Airbus(US:EADSY)2021-02-19 21:44Financial Data and Key Metrics Changes - Full year 2020 revenues decreased to approximately €50 billion, down 29% year-on-year, driven by a challenging market environment impacting commercial aircraft deliveries, which were about 34% fewer year-on-year [30][31] - Full year 2020 EBIT adjusted was €1.7 billion, reflecting lower deliveries and idle costs, including €1.1 billion of COVID-19 related charges [10][32] - Free cash flow before M&A and customer financing was negative €6.9 billion, with a positive €4.9 billion in Q4, indicating a significant recovery in cash flow performance [11][33] - Reported EPS was negative €1.45, and no dividend was proposed for 2020 to strengthen financial resilience [13][58] Business Line Data and Key Metrics Changes - In commercial aircraft, 566 aircraft were delivered in 2020, a decrease of nearly 300 aircraft year-on-year, with 225 delivered in Q4 alone [9][47] - Airbus Helicopters saw a revenue increase of 4.1% in 2020, with EBIT adjusted rising around 12% year-on-year to €471 million, reflecting strong governmental activities [52] - Defence and Space order intake increased to €11.9 billion, representing a book-to-bill ratio above 1, driven by major contract wins in Military Aircraft [26] Market Data and Key Metrics Changes - Global passenger air traffic declined by 66% in 2020 compared to 2019, with international traffic remaining weak throughout the year [18][20] - The company expects market recovery between 2023 and 2025, with domestic and regional markets recovering first, while international traffic will likely take longer to return to pre-COVID levels [20] Company Strategy and Development Direction - The company aims to maintain a strong liquidity position while navigating the crisis and preparing for growth once the situation improves [45] - Focus for 2021 includes delivering aircraft based on customer agreements, finalizing restructuring plans, and preparing for a potential ramp-up in production [61][62] - The ambition is to lead the development of a sustainable global aerospace sector, with investments in decarbonized technologies [64] Management Comments on Operating Environment and Future Outlook - Management acknowledged that the crisis is not over and will likely continue throughout 2021, with uncertainties due to new virus variants and travel restrictions [14][19] - The guidance for 2021 includes at least flat deliveries compared to 2020, an EBIT adjusted target of €2 billion, and breakeven free cash flow before M&A and customer financing [57] Other Important Information - The backlog in units remains above 7,000 planes, with a backlog in value decreasing to €373 billion in 2020, indicating resilience despite the crisis [23] - The company has taken various measures to maintain liquidity, including securing credit facilities and issuing debt securities [43][44] Q&A Session Summary Question: Guidance on deliveries and inventory - The company provided guidance for at least flat deliveries, indicating that production schedules do not contradict this guidance, despite uncertainties in the market [68][72] Question: EBIT guidance and underlying factors - Management explained that the EBIT guidance reflects a conservative approach due to various cost factors and the need for sustainable cost adaptations [69][74] Question: Cash movement and prepayment assumptions - The complexity of cash flow was highlighted, with significant headwinds expected from deferred aircraft deliveries impacting prepayment inflows [78][79] Question: Restructuring progress and employment reductions - The restructuring plan aims to reduce approximately 15,000 positions, with 3,600 already completed, and the remaining reductions expected to phase in gradually [83][84] Question: Customer financing outlook - Management indicated that customer financing levels are low but may not remain so, with expectations for some usage of cash in the coming years [110]