10 MAR 03. EADS lost €299m($325.9m), (2001: profit of €1.37bn ($1.49bn) in 2002 and said it plans to cut 1,700 jobs in its space division.
The company, which owns 80 percent of Airbus, also said it expects to match its 2002 operating results this year, revenue fell to €29.9bn ($32.6bn), (2001: €30.8bn).
“We have prepared EADS to weather a possible further deterioration of the business climate in 2003. Our ability to rapidly respond to changes in the business environment is proving a huge asset in the current circumstances”, the EADS CEOs Philippe Camus and Rainer Hertrich said when the company released its 2002 annual results on Monday. In 2002, EADS achieved solid results in both its commercial and defence businesses and maintained its strong Operating Cash Flow and Net Cash position.
While the Airbus and Aeronautics Divisions were the main contributors to EADS’ profitability, the Defence and Civil Systems Division achieved its planned turnaround, which was stronger than expected. EADS’ space division remained a financial drag in 2002, and EADS said it plans to cut another 1,700 jobs on top of 1,600 cuts announced last year. The size of the total work force in the division was not immediately available.
“Despite the difficult environment, 2002 was another year of commercial and financial success. As in the previous year, we are proud to have again met or exceeded all our financial targets under these circumstances”, the EADS CEOs, Philippe Camus and Rainer Hertrich, commented.
“Looking forward, we have positioned EADS to master the new challenges ahead. We are continuously focusing on means to further improve management efficiency in order to generate cash and to reduce cost. In that respect, Divisions and Headquarters have all done their share in 2002”, the CEOs said. “In addition, as ever we continue to pursue new order opportunitiebased on our superior product portfolio. This means that all the levers we can influence are perfectly under control. And once the commercial aviation markets recover, which we now expect at the earliest by the end of 2004, EADS with its increasingly balanced business portfolio will be extremely well positioned to take full advantage of opportunities across the full spectrum of the aerospace, defence and space industry.”
Net Cash position of €1.2bn at the end of 2002 is better than originally anticipated. Cash Flow from operations, which does not include customer financing, remained at €2.7bn. Free Cash Flow without aircraft financing amounted to €0.6bn, after high capital expenditures particularly for the A380 programme, confirming the company’s ability to self-finance this programme.
The EADS Chief Financial Officer, Hans Peter Ring, said: “In 2002, EADS was very successful in containing at $0.6bn the increase in Airbus and ATR customer financing gross exposure, which was substantially lower than expected.”
For 2003, EADS’ EBIT is completely hedged against currency fluctuations at an exchange rate of €1 = 0.96$. For the years 2004 to 2006, and even beyond, EADS has high volumes of hedging in place at about 0.94$ to 0.95$, greatly limiting the impact of US-Dollar volatility on results. Dividend proposal of €0.30 per share
The EADS Board of Directors has proposed a dividend of €0.30 per share for the business year 2002 (2001: €0.50). This proposal will be submitted to the Shareholders’ vote at the Annual General Meeting in
Amsterdam on 6 May 2003.
The EADS Chief Financial Officer, Hans Peter Ring, commented, “This proposal is consistent with our dividend policy to pay out about two percent of EADS’ market capitalisation, based on an average 2002 share price of about EUR 14. The utmost focus of management at this time is to maintain the highest standard of financial discipline.”
As reported on 10 February, EADS achieved 2002 revenues of €29.9bn (2001: €30.8bn), in line with