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LONG-TERM VALUE
In 2010, EADS turned ten. Management, employees and shareholders looked
back on an eventful decade, in which the Group captured top spots in our
industry. Everyone who contributed to this European success story can be
proud. EADS’ strength today is remarkable, as became even more apparent
during the global economic crisis. The Group proved resilient during this
difficult time. Our management of the order backlog was outstanding,
not the least because of customer loyalty and the quality of our order book.
These attributes contributed significantly to EADS’ impressive recovery last year.
Overall performance in 2010 was better than expected. When we closed
our books, all key financial indicators were above management guidance,
particularly cash flow and order intake. Initiatives launched to enhance
programme management, reduce costs and create efficiencies have all
begun to deliver results. For our part, the Board lived up to its task of guiding
management on a number of fronts.
We facilitated the implementation of a comprehensive compliance organisation,
and are pleased with the processes and procedures that have now been
put in place. The Audit Committee, to which the compliance organisation
reports regularly, can focus on project-related reviews. Where necessary,
we will continue to pursue further organisational enhancements.
Our Enterprise Risk Management has also become well established.
Its creation was decisive in improving programme control, and it holds the key
to further enhancements. The Board fully endorses its rigorous Group-wide
implementation. “Risk flagging” and mitigation must be a vital part of
our management culture – and EADS is evolving significantly in this regard.
The Board also examined major programmes closely, such as the A350 XWB,
A380, A400M, NH90 and Tiger. We focused on de-risking initiatives – an area
where EADS truly progressed in 2010. A380 production is under control and
the A400M programme stands on a robust foundation again. I am especially
proud of the Board’s role in finding a solution to the A400M negotiations.
Importantly, after dealing mainly with operational challenges in the past,
the Board was able in 2010 to focus more on the strategic context, vision,
and forward looking initiatives to support sustainable growth. Nimbleness
and anticipation are mandatory to succeed in today’s dynamic business
environment. The Strategic Committee and the Board spent a considerable
amount of time discussing globalisation strategies as well as future
programmes. The Board subsequently approved a key investment in the
A320neo (new engine option), which is of fundamental importance to EADS.
Letter from the Chairman
of the Board
8
EADS ANNUAL REVIEW 2010