Slide 1: Q1 2003 Results
Q1 2003 Results Hans Peter Ring, CFO Analysts Conference call – May 6, 2003 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain of the statements contained in this document are not historical facts but rather are statements of future expectations and other forward-looking statements that are based on management‘s beliefs. These statements reflect the Company‘s views and assumptions as of the dat
Slide 3: Content
Content 1. Group overview 2. Operating performance by division 3. Financials 4. Roadmap 3 3
Slide 4: Q1 results drivers and 2003 financial targets unchanged
Q1 results are driven by… • 65 Airbus deliveries (as expected) • Impact of weak $ on revenues (€ -0.4 bn) from Q1 2002 • A380 R&D ramp up. EBIT margin pre-R&D maintained (~ 12%) • Strong seasonality of Defence and para-public businesses • Net Cash position affected by one-time factors … 2003 financi
Slide 5: Q1 2003 EBIT development from Q1 2002
Q1 2003 EBIT development from Q1 2002 EADS consolidated EBIT in € millions Aircelle Others disposal (lower (63) deliveries 315 impact fully R&D offset) (125) +3 (4.9 % of 130 revenues) (2.4 % of revenues) Q1 2002 Q1 2003 5 * pre goodwill and exceptionals 5
Slide 6: EADS maintains effective business focus
EADS maintains effective business focus … • Airbus wins 42 new orders until March 31, 2003 • Avion Capital creation highlights sources of available financing • Defence Security Systems reorganisation concentrates on integrated approach to defense systems sales • 1st production Tiger HAP flight compl
Slide 7: Q1 2003 key figures
Q1 2003 key figures in € bn Q1 2003 Q1 2002 Revenues 5.5 € bn 6.4 € bn EBIT* 0.1 € bn 0.3 € bn FCF before cust. financing** (0.3 € bn) 0.4 € bn New orders 5.4 € bn 3.8 € bn March 2003 Dec. 2002 Net Cash position 0.5 € bn 1.2 € bn Total Order-Book 162.7 € bn 168.3 € bn * pre goodwill and exceptionals
Slide 8: Content
Content 1. Group overview 2. Operating performance by division 3. Financials 4. Roadmap 8 8
Slide 9: Airbus
Airbus • 300 deliveries confirmed; €m Q1 2003 Q1 2002 • EBIT pre R&D margin Deliveries 65 72 maintained above 15% Revenues 3,775 4,646 • Revenues affected by: - $ impact (€ -0.4 bn) R&D self-financed 445 320 - Lower deliveries and Revenue in % of revenues 11.8% 6.9% recognition based on 62 ac, EBIT*
Slide 10: Stable Airbus customer financing exposure
Stable Airbus customer financing exposure all figures in € m Figures for 100% Airbus March 2003 Dec. 2002 closing rate $/€ 1.09 1.05 Total Gross exposure* 3,424 3,581 of which off-balance sheet 855 891 Estimate value of collateral (1,911) (2,062) Net exposure 1,513 1,519 Provision (1,513) (1,519) AI
Slide 11: MTA
MTA €m Q1 2003 Q1 2002 • Revenues affected by Revenues mix** 96 101 • € 17.7 bn*** A400M:engine R&D self-financed 6 8 in % of revenues 6.3% 7.9% selection; German Budgetary commission EBIT* (11) (12) • Order-book: affected by the loss of Fairchild Dornier Order book 677 1,295 * pre goodwill and exce
Slide 12: Aeronautics
Aeronautics €m • Eurofighter: first units Q1 2003 Q1 2002 handed over to customers Revenues 969 936 • Eurocopter: Preparation of R&D self-financed 29 25 Tiger deliveries in % of revenues 3.0% 2.7% • Aerostructure and EBIT* 33 16 maintenance business was in % of revenues 3.4% 1.7% sustained thanks to
Slide 13: Space
Space • Astrium 100% consolidated from January 1st 2003. Acquisition €m Q1 2003 Q1 2002 completed; EU approval expected Revenues 403 426 mid-May R&D self-financed 11 12 • Revenues decreased by 19 % in % of revenues 2.7% 2.8% with constant perimeter due to the EBIT* (21) (33) end of Ariane 4 • Drasti
Slide 14: Defence and Civil Systems
Defence and Civil Systems (Figures before new organisation) Q1 2003 Q1 2002 • New organisation (Military €m Aircraft BU included from June Revenues 530 539 2003 to form Defence Security R&D self-financed 37 39 Systems) will allow : in % of revenues 7.0% 7.2% - Integration of military aircraft EBIT*
Slide 15: Content
Content 1. Group overview 2. Operating performance by division 3. Financials 4. Roadmap 15 15
Slide 16: Profit & loss highlights
Profit & loss highlights Q1 2003 Q1 2002 in % of in % of €m Revenues €m Revenues Revenues 5,520 6,408 self-financed R&D 528 9.6% 403 6.3% EBITDA 389 7.0% 687 10.7% EBIT* 130 2.4% 315 4.9% EBIT* before R&D 658 11.9% 718 11.2% Interest result (18) (0.3%) (12) (0.2%) Taxes 1 0.0% (96) (1.5%) Net income
Slide 17: Development of net cash
Development of net cash in € m Q1 2003 Q1 2002 Net cash at the beginning of the period 1.224 1.533 Gross Cash Flow from Operations* 20 189 Change in working capital 102 498 Cash used for investing activities** (510) (593) of which Industrial Capex (additions) *** (409) (419) Customer Financing net a
Slide 18: Development of net cash position on Q1 2003
Development of net cash position on Q1 2003 In € millions Astrium 100% Risk consolidation sharing Loan (74) restructuring (236) FCF before Custo Fin. (309) 1,224 Custo Fin. Others (79) 12 538 Dec. 2002 March 2003 18 18
Slide 19: Content
Content 1. Group overview 2. Operating performance by division 3. Financials 4. Roadmap 19 19
Slide 20: Maintain solid business base in the turmoil
Maintain solid business base in the turmoil • Confirm 2003 Targets 9 300 deliveries 9 Revenues in same range as 2002, based on 1€ = 1.10 $ 9 EBIT* in same range as 2002 9 Free Cash Flow positive pre-customer financing 9 Restrictive customer financing • Implement concrete actions to preserve cash and
Slide 21: Appendix
Appendix 21
Slide 22: Balance Sheet Highlights
Balance Sheet Highlights March December in € m 2003 2002 Assets 49,085 47,400 of which Goodwill 9,533 9,586 of which cash & equivalents, securities 6,719 6,200 of which positive hedge mark-to-market 3,934 2,819 Stockholders' equity 13,430 12,765 of which OCI (Other Comprehensive Income) 3,210 2,452
Slide 23: EBIT* calculation
EBIT* calculation March in € m 2003 Result before financial inc. and (96) income tax Income from investments 24 Exceptionals: Goodwill amortisation 140 Fair value adjustment 62 EBIT* 130 * pre goodwill and exceptionals 23 23
Slide 24: Restructuring, write-off and disposal items included in EBIT*
Restructuring, write-off and disposal items included in EBIT* €m Q1 2003 Q1 2002 EBIT * 130 315 EBIT* margin (% of revenues) 2.4% 4.9% EADS EBIT* includes the following items Airbus Aircelle disposal - - 63 MTA Asset depreciation - (6) DCS Restructuring (16) _ 24 * pre goodwill and exceptionals 24
Slide 25: Net Income pre goodwill and exceptionals
Net Income pre goodwill and exceptionals March March in € m 2003 2002 Net Income (93) (25) • Goodwill amortisation 140 147 • Exceptionals: Fair value adjustment on fixed assets 54 54 Fair value adjustment on inventories 8 3 Tax impact on exceptional fair value (23) (21) • Minorities on goodwill and
Slide 26: A380 close to peak investment
A380 close to peak investment Self-financed R&D expensed by quarter in € m 740 650 628 528 445 473 480 412 403 450 356 322 Cumulative 262 250 150 154 193 A380 R&D 101 126 64 93 = 1.5€bn 50 Q1 2 0 0 1 Q2 2 0 0 1 Q3 2 0 0 1 Q4 2 0 0 1 Q1 2 0 0 2 Q2 2 0 0 2 Q3 2 0 0 2 Q4 2 0 0 2 Q1 2 0 0 3 A380 R&D EAD
Slide 27: Continuing hedging active policy
Continuing hedging active policy EADS hedge portfolio (US$ 41 bn) as of March 31, 2003 US$ bn Volume already hedged 10 8,7 8,5 8 6,7 5,8 5,1 6 4,2 4 1,7 2 0,8 0 2003 2004 2005 2006 2007 2008 2009 2010 (9 mths) € vs $ 0.96 0.94 0.95 0.95 0.96 0.95 0.95 1.01 £ vs $ 1.53 1.53 1.47 1.46 1.46 1.46 1.46 1
Slide 28: Avion Capital
Avion Capital New source of available financing to Airbus customers …Typical aircraft funding structure KFW 25 % Avion Capital CAI 25 % subordinated ~ 20% 25 % loan CIT Lessee Financed ~ 10% aircraft deposit Airbus 25 % ~ 70% • off-balance sheet Bank syndicate • fully reflected in senior loan Gross
Slide 29: Avion Capital
Avion Capital •CEO: Colin Thaine – 30 years aviation experience Former head of aircraft finance of Denton Wilde Sapte •Beyond its underwriting ability, Avion Capital pools diverse resources •Portfolio Management •Syndication •Paying Agency •Security Trust •Back Office •Remarketing •Negotiation 29 29
Slide 30: Quarterly revenues breakdown (cumulative)
Quarterly revenues breakdown (cumulative) Q1 Q2 Q3 Q4 in €m 2003 2002 2003 2002 2003 2002 2003 2002 Airbus 3,775 4,646 9,870 13,750 19,512 MTA 96 101 234 310 524 Aeronautics 969 936 2,226 3,363 5,304 Space 403 426 882 1,389 2,216 DCS 530 539 1,245 1,874 3,306 HQ/Elim. (253) (240) (483) (690) (961) T
Slide 31: Quarterly EBIT* breakdown (cumulative)
Quarterly EBIT* breakdown (cumulative) Q1 Q2 Q3 Q4 in €m 2003 2002 2003 2002 2003 2002 2003 2002 Airbus 166 396 874 1,072 1,361 MTA (11) (12) (72) (79) (80) Aeronautics 33 16 63 132 261 Space (21) (33) (85) (101) (268) DCS (72) (72) (71) (91) 40 HQ/Elim. 35 20 66 80 112 Total EADS 130 315 775 1,013
Slide 32: Quarterly Order-intake breakdown (cumulative)
Quarterly Order-intake breakdown (cumulative) in €m Q1 Q2 Q3 Q4 2003 2002 2003 2002 2003 2002 2003 2002 Airbus 3,416 1,261 10,334 15,446 19,712 MTA 122 61 214 290 403 Aeronautics 915 1,458 2,295 3,171 5,099 Space 341 316 569 1,068 2,145 DCS 761 858 1,605 2,720 4,410 HQ & Elim. (177) (147) (226) (354
Slide 33: Quarterly Order-book breakdown
Quarterly Order-book breakdown in €m Q1 Q2 Q3 Q4 2003 2002 2003 2002 2003 2002 2003 2002 Airbus 134,615 151,794 145,500 148,898 140,996 MTA 677 1,295 1,283 1,258 633 Aeronautics 13,417 14,239 13,797 13,529 13,458 Space 4,401 3,683 3,492 3,445 3,895 DCS 10,297 9,210 9,484 9,953 10,110 HQ & Elim. (689