PROFITS FLAT AT EADS AND THALES
12 May 2009. EADS’ (stock exchange symbol: EAD) first quarter 2009 results demonstrate a continuing solid underlying performance. The strong order book allows active management of deliveries at the expected level although the slowdown of the commercial business is reflected in the weak order intake. Based on under-proportional quarterly deliveries than in the same period of the previous year and less other favourable phasing effects, revenues stood at €8.5bn, EBIT* before one-off at €0.4bn. First-quarter EBIT* was mainly burdened by foreign exchange effects and an A400M accounting charge. The Net Cash Position remains solid at €8.7bn and provides a stable basis for the years to come. EADS is well positioned to face the crisis, although there is limited visibility towards the end of the year and beyond.
Louis Gallois, CEO of EADS said: “Despite the economic challenges, EADS remains robust. We continue to proactively monitor our order book and deliveries and we are improving our efficiency. With regard to the A400M programme, which is a big concern for us, we need to find common solutions on the technical and the commercial frame of the contract to achieve a balanced sharing of the risks with our customers. Nevertheless, even in these tough times, we remain fully committed to investing in our business with a view to the long term. Our successful integration efforts are generating real synergy benefits that go beyond cost savings. The range of skills available across the Group places us in a unique position to offer outstanding solutions for our customers’ future needs.”
EADS has adjusted its divisional structure. The former Military Transport
Aircraft Division is being fully integrated into Airbus and has become – under the name of Airbus Military – the military pole of Airbus. This will strengthen programme management and improve resource allocation. The new organisation is effective as of 2009.
Revenues of the Group amounted to €8.5bn (Q1 2008: €9.9bn) reflecting under-proportional Airbus deliveries (116 aircraft compared to 123 in Q1 2008), less other favourable phasing effects, negative foreign exchange impacts and lower revenue recognition in the A400M programme. However, revenues improved at Astrium (up 20 percent) and Eurocopter
(up 4 percent).
EADS’ EBIT* for the first quarter of 2009 amounted to €232m compared to €769m in the previous year. This decrease came mainly from negative foreign exchange impacts and an A400M accounting charge. Before these one-offs, EADS’ EBIT* contracted to € 0.4 bn (Q1 2008: €0.7bn), mainly impacted by price deterioration on Airbus deliveries, less volume and an unfavourable product mix.
EADS achieved a Net Income of € 170 m (Q1 2008: €285m), or earnings per share of € 0.21 (earnings per share Q1 2008: €0.35). Self-financed R&D expenses slightly increased to €562m (Q1 2008: €534m). This reflects Airbus’ and Eurocopter’s continuing aircraft development programmes.
Free Cash Flow before customer financing stood at €-600m (Q1 2008:
€1,022m). The change compared to the same period of the previous year, in which the Free Cash Flow benefited from a strongly favourable seasonal
effect, reflects the decrease of gross cash flow from operations representing the lower earnings of the quarter and the deterioration of the working capital. This deterioration is mirroring a build-up of inventories at Airbus due to the mismatch between the current production rates and the under-proportional phasing of deliveries versus the full-year forecast. Despite the currently unfavourable market environment, EADS did not face any real need to support customers in the first quarter on a net basis. Therefore, Free Cash Flow including customer financing amounts to € -585 m (Q1 2008: €1,079m). The Group’s Net Cash position remained high at €8.7bn (year-end 2008: € 9.2bn) giving EADS a robust liquidity base in unpredictable economic times.
The seasonality