While EADS again reported increased revenues and profitability for the first half of 2013, driven mainly by its commercial aircraft business, namely Airbus, order intake increased sharply to € 96.6 billion with the order book value reaching € 634.8 billion at the end of June.
“We report a solid performance for the first six months and reaffirm our full year guidance,” said EADS CEO Tom Enders. “Cash generation and programme execution are key management priorities for the second half of the year.” In the first half of 2013, EADS’ revenues increased 6 % to € 26.3 billion (in 2012 it was € 24.9 billion), reflecting the aircraft delivery pattern at Airbus Commercial and broadly stable revenues at Eurocopter, Astrium and Cassidian combined. The Group’s defence revenues were stable at € 5.0 billion.
The company’s capital expenditure of € 1.4 billion was mainly driven by progress on A350 XWB development aircraft and includes development costs capitalised under IAS 38 of € 130 million for the A350. In fact, EADS finished the first half of 2013 with a Net Cash position of € 5.9 billion (year-end 2012: € 12.3 billion) after taking into account the € 1.8 billion used to fund the share buyback programme and the 2012 dividend payment of € 468 million.
EADS’ order intake more than tripled to € 96.6 billion (H1 2012: € 28.2 billion), as the strong momentum continued into the second quarter, particularly at Airbus Commercial. The Group’s defence and space business continued to take orders although at a slower pace than in 2012. By the end of June 2013, the total order book had risen in value to € 634.8 billion (year-end 2012: € 566.5 billion). The defence order book amounted to € 48.2 billion (year-end 2012: € 49.6 billion). And the company is also growing on the human side as of 30 June 2013, EADS had 143,358 employees (year-end 2012: 140,405).
Strategy Review Update In recent months, EADS conducted a strategy review, which paved the way for two important Board decisions. > Firstly, the Group plans to integrate Airbus Military, Astrium and Cassidian into one Defence and Space Division. > Secondly, the Group will enhance integration and cohesion by renaming the Group and its Divisions using the internationally recognised Airbus brand.
The Airbus Group will consist of three Divisions:
- Airbus, responsible for all commercial aircraft activities;
- Airbus Defence & Space, home to the Group’s defence and space activities including Military Transport
- Airbus Helicopters, comprising all commercial and military helicopter activities.
Pooling the space and defence entities Airbus Military, Astrium and Cassidian is the Group’s response to the changing market environment with flat or even shrinking defence and space budgets in the Western hemisphere. This structural change will provide optimised market access, cost and market synergies and improved competitiveness overall. It will also provide better visibility on the European leader in space and defense.
Airbus Helicopters (ex-Eurocopter), with its civil and military products, will remain unchanged. The rotorcraft technology is very particular and it’s necessary to maintain the strong synergies between civil and military products.
Implementation is planned to start step-by-step on 1 January 2014 and will be completed in the second half of 2014. It is designed to support the Group’s Flightpath 2015 for improved shareholder returns. Several regulatory milestones, works council consultations and other approval procedures have to be accomplished before the changes can come into full effect.
Airbus Defence & Space will be a division with around 45,000 employees and an annual turnover of about € 14 billion and will be headquartered in Munich, Germany. The Chief Executive Officer of Airbus Defence & Space will be Bernhard Gerwert (aged 60) and it will consist of four business segments:
- Military Aircraft, headed by Domingo Ureña-Raso (55);
- Space Systems, headed by François Auque (57);
- Communication, Intelligence & Security Systems, headed by Evert Dudok (54);
- Equipment, headed by Thomas Müller (55).
Further nominations will be announced in September and October.
Tom Enders commented: “What we are unveiling today is an evolution, not a revolution. It’s the next logical step in the development of our company. We affirm the predominance of commercial aeronautics in our Group and we restructure and focus our defence and space activities to take costs out, increase profitability and improve our market position. The renaming simply gathers the entire company under the best brand we have, one that stands for internationalisation, innovation and integration – and also for some two thirds of our revenues. It reinforces the message that ‘we make things fly.”
The Group will communicate further details in the fourth quarter.
