EADS AND FINMECCANICA REPORT EARNINGS
EADS and Finmeccanica reported results this week which showed weaknesses in the €opean market in the coming months which was reflected in the drop in both Company’s share prices in spite of reassurances from management. EADS ended the week on €9.78 and Finmeccanica on €8.74 a 4.22% drop on the day.
10 March 2009. EADS (stock exchange symbol: EAD) achieved satisfying results for the full year 2008 delivering an EBIT* of €2.8bn. The Group benefited from its strong underlying performance and foreign currency effects while dealing with challenges in critical programmes.
EADS’ order book achieved a new record of more than €400bn, Net Cash reached an unprecedented level of € 9.2bn thanks to better than expected Free Cash Flow generation.
EADS is in a good position to face the crisis, although the Group is facing a low level of visibility for the second half of 2009 and beyond due to the global economy and financial market weakness which is increasingly impacting air traffic.
“We have achieved a number of significant accomplishments. The Group achieved a solid EBIT* and an outstanding cash performance. We made
significant headway in reshaping the company,“ said Louis Gallois, CEO of
EADS. “Even if the A400M programme required enormous attention, the
Group has regained stability in 2008 and is proving to be resilient in the face of the turbulent global economic environment. 2009 will be a very challenging year for our industry, but we can rely on an extremely motivated workforce and an excellent portfolio of products. Thanks to our large and well diversified order book 2009 deliveries should remain at high levels, and will give us room for manoeuvre. Cash protection is key.”
The Group achieved high levels of deliveries in 2008: Airbus handed over
483 aircraft to its customers – more than ever before. That figure includes 12 A380s. €ocopter also achieved a new record, delivering 588 helicopters.
EADS recorded strong order intake across its product portfolio. Airbus received 777 net aircraft orders and €ocopter booked 715 new helicopters. Good order intake in the defence businesses especially for tankers led to a stable defence order book of around € 55bn, providing the basis for a more balanced business in the years to come. The Group’s space and defence businesses continued to grow profitability demonstrating the robust competitive position they have achieved through innovation and efficiency measures.
In January 2009, EADS announced it had proposed to the launch nations a new approach for the A400M aimed at finding a way forward for this
programme. With this proposed new approach, the first delivery of the
A400M would occur three years after its first flight. In line with complex military development programmes, EADS suggested to resume series
production only once adequate maturity is reached as indicated by flight test results. EADS continues to address the industrial challenges of this
programme and continues to elaborate their impacts on the A400M delivery
schedule. EADS is still working with the suppliers of the propulsion system to determine a reliable date of engine availability and a first flight date for the A400M. On a wider level, EADS is working with subcontractors for the engines and mission critical systems to update its own delivery schedule.
In 2008, EADS’ EBIT* was impacted by €-704m related to the A400M programme. EADS will only be able to update all of the financial consequences of a revised industrial plan, once the availability of the engines and mission critical systems is firmly determined or once OCCAR’s position on the proposal made by EADS is known.
As already communicated with the 9-months 2008 results, the unavailability of a reliable schedule update on the A400M programme led EADS to apply the early stage method of accounting until certain events allow the resumption of the estimate at completion method. *