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EADS first Half year results 2001



Amsterdam, September 20, 2001

  • EADS increases half-year Earnings Before Interest and Taxes by 38% to € 764 million, in line with revenues
  • CEOs: “EADS core businesses and its financial situation are sound. We have the flexibility to adapt to a challenging environment in civil aviation and to deliver value.”

EADS European Aeronautic Defence and Space Company (stock exchange symbol: EAD), the world’s second largest aerospace and defence company, again delivered profitable growth in the first half of 2001.

The EADS-CEOs, Philippe Camus and Rainer Hertrich said, “The aerospace market is entering a new and challenging environment. However, we believe that our strong business fundamentals and an array of new products and services both on civil and defence markets, as well as initiatives and actions we have already started allows us to maintain our 2004 operating margin target of 10% despite a highly uncertain market.

Half-year Earnings Before Interest and Taxes (EBIT, pre-goodwill and exceptional items) rose by 38% to € 764 million (first half year 2000: € 553 million).

This increase was slightly higher than revenue growth of 33% to € 14 billion and was achieved despite the anticipated increase in Research and Development costs, mainly related to the A380. Total self-financed Research and Development increased from € 594 million to € 853 million. EADS published its half-year report on Thursday in Amsterdam..

Strong rise in profits in first half of 2001.

The rise in EBIT in the first half of 2001 was generated through the first-time 100% consolidation of Airbus (80% prior to 2001) and the increase of deliveries at Airbus.

According to EADS CFO Axel Arendt, “Even without the full consolidation of Airbus, EADS would have achieved double-digit growth of revenues and EBIT during this period, thanks to strong performance throughout our portfolio. EBIT grew in all divisions but Defence and Civil Systems, where we are expected to post a positive EBIT for the second half of this year.

Net Income turned positive and reached € 1,657 million (first half 2000: € -359 million). This figure includes total exceptional items of € +1.2 billion (including tax effects) mainly from the creation of the integrated Airbus SAS. EADS has reached a Net Income pre goodwill and exceptionals of € 456 million. Earnings per share pre-exceptional items amounted to € 0.56 (first half 2000: € -0.14).

Free Cash Flow, which was negative in the first half of 2000, made a positive turnaround to reach € 526 million. This is mainly the result of improved cash flow from operations.

Order intake rose sharply to € 42.8 billion in the first half year of 2001 (January to June 2000: € 24.0 billion), as already reported by EADS on 9 August. Total order backlog continued to increase and reached € 185 billion at the end of June 2001, an increase of 56% from June 2000 and of 9% from March 2001. The EADS order backlog is equivalent to more than six years of business and is the highest in the aerospace and defence industry worldwide.

Camus and Hertrich stated, “EADS has exceeded expectations. Our solid performance will continue thanks to our value-driven management, a portfolio of young, highly successful commercial and defence products and services, and continued synergies and savings.” EADS expects to fulfil its stated targets of 15% EBIT growth and 20 % revenue growth in 2001“.

Adapting to challenges

Camus and Hertrich emphasised that the company is actively adapting to the tense international environment. “We are well aware of the risks on international business caused by the recent and contemptible acts of terrorism in the United States,” the CEOs stated at the half-year results press conference. “However, although it is too early to know all the future implications we might face, the management is actively taking steps to maintain utmost flexibility and ensure healthy margins, including tight control of our costs. We are taking all appropriate measures to stay on track, including freezing certain investment and capacity extension,” the CEOs added. “We are mobilising company wide technological research to respond to the security challenge.”

The EADS-CEOs also noted that “We can rely on our strong orderbook, and our increasingly strong defence business. EADS has the right technologies and products to meet growing defence needs, not only in aircraft and missiles, but also in the fields of surveillance, reconnaissance, telecommunications, and defence electronics.”

Airbus: 320 aircraft deliveries in 2001 – production ramp-up frozen

Airbus has, at the very moment, several important assets: a strong backlog of firm orders (1,682 aircraft, more than 50 % of the world total for commercial aircraft above 100 seats), a strong total of firm orders for delivery in 2002 (375), and an increase in market share of deliveries that will lead it to 50 % of the world deliveries over the next few years.

Moreover, its portfolio of firm orders for deliveries in 2002 to 2004 is well diversified (about ¼ for USA, ¼ for Europe, ½ for the rest of the world – including lessors).

For 2001, the planning of deliveries is currently kept at the level of approximately 320 aircraft.

The new situation created by the September 11th terrorist attacks in the US makes it difficult to formulate immediately a precise delivery forecast for 2002 and beyond.

To accommodate its large backlog and increasing workshare, Airbus had been planning to increase production progressively over the next two years. However, taking into account the slowdown of the business, Airbus had already decided in the summer to adjust for a lower growth of the production. In view of the current events, complementary measures have been taken. Airbus has decided to freeze the ramp up of production at the present level (mid 300’s in aircraft numbers). Additional investments or hirings are put on hold.

As a matter of fact, the flexibility embedded in the production tool and the workers contracts enable Airbus to adapt to production rates fluctuations in a 15 % overall range..

The flexible organisation of Airbus production allows for profitability even below this range. The A380 development will continue exactly as planned.

Sound improvements in results in most divisions

Airbus achieved a 52% increase in EBIT to € 797 million in the first half of the year, representing around half of the full year forecast. The division delivered 162 aircraft (first half 2000: 145) and reached net orders, after cancellations, for 250 aircraft (first half 2000: 234). The order backlog totalled 1,714 aircraft at the end of June 2001.

The Military Transport Aircraft division reduced its losses and recorded an EBIT of €- 21 million. Stronger revenues, compared to the first half of 2000, are mainly attributable to an increase of business with the Spanish Air Force (+ € 30 million) and to the inclusion of internal sales with other divisions of CASA (+ € 90 million); these were not included in the figures for the half year 2000. The success of the contract signed recently with the Polish government for the acquisition of eight C295 Military transport aircraft adds to the positive future.”

EBIT at the Space division rose 16% to € 29 million. Revenues remained on the same level as last year. Following an exceptionally high order intake in 2000, orders are – as expected – at a lower level this year.

At the Defence and Civil Systems division, results were particularly influenced by additional provisions in order to improve the performance of missiles EADS/LFK and the market downturn in civil telecommunications (civil joint ventures with Nortel). EADS expects that the division will achieve a positive EBIT in the second half of the year. Revenues in the first six months increased thanks to the missile business – backed up by a strong order backlog – and to the full consolidation of EADS Defence and Security Network for the first time (first half of 2000 includes only one month of EDSN revenues). Order intake decreased slightly, due to certain order delays. However, important decisions are expected for the second half of the year, such as the Meteor order. The recent acquisition of COGENT in the UK is a key element of EADS’ strategy towards expansion in the buoyant market of secured telecommunications.

At the Aeronautics division, EBIT increased by 60 % to € 85 million, while revenues rose by 4%. A positive impact on revenues is derived from Eurocopter deliveries of 130 helicopters in the first six months of the year (first half 2000: 105 helicopters). Order intake reached € 2.3 billion thanks to new contracts signed with the core conversion center Elbe Flugzeugwerke (EFW), as well as with the Military Aircraft business unit and Eurocopter.

EADS European Aeronautic Defence and Space Company is the largest European aerospace company and the No 2 worldwide in terms of revenues. The Group has 100,200 employees. It is active in the sectors of commercial aircraft, helicopters, space, military transport and combat aircraft as well as defence technology and services. Among others, EADS holds 80 percent of Airbus, 75 percent of the space company Astrium, 100 percent of the helicopter manufacturer Eurocopter, 43 percent in the Eurofighter programme and will in future hold 37.5 percent in the missile company MBDA. EADS is listed at the Frankfurt, Madrid and Paris stock exchanges. .

EADS First Half-Year results 2001

(Earnings Before Interest and Taxes)
In millions of €

January-June 2001

January-June 2000
(pro forma)


Airbus **



+ 52 %

Military Transport Aircraft

– 21

– 35

+ 40 %




+ 60 %




+ 16 %

Defence and Civil Systems

– 128

– 50

– 156 %

Eliminations and Headquarters

+ 2


– 94 %




+ 38 %

Net income
In millions of €


1 657


– 359


+ 2 016

pre exceptional items


– 115

+ 571

Earnings per Share
pre exceptional items


0,56 €


– 0,14 €


+ 0,70 €

In millions of €


Airbus **

9 982

6 821

+ 46 %

Military Transport Aircraft



+ 164 %


2 020

1 951

+ 4 %


1 054

1 084

– 3 %

Defence and Civil Systems

1 358

1 068

+ 27 %

Eliminations and Headquarters





14 043

10 585

+ 33 %

Order intake
In millions of €


Airbus **

38 769

15 529

+ 150 %

Military Transport Aircraft



+ 2 %


2 334

5 575

– 58 %



1 467

– 56 %

Defence and Civil Systems

1 267

1 288

– 2 %

Total ***

42 811

23 988

+ 78 %

Order Backlog
In millions of €

30 June 2001

30 June 2000
(pro forma)


Airbus **

157 746

91 462

+ 72 %

Military Transport Aircraft



+ 14 %


13 434

12 709

+ 6 %


4 469

4 798

– 7 %

Defence and Civil Systems

9 435

9 021

+ 5 %

Total ***

185 137

118 720

+ 56 %

*    pre goodwill and exceptional items
**    Airbus 100 % consolidated from 2001 onwards. In 2000, only our 80% share in Airbus was consolidated. Order intake and backlog at catalog prices.
***    incl. Eliminations and Headquarters


Eckhard Zanger - EADS Communications Finance
Tel. +49 89 607 27961

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