Airbus // Universal Registration Document 2021

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

2.1.3.5 EBIT by Business Segment

2021

2020

2019

(In € million)

Airbus (1)

4,175

(1,330)

1,794

Airbus Helicopters

535 568

455 408

414

Airbus Defence and Space

(881)

Subtotal segmental EBIT (1)

5,278

(467)

1,327

Eliminations (1)

64

(43)

12

Total

5,342

(510)

1,339

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

expenses reflecting 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. Foreign currency impact on EBIT. In 2021, 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 fluctuations on its EBIT. Please refer to the “Notes to the IFRS Consolidated Financial Statements – Note 37: Financial Instruments” and see “– Risk Factors – 1. Financial Market Risks – Foreign Currency Exposure” and “– 2.1.2.5 Foreign Currency Translation”. In addition to the impact that hedging 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. During 2021, Cash Flow hedges covering approximately US$20.9 billion of the Company’s US dollar-denominated net exposure matured. In 2021, the compounded exchange rate at which hedged US dollar-denominated revenues were accounted for was €/ US$1.20, as compared to €/US$1.19 in 2020. During 2020, Cash Flow hedges covering approximately US$17.1 billion of the Company’s US dollar-denominated net exposure matured. In 2020, the compounded exchange rate at which hedged US dollar-denominated revenues were accounted for was €/US$1.19, as compared to €/US$1.24 in 2019.

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. 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 reflecting 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, reflecting favourable product mix, strong governmental-related activities and reliable programme execution. It also includes lower research and development

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Airbus / Registration Document 2021