EADS's push to improve profitability got off to a shaky start this year, with a first-quarter pre-tax result €16 million ($22.9 million) in the red despite 10% sales growth, to €9.85 billion. The loss reversed a €150 million pre-tax profit for the period to the end of March last year.
In January, chief executive Louis Gallois said profitability was unacceptable in 2010 and expected to remain so in 2011, although in his remarks on these first-quarter numbers, chief financial officer Hans-Peter Ring described EADS as being "overall on track to increase its underlying profitability".
Stripping out finance costs, this quarter's €181 million positive result amounted to 1.8% of revenue, a clear improvement on the 0.8% achieved a year ago but well short of the 2.6% result for the full-year 2010.
That improvement in earnings before interest and taxes looked more like €230 million before a one-off charge reflecting pre-delivery payments "mismatch" and balance sheet revaluation, including €170 million attributable to the Airbus commercial aircraft division that continues to dominate the company. Ring attributed the rise to a better product mix and cost control at Airbus.
Notably, EADS looks to be going backward in its "Vision 2020" plan to move the group away from being so heavily reliant on the Airbus division. For the first quarter, Airbus commercial's revenue of €6.71 billion was up 12% year-on-year and represented 68% of the EADS total, compared with 67% for the first quarter last year an just 59% for the full-year 2010.
This surge in Airbus commercial's share of the revenue pie came despite good results in all other units, bar the Cassidian defence business, which was down 5% at €878 million during what Ring is calling a "transformation" period to bring the business into line with a changing, and challenging, global defence market.
At the Astrium space division, revenue jumped 27% to €1.17 billion, and Eurocopter was also up, by 3% to €823 million.
Order intake was down across the group: -67% at Airbus commercial, -28% at Airbus military, -37% at Astrium, -26% at Eurocopter and -15% at Cassidian.
Source: Flight International
