Ad-hoc Release: EADS Reports Improved First Quarter (Q1) Results 2013
Amsterdam, 14 May 2013
• Revenues increase 9 percent to € 12.4 billion
• EBIT* before one-off rises 56 percent to € 741 million
• Net Income rises 91 percent to € 241 million
• Full Year 2013 Guidance Reaffirmed
EADS (stock exchange symbol: EAD) achieved a solid start to 2013, with first quarter revenues and profitability driven by commercial aircraft deliveries. Despite the overall market environment, defence revenues remained stable thanks to the Group’s mix of series and development programmes and long-term contracts.
Order intake(5) rose sharply to € 49.9 billion while the order book had reached € 614.3 billion at the end of the first quarter. The reported EBIT* amounted to € 596 million with a Net Cash position of € 9.2 billion at the end of March 2013.
“The quarter was an eventful one for EADS, with shareholders approving the new governance structure while the share buyback programme is progressing and the free-float has risen significantly,” said EADS CEO Tom Enders. “On the operational side, we had a rather good start into 2013 with improved revenues and profitability. Management continues to focus on improving the bottom line performance in 2013 and beyond.”
During the quarter, EADS’ revenues increased 9 percent to € 12.4 billion (Q1 2012: € 11.4 billion), mainly reflecting the higher aircraft deliveries at Airbus Commercial. Revenues at Astrium and Cassidian were broadly stable compared to a year earlier. The Group’s defence revenues totalled € 2.3 billion.
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 € 741 million (Q1 2012: € 475 milliona) for EADS and to € 601 million for Airbus (Q1 2012: € 314 milliona). This was driven by the strong underlying performance at Airbus Commercial. The Group EBIT* before one-off margin improved to 6.0 percent.
EADS’ reported EBIT* increased to € 596 million (Q1 2012: € 333 milliona) and included total one-off charges of € 145 million at Airbus. As anticipated, € 14 million of this were booked for the A380 wing rib feet repair. In addition, a negative dollar mismatch and balance sheet revaluation of € 131 million is reflected in the Q1 2013 one-off charges.
The finance result amounted to € -251 million (Q1 2012: € -143 million). The deviation compared to Q1 2012 mainly reflects a negative foreign exchange revaluation. Net Income increased significantly to € 241 million (Q1 2012: € 126 milliona), or earnings per share of € 0.29 (earnings per share Q1 2012: € 0.15a).
Due to favourable phasing at Airbus Commercial, including IAS 38 capitalisation on the A350 XWB, Self-financed Research & Development (R&D) expenses declined to € 624 million (Q1 2012: € 726 million).
Free Cash Flow before acquisitions amounted to € -3,195 million (Q1 2012: € -1,233 million). This trend reflects the ramp-up in working capital at Airbus and Eurocopter and the seasonality of the Group’s governmental business. Capital expenditure increased to € 670 million to support development programmes. EADS finished the quarter with a Net Cash position of € 9.2 billion (year-end 2012: € 12.3 billion).
EADS’ order intake(5) rose sharply to € 49.9 billion (Q1 2012: € 12.0 billion), driven by significant orders for Airbus Commercial. Despite the challenging market environment, the Group continued to book orders from defence and public customers, although at a lower level than last year. By the end of March 2013, the order book(5) had risen to € 614.3 billion (year-end 2012: € 566.5 billion), supporting the Group’s future growth. The defence order book amounted to € 49.9 billion (year-end 2012: € 49.6 billion).
As of 31 March 2013, EADS had 142,142 employees (year-end 2012: 140,405).
Based on the Q1 results, EADS reaffirms its guidance for the full year 2013.
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 disruption due to the current sovereign debt crisis.
In 2013, gross commercial aircraft orders should be above the number of deliveries, in the range of 700 aircraft. Airbus deliveries should continue to grow to between 600 and 610 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 on-going share buyback.
Excluding the known wing rib feet A380 impact in 2013 of around € 85 million 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 and foreign exchange effects linked to PDP mismatch and balance sheet revaluation.
The A350 XWB programme remains challenging. Any schedule change could lead to an increasingly higher impact on provisions.
EADS aims to be Free Cash Flow breakeven after customer financing and before acquisitions in 2013.
* 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 first quarter 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 Other Businesses.
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 – First Quarter (Q1) Results 2013
(Amounts in euro)