Airbus 2015 Annual Report Download - page 106

AIRBUS GROUP REGISTRATION DOCUMENT 2015 l 74 l
Management’sDiscussion andAnalysisofFinancial Condition andResultsofOperations
2.1 Operating and Financial Review
Changes in Other Operating Assets andLiabilities
Changes in other operating assets and liabilities is comprised
of inventories, trade receivables, other assets and prepaid
expenses netted against trade liabilities, other liabilities
(including customer advances), deferred income and customer
financing. They resulted in a € ‑0.7billion negative impact on the
net cash position for 2015, as compared to a negative impact
of € ‑2.4billion for 2014.
In 2015, the main net contributor to the negative working capital
variation was the change in inventory (€ ‑4.1billion) reflecting
increased work in progress mainly associated with the A350XWB
at Airbus and increased activity on A400M at Airbus Defence
andSpace. Additionally, trade receivables (€ ‑1.4billion) and
other assets and liabilities (€ ‑0.4billion) contributed negatively.
This was partly offset by pre‑delivery payment from customers
(€ 3.8billion) and an increase in trade liabilities (€ 1.6billion). In
2014, the main net contributor to the negative working capital
variation wasthe change in inventory (€ ‑3.3billion) reflecting
inventory growth at Airbus especially due to investment in
programmes to support both production and development,
particularly for the A350XWB and Single Aisle programmes,
as well as at Airbus Defence andSpace. Additionally, trade
receivables contributed negatively (€ ‑0.7billion). These negative
variations within the year were partially offset by pre‑delivery
payments from customers (€ 1.7billion), which increased
compared to 2013.
European government refundable advances. As of
31December 2015, total European government refundable
advances received, recorded on the statement of financial
position in the line items “non‑current other financial liabilities”
and “current other financial liabilities” due to their specific nature,
amounted to € 7.3billion, including accrued interest.
European government refundable advances (net of
reimbursements) increased in 2015, due primarily to refundable
advances received for the A350XWB. Please refer to the “Notes
to the IFRS Consolidated Financial Statements —Note23: Other
financial assets and other financial liabilities”.
Cash Used for Investing Activities
Management categorises cash used for investing activities into
three components: (i)industrial capital expenditures, (ii)M&A
transactions and (iii)others.
Industrial capital expenditures. Industrial capital expenditures
(investments in property, plant and equipment and intangible
assets) amounted to € ‑2.9 billion for 2015 as compared
to € ‑2.5billion for 2014 and € ‑2.9billion for 2013. Capital
expenditures in 2015 related to programmes at Airbus of
€ ‑2.0billion (mainly for the ramp‑up phase of A350XWB and
Single Aisle) and additional projects in the other Divisions of
€ ‑0.9billion. Capital expenditures include product‑related
development costs that are capitalised in accordance with
IAS38. Please refer to “2.1.2.2 Capitalised development costs”.
M&A transactions. In 2015, the € 1.7billion figure principally
reflects the sale of Dassault Aviation shares in the first half
of 2015. Please refer to the “Notes to the IFRS Consolidated
Financial Statements — Note6: Acquisitions and disposals”.
In 2014, the € 893million figure principally reflects the partial sale
of shares of Dassault Aviation (€ 792million) and the disposal of
shares of Patria (€ 133million). Cash was used for the Group’s
acquisitions of Alestis Aerospace S.L. (€ ‑22million) and of
Salzburg München Bank AG (€ ‑21million).
Free Cash Flow
The Group defines Free Cash Flow as the sum of (i)cash
provided by operating activities and (ii)cash used for investing
activities, minus (iii)change of securities, (iv)contribution to plan
assets of pension schemes and (v)realised foreign exchange
results on treasury swaps. As a result of the factors discussed
above, Free Cash Flow amounted to € 2.8billion for 2015 as
compared to € 2.0billion for 2014 and € ‑0.8billion for 2013. Free
Cash Flow before customer financing was € 3.0billion for 2015
as compared to € 1.9billion for 2014 and € ‑0.5billion for 2013.
Change in Treasury Shares
Change in treasury shares for 2015 amounted to € ‑0.3billion
which is related to the share buyback. Airbus Group has
appointed an investment services provider to undertake a share
buyback on behalf of the Company for a maximum amount of
€ 1billion. The buyback will take place between 2November
2015 and 30June 2016. As of 31December 2015, the Group
bought back € 264million of shares.
Change in treasury shares for 2014 amounted to € +0.1billion.
Contribution to Plan Assets of Pension Schemes
The cash outflows of € ‑0.3billion, € ‑0.5billion and € ‑0.2billion
in 2015, 2014 and 2013, respectively, primarily relate to a
contribution to the Contractual Trust Arrangement (CTA) for
allocating and generating pension plan assets in accordance
with IAS19, as well as to plan assets in the UK and to German
benefit funds. Please refer to the “Notes to the IFRS Consolidated
Financial Statements — Note29.1: Post‑employment benefits
— Provisions for retirement plans”. In 2016, the Group intends
to make additional € 400million contributions to plan assets
in order to reduce the provision for retirement plans on its
statement of financial position.
Others
In 2015, the negative change of € ‑680million mainly resulted
from finance lease liabilities and from a financing liability of
€ ‑223million recognised for Airbus’ irrevocable share buyback
commitment as at 31December 2015; recognition of the
financial liability led to a corresponding reduction of equity.
In 2014, the negative change of € ‑467million reflects among
others the change in consolidated financing liabilities (mainly
due to the first consolidation of AirbusGroup bank).
Financial Statements 2015
11 22 33 44 55
QRegistration Document 2015
Annual Report 2015 Financial Statements 2015