April 29, 2021, © Leeham News: Airbus presented its results for the first quarter of 2021 today. It was a reassuring result when other aircraft manufacturers suffer.
The Airbus operations delivered an operational profit of €0.7bn with a net profit of €0.5bn, reflecting good progress in sizing the company for the new reality and a solid performance in operations. Commercial aircraft delivered 125 planes during the quarter against 122 last year. The outlook for 2021 from the 2020 results briefing in February was maintained.
Revenue for 1Q2021 was €10.5bn (€10.6bn 1Q2020), operating profit was €0.7bn (called EBIT adjusted, €0.3bn 2019), and net profit was €0.5bn (€0.1bn).
Free cash flow for 1Q2020 was €1.2bn (€-8.5bn), and the net cash position was €5.6bn (€4.3bn end 2020). The gross liquidity available if needed is €35bn.
Guidance for 2021 is unchanged at:
The contours of the reintegration of aerostructures are now clear. Airbus will have large aerostructures as a core technology going forward. The large structures parts of Premium Aerotec in Germany and Stelia in France are placed in a specialized large aerostructures company. At the same time, the commoditized components parts of these companies form another company to drive specialization for this production.
The wing production in the UK and empennage production in Spain are unaffected by these changes.
The division delivered 122 aircraft; nine A220, 105 A320, one A330, and 10 A350. Gross orders were 31 with 100 cancellations, resulting in -69 net orders. Backlog is now at 6,998 airplanes.
The division delivered € 0.5bn (€0.2bn) of the group’s €0.7bn EBIT Adjusted.
The helicopter division delivered operational profits of €0.62bn (€0.53bn) at stable revenues.
Revenues were flat with a slight increase in the operational result, €0.59bn versus €0.15bn 1Q2020.
One A440M was delivered in the quarter.
Airbus’ Q1 results were better than expected on all key metrics. Reported revenue of €10.5bn was 2% above consensus, adjusted EBIT of €694m was 9% above, and reported FCF of €1.2bn compared to consensus slightly negative. The revenue and EBIT beats were driven by Airbus Commercial segment. Despite delivering more aircraft than last year, segment revenue still decreased slightly due to lighter services revenue. Management acknowledged that currency hedging had a positive impact on segment adj. EBIT in the quarter, and previously cautioned that this would become a headwind later in the year.
Airbus’s Q1-21 results are good overall. They featured a 9% EBIT Adjusted beat vs consensus, though this was mainly driven by the erratic Eliminations line, with some contribution from Commercial Aircraft, and a wide FCF beat, though this was partly offset by no change to what we see as conservative and still sub-consensus FY-21 guidance. In our view, it shows both the potential benefit of the richening mix (more neo narrow-bodies and A321s in particular, as well as quarter-specific customer mix) and the depth of cost savings/avoidance, as well as Airbus’ continued caution as to pacing of deliveries in FY-21 (with a guided total that we calculate to be ~60 aircraft below production, implying more inventory build and related cash outflow).