How did Airbus do 2019 after Boeing Max disaster?

Boeing is not mentioned in Airbus SE  Half-Year (H1) 2019 report as consolidated financial results and maintained its guidance for the full-year.

“The half-year financial performance mainly reflects the ramp-up in production of A320 Family aircraft and transition to the more efficient NEO version, as well as further progress on the A350 financial performance,” said Airbus Chief Executive Officer Guillaume Faury. “We continue to see good demand for our competitive product portfolio, including the new A321XLR, as shown by the strong market endorsement at June’s Le Bourget airshow. Our operational focus is mainly on the A320neo Family ramp-up. The second half of the year in terms of deliveries and in particular free cash flow continues to be challenging. In defense and space, we signed the important contract amendment for the A400M program.”

Gross commercial aircraft orders totaled 213 (H1 2018: 261 aircraft) with net orders of 88 aircraft (H1 2018: 206 aircraft). The order book stood at 7,276 commercial aircraft as of 30 June 2019. Net helicopter orders of 123 units (H1 2018: 143 units) included 23 NH90s for Spain and 11 H145s in the second quarter. Airbus Defence and Space’s order intake by value totaled € 4.2 billion, with second-quarter bookings including the A400M Global Support Step 2 contract with OCCAR and next-generation geostationary Ka-band communications satellites.

Consolidated revenues increased to € 30.9 billion (H1 2018: € 25.0 billion), mainly reflecting higher commercial aircraft deliveries and favorable foreign exchange. At Airbus, a total of 389 commercial aircraft were delivered (H1 2018: 303 aircraft), comprising 21 A220s, 294 A320 Family, 17 A330s, 53 A350s and 4 A380s. Airbus Helicopters delivered 143 units (H1 2018: 141 units) with stable revenues driven by programme phasing compensated by growth in services. Higher revenues at Airbus Defence and Space were supported by Military Aircraft activities.

Consolidated 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, restructurings or foreign exchange impacts as well as capital gains/losses from the disposal and acquisition of businesses – more than doubled to € 2,529 million (H1 2018: € 1,162 million), driven by commercial aircraft activities at Airbus.

Airbus’ EBIT Adjusted increased to € 2,338 million (H1 2018: € 867 million), mainly reflecting the A320 ramp-up and NEO premium, further progress on the A350 financial performance and an improvement in foreign exchange rates in the second quarter.

On the A320 program, NEO aircraft represented 234 out of the total 294 deliveries. The ramp-up in production of the Airbus Cabin Flex (ACF) version of the A321 remains challenging. Given the recent commercial success of the A321 ACF and XLR as demonstrated at Le Bourget, Airbus is studying different options to increase the share of the A321 in current A320 Family production capacity. On the A330 program, the focus is on the ramp-up of the NEO version to secure deliveries in the second half of 2019. A330neo deliveries totaled 13 in the half-year. Good progress was made on A350 recurring cost convergence and the program is on track to reach the breakeven target for the year. Meanwhile, progress was made in preparing the winding down of the A380 programme and securing in-service support for the next decades.

Airbus Helicopters’ EBIT Adjusted totaled € 125 million (H1 2018: € 135 million), reflecting a less favorable delivery mix partially compensated by an increased contribution from services.

EBIT Adjusted at Airbus Defence and Space totaled € 233 million (H1 2018: € 309 million), mainly reflecting efforts to support ongoing campaigns.

Seven A400M military transport aircraft were delivered in the half-year, bringing the in-service fleet to 81 as of 30 June. The A400M contract amendment was signed with OCCAR during the second quarter, concluding the discussions on the program’s Global Rebaselining. With this contract amendment, an agreement has been reached on a new capabilities development plan, a new product delivery schedule, a new retrofit delivery schedule and new financial terms. The anticipated impact of the Global Rebaselining was reflected in the 2018 results.

Consolidated self-financed R&D expenses totaled € 1,423 million (H1 2018: € 1,403 million).

Consolidated EBIT (reported) amounted to € 2,093 million (H1 2018: € 1,120 million), including Adjustments totalling a net € -436 million. These Adjustments mainly comprised:

  • A negative € -208 million related to the prolonged suspension of defense export licences to Saudi Arabia by the German government, of which € -18 million were booked in Q2 2019;
  • A negative € -136 million related to A380 program cost, of which € -75 million was booked in Q2 2019, as part of Airbus’ continuous assessment of assets recoverability and the quarterly review of onerous contract provision assumptions;
  • A total of € -90 million of other costs, including compliance.

Consolidated reported earnings per share of € 1.54 (H1 2018: € 0.64) included a negative impact from the financial result, mainly driven by losses on foreign exchange hedges recognized in the context of the prolonged suspension of defense export licenses. The financial result was   € -215 million (H1 2018: € -303 million). The effective tax rate included the impact of charges related to the prolonged suspension of defense export licenses, as well as the reassessment of tax assets and liabilities. Consolidated net income(2) was € 1,197 million (H1 2018: € 496 million).

Consolidated free cash flow before M&A and customer financing of € -3,981 million
(H1 2018: € -3,968 million) mainly reflected the working capital build supporting deliveries in the second half of 2019. Consolidated free cash flow was € -4,116 million (H1 2018: € -3,797 million).

The consolidated net cash position was € 6.6 billion on 30 June 2019 (year-end 2018: € 13.3 billion) after the 2018 dividend payment of € 1.3 billion in the second quarter. The gross cash position on 30 June was € 17.8 billion (year-end 2018: € 22.2 billion).

Following a review of demographic and underlying assumptions, the pension provision increased in the second quarter. This reflected the global decrease in the discount rate as well as the change in management’s estimates for the valuation of employee benefits in Germany.

In response to developments in the WTO dispute, the United States Trade Representative (USTR) in April published a list of EU products upon which the USTR intends to apply tariffs, which included new aircraft and helicopters as well as major components for aircraft manufacturing in the US. If the USTR decides to impose tariffs on Airbus products and other products from the EU, this could significantly affect the delivery of new Airbus aircraft and helicopters to the US market and have a negative effect on Airbus’ financial condition and results of operations. The potential decision of the EU to impose tariffs on US products could come at a later stage. Airbus continues to support an outcome through a negotiated solution(3).


As the basis for its 2019 guidance, the Company expects the world economy and air traffic to grow in line with prevailing independent forecasts, which assume no major disruptions.

The 2019 earnings and Free Cash Flow guidance is before M&A.

  • Airbus targets 880 to 890 commercial aircraft deliveries in 2019.
  • On that basis:

Airbus expects to deliver an increase in EBIT Adjusted of approximately +15% compared to 2018 and FCF before M&A and Customer Financing of approximately € 4 billion.