Airbus bemoans sluggish sector, reflected in first quarter results

Airbus Factory, Filton

Aircraft manufacturer, Airbus, has grown revenues but seen earnings shrink in the first quarter of its 2024 financial year.

The group, which employs 5,000 staff at its wing making plant in Broughton, near Chester, and around 3,000 staff at its Filton plant in Bristol, has released figures for the three months to March 31, during which it said the sector has shown no signs of improvement.

Consolidated revenues increased nine per cent year-on-year to €12.8bn, up from €11.8 bn last year. A total of 142 commercial aircraft were delivered (Q1 2023: 127 aircraft), comprising 12 A220s, 116 A320 family, 7 A330s and seven A350s.

Revenues generated by Airbus’s commercial aircraft activities increased 13%, mainly reflecting the higher number of deliveries. Airbus Helicopters’ deliveries totaled 50 units (Q1 2023: 71 units) while its revenues decreased nine per cent, reflecting the lower volume of deliveries, partially offset by services.

Revenues at Airbus Defence and Space increased four per cent mainly driven by the Air Power business, partly offset by a less favourable phasing in Space Systems. One A400M military airlifter was delivered in the quarter.

Consolidated EBIT (earnings before interest and tax) Adjusted for the first quarter was €577m (Q1 2023: €773m).

This included the planned impact linked to the increased Airbus Employee Share Ownership Plan, which saw record participation among employees, and resulted in a year-on-year expense increase of slightly above €100m.

EBIT Adjusted related to Airbus’s commercial aircraft activities decreased to €507m (Q1 2023: €580m), with the positive impact from higher deliveries being offset by a slightly less favourable hedge rate as well as investments for preparing the future.

The A220 ramp-up continues towards a monthly production rate of 14 aircraft in 2026, with a focus on the programme’s industrial maturity and financial performance.

Wing manufacture at Broughton

On the A320 family programme, the company is making progress towards the rate of 75 aircraft per month in 2026. Entry-into-service of the A321XLR continues to be expected in the third quarter of 2024.

On widebody aircraft, the company has decided to increase the production rate for the A350 to 12 aircraft a month in 2028 and continues to target rate four for the A330 in 2024.

Airbus Helicopters’ EBIT Adjusted decreased to €71m (Q1 2023: €156m), from a particularly strong first quarter in 2023 and reflecting the lower deliveries.

EBIT Adjusted at Airbus Defence and Space decreased to -€9m (Q1 2023: €36m), mainly reflecting the lower volume and profitability of Space Systems, notably linked to the Estimates at Completion updates performed in the second half of 2023.

Consolidated free cash flow before customer financing was -€1.791bn (Q1 2023: -€876m), mainly reflecting the planned inventory build-up resulting from the execution of the ramp up across programmes. Consolidated free cash flow was -€1.799bn (Q1 2023: -€873m). The gross cash position stood at €23.4bn at the end of March 2024 (year-end 2023: €25.3bn), with a consolidated net cash position of €8.7bn (year-end 2023: €10.7bn).

Gross commercial aircraft orders totaled 170 (Q1 2023: 156 aircraft) with the same number of net orders due to no cancellations (Q1 2023 net orders: 142 aircraft).

The order backlog amounted to 8,626 commercial aircraft at the end of March 2024. Airbus Helicopters registered 63 net orders (Q1 2023: 39 units), mainly in the light and medium segments. Airbus Defence and Space’s order intake by value was €2bn (Q1 2023: €2.5bn).

The guidance for 2024 issued in February remains unchanged, with a target of around 800 commercial aircraft deliveries; EBIT Adjusted between €6.5bn and €7bn; and free cash flow before customer financing of around €4bn.

Guillaume Faury

Airbus CEO, Guillaume Faury, said: “We delivered first quarter 2024 results against the backdrop of an operating environment that shows no sign of improvement.
“Geopolitical and supply chain tensions continue. In that context, we delivered 142 commercial aircraft.

“We started 2024 with a solid order intake across our businesses. The strong momentum on widebody aircraft underpins our decision to increase the production rate for the A350 to 12 aircraft a month in 2028.”

He added: “Our ramp up plans are continuing, supported by the investments in our production system while relying on our core pillars of safety, quality, integrity, compliance and security.”