One Team One Path One Future
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ANNUAL REPORT AT A GLANCE 2016 flying one team one as path one future one Contents 1. one team ONE UNIFIED WAY FORWARD Integrated structure P 6-7 MOVING FURTHER AHEAD Letter from the Chairman of the Board P 8-9 DEVELOPING OUR FULL POTENTIAL Interview with the Chief Executive Officer 2.one P 10-12 Interview with the Chief Operating Officer P 13 path FLYING TOGETHER Group Executive Committee ON THE RIGHT TRACK P 14-15 Interview with the Chief Financial Officer P 18-19 2016 KEY FIGURES P 20-21 COMMERCIAL AIRCRAFT 3. one P 22-23 HELICOPTERS P 24-25 future DEFENCE AND SPACE P 26-27 STAYING ONE STEP AHEAD Future ambitions P 30-33 INNOVATION HIGHLIGHTS P 34-35 CORPORATE SOCIAL RESPONSIBILITY P 36-37 SHARE INFORMATION P 38 For its full-year 2016 financial reporting, Airbus has implemented the European Securities and Markets Authority’s guidelines on Alternative Performance Measures. As a result, certain items will no longer be labelled as “one-offs”. Such items will instead be labelled as “Adjustments”. Airbus will no longer measure and communicate its performance on the basis of “EBIT*” (i.e. EBIT pre-goodwill impairment and exceptionals) but on the basis of “EBIT” (reported). Terminology will change such that “EBIT* before one-offs” will be replaced by “EBIT Adjusted” and “EPS* before one-offs” will be replaced by “EPS Adjusted”. AIRBUS AT A GLANCE 2016 001 Airbus employees work as one to deliver much more than just products. They deliver solutions. Everyday, Airbus strives for excellence in engineering and manufacturing, constantly innovating to deliver game-changing state-of-the-art solutions. Everything the company does is designed to further improve customers’ experiences. Flying together, Flying as one. 002 2016 Key facts one year: so many journeys COMMERCIAL AIRCRAFT ARIANE 5 688 07 Total deliveries 2016 Total launches 2016 HELICOPTERS 418 MILITARY AIRCRAFT* 33 Total deliveries 2016 Total deliveries 2016 * Comprises A400M, A330 MRTT and Light & Medium Aircraft. AIRBUS AT A GLANCE 2016 003 10,000TH DELIVERY OF AN AIRBUS AIRCRAFT – A350 XWB TO SINGAPORE AIRLINES 14 OCTOBER 2016 A320 FAMILY A400M 545 17 Total deliveries 2016 Total deliveries 2016 A350 XWB 49 Total deliveries 2016 A380 28 Total deliveries 2016 004 CHAPTER 01 One unified Moving further Developing Flying way forward ahead our full potential together Integrated structure Letter from Interview with Group Executive Denis Ranque, Tom Enders, Committee Chairman of the Board Chief Executive Officer AIRBUS AT A GLANCE 2016 005 A350-1000 First Flight Test Crew 006 Integrated structure one unified 2016 AIRBUS AT A GLANCE 2016 007 way 2017 forward AIRBUS IS A COMMERCIAL AIRCRAFT MAKER WITH TWO DIVISIONS, ‘HELICOPTERS’ AND ‘DEFENCE AND SPACE’ 008 Letter from Denis Ranque, Chairman of the Board moving further ahead Denis Ranque Chairman of the Board ear Shareholders, the order backlog to a new industry record. Dear Stakeholders, Despite a challenging market, Helicopters reported a small increase in deliveries and 2016 was a significant net orders, strengthening its lead in the civil year for your Company. and parapublic sector. Defence and Space To create a simpler, more booked healthy orders in Military Aircraft streamlined organisation and Space Systems, although the A400M Dwe decided to integrate the Group cor- programme experienced further technical porate structure and functions with those issues and charges. The Board support- of Commercial Aircraft, our largest Division. ed Airbus’ digitalisation initiative, which This was the year’s biggest strategic devel- will help to capitalise on innovative and opment, alongside with portfolio reshap- transformational technologies and busi- ing, as the annual report’s title “flying as ness models. At the same time, the one” suggests. technology function is being reorganised The new entity will combine corporate and and refocused to enhance the direction operational functions and support services. and coordination of Airbus’ overall research Importantly, this will reduce bureaucracy, and technology activities. quicken decision-making and reinforce Company-wide collaboration. Turning to compliance, we are determined to ensure compliance standards and pro- In terms of orders and deliveries, Airbus cesses reach a “best in class” benchmark made good progress. Commercial Aircraft across the Company. Staff underwent delivered a record number of aircraft, de- comprehensive training to raise awareness, spite some operational challenges. The reduce risks and, more generally, to rein- competitiveness of its aircraft portfolio lifted force the culture of integrity. AIRBUS AT A GLANCE 2016 009 BOARD OF DIRECTORS AS OF 1 JANUARY 2017 Similarly, we supported the Corporate Social Responsibility strategy, which is being aligned with applicable UN Sustainable Development Goals. Our environmental and social goals include the philanthropic work of the Airbus Foundation and efforts to promote diversity at all levels. Denis Ranque Tom Enders Chairman of the Board Chief Executive Officer of Directors of Airbus of Airbus The Board proposed a 2016 dividend of € 1.35 per share. We intend to honour our commitment of increasing dividend per share on a sustainable basis by proposing this payment, which is about four percent higher than in 2015. The value is outside the range of the dividend policy exceptionally. It is based on our 2016 underlying perfor- Ralph D. Crosby Catherine Guillouard Former Member of the Deputy Chief Executive mance and it demonstrates our confidence Management Boards of EADS Officer of Rexel SA in our future operational cash generation. and of Northrop Grumman In terms of governance, we introduced ‘staggered’ Board terms with one third of the Directors being reappointed or replaced every year. The extension of the mandates of three Directors and the nomination of one new Director at the 2017 Annual General Meeting follow this principle. Hans-Peter Keitel Hermann-Josef Lamberti Vice President of the Federation CHAIRMAN OF AUDIT COMMITTEE of German Industries (BDI) Former Member of the Management Board of Deutsche Bank “Airbus again made solid progress” Lakshmi N. Mittal Amparo Moraleda Denis Ranque Chairman and Chief Executive Former General Manager Chairman of the Board Officer of ArcelorMittal of IBM South Region We welcome Lord Drayson (Paul) to the Board, subject to the AGM’s approval. As an engineer and entrepreneur, he brings the right expertise for our innovation focus and digital journey. We would also like to thank Claudia Nemat Sir John Parker Member of the Board CHAIRMAN OF REMUNERATION, longstanding Board Member Lakshmi NOMINATION AND GOVERNANCE of Management of COMMITTEE Mittal for 10 years of valuable counsel. His Deutsche Telekom AG Chairman of the Board international outlook has helped Airbus to of Anglo American plc become a truly global company. In summary, Airbus again made solid pro- gress. I thank you for your support of the management and the Board. We are com- mitted to continuing on this successful path Carlos Tavares Jean-Claude Trichet – as one team governing an increasingly Chairman of the Managing Honorary Governor of Banque Board of Peugeot SA de France and former President dynamic company. of the European Central Bank Denis Ranque AUDIT COMMITTEE REMUNERATION, NOMINATION AND GOVERNANCE COMMITTEE 010 Interview with Tom Enders, Chief Executive Officer developing our full potential Tom Enders Chief Executive Officer as 2016 a good one. The order book reached almost year for Airbus? 6,900 aircraft at year-end, which is the highest level ever. This represents a solid Broadly speaking, foundation for our production ramp-up in yes! We faced the coming years. some challenges but made consid- Our Helicopters business delivered more Werable progress in building the Company’s rotorcraft than in 2015 and performed well resilience to succeed in an increasingly commercially despite some very challeng- competitive world. We achieved the full- ing market conditions, particularly on the year guidance and met all of our operational civil and parapublic side. Net orders rose objectives with one exception, the A400M, by six percent which was a pretty good where we had to take another significant performance in the circumstances. charge. The losses we have accumulated on this programme have reached unac- And putting the A400M to one side for a ceptable levels, compelling us to re-engage moment, Defence and Space also had a with our customers to seek mitigation. successful and pivotal year. The Division achieved a book-to-bill of above one and We delivered more commercial aircraft made significant progress in reshaping than ever before in 2016. Although airlines and strengthening the business. Orders ordered fewer aircraft across the industry, for military aircraft and satellites were our net book-to-bill ratio was again above particularly buoyant, including an important AIRBUS AT A GLANCE 2016 011 contract win for search and rescue planes in Canada. Ultimately, we delivered steady underly- ing profits, or EBIT Adjusted, as intended, although our reported profitability was hit by programme charges. We have none- theless proposed a higher dividend of € 1.35 a share which shows our ongoing confidence in the underlying growth potential. What were the main operational developments? Our industrial performance was very strong, with commercial aircraft deliveries rising to 688 after a very busy fourth quarter. This would not have been possible without the strong commitment of all employees con- cerned. I am proud of and grateful for their hard work! We successfully managed the ramp-up of the single aisle and A350 programmes, Defence and Space’s portfolio reshaping while at the same time transitioning to the gained momentum. The space launcher more efficient NEO version of the A320. Joint Venture with Safran became fully op- Importantly, A350 deliveries rose to 49 air- erational and is now forging ahead with the craft, putting us well on track to meet our development of the more efficient Ariane 6 production target of 10 aircraft a month by launcher.