• Record order intake reflects Airbus and Eurocopter harvest
    at Paris Air Show
  • EBIT* of € 367 million, contains Airbus restructuring and
    programme charges
  • Full-year 2007 outlook confirmed, echoes good underlying performance but significant programme challenges
  • 2007 Free Cash Flow expected positive
  • Management structure simplified by recent nominations

EADS’ (stock exchange symbol: EAD) half-year results reflect the Group’s restructuring efforts and charges to move large programmes forward. The recent shareholder decisions on the Group’s governance and leadership structure set the stage for better management empowerment, clearer accountability and enhanced decision making ability.

Revenues were € 18.5 billion (H1 2006: € 19.0 billion), supported by strong commercial deliveries at Airbus, Eurocopter and EADS Astrium. Group revenues were lower due to the absence of an A400M milestone in the first half of 2007 and a negative US Dollar impact.

In the first six months of 2007, EADS recorded an EBIT* (pre goodwill and exceptionals) of € 367 million compared to € 1,654 million in the same period of the previous year. The EBIT* was mainly impacted by Power8 restructuring and programme charges at Airbus, as well as by a charge in the NH90 programme.

EADS registered a Net Income of € 71 million (H1 2006: € 1,056 million), or € 0.09 per share (Earnings per share H1 2006: € 1.32).

In the first six months of 2007, self-financed R&D expenses increased to € 1,268 million (H1 2006: € 1,139 million). This followed from Airbus’ continuing aircraft development programmes and a higher Research & Technology (R&T) effort.

Free Cash Flow including customer financing dropped to € -40 million (H1 2006: € 319 million) reflecting lower contributions from customer financing sell downs and build-up of working capital. Inventories increased across Divisions but were compensated by advance payments received and a better operational performance. Free Cash Flow before customer financing has improved to € -2 million (H1 2006: € -216 million). At the end of June 2007, the Net Cash Position remained stable at € 4.2 billion compared to year-end 2006.

The market environment for aerospace and defence remains supportive. Through its high-class portfolio EADS benefited from robust demand.

The Group’s order intake was boosted mainly by the market successes of Airbus and Eurocopter and reached € 70.2 billion (H1 2006: € 14.2 billion).

The growth was partly curbed by the weaker US Dollar.

At the end of June 2007, EADS’ order book grew to € 308.2 billion (year-end 2006: € 262.8 billion), despite a € -5.4 billion revaluation due to the weaker US Dollar. Orders of commercial aircraft activities are based on list prices. The Group’s defence order book further increased through new contracts for Eurocopter and Defence & Security and stood at € 55.9 billion as of 30 June 2007 (year-end 2006: € 52.9 billion). This strong commercial performance lays a solid foundation for future growth.

Outlook

EADS reiterates the revenues and EBIT* guidance for 2007.

2007 revenues are expected to decrease by a low single-digit percentage factor on the basis of a € 1 = US$ 1.35.

2007 EBIT* is expected to remain roughly stable at the level of the previous year. This is based on expected 440 to 450 aircraft deliveries at Airbus. The mix of opportunities and risks underlying the guidance is evolving: While the strong underlying operational performance across businesses, particularly at Airbus, is providing cause for satisfaction, the risk level on certain key programmes would make it imprudent to change guidance in the present context.

Non-Airbus EBIT* should be close to € 1 billion, before any impact from the A400M cost assessment.

EADS’ Free Cash Flow is now expected to be positive, thanks to the orders registered at Paris Air Show and to the stronger than expected cash performance achieved so far this year.

*EBIT

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.

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