Airbus(US:EADSY)2020-04-29 15:05Financial Data and Key Metrics Changes - Q1 2020 revenues were EUR10.6 billion, down 15% compared to Q1 2019, reflecting a difficult market environment impacting the commercial aircraft business [17] - EBIT adjusted was EUR281 million for the quarter, significantly down year-on-year, mainly driven by lower deliveries and associated costs [17] - Free cash flow before M&A and customer financing was minus EUR8 billion, including EUR3.6 billion in penalties [18] - Net income was minus EUR481 million, with a loss per share of EUR0.61 [19] Business Line Data and Key Metrics Changes - Commercial aircraft delivered 122 aircraft in Q1 2020, a decrease of 40 aircraft year-on-year, with 60 aircraft undelivered at the end of Q1 [27][29] - Helicopters booked 54 net orders in Q1 2020, down from 66 in Q1 2019, with expectations of a soft civil and parapublic market [13] - Defense and Space booked orders of up to EUR1.7 billion, with ongoing discussions on contracts [14] Market Data and Key Metrics Changes - Passenger capacity in China declined by 85% at the peak of the crisis in mid-February, recovering to a decline of 60% in April [11] - The commercial aircraft environment saw 356 gross orders in Q1, with net orders at 290 aircraft and a backlog of 7650 aircraft [12] Company Strategy and Development Direction - The company is implementing a short-term cash containment plan and addressing longer-term cost structure to right-size the business [9][32] - Focus on maintaining a strong competitive position in the single-aisle market, particularly with the A320 family [31] - The company is adapting production rates down by roughly one-third to align with new market demands [28] Management's Comments on Operating Environment and Future Outlook - Management has withdrawn the 2020 guidance due to uncertainties related to COVID-19 and its impact on the business [10] - There is a belief that the aviation industry will recover, with a focus on cash preservation and reducing cash outflows [24][32] - The company is monitoring the financial health of airlines and suppliers closely [32] Other Important Information - The company secured a new credit line amounting to EUR15 billion and issued a EUR2.5 billion bond to bolster liquidity [23][24] - The total hedging portfolio in US dollars stands at $95 billion, with adjustments made to reflect the current situation [20] Q&A Session All Questions and Answers Question: Supply chain risks and undelivered aircraft - Management indicated that risks are present across the supply chain, particularly for suppliers already in a weak position before the crisis [38] - Deliveries in Q2 are expected to remain low, with a potential peak in undelivered aircraft anticipated in Q3 [40] Question: Impact of delivery pullback on EBIT and negotiations with airlines - Guidance has been withdrawn due to uncertainties, with a mid-teens type of fall through expected from each missed delivery [45][46] - Negotiations with airlines are ongoing, with a diverse range of situations being managed [47] Question: Non-current PDPs and strategic threats - Management is navigating contractual rights with airlines while maintaining a collaborative approach [53] - The biggest strategic threat is the ability to adapt and ensure cash flow stability during the crisis [53] Question: Phasing of deliveries and cost structure adaptation - The company has withdrawn its delivery guidance for the year due to the dynamic situation [57] - Cost structure adaptations are being assessed based on evolving market conditions [57] Question: Temporary workforce and ECA financing - The company plans to utilize government support mechanisms to resize the workforce quickly [61] - ECAs are being engaged more intensively to support financing needs [61][62]