Ad-hoc: EADS Reports Improved Nine-Month (9m) Results 2013
Amsterdam, 14 November 2013
- Revenues increase 7 percent to € 40.0 billion
- EBIT* before one-off rises 22 percent to € 2.3 billion
- Net Income rises 36 percent to € 1.2 billion
- Aircraft order, delivery guidance raised to reflect market demand
- Free Cash Flow 2013 guidance adjusted to € -1.5 billion
- EBIT* before one-off target reaffirmed at € 3.5 billion for 2013
EADS (stock exchange symbol: EAD) reported higher revenues and profits for the first nine months of 2013, driven by the strong momentum within its commercial aircraft activities.
Order intake(4) more than doubled to € 138.2 billion with the order book value reaching € 642.5 billion at the end of September. The Net Cash position was € 5.2 billion on 30 September, 2013.
“We achieved a good improvement in revenues and profitability over the first nine months thanks largely to our civil aircraft business,” said EADS CEO Tom Enders. “However, we have significant challenges ahead of us, particularly with respect to cash generation and to the A350 XWB programme, which has entered the next critical phase. I am pleased with the progress made in the reorganisation of the Group’s defence and space businesses into the new Airbus Defence and Space Division and we will provide a further update on this before the end of the year.”
Over the first nine months of 2013, EADS’ revenues increased 7 percent to € 40.0 billion (9m 2012: € 37.3 billion), reflecting the aircraft delivery pattern at Airbus Commercial and increasing activity at Airbus Military (A400M). Revenues were broadly stable at Eurocopter, Astrium and Cassidian.
EBIT* before one-off – an indicator capturing the underlying business margin by excluding material non-recurring charges or profits caused by movements in provisions related to programmes and restructurings or foreign exchange impacts – increased to € 2.3 billion (9m 2012: € 1.9 billion) for EADS and to € 1.7 billion for Airbus (9m 2012: € 1.2 billion). This improvement reflected the solid operational performance at Airbus Commercial. The Group EBIT* before one-off margin was 5.8 percent.
EADS’ reported EBIT* increased to € 2.1 billion (9m 2012: € 1.6 billion). One-off charges were limited to the known impact related to the A380 wing rib feet issue and the pre-delivery payment (PDP) dollar mismatch and balance sheet revaluation at Airbus. The finance result was € -445 million (9m 2012: € -337 million) while net income(3) increased to € 1,195 million (9m 2012: € 880 milliona), or earnings per share of € 1.50 (earnings per share 9m 2012: € 1.08a). Self-financed Research & Development (R&D) expenses increased slightly to € 2,179 million (9m 2012: € 2,145 million).
Free Cash Flow before acquisitions amounted to € -4,815 million (9m 2012:€ -3,235 million), reflecting the working capital evolution linked to delivery phasing, industrial ramp-up, some customer financing activity and the seasonality of the group’s government business. Capital expenditure of € 2.1 billion was mainly driven by progress on A350 XWB development aircraft and includes development costs capitalised under IAS 38 of € 196 million for the A350 XWB. EADS finished the first nine months of 2013 with a Net Cash position of € 5.2 billion (year-end 2012: € 12.3 billion) after taking into account the € 1.9 billion used to fund the share buyback programme and the 2012 dividend payment of € 468 million. The gross cash balance on 30 September was € 12.5 billion, providing financial flexibility and security.
EADS’ order intake(4) rose sharply to € 138.2 billion (9m 2012: € 50.4 billion), as the strong commercial momentum continued into the third quarter, particularly at Airbus. Eurocopter saw some recovery in commercial bookings in the third quarter while Astrium reported significant order momentum. By the end of September 2013, the total order book(4) had risen in value to € 642.5 billion (year-end 2012:€ 566.5 billion). The defence order book amounted to € 47.7 billion (year-end 2012: € 49.6 billion).
As of 30 September 2013, EADS had 144,156 employees (year-end 2012: 140,405).
As the basis for its 2013 guidance, EADS expects the world economy and air traffic to grow in line with prevailing independent forecasts and assumes no major disruptions. Based on the nine month results, EADS has made several adjustments to its full year guidance.
In 2013, gross commercial aircraft orders should be above 1,200 aircraft. Airbus deliveries are expected to be up to 620 commercial aircraft.
Due to lower A380 deliveries and assuming an exchange rate of € 1 = $ 1.35, EADS revenues should see moderate growth in 2013.
By stretching the 2012 underlying margin improvement, in 2013 EADS targets an EBIT* before one-off of € 3.5 billion and an EPS* before one-off of around € 2.50 (FY 2012: € 2.24), prior to the share buyback.
Excluding the wing rib feet A380 impact of around € 85 million in 2013 based on 25 deliveries, going forward, from today’s point-of-view, the “one-offs” should be limited to potential charges on the A350 XWB programme, foreign exchange effects linked to the PDP mismatch and balance sheet revaluation. The A350 XWB programme remains challenging. Any schedule change could lead to an increasingly higher impact on provisions.
An assessment of the need for potential one-off costs from the creation of Airbus Defence and Space will be conducted in the fourth quarter of 2013. Free Cash Flow after customer financing and before acquisitions is now expected to be negative at around € -1.5 billion. This reflects the company’s investment into production ramp-up and development programmes as well as recent government customer budgetary constraints.
* 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.
a. Certain nine-month 2012 and year-end 2012 figures have been restated to reflect the change to pension accounting under IAS 19 while Airbus’ figures also reflect the inclusion of ATR and Sogerma within Airbus Commercial. ATR and Sogerma were formerly included in
EADS is a global leader in aerospace, defence and related services. In 2012, the Group – comprising Airbus, Astrium, Cassidian and Eurocopter – generated revenues of € 56.5 billion and employed a workforce of over 140,000.
EADS – Nine-Month (9m) Results 2013
(Amounts in euro)