Slide 1: Delivering value in a challenging environment
Delivering value in a challenging environment Analyst Conference call - Amsterdam - September 20th, 2001
Slide 2: Agenda
• Delivering value in a challenging environment • H1 2001 Financials • Conclusions
Slide 3: Delivering value and managing challenges
Delivering value and managing challenges Primary drivers of EADS ■ Solid financials ■ Dynamic commercial policy ■ Ready to handle the challenging environment ■ Comprehensive industry-leading defense portfolio ■ Ability to manage commercial aerospace cycles A pro-active approach
Slide 4: Strong Fundamentals
Strong Fundamentals H1 2001 Actual H1 2001 H1 2001 (Airbus 100% consolidated) Actual excl. AirbusUK vs H1 2000** vs H1 2000** pro-forma pro-forma Revenues € 14 bn + 33% + 14% EBIT * € 764 m + 38% + 18% Free Cash Flow € 526 m (€ 168 m) Net Income * € 456 m (€ 115 m) EPS * € 0.56 (€ 0.14) New orders €
Slide 5: Profit & loss highlights
Profit & loss highlights H1 2001 Pro forma H1 2000 in % of in % of € million revenues € million revenues Revenues 14,043 10,585 Self-financed R&D 853 6.1% 594 5.6% EBIT * 764 5.4% 553 5.2% Operating income after goodwill/exceptional 2,055 217 Financial result (53) (644) of which due to hedge account
Slide 6: Revenues and EBIT by division
Revenues and EBIT by division H1 2001 Pro forma H1 2000 € million EBIT* EBIT* EBIT* EBIT* Revenues margin Revenues margin Airbus** 9,982 797 8.0% 6,821 524 7.7% Military Transport Aircraft 195 (21) (10.8%) 74 (35) (47.3%) Space 1,054 29 2.8% 1,084 25 2.3% Defence & Civil Systems 1,358 (128) ( 9.4%)
Slide 7: Dynamic marketing policy leading to success and future growth
Dynamic marketing policy leading to success and future growth ■ Airbus : 250 net orders worth € 39 bn in H1 2001; increased market share to 68% ■ A380 : 67 customer commitments on which 48 firm orders worth € 16 bn ■ A400M : 9 European nations committed to this program: worth over € 10 bn (EADS shar
Slide 8: Managing change to deliver value
Managing change to deliver value Business Development Operational milestones ■ Creation of Airbus SAS ■ Strong $ secured through hedging = €100 m additional policy: 38.5 Bn $ hedged value creation per year ■ Value Creation projects by 2004 implemented and fully on track => ■ Final shareholder € 60 m
Slide 9: EADS Defence product portfolio: Good fit with changing market demand
EADS Defence product portfolio: Good fit with changing market demand European Defence Group n°2 - Market Leader in key segments with an orderbook of € 18.5 bn representing more than 3 years of revenues Deterrence and Survivability Power projection LAUNCH VEHICLES: § BALLISTIC MSL C4ISR MBDA: MISSILE
Slide 10: EADS commercial aircraft business
EADS commercial aircraft business ■ Record backlog (€ 158 bn) with a large base of customers and a balanced regional breakdown ■ Underlying business growth secured by : long-term traffic growth replacement of obsolete fleet, market preference for Airbus products ■ Strong barriers to entry High visib
Slide 11: Managing risk and opportunity; operational flexibility: The Airbus Example
Managing risk and opportunity; operational flexibility : The Airbus Example • Subcontracting policy (38%-40% of total production costs) and dynamic make-or-buy • Internal Workforce flexibility : 15% flexibility by term contracts, overtime, flex time,… • Production cycles reduced from 18 to 9 months
Slide 12: Agenda
• Delivering value in a challenging environment • H1 2001 Financials • Conclusions
Slide 13: Development of net cash
Development of net cash € million pro-forma H1 2001 H1 2000 Net cash position as of Dec. 31st 2,143 (946) Change due to Airbus GIE consolidation (838) Net cash position as of January 1st 1,305 (946) Cash flow from operations* 1,220 791 Cash used for invest. activities (694) (959) Free cash flow 526
Slide 14: Balance sheet
Balance sheet € million Jun. 2001 Jan.2001* Dec. 2000 Fixed Assets 27,427 26,926 20,894 Current Assets 17,954 18,467 16,745 Deferred Tax Assets 5,008 3,922 3,151 Pre-paid Expenses 752 758 654 Total Assets 51,141 50,073 41,444 Shareholders´ Equity 9,852 11,957 10,250 Minority interest 791 1,152 221 T
Slide 15: Conclusions
Conclusions ■ Solid fundamentals : financials on track, robust and balanced backlog, solid underlying long-term prospects ■ High visibility growth from defence products as contracts in backlog are now in transition from development to production ■ Flexible production capacity to adapt to market dema
Slide 16: Income Statement
APPENDIX 1 : Income Statement € million H1 2001 Pro forma * excluding exceptional depreciation on fair value H1 2000 ** after goodwill amortisation and exceptionals €m % €m % Revenues 14,043 100 10,585 100 Cost of sales* (11,159) (79) (8,341) (79) Gross margin pre- exceptionals 2,884 21 2,244 21 Sel
Slide 17: Net Income and EPS pre-goodwill and exceptionals
APPENDIX 2 : Net Income and EPS pre-goodwill and exceptionals Pro forma €m H1 2001 H1 2000 Net income (group share) 1,657 (359) Goodwill amortisation 317 198 Exceptionals : Extraordinary Gain on Airbus SAS (1,934) 0 Fair value adj. on fixed assets 127 74 Fair value adj. on inventories 165 0 Tax impa
Slide 18: EBIT pre-goodwill and exceptionals
APPENDIX 3 : EBIT pre-goodwill and exceptionals Pro forma €m H1 2001 H1 2000 Operating income 2,055 217 Income from investments 34 64 Goodwill amortization 317 198 Exceptionals : Gain Airbus UK (1,934) 0 Fair value adj. on fixed assets 127 74 Fair value adj. on inventories 165 0 EBIT * 764 553 * pre
Slide 19: Financial result breakdown
APPENDIX 4 : Financial result breakdown (no more significant impact of macro hedging) € million H1 2000 Pro forma H1 2000 June 30 closing rate Euro versus $ 0.85 0.95 Interest income (expense) 47 (65) Income from investments 34 64 Other financial result* (134) (643) Total financial result (53) (644)
Slide 20: Balance sheet
APPENDIX 5 : Balance sheet € million Jun. 2001 Jan. 2001* Dec. 2000 Fixed Assets 27,427 26,926 20,894 of which intangible assets 11,785 12,096 8,165 of which property, plant & equipment 10,591 9,573 8,120 of which financial assets 5,051 5,257 4,609 Current Assets 17,954 18,467 16,745 of which cash &
Slide 21: AIC creation major impacts on financials
APPENDIX 6 AIC creation major impacts on financials ■ Additional Goodwill = € 3.9 bn (amortised over 20 years) ■ Additional fair value adjustment = € 0.5 bn ■ Additional value creation by 2004 = € 100 m per year ■ Extraordinary non-cash and non taxable profit = € 1.9 bn ■ Net cash injection from BAE
Slide 22: Equity reconciliation from Dec. 2000 to June 2001
APPENDIX 7 Equity reconciliation from Dec. 2000 to June 2001 €m H1 2001 Equity as of Dec. 31 2000 10,250 Net Income 1,657 Dividends paid (404) Marked-to-market of micro-hedging portfolio (IAS39) net of tax (1,895) Others 244 Equity as of June 30 2001 9,852
Slide 23: Goodwill and exceptionals
APPENDIX 8 : Goodwill and exceptionals Amortisation charge Value as of amortisation €m Jun. 30 2001 2000 H1 2001 e2001* e2002* period Extraordinary profit 0 1,934 1,934 0 Goodwill 11.667 (429) (317) (670) (670) 20 yrs Fair value on fixed assets 1,658 (176) (127) (200) (200) 5-25 yrs Fair value on in