Airbus - 2022 Universal Registration Document

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

2.1 Operating and Financial Review

Airbus Defence and Space’s backlog increased by €2.6 billion to € 36.1 billion and the book-to-bill ratio in value amounted to 1.3 with new net orders of € 13.7 billion, including key orders in the Military Aircraft business such as the contracts for the in

service support of the German and Spanish Eurofighter fleets as well as export contracts for the C295 (India), A330 MRTT (United Arab Emirates and Spain) and A400M airlifter (Republic of Kazakhstan).

02

The following table illustrates the proportion of civil and defence backlog at the end of each of the past three years.

31 December

2022

2021

2020

(In € billion) (In percentage) (1)

(In € billion) (In percentage) (1)

(In € billion) (In percentage) (1)

Civil sector

402.0

89% 355.3 11% 43.1 100% 398.4

89% 334.5 11% 38.6 100% 373.1

90% 10%

Defence sector

47.2

Total

449.2

100%

(1) Including “Eliminations”.

2.1.3.3 EBIT by Business Segment

2022

2021

2020

(In €million)

Airbus

4,800

4,175

(1,330)

Airbus Helicopters

639

535 568

455 408

(118)

Airbus Defence and Space Subtotal segmental EBIT

5,321

5,278

(467)

4

64

(43)

Eliminations

Total

5,325

5,342

(510)

2022 compared to 2021. The Company’s consolidated EBIT remained stable at €5.3 billion for both 2022 and 2021, mainly driven by Airbus. Airbus’ EBIT increased from € 4.2 billion for 2021 to € 4.8 billion for 2022. This mainly reflects the higher commercial aircraft deliveries and is supported by some non-recurring elements related to the re-measurement of past service cost in the retirement obligations, the release of compliance-related provisions and a positive foreign exchange impact, partly offset by contract-related provisions and exceptional premium granted to employees. In 2021, it included the release of COVID-related provisions, including restructuring provision. Airbus Helicopters’ EBIT increased from €535 million for 2021 to € 639 million for 2022, mainly driven by higher services and programme execution. It also included the positive impact related to retirement obligations. Airbus Defence and Space’s EBIT decreased from € 568 million for 2021 to € -118 million for 2022, reflecting the impairment related to the loss of two Pleiades Neo satellites in December and to delays on the Ariane 6 launcher, as well as the impact of updated assumptions in the A400M programme, including inflation and risks related to the remaining SOC3 contractual development milestones to be achieved. This was partly offset by higher volume in Military Aircraft, the ramp-up in Eurodrone and the positive impact related to retirement obligations. 2021 compared to 2020. The Company’s consolidated EBIT increased from € -0.5 billion for 2020 to € 5.3 billion for 2021, mainly driven by Airbus.

Airbus’ EBIT increased from € -1.3 billion for 2020 to € 4.2 billion for 2021. This mainly reflects the higher commercial aircraft deliveries, effort on cost containment and competitiveness as well as the release of COVID-related provisions in 2021 compared to the recording of charges triggered by the COVID-19 pandemic in 2020, including restructuring provision. Airbus Helicopters’ EBIT increased from €455 million for 2020 to € 535 million for 2021, mainly driven by support and services, programme execution and cost focus. Airbus Defence and Space’s EBIT increased from €408 million for 2020 to € 568 million for 2021, reflecting continued cost containment. Additionally, it includes the gain recognised for the sale of one of its sites in France to a 50% joint venture of €122 million and higher A400M programme charge. Foreign currency impact on EBIT. In 2022, more than 70% of the Company’s revenues are denominated in US dollars with approximately 60% of such currency exposure “naturally hedged” by US dollar-denominated costs. The remainder of costs are incurred primarily 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 covers a significant portion of its net foreign exchange exposure to mitigate the impact of exchange rate fluctuations on its EBIT. Please refer to the “Notes to the IFRS Consolidated Financial Statements – Note 38: Financial Instruments” and see “– Risk Factors – 1. Financial Market Risks – Foreign Currency Exposure” and “– 2.1.2.5 Foreign Currency Translation”.

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Airbus / Universal Registration Document 2022