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astuteman
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Airbus 1st half results 2021

Thu Jul 29, 2021 7:48 pm

These got referenced in the A350F thread

viewtopic.php?f=3&t=1458691

But I thought they were worth putting in their own thread.

https://www.airbus.com/investors/financ ... ports.html

Key points for me in terms of Civil Aviation...

Airbus Commercial aircraft division...
Revenue : E17.8Bn ($21.2Bn)
EBIT : E2.4Bn ($2.85Bn)
EBIT margin : 13.4%

80% of deliveries were A320 series

At Corporate level free cashflow was E 2.1Bn ($2.5Bn)

On slide 21 of presentation:-
Gross cash and investments E21.4Bn ($25.5Bn)
Credit facility E6Bn (7.1Bn)
Supplementary Liquidity line - E6.2Bn ($7.4Bn)

It is fairly well known that deliveries have been pushed hard during the pandemic.
It feels like a major effort has been made to preserve cash
The EBIT margin is surprising (especially given some A-net "alternative facts").
That also smacks of cash and margin preservation (e.g. limited R+D, and capital expenditure)

Pretty strong in the circumstances I think

Rgds
Last edited by astuteman on Thu Jul 29, 2021 8:15 pm, edited 1 time in total.
 
Eiszeit
Posts: 79
Joined: Tue Jul 09, 2019 8:50 pm

Re: Airbus 1st half results 2021

Thu Jul 29, 2021 8:02 pm

these are postive numbers? Maybe you could replace the "-" with a ":" because for me as a german person these look like a loss, nontheless these numbers are well good
 
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zkojq
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Joined: Fri Sep 02, 2011 12:42 am

Re: Airbus 1st half results 2021

Thu Jul 29, 2021 8:07 pm

Very strong results indeed, especially the circumstances - though nothing this website can't talk down. ;)

Will be interesting to see the A32x ramp up in the next few years. Seems that they've managed production numbers of that very carefully through the pandemic.

Good to see the A350F approved. Hopefully Airbus can begin to grow a strong position in the freight market just as they have with the passenger market.
First to fly the 787-9
 
astuteman
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Posts: 7413
Joined: Mon Jan 24, 2005 7:50 pm

Re: Airbus 1st half results 2021

Thu Jul 29, 2021 8:14 pm

Eiszeit wrote:
these are postive numbers? Maybe you could replace the "-" with a ":" because for me as a german person these look like a loss, nontheless these numbers are well good


My bad. A carry-over from work powerpoint slides I guess :)
I will amend

Rgds
 
astuteman
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Posts: 7413
Joined: Mon Jan 24, 2005 7:50 pm

Re: Airbus 1st half results 2021

Thu Jul 29, 2021 8:20 pm

zkojq wrote:
Very strong results indeed, especially the circumstances - though nothing this website can't talk down. ;)

Will be interesting to see the A32x ramp up in the next few years. Seems that they've managed production numbers of that very carefully through the pandemic.

Good to see the A350F approved. Hopefully Airbus can begin to grow a strong position in the freight market just as they have with the passenger market.


I agree they are good figures.
Picking up on a point that Revelation has made in recent times... I think this is a far more fiscally conservative Airbus than the one that launched the A380.
It's nice to see the 350F launched, but over the next few years I suspect "financially solid" is going to win over "exciting" - at least for us as enthusiasts..
Hope they don't go too far, and risk falling into the trap Boeing appear to have dropped into (I'm hoping that doesn't offend anyone)..

Rgds
 
tomcat
Posts: 765
Joined: Thu Sep 28, 2000 4:14 am

Re: Airbus 1st half results 2021

Thu Jul 29, 2021 8:57 pm

astuteman wrote:

https://www.airbus.com/investors/financ ... ports.html

Key points for me in terms of Civil Aviation...

Airbus Commercial aircraft division...
Revenue : E17.8Bn ($21.2Bn)
EBIT : E2.4Bn ($2.85Bn)
EBIT margin : 13.4%

80% of deliveries were A320 series

At Corporate level free cashflow was E 2.1Bn ($2.5Bn)


It is fairly well known that deliveries have been pushed hard during the pandemic.
It feels like a major effort has been made to preserve cash
The EBIT margin is surprising (especially given some A-net "alternative facts").
That also smacks of cash and margin preservation (e.g. limited R+D, and capital expenditure)

Pretty strong in the circumstances I think

Rgds


Yes, amazing EBIT margin. Here is the 10 years historical EBIT margin at the group level (in which the commercial division is predominant):
https://finbox.com/DB:AIRA/models/historical-10yr

Over the last 10 years, the EBIT margin of Airbus group has never exceeded 5.8% (it has reached 11% in 2021H1). One would think that the reduced number of deliveries would have at least weighted on the margin due to the dis-economies of scale. Thus what could be the reasons for this improved margin? Here are a few things I could think of:
- the costs related to new aircraft or derivative development are historically low (the XLR is not flying yet and the construction of the first prototype cannot be a significant burden)
- less cost overruns related to the A400M program compared to the worst years of this program
- better product mix: the A380 has hardly contributed to the EBIT over the last 10 years for example, while the increased share of the A321 in the single-aisle family may offer a higher than average margin while the A220 doesn't hurt too much with its limited rate of production.
- maybe that the high production rates of the pre-covid years incurred a high marginal cost. Airbus has been investing for improving the efficiency of its assembly lines and might now be starting to reap the fruits of these improvements.
 
majano
Posts: 343
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Re: Airbus 1st half results 2021

Thu Jul 29, 2021 9:00 pm

Thank you for opening this discussion Astuteman. A few points worth mentioning in my view. These results were better than expected by a wide margin (some analysts went as far as calling them blow-out). The outlook by Airbus is also better. This represents a faster and much stronger than expected recovery. During the early stages of the pandemic, there was talk of the recovery taking years and being slow and uneven.

Between June '20 and June '21 the Airbus backlog deminished from 7,584 to 6,925. This is a good thing for Airbus' sales team. As production rates increase again as they hope, slots will become available.
 
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lightsaber
Moderator
Posts: 22665
Joined: Wed Jan 19, 2005 10:55 pm

Re: Airbus 1st half results 2021

Thu Jul 29, 2021 11:48 pm

tomcat wrote:
astuteman wrote:

https://www.airbus.com/investors/financ ... ports.html

Key points for me in terms of Civil Aviation...

Airbus Commercial aircraft division...
Revenue : E17.8Bn ($21.2Bn)
EBIT : E2.4Bn ($2.85Bn)
EBIT margin : 13.4%

80% of deliveries were A320 series

At Corporate level free cashflow was E 2.1Bn ($2.5Bn)


It is fairly well known that deliveries have been pushed hard during the pandemic.
It feels like a major effort has been made to preserve cash
The EBIT margin is surprising (especially given some A-net "alternative facts").
That also smacks of cash and margin preservation (e.g. limited R+D, and capital expenditure)

Pretty strong in the circumstances I think

Rgds


Yes, amazing EBIT margin. Here is the 10 years historical EBIT margin at the group level (in which the commercial division is predominant):
https://finbox.com/DB:AIRA/models/historical-10yr

Over the last 10 years, the EBIT margin of Airbus group has never exceeded 5.8% (it has reached 11% in 2021H1). One would think that the reduced number of deliveries would have at least weighted on the margin due to the dis-economies of scale. Thus what could be the reasons for this improved margin? Here are a few things I could think of:
- the costs related to new aircraft or derivative development are historically low (the XLR is not flying yet and the construction of the first prototype cannot be a significant burden)
- less cost overruns related to the A400M program compared to the worst years of this program
- better product mix: the A380 has hardly contributed to the EBIT over the last 10 years for example, while the increased share of the A321 in the single-aisle family may offer a higher than average margin while the A220 doesn't hurt too much with its limited rate of production.
- maybe that the high production rates of the pre-covid years incurred a high marginal cost. Airbus has been investing for improving the efficiency of its assembly lines and might now be starting to reap the fruits of these improvements.

I'm baffled at double the margin at 80% of the deliveries.
We can assume the A400M and A380 pulled down overall margins, so handicapping them helped, but that seems too much.
The A350 should be cash flow positive.

The A220 will be hurting rates...

All I can come back with is A321NEO (all flavors) go out the door at a very nice profit margin, the A350 was cash flow positive pre-Covid19, so isn't sucking up too much cash, and the A330NEO's development costs are basically done (just the HGW EIS).

I think we're seeing a cause of loss leaders (A400M/A380) being brought under control and hefty A321NEO profits.

Well done Airbus. Although I didn't expect this, I'll be honest.

Lightsaber
10 months without TV. The best decision of my life.
 
astuteman
Topic Author
Posts: 7413
Joined: Mon Jan 24, 2005 7:50 pm

Re: Airbus 1st half results 2021

Fri Jul 30, 2021 3:46 am

lightsaber wrote:
tomcat wrote:
astuteman wrote:

https://www.airbus.com/investors/financ ... ports.html

Key points for me in terms of Civil Aviation...

Airbus Commercial aircraft division...
Revenue : E17.8Bn ($21.2Bn)
EBIT : E2.4Bn ($2.85Bn)
EBIT margin : 13.4%

80% of deliveries were A320 series

At Corporate level free cashflow was E 2.1Bn ($2.5Bn)


It is fairly well known that deliveries have been pushed hard during the pandemic.
It feels like a major effort has been made to preserve cash
The EBIT margin is surprising (especially given some A-net "alternative facts").
That also smacks of cash and margin preservation (e.g. limited R+D, and capital expenditure)

Pretty strong in the circumstances I think

Rgds


Yes, amazing EBIT margin. Here is the 10 years historical EBIT margin at the group level (in which the commercial division is predominant):
https://finbox.com/DB:AIRA/models/historical-10yr

Over the last 10 years, the EBIT margin of Airbus group has never exceeded 5.8% (it has reached 11% in 2021H1). One would think that the reduced number of deliveries would have at least weighted on the margin due to the dis-economies of scale. Thus what could be the reasons for this improved margin? Here are a few things I could think of:
- the costs related to new aircraft or derivative development are historically low (the XLR is not flying yet and the construction of the first prototype cannot be a significant burden)
- less cost overruns related to the A400M program compared to the worst years of this program
- better product mix: the A380 has hardly contributed to the EBIT over the last 10 years for example, while the increased share of the A321 in the single-aisle family may offer a higher than average margin while the A220 doesn't hurt too much with its limited rate of production.
- maybe that the high production rates of the pre-covid years incurred a high marginal cost. Airbus has been investing for improving the efficiency of its assembly lines and might now be starting to reap the fruits of these improvements.

I'm baffled at double the margin at 80% of the deliveries.
We can assume the A400M and A380 pulled down overall margins, so handicapping them helped, but that seems too much.
The A350 should be cash flow positive.

The A220 will be hurting rates...

All I can come back with is A321NEO (all flavors) go out the door at a very nice profit margin, the A350 was cash flow positive pre-Covid19, so isn't sucking up too much cash, and the A330NEO's development costs are basically done (just the HGW EIS).

I think we're seeing a cause of loss leaders (A400M/A380) being brought under control and hefty A321NEO profits.

Well done Airbus. Although I didn't expect this, I'll be honest.

Lightsaber


I've have been on record as saying this before, Lightsaber, and had some pretty hefty put-downs.
When you look at past Airbus results, and then allow for the losses on the A380, the losses on the A400M, the losses on the A220, the fact that the A350 has only just broken even in recent years, etc, its not been hard to synthesise margins of 17% to 20% on the A320 series.

If you look at the explanatory notes, for the first time, there is virtually no impact from A380 and A400M
So for the first time, perhaps the true margin on those A320's is beginning to show, even at lower rates of delivery.
And as you mention, the delivery mix shifting to what is clearly the profit leader - the A321NEO.
Hopefully this may become clearer as time marches on

Rgds
 
FluidFlow
Posts: 1078
Joined: Wed Apr 10, 2019 6:39 am

Re: Airbus 1st half results 2021

Fri Jul 30, 2021 6:09 am

Quick note on R&D expenses (the one thing that makes us happy because it means new, exciting stuff). Unfortunately it is somewhat bad news:
Research and development expenses decreased by € -500 million to € 2,858 million compared to € 3,358 million in 2019.


This is for the year 2020 taken from here [url]file:///Users/stefan/Downloads/Airbus-FY2020-SN.pdf[/url]

Now for H1 2021 we have:

Research and development expenses decreased by € -134 million to € 1,262 million compared to € 1,396 million in the first half-year
2020.


So we can expect around € 2,500 million for R&D this year. This might go up again depending on the R&D needed for the 350F.

In general if Airbus can keep the good numbers up there is definitely room to increase research spending.

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