EUROPEAN MAJORS REPORT RESULTS IN LINE WITH EXPECTATIONS
14 May 08. EADS (stock exchange symbol: EAD) can rely on robust fundamentals and continued solidity in its underlying performance, but is still facing challenges on its recovery path. Despite a difficult economic environment and a weak US dollar, the Group continued to experience strong business momentum in the first quarter of 2008. The remarkable order intake reflects the capabilities of EADS’ product portfolio on the global market, in particular at Airbus and Military Transport Aircraft Division. The Q1 2008 EBIT* development was supported by a temporary excess volume of matured hedges compared to the economic exposure. For the full year 2008, the Group confirms its EBIT* guidance of € 1.8bn.
“Though many serious challenges have been overcome there remains much to do in order to secure the significant and lasting improvement in operational performance we are targeting. But first quarter results are encouraging in that respect,” said EADS CEO Louis Gallois.
“Implementation and execution of Power8 is underway and we will look into further measures beyond. With regard to our long-term strategic plan Vision 2020, we have achieved first tangible successes: The US tanker selection and our recent acquisition in the US support us in our aim to balance both our global footprint and our business portfolio. We are determined to build on that encouraging start and are looking to make further advances in transforming our business.”
Airbus continued to ramp-up aircraft deliveries, mainly for the A320 Family. Singapore Airlines received further A380s. The Military Transport Aircraft Division achieved the A400M Power-On milestone. Eurocopter increased its deliveries, successfully unveiled its new EC175 transport helicopter and further expanded its international presence by opening an NH90 assembly line in Australia. The EADS Astrium-built Automated Transfer Vehicle successfully completed its mission to supply the International Space Station ISS. The Defence & Security Division enlarged its secure communications business through new orders and the acquisition of the North American emergency response solution provider PlantCML.
Revenues grew by 10 percent to €9.9bn (Q1 2007: € 8.9bn), fuelled by higher Airbus deliveries (123 units incl. two A380s versus 115 aircraft in the same period of the previous year) and increased volumes at Eurocopter, EADS Astrium and Defence & Security. The Military Transport Aircraft Division contributed significantly to the growth thanks to a milestone revenue recognition in the A400M programme, which had been shifted from 2007.
EADS’ EBIT* (pre goodwill and exceptionals) for the first quarter 2008 reached €769m (Q1 2007: €88m). It benefited from improvements across all Divisions. Thanks to a strong operational performance and achievement of Power8 targets, Airbus and Defence & Security secured the largest EBIT* growth compared to the first quarter of 2007 when Airbus’ EBIT* in particular was heavily burdened by Power8 restructuring. Additionally, in the first three months of 2008, Group EBIT* benefited from a temporary excess volume of matured hedges compared to the economic exposure, overcompensating a less favourable hedge rate compared to the same period of the previous year. The reverse effect will impact the upcoming quarters. In Q1 2008, a US dollar impact of around € -500m on loss-making contract provisions put pressure on the Group’s EBIT*, partly balanced out by a gain of around € 200m from revaluations on liabilities. Compared to Q1 2007, the US dollar effects impacted EBIT* by €-360m.
In line with the Group’s EBIT* development, EADS improved its Net Income to €285m (Net Loss Q1 2007: €10m), or earnings per share of €0.35 (loss per share Q1 2007: € 0.01). Self-financed R&D expenses remained roughly stable at €534m (Q1 2007: €549m), but are expected to grow over the full year mainly in the context of Airbus’ aircraft d