EADS: Rising to the challenge

Transcription

1 EADS: Rising to the challenge Pierre de Bausset Investor Relations and Financial Communication Jean-Baptiste Pons Corporate Finance & Treasury Barcelona 13th May 05 Page 1 EADS Highlights Global leader Commercial aircraft market leader with manufacturing flexibility Leading positions in other segments (e.g. helicopters, fighter aircraft) Strong business mix bn order book (5 years of sales) Complementary and young business portfolio (commercial/defence) Global geographical presence Prudent financial management EADS rating: A (stable outlook) by S&P and A3 (st. outlook) by Moody s Solid balance sheet (strong cash position) Proactive long-term hedging policy Strict control of customer financing EADS determined to retain ratings in the single-a category Page 2 1

2 EADS 04 divisional highlights Airbus Military Transport Aircraft Aeronautics Space (Astrium 100% since Jan. 03) Defence and Security Systems Order book 136 bn 19.9 bn 10.2 bn 11.3 bn 17.3 bn Revenues.2 bn 1.3 bn 3.9 bn 2.6 bn 5.4 bn EBIT* 1,922 m 26 m 6 m 10 m 228 m Civil Defence in % of external revenues * pre goodwill and exceptionals Page 3 97% A400M, CN235, C % 65% Eurocopter, ATR, EADS Socata, Sogerma Services, EFW 30% 70% 94% Astrium, Launch Vehicles, CASA Espacio, Space Services, CILAS, Sodern Military Ac (Eurofighter,...), Missiles (MBDA,..), Defence Elect., EADS Telecom, EADS Services 00 04: Solid Airbus Performance Airbus strong margin despite R&D effort and downturn. and leadership to benefit from market upturn Airbus margin pre-r&d Airbus EBIT* margin 16.7% 15.7% 15.2% 15.6% 18.1% > 350 Airbus deliveries 9.5% 8.1% 7.0% 7.1% 9.5% e05 Page 4 2

3 00 Ò 04: Defence Development In a flat EU Defence Procurement environment, EADS achieved. strong Defence order-book expansion, comforting revenue growth Order-book in bn of which Defence Revenues in bn ~ e2 00 6/ ~ 10.0 ~ 8.5 e Page 5 00 Ò 04: Space Turnaround In a gloomy market, Space division was reorganised for EBIT* margin expansion. and strong order-book supports business growth Space order-book and revenues in bn Space EBIT* in millions Space orderbook Space revenues Page 6 3

4 Profit & Loss Highlights * pre goodwill and exceptionals ** compliant with IFRS3 from 04 ( no longer goodwill amortisation); 03 restated for comparison *** IAS 38: 165 m capitalised in 04; 4 m in 03 (1) average number of shares outstanding: 801,035,035 in FY 04 and 800,957,248 in FY 03 Page 7 FY 04 m in % of Revenues Revenues 31,761 30,133 FY 03 m in % of Revenues self-financed R&D*** 2, % 2, % EBITDA 3, % 3, % EBIT* 2, % 1, % EBIT* before R&D 4, % 3, % Interest result (275) (0.9%) (3) (0.7%) Other financial result (55) (0.2%) % Taxes (664) (2.1%) (474) (1.6%) Net income 1, % 644** 2.1% EPS (1) Balance Sheet Highlights in m Dec. 04 Assets 58,267 of which Goodwill 9,460 of which cash & equivalents, securities 9,184 of which positive hedge mark-to-market 8,948 Stockholders' equity 16,973 of which OCI (Other Comprehensive Income) 6,086 Minority interest 2,370 Total provisions 8,573 of which pensions 3,947 of which negative hedge mark-to-market 181 of which other provisions 4,445 Deferred tax liabilities & income 6,125 Liabilities 24,226 of which financial debts 5,126 of which European gvts refundable advances 5,119 Total liabilities and stockholders' equity 58,267 Closing rate /$ 1.36 Page 8 Dec ,378 9,372 7,872 7,964 16,149 5,934 2,179 8,726 3, ,854 6,122 21,2 4,767 4,851 54,

5 Development of Net Cash in m FY 04 FY 03 Net cash position at the beginning of the period 3,105 2,370 Gross Cash Flow from Operations* 2,858 2,690 Change in working capital 2,155 2,019 Cash used for investing activities** (3,399) (3,659) of which Industrial Capex (additions) (3,017) (2,672) of which Customer Financing net additions (188) (1,093) of which Others (194) 106 Free Cash Flow** 1,614 1,050 Free Cash Flow before customer financing 1,802 2,143 Dividend paid including minority (384) (278) Capital increase Astrium first time 100% consolidation impact 0 (74) Non-recourse customer financing (369) 0 Others ($ adjustments on financial liabilities,.) Net cash position at the end of the period 4,058 3,105 * gross cash flow from operations, excl. working capital change ** excl. change in securities, consolidation changes and non-recourse customer financing Page 9 Conservative Financial Policy Funding / Liquidity policy Funding policy Future funding at corporate level to limit structural subordination over time Liquidity policy Maintain at least 3 bn liquidity at all times Page 10 Funding facilities 2 bn Syndicated Credit Facility (renegociated in Aug. 04) 2 bn maturity 09 +2y extention option Lower fees and margin No more financial covenant Fully undrawn EIB loan (signed Aug. 02) 10 years bullet $ 421 million (drawn) 3 bn European Medium Term Note Program (Jan. 03) Inaugural bond issue of 1bn - 7 years (Feb.03) 2nd bond issue of 500mn - 15 years (Sept. 03) Permanent access to debt capital markets 2 bn Billet de Trésorerie Program (signed Dec. 03) Centralised Treasury Cash pooling system Centralisation of FX, interest rate exposure All derivatives dealt at Central Treasury level Front-Office/Middle- Office/Back-Office organization 5

6 EADS Cash is Prudently Invested Total Cash and securities 9.2 bn as of Dec 04 EADS share of cash deposited by MBDA 0,7 Banks and others held by subsidiaries 0,5 Marketable securities & O/N bank deposits held by EADS NV 7,3 Short Term Deposit to BAE 0,7 In bn Marketable securities and overnight bank deposits CPs 67% BMTN / EMTN 0% CDO / CLN 4% Bank Accounts 1% Liquidity Funds 6% Overnight Deposits 6% CDs 16% EADS cash is : invested in highly rated credits readily available within a few days Page 11 Long Term Debt Profile in line with EADS Asset Base Total Gross Debt: 5.13 bn as of Dec 04 EADS gross debt by maturity EADS gross debt by type 1,8 in bn in bn 1,6 1,4 1,2 1,1 0,5 1,7 1,0 0,8 0,6 0,4 1,0 0,9 0,2 0,0 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 15Y Y Total gross debt Bonds Bonds Lease and Sales financing Full-recourse Lease and Sales financing Non-recourse Loans, liabilities and other debts Deposits JV-Partners (BAE, Finmeccanica) Page 12 6

7 Airbus Customer Financing Reduced in 04 2, , , , , , ,5-3.5 Gross exposure Active exposure management Additions and Disposals to Airbus customer financing gross exposure in $ bn Additions Sell Down Amortization Net change Net Exposure fully provisioned Gross Exposure 3.3 bn ($ 4.6 bn) Dec. 31, 04 Net Exposure 1.4 bn Estimated Collateral 1.9 bn Gross exposure : Reduced since 1998 despite downturn Reflects recovery in 04 Spread over 219 aircraft (YE04), ie around 6% of total cumulative deliveries of Page 13 Hedge Policy Approx. half of EADS US$ revenues are naturally hedged by US$ procurement In 04 the annual net exposure was around $ 11bn (including $ 9 bn for Airbus). EADS hedge portfolio (US$ 40.2 bn) on Dec., 31st 04 average rate 1 = 1.03 $ US$ bn 12 10,9 10 8,7 8 7,2 6,7 6 5,0 4 1, vs $ 1,01 1,00 1,02 1,03 1,09 1,04 1,13 vs $ 1,50 1,51 1,49 1,52 1,59 1,61 1,60 0,4 Page 14 Marked-to-market value = 9 bn (@ 1 = 1.36$) 7

8 Credit Highlights Strong balance sheet Strong cash position despite A380 development ramp-up ( 4.06 bn net cash and 9.18 bn gross cash at Dec. 04) Substantial undrawn committed bank lines enhance liquidity ( 2 bn) High debt service capability Strong operating cash flow Low net interest expenses Cash Control is top priority Customer Financing significantly contained Maintain at least 3 bn liquidity at all times Page 15 Pensions obligations 04 in m Defined Benefit Obligations ,513 Plan assets Provisions ,354 Germany France UK/other Total: 5,198 Total: 658 Total: 3, in m ,876 3,973 4,118 4, e 06e 07e Provisions EBIT impact Direct benefits to be paid Benefits paid represent a manageable outflow ( 164 m on average until 07) According to a study by pension experts, the outflow will peak in 26 at around 350 m The pensions are accounted under IFRS rules Page 17 8

9 Q1 05 Financial Highlights in m Revenues of which Defence EBIT* FCF before cust. financing** Net Income New orders Q1 05 Q1 04 7,005 m 1,258 m 657 m 704 m 328 m 8,907 m 6,031 m 1,083 m 198 m 419 m 49 m 3,411 m change +16 % +16 % +232 % 68 % +569 % % in bn March 05 Net Cash position 4.3 bn Total Order book bn of which Defence 49.7 bn * pre goodwill and exceptionals ** excl. investments in medium term securities and consolidation changes Page 18 Dec bn bn 49.1 bn +7 % +3 % +1 % Barcelona, May 05 Page 19 9