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EADS ANNUAL REVIEW 2012
DEPLOYING OUR TALENT
FOR A NEW ERA

Table of contents

  • Page 1
    EADS ANNUAL REVIEW 2012 DEPLOYING OUR TALENT FOR A NEW ERA

  • Page 2
    AT A GLANCE

  • Page 3
    ...Interview with the Chief Strategy and Marketing Officer 24 - Markets & Perspectives 03 ACHIEVING our goals 32 38 40 42 Airbus Eurocopter Astrium Cassidian 04 PREPARING for the future 46 - Engaged People 48 - Innovation 50 - Environmental Protection 52 - Supply Chain 54 - Addresses 56 - Shareholder...

  • Page 4
    EADS ANNUAL REVIEW 2012 2

  • Page 5
    EADS ANNUAL REVIEW 2012 EADS DEPLOYING OUR TALENT FOR A NEW ERA Increased revenues and profitability, a rising order book, progress on key development programmes, a successful management transition and the continued focus on innovation and internationalisation - 2012 was a good year for EADS. It ...

  • Page 6
    ... Eurofighter signs a five-year contract to support the fleet of Typhoon jets across the four Eurofighter core nations - Germany, Italy, Spain and the UK - helping to sustain thousands of jobs in engineering, project management and the supply chain. 22 May 2012 CASSIDIAN BECOMES KEY NATO AGS PARTNER...

  • Page 7
    ... new-generation airlifters in series production are pictured together at the Final Assembly Line in Seville, Spain, ahead of delivery to France and Turkey in 2013. In all, four aircraft are due for delivery in 2013 - three to France and one to Turkey. 05 December 2012 OVERHAUL OF EADS GOVERNANCE...

  • Page 8
    01 MOVING into a new era Management and Governance

  • Page 9

  • Page 10
    ... their outstanding performance in 2012, and I congratulate management for its stamina in driving change. Last, but not least, I thank you, distinguished EADS shareholders, for your persistent loyalty. EADS relies on your commitment. The new Board of Directors as well as the Group Executive Committee...

  • Page 11
    ..., the Board of Directors focused on the Group's financial results and forecasts, asset management, supply chain challenges, the services business, compliance in key business processes and in major programmes, as well as efficiency and innovation initiatives. It reviewed Enterprise Risk Management...

  • Page 12
    EADS ANNUAL REVIEW 2012 MOVING INTO A NEW ERA LETTER FROM THE CHAIRMAN OF THE BOARD DENIS RANQUE "The Board is committed more than ever to supervising all aspects of EADS' performance, risks and opportunities for long-term achievement." Dear Shareholders, Dear Stakeholders, It is a great honour ...

  • Page 13
    ... impetus to the Company's strategic aspirations, while seeking profitable new business opportunities, in terms of business scope and international footprint. As in the recent past, the Board will monitor progress on key programmes, and emphasise risk control and operational excellence. To live up to...

  • Page 14
    ..., he was Chairman and Chief Executive Officer of the Thomson-CSF group, now called Thales. Qualifications: École Polytechnique and Corps des Mines. Mr Enders became EADS CEO in 2012, after previously being Airbus CEO, EADS co-CEO and Defence and Security Systems CEO. His career began on the German...

  • Page 15
    ...career at Lahmeyer International. Qualifications: Universities of Stuttgart and Munich (Construction Engineering & Economics); University of Munich (PhD Engineering). 13 JEAN-CLAUDE TRICHET (70) Honorary Governor of Banque de France RALPH D. CROSBY, JR. (65) Former Member of the Management Boards...

  • Page 16
    EADS ANNUAL REVIEW 2012 MOVING INTO A NEW ERA CHIEF EXECUTIVE OFFICER'S MESSAGE TOM ENDERS "We see 2013 as a year in which EADS will take substantial steps forward in generating higher returns for shareholders." 14 Tom Enders

  • Page 17
    ...performance, as shown in the higher aircraft deliveries and key financial indicators, we also reached a landmark agreement to simplify and normalise EADS' governance and ownership structure. In its key, high-priority programmes, Airbus made good progress on the A350 XWB, with the final assembly line...

  • Page 18
    ..., engineering, procurement and supply chain management, quality and information technology. As Airbus Chief Executive Officer, Mr Brégier is responsible for the overall success of all Airbus activities, commercial and military, driving ongoing and development programmes and strategic initiatives...

  • Page 19
    ...'s strategy including, merger and acquisition operations, as well as the Group's international development and marketing. THIERRY BARIL EADS and Airbus Chief Human Resources Officer succeeded Lutz Bertling on 30 April 2013. The Eurocopter CEO mission is to strengthen Eurocopter's leading position...

  • Page 20
    EADS ANNUAL REVIEW 2012 MOVING INTO A NEW ERA INTERVIEW WITH THE CHIEF FINANCIAL OFFICER HARALD WILHELM "Going forward, improved profitability is priority number one for the management team." 18 FREE CASH FLOW OUTLOOK FOR 2013 IS QUITE MODERATE, THOUGH, AT BREAK-EVEN. WHY IS THAT? In 2013, ...

  • Page 21
    EADS ANNUAL REVIEW 2012 MOVING INTO A NEW ERA INTERVIEW WITH THE CHIEF FINANCIAL OFFICER 19 Harald Wilhelm HOW DO YOU VIEW THE CURRENT SHARE PRICE DEVELOPMENT? After a 38% rise in 2011, and another 22% rise in 2012, the share price development in the first few months of 2013 has again been very...

  • Page 22

  • Page 23
    ANTICIPATING change Strategy 02

  • Page 24
    EADS ANNUAL REVIEW 2012 ANTICIPATING CHANGE INTERVIEW WITH THE CHIEF STRATEGY AND MARKETING OFFICER MARWAN LAHOUD "Our sound market position and financial strength mean that we are in an excellent position to take up the challenge." 22 Marwan Lahoud

  • Page 25
    ... competitive. In addition, Airbus Flight Hour Services, which has made a promising start the attempted merger with BAE Systems in 2012 showed the with some 100 aircraft already under contract. high level of complexity in the current environment. As part of our strategy review, we are looking at...

  • Page 26
    ... ANNUAL REVIEW 2012 ANTICIPATING CHANGE MARKETS & PERSPECTIVES Emerging and developing economies were the main drivers of global economic growth in 2012. Increased activity in these countries is supporting demand for aerospace products, particularly in the civil aviation sector. Due to government...

  • Page 27
    ... drive significant long-term demographic trends with far-reaching impacts on technological development and the environment. Climate protection and energy security are top of the agenda for many governments. Climate change is now widely recognised as a global fact, representing a considerable risk...

  • Page 28
    EADS ANNUAL REVIEW 2012 ANTICIPATING CHANGE AIRCRAFT DEMAND HOLDS STRONG nevertheless saw a large fall in profits, due to weak cargo markets and slower economic growth in China. North American carriers were expected to end 2012 with a collective net profit TRAFFIC INCREASES, DESPITE WEAKER ...

  • Page 29
    ... - Revenue Forecast by Region Global, 2011-2021 - Compound Annual Growth Rate = 4.05% 8.00 8.00 7.00 7.00 6.00 6.00 5.00 5.00 4.00 4.00 3.00 3.00 2.00 2.00 1.00 1.00 0.00 0.00 In $ Bn 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 North America Europe Middle East Asia-Pacific Latin America...

  • Page 30
    ... in global affairs. According to the report "Asian Defence Spending 2000-2011" (Hofbauer, Hermann, Raghavan), military expenditure in Asia is projected to overtake that of the EU in 2012. Total world defence spending (2011) 42.4% 20.9% 18.8% 7.1% 4.6% 4.2% 2.0% Source: SIPRI North America Asia...

  • Page 31
    ...4.6% in real terms. Faced with tight government budgets, defence companies in advanced economies are adapting their business proposition, offering managed services, off-the-shelf products and developing creative partnering approaches. The US strategy of rebalancing towards the Asia-Pacific region is...

  • Page 32
    03 ACHIEVING our goals 2012 Performance

  • Page 33

  • Page 34
    ...expanding international presence, Airbus announced plans to open an assembly line for single-aisle AIRBUS DIVISION OUTLOOK In 2013, Airbus is targeting a further increase in deliveries to between 600 and 610 commercial aircraft. Monthly production rates are set to continue at 42 for the A320, while...

  • Page 35
    ... ACHIEVING OUR GOALS AIRBUS Results (â,¬m) Revenues Self-financed R&D EBIT* Order intake Order book 2012 2011 Change 38,592 2,442 1,230 88,142 523,410 33,103 2,482 584 117,874 495,513 +17% -2% +111% -25% +6% REVENUES BY MARKET (in % of external revenues) 95% Civil 5% Defence Scan here and...

  • Page 36
    ... for in 2014, first delivery of the A350-800, with 270 seats, is planned the fuel-saving A320neo, due for first delivery in 2015. Including for 2016. The A350-1000, with 350 seats, is planned for 2017. Current Engine Option (ceo) aircraft, Airbus Commercial won Major new contracts included Singapore...

  • Page 37
    EADS ANNUAL ANNUAL REVIEW REVIEW2012 2012 ACHIEVING OUR GOALS AIRBUS 35

  • Page 38
    ... The aircraft performed all flight tests required for aircraft type US Coast Guard awarded a contract for two additional CN235 certification, including high-altitude flight tests at La Paz, Bolivia, maritime patrol aircraft. Total deliveries of light and medium rough field tests in Germany and the...

  • Page 39
    EADS ANNUAL ANNUAL REVIEW REVIEW2012 2012 ACHIEVING OUR GOALS AIRBUS 37

  • Page 40
    ... PRESENCE Eurocopter continued its strategic growth path in global markets. 72% of revenues in 2012 were from export markets outside the domestic markets of France, Germany and Spain. OUTLOOK In 2013, Eurocopter expects to deliver profitable growth, supported by increased deliveries and services...

  • Page 41
    EADS ANNUAL ANNUAL REVIEW REVIEW2012 2012 ACHIEVING OUR GOALS EUROCOPTER Results (â,¬m) Revenues Self-financed R&D EBIT* Order intake Order book 2012 2011 Change 6,264 297 311 5,392 12,942 5,415 235 259 4,679 13,814 +16% +26% +20% +15% -6% REVENUES BY MARKET (in % of external revenues) 54% ...

  • Page 42
    ... International Space Station. satellite deliveries in 2013 should be broadly in line with 2012. Major European orders included a contract from ESA worth On defence markets, Astrium will maintain its strong position in â,¬ 300 million for the first phase of the Solar Orbiter mission Europe, as a key...

  • Page 43
    ... REVIEW 2012 ASTRIUM ACHIEVING OUR GOALS ASTRIUM Results (â,¬m) Revenues Self-financed R&D EBIT* Order intake Order book 2012 2011 Change 5,817 128 312 3,761 12,734 4,964 109 267 3,514 14,666 +17% +17% +17% +7% -13% REVENUES BY MARKET (in % of external revenues) 66% Civil 34% Defence...

  • Page 44
    ...EADS' 37.5% share. Within the Allied Ground Surveillance (AGS) programme, Cassidian won a contract worth around â,¬ 300 million from NATO prime contractor Northrop Grumman for the supply of mobile ground segments for a surveillance system using high altitude Unmanned Aerial Systems. At year-end 2012...

  • Page 45
    EADS ANNUAL ANNUAL REVIEW REVIEW2012 2012 ACHIEVING OUR GOALS CASSIDIAN Results (â,¬m) Revenues Self-financed R&D EBIT* Order intake Order book 2012 2011 Change 5,740 234 142 5,040 15,611 5,803 275 331 4,168 15,469 -1% -15% -57% +21% +1% REVENUES BY MARKET (in % of external revenues) 13% ...

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  • Page 47
    PREPARING for the future Key Drivers 04

  • Page 48
    ...500 employees took up the opportunity to move to a new engagement and satisfaction. The survey is to continue beyond EADS department, site or country. In 2012, EADS provided em- the originally planned three waves. ployees with a total of some 3.2 million hours of training. On an organisational level...

  • Page 49
    EADS ANNUAL REVIEW 2012 PREPARING FOR THE FUTURE ENGAGED PEOPLE 47

  • Page 50
    ...' corporate research and technology is managed by EADS Innovation Works, which as of 2012, employs over 1,000 scientists and researchers, including doctorates and interns, at facilities in France, Germany, UK, Spain, USA, Canada, Singapore, India and China. EADS Innovation Works develops the Group...

  • Page 51
    EADS ANNUAL ANNUAL REVIEW REVIEW2012 2012 PREPARING FOR THE FUTURE INNOVATION 49

  • Page 52
    ... energy for buildings. In Toulouse, France, the A350 XWB final assembly facility has been fitted out with Five of the seven research and technology groups within the 22,000 square-metres of photovoltaic cells. Group's corporate research network address topics related to eco-efficiency. 90% of Airbus...

  • Page 53
    EADS ANNUAL ANNUAL REVIEW REVIEW2012 2012 PREPARING FOR THE FUTURE ENVIRONMENTAL PROTECTION A321neo Cryosat 51 Astrium imaging services: satellite view of Bijagos Islands, Guinea-Bissau

  • Page 54
    ... buyers. strategic goal for EADS, as a means of hedging exchange rate risk. High US dollar revenues, in particular through the sale of civil SUPPLIER SYNERGIES aircraft, make the Group particularly exposed to fluctuations in Group-wide procurement boards continued to identify synergies the euro...

  • Page 55
    EADS ANNUAL ANNUAL REVIEW REVIEW2012 2012 PREPARING FOR THE FUTURE SUPPLY CHAIN 53

  • Page 56
    ... 207 845 84 00 EADS NORTH AMERICA EADS North America, Inc. 2550 Wasser Terrace, Suite 9000 Herndon, VA 20171 USA Tel + 1 703 466 5600 EUROCOPTER Eurocopter Aéroport International Marseille Provence 13725 Marignane cedex France Tel +33 4 42 85 85 85 OTHER BUSINESSES EADS Sogerma Z.I. de l'Arsenal...

  • Page 57
    EADS ANNUAL REVIEW 2012 ADDRESSES 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 2 502 60 05 Fax + 32 2 502 30 81 Oslo, Norway Tel + 55 11 3093 2800 Fax + 55 11 ...

  • Page 58
    EADS ANNUAL REVIEW 2012 SHAREHOLDER INFORMATION www.eads.com 56 FINANCIAL CALENDAR FULL YEAR 2012 RESULTS RELEASE INVESTOR RELATIONS CONTACT DETAILS TOLL-FREE TELEPHONE NUMBERS 27 February 2013 EXTRAORDINARY GENERAL MEETING France: 0 800 01 2001 Germany: 00 800 00 02 2002 Spain: 00 800 00 02 ...

  • Page 59
    ... - Eurocopter - Eurofighter/G. Lee - X. Annual review - Photographs © by EADS: Airbus - Airbus China - Airbus Military - Astrium - Astrium/ESA - Banque de France - Cassidian - EADS - EADS/Abaca-Guibbaud - EADS/Capa - Bassignac - EADS Innovation Works - EADS North America - EADS/Lange - EADS/Schlaf...

  • Page 60
    www.eads.com European Aeronautic Defence and Space Company EADS N.V. Mendelweg 30 2333 CS Leiden The Netherlands In France Auriga Building 4, rue du Groupe d'Or - BP 90112 31703 - Blagnac cedex - France 37, boulevard de Montmorency 75781 Paris cedex 16 - France In Germany 81663 Munich - Germany In ...