Airbus Q3 2024 $AIR (-1,01%)

Financial Performance:

• Revenues: Airbus recorded a 5% increase in revenues to EUR 44.5 billion in the first nine months of 2024, compared to EUR 42.6 billion in the same period last year.
• EBIT (adjusted): Adjusted EBIT decreased by 23% to €2.8 billion, compared to €3.6 billion in the previous year.
• Net profit: Net profit fell by 22% to 1.8 billion euros, compared to 2.3 billion euros in the previous year.

Balance sheet overview:

• Total assets: Total assets increased to 124.1 billion euros from 118.9 billion euros at the end of 2023.
• Equity: Equity grew to 19.1 billion euros, compared to 17.7 billion euros.
• Net cash position: The net cash position decreased to 7.2 billion euros, compared to 10.7 billion euros at the end of 2023.

Income statement:

• EBIT (reported): Slight decrease to 2.7 billion euros.
• Earnings per share: Decrease to 2.29 euros, compared to 2.96 euros in the same period last year.

Cash flow overview:

• Free cash flow: Negative cash flow of 877 million euros, compared to a positive cash flow of 843 million euros in the first nine months of 2023.
• Free cash flow before customer financing: Negative at 845 million euros, compared to positive 1.1 billion euros.

Key figures and profitability metrics:

• EBIT margin: Adjusted EBIT margin decreased from 8.5% to 6.3%.
• R&D expenditure: Increase of 8% to 2.4 billion euros.

Segment information:

• Airbus Commercial Aircraft: Revenues increased by 4% to 32.9 billion euros.
• Airbus Helicopters: Revenues increased by 5% to 4.9 billion euros.
• Airbus Defense and Space: Revenues increased by 7% to 7.6 billion euros.

Competitive position:

• Order backlog: The order backlog increased to 8,749 commercial aircraft.
• Net orders: Decrease to 648 aircraft, compared to 1,241 in the previous year.

Forecasts and management commentary:

• Outlook for 2024: Airbus targets 770 commercial aircraft deliveries, an adjusted EBIT of around € 5.5 billion and a free cash flow before customer financing of around € 3.5 billion.

Risks and opportunities:

• Risks: Geopolitical uncertainties, supply chain problems and specific program setbacks, such as with the A400M.
• Opportunities: High demand for products as well as strategic focus on increasing deliveries and transforming the Defense and Space division.

Summary of results:

Airbus showed solid sales growth, supported by higher deliveries and a favorable product mix in commercial aircraft and helicopters. However, profitability metrics such as underlying EBIT and net profit declined due to increased R&D spending and challenges in the Defense and Space segment. With a stable order backlog and continued robust demand, management is focusing on overcoming supply chain issues and geopolitical uncertainties in order to achieve the annual targets for 2024.

Positive aspects:

• Revenue growth: Airbus recorded revenue growth of 5%, reaching a total of EUR 44.5 billion in the first nine months of 2024. This growth was mainly supported by higher commercial aircraft deliveries and a favorable mix in the helicopter segment.
• Strong order situation: The order backlog for commercial aircraft increased to 8,749 units, reflecting strong demand and a solid base for future deliveries.
• Helicopter segment performance: Airbus Helicopters recorded a 5% increase in revenues to a total of EUR 4.9 billion. Growth was supported by a favorable program mix and solid service performance, contributing positively to the overall business.
• Order intake in Defense and Space: Airbus Defence and Space reported a 30% increase in order intake to €11.0 billion, highlighting strong contract wins and good momentum in this area.
• Strategic focus on supply chain management: Airbus has a strong focus on actively managing supply chain challenges and increasing aircraft deliveries. This strengthens the company's position for future demand and gives Airbus a competitive advantage.

Negative aspects:

• Decline in adjusted EBIT: Adjusted EBIT decreased by 23% to €2.8 billion due to the impact of increased R&D spending and provisions in Space, weighing on profitability.
• Decline in net profit: Net profit fell by 22% to €1.8 billion, resulting in a drop in earnings per share from €2.96 to €2.29, which could raise concerns among investors about profitability.
• Negative Free Cash Flow: Airbus reported a negative free cash flow of €877 million, a significant deterioration compared to a positive cash flow of €843 million in the same period in 2023. This is mainly due to higher inventory levels and changes in working capital.
• Decline in net orders: Net orders for commercial aircraft decreased to 648 units (previous year: 1,241), which indicates a slowdown in incoming orders and could affect the order backlog in the long term.
• Challenges in the Defense and Space division: Defence and Space reported an adjusted EBIT of EUR -661 million, mainly due to significant charges in the space sector. This illustrates the ongoing difficulties in this division.