DGAP-Adhoc: Airbus reports First Quarter (Q1) 2017 results
DGAP-Ad-hoc: Airbus SE / Key word(s): Quarter Results
Airbus reports First Quarter (Q1) 2017 results
27-Apr-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.
Ad-hoc release, 27 April 2017
Airbus reports First Quarter (Q1) 2017 results
- Revenues EUR13bn; EBIT Adjusted EUR240m; EBIT (reported) EUR852m; EPS (reported) EUR0.79
- Q1 financials reflect delivery phasing and divestments
- Strong commercial aircraft backlog supporting ramp-up plans
- 2017 guidance confirmed
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 EUR 3.8 billion (Q1 2016: EUR 7.2 billion) with the order book(1) valued at EUR 1,030 billion as of 31 March 2017 (year-end 2016: EUR 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 EUR 13.0 billion (Q1 2016: EUR 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 EUR 240 million (Q1 2016: EUR 498 million).
Commercial Aircraft's EBIT Adjusted was EUR 281 million (Q1 2016: EUR 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 EUR -2 million
(Q1 2016: EUR 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 EUR 63 million (Q1 2016: EUR 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 EUR 548 million (Q1 2016: EUR 547 million).
EBIT(reported) of EUR 852 million (Q1 2016: EUR 362 million) included Adjustments totalling a net
EUR +612 million. These Adjustments comprised:
- A net capital gain of EUR 560 million from the divestment of the Defence Electronics business;
- A positive impact of EUR 55 million related to the dollar pre-delivery payment mismatch and balance sheet revaluation;
- A net negative impact of EUR 3 million related to other portfolio changes at Defence and Space.
Net income(2) increased to EUR 608 million (Q1 2016: EUR 399 million) after the EBIT Adjustments with earnings per share of EUR 0.79 (Q1 2016: EUR 0.51). EPS and net income included a significant negative impact mainly from the revaluation of financial instruments. The finance result was EUR -206 million (Q1 2016: EUR 193 million).
Free cash flow before M&A and customer financing was EUR -1,269 million (Q1 2016: EUR -2,731 million), reflecting the strong focus on working capital amid the production ramp-up and back-loaded deliveries. Free cash flow of EUR -1,116 million (Q1 2016: EUR -3,131 million) included net proceeds of around EUR 600 million from the Defence Electronics disposal.
The net cash position on 31 March 2017 was EUR 9.8 billion (year-end 2016: EUR 11.1 billion) with a gross cash position of EUR 20.3 billion (year-end 2016: EUR 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 EUR 150 million and EPS Adjusted by around 14 cents.
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.
Contacts for the media:
Martin Agüera +49 (0) 175 227 4369
Rod Stone +33 (0) 6 3052 1993
Note to editors: Live Webcast of the Analyst Conference Call
At 08:30 a.m. CEST today, you can listen to the First Quarter 2017 Results Analyst Conference Call with Chief Financial Officer Harald Wilhelm via the Airbus website: www.airbusgroup.com/Q12017. 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 - First Quarter (Q1) 2017 Results
(Amounts in Euro)
Airbus
Q1 2017
Q1 2016
Change
Revenues, in millions
12,988
12,183
+7%
thereof defence, in millions
1,897
2,290
-17%
EBIT Adjusted, in millions
240
498
-52%
EBIT (reported), in millions
852
362
+135%
Research & Development expenses,
in millions
548
547
0%
Net Income(2), in millions
608
399
+52%
Earnings Per Share (EPS)
0.79
0.51
+55%
Free Cash Flow (FCF), in millions
-1,116
-3,131
-
Free Cash Flow before M&A, in millions
-1,599
-2,986
-
Free Cash Flow before M&Aand Customer Financing, in millions
-1,269
-2,731
-
Order Intake(1), in millions
3,823
7,245
-47%
Airbus
31 March2017
31 Dec
2016
Change
Order Book(1), in millions
1,030,158
1,060,447
-3%
thereof defence, in millions
37,696
39,811
-5%
Net Cash position, in millions
9,750
11,113
-12%
Employees
130,289
133,782
-3%
By Division
Revenues
EBIT(reported)
(Amounts in millions of Euro)
Q12017
Q1
2016
Change
Q1 2017
Q1
2016
Change
Commercial Aircraft
9,825
8,668
+13%
336
289
+16%
Helicopters
1,291
1,158
+11%
-2
33
-
Defence and Space
2,114
2,534
-17%
620
88
+605%
Headquarters / Eliminations
-242
-177
-
-102
-48
-
Total
12,988
12,183
+7%
852
362
+135%
By Division
EBIT Adjusted
(Amounts in millions of Euro)
Q1 2017
Q1
2016
Change
Commercial Aircraft
281
406
-31%
Helicopters
-2
33
-
Defence and Space
63
107
-41%
Headquarters / Eliminations
-102
-48
-
Total
240
498
-52%
By Division
Order Intake(1)
Order Book(1)
(Amounts in millions of Euro)
Q1 2017
Q1
2016
Change
31 March2017
31 Dec
2016
Change
Commercial Aircraft
1,153
4,311
-73%
981,958
1,010,200
-3%
Helicopters
1,417
1,004
+41%
11,392
11,269
+1%
Defence and Space
1,521
2,515
-40%
39,421
41,499
-5%
Headquarters / Eliminations
-268
-585
-
-2,613
-2,521
-
Total
3,823
7,245
-47%
1,030,158
1,060,447
-3%
(At the end of the 2016 financial year, Airbus implemented the European Securities and Markets Authority's guidelines on Alternative Performance Measures. As a result, certain items are no longer labelled as "one-offs". Such items are now labelled as "Adjustments". Airbus no longer measures and communicates 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 has changed such that "EBIT* before one-offs" has been replaced by "EBIT Adjusted" and "EPS* before one-offs" replaced by "EPS Adjusted". Please refer to the Glossary for definitions of the Alternative Performance Measures.)
EBIT (reported) / EBIT Adjusted Reconciliation
The table below reconciles EBIT (reported) with EBIT Adjusted.
Airbus
Q1 2017
EBIT (reported), in millions
852
Defence Electronics divestment, in millions
560
$ PDP mismatch/ Balance Sheet revaluation, in millions
55
Other net portfolio changes at Defence and Space, in millions
-3
EBIT Adjusted, in millions
240
Reconciliation of Q1 2016 EBIT* before one-off to EBIT Adjusted
Airbus
Q1 2016
EBIT* before one-off, in millions
501
Exceptionals, in millions
-3
EBIT Adjusted, in millions
498
*Pre-goodwill impairment and exceptionals.
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 20 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 financing
Free cash flow before M&A and customer 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.
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' 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' 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' 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 4 April 2017. For more information, please refer to www.airbusgroup.com
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Language:
English
Company:
Airbus 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
567987 27-Apr-2017 CET/CEST