European Aeronautic Defence and Space Company EADS N.V. / Quarter Results 14.05.2010 07:02 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Ad-hoc release, 14 May 2010 EADS Reports Results of First Quarter 2010 - Revenues of EUR 9.0 billion: high level of deliveries sustained - EBIT* before one-off at EUR 0.15 billion - EBIT* of EUR 83 million - Net income: EUR 103 million - Net Cash at EUR 8.8 billion remains strong EADS' (stock exchange symbol: EAD) macro-economic and commercial environment is gradually improving but remains challenging. Proactive order-book management and robust deliveries across all businesses continued throughout the first quarter. Revenues stood at EUR 9.0 billion. The EBIT* before one-off amounted to EUR 0.15 billion thanks to good performance in Airbus legacy programmes as well as space and defence activities. It was weighed down by A380 and hedge deterioration. EADS' EBIT* amounted to EUR 83 million after exceptional foreign exchange effects. The order intake of EUR 14.4 billion reflects improving commercial momentum in a challenging market environment. The Group's order book of EUR 416 billion provides a solid platform for future deliveries. EADS' Net Cash position of EUR 8.8 billion remains a strong asset. 'I am cautiously optimistic that our industry is slowly on its way back up. Economic indicators signal a recovery trend of the global economy. This has a clear positive impact on air traffic. But recent turbulence on the financial markets also reminds us that the crisis is not yet fully behind us. Volatility is still high, particularly due to the weakness of some Euro-zone economies. Due to the corresponding strengthening of the Dollar, EADS should benefit in the mid- and long-term if the Dollar trend is confirmed', said Louis Gallois, CEO of EADS. 'The key priority for this year is to deliver on our programmes. We need to progress with the A380, to finalise the contract amendment with the Customer Nations on A400M, while moving forward on the technical side and to step up the development of the A350.' In the first three months, EADS' revenues increased to EUR 9.0 billion (Q1 2009: EUR 8.5 billion), supported by a combination of higher volume and a favourable mix on commercial aircraft deliveries at Airbus (119 units with revenue recognition compared to 116 in Q1 2009). Moreover, Eurocopter, Astrium and Other Businesses contributed positively. These effects were partly offset by negative foreign exchange impacts and lower revenue recognition for the A400M programme. In 2010, the application of the percentage of completion method is resumed; no revenue milestones have been recognised in the first quarter 2010. EBIT* before one-off - 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 EUR 0.15 billion (Q1 2009: EUR 0.4 billion) for EADS. Compared to Q1 2009, a favourable mix on Single Aisle and Long Range aircraft were more than offset by mainly the degradation of hedge rates and a reduction of Headquarters and eliminations EBIT*. This reduction is due to a change in the allocation of real estate costs and a lower contribution from Dassault. In addition, the A380 continues to weigh significantly on the underlying performance. Despite strong currency headwinds and A380 operational challenges, EBIT* before one-off at Airbus amounted to EUR 0.08 billion. EADS' EBIT* of EUR 83 million (Q1 2009: EUR 232 million) was further weighed down by exceptional negative foreign exchange impacts. Exchange rate impacts weighed on the Q1 2010 EBIT* by around EUR 300 million compared to Q1 2009. Net Income amounted to EUR 103 million (Q1 2009: EUR 170 million), or earnings per share of EUR 0.13 (earnings per share Q1 2009: EUR 0.21). This reduction was driven by the EBIT* deterioration. The financial result improved: the main change comes from the 2009 negative revaluation of the options while in the first quarter of 2010 the option restructuring programme was completed. Self-financed Research & Development (R&D) expenses slightly increased to EUR 572 million (Q1 2009: EUR 562 million), mainly due to higher activities at Defence & Security. Free Cash Flow before customer financing of EUR -972 million (Q1 2009: EUR -600 million) reflected an increase of inventories and the cut off effect of customer payments received at the end of 2009. Customer financing needs for the quarter amounted to around EUR 150 million. Free Cash Flow after customer financing amounted to EUR -1,124 million (Q1 2009: EUR -585 million). The Group's Net Cash position stood at EUR 8.8 billion (year-end 2009: EUR 9.8 billion). The seasonality of EADS' defence and institutional businesses implies that revenue, earnings and cash performance tend to be back-loaded. The Group's order intake of EUR 14.4 billion was significantly above the 2009 level (Q1 2009: EUR 9.3 billion), primarily due to higher commercial aircraft orders for the A330 and A350XWB at Airbus but with slow momentum in the commercial helicopter market recovery. At the end of March 2010, the order book of EADS stands at a robust EUR 415.8 billion (year-end 2009: EUR 389.1 billion), reflecting increases at all Divisions. The Airbus backlog benefited from a positive revaluation impact of around EUR 22 billion due to the closing spot rate of the U.S. Dollar that has significantly strengthened since year-end. The defence order book stood stable at EUR 57.7 billion (year-end 2009: EUR 57.3 billion) thanks to space service and missile orders. At the end of March 2010, EADS had 119,860 employees (year-end 2009: 119,506). Update on the U.S. Air Force (USAF) tanker modernisation programme On 20 April 2010, EADS North America announced its intention to submit a proposal as prime contractor for the USAF tanker modernisation programme due on 9 July 2010 and to offer the KC-45-the only aircraft flying today that meets the U.S. Air Force's tanker requirements as outlined in the KC-X Request for Proposal (RFP). The KC-45 builds on the EADS-based tanker that was previously selected in 2008 by the Department of Defense (DoD) and that has won the last five consecutive tanker competitions worldwide. EADS North America has assembled a U.S. industrial team to support the KC-45 offering. The DoD has clearly stated that EADS North America is a qualified provider and capable of executing all prime contractor responsibilities, including classified work. The company will continue to add to its industrial team in ways that strengthen the KC-45 offering. Outlook The Group is fundamentally solid to cope with the 2010 economic environment. The improving market trend is confirmed, especially on air traffic, with volatility remaining. The helicopter market is still uncertain. This solidity is based on a resilient, actively managed backlog of 3,426 aircraft at Airbus Commercial, 1,301 in Eurocopter and strong backlog in the Space and Defence businesses. EADS confirms its 2010 outlook as released on 9 March 2010. Based on a number of active campaigns, gross orders at Airbus should be between 250 and 300 in 2010. In 2010, Airbus expects to deliver up to the same level of aircraft as in 2009 (year-end 2009: 498 aircraft). Eurocopter should deliver around 6 percent less helicopters in 2010 compared to the previous year (year-end 2009: 558 helicopters). Therefore, using EUR 1 = $ 1.40 as the average spot rate, EADS revenues should be roughly stable in 2010 (year-end 2009: EUR 42.8 billion). EADS' EBIT* in 2010 will be around EUR 1 billion. The deterioration of the hedge rates will weigh by about EUR -1 billion compared to 2009. A380, while slightly improving, will continue to weigh substantially on the EBIT* before one-off as in 2009. Cost savings and some improvement on aircraft pricing should contribute positively while weaker helicopter deliveries, some increase in Research & Development (R&D) and cost inflation will weigh on profitability. Going forward, the EBIT* performance of EADS will be dependent on the Group's ability to execute on the A400M, A380 and A350XWB programmes in line with the commitments made to its customers. Provided a sustainable year-end cash inflow of institutional and governmental business and subject to pre-delivery payment advances in the A400M programme, the Free Cash Flow before customer financing should be break-even. Free Cash Flow after customer financing should be negative due to customer financing cash-outflows of around EUR 1 billion. If market conditions continue to improve, less cash flow should be consumed by customer financing. * 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 2009, the Group - comprising Airbus, Eurocopter, EADS Astrium and EADS Defence & Security - generated revenues of EUR 42.8 billion and employed a workforce of more than 119,000. Contacts: Alexander Reinhardt +49 89 607 34066 Martin Agüera +49 89 607 34735 Charles-Etienne Lebatard +33 1 42 24 24 25 Philipp Lehmann +49 89 607 34287 Jaime Pérez-Guerra +34 91 585 77 89 14.05.2010 07:02 Ad hoc announcement, Financial News and Media Release distributed by DGAP. Medienarchiv at |[![CDATA[|[a href="http://www.dgap-medientreff.de"|]www.dgap-medientreff.de|[/a|]]]|] and |[![CDATA[|[a href="http://www.dgap.de"|]www.dgap.de|[/a|]]]|] --------------------------------------------------------------------------- Language: English Company: European Aeronautic Defence and Space Company EADS N.V. P.O. Box 32008 2303 DA Leiden 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, Düsseldorf, Hannover, München, Hamburg, Stuttgart End of News DGAP News-Service ---------------------------------------------------------------------------
DGAP-Adhoc: EADS Reports Results of First Quarter 2010
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