Airbus posts 95 per cent earnings increase, becomes lead EADS brand

written by australianaviation.com.au | August 1, 2013
While A380 sales stall, Airbus is banking on an A350 widebody future. Airbus)

As Airbus reported a 95 per cent increase in earnings for the first half of 2013, parent company EADS has confirmed the EADS brand will be replaced by Airbus. As the lead product in the EADS portfolio, the parent company sees greater strength in market positioning under an Airbus Group brand.

“The renaming simply gathers the entire company under the best brand we have, one that stands for internationalisation, innovation and integration,” EADS CEO Tom Enders said.

“What we are unveiling today is an evolution, not a revolution. It’s the next logical step in the development of our company. We affirm the predominance of commercial aeronautics in our Group and we restructure and focus our defence and space activities to take costs out, increase profitability and improve our market position. The renaming simply gathers the entire company under the best brand we have, one that stands for internationalisation, innovation and integration – and also for some two thirds of our revenues. It reinforces the message that ‘we make things fly’.”

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The decision comes after a strategic review instigated by the EADS board under its Flightpath 2015 plan. Airbus will comprise three divisions covering commercial, defence and rotorcraft. The restructure will begin next year and be completed by the end of 2014 subject to the successful completion of employee and union negotiations.

Airbus Military, which produces the C295W and A400M, and the space businesses Astrium and Cassidian, will be integrated into Airbus Defence & Space.

Eurocopter will be rebranded as Airbus Helicopters. “Rotorcraft technology is very particular and it’s necessary to maintain the strong synergies between civil and military products,” EADS said in its announcement.

Airbus reported first-half earnings of nearly €1.2 billion, a 95 per cent increase on the previous year, on revenues of more than €18 billion. Airbus’s projects it will deliver more than 1,000 aircraft during the full year.

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Meanwhile, EADS posted a half-year increase of six per cent in revenues, to €26 billion, based predominantly on Airbus performance.

Commercially, the financial results show capital expenditure of €1.4 billion that included €85 million relating to A380 wing-rib bracket repairs and the remainder centred on A350 development.

The half-year results also brought the first public recognition that the A380 is becoming a problem seller, with slower-than-expected sales causing the company to recast its outlook.

In a potential signal of A350-related development concerns, EADS stated: “The A350 XWB program remains challenging. Any schedule change could lead to an increasingly higher impact on provisions.” While appropriately cautious, the statement raises the possibility of delays related to flight testing of the aircraft.

“Airbus is now entering the most critical phase of the A350 program. The industrial ramp up preparation is underway and risks related to the ramp-up are being closely monitored in line with the schedule, aircraft performance and overall cost envelope.” Notwithstanding this, EADS said the A350 shows “strong momentum”.

Airbus Military received eight net orders compared with 21 net orders in the previous comparative period, although deliveries were higher at 12 compared to seven in the previous period. Airbus Military’s order book was worth €20.8 billion (year-end 2012: € 21.1 billion).

Eurocopter revenues fell by seven per cent to €2,584 million as deliveries declined to 190 helicopters compares to 198 in the first half of 2012. Earnings before interest and tax (EBIT) declined 35 per cent to € 128 million, significantly affected by the grounding of the EC225 Super Puma. Eurocopter’s second quarter order intake included a contract for 34 NH90s from France, but insufficient to match the 2012 first-half orders of 195, this year booking only 167.

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