AIRBUS GROUP 2016 CAPITAL MARKETS UPDATE

Transcription

1 AIRBUS GROUP 2016 CAPITAL MARKETS UPDATE LONDON, 24 FEBRUARY 2016 HARALD WILHELM Chief Financial Officer

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 Airbus Group s 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, Airbus Group s 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 Airbus Group Registration Document dated 16 April Any forward-looking statement contained in this presentation speaks as of the date of this presentation. Airbus Group undertakes no obligation to publicly revise or update any forward-looking statements in light of new information, future events or otherwise.

3 AIRBUS GROUP 2016 CAPITAL MARKETS UPDATE 3 CFO AGENDA MARKET ENVIRONMENT PERFORMANCE ROADMAP

4 CFO AGENDA 4 People Manage risks & opportunities for bids and campaigns Lean Processes Drive business performance & support programme execution Develop Enterprise Risk Management Efficient Systems Increase capital efficiency Digital Driving value

5 CFO AGENDA 4 People Manage risks & opportunities for bids and campaigns Lean Processes Drive business performance & support programme execution Develop Enterprise Risk Management Efficient Systems Increase capital efficiency Digital Driving value

6 CFO AGENDA 4 People Manage risks & opportunities for bids and campaigns Lean Processes Drive business performance & support programme execution Develop Enterprise Risk Management Efficient Systems Increase capital efficiency Digital Driving value

7 CFO AGENDA 4 People Manage risks & opportunities for bids and campaigns Lean Processes Drive business performance & support programme execution Develop Enterprise Risk Management Efficient Systems Increase capital efficiency Digital Driving value

8 CFO AGENDA 4 People Manage risks & opportunities for bids and campaigns Lean Processes Drive business performance & support programme execution Develop Enterprise Risk Management Efficient Systems Increase capital efficiency Digital Driving value

9 in bn in bn in in bn FINANCIAL PERFORMANCE 5 Revenues EBIT* before one-off and RoS CAGR 4% CAGR 12% 6.4% % EBIT* reported CAGR 24% EPS reported CAGR 33% Nb shares M Continuous improvement of financial performance between

10 in bn in bn FCF PERFORMANCE 6 FCF before M&A Evolution ~ 3 bn Total Investments ~ 17 bn FCF before M&A FCF WC Capex Significant investment, controlled inventory build for future growth Emphasis on other working capital

11 in in bn SHAREHOLDER RETURNS 7 Dividend Total Shareholder Returns CAGR 29% (0.10) 39% 40% 40% 38% Proposal * DPS Payout Ratio Dividend Share Buyback Dividend policy since 2013, total shareholder returns ~ 6 bn * Based on 2015 Dividend proposal and completion of 1bn SBB

12 in bn FINANCIAL FLEXIBILITY AND CREDIT RATING Credit Facility Financing Liabilities Net Cash Total Gross Cash Maximise and diversify access to liquidity, maintain financial flexibility and secure A credit rating

13 AIRBUS GROUP 2016 CAPITAL MARKETS UPDATE 13 CFO AGENDA MARKET ENVIRONMENT PERFORMANCE ROADMAP

14 Commercial Symposium - Financial Update - Harald Wilhelm January 2016 MARKET ENVIRONMENT GDP / AIR TRAFFIC 10 % YoY 8% 6% December 2015 Passenger Traffic +6.1% 4% 2% 0% -2% -4% World real GDP World passenger traffic (ASKs) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N J M M J S N Air traffic continues to run ahead of GDP

15 MARKET ENVIRONMENT OIL PRICES / BACKLOG 11 End of year Backlog Quarterly average oil price $ 7,000 6,500 6,000 5,500 5,000 4,500 4,000 Cancellations rate* % 3.8% 0.9% Oil price drops, commercial momentum continues Cancellations below historical levels * Yearly cancellations excluding Ceo-Neo conversions / backlog

16 in $ bn Commercial Symposium - Financial Update - Harald Wilhelm January 2016 MARKET ENVIRONMENT AIRLINE PROFITABILITY 12 Airline Profitability Orders and Deliveries 40 10% 1, % 6% 4% 2% 0% 1,400 1,200 1, % Net Profit post-tax EBIT Margin Deliveries Net orders Average net orders Source: ICAO, IATA Economics Financial health of airlines allows investment into efficient products

17 Commercial Symposium - Financial Update - Harald Wilhelm January 2016 MARKET ENVIRONMENT INTEREST RATES / AIRLINE FINANCING % 5.0 5% Interest Rates (in %) 100% 90% 80% Financing Sources for Airbus Deliveries 2015: 635 A/C Manufacturer ECA Capital markets 2% 6% 7% 4.0 4% 70% 3.0 3% 2.0 2% 1.0 1% 60% 50% 40% 30% Lessor 45% 40% 0.0 0% % US - Short term (LIBOR 3M) EURO - Short term (EURIBOR 3M) 20% Airline 10% 0% Historically low cost of money facilitates customers access to financing and limits Airbus Group s financing exposure

18 Commercial Symposium - Financial Update - Harald Wilhelm MARKET ENVIRONMENT FX / HEDGING 14 EUR / USD Exchange Rates Hedging Portfolio 2015: $ 102 bn at $ : $ 88 bn at $ Spot rate: ** Forward 2 years (2017): 1.13 Forward 3 years (2018): 1.15 Forward 4 years (2019): Spot Bloomberg Forecast (as of 19 th Feb 2016) Source: Bloomberg Average hedge rates*** VS $ Forwards/Collars**** ² and beyond Forward Sales as of Dec 2015 Collars as of Dec 2015 Forward Sales as of Dec 2014 * Net exposure trend for illustrative purposes only Leveraging FX environment & increasing credit capacity Approximately 60% of Airbus Group s US$ revenues are naturally hedged by US$ procurement. Graph shows US$ Forward Sales and Collars ** Total hedges maturing in 2015; *** Total hedge amount contains $/ and $/ designated hedges; **** Blended Forwards and Collars rate includes Collars at least favourable rate

19 AIRBUS GROUP 2016 CAPITAL MARKETS UPDATE 19 CFO AGENDA MARKET ENVIRONMENT PERFORMANCE ROADMAP

20 DRIVING EARNINGS PERFORMANCE 16 Boost Performance End of decade R&D Reduction A350 Turning Profitable A320 Volume and Price 3.43 EPS 2015 FX Impact A330 Rate Reduction & Disposals in Defence & Space Significant EPS growth potential * Box sizes for illustration purpose only

21 A320 RAMP UP 17 OPERATIONAL FINANCIAL Robust Backlog Volume Increase Aircraft Performance Neo Premium Supply Chain Management Recurring Cost Control Productivity & Quality Inventory Lead Time Reduction Additional EBIT and FCF contribution from A320

22 A350 RAMP UP 18 OPERATIONAL FINANCIAL Robust Backlog Product Positioning Aircraft Performance Rate Increase Supply Chain Management Recurring Cost Management Productivity & Quality Inventory Lead Time Optimisation Secure A350 ramp-up on the way to profitability

23 DRIVING CASH PERFORMANCE 19 CASH CONVERSION End of decade Capex Reduction Working Capital Control Business Performance 2015 FCF (before M&A) FCF generation & increasing cash conversion by end of decade * Box sizes for illustration purpose only

24 CONCLUSION: KEY TAKEAWAYS 20 Delivering on commitments Driving programme execution and competitiveness Innovation and digital driving future value Substantial EPS and FCF growth Sustainable shareholder returns Enhancing shareholder value and securing the future