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Airbus reports Half-Year (H1) 2022 results

News actualites aeromorning
  • 297(1) commercial aircraft delivered in H1 2022
  • Revenues € 24.8 billion; EBIT Adjusted € 2.6 billion
  • EBIT (reported) € 2.6 billion; EPS (reported) € 2.42
  • Free cash flow before M&A and customer financing € 2.0 billion
  • A320 Family monthly production rate target of 75 for 2025 unchanged; adjustment to 2022 and 2023 ramp-up trajectory
  • 2022 guidance updated to around 700 commercial aircraft deliveries
  • 2022 guidance maintained for EBIT Adjusted and FCF before M&A and customer financing

Amsterdam, 27 July 2022 – Airbus SE (stock exchange symbol: AIR) reported consolidated financial results for the Half-Year (H1) ended 30 June 2022.

“Airbus delivered a solid H1 2022 financial performance in a complex operating environment, with the geopolitical and economic situation creating further uncertainties for the industry. The supply chain challenges are leading us to adjust the A320 Family ramp-up steps in 2022 and 2023, and we now target a monthly rate of 65 in early 2024. Our aircraft delivery target for 2022 has been updated accordingly. The earnings and free cash flow guidance are maintained, underpinned by the H1 financials,” said Guillaume Faury, Airbus Chief Executive Officer. “The Airbus teams are engaged with suppliers and partners to ramp up towards an A320 Family monthly production rate of 75 in 2025, backed by strong customer demand.”

Gross commercial aircraft orders increased to 442 (H1 2021: 165 aircraft) with net orders of 259 aircraft after cancellations (H1 2021: 38 aircraft). The order backlog amounted to 7,046 commercial aircraft on 30 June 2022. Airbus Helicopters booked 163 net orders (H1 2021: 123 units), including 14 Super Puma Family and in Q1 it was awarded the contract for the Tiger MkIII attack helicopter upgrade programme. Airbus Defence and Space’s order intake by value increased to € 6.5 billion (H1 2021: € 3.5 billion), corresponding to a book-to-bill ratio of around 1.3. Second quarter orders included the contract to deliver 20 latest generation Eurofighter jets to the Spanish Air Force.

Consolidated revenues totalled € 24.8 billion (H1 2021: € 24.6 billion). A total of 297(1) commercial aircraft were delivered (H1 2021: 297 aircraft), comprising 25 A220s, 230 A320 Family, 13 A330sand 29 A350s(2). Revenues generated by Airbus’ commercial aircraft activities were broadly stable. Airbus Helicopters delivered 115 units (H1 2021: 115 units), with revenues rising by 6 percent mainly reflecting growth in services and a favourable mix in programmes. Revenues at Airbus Defence and Space increased 11 percent, mainly driven by the Military Aircraft business and following the Eurodrone contract signature in February. Four A400M airlifters were delivered in H1 2022.

Consolidated EBIT Adjusted – an alternativeperformance measure and key indicator capturing the underlying business margin by excluding material charges or profits caused by movements in provisions related to programmes, restructuring or foreign exchange impacts as well as capital gains/losses from the disposal and acquisition of businesses – was broadly stable at € 2,645 million (H1 2021: € 2,703 million).

EBIT Adjusted related to Airbus’ commercial aircraft activities was broadly stable at € 2,276 million (H1 2021: € 2,291 million). It included the non-recurring positive impact from retirement obligations recorded in Q1, partly offset by the impact from international sanctions against Russia which was reduced as compared to Q1 2022 following good progress on the remarketing of some aircraft. The net positive impact from these two non-recurring elements was largely offset by a less favourable currency hedging rate compared to H1 2021.

On the A320 programme, production is progressing towards a rate of 75 aircraft per month in 2025 as previously communicated. Given the current supply chain challenges, the Company is adapting the ramp-up trajectory and now targets a monthly rate of 65 in early 2024, around six months later than previously planned. The first flight of the A321XLR took place in June, representing an important milestone towards the aircraft’s entry-into-service that is expected to take place in early 2024. On widebody aircraft, the Company is exploring, together with its supply chain, the feasibility of further rate increases to meet growing market demand as international air travel recovers.

Airbus Helicopters’ EBIT Adjusted increased to € 215 million (H1 2021: € 183 million), partly driven by the growth in services and a favourable mix in programmes. It also reflects the non-recurring elements booked in Q1, including the positive impact related to retirement obligations.

EBIT Adjusted at Airbus Defence and Space decreased to € 155 million (H1 2021: € 229 million). This mainly reflects the impairment related to the Ariane 6 launcher delay, the impact of rising inflation in some long-term contracts across the Division’s portfolio and the consequences of international sanctions, partly offset by the positive impact related to retirement obligations booked in Q1.

On the A400M programme, development activities continue towards achieving the revised capability roadmap. Retrofit activities are progressing in close alignment with the customer. In Q2 2022, a charge of € 0.2 billion was recorded, mainly reflecting the updated assumptions of inflation on the launch contract. Risks remain on the qualification of technical capabilities and associated costs, on aircraft operational reliability, on cost reductions and on securing export orders in time as per the revised baseline.

Consolidated self-financed R&Dexpenses totalled € 1,256 million (H1 2021: € 1,262 million).

Consolidated EBIT(reported) amounted to € 2,579 million (H1 2021: € 2,727 million), including net Adjustments of € -66 million.

These Adjustments comprised:

  • € +226 million related to the dollar pre-delivery payment mismatch and balance sheet revaluation, of which € +36 million were in Q2;
  • € -218 million related to the A400M programme, of which € -217 million were in Q2;
  • € -33 million related to the Aerostructures transformation in France and Germany, of which € -26 million were in Q2;
  • € -7 million related to the A380 programme, of which € +4 million were in Q2;
  • € -34 million of other costs including compliance, of which € -29 million were in Q2.

The financial result was € 107 million (H1 2021: € -30 million). It mainly reflects the positive net impact from the revaluation of certain equity investments, partially offset by the revaluation of financial instruments as well as the net interest result of € -136 million. Consolidated net income(3) was € 1,901 million (H1 2021: € 2,231 million) with consolidated reported earnings per share of € 2.42 (H1 2021: € 2.84).

Consolidated free cash flowbefore M&A and customer financing was€ 1,955 million (H1 2021: € 2,051 million), reflecting the profit translated into cash. It also included a favourable timing of cash receipts and payments partly offset by an increase in inventory. Consolidated free cash flow was € 1,646 million (H1 2021: € 2,012 million). The 2021 dividend of € 1.50 per share, or € 1.2 billion, was paid in Q2 2022 while pension contributions totalled € 0.4 billion in H1 2022. On 30 June 2022, the gross cash position stood at € 21.6 billion (year-end 2021: € 22.7 billion) with a consolidated net cash position(4) of € 7.2 billion (year-end 2021: € 7.7 billion).

The liquidity position remains strong, standing at € 27.6 billion at the end of June 2022. In June, the Company bought back a portion of its bonds maturing between 2024 and 2028 for a total amount of € 1 billion to reduce the gross debt position, optimise the balance sheet and regain financial flexibility. In July, liquidity was further improved through the upsizing of the undrawn Revolving Syndicated Credit Facility from € 6 billion to € 8 billion, while the tenor was increased to 5 years with 2 extension options of 1 year. The pricing of this facility benefitted from improved conditions in the loan market and continues to be linked to sustainability criteria.

Outlook

As the basis for its 2022 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 2022 guidance is before M&A.

On that basis,

  • The Company now targets to deliver around 700 commercial aircraft in 2022.
  • The Company maintains its target of around € 5.5 billion of EBIT Adjusted and around € 3.5 billion of Free Cash Flow before M&A and Customer Financing in 2022.

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