Airbus Se (OTC) ((EADSY)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Airbus SE’s latest earnings call reveals a strong performance with robust order intake across various divisions, supported by solid financials and a proposed dividend increase. Despite these positive results, the company faces significant challenges, particularly with the integration of Spirit AeroSystems and ongoing supply chain issues that are affecting the ramp-up of the A350 and A220 models.
Strong Order Intake and Commercial Aircraft Deliveries
Airbus reported delivering 766 commercial aircraft in 2024, marking a 4% increase year-on-year. The company also secured 878 gross orders, demonstrating robust travel demand and a continued strong commercial environment. This substantial order intake reflects the positive sentiment in the aviation market and Airbus’s ability to capitalize on it.
Record Order Intake in Defence and Space
The Defence and Space division achieved a record order intake of €16.7 billion, representing a 6% increase year-on-year, with a book-to-bill ratio of around 1.4. This growth highlights the division’s strong performance and its strategic importance within Airbus’s overall business model.
Solid Performance in Helicopters
Airbus helicopters booked 450 net orders in 2024, up from 393 in 2023, achieving a book-to-bill above 1. The EBIT adjusted for helicopters increased to €818 million, with a profit margin of 10.3%. This segment’s impressive results underscore its contribution to the company’s overall success.
Financial Performance and Dividend Proposal
Airbus reported a net income of €4.2 billion and proposed a 2024 dividend of €2 per share, along with a special dividend of €1 per share. This proposal is supported by a strong free cash flow before customer financing of €4.5 billion, reflecting the company’s robust financial health and commitment to returning value to shareholders.
Challenges with Spirit AeroSystems
The integration of work packages from Spirit AeroSystems presents challenges for Airbus, particularly affecting the A350 and A220 ramp-up. This integration is expected to have a low triple-digit negative impact on EBIT adjusted in 2026 and 2027, indicating potential future hurdles in operational efficiency.
Space Program Charges
Airbus incurred €1.3 billion of charges in its space programs for the full year 2024, including a €0.3 billion charge in Q4 due to technical review completions. These charges reflect the complexities and financial burdens associated with maintaining and advancing space technology initiatives.
Supply Chain and Engine Bottlenecks
Airbus is experiencing supply chain challenges, notably with engine supply from CFM. These issues are resulting in low Q1 delivery expectations and ongoing problems affecting the A350 and A220 programs, underscoring the need for strategic supply chain management.
Forward-Looking Guidance
Looking ahead, Airbus provided guidance for 2025, targeting around 820 commercial aircraft deliveries and an EBIT adjusted of approximately €7 billion. The company also aims for a free cash flow before customer financing of about €4.5 billion. These targets reflect Airbus’s ambition to continue its growth trajectory despite current challenges.
In summary, Airbus’s earnings call painted a picture of a company with strong financial health and robust order intakes across its divisions. However, the company must navigate significant challenges, particularly in integrating Spirit AeroSystems and addressing supply chain bottlenecks. The forward-looking guidance suggests confidence in continued growth, but strategic management will be crucial in overcoming ongoing hurdles.
