Some You Win, Some Toulouse

Airbus SE reported consolidated financial results for the Half-Year (H1) ended 30 June 2023.

“During the first half of 2023 we progressed well across our businesses in an operational environment that remains complex. Our commercial aircraft are in strong demand, as demonstrated by more than eight-hundred orders announced at the Paris Air Show. This demand is driven both by growth and fleet replacement as airlines invest in more fuel efficient fleets,” said Guillaume Faury, Airbus Chief Executive Officer. “Based on this H1 performance, we maintain our 2023 guidance.”

Gross commercial aircraft orders totaled 1,080 (H1 2022: 442 aircraft) with net orders of 1,044 aircraft after cancellations (H1 2022: 259 aircraft). The order backlog amounted to a record 7,967 commercial aircraft at the end of June 2023. Airbus Helicopters registered 131 net orders (H1 2022: 163 units) which were well spread across programs and included 19 H160s. Airbus Defense and Space’s order intake by value was € 6.0-billion (H1 2022: € 6.5-billion), including four new-build and five converted A330 Multi-Role Tanker Transport aircraft for Canada.

Consolidated revenues increased 11-percent year-on-year to € 27.7-billion (H1 2022: € 24.8-billion). A total of 316 commercial aircraft were delivered (H1 2022: 297(1)(2) aircraft), comprising 25 A220s, 256 A320 Family, 14 A330s, and 21 A350s. Revenues generated by Airbus’ commercial aircraft activities increased 16-percent, mainly reflecting the higher number of deliveries. Airbus Helicopters’ deliveries increased to 145 units (H1 2022: 115 units), mainly driven by the Light helicopter segment. The Division’s revenues rose 16-percent, mainly reflecting a solid performance across programs and services. Revenues at Airbus Defense and Space decreased eight-percent, mainly driven by delays in Space Systems and delivery phasing in Military Air Systems. Three A400M military airlifters were delivered in H1 2023.

Consolidated Earnings Before Interest and Taxes (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 programs, restructuring or foreign exchange impacts as well as capital gains/losses from the disposal and acquisition of businesses – was € 2,618-million (H1 2022: € 2,645-million).

EBIT Adjusted related to Airbus’ commercial aircraft activities was broadly stable at € 2,256-million (H1 2022: € 2,276-million). The positive effect from the increase in deliveries, supported by a more favorable hedge rate, was partially reduced by investments for preparing the future. H1 2022 included the non-recurring positive impact from retirement obligations partly offset by the impact resulting from international sanctions against Russia. In H1 2023, further progress was made on compliance related topics which allowed provisions to be released.

The ramp-up on the A220 program is continuing towards a monthly production rate of 14 aircraft in the middle of the decade. On the A320 Family program, production is progressing well towards the previously announced rate of 75 aircraft per month in 2026. Tactical adjustments to production planning will continue to be made as required to meet this target rate, which is now the key reference point for the company and the supply chain. The recent inauguration of a new A321 capable final assembly line in Toulouse is the latest concrete milestone in the development of Airbus’ global industrial system. On the A321XLR, the flight-test program is progressing towards the expected entry-into-service in Q2 2024.

On widebody aircraft, the company continues to target rate four for the A330 in 2024 and rate nine for the A350 at the end of 2025.

Airbus Helicopters’ EBIT Adjusted increased to € 274-million (H1 2022: € 215-million), reflecting the solid performance across programs and services. H1 2022 also included net positive non-recurring elements.

EBIT Adjusted at Airbus Defense and Space decreased to € 78-million (H1 2022: € 155-million), mainly reflecting the decrease in revenues as well as updated assumptions on some long-term contracts, consistent with the difficult environment of the Division's Space business. H1 2022 also included net positive non-recurring elements.

On the A400M program, development activities continue towards achieving the revised capability roadmap. Retrofit activities are progressing in close alignment with the customer. No further net material impact was recognized in the first half of 2023. Risks remain on the qualification of technical capabilities and associated costs, on aircraft operational reliability, on cost reductions and on securing overall volume as per the revised baseline.

Consolidated self-financed R&D expenses totaled € 1,431-million (H1 2022: € 1,256-million).

Consolidated EBIT (reported) amounted to € 1,887-million (H1 2022: € 2,579-million), including net adjustments of € -731-million.

Subject adjustments comprised:

• € -651-million related to the dollar pre-delivery payment mismatch and balance sheet revaluation, of which € -291-million were in Q2. This is mainly linked to the phasing impact arising from the difference between transaction date and delivery date;
• € -34-million related to the Aerostructures transformation, of which € -25-million were in Q2;
• € -46-million of other costs including compliance, of which € -32-million were in Q2.

The financial result was € 102-million (H1 2022: € 107-million). It mainly reflects a positive impact from the revaluation of certain equity investments, partly offset by the net interest result and negative impacts from the revaluation of financial instruments. Consolidated net income(3) was € 1,526-million (H1 2022: € 1,901-million) with consolidated reported earnings per share of € 1.94 (H1 2022: € 2.42).

Consolidated free cash flow before M&A and customer financing was € 1,574-million (H1 2022: € 1,955-million), reflecting progress on deliveries as well as an increase in inventory linked to the ongoing ramp-up across programs. It also includes a favorable timing of receipts and payments.

Consolidated free cash flow was € 1,474-million (H1 2022: € 1,646-million). The gross cash position stood at € 22.9-billion at the end of June 2023 (year-end 2022: € 23.6-billion), with a consolidated net cash position of € 9.1-billion (year-end 2022: € 9.4-billion).

The guidance issued in February 2023 is maintained.

As the basis for its 2023 guidance, the company assumes no additional disruptions to the world economy, air traffic, the supply chain, the company’s internal operations, and its ability to deliver products and services.

On that basis, the company targets to achieve in 2023 around:

• 720 commercial aircraft deliveries;
• EBIT Adjusted of € 6.0-billion;
• Free Cash Flow before M&A and Customer Financing of € 3.0-billion.

FMI: www.airbus.com/investors