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30 Jul 10. EADS’ (stock exchange symbol: EAD) macroeconomic and commercial environment continues to improve while challenges remain, particularly in the institutional sector. Revenues stood at €20.3bn. The EBIT* before one-off of € 0.6 bn benefited from good performance in Airbus legacy programmes and other business activities. EADS’ EBIT* amounted to €406m after exceptional foreign exchange effects. The order intake of €30.8bn mirrors the improved momentum in commercial aviation. EADS’ order book of more than €454bn provides a solid platform for future deliveries. The Group’s Net Cash position of €8.9bn remains a key asset.

“Berlin and Farnborough Air Show orders reflect an improvement in the commercial aviation market. I am particularly glad to see the return of aircraft lessors. However, the institutional outlook is more challenging as public budgets in our domestic markets are under tight review”, said Louis Gallois, CEO of EADS. “Our key priorities remain clear: improving efficiency on the A380 production, developing the A350 and finalising the A400M contract amendment with the Customer Nations. I want to add that we have submitted
our bid for the U.S. Air Force tanker programme and that we will fight hard to win the competition again.”

In the first six months, EADS’ revenues remained stable at €20.3bn
(H1 2009: €20.2bn). Deliveries at Airbus Commercial (250 units) and
Eurocopter (249 helicopters) remained roughly stable at a high level.
The percentage of completion methodology was resumed on the A400M programme. In the second quarter, based on the allocation of internal
milestones, around €300m in revenues were booked on the programme. Customer Nations and EADS continue working towards a contract amendment. In the meantime, the A400M flight test programme is progressing better than expected; however, the development of the Flight Management System is on the critical path, with more challenges than expected. Risk mitigation actions are being undertaken. Management assumptions of March 2010 underpinning the A400M provision calculation remain valid. As previously indicated, reassessment of these assumptions could have a significant impact on future results.

EBIT* before one-off (adjusted EBIT*) – an indicator capturing the
underlying business margin by excluding non-recurring charges or profits caused by movements in provisions or foreign exchange impacts – stood at €0.6bn (H1 2009: €1.3bn) for EADS and around €0.3bn for Airbus. It benefited from good performance in Airbus legacy programmes and other business activities. As expected, the A380 continues to weigh significantly on the underlying performance. Compared to H1 2009, EBIT* before one off was weighed down by the deterioration of hedge rates and higher investment in Research & Development.

EADS’ reported EBIT* of €406m (H1 2009: €888m) was further weighed down mainly by exceptional negative foreign exchange impacts. EADS has further refined its natural hedging strategy in line with IFRS, impacting reported EBIT* and other financial result but with no impact on EBIT* before one-off and net income. Exchange rate impacts weighed on the H1 2010 reported EBIT* by around €550 m compared to H1 2009.
Net Income amounted to €185m (H1 2009: €378m), or earnings per share of €0.23 (earnings per share H1 2009: €0.47). The interest result reflects the decline in interest rates on the financial markets. The other financial result improved considerably by around €270m year on year. This line includes the positive revaluation of the Group’s U.S. dollar and GBP cash assets.

Self-financed Research & Development (R&D) expenses grew to €1,301m (H1 2009: €1,172m), driven by increases in Airbus due to a ramp up in A350 XWB activity as well as a rise in product investment at Defence & Security and Eurocopter.

Free Cash Flow before customer financing of €-470m (H1 2009:
€-948m) reflects a lower deterioration in working capital but the decrease in EBIT*

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