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
| Source: EQS Group AG