Airbus - 2022 Universal Registration Document

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

In order to do so, the Company primarily uses two mechanisms: – Financial instruments represented by the hedge portfolio, made of foreign exchange derivative contracts, which constitutes the main means of minimising the impact of exchange rate fluctuations on Company’s profit. – Euro conversion, on an exceptional basis and at the specific request of the customers. It consists of the conversion of the full or partial payment from US dollar into euro based on an agreed conversion rate and is accounted for in the IFRS Consolidated Financial Statements as a contract in euros. In addition to the impact that coverage activities have on the Company’s EBIT, the latter is also affected by the impact of

revaluation of certain assets and liabilities at the closing rate and the impact of natural hedging. Since 2022 and going-forward, the Company has presented its matured hedge portfolio and euro conversion on a blended basis and therefore blended rates reflect both the EBIT impact of hedge rates of the US dollar hedge portfolio and euro conversions. During 2022, US$ 20.3 billion of forwards matured and euro conversion realised at an average blended rate of €/US$1.22. During 2021, US$ 21.8 billion of forwards matured and euro conversion realised at an average blended rate of €/US$1.21, as compared to €/US$1.20 in 2020.

2.1.3.4 EBIT Adjusted The Company uses an alternative performance measure EBIT Adjusted as a key indicator capturing the underlying business margin by excluding material charges or profits caused by movements in provisions related to programmes, restructurings or foreign exchange impacts as well as capital gains/losses from the disposal and acquisition of businesses. The following table reconciles the Company’s EBIT with its EBIT Adjusted.

2022

2021

2020

(In €million)

EBIT

5,325

5,342

(510)

(308)

38

480

PDP mismatch / BS revaluation

A380 programme

(28)

(274)

385

477

212

63

A400M charge

75

65

87

Compliance costs

0

(122)

0

Non-current assets disposal (1)

(4)

0

2

M&A impact

62

(163)

1,199

Restructuring (2)

0

(234)

0

Payments by suppliers

Others

28

1

0

EBIT Adjusted

5,627

4,865

1,706

(1) Included gain from divestment of one of its sites in France to a 50% joint venture in 2021. (2) Included Aerostructures transformation costs (€0.1 billion) in 2022, release of restructuring provision (€0.2 billion) in 2021 initially recognised in 2020 (€1.2 billion).

2.1.3.5 EBIT Adjusted by Business Segment

2022

2021

2020

(In €million)

Airbus

4,600

3,570

618 471 660

Airbus Helicopters

639 384

535 696

Airbus Defence and Space

Subtotal segmental EBIT Adjusted

5,623

4,801

1,749

Eliminations

4

64

(43)

Total

5,627

4,865

1,706

168

Airbus / Universal Registration Document 2022