ODDO IR Day. November 28 th, Oliver Vogelgesang Vice President Investor Relations

Transcription

1 ODDO IR Day November 28 th, 2011 Oliver Vogelgesang Vice President Investor Relations

2 Safe Harbour Statement 2 Disclaimer This presentation includes forward-looking statements. Words such as anticipates, believes, estimates, expects, intends, plans, projects, may and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements made about strategy, ramp-up and delivery schedules, introduction of new products and services and market expectations, as well as statements regarding future performance and outlook. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include but are not limited to: Changes in general economic, political or market conditions, including the cyclical nature of some of EADS businesses; Significant disruptions in air travel (including as a result of terrorist attacks); Currency exchange rate fluctuations, in particular between the Euro and the U.S. dollar; The successful execution of internal performance plans, including cost reduction and productivity efforts; Product performance risks, as well as programme development and management risks; Customer, supplier and subcontractor performance or contract negotiations, including financing issues; Competition and consolidation in the aerospace and defence industry; Significant collective bargaining labour disputes; The outcome of political and legal processes, including the availability of government financing for certain programmes and the size of defence and space procurement budgets; Research and development costs in connection with new products; Legal, financial and governmental risks related to international transactions; Legal and investigatory proceedings and other economic, political and technological risks and uncertainties. As a result, EADS actual results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see EADS Registration Document dated 21st April Any forward-looking statement contained in this presentation speaks as of the date of this presentation. EADS undertakes no obligation to publicly revise or update any forward-looking statements in light of new information, future events or otherwise.

3 9M 2011 Highlights f Profitability Trend & Growth Drivers

4 9M 2011 Divisional Highlights 4 Other Businesses in bn Airbus Commercial Airbus Military New Orders** 85,4 0,41 2,8 2,3 2,6 1,6 Backlog** 436,4 21,67 13,9 14,7 16,1 3,2 Revenues 21,2 1,75 3,5 3,4 3,4 0,8 EBIT* 0,31 0,01 0,16 0,17 0,17 0,02 9M 2011 EADS Revenues: 32,7 bn 9M 2011 EADS EBIT*: 0,89 bn *Excluding goodwill impairment and exceptionals ** Contributions from commercial aircraft business are based on list prices

5 9M 2011 Highlights 5 Commercial Update: Commercial success continues; Rate 44 per month for SA production still under investigation thanks to active campaigns; Record Backlog and Overbooking allow monitoring of macro environment. Defence Update: Pressure on Defence Budgets. No change to overall environment Strategic Roadmap Progress: Successful completion of Satair and Metron acquisitions; consolidation expected Q4; Vizada acquisition expected to close in the coming months. 9m Earnings Highlights: Better than expected 9m 2011 earnings lead to increase in guidance; Program update A350 with EIS now in H1 2014; Free Cash Flow before acquisitions at +587 m; Net cash of 11,4 bn Latin America 6% Leasing 19% Middle East 10% North America 11% RoW 4% Europe 13% Asia Pacific 37% Airbus order backlog by region (in units)

6 Financial Highlights 9M 2011 & FY Revenues (bn ) EBIT (m ) ,8 42,8 +7% 31,6 +4% 32,7 9M M 2011 FY2009 FY % 885 9M M % FY FY 2010 Free Cash Flow [before acquisitions] (m ) Net Cash (m ) % 587 * +363% % % M M 2011 FY2009 FY2010 * excluding Vector Aerospace acquisition 0 9M M 2011 FY2009 FY2010 Continuing strong Top-Line & Balance Sheet Performance. Ebit Performance stabilizing, BUT profitability still below benchmark level.

7 Financial Highlights 9M 2011 & 9M Revenues EBIT* Self-financed R&D** EBIT* before one-off Net income (loss) EPS*** Order Intake Total Order Book**** 9M 2011 m 32, , M 2010 m 31, , FY 2010 m 45,752 1,231 2,939 1, FY 2009 m 42,822 (322) 2,825 2,200 (763) (0.94) * Pre-goodwill impairment and exceptionals ** IAS 38: 145 m capitalized during FY 2010; 53 m capitalized during FY 2009 *** Average number of shares outstanding: 810,693,339 in FY 2010 **** Commercial order book based on list prices Strong order intake due to commercial aircraft momentum leading to record order book. Increase in EBIT* before one-off due to operational improvements from Eurocopter and Airbus Commercial activities and some favourable phasing at Airbus and in Headquarters.

8 Free Cash Flow 9M 2011 & FY in m Net cash position at the beginning of the period 9M ,918 9M ,797 FY ,797 FY ,193 Gross Cash Flow from Operations * Change in working capital of which Customer Financing 1, (91) 2,177 2, , (406) Cash used for investing activities ** of which Industrial Capex (additions) of which Others (e.g. acquisitions) (1,772) (1,333) (439) (1293) (1,307) 14 (2,289) (2,250) (39) (1,853) (1,957) 104 Free Cash Flow ** , Free Cash Flow before customer financing** (27) 882 2, Change in capital and non controlling interests Change in treasury shares Contribution to plan assets of pension schemes Dividend Others Net cash position at the end of the period (57) (1) (300) (182) (134) 11,399 (25) (14) (323) (6) ,326 (48) (3) (553) (7) 25 11, (5) (173) (166) 346 9,797 Strong Net Cash position, mainly driven by operational performance improvements. Before Vector Aerospace, the free cash flow for 9M 2011 is positive at around 587 m. * Gross cash flow from operations, excluding working capital change ** Excluding change in securities and contribution to plan assets of pension schemes

9 Guidance Increase of guidance for Airbus orders, Revenues, EBIT* before one-off and Free Cash Flow Airbus Orders & Deliveries: Airbus deliveries: commercial aircraft; Gross Orders around 1,500. Revenues: EADS revenues should increase by more than 4% compared to 45.8 bn in EBIT* before one-off: EADS now expects 2011 EADS EBIT* before one-off to increase compared to the 2010 level, at around 1.45 bn thanks to better than expected underlying commercial performance. EBIT*/EPS: EADS expects 2011 EPS before one-off to be around 0.9 (FY 2010: 0.86) Going forward, the reported EBIT* and EPS performance of EADS will be dependent on the Group s ability to execute on the A400M, A380 and A350 XWB programmes, in line with the commitments made to its customers Reported EBIT* and EPS also depend on exchange rate fluctuations; As previously communicated, at 1 = $ 1.35, the 2011 EPS should be above the 2010 level of 0.68; at 1 = $ 1.45, it may be below. Free Cash Flow: Free Cash Flow before acquisitions is now expected to be significantly above 1 bn EBIT* before one-off: Latest reviews confirm it should materially improve thanks to Airbus with volume increase, better pricing and A380 improvement. * Pre-goodwill impairment and exceptionals

10 Risks related to current Financial Market environment? 10 EADS is confident to limit any potential impacts due to: Proven resilience tools during last financial & economic crisis: Huge order book of 503 bn (9M 11), mainly from the expanding regions. Proactive backlog management (overbooking, watchtower process, internal flexibility). Solid Free Cash Flow generation, with robust liquidity. Ability to maintain strong credit metrics during the economic downturn. Secured aircraft financing until year end and early next year Almost all financing sources remain fully committed & active. Many new banks from Asia are entering the market. ECAs should continue to provide guarantees as proven in the financial crisis Lessors remain a strong source of finance for deliveries. Conservative asset management policy: Only investments into fixed income instruments with a minimum long term credit rating of A-/A3 excl. equities, real estate or commodities. Action plan launched in June 2011 to further improve portfolio liquidity, decrease overall credit risk & limit sensitivity of the portfolio value to interest rate changes

11 9M 2011 Highlights Profitability Trend & Growth Drivers

12 Evolution of main Profitability Drivers Overview 12 A) Dynamics in air traffic past 3 years Economic crisis: Airbus production slightly adjusted downwards next 3 years Strong product portfolio/policy & positive demand dynamics [Growth & Replacement]: Airbus production rates significantly raised & improved pricing B) Currency risk Deterioration of /$ hedging rate by 20 cents over past 3 years Stabilisation of hedging rate at about 1,38 /$ C) Airbus Program development Challenges in three major programs concurrently: A380, A400M and A350 Stabilisation and de-risking of A380 and A400M programs; A350 remains biggest risk, but lessons learnt implemented D) Changes in governmental business Lack of clarity on future defense expenses Better visibility: proactive implementation of transformation programs within Astrium, Eurocopter and Cassidian addressing new market environment Budget constraints in home countries Export opportunities

13 A) Dynamics in Air Traffic (I/V) Strong ongoing momentum in commercial aviation 13 High correlation between GDP growth and growth in air traffic World passenger traffic [ASK] Deliveries [u] A/c deliveries Solid air traffic growth is driving demand for new aircraft. Airbus has decided in 2011 to further increase production rates: Single-aisle aircraft from the current 36 a/c per month to 42 a/c in Q4'12. Rate 44 per month still under investigation Long-range from the current 8 a/c per month to 10 a/c in Q2'13 Sources: Global Insight, OAG, IATA, ATA, AEA, Airbus

14 A) Dynamics in Air Traffic (III/V) Demand driven by more efficient products 14 Air traffic growth combined with sharply higher oil price: The right time for the commercial launch of A320neo The A320neo offers a reduction in fuel consumption of 15%, using new engines and "Sharklets". With an oil price >$ 100, fuel represents approximately ~35% of the airlines operating costs and is the biggest single cost element. A320neo is selling faster than any other single-aisle aircraft, impressively confirmed by 1,420 orders & commitments since December Strong demand ensures price stability or even "price premium". NEO, the right answer to rising competition [Commerzbank]

15 A) Dynamics in Air Traffic (II/V) Growth Driver Expanding Regions 15 What happens when 1 bn Chinese and 1 bn Indians fly? 10 1 World average 1.6 trips per capita UK 2 trips per capita USA Trips per capita ,1 0,01 India China 0.11 trip per capita 0.01 trip per capita ,684 a/c 1,353 a/c GMF 2011: a/c 0, Deliveries up to 2009 China India Expectations Real GDP per Capita it triggers almost a tripling of aircraft demand in these countries within the next two decades Source: Airbus GMF, The Economist, Goldman Sachs Research estimates

16 A) Dynamics in Air Traffic (IV/V) Replacement need US triggered by the historic order of American Airlines 16 New single-aisle demand for top world regions Region 20 years new Singleaisle demand Percent of World Single-aisle demand Europe % Asia % USA % Rest of the world (excl. USA, Europe and Asia) 4765 ~25% US market: a need for new passenger aircraft; thereof more than 85% Single Aisle US Single Aisle market size is similar to the total Asian market (incl. China and India) With NEO, Airbus is well positioned for replacement market

17 A) Dynamics in Air Traffic (V/V) Significant volume ramp-up for entire product portfolio 17 Airbus backlog of more than a/c (Sep 11) Volume ramp-up for all Airbus products (+40% in 5 years) Challenge for supply chain has to be managed carefully

18 B) Currency Risk Mitigation of the dollar risk through hedging 18 Approximately 50% of EADS US$ revenues naturally hedged by US$ procurement; In 9m 2011, hedges of $ 13.5 bn* matured at an average hedge rate of 1 = $ 1.38; In 9m 2011, new hedge contracts of $ 15.0 bn, including $ 1 bn of options, were added at an average rate of 1= $ 1.38**. Ø Yearly Rate 1,5 1,45 1,4 1,35 1,3 1,25 1,2 1,15 1,1 1,05 1 1,12 1,26 1,16 1,37 1,18 1,47 1,26 1,39 1,35 1,33 1, ,38 Ø Market Rate /$ Ø Hedge Rate /$ Stabilisation of hedging rate at around 1.38 /$ over the next years Contracting in Euro is progressing # Market Rate as of # t * Total hedge amount contains $/ and $/ designated hedges ** Including $ 1 bn of options *** Includes collars at their least favourable rates

19 C) Airbus Program Development under tight control A400M, A380, A A400M Technical status: Flight testing continues at maximum capacity for timely achievement of certification. Cause of the engine problems has been identified; substantial progress has been made towards solving these problems. On track for delivery in Q SQ MSN010 and EK MSN013 off 16R at SYD, 16 April 2010 JETPHOTOS.NET A a/c in service. 236 (all pax) from 18 customers. (9M 11) Production ramp up aircraft deliveries in 2011 Ramp up: > 2 per month in 2011 and rate 3 in H Airframe Recurring cost in 2011: -33% compared to «Break even point» to be reached in 2014/2015 * Based on a /$ rate assumption of 1.35 A350 XWB Commercial status Total of 567 orders from 35 airlines (9M 2011) Technical status Manufacturing & pre-assembly are progressing across all pre final-assembly sites Start of the FAL is now scheduled for Q1 2012; [provision update of 200 m in Q3 2011] Entry into service now scheduled for H A380 and A400M, the risk profile has improved significantly A350 XWB is closely monitored for cost and for timeliness

20 D) Change in Governmental Business anticipated Cassidian, Astrium and Eurocopter 20 Cassidian Backlog at 16.1 billion (9M 2011); solid basis for mid-term deliveries. Eurofighter Tranche 3A production stretched and thus secured until Eurofighter : India and Switzerland campaigns progressing. The new Cassidian organisation has been launched. Astrium High backlog with 14.6 billion (9M 2011). Higher volume and productivity across the business linked to the AGILE transformation programme. 46th consecutive successful Ariane 5 launch. ESA technical acceptance of first two Galileo IOV satellites. Acquisition of Vizada: Regulatory approvals expected in coming months. Eurocopter Recovery in light and medium helicopter markets driven by US and Eastern Europe. Focus on Innovation: Flight testing of the AS350, X3, EC145 T2. Takeover of Vector Aerospace (Canada) to strengthen the global services business & footprint in US. Situation of public finances must be monitored carefully Cassidian, Eurocopter and Astrium have launched transformation programs early to proactively meet the market changes.

21 Conclusion 21 Strong financial performance S&P rating outlook improved (Sep 2011) Profitability not yet on benchmark level, but improvement levers in place Airbus performance development driven by: Production rate increase Year on year pricing improvement a premium value Continue P8+ efforts offsetting cost increase & escalation A380: from significant loss contribution to gross margin/ebit breakeven Stable R&D, with decrease after the A350 XWB EIS Governmental business to be adapted to new market environment Transformation programs implemented and running Progress on expansion of services business with recent acquisitions

22 Q&A

23 EADS continues to expand its Service Business 2011 Mergers & Acquisitions overview 23 SATAIR : Airbus to position itself as a leading global service and support provider for MROs with extented commercial network Distributor of aircraft parts and services specializing in expendables and components. Satair will become the nucleus for the reorganisation of the Airbus services business 2010 Revenue : 403 M$ EBITDA Margin: 8.9%. Employees: 360. METRON AVIATION : Airbus to enlarge its global Air Traffic Management expertise Research provider in Air Traffic Flow Management, airspace design, energy and environmental solutions to Air Navigation Service Providers, airlines and airports. Improved air traffic management is an important contributor for a/c fuel reductions. Employees: ~200. VIZADA : Astrium to propose greater flexibility & diversified satcom capabilities with sizeable business in the US Independent provider of global satellite-based mobility communication services, across sectors including maritime, aero, land, media, NGO & government/defence. Vizada will accomplish today s Astrium service business and make Astrium a leader in this sector Revenue : 660 M$ EBITDA Margin: 13.6%. Employees: 700. VECTOR AEROSPACE : Eurocopter becoming a global player in Aerospace Support and Services through facilities in Canada, the United States, United Kingdom and South Africa all regulatory approvals received. Provider of multi-platform helicopter maintenance, repair and overhaul services 2010 Revenue : ~545 M$** EBITDA Margin: 11.9%. Employees: 2500 Reinforcement of Services Expansion Strategy through acquisition of >1.6 Bn$ of services related revenues Increase of North America footprint

24 Status of A320neo Orders As of Nov, 16 th A320neo family orders Firm orders Virgin Air Lease Corporation ILFC AviancaTaca GE Capital Transaero SAS ALAFCO TransAsia Airways Spirit Airlines Indigo Lan Go Air AirAsia MoU/LOIs American Airlines Lufthansa Cebu Pacific* Garuda Indonesia* CIT* Qantas TAM* JetBlue* Republic Airways* ALAFCO* Aviation Capital Group Qatar Airways Total Total 1420 *First commitment announced at Le Bourget *First commitment announced at Le Bourget

25 GMF 2011 Highlights 25 GMF 2011 key numbers and 20-year change World fleet forecast % change RPK (trillion) % Passenger aircraft fleet 15,000 31, % New passenger aircraft deliveries - 26,920 - Dedicated freighters 1,600 3, % New freighter aircraft deliveries Total new aircraft deliveries 27,850 Market value of $3.5 trillion

26 Quelle: Airbus Market Research, ICAO, Dow Jones Industrial Average Mid- and Longterm Global Outlook Air travel remains a strong growth market 26 RPK (trillion) 10,0 8,0 6,0 Air traffic has doubled every 15 years Air traffic will double in the next 15 years 4,0 2,0 20-year world annual traffic growth 4.8% 0, Air traffic is expected to double in next 15 years (annual growth rate 4.8%) Aircraft demand driven by Dynamic air traffic growth; especially in expanding regions (China, India, Middle East) Replacement of aircraft in service in mature markets (USA, Western Europe) Continued growth of LCCs, especially in Asia Greater and continued market liberalization

27 Shift of Airbus Backlog Balance from Developed to Expanding Regions 27 End December 2010 [a/c] End December 2000 [a/c] Lessors 629 (18%) 650 (41%) Other** 83 (2%) North America 353 (10%) 426 (27%) Latin America 260 (7%) 101 (6%) Europe 606 (17%) 317 (20%) Africa 84 (2%) 17 (1%) Middle East 462 (13%) 31 (2%) India 182 (5%) 8 (1%) China 318 (9%) 26 (2%) Asia* / Pacific 575 (16%) 14 (1%) Backlog development: West to East drift Impressive airline industry expansion in emerging countries already visible in today s backlog distribution for example: China backlog increased by factor 12 and India backlog by factor 23 between 2000 and 2010 Replacement needs, especially of the developed regions (e.g. USA, Europe) not yet visible in bookings *Indian sub-continent & China excluded **includes Private, Military and other aircraft

28 Currency Hedge Policy 28 Contracting in Euro is progressing; Approximately 50% of EADS US$ revenues naturally hedged by US$ procurement; In 9m 2011, hedges of $ 13.5 bn* matured at an average hedge rate of 1 = $ 1.38; In 9m 2011, new hedge contracts of $ 15.0 bn, including $ 1 bn of options, were added at an average rate of 1= $ 1.38**. EADS hedge portfolio*, 30 September 2011 ($ 71.8 bn), average rates of 1 = $ 1.38** and 1 = $ 1.61 US$ bn Remaining 3 months Collars Forward contracts Average hedge rates vs $** vs $ * Total hedge amount contains $/ and $/ designated hedges ** Includes collars at their least favourable rates Mark-to-market value = -1.6 bn Closing 1.35 vs. $

29 Airbus Customer Financing 29 Active exposure management $ bn (2.9) (0.2) 0.6 (0.9) (0.1) Additions and Disposals to Airbus customer financing gross exposure Additions Sell Down Amortisation (0.7) (1.3) (0.7) (2.2) (0.2) (1.0) (1.1) (0.2) (0.2) (0.3) (0.3) (0.1) (0.2) Net change (0.2) (0.2) (0.2) (0.7) (0.1) (0.1) (0.2) Sep (0.5) (0.1) Net Exposure fully provisioned Gross Exposure 1 bn ($ 1.4 bn) Net Exposure 0.4 bn Estimated Collateral 0.6 bn 30 September 2011 Gross exposure in $ bn

30 EADS: Strong Liquidity Position as at 30 September bn Credit Facility 4.7 bn Financing Liabilities (incl. 1.5 bn liabilities of EMTN) Maturity 2016*, undrawn Fully committed by 39 banks No financial covenants No MAC clause EMTN progamme Long term rating : Moody s: A1 S & P: A 16.1 bn Total Gross Cash Invested in highly rated securities 11.4 bn Net Cash *the facility provides for two 1-year extension options at the choice of the lender