Airbus - 2022 Universal Registration Document

Risk Factors / 2 Business-Related Risks

(in Mirabel and in Mobile) in 2020-2021 and have been around rate six since early 2022 with a monthly production target of rate 14 targeted for the middle of the decade. Attention will remain high on the overall supply chain including engine maturity and availability in service. A380 programme. In connection with the A380 programme, the Company faces the following main challenges: secure ageing fleet in-service support for the next decades and long-term competitiveness. H175 programme. Positive market trend leading to a production ramp up challenge. NH90 programme. Risk of termination of Norway’s contract for 14 NH90 helicopters (13 of which have already been delivered) following receipt of notice of termination dated 9 June 2022. Parties are engaged in discussions with a view to resolve the matter. For further information, please refer to the “Notes to the IFRS Consolidated Financial Statements – Note 13: Revenue and Gross Margin”. H160 programme. The main challenge for the H160 programme is the industrial ramp-up phase. Border security. In connection with border security projects, the Company faces the following main challenges: meeting the schedule and cost objectives taking into account the complexity of the local infrastructures to be delivered and the integration of commercial-off-the-shelf products (radars, cameras and other sensors) interfaced into complex system networks; assuring efficient project and staffing; managing the rollout including subcontractors and customers. Negotiations on change requests in this respect along with schedule re-alignments remain ongoing. The Company continues to engage with its customer to agree a way forward on this contract. The outcome of these negotiations is presently unclear but could result in significant further financial impacts. Launchers. Following the failed first commercial flight of the Vega C launcher on 20 December 2022 and in light of the few years delay in the launch of Ariane 5’s successor, Ariane 6, with its maiden flight scheduled at the time of publication of this report to take place by the end of 2023, the Company faces a challenge related to Europe’s lack of independent access to space in the short term.

A400M programme. After the Company signed a contract amendment to restructure the contract, risks remain on development of technical capabilities (development effort as well as possible commercial agreement associated costs in order to reach Type Acceptance) and the associated costs, on aircraft operational reliability, on cost reductions and on securing sufficient export orders in time as per the revised baseline. For further information, please refer to the “Notes to the IFRS Consolidated Financial Statements – Note 13: Revenue and Gross Margin”. A350 programme. In connection with the A350 programme, the Company faces the following main challenges: secure revised delivery targets and further rate adaptation depending on traffic evolution, monitor and support the supply chain including lead-time items from corresponding suppliers, reduce recurring costs to improve competitiveness within a widebody market that starts to recover, and deliver on major programme developments (A350 Freighter development, A350-1000 Ultra Long Range certification baseline, A350 new paint scheme). Attention will remain high towards the engine manufacturer’s capacity to deliver on engines’ maturity and competitiveness topics. A330 programme. In response to the new COVID-19 market environment, the commercial aircraft production rate for the A330 programme was adapted to two per month in June 2020. Then, following new orders, the decision was taken in Q3 2021 to increase the production rate to almost three, which was done at the end of 2022. In February 2023, the Company announced it now targets to reach rate 4 in 2024. Decisions on further rate adaptation will depend on traffic evolution. In connection with the A330 programme, the main challenges the Company faces are to secure product competitiveness in the widebody market segment, and to monitor and support the supply chain. The developments were delivered on track in recent years. Attention will remain high towards the engine manufacturer’s capacity to deliver on engines’ maturity and competitiveness topics. A220 programme. In connection with the A220 programme, the main challenges the Company faces are to secure the A220 cost reduction trajectory with a strong focus on its Design to Cost roadmap and recurring cost reduction, and to ensure an A220 book to bill ratio above one to fill current open slots. As a consequence of the COVID-19 pandemic, the commercial aircraft production rates were adapted to rate five per month

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Airbus / Universal Registration Document 2022