European Aeronautic Defence and Space Company / Quarter Results
14.05.2008
Release of a Adhoc News, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Ad-hoc release, 14 May 2008
EADS Q1 2008 results
EADS' Q1 2008 results reflect ongoing solid underlying performance and
favourable seasonal effects
- Revenues up 10 percent to Group total of 9.9 billion
growth across all Divisions
- EBIT* grew to 769 million despite burden of declining US dollar
improvement in all five Divisions
- Free Cash Flow before customer financing increased to 1.1 billion
- Order intake up to 39.3 billion thanks to Airbus and
Military Transport Aircraft Division
EADS (stock exchange symbol: EAD) can rely on robust fundamentals and
continued solidity in its underlying performance, but is still facing
challenges on its recovery path. Despite a difficult economic environment
and a weak US dollar, the Group continued to experience strong business
momentum in the first quarter of 2008. The remarkable order intake reflects
the capabilities of EADS' product portfolio on the global market, in
particular at Airbus and Military Transport Aircraft Division. The Q1 2008
EBIT* development was supported by a temporary excess volume of matured
hedges compared to the economic exposure. For the full year 2008, the Group
confirms its EBIT* guidance of 1.8 billion.
'Though many serious challenges have been overcome there remains much to do
in order to secure the significant and lasting improvement in operational
performance we are targeting. But first quarter results are encouraging in
that respect,' said EADS CEO Louis Gallois. 'Implementation and execution
of Power8 is underway and we will look into further measures beyond. With
regard to our long-term strategic plan Vision 2020, we have achieved first
tangible successes: The US tanker selection and our recent acquisition in
the US support us in our aim to balance both our global footprint and our
business portfolio. We are determined to build on that encouraging start
and are looking to make further advances in transforming our business.'
Airbus continued to ramp-up aircraft deliveries, mainly for the A320
Family. Singapore Airlines received further A380s. The Military Transport
Aircraft Division achieved the A400M Power-On milestone. Eurocopter
increased its deliveries, successfully unveiled its new EC175 transport
helicopter and further expanded its international presence by opening an
NH90 assembly line in Australia. The EADS Astrium-built Automated Transfer
Vehicle successfully completed its mission to supply the International
Space Station ISS. The Defence & Security Division enlarged its secure
communications business through new orders and the acquisition of the North
American emergency response solution provider PlantCML.
Revenues grew by 10 percent to 9.9 billion (Q1 2007: 8.9 billion),
fuelled by higher Airbus deliveries (123 units incl. two A380s versus 115
aircraft in the same period of the previous year) and increased volumes at
Eurocopter, EADS Astrium and Defence & Security. The Military Transport
Aircraft Division contributed significantly to the growth thanks to a
milestone revenue recognition in the A400M programme, which had been
shifted from 2007.
EADS EBIT* (pre goodwill and exceptionals) for the first quarter 2008
reached 769 million (Q1 2007: 88 million). It benefited from
improvements across all Divisions. Thanks to a strong operational
performance and achievement of Power8 targets, Airbus and Defence &
Security secured the largest EBIT* growth compared to the first quarter of
2007 when Airbus' EBIT* in particular was heavily burdened by Power8
restructuring. Additionally, in the first three months of 2008, Group EBIT*
benefited from a temporary excess volume of matured hedges compared to the
economic exposure, overcompensating a less favourable hedge rate compared
to the same period of the previous year. The reverse effect will impact the
upcoming quarters. In Q1 2008, a US dollar impact of around -500 million
on loss-making contract provisions put pressure on the Group's EBIT*,
partly balanced out by a gain of around 200 million from revaluations on
liabilities. Compared to Q1 2007, the US dollar effects impacted EBIT* by
-360 million.
In line with the Group's EBIT* development, EADS improved its Net Income to
285 million (Net Loss Q1 2007: 10 million), or earnings per share of
0.35 (loss per share Q1 2007: 0.01). Self-financed R&D expenses remained
roughly stable at 534 million (Q1 2007: 549 million), but are expected
to grow over the full year mainly in the context of Airbus aircraft
development programmes, especially for the A350 XWB.
Free Cash Flow before customer financing increased to 1,059 million
(Q1 2007: -785 million) driven by improved cash flow from operations and
reduced capital expenditure. The improvement in operating cash flow was
mainly related to a stronger inflow of customer advance payments and
additionally benefiting from a much lower build-up of inventories.
Consequently, Free Cash Flow including customer financing improved to
1,116 million (Q1 2007: -822 million) including a stronger net
contribution from sell-down of customer financing assets compared to a
cash-out in the first quarter of 2007. In the first quarter of 2008, Cash
Flow is significantly less impacted by capital expenditure, settlement
payments and restructuring expenses than it will be over the rest of the
year. At the end of March, the Net Cash Position reached 8.3 billion
(year-end 2007: 7.0 billion).
In the first three months of 2008, EADS raised its order intake to 39.3
billion (Q1 2007: 10.5 billion) thanks to strong orders at Airbus and
with finalisation of the UK tanker programme FSTA and a tanker order from
Saudi-Arabia at Military Transport Aircraft. The Group benefited from a
continuing demand for EADS' excellent products, mainly from Asia-Pacific
and legacy carriers.
Up to the end of March 2008, the Groups order book remained on a record
level of 351.5 billion (year-end 2007: 339.5 billion). This growth was
achieved despite a -17 billion revaluation due to the weaker US dollar at
the end of the first quarter. Orders within the commercial aircraft
business are based on list prices. The Group further expanded its defence
order book mainly thanks to its Military Transport Aircraft Division;
defence order book closed the first quarter at 58.0 billion (year-end
2007: 54.5 billion). At the end of March, EADS had 116,375 employees
(year-end 2007: 116,493).
Outlook
EADS confirms the guidance for 2008 that was published on 11 March 2008.
The EADS guidance is based on a closing spot rate at year-end 2008 of
1 = US$ 1.45.
EADS expects Airbus to capture above 700 aircraft orders in 2008.
EADS revenues are expected to exceed 40 billion in 2008, with about
470 aircraft deliveries for the full year.
EADS expects its 2008 EBIT* at 1.8 billion. While, in the first quarter,
the strong underlying performance across businesses, particularly at
Airbus, shows a satisfactory trend, EADS needs to balance it with
challenges on key programmes this year.
The weakening of closing spot rate at year-end 2008 could have negative
impacts on earnings linked to the revaluation at a deteriorated
US dollar rate of some Airbus balance sheet items, including loss-making
contract provisions.
Before the impact of customer financing, EADS expects 2008 Free Cash Flow
at 500 million (keeping in mind it is the most volatile item to predict).
This includes the cash consideration for the acquisitions EADS announced
lately. If the positive trend of the first quarter is confirmed, upside to
this number is possible.
For the 2008 EBIT* guidance as well as for the mid-term outlook, any
potential financial impact of the new A380 delivery schedule has not been
determined so far.
* 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.
Contact:
Pierre Bayle +33 1 42 24 20 63
Markus Wölfle +49 89 607 34287
DGAP 14.05.2008
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Language: English
Issuer: European Aeronautic Defence and Space Company
Beechavenue 130-132
1119 PR Schiphol Rijk
Niederlande
Phone: 00 800 00 02 2002
Fax: +49 (0)89 607 - 26481
E-mail: ir@eads.net
Internet: www.eads.com
ISIN: NL0000235190
WKN: 938914
Indices: MDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, Hannover, Düsseldorf, Hamburg, München, Stuttgart
End of News DGAP News-Service
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DGAP-Adhoc: EADS Q1 2008 results
| Source: EQS Group AG