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07 March 2012
07. March 2012 Company

Ad-hoc release - Increasing Growth Momentum: EADS Reports Full Year Results 2011


  • All key indicators significantly above guidance
  • Group order backlog surges to record level: € 541 billion
  • Revenues increase 7 percent to € 49.1 billion
  • EBIT* before one-off up 34 percent: € 1.8 billion
  • Net Income before one-off up 76 percent to € 1.1 billion
  • Strong Free Cash Flow before acquisitions of € 2.5 billion
  • Proposed dividend increases to € 0.45
  • 2012 EBIT* before one-off guidance above € 2.5 billion

EADS (stock exchange symbol: EAD) announces better than expected results for the full year 2011. Despite a volatile macro-economic context, EADS in 2011 continued to grow and to improve its financial performance, particularly thanks to strong commercial momentum backed by resilient air traffic figures. Defence markets in the Western world were under pressure, as anticipated. The order intake(5) reached € 131 billion in 2011. EADS’ order book(5) stood at a record level of € 541 billion. Revenues amounted to € 49.1 billion. The EBIT* before one-off of around € 1.8 billion benefited from good performance in Airbus legacy programmes and Airbus Military as well as commercial series and services activity at Eurocopter. The reported EBIT* amounted to € 1.7 billion. Cash-flow generation remained strong and led to a Net Cash position of € 11.7 billion.

“In 2011, EADS achieved financials above expectation and demonstrated that it is a healthy growth story. The order intake in commercial aircraft has elevated our order book to record levels and I am pleased that the civilian helicopter market has also significantly gained momentum. Our strong cash generation protects the company and allowed us to secure important acquisitions, mainly in the field of services. The stage is set for EADS to turn the corner towards increased profitability”, said Louis Gallois, CEO of EADS. “Certainly, 2012 will have challenges in store for us. We continue to devote the highest management attention to our key programmes, especially the A350. We will also have to monitor the uncertain economic environment and the outcome of discussions with governments on the future of defence procurement programmes. It is essential that these talks, notably in Germany, show fast and sound results for both sides.”

For the full year 2011, EADS’ revenues increased 7 percent to € 49.1 billion (FY 2010: € 45.8 billion). This growth is driven by volume and mix effects at Airbus and the increase of commercial activity at Eurocopter. These increases more than offset a slight decrease at Astrium and Cassidian. The overall 2011 revenue contribution from the first consolidation of the major acquisitions was around € 300 million, mainly Vector Aerospace and Satair, while the EBIT* impact was insignificant. Physical deliveries remained high with 534 aircraft at Airbus Commercial, 503 helicopters at Eurocopter and the 46th consecutive successful Ariane 5 launch.

EBIT* before one-off (adjusted EBIT*) – an indicator capturing the underlying business margin by excluding non-recurring charges or profits caused by movements in provisions or foreign exchange impacts – stood at around € 1.8 billion (FY 2010: € 1.3 billion) for EADS and at around € 0.5 billion for Airbus (FY 2010: around € 0.3 billion). Compared to 2010, this represents a significant rise, despite an increase in Research & Development expenses and dollar headwind. It benefited from good performance in Airbus legacy programmes thanks to volume, mix and price improvements. Also, Airbus Military and especially Eurocopter contributed to the performance improvement, the latter mainly from its commercial series and services activity. The Headquarters EBIT* before one-off improved in 2011, mainly due to an increased allocation of management fees to Divisions and positive impacts from Group eliminations in the fourth quarter.

EADS’ reported EBIT* stood at € 1,696 million (FY 2010: € 1,231 million). At Airbus Commercial, a higher number of deliveries and better pricing more than compensated hedge rate deterioration and higher R&D. The total one-time effects at Airbus were roughly neutral. The negative impact from the A350 XWB provision was more than offset by the effects from the A340 completion and by a positive foreign exchange impact on pre-delivery payments mismatch and balance sheet revaluation. The performance of Astrium, Cassidian and Eurocopter includes around € 200 million net in negative one-time items. This is partially compensated by positive one-offs in Other Businesses and Headquarters. The largest proportion is in Eurocopter, which has reported roughly € 115 million of negative one-time effects, driven mainly by governmental programmes and by the SHAPE transformation programme. Cassidian booked a net charge of € 72 million for restructuring and programmes. At Astrium, a charge of € 23 million was booked in the fourth quarter, relating to the AGILE transformation programme.

Net Income increased by 87 percent to € 1,033 million (FY 2010: € 553 million), or earnings per share of € 1.27 (earnings per share FY 2010: € 0.68). The Net Income before one-off(4) increased to € 1,061 million (FY 2010: € 603 million). These increases are mainly driven by the operational improvement reflected in the EBIT*, which is flowing down to the Net Income.

The finance result amounts to € -220 million (FY 2010: € -371 million). The interest result of € 13 million (FY 2010: € -99 million) improved mainly due to higher interest income related to the good cash performance. The 2011 interest result includes a positive one-time release of € 120 million due to the completion of the A340 programme. The other financial result amounts to € -233 million (FY 2010: € -272 million). This line includes, among others, a negative revaluation of EADS’ foreign exchange options for around € 90 million and the unwinding of discounted provisions for an amount of € -172 million.

Based on an Earnings per Share (EPS) of € 1.27, the EADS Board of Directors proposes payment on 7 June 2012 of a dividend of € 0.45 per share to the Annual General Meeting of shareholders (FY 2010:
€ 0.22 per share). The record date should be 6 June 2012.

“I am pleased we can share the good performance and growth with our shareholders through a significantly increased dividend based on a pay-out ratio converging towards sector and industry peers”, said Hans Peter Ring, CFO of EADS. “As the Group matures, this dividend policy shall serve as the orientation for the future.”

Self-financed Research & Development (R&D) expenses rose to € 3,152 million (FY 2010: € 2,939 million), driven mainly by increases at Airbus on the A350 XWB development, at Cassidian for Unmanned Aerial Systems (UAS) and Eurofighter radar activities as well as at Eurocopter.

Free Cash Flow for the full year 2011 benefited from good operational performance. Free Cash Flow stood at € 958 million (FY 2010: € 2,707 million). After customer financing and before acquisitions, the Free Cash Flow of € 2,493 million is significantly above expectations thanks to higher order intake and higher than expected deliveries at Airbus, better EBIT* before one-off and better than expected cash inflow from government customers. Gross cash flow from operations increased compared to one year ago, mainly due to the improvement of profitability before depreciation and provisioning. The working capital includes an inventory increase at Airbus due to the progressive ramp-up on production programmes. The ramp-up in inventories was overcompensated by higher advance payments received at Airbus. Customer financing generated cash of € 135 million in 2011 as the lessor and global banking markets continue to be active despite recent concerns. The level of industrial capital expenditure is slightly below the 2010 level. In line with the Group’s strategy, EADS pursued some significant acquisitions in 2011 with an overall cash-out of approximately € 1.5 billion.

EADS’ Net Cash position amounted to a solid € 11.7 billion (year-end 2010: € 11.9 billion) after acquisitions. It also reflects a cash contribution to pension assets of € 489 million.

EADS’ order intake(5) increased by 58 percent to € 131.0 billion (FY 2010: € 83.1 billion), driven by the higher level of commercial aircraft orders at Airbus. At the end of December 2011, the Group’s order book(5) increased by 21 percent to a record level of € 541.0 billion (year-end 2010: € 448.5 billion), underpinning EADS’ top line growth into the future. The Airbus Commercial backlog benefited from a positive revaluation impact of around € 15 billion due to the US dollar closing spot rate that has strengthened since year-end 2010. The defence order book decreased to € 52.8 billion (year-end 2010:
€ 58.3 billion).

At the end of December 2011, EADS counted 133,115 employees, including 6,505 employees from the acquisitions of Vector Aerospace, PFW Aerospace, Vizada, Satair and several smaller acquisitions (year-end 2010: 121,691).


As basis for EADS’ 2012 guidance, the Group expects the world economy and air traffic to grow in line with prevailing independent forecasts and assumes an average dollar exchange rate of € 1 = $ 1.35.
In 2012, Airbus should deliver around 570 commercial aircraft. Gross orders should be above the number of deliveries. EADS 2012 revenues should continue to grow above 6 percent. Group EBIT* before one-off should improve significantly thanks to volume increases at Airbus and Eurocopter, better pricing at Airbus and A380 improvement. EADS expects the EBIT* before one-off to be above € 2.5 billion. The EADS 2012 Earnings per Share (EPS)* before one-off(4) should be above € 1.65 (FY 2011: € 1.39), based on the Net Income* before one-off(4).

Going forward, the reported EBIT* and EPS performance of EADS will be dependent on the Group’s ability to execute on its complex programmes such as A400M, A380 and A350 XWB, in line with the commitments made to its customers. Based on this EBIT* guidance, EADS should continue to generate a positive Free Cash Flow after customer financing and before acquisitions. As it is the most volatile item, especially during uncertain macro-economic times, EADS will give a more precise guidance later in the year. 
* 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.

EADS is a global leader in aerospace, defence and related services. In 2011,
the Group – comprising Airbus, Astrium, Cassidian and Eurocopter – generated revenues of € 49.1 billion and employed a workforce of over 133,000. 


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