24 Feb 2016. Airbus Group Reports Solid 2015 Results, With Guidance Achieved.
Revenues up six percent to € 64 bn; EBIT* before one-off € 1 bn
- Earnings per share rise 15 percent to € 43
- Proposed 2015 dividend € 30 per share, up eight percent from 2014
- Free cash flow € 8 bn, including € 1.7bn proceeds from Dassault Aviation stake sale
- Record order backlog supports ramp-up
- Guidance 2016 confirms outlook
Airbus Group SE (stock exchange symbol: AIR) reported solid 2015 results with its guidance achieved for all key performance indicators, reflecting continued operational improvement.
“The 2015 results reflect our solid financial and operational performance. We have delivered on our commitments and have maintained our outlook for 2016 and beyond,” said Tom Enders, Airbus Group Chief Executive Officer. “Revenues and EBIT increased from a year earlier, delivering earnings per share growth while free cash flow improved. The record order book supports our commercial aircraft ramp-up plans and we are driving operational efficiency. We have now decided to increase the A330 production rate back to seven aircraft a month in 2017. There was also strong momentum in defence and space, with a book-to-bill ratio above 1. Operational highlights included reaching breakeven on the A380 programme for the first time, delivering 14 A350s in the first year of industrialisation and receiving dual certification for the A320neo. We remain focused on programme execution and managing the challenges we face with the acceleration of the A350 and A400M ramp-ups and A320neo transition. We will increase shareholder returns with a proposed dividend of 1.30 euros a share and our current share buyback.”
Group order intake(1) in 2015 was € 159bn (2014: € 166bn), with the order book(1) value reaching a record € 1,006bn as of 31 December 2015 (year-end 2014: € 858 bn). Airbus received 1,080 net commercial aircraft orders (2014: 1,456 net orders), including 136 A330s. The 2015 gross orders of 1,190 aircraft included three A380s for new customer ANA. After 50 governmental helicopter cancellations, Airbus Helicopters received 333 net orders (2014: 369 units) including 107 H145s and 36 H175s. Order intake by value rose 18 percent at Airbus Defence and Space, with bookings including 14 additional A330 MRTTs and five telecommunications satellites. During the year, an agreement was also signed with OneWeb for 900 small telecommunications satellites.
Group revenues increased six percent to € 64.5bn (2014: € 60.7bn). This was mainly driven by Commercial Aircraft which registered an eight percent rise in revenues on higher deliveries of 635 aircraft (2014: 629 units), including 14 A350 XWBs, and the strengthening
U.S. dollar. Despite lower overall deliveries of 395 units (2014: 471 units), Helicopters’ revenues rose four percent and mainly reflected a higher level of services activities. Defence and Space’s revenues were broadly stable despite the de-consolidation of launcher revenues with the creation of the Airbus Safran Launchers Joint Venture’s first phase. A total of 11 A400M military transport aircraft were delivered in 2015.
Group EBIT* before one-off(3) – an indicator capturing the underlying business margin by excluding material non-recurring charges or profits caused by movements in provisions related to programmes and restructurings or foreign exchange impacts – rose to € 4,132 m (2014: € 4,066 m) with increases in all Divisions compensating the lower Dassault Aviation contribution.
Commercial Aircraft’s EBIT* before one-off rose 10 percent to €2,780 m (2014: € 2,529m), reflecting a solid operational performance that included the A380 breakeven and cost control. Helicopters’ EBIT* before one-off increased to € 427m (2014: € 413m), as lower deliveries were compensated by higher services activities, a favourable mix and progress on the Division’s transformation plan. Defence and Space’s EBIT* before one- off rose 15 percent to € 1,060m (2014: € 92 m), driven by strong programme execution across all business lines and progress with its transformation plan.
Group self-financed R&D expenses totalled € 3,460m (2014: €3,391m).
The A350 XWB production ramp-up is accelerating, with a strong focus on the supply chain performance, controlling and reducing the level of outstanding work and managing recurring costs to target. This remains challenging. Joint European and U.S. certification for the A320neo was received in the fourth quarter of 2015 with the first delivery following in January 2016. Despite some schedule setbacks, the A320neo ramp-up preparation is underway with the focus on maturity and service readiness for early operations in line with customer expectations. Deliveries will be back-loaded this year. The A400M programme is in the ramp-up phase. Industrial efficiency and military capability remains a challenge during this phase.
The Group is working with its customers to agree a schedule of military capability enhancement and deliveries as well as reviewing the escalation formulae(5). Industrial recovery measures have been identified and the Group is focused on delivery, but risk remains.
Reported EBIT*(3) rose slightly to € 4,086m (2014: € 4,040m), with net one-offs totalling € -46m and comprising:
- A net charge of € 635m related to the dollar pre-delivery payment mismatch and balance sheet revaluation driven by the devaluation of the euro versus the dollar compared to historical rates;
- A € 290m net charge related to the A400M programme which is unchanged compared to the first half 2015 results disclosure;
- A net gain of € 90 m linked to divestments in Defence and Space and of Commercial Aircraft subsidiary CIMPA;
- A gain of € 41m after reassessing and adjusting the provision for the restructuring at Defence and Space which is progressing well;
- A € 748 m net gain from the sale of an 18.75% stake in Dassault Aviation(6) in the first half of
Net income(4) and earnings per share (EPS) increased 15 percent to € 2,696 m (2014: € 2,343m) and € 3.43 (2014: € 2.99) respectively. The finance result was € -687m (2014: € -778m) and included one-offs totalling € -218 m, mainly from a negative foreign exchange revaluation. 2015 net income and EPS were positively influenced by a lower effective tax rate following tax reduced capital gains from divestments.
Based on the EPS performance, Airbus Group’s Board of Directors will propose to the Annual General Meeting the payment of a 2015 dividend of € 1.30 per share on 4 May 2016 (FY 2014: € 1.20 per share). The record date shall be 3 May 2016. “Given the solid financial and operational progress during 2015, we are proposing an improved dividend of € 1.30 a share, which represents an eight percent increase over 2014. This is in line with the top end of our stated dividend policy,” said Airbus Group Chief Financial Officer Harald Wilhelm.
Free cash flow before mergers and acquisitions improved to € 1,175 m (2014: € 1,109m), reflecting the solid operational performance, healthy pre-delivery payment inflows and ongoing efforts to control working capital during the programme ramp-up phase. Proceeds of around € 1.7bn in the first half of 2015 from the sale of Dassault Aviation shares boosted free cash flow to € 2,825m (2014: € 2,002m). The net cash position at the end of 2015 was € 10.0 bn (year-end 2014: € 9.1bn) after a 2014 dividend payment of € 945m (2013: € 587m), € 264m spent under the share buyback and a pension contribution of € 217m. The gross cash position on 31 December 2015 was € 19.1 bn (year-end 2014: € 16.4bn).
Outlook
As the basis for its 2016 guidance, Airbus Group expects the world economy and air traffic to grow in line with prevailing independent forecasts and assumes no major disruptions.
2016 earnings and free cash flow guidance is based on a constant perimeter.
In 2016, Airbus expects to deliver more than 650 aircraft, and the commercial order book is expected to grow.
In 2016, before M&A, Airbus Group expects stable EBIT* before one-off and EPS* before one-off compared to 2015.
In 2016, before M&A, Airbus Group expects to deliver stable free cash flow compared to 2015.
* Airbus Group 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 former EADS merger and Airbus Combination, as well as impairment charges thereon.
Airbus Group – Full-Year (FY) Results 2015
(Amounts in euro)
| Airbus Group | FY 2015 | FY 2014 | Change |
| Revenues, in ms thereof defence, in ms | 64,450
11,512 |
60,713
10,993 |
+6%
+5% |
| EBITDA (2), in ms | 6,528 | 6,147 | +6% |
| EBIT before one-offs (3), in ms | 4,132 | 4,066 | +2% |
| EBIT (3), in ms | 4,086 | 4,040 | +1% |
| Research & Development expenses, in ms | 3,460 | 3,391 | +2% |
| Net Income (4), in ms | 2,696 | 2,343 | +15% |
| Earnings Per Share (EPS) (4) | 3.43 | 2.99 | +15% |
| Free Cash Flow (FCF), in ms | 2,825 | 2,002 | +41% |
| Free Cash Flow before M&A, in ms | 1,175 | 1,109 | +6% |
| Free Cash Flow
before Customer Financing, in ms |
2,975 | 1,894 | +57% |
| Dividend per share(7) | 1.30 | 1.20 | +8% |
| Order Intake (1), in ms | 158,967 | 166,430 | -4% |
| Airbus Group | 31 Dec
2015 |
31 Dec
2014 |
Change |
| Order Book (1), in ms thereof defence, in ms | 1,005,864
38,411 |
857,519
42,240 |
+17%
-9% |
| Net Cash position, in ms | 10,003 | 9,092 | +10% |
| Employees | 136,574 | 138,622 | -1% |
| by Division | Revenues | EBIT (3) | ||||
| (Amounts in ms of Euro) | FY 2015 | FY 2014 | Change | FY 2015 | FY 2014 | Change |
| Commercial Aircraft | 45,854 | 42,280 | +8% | 2,301 | 2,671 | -14% |
| Helicopters | 6,786 | 6,524 | +4% | 427 | 413 | +3% |
| Defence and Space | 13,080 | 13,025 | 0% | 745 | 409 | +82% |
| Headquarters / Eliminations | -1,270 | -1,116 | – | 613 | 547 | – |
| Total | 64,450 | 60,713 | +6% | 4,086 | 4,040 | +1% |
| by Division | EBIT before one-offs(3) | ||
| (Amounts in ms of Euro) | FY 2015 | FY 2014 | Change |
| Commercial Aircraft | 2,780 | 2,529 | +10% |
| Helicopters | 427 | 413 | +3% |
| Defence and Space | 1,060 | 920 | +15% |
| Headquarters / Eliminations | -135 | 204 | – |
| Total | 4,132 | 4,066 | +2% |
| by Division | Order Intake (1) | Order Book (1) | ||||
| (Amounts in ms of Euro) | FY 2015 | FY 2014 | Change | 31 Dec
2015 |
31 Dec
2014 |
Change |
| Commercial Aircraft | 139,062 | 150,085 | -7% | 952,450 | 803,633 | +19% |
| Helicopters | 6,168 | 5,469 | +13% | 11,769 | 12,227 | -4% |
| Defence and Space | 14,440 | 12,225 | +18% | 42,861 | 43,075 | 0% |
| Headquarters / Eliminations | -703 | -1,349 | – | -1,216 | -1,416 | – |
| Total | 158,967 | 166,430 | -4% | 1,005,864 | 857,519 | +17% |
Airbus Group – Fourth Quarter Results (Q4) 2015
| Airbus Group | Q4 2015 | Q4 2014 | Change |
| Revenues, in ms | 21,485 | 20,216 | +6% |
| EBIT before one-offs (3), in ms | 1,328 | 1,476 | -10% |
| EBIT (3), in ms | 1,140 | 1,457 | -22% |
| Net Income (4), in ms | 796 | 944 | -16% |
| Earnings Per Share (EPS) (4) | 1.02 | 1.21 | -16% |
| by Division | Revenues | EBIT (3) | ||||
| (Amounts in ms of Euro) | Q4 2015 | Q4 2014 | Change | Q4 2015 | Q4 2014 | Change |
| Commercial Aircraft | 14,735 | 13,460 | +9% | 399 | 898 | -56% |
| Helicopters | 2,363 | 2,264 | +4% | 186 | 172 | +8% |
| Defence and Space | 4,697 | 4,828 | -3% | 596 | 39 | +1,428% |
| Headquarters / Eliminations | -310 | -336 | – | -41 | 348 | – |
| Total | 21,485 | 20,216 | +6% | 1,140 | 1,457 | -22% |
| by Division | EBIT before one-offs(3) | ||
| (Amounts in ms of Euro) | Q4 2015 | Q4 2014 | Change |
| Commercial Aircraft | 554 | 749 | -26% |
| Helicopters | 186 | 172 | +8% |
| Defence and Space | 629 | 550 | +14% |
| Headquarters / Eliminations | -41 | 5 | – |
| Total | 1,328 | 1,476 | -10% |
Q4 2015 revenues rose six percent compared to Q4 2014, driven mainly by a favourable foreign exchange impact and higher A350 deliveries at Commercial Aircraft.
Q4 2015 EBIT* before one-off decreased as expected, driven mainly by higher R&D at
Commercial Aircraft. It was further reduced by the lower Dassault Aviation contribution in the Headquarters/ Eliminations line.
Q4 2015 reported EBIT* declined 22% to € 1,140m. Reflecting net one-offs of € -188m, it includes the negative one-off from foreign exchange from the dollar pre-delivery payment mismatch and balance sheet revaluation of € -275m. Q4 2014 reported EBIT* included net one-offs of € -19m.
Q4 2015 net income was positively influenced by a low Q4 effective tax rate following tax reduced capital gains on divestments in Commercial Aircraft and in Defence and Space.
Footnotes:
Contributions from commercial aircraft activities to Order Intake and Order Book based on list
- Earnings before interest, taxes, depreciation, amortisation and
- Earnings before interest and taxes, pre goodwill impairment and
- Airbus Group continues to use the term Net Income. It is identical to Profit for the period attributable to equity owners of the parent as defined by IFRS
- Long-term contracts generally contain a contract clause which escalates the price of the contract in line with a formula reflecting an approximate escalation of the input costs – labour and Various indexes are used depending on the mix of input costs.
- The remaining Dassault Aviation participation is now recorded as an asset held for sale and the result of the period of Dassault Aviation will no longer contribute to the Headquarters earnings line, except for dividends to be received and the capital gain from future sales of Dassault Aviation
- To be proposed to the Annual General Meeting