Leeham News and Analysis
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Leeham News and Analysis
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(Updated) Airbus 1Q2021, a strong quarter in difficult times
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.
Group-level 1Q results
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:
- Airbus targets the same commercial aircraft deliveries as for 2020.
- Airbus expects an EBIT Adjusted of €2 bn
- Break-even Free Cash Flow.
Reintegration of Aerostructures in the group
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.
Commercial aircraft
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.
Helicopters
The helicopter division delivered operational profits of €0.62bn (€0.53bn) at stable revenues.
Defense and Space
Revenues were flat with a slight increase in the operational result, €0.59bn versus €0.15bn 1Q2020.
One A440M was delivered in the quarter.
Initial analyst reaction:
Bernstein Research
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.
Stifel
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).
Hello Bjorn:
Did Airbus give any breakdown of the geographical regions in which deliveries/orders/revenue occurred? Or any indication of which region was dominant? I’m guessing Asia Pacific, but who knows?
No, not in the call I was on.
Sounds like the aero structures set up of old is back. Aerospatiale in France, DASA in Germany ( tba BAE in Britain)….all that’s changed is the names on the buildings.
The story above says ‘integration’. But the detail of the changes says separate national organisations
Eg ‘As part of the transformation, Airbus is to establish a German-based operation in detail parts which will emerge from Premium Aerotec.’ FG.
The switch to carbon fiber structures and robots make these changes logical. It will drive cost and competitiveness for the next generation aircrafts designed for manufacture by those robots. Customers will appreciate much longer check intervals as aluminum and steel get replaced by carbon and titanium alloys with improvement in range making these new aircraft seldom visit hangars for P-, B-, C- checks if designed properly not causing any heat damage onto the composites.
Yes, it will be national legal entities for tax reasons, etc, but in terms of processes, technology, competence pooling, and sharing, etc it will be handled as one entity, part of Airbus what I understand.
Doesnt make sense to say ‘tax reasons’ as the EU has been running for decades with many large companies with cross border factories etc working as seamless as possible.
Heres a story about Stelia in Canada doing aerostructures work for Bombardier business jets and they have subcontracts in France and Morocco. Stelia again is the business doing A220 work in Quebec as well.
https://airinsight.com/stelia-aerospace-assembling-global-7500-fuselages-in-mirabel/
No reason a Stelia branded plant could operate in Germany or Premium Aerotec in France if it was really about different ‘competencies’ or other corporate jargon
The real reason seem to be language and cultural differences as the Stelia
‘new’ presence in french speaking Quebec shows. It seems the French wont accept German bosses and vice versa.
A further indication that Airbus is developing a new freighter. LNA reported this last week.
“Airbus Signals Intention to Build a Widebody Freighter Aircraft”
“The proposed A350-950F would fit between the A350-900 and the larger A350-1000 in size. The development of the A350 derivative for freighter use would cost an estimated $2 to $3 billion, and Airbus would need to secure orders for 50 aircraft before launching the program.”
https://www.ainonline.com/aviation-news/air-transport/2021-04-29/airbus-signals-intention-build-widebody-freighter-aircraft
That would put the A350F in a 777F slot.
The F market is pretty strange where and MD-11F is still considered a very viable bird (and most are conversions not original F builds)
Tough neihborhoold to compete in with all airlines having established on the 747-777 can structure.
FedEx has issues going to the 777 as they had no 747s and the portals were perilously close to the higher can height.
Not to mention bought and paid for and reliable. FedEx mechanics raved about the 777 (they hated Airbus but that might have been a familiarization thing, I ran into to the US Mechanics the peculiar European mind set on building things)
Equally, there is now an aftermarket 777-300F as well as a great deal of feed stock developing for 300F as well as some good 200 feed stock.
FedEx loved the 777F (not just the mechanics, management often expressed delight)
The 777-200F and the MD-11F were the weight area that worked. FedEx flys the 200F on many of the routes MD-11F was on (also some bypass routes as they had the range but I never heard if they had to drop some weight to do so)
The -300ERSF is being looked at by heavy haulers not just package ops.
Feedstock is something that plays into it, if the 777X or A350 does not replace 300s?
The 200ERSF was a big deal at one time but no feed stock (FedEx was shooting for it based on Singapore retired fleet but Singapore elected to shift them over to Scoot)
Boeing had production paid for on the 777F program so it was an easier move than the relatively new A350
As noted, the F market is an odd one.
I see comments on the A330NEO F as well.
If the A330CEO F did not sell??????????????? (38)
Why I have not seen an explanation
But if the core issue is there then the A350F has that same burden.
FedEx went with the MD-11F from the start, UPS picked it up latter (all pax to F conversion as far as I know, a lot of Fedex MD-11F are as well)
UPS went with new 757F, FedEx finally gave up the 727s and converted them from Passenger.
We might see more 737-800F conversions as they come on the market. I believe its a lower cost conversion both for stock and the hull cuts than the A320.
“_they hated Airbus_ but that might have been a familiarization thing, I ran into to the US Mechanics the peculiar European mind set on building things”
A central issue in American culture:
Sabotaging other people and things you don’t like to give substance to ones prejudices. ( or just to “fix” their superiorness 🙂
A kind of behavior that permeates the society as a whole.
Interesting that they plan to develop a new airframe rather that just repurpose the 900 or 1000. I wonder if that signals they will add a hinged front door giving it front loading capabilities. Something that would provide an advantage over the 777.
Maybe not impossible but incredibly costly.
Vast majority work fine with the side load.
They won’t do a “Beluga” on the A350.
Front loading is overhyped.
“develop a new airframe”
Thats not what they are saying, its just another small fuselage barrel section. Its usual that they would do that but its the reverse of what Boeing does with the 777F. They start with the heavyweight structure and loads of the 777-300ER and reduce the fuselage frames to match the -200 size.
However these sorts of things are driven entirely on what the air freight companies want and Im skeptical a carbon fibre freighter is what the market wants, and pay what the manufactures costs are.
It could turn out as two different types with the same/similar length.
a PAX -950 based on the -900 structure
A Freight -950 based on the -1000 structure
I miss Eurocopter . Had a much cooler cache to it than Airbus.