522 million), or € -0.01 per share (Earnings per share Q1 2006: € 0.66), which is in line with the Group’s EBIT* development.

In the first quarter of 2007, self-financed R&D expenses accounted for € 550 million (Q1 2006: € 536 million). The slight increase resulted from Airbus’ continuing aircraft development programmes and a higher Research & Technology (R&T) effort across the Group.

Free Cash Flow including customer financing dropped to € -815 million (Q1 2006: € 363 million) reflecting unfavourable working capital development, mainly at Airbus. Inventories increased across Divisions and higher payments for trade liabilities were made than last year. The deterioration of Free Cash Flow is further explained by lower effects from customer financing sell downs at Airbus. Free Cash Flow before customer financing amounted to € -778 million (Q1 2006: € -67 million). At the end of March 2007, the Net Cash Position stood at € 3.5 billion (year-end 2006: € 4.2 billion).

Demand remained robust, and once again, the Group’s order intake reached € 10.5 billion (Q1 2006: € 10.5 billion) despite the weakness of the US Dollar and cancellation of an A380 freighter order. In the first quarter of 2007, EADS achieved again a favourable book-to-bill ratio above one, supported by the strong commercial performance of Eurocopter and the Defence & Security Division, while other Divisions took fewer orders.

At the end of March, EADS’ order book stood at € 261.5 billion
(year-end 2006: € 262.8 billion), and was burdened by a US Dollar impact of € -2.5 billion. Orders of commercial aircraft activities are based on list prices. The Group’s defence order book further increased and stood at € 54.3 billion as of 31 March 2007 (year-end 2006: € 52.9 billion).


EADS confirms the outlook for 2007 that was published on 9 March 2007:

Under its 2007 internal budget, EADS plans its revenues will experience a single-digit decrease (mainly due to the assumed €-US$ rate of 1.30), and its EBIT* will remain roughly stable in 2007.

Adjusted for a stable US Dollar, Airbus revenues would remain level, based on 440 to 450 deliveries through the year, and despite lower contributions from the A400M. Airbus will display another substantial loss in 2007, attributable to charges for the Power8 restructuring, further costs to support the A380 programme, potential A350XWB launch charges, higher R&D expenses, as well as the impact of the worsening US Dollar parity to the Euro.

Meanwhile, helicopters, defence and space businesses should display stable revenues, and should collectively increase their contribution to a combined EBIT* expected to be close to € 1 billion as soon as 2007.

The Free Cash Flow contribution from Airbus in 2007 will lead to a negative Group-wide Free Cash Flow as low as € -1 billion. However, volatility of working capital components can provoke substantial swings in this figure.


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.