Amsterdam, 27 April 2017 – Airbus SE (stock exchange symbol: AIR) reported first quarter 2017 results and confirmed its guidance for the full year.

“Our first quarter performance doesn’t offer any big surprises: we are on track for our full year EBIT and free cash flow objectives and we took a nice uptick in cash proceeds from the sale of Defence Electronics,” said Airbus Chief Executive Officer Tom Enders. “New order activity was low in Q1 as predicted but let’s not forget that our strong order book of over 6,700 commercial aircraft supports our ongoing production ramp-up. Programme execution remains key for all our businesses!”

Order intake(1) totalled € 3.8 billion (Q1 2016: € 7.2 billion) with the order book(1) valued at

€ 1,030 billion as of 31 March 2017 (year-end 2016: € 1,060 billion) and supporting the ramp-up plans. Net commercial aircraft orders amounted to six aircraft (Q1 2016: 10 aircraft), with the backlog comprising 6,744 aircraft as of 31 March. Net helicopter orders rose to 60
(Q1 2016: 51 net orders), including 10 Super Puma family helicopters and 14 H145s. Defence and Space’s order intake was impacted by the perimeter changes from portfolio reshaping.

Revenues increased seven percent to € 13.0 billion (Q1 2016: € 12.2 billion). Commercial Aircraft’s revenues rose 13 percent, with deliveries of 136 aircraft (Q1 2016: 125 aircraft) including a higher proportion of A350 XWBs. Helicopters’ revenues increased by 11 percent with deliveries of 78 units (Q1 2016: 56 units). Lower revenues at Defence and Space were mainly driven by the perimeter change impact from portfolio reshaping but were stable on a comparable basis. The sale of the Defence Electronics business took place in the first quarter.

EBIT Adjusted – an alternative performance measure and key indicator capturing the underlying business margin by excluding material charges or profits caused by movements in provisions related to programmes, restructuring or foreign exchange impacts as well as capital gains/losses from the disposal and acquisition of businesses – totalled € 240 million (Q1 2016: € 498 million).

Commercial Aircraft’s EBIT Adjusted was € 281 million (Q1 2016: € 406 million), mainly reflecting the aircraft delivery mix, transition pricing and some higher ramp-up costs.

Good progress was made on the A350 XWB with 13 aircraft delivered in the quarter.
The programme is on track to reach the monthly production target of 10 aircraft by the end of 2018. The level of outstanding work has improved in the industrial system and supply chain bottlenecks are also beginning to improve. A key area of focus remains recurring cost convergence, which is challenging, as the ramp-up pace accelerates.

On the A320neo programme, a total of 26 aircraft were delivered to 14 customers. The first delivery of an A321neo occurred in April. Flight testing of the A319neo is now underway.
The A320neo is exceeding expectations, however customers are experiencing a number of in-service issues which need to be resolved, in particular with the Pratt & Whitney GTF engine. The ramp-up will again be back-loaded this year to reflect the necessary time for the implementation of product improvements.

Despite higher deliveries and revenues, Helicopters’ EBIT Adjusted totalled € -2 million (Q1 2016: € 33 million). This reflected an unfavourable mix and lower commercial flight hours in services as well as impacts associated with the partial H225 grounding. The Company continues to work with the investigation authorities and customers to resume flights and services in all regions.

Defence and Space’s EBIT Adjusted declined to € 63 million (Q1 2016: € 107 million), mainly reflecting the perimeter change with the underlying business performing as expected.

Four A400Ms were delivered compared to two aircraft in the first quarter of 2016. Discussions were entered into with customers as planned. Challenges remain on meeting contractual capabilities, securing sufficient export orders in time, cost reduction and commercial exposure, which could be significant.

Group self-financed R&D expenses were stable at € 548 million (Q1 2016: € 547 million).

EBIT (reported) of € 852 million (Q1 2016: € 362 million) included Adjustments totalling a net
€ +612 million. These Adjustments comprised:

A net capital gain of € 560 million from the divestment of the Defence Electronics business;
A positive impact of € 55 million related to the dollar pre-delivery payment mismatch and balance sheet revaluation;
A net negative impact of € 3 million related to other portfolio changes at Defence and Space.
Net income(2) increased to € 608 million (Q1 2016: € 399 million) after the EBIT Adjustments with earnings per share of € 0.79 (Q1 2016: € 0.51). EPS and net income included a significant negative impact mainly from the revaluation of financial instruments. The finance result was € -206 million (Q1 2016: € 193 million).

Free cash flow before M&A and customer financing was € -1,269 million (Q1 2016: € -2,731 million), reflecting the strong focus on working capital amid the production ramp-up and back-loaded deliveries. Free cash flow of € -1,116 million (Q1 2016: € -3,131 million) included net proceeds of around € 600 million from the Defence Electronics disposal.
The net cash position on 31 March 2017 was € 9.8 billion (year-end 2016: € 11.1 billion) with a gross cash position of € 20.3 billion (year-end 2016: € 21.6 billion).

Outlook

As the basis for its 2017 guidance, Airbus expects the world economy and air traffic to grow in line with prevailing independent forecasts, which assume no major disruptions.

Airbus’ 2017 earnings and free cash flow guidance is based on a constant perimeter:

Airbus expects to deliver more than 700 commercial aircraft.
Before M&A, Airbus expects mid-single-digit percentage growth in EBIT Adjusted and EPS Adjusted compared to 2016.
Free Cash Flow is expected to be similar to 2016 before M&A and Customer Financing.
The perimeter change in Defence and Space is expected to reduce EBIT Adjusted and Free Cash Flow before M&A and Customer Financing by around € 150 million and EPS Adjusted by around 14 cents.