AIRBUS - 2020 Universal Registration Document

2. Management’s Discussion and Analysis of Financial Condition and Results of Operations / 2.1 Operating and Financial Review

2.1.3.4 EBIT Adjusted by Business segment

2020

2019

2018

(In € million)

Airbus (1)

618 471 660

5,947

4,425

Airbus Helicopters

422 565

380 935

Airbus Defence and Space

Subtotal segmental EBIT Adjusted (1)

1,749

6,934

5,740

Eliminations (1)

(43)

12

94

Total

1,706

6,946

5,834

(1) 2019 and 2018 figures are restated due to new segment presentation.

2.1.3.5 EBIT by Business segment

2020

2019

2018

(In € million)

Airbus (1)

(1,330)

1,794

3,912

Airbus Helicopters

455 408

414

366 676

Airbus Defence and Space

(881)

Subtotal segmental EBIT (1)

(467)

1,327

4,954

Eliminations (1)

(43)

12

94

Total

(510)

1,339

5,048

(1) 2019 and 2018 figures are restated due to new segment presentation.

2020 compared to 2019. The Company’s consolidated EBIT decreased from €1.3 billion for 2019 to € -0.5 billion for 2020. This includes the impacts of the ongoing COVID-19 pandemic and the €1.2 billion restructuring provision recognised in the third quarter of 2020 (see “– 2.1 Operating and Financial Review”). Airbus’ EBIT decreased from €1.8 billion for 2019 to € -1.3 billion for 2020, also re ecting the impacts of the ongoing COVID-19 pandemic including lower deliveries, the charges recognised as a result of the comprehensive review of the operational assets and liabilities taking into account the amended production rates and expected future deliveries and the restructuring provision recorded related to the COVID-19 pandemic. In 2019, it included the recognition of penalties for agreements with authorities of €3.6 billion. Airbus Helicopters’ EBIT increased from €414 million for 2019 to € 455 million for 2020, re ecting favourable product mix, strong governmental-related activities and reliable programme execution. It also includes lower research and development expenses re ecting the end of the European Union Aviation Safety Agency (“EASA”) certification process for the five-bladed H145 and the H160. Airbus Defence and Space’s EBIT increased from € -881 million for 2019 to €408 million for 2020, mainly due to lower A400M programme charge in 2020 as well as the ef fect of costs containment measures and lower research and development costs, partially offset by the impact of COVID-19 pandemic, including on the launcher business. 2019 compared to 2018. The Company’s consolidated EBIT decreased by 73.5%, from €5.0 billion for 2018 to €1.3 billion for 2019. The decrease re ected the strong operational performance at Airbus, driven by higher deliveries and favourable mix, overcompensated by the compliance penalties, the A400M charge recognised in the period and the lower performance at Airbus Defence and Space.

Airbus’ EBIT decreased from € 3.9 billion for 2018 (restated) to €1.8 billion for 2019 (restated), negatively impacted by the recognition of penalties for agreements with authorities of € 3.6 billion and € 206 million related to compliance costs. This partially of fset the record deliveries and operational performance, largely driven by the A320 ramp-up and progress on the A350. It also included the gain from disposals of PFW Aerospace GmbH of €57 million and Alestis Aerospace S.L. of €45 million. Airbus Helicopters’ EBIT increased from €366 million for 2018 to €414 million for 2019, re ecting a higher contribution from services and lower research and development costs, partially reduced by less favourable delivery mix. Airbus Defence and Space’s EBIT decreased from €676 million for 2018 to € -881 million for 2019, mainly due to the recognition of the A400M programme charge of € 1.2 billion and the €221 million suspension of defence export licences to Saudi Arabia by the German government. EBIT deterioration also re ected the lower performance in Space and efforts to support sales campaigns. Airbus Defence and Space’s EBIT in 2018 also included the impact of disposals, mainly the gain from the Plant Holdings, Inc. of €159 million. Foreign currency impact on EBIT. In 2020, more than 70% of the Company’s revenues are denominated in US dollars, whereas a substantial portion of its costs is incurred in euros and to a lesser extent, pounds sterling. Given the long-term nature of its business cycles (evidenced by its multi-year backlog), the Company hedges a significant portion of its net foreign exchange exposure to mitigate the impact of exchange rate uctuations on its EBIT. Please refer to the “Notes to the IFRS Consolidated Financial Statements – Note 38: Information about Financial Instruments” and see “– Risk Factors – 1. Financial Market Risks – Foreign Currency Exposure” and “– 2.1.2.5 Foreign Currency Translation”. In addition to

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Airbus / Registration Document 2020