Airbus 2014 Annual Report Download - page 34
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udging by the results webcast,
you seemed quite happy with
the 2014 figures. What were
the highlights from your point
of view?
Yes, we delivered a pretty good set
of numbers, I would say. Our profitability con-
tinues to improve. While revenues were up 5%,
our reported EBIT increased 54% to €4 billion.
Despite the A400M charge, our earnings were
up 61% at €2.99 per share. That’s the basis
for the proposed dividend, €1.20 per share,
which is again an increase of 60% on the
previous year.
On top of that, our Free Cash Flow has de-
veloped positively, at €1.1 billion even before
the 0.9 billion proceeds from divestments. I’m
particularly pleased about that, I have to say.
Our cash flow is a challenge with the ongoing
investment in programmes. I’m talking mainly
about the production ramp-ups in the A350,
A320 and A400M programmes. So it’s great to
see the efforts in working capital management
are paying off. The teams have been doing a
great job there.
How do you see the trend going
forward? I mean, you beat the cash
guidance by some margin in 2014.
As I said, we’ve been keeping a close eye on
the cash profile throughout the year. And we
had a good fourth quarter, thanks to strong
execution and deliveries, as well as healthy
customer advances. All this helped us to deliver
better than expected cash flow in 2014.
For 2015, we’re targeting breakeven cash flow
before M&A activities. That means before
proceeds from divestments. You may say that
seems a little conservative. I would tend to
disagree given where we stand in our
programmes cycle. A400M weighed heavily on
our cash flow in 2014 and will continue to do so
in 2015. We have a strong cash need to
support the A350 ramp-up. We are in the
development phase of our A330neo and the
A320neo will also start to ramp up with the first
deliveries at the end of 2015.
Beyond 2015 we should see further improve-
ment, though. And of course, don’t forget that
in the near-term our cash flow after M&A will be
supported by the ongoing divestments.
What kind of impact should we be
expecting from those divestments?
Well, for 2014 you already saw some cash
impact. The figure includes close to €800
million from the sale of a part of our holdings in
Dassault Aviation in November 2014 and we
sold around 8% of Dassault shares. Beginning
2015, we sold 18.75% of Dassault shares.
Depending on market conditions, we want to
continue selling down our stake in the year
ahead. For those other divestments planned as
part of the portfolio optimisation in the defence
and space businesses, we will have to see the
timings of the various carve-outs and asset
sales. The process is not yet sufficiently
advanced to give numbers right now.
But clearly you have some confidence
about the cash situation going forward.
It’s a big increase in dividend, at any rate.
The proposed dividend is a significant increase
on last year’s, certainly, but it’s fully in line with
the company policy. €1.20 represents a 40%
payout ratio which is the upper end of our
targeted payout range.
We have a strong liquidity position. Our gross
cash balance of €16.4 billion at the end of 2014
provides us with flexibility and security to invest
in our business growth while also improving
cash returns to shareholders. We begin the
year with a solid net cash position of €9.1 billion.
Looking to 2015, if we secure the divestment
proceeds and we see we are on track with
the A350 ramp-up and A320 transition, I think
we will review our cash allocation policy to
maximise shareholder value.
IMPROVING
RETURNS
Earnings per share reported
EARNINGS PER SHARE
PERFORMANCE (in €)
INTERVIEW WITH HARALD WILHELM
CHIEF FINANCIAL OFFICER
** The 2013 figures have been restated to reflect the application of IFRS 10 and 11.
Pay-out ratio
* To be proposed to the Annual General Meeting 2015.
AIRBUS GROUP DIVIDEND
Gross dividend per share (in €)
ANNUAL REVIEW 2014
32
02 PILOTING EFFICIENCY
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
31%
40% 40%
0.60
0.75
1.20*
2012 2013 2014
3,5
3
2,5
2
1,5
1
0,5
0
3,5
3
2,5
2
1,5
1
0,5
0
1.86
1.46
2.99
2013** 20142012