DGAP-Ad-hoc: Airbus SE / Key word(s): Half Year Results
Airbus SE: Airbus reports Half-Year (H1) 2017 results
27-Jul-2017 / 06:59 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR, transmitted by
DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
*Ad-hoc release, 27 July 2017*
*Airbus reports Half-Year (H1) 2017 results *
· Revenues EUR29bn; EBIT Adjusted EUR1.1bn; EBIT (reported) EUR1.8bn; EPS
(reported) EUR1.94
· Commercial aircraft environment healthy, robust backlog supports ramp-up
plans
· H1 financials reflect delivery pattern mainly impacted by engine issues
· 2017 guidance maintained
Airbus SE (stock exchange symbol: AIR) reported half-year 2017 financial
results and maintained its guidance for the full year.
"The commercial aircraft environment remains healthy while the robust order
backlog continues to support our production ramp-up plans. However, we are
facing challenges due to ongoing engine issues but we have a clear road-map
in place and have maintained our full-year guidance. Achieving the aircraft
delivery target depends on the engine suppliers meeting their commitments,"
said Airbus Chief Executive Officer Tom Enders. "Our focus in the second
half remains squarely on programme execution and delivering the ramp-up. In
Helicopters, resolving the H225 situation while supporting our customers is
a top priority and at Defence and Space we continue our efforts to de-risk
the A400M programme. Over the longer term, Airbus will benefit from its
strong focus on innovation and more efficient and integrated structure."
*Order intake*(1) totalled EUR 37.2 billion (H1 2016: EUR 39.1 billion) with
the *order book*(1) valued at EUR 981 billion as of 30 June 2017 (year-end
2016: EUR 1,060 billion). A total of 203 net commercial aircraft orders were
received (H1 2016: 183 aircraft), with the order backlog comprising 6,771
aircraft at the end of June. During June's Paris Air Show, 144 firm orders
and 202 commitments were announced. Net helicopter orders increased to 151
(H1 2016: 127 net orders), including 30 H225Ms for Kuwait. Defence and
Space's order intake was impacted by the perimeter changes from portfolio
reshaping and some slowdown in telecommunication satellites. Good order
momentum was seen in Military Aircraft with orders for 19 Light and Medium
aircraft booked.
*Revenues *were stable at EUR 28.7 billion (H1 2016: EUR 28.8 billion)
despite the perimeter changes in Defence and Space. Commercial Aircraft
revenues rose three percent with deliveries of 306(2) aircraft (H1 2016: 298
aircraft) comprising 239 A320 Family, 30 A350 XWBs, 31 A330s and six A380s.
Helicopters' revenues increased nine percent with deliveries of 190 units
(H1 2016: 163 units). Revenues at Defence and Space reflected a negative
impact of around EUR 1.2 billion from the perimeter changes.
*EBIT Adjusted *- an alternativeperformance measure and key indicator
capturing the underlying business margin by excluding material charges or
profits caused by movements in provisions related to programmes,
restructuring or foreign exchange impacts as well as capital gains/losses
from the disposal and acquisition of businesses - totalled EUR 1,099 million
(H1 2016: EUR 1,679 million).
Commercial Aircraft's EBIT Adjusted was EUR 954 million (H1 2016: EUR 1,269
million), reflecting the aircraft delivery mix and phasing as well as
transition pricing.
Good progress was made on the A350 industrial ramp-up with 30 deliveries
compared to 12 in the first half of 2016. The A350 programme is on track to
meet the monthly production rate target of 10 aircraft by the end of 2018.
The level of outstanding work has improved in the industrial system and
supply chain bottlenecks are improving. In the second quarter, Qatar Airways
cancelled four A350 delivery slots. The focus remains on recurring cost
convergence. On the A320neo programme, 59 aircraft were delivered compared
to eight in the first half of 2016. The A320neo ramp-up remains challenging
and customers are still experiencing a number of in-service engine issues.
Engine supplier Pratt & Whitney has introduced some fixes but these
improvements have not come through yet on a reliable basis under normal
service conditions. Close to 200 A320neo deliveries are still targeted for
2017 but this objective is more challenging given these engine issues.
Considering the current A380 order booking situation, 2019 deliveries will
be adjusted to eight aircraft.
Helicopters' EBIT Adjusted totalled EUR 93 million (H1 2016: EUR 144
million), reflecting an unfavourable mix mainly from lower commercial flight
hours in services as well as the impact from the partial H225 grounding. In
July, UK and Norwegian aviation authorities lifted the H225 flight ban.
However, the implementation of enhanced safety measures will require a plan
of checks, modifications and preventive inspections. Airbus will continue to
support its customers, as and when required, to progressively bring the H225
fleet back into operations.
Defence and Space's EBIT Adjusted declined to EUR 248 million (H1 2016: EUR
322 million), reflecting the perimeter change and was broadly stable on a
comparable basis.
Eight A400Ms were delivered compared to five aircraft in the first half of
2016. Airbus has continued with A400M development activities toward
achieving the revised capability roadmap shared with the customer. However,
achievement of the contractual technical capabilities and associated costs
remain highly challenging. Challenges also remain on securing sufficient
export orders in time, on cost reductions, industrial efficiency and
commercial exposure, which could all impact significantly the programme.
Discussions to de-risk the A400M programme are ongoing with the Nations and
OCCAR.
Group *self-financed R&D* *expenses *declined to EUR 1,288 million (H1 2016:
EUR 1,309 million).
*EBIT*(reported) of EUR 1,791 million (H1 2016: EUR 1,851 million) included
Adjustments totalling a net EUR +692 million compared to net Adjustments of
EUR +172 million in the first half of 2016. The H1 2017 Adjustments
comprised:
· A net charge of EUR 70 million on the A400M programme mainly reflecting
price escalation;
·
· A positive impact of EUR 174 million related to the dollar pre-delivery
payment mismatch and balance sheet revaluation;
· A net capital gain of EUR 560 million from the divestment of the Defence
Electronics business in the first quarter;
· A net positive impact of EUR 28 million related to other portfolio
changes at Defence and Space.
*Net income(3)* amounted to EUR 1,503 million (H1 2016: EUR 1,761 million)
after the EBIT Adjustments with *earnings per share* of EUR 1.94 (H1 2016:
EUR 2.27). EPS and net income included a positive impact mainly from the
revaluation of financial instruments and balance sheet items. The finance
result was EUR 66 million (H1 2016: EUR -148 million).
*Free cash flow* *before M&A and customer financing *improved to EUR -2,093
million (H1 2016: EUR -2,649 million), although its development has been
impacted by the aircraft delivery profile as well as the recently cancelled
A350 delivery slots. *Free cash flow* of EUR -1,956 million (H1 2016: EUR
-1,119 million) included net proceeds of around EUR 600 million from the
Defence Electronics disposal in the first quarter. The *net cash position*
on 30 June 2017 was EUR 7.9 billion (year-end 2016: EUR 11.1 billion) after
the 2016 dividend payment of EUR 1.0 billion in the second quarter with a
gross cash position of EUR 19.3 billion (year-end 2016: EUR 21.6 billion).
*Outlook *
As the basis for its 2017 guidance, Airbus expects the world economy and air
traffic to grow in line with prevailing independent forecasts, which assume
no major disruptions.
Airbus' 2017 earnings and Free Cash Flow guidance is based on a constant
perimeter:
· Airbus expects to deliver more than 700 commercial aircraft which
depends on engine manufacturers meeting commitments.
· Before M&A, Airbus expects mid-single-digit percentage growth in EBIT
Adjusted and EPS Adjusted compared to 2016.
· Free Cash Flow is expected to be similar to 2016 before M&A and Customer
Financing.
The perimeter change in Defence and Space is expected to reduce EBIT
Adjusted and Free Cash Flow before M&A and Customer Financing by around EUR
150 million and EPS Adjusted by around 14 cents.
*About Airbus *
Airbus is a global leader in aeronautics, space and related services. In
2016, it generated revenues of EUR 67 billion and employed a workforce of
around 134,000. Airbus offers the most comprehensive range of passenger
airliners from 100 to more than 600 seats. Airbus is also a European leader
providing tanker, combat, transport and mission aircraft, as well as
Europe's number one space enterprise and the world's second largest space
business. In helicopters, Airbus provides the most efficient civil and
military rotorcraft solutions worldwide.
*Contacts for the media:*
Martin Agüera +49 (0) 175 227 4369 martin.aguera@airbus.com
Rod Stone +33 (0) 6 3052 1993 rod.stone@airbus.com
*Note to editors:* *Live Webcast of the Analyst Conference Call*
At 08:30 a.m. CEST today, you can listen to the *Half-Year* *2017 Results
Analyst Conference* *Call* with Chief Executive Officer Tom Enders and Chief
Financial Officer Harald Wilhelm via www.airbus.com [1]. The analyst call
presentation can also be found on the company website. A recording will be
made available in due course. For a reconciliation of Airbus' KPIs to
"reported IFRS" please refer to the analyst presentation.
*Airbus - Half-Year (H1) 2017 Results *
(Amounts in Euro)
*Airbus * *H1 2017* H1 2016 Change
*Revenues*, in millions *28,709* 28,755 0%
thereof defence, in millions *4,563 * 4,731 -4%
*EBIT Adjusted*, in millions *1,099* 1,679 -35%
*EBIT (reported)*, in millions *1,791* 1,851 -3%
*Research & Development expenses*, *1,288* 1,309 -2%
in millions
*Net Income(3)*, in millions *1,503* 1,761 -15%
*Earnings Per Share (EPS) * *1.94* 2.27 -15%
*Free Cash Flow (FCF)*, in millions *-1,956* -1,119 -
*Free Cash Flow * *-2,547* -3,236 -
*before M&A*, in millions
*Free Cash Flow before M&A* *-2,093* -2,649 -
*and Customer Financing*, in millions
*Order Intake(1)*, in millions *37,164* 39,135 -5%
*Airbus * *30 June* 31 Dec Change
*2017* 2016
*Order Book(1)*, in millions *980,857* 1,060,447 -8%
thereof defence, in millions *38,168 * 39,811 -4%
*Net Cash position*, in millions *7,899* 11,113 -29%
*Employees* *130,402* 133,782 -3%
*By Business *Revenues* *EBIT(reported)*
Segment*
(Amounts in *H1* H1 Change *H1 * H1 Change
millions of *2017* 2016 *2017* 2016
Euro)
Commercial *21,789 21,061 +3% *1,078* 420 +157%
Aircraft *
Helicopters *2,921* 2,687 +9% *93* 144 -35%
Defence and *4,625* 5,440 -15% *816 * 475 +72%
Space
Headquarters *-626* -433 - *-196* 812 -
/
Eliminations
*Total* *28,709 28,755 0% *1,791* 1,851 -3%
*
*By Business Segment* *EBIT Adjusted*
(Amounts in millions of Euro) *H1 * H1 Change
*2017* 2016
Commercial Aircraft *954* 1,269 -25%
Helicopters *93* 144 -35%
Defence and Space *248 * 322 -23%
Headquarters / Eliminations *-196* -56 -
*Total* *1,099* 1,679 -35%
*By Business *Order Intake(1)* *Order Book(1)*
Segment*
(Amounts in *H1 * H1 Change *30 31 Dec Change
millions of *2017* 2016 June* 2016
Euro) *2017*
Commercial *30,272* 32,302 -6% *932,29 1,010,20 -8%
Aircraft 1* 0
Helicopters *3,630* 2,338 +55% *11,996 11,269 +6%
*
Defence and *3,616* 5,189 -30% *38,708 41,499 -7%
Space *
Headquarters *-354* -694 - *-2,138 -2,521 -
/ *
Eliminations
*Total* *37,164* 39,135 -5% *980,85 1,060,44 -8%
7* 7
*Airbus - Second Quarter Results (Q2) 2017*
(Amounts in Euro)
*Airbus * *Q2 2017* Q2 2016 Change
*Revenues*, in *15,721* 16,572 -5%
millions
*EBIT Adjusted*, in *859* 1,181 -27%
millions
*EBIT (reported)*, *939* 1,489 -37%
in millions
*Net Income(3)*, in *895* 1,362 -34%
millions
*Earnings Per Share *1.16* 1.76 -34%
(EPS)*
*By Business *Revenues* *EBIT (reported)*
Segment*
(Amounts in *Q2* Q2 Change *Q2* Q2 Change
millions of *2017* 2016 *2017* 2016
Euro)
Commercial *11,964 12,393 -3% *742* 131 +466%
Aircraft *
Helicopters *1,630* 1,529 +7% *95* 111 -14%
Defence and *2,511* 2,906 -14% *196* 387 -49%
Space
Headquarters *-384* -256 - *-94* 860 -
/
Eliminations
*Total* *15,721 16,572 -5% *939* 1,489 -37%
*
*By Business Segment* *EBIT Adjusted*
(Amounts in millions of Euro) *Q2* Q2 Change
*2017* 2016
Commercial Aircraft *673* 863 -22%
Helicopters *95* 111 -14%
Defence and Space *185* 215 -14%
Headquarters / *-94* -8 -
Eliminations
*Total* *859* 1,181 -27%
*Q2 2017 revenues* decreased by five percent, due to the delivery pattern in
Commercial Aircraft and the perimeter changes at Defence and Space.
*Q2 2017 EBIT Adjusted* decreased by 27 percent, mainly driven by a decrease
in Commercial Aircraft reflecting unfavourable delivery and phasing impact,
transition pricing and ramp-up costs, partly mitigated by an R&D tailwind.
*Q2 2017 EBIT (reported*) decreased to EUR 939 million. It reflects net
positive Adjustments of EUR 80 million booked in Q2 related to a net charge
of EUR -70 million on the A400M programme, portfolio Adjustments in Defence
and Space of EUR 31 million and the impact from foreign exchange resulting
from the dollar pre-delivery payment mismatch and balance sheet revaluation
of EUR 119 million. Q2 2016 Adjustments amounted to approximately EUR 300
million.
In addition*, *the *Q2 2017 net income* decreased due to higher income
taxes, partially compensated by positive foreign exchange effects.
(At the end of the 2016 financial year, Airbus implemented the European
Securities and Markets Authority's guidelines on Alternative Performance
Measures. As a result, certain items are no longer labelled as "one-offs".
Such items are now labelled as "Adjustments". Airbus no longer measures and
communicates its performance on the basis of "EBIT*" but on the basis of
"EBIT" (reported) as the difference between the two KPIs, the so called
"pre-goodwill and exceptionals", has become less relevant. There is no
change to the substance of the guidance. Terminology has changed such that
"EBIT* before one-offs" has been replaced by "EBIT Adjusted" and "EPS*
before one-offs" replaced by "EPS Adjusted". Please refer to the Glossary
for definitions of the Alternative Performance Measures.)
*EBIT (reported) / EBIT Adjusted Reconciliation*
The table below reconciles EBIT (reported) with EBIT Adjusted.
*Airbus * *H1 2017*
*EBIT (reported)*,in millions *1,791*
*thereof:*
*A400M charge, *in millions *-70*
*$ PDP mismatch/Balance Sheet revaluation, *in *174*
millions
*Defence Electronics divestment, *in millions *560*
*Other net portfolio changes at Defence and Space, *in *28*
millions
*EBIT Adjusted*, in millions *1,099*
*Reconciliation of H1 2016 EBIT* before one-off to EBIT Adjusted*
*Airbus * *H1 2016*
*EBIT* before one-off*, in millions *1,684*
*Exceptionals*,in millions *-5*
*EBIT Adjusted*,in millions *1,679*
*Pre-goodwill impairment and exceptionals.
*Glossary*
*KPI* *DEFINITION*
*EBIT* The Company continues to use
the term EBIT (Earnings before
interest and taxes). It is
identical to Profit before
finance cost and income taxes
as defined by IFRS Rules.
*Adjustments* Adjustments, an *alternative
performance measure,* is a term
used by the Company which
includes material charges or
profits caused by movements in
provisions related to
programmes, restructuring or
foreign exchange impacts as
well as capital gains/losses
from the disposal and
acquisition of businesses.
*EBIT Adjusted* EBIT Adjusted - an *alternative
performance measure* and key
indicator capturing the
underlying business margin by
excluding material charges or
profits caused by movements in
provisions related to
programmes, restructuring or
foreign exchange impacts as
well as capital gains/losses
from the disposal and
acquisition of businesses.
*EPS Adjusted* EPS Adjusted is an *alternative
performance measure* of basic
earnings per share as reported
whereby the net income as the
numerator does include
Adjustments. For
reconciliation, see slide 18 of
the Analyst presentation.
*Gross cash position* The Company defines its
consolidated gross cash
position as the sum of (i) cash
and cash equivalents and (ii)
securities (as all recorded in
the consolidated statement of
financial position).
*Net cash position* For definition of the
*alternative performance
measure* net cash position, see
Registration Document, MD&A
section 2.1.6.
*FCF* For the definition of the
*alternative performance
measure* free cash flow, see
Registration Document, MD&A
section 2.1.6.1. It is a key
indicator which allows the
Company to measure the amount
of cash flow generated from
operations after cash used in
investing activities.
*FCF before M&A* Free cash flow before mergers
and acquisitions refers to free
cash flow as defined in the
Registration Document, MD&A
section 2.1.6.1 adjusted for
net proceeds from disposals and
acquisitions. It is an
*alternative performance
measure* and indicator that is
important in order to measure
FCF excluding those cash flows
from the disposal and
acquisition of businesses.
*FCF before M&A and customer Free cash flow before M&A and
financing* customer financing refers to
free cash flow before mergers
and acquisitions adjusted for
cash flow related to aircraft
financing activities. It is an
*alternative performance
measure *and indicator that may
be used from time to time by
the Company in its financial
guidance, esp. when there is
higher uncertainty around
customer financing activities,
such as during the suspension
of ECA financing support.
*Footnotes:*
1) Contributions from commercial aircraft activities to Order Intake and
Order Book based on list prices.
2) Thereof 304 deliveries with revenue recognition.
3) Airbus continues to use the term Net Income. It is identical to Profit
for the period attributable to equity owners of the parent as defined by
IFRS Rules.
*Safe Harbour Statement:*
Certain statements contained in this press release are not historical facts
but rather are statements of future expectations and other forward-looking
statements that are based on management's beliefs. These statements reflect
Airbus' views and assumptions as of the date of the statements and involve
known and unknown risk and uncertainties that could cause actual results,
performance or events to differ materially from those expressed or implied
in such statements.
When used in this press release, words such as "anticipate", "believe",
"estimate", "expect", "may", "intend", "plan to" and "project" are intended
to identify forward-looking statements.
This forward looking information is based upon a number of assumptions
including without limitation: assumption regarding demand, current and
future markets for Airbus' products and services, internal performance,
customer financing, customer, supplier and subcontractor performance or
contracts negotiations, favourable outcomes of certain pending sales
campaigns. Forward looking statements are subject to uncertainty and actual
future results and trends may differ materially depending on variety of
factors including without limitation: general economic and labour
conditions, including in particular economic conditions in Europe, North
America and Asia, legal, financial and governmental risk related to
international transactions, the cyclical nature of some of Airbus'
businesses, volatility of the market for certain products and services,
product performance risks, collective bargaining labour disputes, factors
that result in significant and prolonged disruption to air travel worldwide,
the outcome of political and legal processes, including uncertainty
regarding government funding of certain programs, consolidation among
competitors in the aerospace industry, the cost of developing, and the
commercial success of new products, exchange rate and interest rate spread
fluctuations between the euro and the U.S. dollar and other currencies,
legal proceeding and other economic, political and technological risk and
uncertainties. Additional information regarding these factors is contained
in the Company's "Registration Document" dated 4 April 2017. For more
information, please refer to www.airbus.com [2]
27-Jul-2017 CET/CEST The DGAP Distribution Services include Regulatory
Announcements, Financial/Corporate News and Press Releases.
Archive at www.dgap.de
Language: English
Company: Airbus SE
P.O. Box 32008
2303 DA Leiden
Netherlands
Phone: 00 800 00 02 2002
Fax: +49 (0)89 607 - 26481
Internet: www.airbusgroup.com
ISIN: NL0000235190
WKN: 938914
Indices: MDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich,
Stuttgart, Tradegate Exchange
End of Announcement DGAP News Service
596137 27-Jul-2017 CET/CEST
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(END) Dow Jones Newswires
July 27, 2017 00:59 ET (04:59 GMT)
