Ad-hoc release, 27 July 2005: EADS – First Half Year Results 2005
EADS Half Year Results indicate strong performance for full year 2005
- EBIT*: EUR 1.54 billion, up 57 percent
- Revenues: EUR 16 billion , up 10 percent
- Net Cash Position: EUR 4.7 billion, strongly improved
- Net Income: EUR 816 million, more than doubled
Amsterdam, 27 July 2005
EADS (stock exchange symbol: EAD), a global leader in aerospace, defence and related services, performed strongly in the first half year of 2005 mainly due to an increase in Airbus deliveries and better results from its Space and Defence Divisions. EADS reached an EBIT* of EUR 1.54 billion in the first six months, 57 percent higher than the figure for the same period of 2004 (EUR 979 million). The EBIT* margin has increased from 6.7 percent to 9.6 percent.
EADS also confirmed its confidence in 2005 EBIT* to exceed EUR 2.6 billion. EADS raised its forecast for earnings per share (EPS) to reach EUR 1.50 for the full year 2005 (2004: EUR 1.27).
Strong EBIT* improvement
The strong EBIT* was mainly driven by the increase of Airbus aircraft deliveries from 161 in the first half of 2004 to 189 in the same period of 2005. First half year EBIT* was supported by favourable US Dollar hedging rates at an average exchange market rate of EUR 1 = US$ 1.01. The EBIT* increase also results from improvements at the Defence and Space Divisions as well as a higher contribution from the 46.30 percent stake in Dassault Aviation.
As usual, revenues and earnings of EADS' space and defence businesses are expected to be stronger in the third and fourth quarter.
In the second half of 2005 less favourable hedging rates at an average level of around EUR 1 = US$ 1.11 and higher self-financed Research & Development (R&D) expenses related to the A380 freighter will have a balancing effect on the full year EBIT* of EADS. The EBIT* is expected to exceed EUR 2.6 billion in 2005.
The self-financed R&D charge has decreased from EUR 1,113 million in the first half of 2004 to EUR 950 million in the first half of 2005. This is in large part due to the entry into production of the A380 passenger version and the increase of R&D capitalisation for the A380. R&D expenses are expected to increase again in the following quarters when the A380 freighter version development programme ramps up.
Net Cash continues to grow
Free Cash Flow before customer financing amounted to EUR 1.5 billion in the first half year (H1 2004: EUR 259 million). The build-up of working capital for the A380 and ramped-up production rates did not hamper the strong cash generation from strong profits and customer pre-delivery payments.
Net income of EUR 816 million
EADS recorded a first half year Net Income of EUR 816 million (H1 2004: EUR 381 million), or EUR 1.03 per share (H1 2004: EUR 0.48). This increase follows the surge in EBIT*, lower interest charge and the impact of the stronger US Dollar on EADS’ US Dollar denominated assets.
Revenues up 10 percent – Order book strengthened
EADS revenues increased in all divisions. Group revenues grew by 10 percent in the first six months reaching EUR 16.0 billion (H1 2004: EUR 14.6 billion).
The EADS order intake from January to June 2005 grew to EUR 25.4 billion (H1 2004: EUR 13.5 billion), reflecting strong increase of Airbus orders and large defence orders such as MEADS and South Africa’s A400M. At EUR 204 billion, the EADS order book continued to grow (year-end 2004: EUR 184 billion). This is partly due to the relative dollar strength in the last six months. The order book remains the strongest in the global aerospace and defence industry.
Outlook
For the full year 2005, EADS confirms its confidence in 2005 EBIT* to exceed EUR 2.6 billion. EADS raises its earnings per share (EPS) and cash flow targets.
EADS foresees an increase in divisional performance across the Group, partly offset by less favourable hedges compared to 2004.
EADS expects its 2005 revenues to grow to around EUR 33 billion, impacted partly by a weaker dollar assumption (EUR 1 = US$ 1.30). EADS’ group-wide defence revenues should increase by 10 percent during the course of the year to EUR 8.5 billion.
EADS expects Airbus to deliver more than 360 aircraft in 2005. Airbus revenues are expected to increase in line with higher deliveries of single-aisle aircraft. The 2005 aircraft mix will be less favourable than in 2004.
After the strong cash flow generation in 2004, Free Cash Flow before Customer Financing is expected to be strong again in 2005.
2005 EPS are expected to increase by at least 18 percent to EUR 1.50, based on an expected average of 800 million shares. This updated EPS guidance reflects better than expected financial result due to higher cash levels but remains dependent on the year-end US Dollar exchange rate.
EBIT
* EADS uses EBIT pre-goodwill amortization and exceptionals as a key indicator of its economic performance. The term “exceptionals” refers to income or expenses of a non-recurring nature, such as amortization expenses of fair value adjustments relating to the EADS merger, the formation of Airbus S.A.S. and the formation of MBDA, and impairment charges.
Contact:
| Rainer Ohler | EADS |
Tel.: +49 89 60 73 42 35 |
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