Airbus 2015 Annual Report Download - page 99

AIRBUS GROUP REGISTRATION DOCUMENT 2015 l 67 l
Management’sDiscussion andAnalysisofFinancial Condition andResultsofOperations
Registration Document 2015
2.
2.1 Operating and Financial Review
for the period ended 31December 2015 (€ 551million for the
period ended 31December 2014). (Please refer to “2.1.1.3
Significant Programme Developments, Restructuring and
Related Financial Consequences in 2013, 2014 and 2015”).
Airbus Defence andSpace’s EBIT* also included an adjustment
of the provision for restructuring generating a positive impact of
€ 41million and a net gain from the Airbus Safran Launchers first
phase deconsolidation and some further small disposal impacts.
The EBIT* of Other/ Headquarters/ Consolidation increased by
12.1% from € 547million for 2014 to € 613million for 2015. This is
due to the increase in the Dassault Aviation result driven mainly
by the higher capital gain from ongoing divestment compared
to 2014. 2014 also included the gain from the sale of the Paris
Headquarters building.
2014 compared to 2013. The Group’s consolidated EBIT*
increased by 54.0%, from € 2.6billion for 2013 to € 4.0billion
for 2014, primarily reflecting the increased EBIT* at Airbus in
2014, which increased by 67.7%, from € 1.6billion for 2013 to
€ 2.7billion for 2014, mainly due to higher aircraft deliveries
(629 deliveries in 2014, as compared to 626 deliveries in 2013),
continued operational improvements including A380 progress
towards breakeven and a favourable evolution of maturing
hedges, partially offset by increased A350XWB support costs.
In Q42013 a negative charge of € 434million was recorded on
the A350XWB programme contributing to the improvement
seen in 2014.
Airbus Helicopters’ EBIT* increased by 4.0%, from € 397million
for 2013 to € 413million for 2014, despite higher research and
development expenses and a less favourable revenue mix.
Airbus Defence andSpace’s EBIT* decreased by 37.9% from
€ 659million for 2013 to € 409million for 2014. In the last
quarter of 2014, Management reviewed the A400M programme
evolution mostly driven by military functionality challenges and
industrial ramp‑up together with associated mitigation actions.
As a result of this review, Airbus Defence andSpace recorded
based on Management best estimate an additional net charge
of € 551million for the period ended 31December 2014.
The EBIT* of Other/ Headquarters/ Consolidation increased
from € ‑25million for 2013 to € +547million for 2014. This
includes a capital gain of € 343million linked to the divestment of
eight percent of the Company’s Dassault Aviation participation.
Foreign currency impact on EBIT*. At least 70% of the
Group’s revenues are denominated inUSdollars, whereas a
substantial portion of its costs is incurred ineuros and, to a
lesser extent, pounds sterling. Given the long‑term nature of
its business cycles (evidenced by its multi‑year backlog), the
Group hedges a significant portion of its net foreign exchange
exposure to mitigate the impact of exchange rate fluctuations
on its EBIT*. Please refer to the “Notes to the IFRS Consolidated
Financial Statements — Note35: Information about financial
instruments” and “Risk Factors — 1.Financial Market Risks
— Foreign Currency Exposure”. In addition to the impact that
Hedging Activities have on the Group’s EBIT*, the latter is also
affected by the impact of revaluation of certain assets and
liabilities at the closing rate and the impact of natural hedging.
During 2015, cash flow hedges covering approximately
US$ 25.5billion of the Group’s USdollar‑denominated revenues
matured. In 2015, the compounded exchange rate at which
hedged USdollar‑denominated revenues were accounted
for was €‑US$ 1.34, as compared to €‑US$ 1.35 in 2014. This
difference resulted in an approximate € +0.05billion increase in
EBIT* from 2014 to 2015. In addition, other currency translation
adjustments, including those related to the mismatch between
USdollar‑denominated customer advances and corresponding
USdollar‑denominated costs as well as the revaluation of loss‑
making contract provisions, had an approximate negative effect
of € ‑0.78billion on EBIT* compared to 2014. Please refer to
“2.1.2.4 Foreign Currency Translation”.
During 2014, cash flow hedges covering approximately
US$ 24.3billion of the Group’s USdollar‑denominated revenues
matured. In 2014, the compounded exchange rate at which
hedged USdollar‑denominated revenues were accounted
for was €‑US$ 1.35, as compared to €‑US$ 1.37 in 2013. This
difference resulted in an approximate € +0.2billion increase in
EBIT* from 2013 to 2014. In addition, other currency translation
adjustments, including those related to the mismatch between
USdollar‑denominated customer advances and corresponding
USdollar‑denominated costs as well as the revaluation of loss‑
making contract provisions, had an approximate positive effect
of € +0.24billion on EBIT* compared to 2013.
Financial Statements 2015
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QRegistration Document 2015
Annual Report 2015 Financial Statements 2015
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