EADS reports half-year earnings before interest and taxes of EUR 553 million
Amsterdam, 25 October 2000
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Sound financial basis for the merged company
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Revenues of EUR 10.6 billion
EADS European Aeronautic Defence and Space Company (stock exchange symbol: EAD) started into life in July 2000 on the back of a sound first half year. The company reported proforma Earnings Before Interest and Taxes (EBIT, pre goodwill and exceptional items) of EUR 553 million for the period up to June 30, 2000, according to its first Half-Year Report published on Wednesday in Amsterdam.
EADS group revenues for the same period amounted to EUR 10.6 billion. The company formed by a merger of DaimlerChrysler Aerospace, Aerospatiale Matra and CASA is well on track to deliver what was announced during the initial public offering, which took place on July 10, 2000.
Co-CEO Philippe Camus said: "Our fundamentals continued to improve during the first six months of the year confirming our vision that EADS will become a strong leader in the Aerospace and Defence business. The Airbus division revenues and profit recorded for the first half of 2000 establish a strong base for continued improvements coming from the transformation of Airbus into an integrated company."
"Our Aeronautics division is also going to contribute positively to the growth of revenues and profitability in 2000", Camus continued. "In Defence and Civil Systems, Military Transport Aircraft and Space, we are pursuing positive initiatives towards growth and profitability with significant orders of satellites and missiles succeeding against the competition."
Co-CEO Rainer Hertrich commented on the prospects of EADS: "With a very high level of new orders worth EUR 24 billion in the first half year, we had already achieved almost 100 percent of our initial target for the full year. Most importantly, all the divisions of EADS have recorded a level of order intake higher than revenues for the same period. This order level contributes to reinforce an already exceptional backlog which at the end of June 2000 stood at EUR 119 billion, representing over four years of business activity. This is evidence of the competitiveness of our products and confirms our growth strategy for the coming years."
"As our markets show clear growth opportunities and our order backlog will generate a significant increase in revenues and earnings from 2002, we can confirm our target of eight percent EBIT margin in 2004," Hertrich continued. "Moreover, the strong dollar will constitute a favourable environment for even exceeding these profitability goals past the year 2003."
EADS Chief Financial Officer Axel Arendt added: "Our half-year EBIT figure of EUR 553 million is in line with our expectations for year-end 2000, and one should take into consideration that the second part of the year is usually stronger in terms of revenues and profits. We also expect to have a stronger cash position by year end, as was the case in the past for the former companies constituting now EADS - this will further reinforce a very strong financial situation."
Airbus main contributor to revenues and profits
The Airbus division of EADS continued its sound performance during the first half of 2000, with revenues of EUR 6.8 billion and EBIT of EUR 516 million. The aircraft market has proven to be stronger than our expectations with orders for 234 aircraft and deliveries of 145 aircraft in the first half year.
The order situation was further improved following the Farnborough Airshow end of July 2000, where large orders and commitments were secured with major customers. During the first nine months of 2000, Airbus recorded 304 firm orders, with 218 aircraft delivered.
The A3XX program has passed important milestones with strong interest from major airlines, proving the market vision of Airbus.
The Military Transport Aircraft division recorded revenues of EUR 74 million in the first half year. EBIT was EUR -35 million, as the division's business is not yet benefiting from upcoming programs such as the A400M.
The Aeronautics division's order intake attained a high level, particularly at Eurocopter. Four European states have already ordered the NH 90. Series production of the Eurofighter aircraft will start near the end of the year, with first delivery expected at the end of 2001. Revenues of the Aeronautics division reached EUR 1.95 billion in the first six months of 2000, with EBIT of EUR 53 million.
Revenues at the Space Systems division were EUR 1.08 billion, and EBIT amounted to EUR 29 million. Major contracts were awarded for three Inmarsat IV, two Intelsat 10 and one Hot Bird 7 satellites, as well as for the production of 20 Ariane launchers, thus confirming the competitiveness of the company's products.
The Defence and Civil Systems division recorded revenues of EUR 1.07 billion in the first six months of 2000, leading to EBIT of EUR -62 million. Major contracts for defence export such as Scalp, Mica and Exocet missiles for Greece at the beginning of the current half year and a strong order backlog will be the basis for renewed growth of this business by 2002.
Co-CEOs: "We will reach our value creation targets"
In a joint statement the Co-CEOs said: "Since the formation of the company three months ago, our post-merger integration teams have done a tremendous job. Merger integration is on track and we have already identified more than 400 merger integration projects which will provide the basis for value creation. These projects clearly show that we will reach our target of EUR 580 million recurring value creation, including benefits from Airbus Integrated Company, that we had announced to take full effect in the year 2004."
First half-year figures on a proforma basis
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As EADS only began its operations as a merged company at the beginning of the second half of the year, first half-year figures are calculated on a proforma basis with no 1999 half-year figures available. For the full year 1999, EADS had reported proforma revenues of EUR 22.6 billion, and EBIT (pre goodwill end exceptional items) of EUR 1.445 billion.
For the same reasons as in 1999, EADS records a net income of EUR -359 million due to the change in accounting rules applied to the hedging position. This net loss is the effect of a financial result of EUR -643 million due mainly to a provision constituted to reflect the difference between the spot rate of 0.95 $/EUR at June 30, 2000 and the spot rate of 1 $/EUR at December 31, 1999. This provision neither has an effect on the cash position of the company, nor does it reflect any change in its economic performance.
EADS was formed on July 10, 2000 following the merger of Aerospatiale Matra of France, DaimlerChrysler Aerospace (Dasa) of Germany and the Spanish CASA. EADS is the third largest aerospace company in the world. It has approximately 87,000 employees
For further information, please contact EADS Corporate Communications:
Eckhard Zanger, Communications Finance
Tel. +49 89 607 27961
