How did Airbus do 2019 after Boeing Max disaster?
Boeing isn’t mentioned in Airbus SE Half-Year (H1) 2019 report as consolidated financial results and maintained its guidance for the full-year.
“The half-year financial performance mainly reflects the ramp-up in production of A320 Family aircraft and transition to the better NEO version, and further progress on the A350 financial performance,” said Airbus CEO Guillaume Faury. “We continue steadily to see good demand for the competitive product portfolio, like the new A321XLR, as shown by the strong market endorsement at June’s Le Bourget airshow. Our operational focus is on the A320neo Family ramp-up mainly. The second 1 / 2 of the entire year with regards to deliveries and specifically free cashflow is still challenging. In space and defense, we signed the important contract amendment for the A400M program.”
Gross commercial aircraft orders totaled 213 (H1 2018: 261 aircraft) with net orders of 88 aircraft (H1 2018: 206 aircraft). The order book stood at 7,june 2019 276 commercial aircraft by 30. Net helicopter orders of 123 units (H1 2018: 143 units) included 23 NH90s for Spain and 11 H145s in the next quarter. Airbus Space&rsquo and Defence;s order intake by value totaled € 4.2 billion, with second-quarter bookings like the A400M Global Support Step two 2 contract with OCCAR and next-generation geostationary Ka-band communications satellites.
Consolidated revenues risen to € 30.9 billion (H1 2018: € 25.0 billion), reflecting higher commercial aircraft deliveries and favorable forex mainly. At Airbus, a complete of 389 commercial aircraft were delivered (H1 2018: 303 aircraft), comprising 21 A220s, 294 A320 Family, 17 A330s, 53 A350s and 4 A380s. Airbus Helicopters delivered 143 units (H1 2018: 141 units) with stable revenues driven by programme phasing compensated by growth in services. Higher revenues at Airbus Space and Defence were supported by Military Aircraft activities.
Consolidated EBIT Adjusted – an alternative solution performance measure and key indicator capturing the underlying business margin by excluding material charges or profits due to movements in provisions linked to programmes, restructurings or forex impacts together with capital gains/losses from the acquisition and disposal of businesses – a lot more than doubled to € 2,529 million (H1 2018: € 1,162 million), driven by commercial aircraft activities at Airbus.
Airbus’ EBIT Adjusted risen to € 2,338 million (H1 2018: € 867 million), reflecting the A320 ramp-up and NEO premium mainly, further progress on the A350 financial performance and a noticable difference in forex rates in the next quarter.
On the A320 program, NEO aircraft represented 234 from the total 294 deliveries. The ramp-up in production of the Airbus Cabin Flex (ACF) version of the A321 remains challenging. Given the recent commercial success of the A321 XLR and ACF as demonstrated at Le Bourget, Airbus is studying different alternatives to improve the share of the A321 in current A320 Family production capacity. On the A330 program, the focus is on the ramp-up of the NEO version to secure deliveries in the next 1 / 2 of 2019. A330neo deliveries totaled 13 in the half-year. Good progress was made on A350 recurring cost convergence and this program is on the right track to attain the breakeven target for the entire year. Meanwhile, progress was manufactured in preparing the winding down of the A380 programme and securing in-service support for another decades.
Airbus Helicopters’ EBIT Adjusted totaled € 125 million (H1 2018: € 135 million), reflecting a less favorable delivery mix compensated by an elevated contribution from services partially.
EBIT Adjusted at Airbus Space and Defence totaled € 233 million (H1 2018: € 309 million), reflecting efforts to aid ongoing campaigns mainly.
a400M military transport aircraft were delivered in the half-year
Seven, june bringing the in-service fleet to 81 by 30. The A400M contract amendment was signed with OCCAR through the second quarter, concluding the discussions on the program’s Global Rebaselining. With this particular contract amendment, an agreement has been reached on a fresh capabilities development plan, a fresh product delivery schedule, a fresh retrofit delivery schedule and new financial terms. The anticipated impact of the Global Rebaselining was reflected in the 2018 results.
Consolidated self-financed R&D expenses totaled € 1,423 million (H1 2018: € 1,403 million).
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Consolidated EBIT (reported) amounted to € 2,093 million (H1 2018: € 1,120 million), including Adjustments totalling a net € -436 million. These Adjustments mainly comprised:
- A negative € -208 million linked to the prolonged suspension of defense export licences to Saudi Arabia by the German government, which € -18 million were booked in Q2 2019;
- A negative € -136 million linked to A380 scheduled program cost, which € -75 million was booked in Q2 2019, within Airbus’ continuous assessment of assets recoverability and the quarterly overview of onerous contract provision assumptions;
- A total of € -90 million of other costs, including compliance.
Consolidated reported earnings per share of € 1.54 (H1 2018: € 0.64) included a poor impact from the financial result, mainly driven by losses on forex hedges recognized in the context of the prolonged suspension of defense export licenses. The financial result was € -215 million (H1 2018: € -303 million). The effective tax rate included the impact of charges linked to the prolonged suspension of defense export licenses, plus the reassessment of tax liabilities and assets. Consolidated net income(2) was € 1,197 million (H1 2018: € 496 million).
Consolidated free cash flow before M&A and customer financing of € -3,981 million
(H1 2018: € -3,968 million) mainly reflected the working capital build supporting deliveries in the next 1 / 2 of 2019. Consolidated free cash flow was € -4,116 million (H1 2018: € -3,797 million).
The consolidated net cash position was € 6.6 billion on 30 June 2019 (year-end 2018: € 13.3 billion) following the 2018 dividend payment of € 1.3 billion in the next quarter. The gross cash position on 30 June was € 17.8 billion (year-end 2018: € 22.2 billion).
Following overview of underlying and demographic assumptions, the pension provision increased in the next quarter. This reflected the global reduction in the discount rate in addition to the noticeable change in management’s estimates for the valuation of employee benefits in Germany.
In reaction to developments in the WTO dispute, america Trade Representative (USTR) in April published a listing of EU products where the USTR intends to use tariffs, including new helicopters and aircraft and also major components for aircraft manufacturing in america. If the USTR decides to impose tariffs on Airbus products along with other products from the EU, this may significantly affect the delivery of new Airbus aircraft and helicopters to the united states market and also have a poor influence on Airbus’ financial results and condition of operations. The potential decision of the EU to impose tariffs on US products could come at a later stage. Airbus continues to aid an outcome by way of a negotiated solution(3).
As the foundation because of its 2019 guidance, the business expects the global world economy and air traffic to cultivate consistent with prevailing independent forecasts, which assume no major disruptions.
The 2019 earnings and CASHFLOW guidance is before M& Free;A.
- Airbus targets 880 to 890 commercial aircraft deliveries in 2019.
- On that basis:
Airbus expects to provide a rise in EBIT Adjusted of around +15% in comparison to 2018 and FCF before M&A and Customer Financing of &euro approximately; 4 billion.
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