Airbus Q4 2025 Pre-Call Summary Company Overview - **Company**: Airbus (OTCPK:EADS.F) - **Call Date**: January 27, 2026 - **New Head of Investor Relations**: Jean-Christophe Henoux, appointed December 1, 2025 Key Points Financial Performance - **Aircraft Deliveries**: Delivered 286 aircraft in Q4 2025, an increase of 17 aircraft compared to 269 in Q4 2024, including: - +1 A220 - +9 A320 - +3 A350 - +4 A330 [3] - **Fixed Costs**: Anticipated mechanical under assumption of fixed costs due to shortfall against initially planned delivery volume [3]. - **Foreign Exchange Impact**: Stable average blended rate at 1.21 for Q4 2025, expected to have a neutral financial impact compared to Q4 2024 [3]. - **Recruitment**: Continued hiring in 2025, but at a slower pace than in 2024 [3]. Cost and Inflation - **Inflation Impact**: Expected low triple-digit negative impact in 2025, slightly less than EUR 200 million negative impact recorded in 2024 [4]. - **R&D Expenses**: Anticipated to be slightly lower than in 2024 [4]. - **Tariffs**: Financial impact for 2025 expected to be between EUR 100 million and EUR 200 million, with most recorded in Q4 [4]. Division Performance - **Airbus Helicopters**: Similar volume of helicopters delivered in Q4 2025 compared to Q4 2024, with solid performance expected in services [5]. - **Airbus Defence and Space**: A charge of EUR 0.3 billion recorded in Q4 2024 for contract updates; only two-thirds of this charge is expected to normalize [5]. - **Free Cash Flow**: Expected to reflect higher volume of commercial aircraft deliveries, despite updates to delivery targets impacting inventory levels [6]. Market Outlook - **Order Momentum**: Strong momentum observed in all divisions for both civil and military markets in Q4 2025 [6]. Communication and Guidance - **Quiet Period**: Quiet period begins January 29, 2026, with full year 2025 earnings release scheduled for February 19, 2026, at 7:30 A.M. CET [2][7].

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **China** financial market, particularly regarding **portfolio flows** and their impact on the **RMB** (Renminbi) exchange rate. Core Insights 1. **Record Outflows**: In July, there was a record amount of **USD 58 billion** in cross-border net portfolio investment outflows, which raised concerns among investors about the downward pressure on the RMB [3][10][12]. 2. **FX-Hedged Outflows**: The outflows include significant amounts that were **FX-hedged**, suggesting that the actual downward pressure on the RMB may be overstated [3][12]. 3. **Net FX Settlement Deficit**: The smaller net FX settlement deficit may understate the FX impact, as it does not account for FX-conversion activities in the offshore CNH market [3][12]. 4. **Portfolio Flow Segmentation**: A detailed analysis of portfolio flows is necessary to understand their FX impact, focusing on bonds and equity flows from both foreign and local investors [9][12]. 5. **Southbound Stock Connect**: Southbound Stock Connect flows have exceeded **RMB 1 trillion** year-to-date, contributing to CNH selling and HKD buying [8][19][25]. 6. **Foreign Bond Sales**: Overseas investors have sharply sold China bonds, with net outflows exceeding **RMB 300 billion** in July, primarily from NCDs, CGBs, and PFBs [38][39]. 7. **SB Bond Connect Expansion**: The SB Bond Connect has become a crucial channel for domestic financial institutions to invest overseas, with potential plans to double the annual quota to **RMB 1 trillion** [26][27][28]. Additional Important Insights 1. **Volatility in Portfolio Flows**: The capital account liberalization has led to increased volatility in portfolio flows since 2018, with a widening gap between net receipts and net FX settlements [11][12]. 2. **Institutional Investor Involvement**: The majority of Southbound inflows this year are estimated to come from institutional investors, such as insurers and private funds, rather than government funds [24][25]. 3. **Impact on CNH Bonds**: Increased demand for offshore RMB products could lead to a rise in CNH bond supply, potentially putting downward pressure on CNH CCS [29]. 4. **Foreign Equity Access**: Foreign investors access the China onshore equity market mainly through QFI and NB Stock Connect, with the latter's data discontinued since August 2024, complicating real-time flow assessments [35][36]. Conclusion - The analysis indicates that while there are significant outflows from China, the actual impact on the RMB may be mitigated by FX-hedged positions. The ongoing developments in portfolio flows, particularly through Southbound channels, will be crucial to monitor for future investment strategies and market stability.