• Strong Airbus deliveries of 254 commercial aircraft
  • EBIT* before one-off: € 1.3 billion
  • EBIT* of € 888 million
  • Net Income generation of € 0.4 billion
  • Solid Net Cash position of € 8.1 billion
  • Raising Free Cash Flow guidance 2009
  • Negotiations on A400M with customers entering new phase

EADS’ (stock exchange symbol: EAD) half-year 2009 results demonstrate that the Group is still performing well across its businesses. In doing so, EADS continues to actively monitor its customer base and its significant order book of more than € 390 billion. The order intake of € 17.2 billion reflects the slowdown in the commercial sector. Revenues stood at € 20.2 billion, EBIT* before one-off at € 1.3 billion. EADS’ half-year EBIT* of € 888 million was mainly burdened by foreign exchange effects. The Net Cash Position remains solid at € 8.1 billion. Thus, in the current phase of limited economic visibility, EADS continues to be well positioned to face the crisis.

“Thanks to our robust business and our disciplined financial management, EADS is in good shape. At the same time, challenges in new programmes remain and have to be addressed. We are sticking to our priorities: protecting cash, managing the order book and deliveries and ensuring that EADS is competitively positioned in its different market segments. This was demonstrated by our recent win of the Saudi Arabia border security contract,” said Louis Gallois, CEO of EADS. “We welcome the commitment of our A400M launch customers to the programme. In partnership with our customers and our suppliers we are now continuing to work hard in order to bring the A400M back on track.”

Group revenues slightly increased by 2 percent to € 20.2 billion (H1 2008: € 19.7 billion). At Airbus, deliveries remained at a high level thanks to an improved second quarter compared to previous year. Revenues were negatively impacted by foreign exchange effects and an unfavourable mix including low A380 deliveries. The Astrium Division in particular contributed to increased Group revenues.

Based on a strong Q2 EBIT* – which increased by nearly 70 percent compared to previous year – EADS recorded an H1 EBIT* of € 888 million (H1 2008: € 1.16 billion). The EBIT* was mainly burdened by exceptional negative foreign exchange impacts. Before these exceptionals, EBIT* before one-off stood at € 1.3 billion (H1 2008: € 2.0 billion). Compared to previous year, EBIT* before one-off was weighed down by price deterioration on aircraft deliveries and degradation of hedge rates, partially mitigated by volume and Power 8 savings. A380 costs are still higher than expected.

The Group achieved a Net Income of € 378 million (H1 2008: € 403 million), or earnings per share of € 0.47 (earnings per share H1 2008: € 0.50). Self-financed R&D expenses slightly increased to € 1,172 million (H1 2008: € 1,130 million). This reflects Airbus’ continuing aircraft development programmes as well as the Group’s innovative momentum.

Free Cash Flow before customer financing dropped to € -948 million (H1 2008: € 894 million). The change compared to the same period of the previous year, in which the Free Cash Flow benefited from strong inflow of customer advance payments, reflects the deterioration of the working capital and the decrease of gross cash flow from operations in line with the reduction of the EBIT* before one-off and lower hedging volume. The working capital deterioration is due to inventory build-up at Airbus and the retention of customer advance payments for the A400M programme. The outflow for the A400M amounts to € -400 million. Pre-delivery payments received in H1 2009 remain in line with the H1 2008 level. Despite the currently unfavourable market environment customer financing needs remain limited in the first half. Therefore, Free Cash Flow including customer financing amounts to € -1,169 million (H1 2008: € 975 million). The Group’s Net Cash position is solid at € 8.1 billion(year-end 2008: € 9.2 billion) representing a strong asset in the current situation of limited economic visibility.

Due to lower commercial aircraft and helicopter orders, relating to the current economic climate, the Group’s order intake decreased to € 17.2 billion (H1 2008: € 51.2 billion). Up to the end of June 2009, EADS' order book remained high at € 391 billion (year-end 2008: € 400.2 billion), including a € -4.3 billion revaluation due to the weaker US dollar at the end of June compared to end of December 2008. Orders within the commercial aircraft business are based on list prices. Robust order intake in the defence business led to a stable defence order book of € 55.2 billion (year-end 2008: € 54.9 billion). At the end of June 2009, EADS had 117,661 employees (year-end 2008: 118,349).

The customer OCCAR and the launch nations have reiterated their commitment to the A400M: On 24 July, they confirmed that they will adhere to the A400M programme to enable further detailed negotiations up to the end of year. This provides an opportunity for all parties involved to realign the programme on an achievable basis. EADS is using this phase to carry on with its suppliers and partners to establish a robust timetable including a date for the first flight. Furthermore, this period gives room to rebase the contract on realistic conditions acceptable to all parties. EADS intends to reduce any further potential loss, but the full financial consequences of the delays will only be known once the negotiations are finalised.

Over the last months, the programme made further progress. The first A400M development aircraft is being prepared for engine fitting. The second aircraft is assembled and has entered systems testing phase while final assembly for the third unit has started. The flying test bed for the engine has successfully performed twelve flights with more than 35 flight hours. A first version of the revised engine software FADEC was received and is showing good initial results in testing.

Due to the continuing high level of uncertainty on the programme, EADS retained the early stage accounting treatment of this programme**. This resulted in an EBIT* impact of € -191 million for the first six months (thereof € -120 million taken in the first quarter).

Substantial negative income statement impacts may still have to be booked in future periods depending on the progress of the development and the outcome of the negotiations on the A400M programme.


The first half of 2009 confirms the trends identified at the beginning of the year. The Group's bottom-up analysis of the order book still shows overbooking for the coming years. Nevertheless, this is challenged by the deterioration of the macro-economic and traffic indicators, even if the negative trend was stopped or slightly reversed recently. There is no clear sign of stabilisation since traffic and yield deterioration as well as funding conditions are challenging airlines’ financials. Therefore, EADS is cautiously monitoring the market, its customer base and its suppliers and continues to apply a rolling plan concept. Besides the commercial order book, the Group's solid defence and institutional order book provides a certain level of protection and stability.

EADS expects Airbus to capture up to 300 new gross orders in 2009, even if that goal is challenging in the current market environment. Based on the healthy H1 delivery trend, deliveries of 2009 should be at least at the 2008 level. With an assumption of a US dollar rate of € 1 = US$ 1.39, EADS revenues should be roughly in line with the 2008 level.

Under these assumptions, EBIT* before one-off in the second half of 2009 should be positive but lower compared to the first half of 2009. Compared to the first six months of the year, it will be negatively impacted, mainly by increasing Research & Development expenses and significant hedge rates deterioration. EADS R&D expenses should amount to roughly € 3 billion for the full year. On the other side, this degradation will be partly offset by a lower price deterioration than in H1 and by favourable seasonal effects on part of the business. Concerning one-off impacts affecting H2, the range and magnitude of the potential A400M programme charge is wide. Finally, A380 ramp-up is progressing and Airbus expects to deliver 14 A380 in 2009. A380 costs are still higher than expected and EADS will review the potential impact on the learning curve in H2.

EADS is raising its Free Cash Flow guidance. EADS is now expected to consume around € 1 billion of Free Cash Flow after customer financing in 2009 not taking into account the A400M programme.


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.


As the outcome of the A400M construction contract cannot be estimated reliably, EADS can currently not comply with all requirements to account for the contract under the estimate-at-completion accounting methodology. Consequently and in accordance with IAS 11 (Construction Contracts), EADS has suspended the application of estimate at completion methodology accounting (“milestone accounting”) and has then recognised contract costs incurred to date as an expense directly in the income statement as well as corresponding revenues as far as such contract costs incurred are expected to be recoverable under the “early stage“ method of accounting. The cost-at-completion provision was then updated only to cover additional losses under the contract which EADS was able to estimate reliably. (For more details refer to the “First Half-Year
2009 Financial Report”).