DJ DGAP-Adhoc: European Aeronautic Defence and Space Company: Solid EADS 2008 results provide resilience in difficult global economic environment
DJ DGAP-Adhoc: European Aeronautic Defence and Space Company: Solid EADS 2008 results provide resilience in difficult global economic environment
European Aeronautic Defence and Space Company / Final Results 10.03.2009 Release of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. =-------------------------------------------------------------------------- Ad-hoc release, 10 March 2009 EADS - FY 2008 results Solid EADS 2008 results provide resilience in difficult global economic environment - Group EBIT* of EUR 2.8 billion - supported by excellent underlying performance, significant positive foreign currency effects but burdened by programme charges - Net Income of EUR 1,572 million (FY 2007: EUR -446 million) - Free Cash Flow exceeded expectations with EUR 2.6 billion - Robust balance sheet with Net Cash at a record level of EUR 9.2 billion - Revenues increased by 11 percent to EUR 43.3 billion - Order book grew 18 percent to a record of EUR 400 billion - Dividend proposal of EUR 0.20 per share - A400M issues with customers and suppliers pending EADS (stock exchange symbol: EAD) achieved satisfying results for the full year 2008 delivering an EBIT* of EUR 2.8 billion. The Group benefited from its strong underlying performance and foreign currency effects while dealing with challenges in critical programmes. EADS' order book achieved a new record of more than EUR 400 billion, Net Cash reached an unprecedented level of EUR 9.2 billion thanks to better than expected Free Cash Flow generation. EADS is in a good position to face the crisis, although the Group is facing a low level of visibility for the second half of 2009 and beyond due to the global economy and financial market weakness which is increasingly impacting air traffic. 'We have achieved a number of significant accomplishments. The Group achieved a solid EBIT* and an outstanding cash performance. We made significant headway in reshaping the company,' said Louis Gallois, CEO of EADS. 'Even if the A400M programme required enormous attention, the Group has regained stability in 2008 and is proving to be resilient in the face of the turbulent global economic environment. 2009 will be a very challenging year for our industry, but we can rely on an extremely motivated workforce and an excellent portfolio of products. Thanks to our large and well diversified order book 2009 deliveries should remain at high levels, and will give us room for manoeuvre. Cash protection is key.' The Group achieved high levels of deliveries in 2008: Airbus handed over 483 aircraft to its customers - more than ever before. That figure includes 12 A380s. Eurocopter also achieved a new record, delivering 588 helicopters. EADS recorded strong order intake across its product portfolio. Airbus received 777 net aircraft orders and Eurocopter booked 715 new helicopters. Good order intake in the defence businesses especially for tankers led to a stable defence order book of around EUR 55 billion, providing the basis for a more balanced business in the years to come. The Group's space and defence businesses continued to grow profitability demonstrating the robust competitive position they have achieved through innovation and efficiency measures. In January 2009, EADS announced it had proposed to the launch nations a new approach for the A400M aimed at finding a way forward for this programme. With this proposed new approach, the first delivery of the A400M would occur three years after its first flight. In line with complex military development programmes, EADS suggested to resume series production only once adequate maturity is reached as indicated by flight test results. EADS continues to address the industrial challenges of this programme and continues to elaborate their impacts on the A400M delivery schedule. EADS is still working with the suppliers of the propulsion system to determine a reliable date of engine availability and a first flight date for the A400M. On a wider level, EADS is working with subcontractors for the engines and mission critical systems to update its own delivery schedule. In 2008, EADS' EBIT* was impacted by EUR -704 million related to the A400M programme. EADS will only be able to update all of the financial consequences of a revised industrial plan, once the availability of the engines and mission critical systems is firmly determined or once OCCAR's position on the proposal made by EADS is known. As already communicated with the 9-months 2008 results, the unavailability of a reliable schedule update on the A400M programme led EADS to apply the early stage method of accounting until certain events allow the resumption of the estimate at completion method. ** As the A400M will not perform its first flight before the end of March 2009, the launch customer OCCAR has the contractual right to claim termination of the entire A400M Launch Contract as of 1 April 2009. This termination may only be obtained with a unanimous mandate of all launch nations, which makes it very unlikely according to the assessment of the EADS management. Theoretically, a cancellation of the A400M contract by OCCAR would trigger reimbursement of the pre-delivery payments and other payments received from OCCAR. The total amount is approximately EUR 5.7 billion. Separately, each of the launch nations may claim cancellation of those individual aircraft which would be substantially delayed. EADS has adjusted its divisional structure. The former Military Transport Aircraft Division is being integrated into Airbus and will become - under the name of Airbus Military - the military pole of Airbus. This will strengthen programme management in particular for the A400M and improve resource allocation. This new organisation is effective as of 2009. EADS is therefore disclosing its 2008 results according to the former divisional structure, thus still reporting the Military Transport Aircraft Division separately. Revenues rose strongly by 11 percent to EUR 43.3 billion (FY 2007: EUR 39.1 billion) reflecting top line growth from operations across all Divisions. The increase includes EUR 1.1 billion resulting from the move to the early stage accounting methodology in the A400M programme applied starting in the third quarter of 2008. The Group's revenue growth more than offset a weaker average US dollar rate. Based upon a strong delivery performance, EADS achieved 56 percent of its revenues outside Europe thanks to strong contributions from Asia-Pacific (25 percent), North America (18 percent) and other regions (13 percent). EADS' EBIT* (pre goodwill and exceptionals) for the full year of 2008 improved to EUR 2,830 million compared to EUR 52 million in the previous year, when Airbus' EBIT* in particular was burdened by higher exceptional charges (Power8, A400M, A350 XWB). This EBIT* growth contains around around EUR 900 million resulting from the revaluation of loss-making contracts at the EUR/US$ and GBP/US$ closing spot rates. The stronger EBIT* resulted from improvements across all Divisions. At Airbus, strong operational performance in series programmes, achievement of Power8 cost savings and lower exceptional charges than in the previous year contributed positively to EBIT* growth. The Military Transport Aircraft Division's EBIT* improvement was due to a ramp-up in tanker activity and lower exceptional charges than in the previous year. Eurocopter's EBIT* increase reflects the positive volume effect and better pricing. Both Astrium and the Defence & Security Division increased EBIT* and reached record profitability. In line with the Group's EBIT* development, EADS improved its Net Income to EUR 1,572 million (FY 2007: EUR -446 million), or earnings per share to EUR 1.95 (earnings per share FY 2007: EUR -0.56). Self-financed R&D expenses remained stable at EUR 2,669 million (FY 2007: EUR 2,608 million). This reflects Airbus' and Eurocopter's continuing aircraft development programmes. Free Cash Flow before customer financing was stronger than expected and reached EUR 2,886 million (FY 2007: EUR 3,293 million). The change resulted mainly from the higher level of advance payments received in 2007 (incl. Paradigm refinancing step-up of EUR 1.1 billion), partly compensated by positive contributions from tanker programmes. Due to some customer financing needs, Free Cash Flow including customer financing stood at EUR 2,559 million (FY 2007: EUR 3,354 million). Despite a cash-out for contribution to plan assets of pension schemes and premium for options, the Net Cash position reached a record EUR 9.2 billion (year-end 2007: EUR 7.0 billion). This gives EADS a robust liquidity base in economically turbulent and unpredictable times. The Group's improved operational performance in legacy programmes and the strong cash development drove earnings per share to EUR 1.95 and justify the increase in dividend. The Board of Directors is proposing to the Annual General Meeting of shareholders a dividend of EUR 0.20 per share (gross amount dividend per share 2007: EUR 0.12). Subject to the Annual General Meeting approval, the dividend will be paid on 8 June 2009. EADS CFO Hans Peter Ring commented: 'The amount of the dividend acknowledges the turbulent economic environment and the risk in the A400M programme, but recognises the loyalty of EADS shareholders and reflects our confidence in the Group's solidity through 2009 and beyond.' A remarkable order intake of EUR 98.6 billion (FY 2007: EUR 136.8 billion), supported by strong order flow in all Divisions - including the important UK tanker order - underlines the attractiveness of EADS' product offering across its entire portfolio. At the end of December 2008, EADS' order book reached a record level of EUR 400.2 billion (year-end 2007: EUR 339.5 billion). The growth in order book benefited EUR 10 billion from a favourable US dollar spot rate at the end of December 2008 compared to year-end 2007. Orders
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March 10, 2009 01:23 ET (05:23 GMT)