Strong Commercial Momentum: EADS Reports Half-Year Results 2011

• Order intake up 89 percent to € 58.1 billion
• Key success: American Airlines endorses A320 and A320neo families
• Revenues up 8 percent: € 21.9 billion
• EBIT* before one-off: € 720 million
• Free Cash Flow before acquisition of Vector Aerospace of around € 250 million
• Net Income: € 109 million

EADS (stock exchange symbol: EAD) publishes solid results for the half year 2011 in an environment of continuing strong commercial momentum. In the first six months of 2011, the order intake(4) amounted to € 58.1 billion. EADS’ order book of more than € 453 billion remains a solid platform for future deliveries. Revenues amounted to € 21.9 billion. The EBIT* before one-off of around € 720 million benefited from good underlying performance, especially at Airbus Commercial. The reported EBIT* amounted to € 563 million. Net Cash stood at € 11.0 billion. Large programme developments, budget pressure in institutional markets, helicopters and defence as well as currency volatility are being monitored.

”Our results for the first half of 2011 mirror the strong demand in the commercial aviation sector. In terms of orders, Paris Air Show was record-breaking for us, particularly thanks to the A320neo. The recent historic order by American Airlines adds to this remarkable success story as the strong commercial momentum continues beyond Le Bourget. Meanwhile, we have extended our services portfolio and global footing by closing the acquisition of Vector Aerospace and launching an offer to acquire Satair A/S in Denmark,” said Louis Gallois, CEO of EADS. “Clearly, our large programme developments deserve our utmost management attention, especially the A350 XWB.”

In the first six months, EADS’ revenues increased 8 percent to € 21.9 billion (H1 2010: € 20.3 billion). This growth is mainly driven by volume effects at Airbus Commercial and Astrium. Deliveries remained at a high level with 258 aircraft at Airbus Commercial, 205 helicopters at Eurocopter and the 44th consecutive successful Ariane 5 launch. In the first six months, Airbus Military recorded revenues for the A400M programme of € 412 million.

EBIT* before one-off (adjusted EBIT*) – an indicator capturing the underlying business margin by excluding non-recurring charges or profits caused by movements in provisions or foreign exchange impacts – stood at around € 720 million (H1 2010: around € 640 million) for EADS and at around € 310 million for Airbus (H1 2010: around € 260 million). It benefited from good underlying performance in Airbus legacy programmes and at Eurocopter. It also included an unchanged A380 impact compared to last year.

EADS’ reported EBIT* stood at € 563 million (H1 2010: € 406 million).

Net Income amounted to € 109 million (H1 2010: € 185 million), or earnings per share of € 0.13 (earnings per share H1 2010: € 0.23). It benefited from the good EBIT* performance but was dragged down by accounting revaluations on foreign exchange. The finance result amounts to € -366 million (H1 2010: € -109 million). The interest result of € -97 million (H1 2010: € -114 million) improved thanks to a better average cash balance. Meanwhile, the other financial result deteriorated considerably to € -269 million (H1 2010: € 5 million). The main change comes from the negative revaluation of US dollar and GBP cash assets due to the deterioration of the closing spot rate at the end of June compared to the end of December 2010. On the other hand, the net change in fair value of cash-flow hedges had a positive impact of € 2.3 billion on EADS equity.

Self-financed Research & Development (R&D) expenses increased to € 1,409 million (H1 2010: € 1,301 million), driven mainly by development on the A350 XWB at Airbus.

Free Cash Flow before customer financing improved to € -286 million (H1 2010: € -470 million), thanks to better operational performance despite unfavourable phasing at Eurocopter and Cassidian. The improvement is driven by the working capital. A higher level of customer advances received, particularly at Airbus and improved working capital management is partially reduced by a ramp-up in inventories, particularly at Airbus and Astrium. The level of capital expenditure is in line with the 2010 level. Customer financing generated cash of around € 100 million in the first six months as the lessor and banking market appetite continues to be active. Free Cash Flow after customer financing stood at € -184 million (H1 2010: € -737 million). Before the acquisition of Vector Aerospace, Free Cash Flow is positive at around € 250 million.

EADS’ Net Cash position amounted to € 11.0 billion (year-end 2010: € 11.9 billion), remaining a solid foundation for the Group’s operational needs as well as future growth. It also reflects a cash contribution to pension assets of € 300 million and a cash purchase of minority shares in Dornier/ DADC. EADS purchased these minority shares from Daimler AG.

The Group’s order intake(4) of € 58.1 billion (H1 2010: € 30.8 billion) primarily benefited from an environment of continued strong passenger traffic combined with the strength of EADS’ enhanced product portfolio. By the end of June 2011, EADS’ order book(4) stood at € 453.8 billion (year-end 2010: € 448.5 billion), providing a solid platform for future growth. The Airbus Commercial backlog has been reduced by a negative revaluation impact of around € 28 billion due to the deterioration of the US dollar closing spot rate since the year-end 2010. The defence order book stood at € 55.6 billion (year-end 2010: € 58.3 billion).

At the end of June 2011, EADS’ workforce consisted of 123,975 employees (year-end 2010: 121,691).