Airbus achieves ‘strong performance’ for nine month period

Guillaume Faury

Aircraft manufacturer Airbus has reported consolidated financial results for the nine months ended September 30, 2021, which it said reflect “a strong performance”.

The group employs around 4,500 staff at its wing-making plant in Broughton, near Chester, which makes wings for all its commercial aircraft.

Last month it was reported that hundreds more jobs could be created at the Broughton site if the aviation group wins a Government helicopter contract which would lead to a new assembly line being built there.

Consolidated revenues increased 17% to €35.2bn, compared with €30.2bn in the same period last year, mainly reflecting the higher number of commercial aircraft deliveries compared with 2020’s nine month term.

A total of 424 commercial aircraft were delivered (2020: 341 aircraft), comprising 34 A220s, 341 A320 Family, 11 A330s , 36 A350s and two A380s.

Revenues generated by Airbus’s commercial aircraft activities increased 21%, largely reflecting the delivery performance compared with 2020 which was strongly impacted by COVID-19.

Airbus Helicopters delivered 194 units (9m 2020: 169 units) with revenues up 14% reflecting growth in services as well as the higher deliveries, notably more helicopters from the Super Puma family.

Revenues at Airbus Defence and Space were broadly stable year-on-year with four A400M military airlifters delivered in 9m 2021.

Consolidated EBIT adjusted was €3,369m (9m 2020: € -125m).

The EBIT adjusted related to Airbus’s commercial aircraft activities totalled €2,739m (9m 2020: € -641m), mainly driven by the operational performance linked to deliveries and efforts on cost containment and competitiveness.

Gross commercial aircraft orders totalled 270 (9m 2020: 370 aircraft) with net orders of 133 aircraft after cancellations (9m 2020: 300 aircraft).

The order backlog was 6,894 commercial aircraft on September 30, 2021. Airbus Helicopters booked 185 net orders (9m 2020: 143 units), including 10 helicopters of the Super Puma Family. Airbus Defence and Space’s order intake by value was €10.1bn (9m 2020: €8.2bn) with third quarter orders including 56 C295 aircraft for India, two A400Ms for Kazakhstan and support and spares contract renewals for the German and Spanish Eurofighter fleets.

The A220 production rate, which is currently at five aircraft a month, is expected to increase to around six per month in early 2022, with a monthly production rate of 14 envisaged by the middle of the decade. On the A320 family programme, the company is working to secure the ramp up and is on trajectory to achieve a monthly rate of 65 aircraft by summer 2023.

The recent commercial successes of the A330 programme enable a monthly rate increase from around two to almost three aircraft at the end of 2022. The A350 programme is expected to increase from around five to around six aircraft a month in early 2023.

Airbus Helicopters’ EBIT adjusted increased to €314m (9m 2020: €238m), driven by services, programme execution and lower spending on research and development.

EBIT adjusted at Airbus Defence and Space increased to €284m (9m 2020: €266m), mainly reflecting the division’s efforts on cost containment and competitiveness.

Consolidated EBIT (reported) amounted to € 3,437m (9m 2020: € -2,185m), including net adjustments of € +68m.

These Adjustments comprised: € +190m related to the A380 programme, of which € +45m were booked in quarter three; € -165m related to the dollar pre-delivery payment mismatch and balance sheet revaluation, of which € +5m were in quarter three; € +43m of other adjustments, including compliance costs, of which € -6m were in quarter three.

The financial result was € -172m (9m 2020: € -712m) which mainly reflects the net interest result of € -233m partly offset by € +63m related to the revaluation of the Dassault Aviation equity stake. Consolidated net income was €2,635m (9m 2020 net loss € -2,686m) with consolidated reported earnings per share of €3.36 (9m 2020 loss per share € -3.43).

Consolidated free cash flow before mergers and acquisitions and customer financing was €2,260m (9m 2020: € -11,798m), reflecting efforts on cash containment and also included a positive phasing impact from working capital. Consolidated free cash flow was €2,308m (9m 2020: € -12,276m).

On September 30, 2021, the gross cash position stood at €21.7bn (year-end 2020: €21.4bn) with a consolidated net cash position of €6.7bn (year-end 2020: €4.3bn). The company’s liquidity position remains strong, standing at €27.7bn at the end of September 2021. Given the increase in the net cash position and the robust liquidity, a decision was taken not to renew the undrawn €6.2bn supplemental liquidity line which matured in September. In the meantime, the maturity of the €6bn revolving syndicated credit facility has been extended by a year.

As the basis for its 2021 guidance, the company assumes no further disruptions to the world economy, air traffic, the company’s internal operations, and its ability to deliver products and services. The company’s 2021 guidance is before mergers and acquisitions.

On that basis, the company has updated its 2021 guidance and now targets to achieve in 2021 around 600 commercial aircraft deliveries, EBIT adjusted of €4.5bn and free cash flow before mergers and acquisitions and customer financing of €2.5bn.

Airbus chief executive, Guillaume Faury, said: “The nine month results reflect a strong performance across the company as well as our efforts on cost containment and competitiveness.

“As the global recovery continues, we are closely monitoring potential risks to our industry. We are focused on securing the A320 family ramp up and striving to ensure the right industrial and supply chain capabilities are in place.

“Based on our nine month performance, we have updated our 2021 earnings and cash guidance. We are strengthening the balance sheet to secure investment for our long term ambitions.”

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