Profits up on back of improved military sales and better than hoped for Airbus performance
EADS is edging closer to its goal of driving up defence sales to 30% of revenues by 2005, but Airbus remains the company's bread-winner.
The company last week announced an 8% rise in earnings before interest and tax (EBIT) for 2003 to €1.5 billion ($1.9 billion) on revenues up slightly to €30.1 billion from €29.9 billion in 2002.
Defence revenues rose 18% to €7.1 billion - almost a quarter of the business. The defence business accounted for half of EADS's €61.2 billion new orders in 2003. These included the €20 billion A400M deal and orders from Spain for Eurocopter Tigers, Greece for NH90s and Austria for Eurofighter Typhoons. Defence orders have more than doubled from last year and now represent a quarter of EADS's overall orderbook, compared with 13% in 2002, putting the company on track to achieve its 2005 target.
Airbus - of which EADS owns 80% - had a better-than-expected year with 305 deliveries and a particularly strong fourth quarter. Revenues were down 2% to €19 billion and EBIT was virtually unchanged on 2002, at €1.4 billion. However, EADS says revenues would have been 5% higher had the dollar value remained unchanged.
The Space division lost €400 million but was landed with restructuring costs of €288 million, and will break even in 2004, says the company.
Joint chief executive Philippe Camus has repeated EADS' ambition to expand its US manufacturing and customer base, but rules out a "major acquisition of a defence company". He says: "There are better opportunities [to buy] a small or medium company if it would give us access to the market."
MURDO MORRISON / PARIS
Source: Flight International
