Profitability drivers

Transcription

1 Profitability drivers Global Investor Forum, Toulouse November Hans-Peter Ring CFO 1

2 2 Disclaimer 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 22nd 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. 2

3 3 10 Years at EADS Strong ramp-up (e.g. Airbus & EC) Deliveries 289 helicopters 311 aircraft 558 helicopters 498 aircraft Long-term Stability Backlog 132 bn 195% 76% 389 bn Top-line Growth Revenues & employees Net Cash 24,2 bn empl. 1,3 bn 77% 34% 42,8 bn empl Financial Flexibity 651% 9,8 bn Tremendous growth Major programme issues Impressive cash-flow generation Credit Rating: S&P A- ; Moody s A1 Low profitability due to: dollar deterioration against euro from parity to 1: $1.40 and programme execution challenges PROFITABILITY NEEDS TO BE IMPROVED! * 2000 figures have been adjusted to reflect perimeter changes 3

4 4 External driver: currency EADS hedge portfolio*, 30 Sept : ($ 71.8 bn), average rates of 1 = $ 1.38*** US$ bn Collars Forward contracts 5.1 * Total hedge amount contains $/ and $/ designated hedges ** Includes $ 1.9 bn of options restructuring *** includes collars at their least favourable rates vs $*** 1,35 1,38 1,37 1,38 1,38 1,41 Average hedge rates 2011 and 2012 : ~100% fully hedged Slow-down of the pace of hedging when the dollar weakens and reduction of the size of the portfolio to increase flexibility 4

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7 7 Airbus Military A400M Revenues will be recognized based on internal and contractual milestones. EBIT neutral due to the utilization of the provision until the end of the contract (development and deliveries to OCCAR) Cash-Flow will likely be negative for a few years but will depend on the final agreement on the Export Levy Facility Other activities Ramp-up in Tanker activities. US tanker would have meaningful impact only after 2015 with some investment before Significant growth in services Small decline of Medium and Light in the short term Gradual improvement of profitability outside the A400M revenues 7

8 8 Eurocopter Revenues Slow recovery, start of a positive order trend Revenues should start growing from 2012 Product policy investments within SHAPE: SHAPE Product investments Cost improvement Customer services People/organisation development Profitability Mitigating NH90 issues and short term pressure from light civil segment thanks to SHAPE Increase of R&D to strengthen the medium and heavy segment Start of improvement in 2012 Long term growth forecasts: RR, Theal and Forecast Int. predict a common demand of 15-16,000 helicopters worldwide over the next decade Product policy should pay mid-term when new products arrive in a booming market 8

9 9 Astrium Revenues roughly stable Astrium remains number 1 in Europe and number 3 worldwide with strong positions on Satellites, Space Transportation and Services Pressure from institutional business Increasing competition across the segments Profitability Consistent and reliable business performance Improvement/protection of return of sales thanks to a transformation plan to adapt to global competition and a new market environment EBIT* maintained stable short term but improving over the mid term Gradual improvement of earnings thanks to new way of working 9

10 10 Cassidian Revenues roughly stable Reduction of defence budget in domestic markets: start of business model outside home countries Growth of security, services and export could compensate pressure Different split of activity: increasing weight of systems Different geographical breakdown: Home countries revenues from 50% to 30% of total sales Expansion in Asia, South America and Middle East Profitability Going global means investment in new markets: more cautious on margin trading to take into account learning curve effects Learning curve on system activities will weigh on short term Budget pressure creates new environment Increase of R&D short term but customer commitment necessary After short term pressure on profitability, medium term outlook attractive 10

11 11 Conclusion Airbus on the road to mid-term profitable growth but with execution challenges Limited short term pressure on civil helicopter, defence and institutional businesses: business profile and margin potential remain strong Current Ambition level supports Vision 2020 of 10% underlying EBIT* margin but at long term dollar average Airbus growth means rebalancing towards defence/security/services is only possible with meaningful M&A activity 11