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“WE MAKE
IT FLY”
ANNUAL REVIEW 2013

Table of contents

  • Page 1
    "WE MAKE IT FLY" ANNUAL REVIEW 2013

  • Page 2
    ...Group Executive Committee 18 - Management Structure ANNUAL REVIEW 2013 - WE MAKE IT FLY / 02 ENHANCING GLOBAL COMPETITIVENESS 22 - Interview with the Chief Financial Officer 24 - Key Financial Figures 26 - Share Information 28 - Interview with the Chief Strategy and Marketing Officer 30 - Strategy...

  • Page 3
    EADS BECOMES WE MAKE IT FLY - ANNUAL REVIEW 2013 AND HAS 3 DIVISIONS: AIRBUS AIRBUS DEFENCE AND SPACE AIRBUS HELICOPTERS 1 NAME, 3 DIVISIONS, 1 MISSION. 01

  • Page 4
    02 ANNUAL REVIEW 2013 - WE MAKE IT FLY

  • Page 5
    2013 PROFILE â,¬ 686.7 â,¬ 59.3 â,¬ 1.85 â,¬ 0.75 990 144,061 billion order book billion revenues WE MAKE IT FLY - ANNUAL REVIEW 2013 earnings per share dividend* per share *To be proposed to the Annual General Meeting patent filings in 2013 employees 03

  • Page 6
    - THE GROUP IN 2013 AIRBUS GROUP - EADS IN 2013 Airbus Group is a global leader in aeronautics, space and related services. ANNUAL REVIEW 2013 - WE MAKE IT FLY REVENUES BY REGION EUROPE ASIA-PACIFIC 36% â,¬m Revenues Order book(3) 2013 21,048 161,943 2013 19,557 221,426 33% 04

  • Page 7
    ... to equity owners of the parent as defined by IFRS Rules. (2) To be proposed to the Annual General Meeting. (3) Contributions from commercial aircraft activities to Order intake and Order book based on list prices. NORTH AMERICA MIDDLE EAST AFRICA / CENTRAL AND SOUTH AMERICA 15% 2013 8,781...

  • Page 8
    ... FLY AIRBUS GROUP -EADS YEAR IN REVIEW 2013 3 27 March 2013 SHAREHOLDERS APPROVE GOVERNANCE MAKE-OVER (2) Voting at EADS' Extraordinary General Meeting, shareholders approved the corporate governance overhaul, including the election of new Directors. Afterwards, the Board approved a share buyback...

  • Page 9
    ...German Air Force took delivery of the 400th Eurofighter Typhoon. The aircraft has proved its operational effectiveness over 10 years of service, and now secures the airspace of the six nations where it is in service, 24 hours a day, seven days a week. Scan here or visit www.reports.airbus-group.com...

  • Page 10
    ANNUAL REVIEW 2013 - WE MAKE IT FLY Management and Governance. The Board and Management implemented a major overhaul of the Group's governance and shareholder structure, bringing a significant increase in the free float. 08

  • Page 11
    WE MAKE IT FLY - ANNUAL REVIEW 2013 / 01 "DRIVING OUR DEVELOPMENT" 09

  • Page 12
    ...to have presided as Chairman over such a distinguished Board and at such a transformational time in the company's history. Following the Extraordinary General Meeting of March last year, far-reaching changes to the shareholder structure and corporate governance are now fully effective. The freefloat...

  • Page 13
    ... strong Airbus brand for the entire Group. Board expertise has been an important resource helping to shape and challenge management thinking on a variety of longer-term 'DNA' topics, such as innovation and global footprint, executive incentivisation, enterprise risk management, compliance programmes...

  • Page 14
    ... development, sales, personal software, marketing and brand management. Prior to his current position, Sir John Parker held several leadership positions in the engineering, shipbuilding and defence industries, including the chairmanship of National Grid until end 2011 and some 25 years' experience...

  • Page 15
    ... Officer of Airbus Group 12. Josep Piqué i Camps (59) Vice-Chairman and CEO of Obrascón Huarte Lain Mr Mittal is an entrepreneur who founded Mittal Steel Company in 1976. The company has successfully grown over the years, is today known as ArcelorMittal, and has become the world's largest...

  • Page 16
    ANNUAL REVIEW 2013 - DRIVING OUR DEVELOPMENT - CHIEF EXECUTIVE OFFICER'S INTERVIEW Tom Enders Chief Executive Officer "THERE WERE A NUMBER OF OPERATIONAL ACHIEVEMENTS IN 2013." n many ways 2013 was a pivotal year for Airbus Group. What were the most important developments? Yes, it was quite some...

  • Page 17
    ... of Airbus Group employees through a special offer of 10 free shares to each. I think it's appropriate for employees to take a share in company ownership. We're all in this enterprise together. And we all want it to succeed. DRIVING OUR DEVELOPMENT - ANNUAL REVIEW 2013 GROUP PRIORITIES 2014 - KEY...

  • Page 18
    ... commercial success and customer satisfaction on programmes and related services. Marwan Lahoud Airbus Group Chief Strategy and Marketing Officer Mr Lahoud is responsible for the elaboration of the Group's strategy and responsible for the Group's international development and marketing. Bernhard...

  • Page 19
    ..., holding overall responsibility for operations, engineering, procurement and supply chain management, quality and information technology in this Division. Jean Botti Airbus Group Chief Technical Officer Mr Botti's mission is to steer Airbus Group's Research & Technology strategy. He oversees...

  • Page 20
    - MANAGEMENT STRUCTURE AIRBUS GROUP MANAGEMENT STRUCTURE as of 1 March 2014 DIVISIONS Airbus Fabrice Brégier (CEO) Thierry Baril Günter Butschek John Leahy Harald Wilhelm ANNUAL REVIEW 2013 - DRIVING OUR DEVELOPMENT Board of Directors Denis Ranque (Chairman) Tom Enders (CEO) Manfred Bischoff ...

  • Page 21
    ... Bausset Chief Financial Officer DRIVING OUR DEVELOPMENT - ANNUAL REVIEW 2013 Harald Wilhelm Corporate Audit Corinne Colloc´h Chief Strategy & Marketing Officer Marwan Lahoud Chief Compliance Officer Pedro Montoya Chief Human Resources Officer Thierry Baril Legal Department Peter Kleinschmidt...

  • Page 22
    ANNUAL REVIEW 2013 - WE MAKE IT FLY Financial Overview, Strategy, Markets & Perspectives. Airbus Group is focused on delivering improved financial performance, based on commercial leadership in the aeronautics field and optimised positioning in defence and space. 20 SPOT 6 Satellite Image - ...

  • Page 23
    / 02 "ENHANCING GLOBAL COMPETITIVENESS" 21 WE MAKE IT FLY - ANNUAL REVIEW 2013

  • Page 24
    ... development? We are currently in a phase of heavy investment in production and development programmes, in particular with the A400M and A350 XWB ramping up. As a result, the free cash flow for the full year was negative. However, it was better than expected some months ago, reflecting a high level...

  • Page 25
    ... assuming a dollar euro rate of 1.35, you should expect revenues in 2014 to be broadly stable compared to 2013, with Airbus deliveries at roughly the same level as last year. Underlying profitability should see moderate growth in 2014, and we are reaffirming our 2015 target of a 7-8% return on sales...

  • Page 26
    ...ANNUAL REVIEW 2013 - ENHANCING GLOBAL COMPETITIVENESS 40 30 20 10 0 37 44 47 12 2011 12 2012 12 2013 Commercial Defence Airbus Airbus Defence and Space Airbus Helicopters Pro forma as per FY 2013 disclosure. Europe Asia-Pacific North America Middle East Africa / Central and South America...

  • Page 27
    ... 2011 Commercial Defence 50 2012 47 2013 Asia-Pacific Europe Middle East North America Africa / Central and South America Thanks to strong commercial momentum and a highly competitive product range, the Airbus Group backlog has grown steadily over the past years. The Airbus Group backlog is well...

  • Page 28
    ... 55.8. As of 2 January 2014, the Group's shares are listed under the Airbus Group name and symbol: AIR. PROFILE NUMBER OF SHARES AS OF 31 DECEMBER 2013 783,157,635 ISIN CODE HIGH IN 2013 ON THE PARIS STOCK MARKET: ON 27 DECEMBER 2013 â,¬ 56.24 LOW IN 2013 ON THE PARIS STOCK MARKET: ON 2 JANUARY...

  • Page 29
    SHARE INFORMATION - SHARE PRICE EVOLUTION AS OF 31 DECEMBER 2013 Base 100 as of 3 January 2011 EADS share price in â,¬ 350 60 300 50 250 40 200 ENHANCING GLOBAL COMPETITIVENESS - ANNUAL REVIEW 2013 30 150 20 100 50 J F M A M J J A S O N D EADS CAC 40 MSCI World Aero/Defence (in â,¬, ...

  • Page 30
    ... Marketing Officer "COMMERCIAL AVIATION REMAINS OUR MAJOR GROWTH ENGINE." In 2013, the Group completed its strategy review and launched "Strategy 2.0." Can you summarise the main findings? The previous Group strategy, Vision 2020, launched back in 2007, was mainly focused on growth, profitability...

  • Page 31
    ...service over the next five years alone, we have a unique opportunity to grow and shape a long term profitable business while adding high value to our customers on and around our products. What about potential acquisitions? Acquisitions are tools to reach our strategic goals and we have the resources...

  • Page 32
    ...Defence and Space Optimisation and Value Creation. Following a strategy review conducted in 2013, Airbus Group has elaborated a set of strategic priorities for the Group which define the way ahead for the years to come. STRATEGIC PRIORITIES FOR THE GROUP Strengthen market position and profitability...

  • Page 33
    ... Europe. 2013 CIVIL REVENUES The Group is largely a commercial company. 15% 36% 20% 64% 85% 80% Aeronautics Non-aeronautics Outside Europe Europe Commercial Defence ENHANCING GLOBAL COMPETITIVENESS - ANNUAL REVIEW 2013 Airbus Group has seen remarkable growth over the past years. While...

  • Page 34
    ... Emerging market and developing economies are forecast to grow at 5.1% in 2014, with a growth rate of 7.3% in China, 5.1% in India and 5.4% across ASEAN-5 countries. In its report, the IMF warns of risks faced by emerging markets relating to exchange rates and financial markets. LONG-TERM ECONOMIC...

  • Page 35
    ... net profit of US$ 8.6 billion in North America, US$ 3.7 billion in Asia-Pacific and US$ 3.1 billion in Europe. ROBUST MID-TERM OUTLOOK According to the IATA Airline Industry Forecast 2013-2017, published in December 2013, demand is expected to expand by an average 5.4% compound annual growth rate...

  • Page 36
    ...four key programmes: remotely piloted aircraft systems, air-to-air refuelling, satellite communications and cyber. Cybersecurity continues to grow in importance. According to the report "The Global Cybersecurity Market 2013-2023" published in July 2013 by Security Defence Intelligence, North America...

  • Page 37
    ...the previous ten years. Teal Group forecasts civil and military rotorcraft operators will require 16,126 new helicopters worth US$ 193.1 billion over the next ten years. In value terms, military helicopters account for by far the largest share of the market. The 10-year forecast projects a civil and...

  • Page 38
    Review of the Divisions in 2013. Increased aircraft deliveries, strong order intake and operational focus are fuelling an improved performance. 36 ANNUAL REVIEW 2013 - WE MAKE IT FLY

  • Page 39
    KEY FINANCIALS 2013 - WE MAKE IT FLY - ANNUAL REVIEW 2013 / 03 "ACHIEVING OUR GOALS" 37

  • Page 40
    - AIRBUS GROUP ORGANISATION AIRBUS GROUP ORGANISATION AS OF 1 JANUARY 2014 ANNUAL REVIEW 2013 - ACHIEVING OUR GOALS AIRBUS AIRBUS Commercial AIRBUS Military ASTRIUM CASSIDIAN EUROCOPTER 38

  • Page 41
    ... OUR GOALS - ANNUAL REVIEW 2013 AIRBUS Revenues EBIT* â,¬ 39,889 m â,¬ 1,595 m Large commercial aircraft, services AIRBUS DEFENCE AND SPACE (1) Revenues EBIT* â,¬ 14,422 m â,¬ 690 m Military Aircraft Space Systems Communication, Intelligence and Security Electronics AIRBUS HELICOPTERS Revenues...

  • Page 42
    ...June 2013 Scan here or visit www.reports.airbus-group.com The Division (comprising commercial and military activities) delivered a record number of aircraft, while beating its target for new commercial orders and achieving significantly improved profitability. In 2013, the consolidated revenues of...

  • Page 43
    ... 2016. Discussions advanced on an extension of the successful Final Assembly Line partnership in China. INCREMENTAL INNOVATION Airbus continued its strategy of incremental innovation, upgrading existing series aircraft in order to maximise customer benefit while minimising development risk. In 2013...

  • Page 44
    ... Airbus aircraft (year-end 2012: 4,682 units). Airbus' order intake represents a market share of 51% of total gross aircraft orders and 53% of net orders by units (2012: 41% of gross orders, 42% of net orders). BUOYANT SINGLE-AISLE DEMAND Demand for single-aisle aircraft remained robust with a total...

  • Page 45
    ... 19 restatement and perimeter change. ACHIEVING OUR GOALS - ANNUAL REVIEW 2013 a Memorandum of Understanding for the purchase of 20 A380s. At the end of 2013, the A380 order backlog amounted to 182 aircraft; 122 aircraft were already in service with ten airlines. The programme remains on track to...

  • Page 46
    ..., market presence and performance. ANNUAL REVIEW 2013 - ACHIEVING OUR GOALS The Airbus Defence and Space Division, operational as of January 2014, brings together a world-leading portfolio of business assets and expertise. The new Division is Europe's number one defence and space enterprise...

  • Page 47
    ... to France in 2013 At the end of 2013, 17 A330 MRTT aircraft were in service with four countries. Six new orders were booked from Singapore, bringing the backlog at the end of 2013 to 17 aircraft. Airbus estimates a potential total export market, excluding the US, of more than 100 tanker aircraft...

  • Page 48
    ... profitability." The 400th Eurofighter Typhoon was delivered to Germany in 2013 (Photo Contest winner) Scan here or visit www.reports.airbus-group.com The former Cassidian Division delivered an improved performance while adapting the business to the changed defence environment. As of 2014...

  • Page 49
    ... ships against terrorist attacks. Several contracts were signed to supply Professional Mobile Radio (PMR) technology, including a contract to update and expand the Beijing government's shared Tetra network. OUTLOOK As of 2014, the former Cassidian is fully integrated within the new Airbus Defence...

  • Page 50
    ... - ASTRIUM IN 2013 ANNUAL REVIEW 2013 - ACHIEVING OUR GOALS "VOLUME AND PRODUCTIVITY in launchers, defence and satellites helped to mitigate lower services activity." Four successful Ariane 5 launches conducted in 2013 Scan here or visit www.reports.airbus-group.com Order momentum continued at...

  • Page 51
    ...with Inmarsat for broadband services. The new Global Xpress service is the world's first globally available high-speed broadband service delivered via Ka-band satellite network. OUTLOOK As of 2014, the former Astrium is fully integrated within the new Airbus Defence and Space Division (see page 44...

  • Page 52
    ... 2013 "PROFITABILITY WAS DRIVEN ANNUAL REVIEW 2013 - ACHIEVING OUR GOALS by increased deliveries of light helicopters, strong deliveries of heavy platforms and services." Airbus Helicopters' civil and parapublic market share was 46% in 2013 Scan here or visit www.reports.airbus-group.com Airbus...

  • Page 53
    ... in Poland, dependent on Poland's strategic decision in the field of defence. A high-technology component factory was opened in Mexico, while an EC225 training facility was opened in Norway. OUTLOOK A key priority in 2014 will be to achieve successful entry-into-service of the new EC175 and the...

  • Page 54
    Key Drivers. Group-wide support activities are reinforcing the common Company culture, fostering integration and strengthening long-term value creation. 52 ANNUAL REVIEW 2013 - WE MAKE IT FLY

  • Page 55
    KEY FINANCIALS 2013 - WE MAKE IT FLY - ANNUAL REVIEW 2013 / 04 "BUILDING OUR CULTURE" 53

  • Page 56
    - ENGAGED PEOPLE Airbus Group sees employee engagement as a key driver of company performance. ENGAGED PEOPLE Airbus Group is committed to ensuring a talent pipeline drawing from all backgrounds. ANNUAL REVIEW 2013 - BUILDING OUR CULTURE In 2013, the Group recruited 8,823 employees worldwide (11,...

  • Page 57
    ...XWB flight programme. Furthermore, the Group allocated ten free shares to each employee. Airbus Group actively supports employee development through training and career moves within the company. In 2013, more than 10,000 employees took up the opportunity to move to a new department, site or country...

  • Page 58
    ... use of fuel cell by-products such as water, inert gas and waste heat reduce the total weight and allow for improved energy efficiency. Airbus also formed agreements to research the development and commercialisation of sustainable fuels for aviation in countries such as Canada, Russia and China. 56

  • Page 59
    ECO EFFICIENCY - Airbus Group is researching advanced technologies that will lead to alternative sources of on-board power for aircraft. BUILDING OUR CULTURE - ANNUAL REVIEW 2013 A320neo Together with its customers and partners, Airbus Defence and Space is contributing to a more sustainable ...

  • Page 60
    ...weight helicopter is also advancing. INTELLECTUAL PROPERTY AND TECHNOLOGY LICENSING Overall, the Group's engineers filed a total of 990 priority patent applications in 2013. Recognising the company's track record at the forefront of research and technology worldwide, Thomson Reuters listed the Group...

  • Page 61
    ...are managed by Airbus Group Innovations, which employs over 1,000 scientists and researchers, including doctorates and interns, at facilities in France, Germany, UK, Spain, USA, Canada, Singapore, India and China. Airbus Group Innovations develops the Group's technical potential from readiness level...

  • Page 62
    ... to the success of the business. ANNUAL REVIEW 2013 - BUILDING OUR CULTURE The external supply chain represents a major share of the value of Airbus Group products. For 2013, the ratio of external sourcing turnover to Group revenues is expected to be in line with the previous year at approximately...

  • Page 63
    ... placed orders in 2012, while 39% was in euros, 6% in sterling and 1% in other currencies. GLOBAL SOURCING The Group continued to develop the supply chain beyond Europe, as a means of gaining access to growth markets and increasing natural currency hedging. Country sourcing offices in India, China...

  • Page 64
    ...The Group's annual Global Investor Forum, held in London in December 2013 and attended by more than 160 institutional investors and analysts, was broadcast live on the Company website. In addition, the team met individual shareholders in more than 20 information meetings and dedicated site visits in...

  • Page 65
    ... 2014, Airbus Group invited aviation enthusiasts to participate in the "Through Your Eyes" Photo Contest and show their talents. The 3 winning photographs have been published in the Annual Report. The winners are Ramon Jordi, Christian Böhme and Robert Oram. WE MAKE IT FLY - ANNUAL REVIEW 2013...

  • Page 66
    ... Tel + 844 39 43 68 85 ANNUAL REVIEW 2013 - WE MAKE IT FLY AIRBUS DEFENCE AND SPACE Landshuter Strasse 26 85716 Unterschleissheim* Germany Tel + 49 89 3179 0 *Subject to relocation. AIRBUS HELICOPTERS Aéroport International Marseille Provence 13725 Marignane cedex France Tel + 33 4 42 85 85 85...

  • Page 67
    ... AIRBUS GROUP 2013 Annual Report package consists of: Annual Review 2013 "WE MAKE IT FLY" Registration Document 2013 Financial Statements AIRBUS GROUP would like to thank all those who contributed to the making of this Annual Report. Please also refer to the accompanying AIRBUS GROUP Corporate...

  • Page 68
    www.airbus-group.com European Aeronautic Defence and Space Company EADS N.V. Mendelweg 30 2333 CS Leiden The Netherlands Auriga Building 4, rue du Groupe d'Or - BP 90112 31703 Blagnac cedex - France