Airbus // Universal Registration Document 2021

Risk Factors / 2 Business-Related Risks

Major Research and Development Programmes

Company will attract and retain the personnel it requires to conduct its operations successfully and in particular to attract and retain engineers and other professionals with the technical skills and experience required for its research and development programmes. Failure to attract and retain such personnel or an increase in the Company’s employee turnover rate could negatively affect the Company’s financial condition and results of operations more generally and particularly its ability to successfully execute its research and development programmes. There is a risk of additional repercussions from COVID-19’s impact on skills and expertise. Significant ef fort has been made to maintain key resources and cope with the increased departure of skilled staff with improved knowledge management and knowledge transfer schemes across the Company. The COVID-19 crisis has impacted key company technological developments and competencies, but despite this, the Company continues seeking to further its development in sustainable technologies. This commitment directs a significant proportion of the longer term technology research efforts for future products and services and is based on solving complex problems backed by exploring multiple technology pathways. Retaining this ambitious programme is achieved with national research funding through frameworks such as CORAC, LUFO, ATI, CDTI and Horizon Europe where the frameworks enable the Company and the wider aviation ecosystem to mature and develop the required key competencies and technologies. No assurances can be given that the Company will achieve the anticipated level of returns from these programmes and other development projects, which may negatively affect the Company’s financial condition and results of operations and competitiveness.

The business environment in many of the Company’s principal operating business segments is characterised by extensive research and development costs requiring significant up-front investments with a high level of complexity. For the year 2021, research and development expenses were €2.7 billion. For the year 2020, research and development expenses were €2.9 billion (compared to €3.4 billion for the year 2019). Due to the technologically advanced complex nature of the products that the Company produces and the long period, including ramp up time, it takes to produce them, the business plans underlying such investments often contemplate a long payback period before these investments are recouped, and assume a certain level of return over the course of this period in order to justify the initial investment. There can be no assurance that the commercial, technical and market assumptions underlying such business plans will be met, and consequently, the payback period or returns contemplated therein achieved. Significant technological, skills and industrial challenges exist to achieve the Company’s sustainability ambitions for the future generations of aerospace. These ambitions require cross industry and cross government collaboration to address the technological risks that need to be overcome. See “– Environment, Human Rights, Health & Safety Risks – Climate-Related Risks” below. Successful development of new programmes also depends on the Company’s ability to attract and retain engineers and other professionals with the technical skills and experience required to meet its specific needs. Demand for such engineers may often exceed supply depending on the market, resulting in intense competition for qualified professionals. The Company’s attrition rate in 2021 was 7.4% overall (including subsidiaries) (compared to 5.8% overall in 2020). There can be no assurance that the As part of its business strategy, the Company may acquire or divest businesses and/or form joint ventures or strategic alliances. Executing acquisitions and divestments can be difficult and costly due to the complexities inherent in integrating or carving out people, operations, technologies and products. There can be no assurance that any of the businesses that the Company intends to acquire or divest can be integrated or carved out successfully, as timely as originally planned or that they will perform well and deliver the expected synergies or cost savings once integrated or separated. In addition, regulatory, administrative, opposition by social partners or other contractual conditions can prevent transactions from

Acquisitions, Divestments, Joint Ventures and Strategic Alliances

being finalised. Each acquisition, divestment, joint venture and strategic alliance is very specific in its nature, purpose, risk and opportunities. The Company identifies risks through a detailed and systematic due diligence process and addresses the risks identified through price mitigation and/or appropriate contractual coverage, such as indemnification mechanisms, both being the tailored-made results of complex negotiations with the sellers/ buyers and/or partners. The Company’s business, results of operations and financial condition may be materially affected if these transactions will not be successfully completed or do not produce the expected benefits.

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Airbus / Registration Document 2021