By Bjorn Fehrm
Oct. 30, 2015, ©. Leeham Co: Airbus Group announced its increase of the production rate for the best-selling A320 range to 60 a month in conjunction with its 3Q 2015 results. The rate increase shall be seen against a backdrop of ever-increasing backlog for the A320neo, now at over 4,300 aircraft. The sales bonanza of the A320 is continuing with another 100 aircraft committed at Chancellor Merkel’s visit to China in October.
Airbus Group booked solid results for the third quarter, with order intake for Airbus for the year already secured in 3Q at 815 aircraft (791 3Q 2014). Noteworthy are the A330 bookings of 87 aircraft which have also continued in October with another 30 aircraft committed by China.
Revenue was up 6% to €43bn (€40bn 3Q 2014) and core operational EBIT was up 6.5% to €2.8bn compared to €2.59bn 3Q 2014. Free Cash Flow (FCF) was better than 3Q 2014, with €-1.8bn instead of €-2.1bn4. Airbus group expect FCF to be breakeven for the year.
Given the strong results Airbus Group has decided to buy back €1bn of shares before June 2016.
Details from the Airbus programs are:
Strong sales have built the confidence for rate 60 from mid-2019. The Pratt & Whitney GTF flight test has had several interruptions but Airbus expects to deliver the first unit to Qatar Airways at the end of year.
The rate of 6 per month is now fully covered with orders for 117 aircraft YTD, a relief for Airbus. A330neo program is on track for Q4 2017 delivery. With sales of the ceo covered, attention now turns to the A330neo.
The ramp up of A350 is still a challenge, mainly due to cabin sub-suppliers having problems with delivery quantity and quality. The forecast for the year’s deliveries is still 15 units with “more than double that” for 2016.
The YTD FCF and EBIT are positively affected by the A380 stopping to consume company cash. The guidance is to have breakeven on a unit basis for 2015. Nineteen A380s have been delivered during the first three-quarters.
Deliveries are secured until 2017 with sales campaigns working on the 2018 deliveries. Breakeven was 30 per year, for 2016 it is now below 30 and going forward, Airbus is working on improving that further.
The trouble child of the corporation. Still a struggle to deliver to customer commitments and with the agreed capabilities. Five A400M delivered so far. The A400M program is a clear burden on the FCF and results of the Airbus Defence and Space division.
Solid results despite a down market. Good sales of new helicopter products and good progress on increasing the after sales services revenues.