LONDON – Airbus SE (stock exchange symbol: AIR) reported consolidated financial results for the Half-Year (H1) ending June 30, 2020.
Net commercial aircraft orders totaled 298 (H1 2019: 88 aircraft), including 8 aircraft in Q2, with the order backlog comprising 7,584 commercial aircraft as of 30 June 2020.
Airbus Helicopters booked 75 net orders (H1 2019: 123 units). Bookings included 3 H145, 1 Super Puma, and 1 H160 in Q2 alone. Airbus Defence and Space’s order intake increased to €5.6 bn (US$6.5 bn).
H1 report data
Consolidated revenues decreased to €18.9 bn (H1 2019: €30.9 bn), driven by the difficult market environment impacting the commercial aircraft business with around 50% fewer deliveries year-on-year.
This was partly offset by more favourable foreign exchange rates. A total of 196 commercial aircraft were delivered (H1 2019: 389 aircraft), comprising 11 A220s, 157 A320 Family, 5 A330s and 23 A350s.
Airbus Helicopters reported stable revenues, reflecting lower deliveries of 104 units (H1 2019: 143 units) partially compensated by higher services.
Lower volume impacted revenues at Airbus Defence and Space, in particular in Space Systems.
Overall, the COVID-19 crisis caused delays on some Airbus programs.
|Consolidated Airbus||H1 2020||H1 2019||Change|
|Revenues, in millionsthereof defence, in millions||18,9484,092||30,8664,085||-39%0%|
|EBIT Adjusted, in millions||-945||2,529||–|
|EBIT (reported), in millions||-1,559||2,093||–|
|Research & Development expenses, in millions||1,396||1,423||-2%|
|Net Income/Loss, in millions||-1,919||1,197||–|
|Earnings/Loss Per Share||-2.45||1.54||–|
|Free Cash Flow (FCF), in millions||-12,876||-4,116||–|
|Free Cash Flow before M&A, in millions||-12,373||-3,998||–|
|Free Cash Flow before M&A and Customer Financing, in millions||-12,440||-3,981||–|
|Consolidated Airbus||30 June 2020||31 Dec 2019||Change|
|Net Cash/Debt position, in millions||-586||12,534||–|
|By Business Segment||Revenues||EBIT (reported)|
|(Amounts in millions of Euro)||H1 2020||H1 2019 (1)||Change||H1 2020||H1 2019 (1)||Change|
|Airbus Defence and Space||4,551||5,015||-9%||73||-15||–|
|By Business Segment||EBIT Adjusted|
|(Amounts in millions of Euro)||H1 2020||H1 2019 (1)||Change|
|Airbus Defence and Space||186||233||-20%|
|By Business Segment||Order Intake (net)||Order Book|
|H1 2020||H1 2019||Change||30 June 2020||30 June 2019||Change|
|Airbus, in units||298||88||+239%||7,584||7,276||+4%|
|Airbus Helicopters, in units||75||123||-39%||666||697||-4%|
|Airbus Defence and Space, in millions of Euro||5,588||4,220||+32%||N/A||N/A||N/A|
Airbus consolidated Q2 results 2020
- Revenues decreased by 55%, mainly driven by lower deliveries at Airbus and Airbus Helicopters, and lower revenues at Airbus Defence and Space.
- EBIT Adjusted of € -1,226 million reflected low commercial aircraft deliveries and COVID-19 related charges.
- EBIT (reported) of € -1,638 million included net Adjustments of € -412 million. Net Adjustments in the second quarter of 2019 amounted to € -68 million.
- Q2 2020 Net Loss of € -1,438 million mainly reflected EBIT (reported) and the low effective tax rate.
|Consolidated Airbus||Q2 2020||Q2 2019||Change|
|Revenues, in millions||8,317||18,317||-55%|
|EBIT Adjusted, in millions||-1,226||1,980||–|
|EBIT (reported), in millions||-1,638||1,912||–|
|Net Income/Loss, in millions||-1,438||1,157||–|
|Earnings/Loss Per Share (EPS)||-1.84||1.49||–|
|By Business Segment||Revenues||EBIT (reported)|
|(Amounts in millions of Euro)||Q2 2020||Q2 2019 (1)||Change||Q2 2020||Q2 2019 (1)||Change|
|Airbus Defence and Space||2,440||2,903||-16%||126||102||+24%|
|By Business Segment||EBIT Adjusted|
|(Amounts in millions of Euro)||Q2 2020||Q2 2019 (1)||Change|
|Airbus Defence and Space||171||132||+30%|
Consolidated EBIT Adjusted totalled € -945 m (H1 2019: €2,529 m). Airbus’ EBIT Adjusted of € -1,307 m (H1 2019: €2,193 m) mainly reflected the reduced commercial aircraft deliveries and lower cost efficiency.
Steps have been taken to adapt the cost structure to the new levels of production, the benefits of which are materialising as the plan is executed. Also included in the EBIT Adjusted is € -0.9 bn of COVID-19 related charges.
Airbus Helicopters’ EBIT Adjusted increased to €152 m (H1 2019: €125 m), reflecting a favourable mix, mainly in military, and higher services partially offset by the lower deliveries. The five-bladed H145 and H160 helicopters were recently certified by the European Union Aviation Safety Agency.
EBIT Adjusted at Airbus Defence and Space decreased to €186 m (H1 2019: €233 m), reflecting the COVID-19 impact, mainly in Space Systems, partly offset by cost reduction measures. The Division’s restructuring plan was updated to also reflect the impact of the coronavirus pandemic.
|Consolidated Airbus (Amounts in millions of Euro)||H1 2020|
|A380 programme cost||-332|
|$ PDP mismatch/balance sheet revaluation||-165|
Airbus Consolidated report
Consolidated self-financed R&D expenses totalled €1,396 m (H1 2019: €1,423 m). Consolidated EBIT (reported) was € -1,559 m (H1 2019: €2,093 m), including Adjustments totalling a net € -614 m.
These Adjustments comprised:
- € -332 m related to A380 program cost, of which € -299 m was in Q2;
- € -165 m related to the dollar pre-delivery payment mismatch and balance sheet valuation, of which € -31 m was in Q2;
- € -117 m of other costs, including compliance, of which € -82 m was in Q2.
The consolidated reported loss per share of € -2.45 (H1 2019 earnings per share: €1.54) includes the financial result of € -429 m (H1 2019: € -215 m).
The financial result reflects a net € -212 m related to Dassault Aviation as well as the impairment of a loan to OneWeb, recorded in Q1 2020 for an amount of € -136 m. The consolidated net loss was € -1,919 m (H1 2019 net income: €1,197 m).
Consolidated free cash flow before M&A and customer financing amounted to € -12,440 m (H1 2019: € -3,981 m) of which € -4.4 bn was in Q2.
The corresponding figure for Q1 2020 excluding the penalty payments was also at € -4.4 bn, demonstrating that cash containment measures including the adjustment of incoming supply started to become effective.
These measures partially compensated for the reduced cash inflow from the low number of commercial aircraft deliveries in Q2.
Capital expenditure in H1 was stable year-on-year at around €0.9 bn with Full-Year 2020 capex still expected to be around €1.9 bn. Consolidated free cash flow was € -12,876 m (H1 2019: € -4,116 m).
The consolidated net debt position was € -586 m on 30 June 2020 (year-end 2019 net cash position: €12.5 bn) with a gross cash position of €17.5 bn (year-end 2019: €22.7 bn).
Statement from Airbus CEO
Guillaume Faury, Airbus CEO, said, “The impact of the COVID-19 pandemic on our financials is now very visible in the second quarter, with H1 commercial aircraft deliveries halving compared to a year ago.”
“We have calibrated the business to face the new market environment on an industrial basis and the supply chain is now working in line with the new plan. It is our ambition to not consume cash before M&A and customer financing in H2 2020.”
Faury also said, “We face a difficult situation with uncertainty ahead, but with the decisions we have taken, we believe we are adequately positioned to navigate these challenging times in our industry.”
Key post-closing events
In the frame of COVID-19, discussions are progressing with social partners. A restructuring provision is expected to be recognised once the necessary conditions are fulfilled. The amount is expected to be between €1.2 bn and €1.6 bn.
The UK Serious Fraud Office (SFO) has requisitioned GPT Special Project Management Ltd (GPT) to appear in court for prosecution on a single corruption-related charge.
GPT is a UK company that operated in Saudi Arabia which was acquired by Airbus in 2007 and ceased operations in April 2020. The SFO’s investigation related to contractual arrangements originating prior to GPT’s acquisition and continuing thereafter.
French and Spanish Contracts
A resolution of GPT, whatever its form, will not affect the 31 January 2020 UK Deferred Prosecution Agreement and a value has been provisioned in the Airbus accounts.
On 24 July 2020, the Company announced it had agreed with the governments of France and Spain to make amendments to the A350 Repayable Launch Investment contracts to end the long-standing World Trade Organisation dispute and remove any justification for US tariffs.
After 16 years of litigation at the WTO, this final step removes the last contentious point by amending the French and Spanish contracts to what the WTO considers the appropriate interest rate and risk assessment benchmarks.