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EADS ANNUAL REVIEW 2011
PROGRESSING, INNOVATING,
TRANSFORMING

Table of contents

  • Page 1
    PROGRESSING, INNOVATING, TRANSFORMING EADS ANNUAl REVIEW 2011

  • Page 2
    AT A GLANCE

  • Page 3
    ...Strategy and Marketing Officer Key export markets 2012-2022 Markets & Perspectives TODAY/TOMORROW 34 lEADING 38 40 46 48 50 Airbus Eurocopter Astrium Cassidian The Year in Review 52 VERSATIlE 56 58 60 62 64 66 68 Engaged People TODAY/TOMORROW Eco-efficient Innovation Programme Management Supply...

  • Page 4
    2 EADS ANNUAl REVIEW 2011 PROGRESSING, INNOVATING, TRANSFORMING EADS is on track. We are making progress in our financial performance and in our key programme developments. We continue to be at the forefront of innovation, developing new technologies, launching new products and providing advanced...

  • Page 5
    EADS ANNUAl REVIEW 2011 3 A380 over Hong Kong

  • Page 6
    4 EADS ANNUAl REVIEW 2011 CONFIDENT TODAY/TOMORROW A380

  • Page 7
    EADS ANNUAl REVIEW 2011 CONFIDENT TODAY/TOMORROW 5 CONFIDENT - with reserves to go the extra mile TODAY Airbus delivers the world's most innovative commercial and military aircraft to customers across the planet. The flagship A380 is one example. Scan the QR-code with your smartphone for more ...

  • Page 8
    6 EADS ANNUAl REVIEW 2011 CONFIDENT TODAY/TOMORROW TOMORROW By delivering a reduction in fuel consumption of up to 15%, the A320neo sets new standards for performance in the high-volume, single-aisle segment. A320neo

  • Page 9
    EADS ANNUAl REVIEW 2011 CONFIDENT TODAY/TOMORROW 7

  • Page 10
    ...it was also the right decision. The Board also supported Eurocopter's ambitious innovation strategy, represented by numerous new platforms and demonstrators in 2011, and by the launch of the X4 helicopter programme. Thirdly, EADS is transforming itself. Success on global markets requires flexibility...

  • Page 11
    ... guide management, challenge the status quo where necessary and validate the strategic direction, to ensure that this unique European success story stays on course. The Board fully supported efforts to make EADS progress, innovate and transform in 2011. It kept a watchful eye on key programmes such...

  • Page 12
    ... REVIEW 2011 CONFIDENT TODAY/TOMORROW CORPORATE GOVERNANCE Focusing on major strategic and operational issues, Board discussions concentrated on significant programmes such as the A350 XWB, acquisitions, management succession, and EADS employee engagement. BOARD MEETINGS The Board of Directors...

  • Page 13
    ... the CORPORATE GOVERNANCE section in the REGISTRATION DOCUMENT 2011. * Current composition. Future composition will be subject to the decision of the newly appointed Board of Directors, following the Annual General Meeting to be held on 31 May 2012. SHAREHOlDER STRUCTURE as of 31 December 2011 22...

  • Page 14
    ..., Chairman of SNCF, President and CEO of Airbus, and an EADS Director since the creation of the Company. Earlier in his career, he held positions in the French Ministries of Economy & Finance, Research & Industry, and Defence. 08 Prior to his current position, Mr lagardère held various top...

  • Page 15
    ...the Crédit Commercial de France, after holding various high ranking positions within the French Treasury. 11 Mr Porth is Daimler's Director for Human Resources. He is also in charge of labour relations, IT-management and Procurement of Non-Production Material & Services. He previously held various...

  • Page 16
    ... In 2011, EADS overachieved on all its key financial indicators, including revenues, order intake, EBIT* and net income. All Divisions contributed to the better-than-expected EBIT*, setting a series of new records on the way: Raising production for the tenth year in a row, Airbus Commercial achieved...

  • Page 17
    ...regional aircraft with between 50 and 90 seats. In March 2012, EADS North America delivered the 200th light Utility Helicopter to the US Army out of the planned 345 units. All deliveries were on time and within budget. These successes support our growth strategy, as does our external growth in 2011...

  • Page 18
    ... military, driving ongoing and development programmes and strategic initiatives. DOMINGO UREÃ'A-RASO drives Airbus Military Mr Bertling's mission is to strengthen Eurocopter's leading position and deliver commercial success and customer satisfaction on all helicopter programmes and related services...

  • Page 19
    ... Group's defence, security and space activities to foster synergies. JEAN BOTTI steers EADS' Research and Technology, Innovation, Technical means and policies Mr Zoller is in charge of driving successful business performance at Cassidian while preparing the Division's future. Mr Brégier is Airbus...

  • Page 20
    18 EADS ANNUAl REVIEW 2011 ACHIEVING TODAY/TOMORROW sustain results long-term TODAY ACHIEVING - with the capacity to Cutting-edge technology makes innovative aircraft such as the Eurocopter EC145 T2 quieter and more fuel-efficient. Scan the QR-code with your smartphone for more information or ...

  • Page 21
    EADS ANNUAl REVIEW 2011 ACHIEVING TODAY/TOMORROW 19

  • Page 22
    20 EADS ANNUAl REVIEW 2011 ACHIEVING TODAY/TOMORROW X 3 helicopter demonstrator

  • Page 23
    EADS ANNUAl REVIEW 2011 ACHIEVING TODAY/TOMORROW 21 TOMORROW The new X3 high-speed, long-range helicopter demonstrator combines the vertical lift-off capability of a helicopter with the speed of a plane.

  • Page 24
    ..., Satair and Metron in 2011, is mainly thanks to our careful approach to cash management. This remains a key priority for us. The investment of approximately â,¬ 1.5 billion into acquisitions in 2011 is more than financed by the Free Cash Flow before acquisitions. Our net cash position at the end of...

  • Page 25
    EADS ANNUAl REVIEW 2011 ACHIEVING TODAY/TOMORROW INTERVIEW WITH THE CHIEF FINANCIAl OFFICER 23 "In financial terms, I think the Company is sounder than ever, with strong revenues, a huge backlog of orders, and a very solid financial profile." How do you estimate the currency risk for EADS going...

  • Page 26
    ... 2016. Eurocopter also created a joint venture with Korea Aerospace Industries to support Korean Utility Helicopter marketing and support. Vizada likewise will strengthen EADS' presence on the North American market being a major supplier to the US government as well as to a range of civil customers...

  • Page 27
    ...TODAY/TOMORROW INTERVIEW WITH THE CHIEF STRATEGY AND MARKETING OFFICER 25 "The acquisitions we made in 2011 will help us to increase the services share of our business and extend our global footprint." Clearly civil aircraft orders accounted for by far the largest part of EADS orders in 2011. How...

  • Page 28
    ... ANNUAl REVIEW 2011 ACHIEVING TODAY/TOMORROW KEY EXPORT MARKETS 2012-2022 EADS: a European company in a global environment RUSSIA CHINA - Russia's industrial and technological capabilities offer EADS great potential for partnerships. - EADS continues to increase its share of the largest market...

  • Page 29
    EADS ANNUAl REVIEW 2011 ACHIEVING TODAY/TOMORROW KEY EXPORT MARKETS 27 RUSSIA TURKEY CHINA SOUTH KOREA MIDDLE EAST INDIA MALAYSIA BRAZIL INDONESIA Around â,¬ 10 billion MARKET POTENTIAl Based on Airbus Global Market Forecast 2011-2030 and internal estimates INDONESIA - Indonesia is ...

  • Page 30
    28 EADS ANNUAl REVIEW 2011 ACHIEVING TODAY/TOMORROW MARKETS & PERSPECTIVES The global economy slowed in 2011, yet aviation continued its growth trend. Meanwhile, high levels of public sector debt are putting pressure on government spending within the defence, security and space sectors. RECOVERY ...

  • Page 31
    ... banks are facing higher costs to access US dollars, the main aircraft financing currency. Despite these pressures Airbus surpassed its deliveries target for 2011. Higher margins made aircraft financing more attractive to those financial institutions that have access to US dollars. leasing companies...

  • Page 32
    ... largest profits both in 2011 and 2012, according to IATA's December 2011 report. The Asia-Pacific region accounts for 32% of Airbus deliveries projected for 2012. SUPPLY CHAIN FRAGILITY As manufacturers increase production, pressure has grown for suppliers to consolidate. In September 2011, United...

  • Page 33
    ... additional development progress in countries such as India, South Korea and Turkey amongst others. HELICOPTER ORDERS RECOVER Within the helicopter sector, order levels are recovering from their recession lows. The oil and gas sector is driving demand, as relatively high energy prices are leading...

  • Page 34
    ...and security solutions. According to SIPRI, India's defence expenditure in 2010 rose 15% above the previous year to US $ 41.2 billion. In the same period, defence spending rose WORlDWIDE FIGHTER AIRCRAFT MARKET FORECAST (in US $ billion) 20 15 10 5 0 2012 2013 2014 2015 2016 Source: Teal Group...

  • Page 35
    ... space access. GlOBAl MIlITARY SPENDING (in 2010) 43% 7% 4% 4% 4% 3% 3% 3% 3% 2% 2% USA China UK France Russia Japan Saudi Arabia Germany India Italy Brazil Rest of World Total: US $1,612 billion Source: SIPRI 22% WORlD CIVIl HElICOPTER FlEET BY REGION (as of November 2011, in % of aircraft) 45...

  • Page 36
    34 EADS ANNUAl REVIEW 2011 lEADING TODAY/TOMORROW LEADING - Assuring mission success Eurofighter "Typhoon"

  • Page 37
    EADS ANNUAl REVIEW 2011 lEADING TODAY/TOMORROW 35 TODAY Cassidian provides state-of-the-art systems and services for armed forces, the police and civil protection authorities around the world. Scan the QR-code with your smartphone for more information or visit www.eads.com

  • Page 38
    36 EADS ANNUAl REVIEW 2011 lEADING TODAY/TOMORROW TOMORROW Cassidian pioneers groundbreaking technology, such as those integrated within the Euro Hawk UAS, to safeguard sensitive infrastructure and monitor terrorist hot spots. Euro Hawk

  • Page 39
    EADS ANNUAl REVIEW 2011 lEADING TODAY/TOMORROW 37

  • Page 40
    ...the eco-efficient aircraft wins 1,226 firm orders, becoming the fastest-selling new aircraft ever. Zehst, Zero Emission High Speed Technology X 3 helicopter demonstrator 20-26 June 2011 EADS INVITES YOUNG TAlENT TO PARIS AIR SHOW. In a year when EADS hires approximately 5,000 employees, the Group...

  • Page 41
    .... The first Euro Hawk unmanned aircraft for the German armed forces, jointly produced by Cassidian and Northrop Grumman, touches down in Manching, Germany, prior to delivery planned for 2012. 1 December 2011 NEW ARIANE 5 lAUNCHER APPROVED. The European Space Agency approves Astrium's design for the...

  • Page 42
    ... Air Traffic Management (ATM) products and services for the global aviation industry. ALTERNATIVE FUELS Airbus is working to reduce the environmental impact of aviation by integrating technological innovations into new aircraft and by supporting the search for alternative sources of fuel. Airbus...

  • Page 43
    EADS ANNUAl REVIEW 2011 lEADING TODAY/TOMORROW AIRBUS 41 AIRBUS DIVISION1) (â,¬m) Revenues Self-financed R&D EBIT* Order intake Order book 2011 2010 Variation 33,103 2,482 584 117,874 495,513 29,978 2,321 305 68,223 400,400 +10% +7% +91% +73% +24% 1) Airbus reports in two segments: Airbus ...

  • Page 44
    ... Commercial won 56% of total gross aircraft orders (above 100 seats) by value in 2011 and 54% of net orders by value. BEST-SELLING A320 FAMILY In terms of commercial aircraft orders, 2011 was the year of the A320neo. The A320neo combines advances in engine fuel-efficiency with "sharklet" wing-tip...

  • Page 45
    EADS ANNUAl REVIEW 2011 lEADING TODAY/TOMORROW AIRBUS 43 A330-200 Freighter A330 Final Assembly line, Toulouse, France Air Asia A320neo

  • Page 46
    44 EADS ANNUAl REVIEW 2011 lEADING TODAY/TOMORROW A400M and C295 A400M Final Assembly line, Seville, Spain A330 MRTT

  • Page 47
    ... and light military transport aircraft. A new radar housing structure, called a rotodome, underwent flight testing on a C295 in 2011, with the aim of developing a new market segment for high-performance airborne early warning and control systems. AIRBUS DIVISION OUTLOOK In 2012, Airbus is targeting...

  • Page 48
    ... in commercial deliveries and support activities, as well as improved operational performance. In a recovering market, Eurocopter booked 457 net helicopter orders (346 in 2010). The order intake amounted to â,¬ 4.7 billion. E xpor t sales outside the company's home countries represented 77% of order...

  • Page 49
    EADS ANNUAL REVIEW 2011 LEADING TODAY/TOMORROW EUROCOPTER 47 (â,¬m) Revenues Self-financed R&D EBIT* Order intake Order book 2011 2010 Variation 5,415 235 259 4,679 13,814 4,830 189 183 4,316 14,550 +12% +24% +42% +8% -5% REVENUES BY MARKET (in % of external revenues) 47% Defence 53% ...

  • Page 50
    48 EADS ANNUAL REVIEW 2011 LEADING TODAY/TOMORROW (â,¬m) Revenues Self-financed R&D EBIT* Order intake Order book 2011 2010 Variation 4,964 109 267 3,514 14,666 5,003 85 283 6,037 15,760 -1% +28% -6% -42% -7% REVENUES BY MARKET (in % of external revenues) 34% Defence 66% Civil Ariane 5

  • Page 51
    .... While performance of the satellite, defence and launcher segments improved, 2011 saw lower services activity due to a changing market environment. Astrium's investment in future competitiveness led to higher research and development and non-recurring costs related to the AGIlE transformation plan...

  • Page 52
    ... will be mainly used for investment in new products and services, to fund globalisation and to secure Cassidian's profitability ambitions. Revenues were stable at â,¬ 5.8 billion (â,¬ 5.9 billion in 2010). The Eurofighter programme and MBDA missile programmes continued to be key revenue drivers...

  • Page 53
    EADS ANNUAl REVIEW 2011 lEADING TODAY/TOMORROW CASSIDIAN 51 (â,¬m) Revenues Self-financed R&D EBIT* Order intake Order book 2011 2010 Variation 5,803 275 331 4,168 15,469 5,933 251 457 4,312 16,903 -2% +10% -28% -3% -8% REVENUES BY MARKET (in % of external revenues) 92% Defence 8% ...

  • Page 54
    52 EADS ANNUAl REVIEW 2011 VERSATIlE TODAY/TOMORROW Automated Transfer Vehicle (ATV)

  • Page 55
    EADS ANNUAl REVIEW 2011 VERSATIlE TODAY/TOMORROW 53 VERSATILE - Securing access to space TODAY In 2011, the most complex cargo spacecraft ever produced in Europe, the Astrium-produced Automated Transfer Vehicle Johannes Kepler, successfully docked with the International Space Station. Scan the ...

  • Page 56
    54 EADS ANNUAl REVIEW 2011 VERSATIlE TODAY/TOMORROW Ariane 5

  • Page 57
    EADS ANNUAl REVIEW 2011 VERSATIlE TODAY/TOMORROW 55 TOMORROW Astrium is prime contractor for future developments of the proven Ariane 5, which has already achieved 46 successful launches in succession. The next major upgrade aims to provide an increased payload of up to 12 tonnes.

  • Page 58
    ... administrative work and creating efficiencies. In 2011, their total revenue was close to â,¬ 200 million and they achieved their planned cost savings. EMPLOYEE SHARE OWNERSHIP PLAN In 2011, the Employee Share Ownership Plan (ESOP) was changed to a matching plan concept and an all-time record number...

  • Page 59
    ...support "EADS Vision 2020" goals. We are also working closer with universities both within Europe and in other countries to make sure future graduates have the competences we need. How does long-term management of EADS' skills base help employees to have rewarding careers? In order to secure our key...

  • Page 60
    ...potentially improve the environmental performance of air travel? Zehst aims at zero emissions of CO2 particles, and reduction of NOx emissions compared to the current standard. It also aims at reducing noise during the entire flight: from take-off to landing, including high-speed legs of the journey...

  • Page 61
    ... such as lufthansa, Air France and Interjet that are using drop-in biofuels on commercial flights. TECHNOLOGY DEMONSTRATORS As a starting point for research into radically new aircraft designs which could pave the way for zero emissions air travel, Innovation Works presented in 2011 two new advanced...

  • Page 62
    ...further policies were designed and will be deployed in 2012. These are focused on preparing supplier work packages effectively, learning from mistakes and preparing to support customers early in new programmes. DEVELOPING PROFESSIONALS EADS regards programme management as a core company skill and is...

  • Page 63
    EADS ANNUAl REVIEW 2011 VERSATIlE TODAY/TOMORROW PROGRAMME MANAGEMENT 61 A380 Final Assembly line, Toulouse, France MAKING PROGRAMME MANAGEMENT A STRENGTH INTERVIEW WITH JEAN-JACQUES SAlVATOR, Head of Programme Management Organisation, Eurocopter establishing rules in areas such as project ...

  • Page 64
    ... within procurement. If we discover difficulties, we of course work on recovery plans. We try though to mitigate risks before they occur, by helping suppliers to secure funding, or by supporting consolidation of suppliers. Airbus supply chain experts are integrated in this process. Often financial...

  • Page 65
    ...remedial actions. In some cases, EADS actively supported suppliers, helping to diagnose and fix problems. GLOBAL SOURCING As part of its long-term plans for global growth and in order to increase dollar-based procurement, EADS is aiming to develop its supply chain outside Europe. In 2010, 29% of the...

  • Page 66
    ... to climate change. CLEAN SKY Funded equally by the European Commission and Europe's aviation industry, this Joint Technology Initiative is designed to speed up the technology breakthroughs needed to achieve ACARE's environmental goals. CORPORATE GOVERNANCE The control and monitoring of a company to...

  • Page 67
    ... a group of gases that contribute to climate change. POWER8 An Airbus efficiency programme that introduced a range of improvements including leaner processes and better cash management. RAMP-UP An industry term to describe a production programme's increasing level of output. SHARED SERVICES Support...

  • Page 68
    66 EADS ANNUAl REVIEW 2011 ADDRESSES EADS HEADQUARTERS European Aeronautic Defence and Space Company EADS N.V. Mendelweg 30 2333 CS leiden The Netherlands Tel + 31 71 524 56 00 HEAD OFFICES In France: EADS 37, boulevard de Montmorency 75781 Paris cedex 16 France Tel + 33 1 42 24 24 24 In Germany:...

  • Page 69
    EADS ANNUAl REVIEW 2011 ADDRESSES 67 EADS STRATEGY AND MARKETING ORGANISATION Tel + 33 1 42 24 24 24 - Fax + 33 1 42 24 26 19 Representative offices Europe Brussels, Belgium Latin America São Paulo, Brazil Tel + 32 25 04 78 12 Fax + 32 25 04 78 28 Athens, Greece Tel + 55 11 3093 2807 Fax + ...

  • Page 70
    68 EADS ANNUAl REVIEW 2011 SHAREHOLDER INFORMATION www.eads.com FINANCIAl CAlENDAR FULL YEAR 2011 RESULTS RELEASE: INVESTOR RElATIONS CONTACT TOLL-FREE TELEPHONE NUMBERS: 8 March 2012 FIRST QUARTER 2012 RESULTS RELEASE: France: 0 800 01 2001 Germany: 00 800 00 02 2002 Spain: 00 800 00 02 2002 ...

  • Page 71
    ...Document 2011 Financial Statements EADS would like to thank all those who contributed to the making of this Annual Report. Designed and produced by - Written by The Clerkenwell Consultancy - Printed by Chirat. Slip-Case - Photographs © by EADS: Airbus/Fixion - Astrium - Eurocopter/Deulin - Euro...

  • Page 72
    ... 30 2333 CS Leiden The Netherlands In France 37, boulevard de Montmorency 75781 Paris cedex 16 - France In Germany 81663 Munich - Germany In Spain Avenida de Aragón 404 28022 Madrid - Spain Cover image: Tail rotor of diesel-electric hybrid helicopter concept, developed by EADS Innovation Works.