Slide 1: H1 2010 Earnings Conference Call
H1 2010 Earnings Conference Call, 30th July 2010 Louis Gallois CEO Hans Peter Ring CFO
Slide 2: Safe Harbour Statement
Safe Harbour Statement 2 Disclaimer This presentation includes forward-looking statements. Words such as “anticipates”, “believes”, “estimates”, “expects”, “intends”, “plans”, “projects”, “may” and similar expressions are used to identify these forward-looking statements. Examples of forward-looking
Slide 3: Contents
Contents 3 Group Highlights Financial Highlights Divisional Performance Guidance EADS – H1 2010 earnings
Slide 4: Group Highlights: H1 2010
Group Highlights: H1 2010 4 Business highlights • Signs of improvement in commercial aircraft environment; orders and commitments for 255 aircraft at Farnborough; Single Aisle rate increase to 38 aircraft per month in Q3 2011 and 40 in Q1 2012; • Deliveries: 250 commercial aircraft, 249 helicopters;
Slide 5: Contents
Contents 5 Group Highlights Financial Highlights Divisional Performance Guidance EADS – H1 2010 earnings
Slide 6: H1 2010 Financial Highlights
H1 2010 Financial Highlights 6 in € bn H1 2010 H1 2009 Change Revenues 20.3 20.2 +1% of which Defence 5.1 4.6 +12% EBIT* before one-off 0.6 1.3 -50% Order intake 30.8 17.2 +79% in € bn June 2010 Dec. 2009 Change Total Order book** 454.5 389.1 +17% of which Defence 56.6 57.3 -1% • Higher level of com
Slide 7: H1 2010 EBIT* Before One-off
H1 2010 EBIT* Before One-off 7 EADS Airbus in € bn Group Division EBIT* before one-off 2010 0.64 0.26 % Revenues 3.2 % 1.9 % One-off impacts: • Eurocopter one time effects include a charge and margin adjustment for (0.07) NH90, restructuring and KUH technical milestone recognition • Currency effect
Slide 8: H1 2010 Profit & Loss Highlights
H1 2010 Profit & Loss Highlights 8 H1 2010 H1 2009 in % of in % of €m Revenues €m Revenues EBIT* 406 2.0% 888 4.4% Self-financed R&D** 1,301 6.4% 1,172 5.8% EBIT* before R&D 1,707 8.4% 2,060 10.2% Interest result (114) (0.6%) (40) (0.2%) Other financial result 5 0% (267) (1.3%) Taxes (88) (0.4%) (17
Slide 9: Currency Hedge Policy
Currency Hedge Policy 9 • Approximately 50% of EADS’ US$ revenues naturally hedged by US$ procurement; • In H1 2010, hedges of $ 9.4 bn* matured at an average hedge rate of € 1 = $ 1.34; • In H1 2010, new hedge contracts of $ 20.6 bn** were added at an average rate of € 1= $ 1.34***. EADS hedge port
Slide 10: Free Cash Flow
Free Cash Flow 10 in € m H1 2010 H1 2009 Net cash position at the beginning of the period 9,797 9,193 Gross Cash Flow from Operations* 874 1,351 Change in working capital (815) (1,898) of which Customer Financing (267) (221) Cash used for investing activities** (796) (622) of which Industrial Capex
Slide 11: Contents
Contents 11 Group Highlights Financial Highlights Divisional Performance Guidance EADS – H1 2010 earnings
Slide 12: Airbus Division
Airbus Division 12 Airbus Division (after interco elimination) Airbus Commercial Airbus Military (excl. A400M) (Former MTAD, incl. A400M) €m H1 2010 H1 2009 H1 2010 H1 2009 H1 2010 H1 2009 restated restated b) Deliveries 258 a/ca) 259 a/c 250 a/c 254 a/c 9 a/c 5 a/c Revenues 13,853 13,951 12,965 13,
Slide 13: Airbus Division
Airbus Division 13 Airbus Commercial (excl. A400M) Revenues stable EBIT* -67% • 5 SA aircraft delivered under operating lease; • Small positive pricing impact net of escalation; • Favourable mix effect; • Impact from fx effects (€ - 0.5 bn) see slide 23; • Impact from fx (€ - 0.8 bn). • Higher R&D d
Slide 14: Eurocopter
Eurocopter 14 Market €m H1 2010 H1 2009 • Commercial market remains uncertain: 140 net orders, stable with H1 09. Cancellation trend slowing; Revenues 2,109 1,908 • 249 h/c deliveries, including 13 NH90 and Tiger, R&D self-financed** 94 78 +10 compared to H1 09; in % of revenues 4.5% 4.1% • 2010 del
Slide 15: Astrium
Astrium 15 €m H1 2010 H1 2009 Revenues -4% • Positive contribution from defence and telecom services; Revenues 2,110 2,194 • H1 09 included one-time catch up effect for in-orbit incentive R&D self-financed 31 32 schemes (€ + 0.2 bn). in % of revenues 1.5% 1.5% EBIT* 106 99 EBIT* +7% in % of revenues
Slide 16: Defence & Security
Defence & Security 16 €m H1 2010 H1 2009 Revenues stable • Higher volume from core and export programmes in Revenues 2,183 2,161 Eurofighter and Missiles; R&D self-financed 123 90 • Lower volume in service activities. in % of revenues 5.6% 4.2% EBIT* 110 143 EBIT* -23% in % of revenues 5.0% 6.6% • S
Slide 17: Other Businesses
Other Businesses 17 €m H1 2010 H1 2009 Revenues +15% • Higher deliveries and asset management activity at ATR; Revenues 554 480 • Lower aerostructures revenues at Sogerma; R&D self-financed 2 2 • LUH ramp-up with 22 deliveries in H1 10. in % of revenues 0.4% 0.4% EBIT* 0 2 EBIT* breakeven in % of re
Slide 18: Contents
Contents 18 Group Highlights Financial Highlights Divisional Performance Guidance EADS – H1 2010 earnings
Slide 19: 2010 Outlook
19 2010 Outlook Commercial Cycle • Airbus gross orders above 400 at the end of 2010; • Eurocopter civil market and related order stream sluggish; • Airbus deliveries around 500; Eurocopter slightly below the 2009 level. At €1: $1.35 Revenues • EADS revenues more than € 44 bn. EBIT* before one off •
Slide 20: Appendix
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Slide 21: Refinement of natural hedging strategy: Trade Liabilities
Refinement of natural hedging strategy: 21 Trade Liabilities • Natural hedging strategy further refined in line with IFRS, impacting reported EBIT* and other financial result but with no impact on EBIT* before one-off and net income. • A natural hedge relationship is identified since April 1, 2010 b
Slide 22: Revaluation of A400M provision with USD costs
Revaluation of A400M provision with USD costs 22 • Significant part of A400M USD costs: • EADS separates derivatives with a nominal amount of 1.4 billion USD, embedded in supplier host contracts which relate to the A400M programme. • Changes in the fair value of these embedded derivatives in the amo
Slide 23: H1 2010 Forex EBIT* Impact Bridge
H1 2010 Forex EBIT* Impact Bridge 23 Forex impact on EBIT* ( in € bn ) BRIDGE • Revaluation of Airbus Commercial LMC provisions (0.01) • Revaluation of Airbus Military A400M provision (0.04) • Deterioration of hedge rates (€ : $ 1.22 to 1.34) (0.65) out of which Airbus ~(0.62) • Other one-off forex
Slide 24: H1 2009 EBIT* Before One-off
H1 2009 EBIT* Before One-off 24 EADS Airbus in € bn Group Division EBIT* before one-off 2009 1.28 0.91 % Revenues (excl. A400M recoverable part of the costs: € 295 m) 6.4% 6.6% One-off impacts: • Impact of A400M Early Stage Accounting** (0.08) (0.08) • Revaluation of all LMCs ($ and £)*** (0.06) (0.
Slide 25: H1 2010 Financial Highlights
H1 2010 Financial Highlights 25 H1 2010 H1 2009 in % of in % of €m Revenues €m Revenues Revenues 20,308 20,195 self-financed R&D** 1,301 6.4% 1,172 5.8% EBITDA* 1,148 5.7% 1,663 8.2% EBIT* 406 2.0% 888 4.4% EBIT* before R&D 1,707 8.4% 2,060 10.2% Net income 185 0.9% 378 1.9% EPS*** € 0.23 € 0.47 Net
Slide 26: EADS Shareholding structure
Shareholding structure 26 Contractual Partnership Free float SOGEADE SEPI Daimler Lagardère & incl. Minor direct holdings: French French State: 0.06% State Treasury shares: 0.38% 22.46% 5.48% 22.46%* 50.4% 49.6% as at 30th June 2010 EADS * On February 9, 2007, Daimler reached an agreement with a con
Slide 27: Expected EADS Average Hedge Rates € vs. $
Expected EADS Average Hedge Rates € vs. $ 27 Average hedge rates 1.50 1.40 1.38 1.36 1.35 1.35 1.33 1.30 1.32 1.29 1.26 1.25 1.19 1.20 2009 Average FY 2009 2010e Average FY 2010e 1.10 Q1 Q2 Q3 Q4 FY EADS – H1 2010 earnings
Slide 28: Provision Consumption excluding A400M
Provision Consumption excluding A400M 28 (as at 31 Dec. 2009) 3 2 in Bn € 1 0 Closing 2009 < 2013 2013- 2014 > 2014 Restructuring P ro visio ns Liquidated Damages LM C EADS – H1 2010 earnings
Slide 29: Airbus Customer Financing
Airbus Customer Financing 29 Active exposure management Additions and Disposals to Airbus customer financing gross exposure in $ bn Net Exposure fully 2.5 provisioned Additions Sell Down Amortisation 1.5 1.4 Net 0.5 1.5 1.0 0.9 0.3 0.6 0.4 Gross 0.6 0.5 1.5 0.4 0.8 Exposure (0.9) (0.7) (1.3) Exposur
Slide 30: Customer Financing Exposure
Customer Financing Exposure 30 100% AIRBUS 50% ATR 100% EC in € m June 2010 Dec.2009 June 2010 Dec.2009 June 2010 Dec.2009 Closing rate € 1 = $ 1.23 $ 1.44 Total Gross exposure 1,715 1,260 139 159 91 76 of which off-balance sheet 346 335 44 47 52 47 Estimated value of collateral (1,094) (772) (126)
Slide 31: Q2 2010 Key Figures
Q2 2010 Key Figures 31 in € bn Q2 2010 Q2 2009 Revenues 11.4 11.7 EBIT* 0.3 0.7 FCF before customer financing** 0.5 (0.3) New orders 16.4 7.8 Revenues EBIT* in € m Q2 2010 Q2 2009 Q2 2010 Q2 2009 Airbus 7,589 8,068 97 430 Eurocopter 1,311 1,150 45 61 Astrium 1,186 1,290 65 63 DS 1,255 1,227 89 122 H
Slide 32: EBIT* Calculation
EBIT* Calculation 32 in € m H1 2010 H1 2009 EBIT* 406 888 Exceptionals: Disposal (fixed assets in other income) 0 (1) Fair value depreciation (22) (26) Profit before finance cost 384 861 and income taxes EADS – H1 2010 earnings * Pre-goodwill impairment and exceptionals
Slide 33: Net Income pre-exceptionals
Net Income pre-exceptionals 33 in € m H1 2010 H1 2009 Net income* 200 397 EPS* (1) € 0.25 € 0.49 Exceptionals: Fair value adjustment (22) (27) Related tax impact 7 8 Net income 185 378 EPS (1) € 0.23 € 0.47 * Pre-goodwill impairment and exceptionals; the term “exceptionals” refers to such items as d
Slide 34: Net Cash Position
Net Cash Position 34 in € m June 2010 Dec. 2009 June 2009 Gross cash 13,511 15,093 12,373 Financing Debts Short-term Financing Debts* (1,618) (2,429) (2,319) Long-term Financing Debts (3,029) (2,867) (1,948) Reported Net cash 8,864 9,797 8,106 Airbus non-recourse debt 669 652 668 Net cash excl. non-
Slide 35: EADS: Strong Liquidity Position
EADS: Strong Liquidity Position 35 as at 30 June 2010 • Maturity 2012 € 3.0 bn • Undrawn • Fully committed by 32 banks Credit Facility • No financial covenants • No MAC clause € 4.6 bn EMTN progamme • Long term rating : A1 / BBB+ Financing Liabilities • CDS in line with its rating/sector (incl. € 1.
Slide 36: Balance Sheet Highlights: Assets
Balance Sheet Highlights: Assets 36 in € m June 2010 Dec. 2009 Non-current Assets 40,656 37,792 of which Intangible & Goodwill 11,151 11,060 of which Property, plant & equipment 12,940 12,508 of which Investments & Financial assets 5,062 4,724 of which positive hedge mark-to-market 301 1,307 of whic
Slide 37: Balance Sheet Highlights: Liabilities
Balance Sheet Highlights: Liabilities 37 in € m June 2010 Dec. 2009 Total Equity 5,239 10,641 of which OCI (Other Comprehensive Income) (2,494) 2,646 of which Non-controlling interests 90 106 Total Non-current liabilities 33,950 27,287 of which pensions 5,525 5,080 of which other provisions 3,235 3,
Slide 38: Quarterly Revenues Breakdown (cumulative)
Quarterly Revenues Breakdown 38 (cumulative) in € m Q1 H1 9m FY 2010 2009 2010 2009 2010 2009 2010 2009 Airbus Division 6,264 5,883 13,853 13,951 . 20,193 . 28,067 Thereof Airbus Comm.* 5,989 5,470 12,965 13,204 . 18,949 . 26,370 Thereof Airbus Military 384 456 1,007 855 . 1,637 . 2,235 Eurocopter 7
Slide 39: Quarterly EBIT* Breakdown (cumulative)
Quarterly EBIT* Breakdown 39 (cumulative) in € m Q1 H1 9m FY 2010 2009 2010 2009 2010 2009 2010 2009 Airbus Division 7 89 104 519 . 523 . (1,371) Thereof Airbus Comm.** 6 205 241 737 . 743 . 386 Thereof Airbus Military 1 (116) (161) (218) . (216) . (1,754) Eurocopter 26 38 71 99 . 165 . 263 Astrium
Slide 40: Quarterly Order-intake Breakdown (cumulative)
Quarterly Order-intake Breakdown 40 (cumulative) in € m Q1 H1 9m FY 2010 2009 2010 2009 2010 2009 2010 2009 Airbus Division 11,158 1,792 24,542 6,194 . 11,335 . 23,904 Thereof Airbus Comm.* 11,035 1,667 24,302 6,025 . 10,487 . 23,461 Thereof Airbus Military 146 164 285 247 . 1,049 . 637 Eurocopter 1
Slide 41: Quarterly Order-book Breakdown (cumulative)
Quarterly Order-book Breakdown 41 (cumulative) in € m Q1 H1 9m FY 2010 2009 2010 2009 2010 2009 2010 2009 Airbus Division 366,051 365,412 405,027 343,584 . 332,035 . 339,722 Thereof Airbus Comm.* 346,182 345,123 385,677 323,497 . 311,674 . 320,321 Thereof Airbus Military 21,155 21,999 20,773 21,680