Ad-hoc | 22 February 2017 06:59
Airbus Group SE / Key word(s): Final Results
22-Feb-2017 / 06:59 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR, transmitted by
DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Ad-hoc release, 22 February 2017
(For its Full-Year 2016 financial reporting, Airbus has implemented the
European Securities and Markets Authority's guidelines on Alternative
Performance Measures. As a result, certain items will no longer be labelled
as "one-offs". From now on such items will be labelled as "Adjustments".
Airbus will no longer measure and communicate its performance on the basis
of "EBIT*" but on the basis of "EBIT" (reported) as the difference between
the two KPIs, the so called "pre-goodwill and exceptionals", has become
less relevant. There is no change to the substance of the guidance.
Terminology will change such that "EBIT* before one-offs" will be replaced
by "EBIT Adjusted" and "EPS* before one-offs" will be replaced by "EPS
Adjusted". Please refer to the Glossary for definitions of the Alternative
Performance Measures.)
Airbus delivers Full-Year 2016 results in line with guidance
- Record commercial aircraft deliveries and backlog support ramp-up
- Revenues EUR67 bn; EBIT Adjusted EUR4.0 bn; EBIT (reported) EUR2.3 bn;
EPS (reported) EUR1.29
- Free cash flow before M&A and customer financing EUR 1.4 billion
- Future earnings per share / free cash flow growth confirmed
- Proposed 2016 dividend EUR1.35 per share, up four percent from 2015
- A400M FY 2016 charge totals EUR 2.2 billion: significant EPS burden,
programme remains a concern
Airbus (stock exchange symbol: AIR) reported 2016 financial results with
its guidance achieved for all key performance indicators and provided an
outlook for 2017.
"We have delivered on the commitments that we gave a year ago and achieved
our guidance and objectives, with one exception, the A400M, where we had to
take another significant charge totalling 2.2 billion euros in 2016. De-
risking the programme and strengthening programme execution are our top
priorities for this aircraft in 2017," said Tom Enders, Airbus Chief
Executive Officer. "We recorded a net book-to-bill above one in a year we
delivered more commercial aircraft than ever before. The record order
backlog is supporting the ramp-up plans and our performance in 2016 shows
we can deliver on that. We successfully managed the ramp-up of the single-
aisle and A350 programmes while at the same time transitioning to the more
efficient version of the A320. Our commercial performance in helicopters
was good despite a difficult market environment and we continued to
strengthen and reshape the defence and space portfolio. We are taking
additional steps to increase efficiency through the integration project,
while investments in digital transformation will further improve our
competitiveness. Overall, the progress we made last year gives us
confidence that we have the building blocks in place to achieve our
earnings and cash flow growth potential."
Order intake(1) in 2016 totalled EUR 134 billion (2015: EUR 159 billion),
with the order book(1) valued at EUR 1,060 billion as of 31 December 2016
(year-end 2015: EUR 1,006 billion). Net commercial aircraft orders amounted
to 731 aircraft (2015: 1,080 aircraft), including 41 A350 XWBs and 83
A330s. The net book-to-bill ratio was above 1 while the order backlog
reached a record 6,874 commercial aircraft at the end of the year. Net
helicopter orders totalled 353 (2015: 333 net orders), including the H225M
for Singapore and the UK Military Flying Training System contract. Defence
and Space achieved a book-to-bill above 1 with strong order momentum in
military aircraft and in satellites. Key orders included 16 C295W search
and rescue planes for Canada and the Eurofighter sustainment and support
contracts.
Group revenues increased three percent to EUR 67 billion (2015: EUR 64
billion). Revenues in Commercial Aircraft rose seven percent, reflecting
the record deliveries of 688 aircraft (2015: 635 aircraft) and a favourable
foreign exchange impact. Despite increased deliveries of 418 units (2015:
395 units), Helicopters' revenues were weighed down by an unfavourable mix
and lower commercial flight hours in services. Defence and Space's revenues
decreased nine percent, reflecting a negative impact from portfolio
reshaping of about EUR 1 billion but were broadly stable on a comparable
basis.
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 EUR 3,955
million (2015: EUR 4,108 million).
Commercial Aircraft's EBIT Adjusted increased to EUR 2,811 million (2015:
EUR 2,766 million), reflecting higher A320 volumes and a 21% decline in
research and development (R&D) expenses due mainly to the planned R&D ramp-
down on the A350. EBIT Adjusted was negatively impacted by the lower A330
production rate, higher A350 dilution, transition pricing and ramp-up
costs.
On the A320neo programme, 68 aircraft were delivered to 17 customers. Both
engine suppliers are committed to deliver in line with customer
expectations. Challenges remain with the A320neo ramp-up and delivery
profile, which is expected to be back-loaded in 2017.
The ambitious ramp-up target was met for the A350, with 49 aircraft
delivered during 2016. Good progress was made during the year in terms of
risk management and reduction of the outstanding work in the A350 Final
Assembly Line. The focus remains on recurring cost convergence as the ramp-
up progresses and the situation remains challenging. The supply chain has
improved, although some bottlenecks remain, but the Company is on track to
manage the 2017 ramp-up on the way towards the production target of 10
aircraft a month by the end of 2018. Flight testing of the A350-1000 is
underway.
In Helicopters, EBIT Adjusted totalled EUR 350 million (2015: EUR 427
million), reflecting the unfavourable mix and lower commercial flight hours
in services as well as the H225 accident in Norway and some campaign costs.
However, the underlying performance continues to be supported by ongoing
transformation measures and strong efforts to adapt to market challenges.
Defence and Space's EBIT Adjusted was EUR 1,002 million (2015: EUR 1,051
million). The good underlying performance partially mitigated the perimeter
change effect from portfolio reshaping. It was supported by a strong
contract mix and risk reduction as well as benefits materialised from
restructuring efforts.
On the A400M programme, deliveries increased to 17 aircraft in 2016 (2015:
11 deliveries) with two delivered year-to-date in 2017. The propeller
gearbox (PGB) crisis was addressed in the second half of the year with the
interim fix to increase the time between inspection intervals. Capability
was stepped up with the aircraft now being delivered including some
tactical capability. During the second half of 2016, further challenges
were encountered to meet military capability enhancements and management
reassessed the industrial cost of the programme, now including an
estimation of the commercial exposure. As a result of these reviews a total
charge of EUR 2.2 billion was recorded in 2016 (including EUR 1.2 billion
in the fourth quarter). Cash retentions by customers will continue to weigh
significantly in 2017 and 2018 in particular. Challenges remain on meeting
contractual capabilities, securing sufficient export orders in time, cost
reduction and commercial exposure, which could be significant. Given the
size of the cumulative A400M programme loss, the Board of Directors has
mandated management to re-engage with customers to cap the remaining
exposure.
Group self-financed R&D expenses declined to EUR 2,970 million (2015: EUR
3,460 million).
EBIT (reported) of EUR 2,258 million (2015: EUR 4,062 million) included
Adjustments totalling a net
EUR -1,697 million. These Adjustments in 2016 comprised:
- A total net charge of EUR 2,210 million related to the A400M programme,
including the incremental charge in the fourth quarter;
- A negative impact of EUR 930 million related to the dollar pre-delivery
payment mismatch and balance sheet revaluation;
- A provision of EUR 182 million related to restructuring and
transformation programmes;
- A net charge of EUR 33 million related to portfolio adjustments at
Commercial Aircraft and Defence and Space;
- A net capital gain of EUR 1,175 million linked to the creation of Phase
2 of the Airbus Safran Launchers Joint Venture;
- A EUR 385 million charge on the A350 programme booked in the first half
of 2016;
- A net capital gain of EUR 868 million booked in the first half of 2016
related to the disposal of shares in Dassault Aviation and a mark-to-
market of the remaining shares.
Net income(2) totalled EUR 995 million (2015: EUR 2,696 million) after the
EBIT Adjustments. It was also significantly impacted by negative foreign
exchange effects. Earnings Per Share were
EUR 1.29 (2015: EUR 3.43). The finance result amounted to EUR -967 million
(2015: EUR -687 million).
The Board of Directors will propose to the Annual General Meeting the
payment of a 2016 dividend of EUR 1.35 per share on 20 April 2017 (2015:
EUR 1.30 per share). The date of record is 19 April 2017. "We intend to
honour our commitment of increasing dividend per share on a sustainable
basis by proposing this payment, which is about four percent higher than in
2015. The value is outside the range of the dividend policy exceptionally.
It is based on our 2016 underlying performance and it demonstrates our
confidence in our future operational cash generation," said Airbus Chief
Financial Officer Harald Wilhelm.
Free cash flow before M&A and customer financing amounted to EUR 1,408
million (2015:
EUR 1,325 million), reflecting the strong delivery performance and cash
generation potential.
Free cash flow of EUR 3,181 million (2015: EUR 2,825 million) included
around EUR -250 million in aircraft financing. The aircraft financing
environment remains healthy with a high level of liquidity available in the
market at good rates for Airbus' product portfolio. Support did not
materialise in the fourth quarter from European Export Credit Agencies
(ECAs) but Airbus continues to work with them to resume ECA-backed
financing. Also included in the free cash flow is EUR 1.2 billion in
proceeds from the sale of Dassault Aviation shares and around EUR 750
million from the implementation of Phase 2 of the Airbus Safran Launchers
JV. In addition, around EUR 1.7 billion were spent on shareholder returns
through the Dividend payment and the final tranche of the Share Buyback.
The net cash position on 31 December 2016 was EUR 11.1 billion (year-end
2015: EUR 10.0(3) billion) with a gross cash position of EUR 21.6 billion
(year-end 2015: EUR 19.1(3) 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.
About Airbus
Airbus is a global leader in aeronautics, space and related services. In
2016, it generated revenues of EUR 67 billion and employed a workforce of
around 134,000. Airbus offers the most comprehensive range of passenger
airliners from 100 to more than 600 seats. Airbus is also a European leader
providing tanker, combat, transport and mission aircraft, as well as
Europe's number one space enterprise and the world's second largest space
business. In helicopters, Airbus provides the most efficient civil and
military rotorcraft solutions worldwide.
(The legal name change to Airbus SE from Airbus Group SE is still subject
to the approval of the Annual General Meeting due to be held on 12 April
2017.)
Contacts for the media:
Martin Agüera +49 (0) 175 227 4369
Rod Stone +33 (0) 6 3052 1993
Note to editors: Digital Annual Press Conference / Live Webcast of the
Analyst Conference Call
At 08:00 a.m. CET today, it is possible to follow Airbus' first ever
Digital Annual Press Conference live via: www.airbusgroup.com/fy2016
You can also listen to the Full-Year 2016 Results Analyst Conference Call
with Chief Executive Officer Tom Enders and Chief Financial Officer Harald
Wilhelm at 09:30 a.m. CET today (22 February) via the Airbus website:
www.airbusgroup.com/fy2016. The analyst call presentation can also be found
on the company website. A recording will be made available in due course.
For a reconciliation of Airbus' KPIs to "reported IFRS" please refer to the
analyst presentation.
Airbus - Full-Year (FY) Results 2016
(Amounts in Euro)
Airbus FY 2016 FY 2015 Change
Revenues, in millions 66,581 64,450 +3%
thereof defence, in 11,102 11,512 -4%
millions
EBIT Adjusted , in 3,955 4,108 -4%
millions
EBIT (reported), in 2,258 4,062 -44%
millions
Research & Development 2,970 3,460 -14%
expenses,
in millions
Net Income(2), in 995 2,696 -63%
millions
Earnings Per Share 1.29 3.43 -62%
(EPS)
Free Cash Flow (FCF), 3,181 2,825 +13%
in millions
Free Cash Flow 1,156 1,175 -2%
before M&A, in
millions
Free Cash Flow before 1,408 1,325 +6%
M&A
and customer
financing, in millions
Dividend per share(4) 1.35 1.30 +4%
Order Intake(1), in 134,480 158,967 -15%
millions
Airbus 31 Dec 31 Dec Change
2016 2015
Order Book(1), in 1,060,447 1,005,864 +5%
millions
thereof defence, in 39,811 38,411 +4%
millions
Net Cash position, in 11,113 10,003(3) +11%
millions
Employees 133,782 136,574 -2%
by Division Revenues EBIT (reported)
(Amounts in FY FY Change FY FY Change
millions of Euro) 2016 2015 2016 2015
Commercial 49,237 45,854 +7% 1,543 2,287 -33%
Aircraft
Helicopters 6,652 6,786 -2% 308 427 -28%
Defence and Space 11,854 13,080 -9% -93 736 -
Headquarters / -1,162 -1,270 - 500 612 -
Eliminations
Total 66,581 64,450 +3% 2,258 4,062 -44%
by Division EBIT Adjusted
(Amounts in millions of Euro) FY FY Change
2016 2015
Commercial Aircraft 2,811 2,766 +2%
Helicopters 350 427 -18%
Defence and Space 1,002 1,051 -5%
Headquarters / Eliminations -208 -136 -
Total 3,955 4,108 -4%
by Division Order Intake (1) Order Book (1)
(Amounts in FY FY Change 31 Dec 31 Dec Chan-
millions of 2016 2015 2016 2015 ge
Euro)
Commercial 114,938 139,062 -17% 1,010,2 952,450 +6%
Aircraft 00
Helicopters 6,057 6,168 -2% 11,269 11,769 -4%
Defence and 15,393 14,440 +7% 41,499 42,861 -3%
Space
Headquarters / -1,908 -703 - -2,521 -1,216 -
Eliminations
Total 134,480 158,967 -15% 1,060,4 1,005,864 +5%
47
Airbus - Fourth Quarter Results (Q4) 2016
(Amounts in Euro)
Airbus Q4 2016 Q4 2015 Change
Revenues, in millions 23,876 21,485 +11%
EBIT Adjusted, in 1,547 1,328 +16%
millions
EBIT (reported), in -98 1,140 -
millions
Net Income(2), in -816 796 -
millions
Earnings Per Share (EPS) -1.06 1.02 -
by Division Revenues EBIT (reported)
(Amounts in Q4 Q4 Change Q4 Q4 Change
millions of 2016 2015 2016 2015
Euro)
Commercial 17,726 14,735 +20% 770 398 +93%
Aircraft
Helicopters 2,370 2,363 0% 108 186 -42%
Defence and 4,140 4,697 -12% -672 596 -
Space
Headquarters / -360 -310 - -304 -40 -
Eliminations
Total 23,876 21,485 +11% -98 1,140 -
by Division EBIT Adjusted
(Amounts in millions of Euro) Q4 Q4 Change
2016 2015
Commercial Aircraft 975 553 +76%
Helicopters 150 186 -19%
Defence and Space 566 629 -10%
Headquarters / -144 -40 -
Eliminations
Total 1,547 1,328 +16%
Q4 2016 revenues increased by 11 percent, driven by the strong delivery
performance in Commercial Aircraft but were weighed down by the perimeter
change in Defence and Space.
Q4 2016 EBIT Adjusted increased by 16 percent, supported by the strong
increase in Commercial Aircraft which mainly reflected an R&D tailwind,
favourable volume, transition pricing and ramp-up costs.
Q4 2016 EBIT (reported) decreased to EUR -98 million. It mainly reflects
negative adjustments of EUR -1.6 billion booked in Q4 related to a net
incremental A400M charge of EUR -1.2 billion, approximately EUR -200
million related to the impact from foreign exchange resulting from the
dollar pre-delivery payment mismatch and balance sheet revaluation and a
net restructuring provision of EUR -182 million
In addition, the Q4 2016 net income was significantly impacted by negative
foreign exchange effects in the other financial result
EBIT (reported) / EBIT Adjusted Reconciliation
The table below reconciles EBIT (reported) with EBIT Adjusted.
Airbus FY 2016 FY 2015 Change
EBIT (reported), in millions 2,258 4,062 -44%
A400M business update, in millions -2,210 -290
$ PDP mismatch / Balance Sheet -930 -635 -
revaluation, in millions
Restructuring/Transformation, in -182 41 -
millions
Portfolio in Defence and Space and -33 90 -
Commercial Aircraft, in millions
Airbus Safran Launchers JV creation 1,175 - -
Phase 2, in millions
A350 business update, in millions -385 -
Dassault Aviation disposal, in 868 748 +16%
millions
EBIT Adjusted, in millions 3,955 4,108 -4%
Reconciliation of EBIT (reported), EBIT Adjusted and EBIT* before one-offs
Airbus FY 2016 FY 2015 Change
EBIT* before one-offs, in 3,999 4,132 -3%
millions
Exceptionals, in millions -44 -24 -
EBIT Adjusted, in millions 3,955 4,108 -4%
Adjustments, in millions -1,697 -46 -
EBIT (reported), in 2,258 4,062 -44%
millions
Glossary
KPI DEFINITION
EBIT The Company continues to use the term
EBIT (Earnings before interest and
taxes). It is identical to Profit
before finance cost and income taxes
as defined by IFRS Rules.
Adjustments Adjustments, an alternative
performance measure, is a term used by
the Company which includes 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.
EBIT Adjusted 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.
EPS Adjusted EPS Adjusted is an alternative
performance measure of a basic
earnings per share as reported whereby
the net income as the numerator does
include Adjustments. For
reconciliation, see slide 23 of the
Analyst presentation.
Gross cash position The Company defines its consolidated
gross cash position as the sum of (i)
cash and cash equivalents and (ii)
securities (as all recorded in the
consolidated statement of financial
position).
Net cash position For definition of the alternative
performance measure net cash position,
see Registration Document, MD&A
section 2.1.6.
FCF For the definition of the alternative
performance measure free cash flow,
see Registration Document, MD&A
section 2.1.6.1. It is a key indicator
which allows the Company to measure
the amount of cash flow generated from
operations after cash used in
investing activities.
FCF before M&A Free cash flow before mergers and
acquisitions refers to free cash flow
as defined in the Registration
Document, MD&A section 2.1.6.1
adjusted for net proceeds from
disposals and acquisitions. It is an
alternative performance measure and
indicator that is important in order
to measure FCF excluding those cash
flows from the disposal and
acquisition of businesses.
FCF before M&A and customer Free cash flow before M&A and customer
financing financing refers to free cash flow
before mergers and acquisitions
adjusted for cash flow related to
aircraft financing activities. It is
an alternative performance measure and
indicator that may be used from time
to time by the Company in its
financial guidance, esp. when there is
higher uncertainty around customer
financing activities, such as during
the suspension of ECA financing
support.
Footnotes:
1) Contributions from commercial aircraft activities to Order Intake and
Order Book based on list prices.
2) Airbus continues to use the term Net Income. It is identical to Profit
for the period attributable to equity owners of the parent as defined
by IFRS Rules.
3) Excluding the reclassification of certain securities.
4) To be proposed to the Annual General Meeting 2017.
Safe Harbour Statement:
Certain statements contained in this press release are not historical facts
but rather are statements of future expectations and other forward-looking
statements that are based on management's beliefs. These statements reflect
Airbus Group's views and assumptions as of the date of the statements and
involve known and unknown risk and uncertainties that could cause actual
results, performance or events to differ materially from those expressed or
implied in such statements.
When used in this press release, words such as "anticipate", "believe",
"estimate", "expect", "may", "intend", "plan to" and "project" are intended
to identify forward-looking statements.
This forward looking information is based upon a number of assumptions
including without limitation: assumption regarding demand, current and
future markets for Airbus Group's products and services, internal
performance, customer financing, customer, supplier and subcontractor
performance or contracts negotiations, favourable outcomes of certain
pending sales campaigns. Forward looking statements are subject to
uncertainty and actual future results and trends may differ materially
depending on variety of factors including without limitation: general
economic and labour conditions, including in particular economic conditions
in Europe, North America and Asia, legal, financial and governmental risk
related to international transactions, the cyclical nature of some of
Airbus Group's businesses, volatility of the market for certain products
and services, product performance risks, collective bargaining labour
disputes, factors that result in significant and prolonged disruption to
air travel worldwide, the outcome of political and legal processes,
including uncertainty regarding government funding of certain programs,
consolidation among competitors in the aerospace industry, the cost of
developing, and the commercial success of new products, exchange rate and
interest rate spread fluctuations between the euro and the U.S. dollar and
other currencies, legal proceeding and other economic, political and
technological risk and uncertainties. Additional information regarding
these factors is contained in the Company's "Registration Document" dated 5
April 2016. For more information, please refer to www.airbusgroup.com
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Language: English
Company: Airbus Group SE
P.O. Box 32008
2303 DA Leiden
Netherlands
Phone: 00 800 00 02 2002
Fax: +49 (0)89 607 - 26481
Internet: www.airbusgroup.com
ISIN: NL0000235190
WKN: 938914
Indices: MDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover,
Munich, Stuttgart, Tradegate Exchange
End of Announcement DGAP News Service