EADS ANNUAL REVIEW 2012

Deploying our Talent
for a new era

AT A
GLANCE

Deploying
OUR talentAnnualreview2012

for a new era

The Year in Review 201201

MOVING

into a new era
08 -	Message fromthe departing Chairman
10 -	Letter from the Chairmanof the Board
12 - The Board of Directors
14 -	Chief Executive Officer’s
Message
16 -	Group Executive Committee
18 -	Interview with the Chief
Financial Officer

02

Anticipatingchange22 - Interview with the Chief
Strategy and Marketing
Officer
24 - Markets & Perspectives

03

Achieving
our goals

32 - Airbus
38 - Eurocopter
40 - Astrium
42 - Cassidian04

Preparingfor the future

46 - Engaged People
48 - Innovation
50 - Environmental Protection
52 - Supply Chain
54 - Addresses
56 - Shareholder Information

EADS ANNUAL REVIEW 2012

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EADS ANNUAL REVIEW 2012

EADS
Deploying our Talent
for a new era
Increased revenues and profitability, a rising order
book, progress on key development programmes,
a successful management transition and the continued focus on innovation and internationalisation – 2012
was a good year for EADS. It was also a year that saw
significant progress made towards the reshaping of thecompany’s Corporate Governance. EADS is therefore
well positioned to meet the coming challenges withincreased confidence. Driving EADS’ success during
its second decade and beyond will be its talented
employees working around the globe in all areas of
the business...

...deploying our talent for a new era.

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EADS ANNUAL REVIEW 2012

the Year in Review
2012‘Flashdrums’, Farnborough Airshow

Eurofighter

4

EC145
Airbus unveils US assembly line plan

Inauguration of A350 XWB FAL

30 March 2012
EUROFIGHTER SIGNS FIVE-YEAR
SUPPORT CONTRACT
Eurofighter signs a five-year contract tosupport the fleet of Typhoon jets across thefour Eurofighter core nations – Germany,
Italy, Spain and the UK – helping to sustain
thousands of jobs in engineering, project
management and the supply chain.

22 May 2012CASSIDIAN BECOMES KEY
NATO AGS PARTNER
Cassidian becomes a major partner in
NATO’s Alliance Ground Sur veillance(AGS) programme, as sub-contractor to
Northrop Grumman, supplying the mobile
ground segment entities.

12 July 2012
EADS BEATS recruitment DRUM
AT FARNBOROUGH
400 EADS volunteers stage a surprise
performance at Farnborough Airshow
with bright shirts and noisy ‘flashdrums’,
highlighting the Group’s recruitment
initiatives, including plans to hire 5,000
people in 2012.

27 April 2012
EUROCOPTER DELIVERS
500TH EC145
Eurocopter delivers the 500 th EC145
medium-size workhorse to Transportes
Aereos Pegas at its facility in Donauwörth, Germany, marking the helicopter’s
10 years of high-rate production. Transportes Aereos Pegas is the largest Mexican operator in the Gulf of Mexico.

02 July 2012
Airbus announces A320
US FINAL ASSEMBLY LINE
In a major strategic development, Airbus
announces plans to establish a US A320
Final Assembly Line (FAL), its first US manufacturing facility, in Mobile, Alabama. The
FAL will create jobs and meet the needs of
local customers in the biggest market for
single-aisle aircraft.

23 October 2012AIRBUS UNVEILS A350 XWB
FINAL ASSEMBLY LINE
French Prime Minister, Jean-Marc Ayrault,
and Airbus CEO, Fabrice Brégier, inaugurate the 74,000 square metre A350 XWB
Final Assembly Line in Toulouse, France,that will employ 1,500 people and build up
to 10 aircraft a month from 2018.

EADS ANNUAL REVIEW 2012

the Year in Review 2012

Ariane 5

Skynet 5D

A400M

A320 equipped with Sharklets

5

EC175

16 November 2012
FIRST THREE A400M TAKE SHAPE
The initial three A400M new-generation
airlifters in series production are pictured
together at the Final Assembly Line inSeville, Spain, ahead of delivery to France
and Turkey in 2013. In all, four aircraft are
due for delivery in 2013 – three to France
and one to Turkey.

05 December 2012
Overhaul of EADS Governanceand Shareholding structure
The EADS Board of Directors and theCompany’s core shareholders agree on
a far-reaching change of the Company’s
shareholding structure and governance.
This agreement, approved by shareholders in March 2013, will simplify the governance of EADS and increase the free floatof EADS shares from 49% to over 70%.

19 December 2012
ARIANE 5 LAUNCHES UK’S
SKYNET 5D MILITARY SATELLITE
Ariane 5 launches a Skynet 5D military
satellite from Kourou, French Guiana.
Astrium also made the satellite for the
UK Ministry of Defence Skynet 5 programme, while Astrium Services operates
the programme.

21 November 2012
EUROPEAN SPACE BUDGETSECURES LAUNCHER FUNDSThe European Space Agency votes for a€ 10 billion budget from 2013 to 2017, confirming future funding for further development of the Ariane 5 ME satellite launcher
and the definition study of Ariane 6. The
budget decision provides greater certainty for Europe’s space industry.

12 December 2012
EC175 PRODUCTION HELICOPTER
MAKES MAIDEN FLIGHT
Eurocopter conducts the first flight for an
EC175 production helicopter, developedwith Chinese partner AVIC, confirming the
medium-sized civil helicopter’s excellent
performance in terms of safety, power
efficiency and comfort.

21 December 2012
AIRASIA RECEIVES FIRST
A320 WITH SHARKLETSAirAsia becomes the first operator of an
A320 equipped with Sharklets, the large
wing-tip devices that improve aerodynamics and are designed to reduce fuel burnby up to 4%, with commensurate emissions reductions. AirAsia is the biggest
A320 Family customer.

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movinginto a new era
Management and GovernanceEADS ANNUAL REVIEW 2012

moving into a new era

messagefrom thedeparting
Chairman“From now on, control of this Company
rests with all shareholders, the majority
belonging to the free float.”arnaud lagardère

8

Arnaud Lagardère, Chairman until 2 April 2013

Dear Shareholders,
I was appointed Chairman of EADS at last year’s Annual General
Meeting, yet by the time you read these lines my successor
will already be in place. This shows the pace of change at our
Company in 2012.
Businesswise, EADS achieved double-digit revenues andprofit growth, in a tough macro-economic environment. These
accomplishments and confidence in the outlook led the Board toboost its dividend payout recommendation. EADS’s rising shareprice also rewarded these positive developments.
Through 2012, the Board of Directors (and its Committees) dealt
diligently with recurring topics; notably, it strengthened controls
for risk and compliance issues, supported succession planningand backed the introduction of Return on Capital Employed as
one of a number of key performance criteria.

The Board of Directors also attended to exceptional issues,
starting with a management transition: the climax of that activity
was the Extraordinary General Meeting, held in March 2013,
which dissolved the Shareholder Pact that had given EADS thenecessary stability to develop successfully since inception in
2000. This elaborate system of governing rules and agreements
was originally meant to grant access to a diversified shareholder
base while protecting key sovereign interests, to ease thetransition to a robust corporate culture, to foster integration of
personnel, to leverage the different nationalities, and to shielddaily management from political interference. But after 12 years,
it was time to turn EADS into a “regular” company.
Following the attempted merger with BAE Systems, whichbrought the system’s limitations to light, all stakeholders
agreed to change fundamentally the governance and open up
the ownership foundations of the Company. In a remarkably
short time, an agreement was reached, which was signed in
December 2012.
From now on, control of this Company rests with all shareholders,the majority belonging to the free float.
The composition of a new Board of Directors, to replace outgoing
Directors originally nominated by core shareholders, was delegated to an ad-hoc Nomination Committee, led by Sir John Parker
and comprised solely of independent Directors, who identified thebest candidates for an expanded and empowered Board.
I am grateful to all Directors for having supported this “comingof age” of EADS, and particularly to departing Directors for theirfirst-rate contributions; during my mandates as Director and as
Chairman, it has been my goal to foster the development of theCompany.
My late father, Jean Luc Lagardère, together with Jürgen
Schrempp and Pedro Ferreras, had envisioned a financially solidand powerful EADS, which would be a magnificent symbol ofEuropean integration. Their wish is fulfilled!
Future success will require the motivation and dedication of
EADS’ employees. I thank them for their outstanding performance in 2012, and I congratulate management for its stamina
in driving change.
Last, but not least, I thank you, distinguished EADS shareholders, for your persistent loyalty. EADS relies on your commitment. The new Board of Directors as well as the Group
Executive Committee under the leadership of Tom Enders will
do their best to justify it.

Arnaud Lagardère

EADS ANNUAL REVIEW 2012

moving into a new era

message from the departing Chairman

The year 2012 was a year of transition and progress for the
EADS Board of Directors, preparing the way for far-reachingchanges in the Group’s governance. On 5 December 2012,
the EADS Board of Directors, together with core stakeholders
signed an agreement aimed at normalising and simplifying theCompany’s governance and shareholder structure. Following
this agreement, revised articles of association were approved
and new Directors elected at the EADS Extraordinary General
Meeting (EGM) on 27 March 2013.

Board assessment 2012
The Board of Directors carries out an assessment of its
performance annually and a more thorough assessment isconducted every three years by independent consultants. Due tothe transition of Board and management in mid-year, and in viewof the significant changes in governance and Board composition,
following the EGM in March 2013, the Board decided to forego a
Board assessment in 2012. The next Board assessment will be
conducted in 2013.

Board meetings
The Board of Directors met 11 times during 2012 and wasregularly informed of developments through business reports
from the Chief Executive Officer, including strategic andoperational plans. The average attendance rate at such meetings
remained stable at 86%.
Throughout 2012, the Board of Directors monitored the progressof significant programmes, such as A350 XWB, A400M, A380,
NH90, and Saudi Border Security. It was kept regularly informed
about the A350 XWB programme development progress as wellas the A380 wing rib feet challenges.
The Board of Directors also addressed EADS’ strategy (including
the competitive environment) and undertook post-merger
integration reviews on recent acquisitions. Furthermore, theBoard approved the Single Aisle Final Assembly Line investment
in Mobile, Alabama.
Following a review of the abandoned merger project between
EADS and BAE Systems, the Board supported management
to negotiate the renouncement by the principal shareholders of
their control rights and the establishment of the new governanceagreed in the Multiparty Agreement.
Moreover, the Board of Directors focused on the Group’s
financial results and forecasts, asset management, supply chain
challenges, the services business, compliance in key businessprocesses and in major programmes, as well as efficiency andinnovation initiatives. It reviewed Enterprise Risk Management(“ERM”) results, export control regulations, investor relations
and financial communication policy, and legal risks. The Board
also discussed further actions resulting from the third EADS
engagement survey.
Finally, the Board of Directors focused on governance issues
and succession planning, ensuring a smooth Board andmanagement transition.

The Audit Committee
The Audit Committee makes recommendations to the Boardof Directors on the approval of the annual financial statements
and the interim accounts, as well as the appointment of external
auditors and the determination of their remuneration. In 2012,
the Audit Committee fully performed all of its duties, and met fivetimes, with an 85% average attendance rate.

Board activity in 2012

The Remuneration and Nomination Committee
The Remuneration and Nomination Committee met six times
during 2012, with a 96% average attendance rate.
In addition to making recommendations to the Board of Directors
for major appointments within the Group, the Remuneration and
Nomination Committee reviewed top talents and succession
planning, discussed measures to improve engagement and topromote diversity, reviewed the remuneration of the Executive
Committee members for 2012, the long-term incentive plan, andthe variable pay for 2011. Based on the outcome of the Free
Share plan, it also proposed the terms of the 2013 Employee
Share Ownership Plan.
The Strategic Committee
During the merger initiative with BAE, the Board of Directors
absorbed the functions of the Strategic Committee, thus theCommittee only met once during the first half-year of 2012. The
new EADS Governance, proposed to the EGM for approval,
does not foresee the perpetuation of the Strategic Committee.

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EADS ANNUAL REVIEW 2012

moving into a new era

letter fromthe Chairmanof the board“The Board is committed more thanever to supervising all aspects of EADS’
performance, risks and opportunities
for long-term achievement.”

Denis RanqueDear Shareholders, Dear Stakeholders,
It is a great honour to have been appointed Chairman of theBoard at a time when EADS is moving ahead with a newcorporate governance and an enlarged shareholder base. I was
delighted to accept the challenge because of what the “newdeal” means for the Company and its stakeholders:First, it gives a greater voice to all shareholders, without
discrimination.
Secondly, it means less exposure to national politics and a mature
relationship with EADS home countries’ governments, which canrest assured that their vital security interests are protected.
Lastly, it means that over 70% of EADS shares are now in thefree float, enhancing their liquidity and increasing their appeal
to investors, for instance through a greater weighting in indices.

10

These positive effects stem from fundamental governancechanges that you, as shareholders, endorsed at the Extraordinary
General Meeting of 27 March 2013:
The main points to highlight are:Board independence: at least nine non-executive directors
must meet the independence test set by the Dutch Corporate
Governance Code, and neither active civil servants nor state
representatives are eligible for the Board: we now have
10 independent directors. For the Boards of the Defence
Companies of France and Germany, only EADS can propose
candidates, who are subject to a state consent mechanism.
Denis Ranque, Chairman from 2 April 2013

Decision-making is simplified: within the Board, simple majority
is the rule, and veto rights have disappeared. However, a systemof qualified majorities and quorums has been introduced, specifically targeted to maintain the balance of the new governance,or to force a higher degree of scrutiny and conviction for important decisions.
The “new deal” means not more, but rather less state influence: As with any other normal company, the authority of theFrench, German and Spanish states will be confined to the rolesof regulator or customer. Through their agreement, they will havevery limited powers of influence, and as any other shareholder,none over operational issues, which is an important change fromthe past.
The 15% upper ownership limit, combined with the 80%
breakthrough requirement for take-overs and the present 28%
states ownership, provides ample assurance that strategic
assets stay out of reach of hostile control attempts. The French

EADS ANNUAL REVIEW 2012

moving into a new era

and German Defence Subsidiaries provide another ring-fencing
mechanism for the most nationally sensitive activities inside a
dedicated perimeter overseen by a cleared Board.
What should you expect from the Board of Directors?
The Board and I intend to leverage the tools you have handed to
us in order to support and challenge the management and to set
the Company’s sights on continued ambitious, sustainable andresponsible growth.
Building on the healthy base set by our predecessors, we will
first focus on giving fresh impetus to the Company’s strategic
aspirations, while seeking profitable new business opportunities,
in terms of business scope and international footprint. As in the
recent past, the Board will monitor progress on key programmes,and emphasise risk control and operational excellence.
To live up to the “new deal” with our stakeholders, we must be
attuned to their voice, and above all to that of our shareholders.
The Board recognises that, to be attractive to investors, EADS
must be capital effective. Authorised by shareholders, it launched
the share buy-back and subsequent share cancellations to
support earnings per share accretion, and the broadening of ourshareholder base to new investors. The calibration of this buyback was made prudently, with an eye to value, affordability andfuture capacity to invest, as well as to the impact on credit ratings.

Letter from the Chairman of the Board

CoMmitTees of the boardof directors
Audit
Committee

Hermann-Josef Lamberti (Chairman)
Anne Lauvergeon
Michel Pébereau
Josep Piqué i Camps

11

Remuneration
and Nomination Committee

Sir John Parker (Chairman)
Jean-Claude Trichet
Lakshmi N. Mittal
Hans-Peter Keitel

For more detailed information on the new governance,
please refer to the Corporate Governance section in
the Registration Document 2012.

The Board also believes in the merits of a sustainable dividend
policy, reflecting the Company’s improving performance.
Furthermore, the Board wants EADS’ new dynamism to benefit
stakeholders at large: employees – whose competence anddedication underpin our success – as well as our suppliers andbusiness partners, and more generally the communities in which
EADS strives to be an exemplary citizen. To accomplish this, theBoard is committed more than ever to supervising all aspects
of EADS’ performance, risks and opportunities for long-term
achievement.

Shareholder Structure as of 01 May 201311.29%	SOGEPA (French State)
10.09%	GZBV* (German State)
3.93%

68.50%	Retail and Institutional
Investors**

EADS now has a great opportunity to hoist its mainsail and catch
favourable winds.
Yours sincerely,

SEPI (Spanish State)

6.19%	Share buyback* KfW and other German public entities** Including warehoused shares of SOGEPA (0.07%) and SEPI (0.29%)

page 19

Denis RanqueEADS ANNUAL REVIEW 2012

moving into a new era

THE BOARD OF DIRECTORS
Appointed at the Extraordinary General Meeting, 27 March 2013; effective as of 2 April 2013

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Denis Ranque (61)

Tom Enders (54)Michel Pébereau (71)

Chairman of the Board of Directorsof EADS

Chief Executive Officer of EADS

Honorary President of BNP Paribas

Mr Ranque joined the Thomson group in1983 as planning Director and then became
Director of the space business. From1998 to 2009, he was Chairman and Chief
Executive Officer of the Thomson-CSF group,
now called Thales. Qualifications: École
Polytechnique and Corps des Mines.

Mr Enders became EADS CEO in 2012, after
previously being Airbus CEO, EADS co-CEO
and Defence and Security Systems CEO.
His career began on the German Ministerof Defence’s planning staff. Qualifications:
Bonn University and University of California
in Los Angeles (Economics, Political Science& History).

Mr Pébereau was BNP Paribas’ CEO/
Chairman of the Board. Previously he was
Chairman/CEO of Crédit Commercial deFrance. He has held high ranking positionsin the French Treasury. Qualifications:
École Nationale d’Administration and École
Polytechnique.

Hermann-Josef Lamberti (57)

Sir John Parker (70)

Lakshmi N. Mittal (62)Former Member of the Management
Board of Deutsche Bank

Chairman of Anglo American

Chairman and Chief Executive Officer
of Arcelor Mittal

Mr Lamberti was COO and Member ofDeutsche Bank’s Management Board(1999-2012). He previously worked for IBM,
becoming Chairman of IBM Germany. He
started his career with Touche Ross, before
joining Chemical Bank. Qualifications:
Universities of Cologne and Dublin (Business
Administration).

Sir John Parker is Chairman of Anglo American; Deputy Chairman of DP World (Dubai);
Non-Executive Director Carnival. He was
Chairman of National Grid, and CEO of
Harland & Wolff and Babcock International
Group. Qualifications: College of Technology
and Queens University (Naval Architectureand Mechanical Engineering).

Mr Mittal is Chairman and CEO of Arcelor
Mittal, the world’s largest steel maker. He
is a Member of the Board of Directors ofGoldman Sachs, of the World Economic
Forum’s International Business Council, andof the Advisory Board of the Kellogg Schoolof Management. Qualifications: St Xavier’s
College, Kolkata (Commerce).

EADS ANNUAL REVIEW 2012

moving into a new era

Josep Piqué i Camps (58)Anne Lauvergeon (53)Hans-Peter Keitel (65)

Chairman of Pangea XXI, Consultora
Internacional

Partner of Efficiency Capital, Chairman
and CEO of A.L.P S.A.

Vice President of the Federation of German

Mr Camps is Chairman of Vueling and Spain’s
former Minister for Industry & Energy, Ministerof Foreign Affairs and Minister of Science &Technology. Qualifications: University ofBarcelona (PhD in Economics & BusinessStudies; Law).

Ms Lauvergeon was CEO of Areva (20012011). She previously worked at Alcatel andLazard Frères & Cie, and was Deputy Chiefof Staff to the French President. Qualifications: École Normale Supérieure and école
Nationale Supérieure des Mines.

Mr Keitel is Vice President of the Federation ofGerman Industry. Previously, he was Hochtief
CEO (1992-2007) and started his career at
Lahmeyer International. Qualifications: Universities of Stuttgart and Munich (Construction Engineering & Economics); University of
Munich (PhD Engineering).

Jean-Claude Trichet (70)Ralph D. Crosby, Jr. (65)

Manfred Bischoff (70)

Honorary Governor of Banque de France

Former Member of the Management Boards
of EADS and Northrop Grumman

Chairman of the Supervisory Boardof Daimler

Mr Crosby was the US Vice President’s
military staff assistant and served on Northrop
Grumman’s Corporate Policy Council. He
is a former Chairman/CEO of EADS North
America (2002-2009). Qualifications: West
Point Military Academy, Harvard University
and Geneva University.

Mr Bischoff joined Daimler-Benz in 1976,
later becoming a Member of the DaimlerBenz Board of Management. He was EADS
Chairman (2000-2007) and is Chairman of
the Daimler Supervisory Board. Qualifications: Heidelberg University (Economics
diploma and PhD).

Mr Trichet was President of the European
Central Bank. Previously, he managed
the French Treasury and was Governor of
Banque de France. Qualifications: École desMines de Nancy, Institut d’Études Politiquesde Paris, University of Paris (Economics) andÉcole Nationale d’Administration.

THE BOARD OF DIRECTORS

Industry (BDI)

13

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EADS ANNUAL REVIEW 2012

Chief
executive
officer’s
MESSAGETom Enders

14

Tom Enders

moving into a new era“We see 2013 as a year in which
EADS will take substantial steps
forward in generating higher returns
for shareholders.”

EADS ANNUAL REVIEW 2012

moving into a new era

Chief executive officer’s MESSAGe

Dear Shareholders, Employees, Customers and Suppliers,
Eurocopter progressed on its innovation roadmap, with the market
endorsement of the EC130 T2 and EC145 T2. Furthermore, thefirst NH90 transport and naval versions were delivered in their
final configuration. With regard to the EC 225 limitations, following
some incidents on rotor shaft cracks and emergency warnings,
Eurocopter has identified root causes and defined solutions. The
fleet is expected to return to service after regulators’ approval
The new Board is in place, and I am looking forward to working
later in the year.
hand in hand with the new Chairman, Denis Ranque, whom I have
known for many years. The private core shareholders, Daimler Aside from demonstrating strong programme execution, Astrium
and Lagardère, which initially helped to create the Company, have has now received its initial contracts to secure development steps
now divested their shareholdings, allowing free float share owners of Ariane 6 and the Ariane 5 Midlife Evolution, after the European
Space Agency broadly confirmed European space budgets into step up to 72% of our capitalisation.
November 2012.
Thanks largely to strong operational improvements in thecommercial business, EADS generated continued earnings The new management at Cassidian pushed through a restructuring
growth in 2012. The Company achieved a double-digit increase plan to adapt to the changing market environment. The Division
in revenues and EBIT*, improved its underlying operating margin to now has a healthy platform to deliver improving margins going
5.3% and increased the order backlog to € 567 billion. The EBIT* forward on its profitable core activities.
and net income, however, were weighed down by significant oneThe many highlights would not have been possible without theoff charges related to Airbus, Eurocopter and Cassidian activities.
immense day-to-day commitment of our 140,000 employees in
From an operational perspective, 2012 was a year of notable helping the Group to achieve its operational targets and its financial
milestones across the EADS Divisions, which all contributed to performance. We also saw a smooth management transition
during the year, and we should not forget the valuable long-term
the improved Group EBIT* performance:
Airbus Commercial registered its 11th year in a row of increased contribution that my predecessor Louis Gallois made to EADS in
production, with a record 588 deliveries to 89 customers while his five years as CEO until 31 May 2012.
Airbus Military delivered 29 aircraft; ATR also showed goodAny review of 2012 would not be complete without mentioning
progress, delivering a record 64 aircraft.
our attempt to merge with BAE Systems. While this plan ultimately
Due to a very strong and growing product support business,didn’t materialise, it did pave the way for December’s Multiparty
Eurocopter achieved all time record revenues of € 6.3 billion,
Agreement that has helped to simplify and normalise the corporate
despite lower deliveries. The number of Lakota Light Utility
governance of EADS. Crucially, the old shareholder pact hashelicopter deliveries reached around 250.
been dissolved and we now have a new Board of Directors
Astrium reaffirmed its position as a leading player in the global
with clear independence. We have also begun to establish ourspace industry, with seven Ariane 5 launches and the delivery of
single operational headquarters in Toulouse, marking the further
nine Astrium-built satellites.
integration of EADS. Clearly, EADS 2.0 is becoming a reality.
Cassidian’s core operations performed well with a sustainedlevel of Eurofighter deliveries and year-on-year growth in orders, During 2013, the executive management team will aim to build on
despite a challenging business environment of restrained defence the progress we made in 2012. A key priority is to ensure that EADS’
future top-line performance is reinforced by an improvement in thebudgets.
bottom-line. To achieve this, we will focus on portfolio de-risking
The Group saw a strong contribution from its expanding services
and the close management of development programmes, like theactivities with the companies acquired in 2011 contributing about
A350 XWB, to contain and reduce the embedded risks. We see€ 1.5 billion in revenues during 2012. The services activities of2013 as a year in which EADS will take substantial steps forward
Eurocopter and Astrium were boosted significantly by thein generating higher returns for shareholders.
acquisitions of Vector Aerospace and Vizada respectively.
Judging by the strong financial results and significant corporate
developments, 2012 will be remembered as a pivotal year in thehistory of EADS. Aside from an improved operational performance,
as shown in the higher aircraft deliveries and key financial
indicators, we also reached a landmark agreement to simplify
and normalise EADS’ governance and ownership structure.

In its key, high-priority programmes, Airbus made good progresson the A350 XWB, with the final assembly line becoming fully
operational ahead of the first flight expected in summer 2013. The
programme remains challenging, however, with no margin left inthe schedule. Function and reliability testing was completed for the
A400M military transporter, allowing first deliveries to take placein the second quarter of 2013. Elsewhere, the wing issues on the
A380 were resolved, with repairs ongoing for deployed aircraft anddesign modifications embodied into the new production standard.

Tom Enders
Chief Executive Officer

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EADS ANNUAL REVIEW 2012

moving into a new era

GROUP Executive
COMMITTEE

16

Harald WilhelmFrançois Auque

Jean Botti

EADS and Airbus Chief Financial Officer

Astrium Chief Executive Officer

EADS Chief Technical Officer

Mr Wilhelm’s mission is to ensure thefinancial performance of EADS and Airbus,
to secure the funding of the Group, tomanage risks and opportunities, provide
financial transparency and create value
for EADS shareholders.

Mr Auque is responsible for the successof Astrium, while preparing the Space
Division’s future.

Mr Botti’s mission is to steer EADSGroup R&T strategy, activities and to secure
innovative technologies as well as IT,
quality and manufacturing tools for
the Company’s future.

Günter Butschek

Fabrice Brégier

Tom Enders

Airbus Chief Operating Officer

Airbus Chief Executive Officer

EADS Chief Executive Officer

Mr Butschek is Airbus COO, holding
the overall responsibility for operations,engineering, procurement and supply
chain management, quality andinformation technology.

As Airbus Chief Executive Officer,
Mr Brégier is responsible for the overall
success of all Airbus activities, commercial
and military, driving ongoing anddevelopment programmes and strategic
initiatives.

Mr Enders is responsible for the overall
successful management of EADS Groupbusiness and operations. He chairs
the Group Executive Committee.

Photo taken at A350 XWB FAL in Toulouse, France

EADS ANNUAL REVIEW 2012

moving into a new era

GROUP Executive CommitTee

17

Marwan Lahoud

Lutz Bertling

John Leahy

EADS Chief Strategy and Marketing Officer

Eurocopter Chief Executive Officer

Airbus Chief Operating Officer – Customers

Mr Lahoud is responsible for theelaboration and execution of the Group’s
strategy including, merger and acquisition
operations, as well as the Group’s
international development and marketing.

Thierry Baril
EADS and Airbus Chief Human
Resources Officer

Mr Baril’s role is to ensure that the EADS
and Airbus workforce is competent,
engaged and efficiently managed to master
present challenges and anticipate future
talent needs.

—> Guillaume Faury

succeeded Lutz Bertlingon 30 April 2013.
The Eurocopter CEO mission
is to strengthen Eurocopter’s
leading position and deliver commercial
success and customer satisfaction on
all helicopter programmes and related
services.

Bernhard Gerwert
Cassidian Chief Executive Officer

Mr Gerwert is in charge of driving successful
business performance at Cassidian, while
preparing the Division’s future.

Mr Leahy’s responsibilities cover allcommercial activities of Airbus including
sales, marketing, contracts, business
transaction control, asset management,
leasing and business development.
Domingo Ureña-Raso
Head of Airbus Military

Mr Ureña-Raso is in charge of Airbus
Military, responsible notably for the A400M
programme and Tankers. In this function,
he reports to the CEO of Airbus.
Sean O’Keefe
EADS North America Chief Executive Officer

Mr O’Keefe has strategic, management andoperational responsibilities in the US to expand
the EADS market presence in coordination
with the EADS operating Divisions.

EADS ANNUAL REVIEW 2012

moving into a new era

INTERVIEW

with the chief
financial officer“Going forward, improved
profitability is priority number one
for the management team.”

HARALD WILHELM

In 2012, EADS delivered what appears an improved
set of figures. Could you talk us throughthe main highlights?
Our 2012 results are a good reflection of the progress I believe
we are making at EADS. Despite a difficult macro-economic
environment, our revenues are up 15%. Commercial momentum
remains healthy. Our order book now stands at the record levelof € 566 billion, which is an immense platform for future growth.
It’s also worth highlighting the broad geographical spread of
the backlog, which reflects dynamic growth in Asia-Pacific andMiddle East.

18

invest in our business. Going forward, maintaining a strong
liquidity position will continue to be a clear priority. We won’t
compromise on that.

Free cash flow outlook for 2013 is quite
moderate, though, at break-even. Why is that?
In 2013, clearly, we are expecting a further improvement inunderlying profitability, with an EBIT* before one-off target of€ 3.5 billion. That will translate into a significant improvement in
operating cash flow. However, in 2013 we will also see continued
investment in the programme ramp-up, not only at Airbus but
also Eurocopter. We have the start of the A350 industrialisation,
But most importantly of all: our results show that we are making
ramp-up of the A400M programme and a temporary reduction
progress in terms of profitability. Our EBIT* before one-off was up
in A380 deliveries as we transition to the new wing rib feet. This
68%, and our net income has risen 19% to € 1.2 billion. Thoughwill all have some impact on capital expenditure and working
we still have some way to go to reach longer-term profitability
capital. As in 2012, we expect a rather back loaded pattern, andtargets, it’s a major step. Going forward, improved profitability
will push hard to recover by the end of the year.
is priority number one for the management team. And we’ll befocusing especially on our operations. Within the major new
You mentioned longer-term profitability targets.
programmes, we’ll be devoting our utmost attention to the A350,
What level of profitability would you be aiming at
which is progressing though it remains a key risk.
over the coming years?
Our operational performance is improving, driven above all by
Can you explain what’s behind the dividend
the civil aircraft business, but also with positive contributions
proposal for this year?
from Eurocopter and Astrium, and in Cassidian core activities
The proposed dividend of € 0.60 per share is a clear sign
are also performing well. In the coming years, while the positivethat we are focused on delivering value to our shareholders.
progression should be supported by falling costs on the
The increase on the previous year’s dividend (€ 0.45) reflects
A380 programme, we are entering a critical stage in the A350
our improved earnings per share. Beyond that, it also showsdevelopment. As in any new aircraft programme we would
an increased payout ratio, which is now up to 40% fromexpect first deliveries here to have a rather dilutive effect on
35% last year.
profitability. Leaving aside the A350 risk and assuming the dollareuro rate remains at a level of around 1.30$/€, our ambition is
Why are you proposing a share buyback?
clearly to reach a return on sales of 10% by the full year 2015.
As you know, EADS is moving towards a new shareholding
structure. It’s a transformational development which will As part of the effort to reach that level, we are focusing amongst
normalise our governance and significantly increase the free- others on reducing risk in our portfolio. The new management at
float. I believe that our shareholders should benefit from these Cassidian, for example, completed a comprehensive businessdevelopments. That is why the management proposed a share review in 2012, which should pave the way for improving margins
buyback programme for up to € 3.75 billion over an 18-month within the Division’s core business. Of course, our primary focus
period. This is a sign of our confidence in the new set-up is on programme execution across the Group, with a particularand, above all, a recognition of our shareholders’ loyalty. With focus on the A350, which has made good progress in the pasta net cash position at € 12.3 billion, we have the resources year though it remains a challenging programme.
to reward shareholders while preserving the flexibility to

EADS ANNUAL REVIEW 2012

moving into a new era

INTERVIEW with the chief financial officer

19

Harald Wilhelm

How do you view the current shareprice development?
After a 38% rise in 2011, and another 22% rise in 2012, the shareprice development in the first few months of 2013 has again
been very positive. It’s a sign that investors share our optimism
and trust in our capacity to deliver. Together with the entire EADS
management team, I’m aware of the responsibility that goes withthat trust. We are fully motivated to meet the challenge.

02

ANTICIPATING
changeStrategy

EADS ANNUAL REVIEW 2012

INTERVIEWANTICIPATING changewith the Chief
Strategy andMarketing Officer
MARWAN LAHOUD

22

Marwan Lahoud“Our sound market position andfinancial strength mean that
we are in an excellent position
to take up the challenge.”

EADS ANNUAL REVIEW 2012

ANTICIPATING change

INTERVIEW with the Chief Strategy and Marketing Officer

The business environment has seen significant
change in recent years. How does EADS standwith its current strategy?
The global market environment is indeed evolving. The debt
crisis has made the budgetary situation in our domestic
countries tighter than ever. On the other hand, the civil aircraftbusiness remains very robust, with strong demand comingfrom the world’s growth regions particularly. It’s one of the main
reasons why our order backlog has reached the record level of€ 566.5 billion.
Over the past years, our strategy has been to focus on generating
growth across our business portfolio, through extending theCompany’s international presence and developing our business
offering, especially in the services field. I believe that we havemade good progress in those areas and that the company isstronger as a result.
But it’s five years now since the strategic roadmap was drawn
up, and we have to recognize that many things are changing forthe company. We’re entering a new era for EADS in 2013, with a
new shareholder structure and corporate governance and a new
Board of Directors. Now is certainly a time to revisit our strategy
and to test whether certain assumptions we made five years ago
remain valid.

establish Airbus as an industrial player in the US. The new Mobile
plant is expected to produce between 40 and 50 A320 family
aircraft per year by 2018 and should help Airbus increase its
share of the huge North American market for single aisle aircraft.
It will also help Airbus increase its natural hedge against the
euro-dollar exchange rate risk.
Besides that, Eurocopter continues to make a lot of progress,
particularly in South America and Asia. For example, a newassembly facility for EC725 helicopters was inaugurated in
Itajuba, Brazil, representing a total investment of € 160 million.
Eurocopter also signed an agreement for a completion andcustomization center for Ecureuil helicopters in Tianjin, China.
Astrium, too, has been pursuing its international development
through the creation of Astrium Americas, Astrium Brazil andAstrium Singapore. Astrium also signed a joint venture agreementwith the Russian industrial corporation RSC Energia for the joint
development of satellites and satellite equipment.

You mentioned progress in terms of internationalpresence. Can you give any recent examples?
I would say, the decision to set up an Airbus Final Assembly Linein Mobile, Alabama clearly stands out. As well as representing
a major addition to EADS’ existing production sites, it will firmly

In just a few words, how would you summarise
EADS’ current situation?
I would say that our sound market position and financial strengthmean that we are in an excellent position to take up the challenge
over the coming years.

EADS has been targeting growth in its services
businesses. How much progress have you madeover the past year?
Following the acquisition of Vector Aerospace and Vizada in2011, those companies are contributing very effectively towards
our growth in the services sector. Beyond acquisitions, ourDivisions have continued to extend their services offerings.
Isn’t defence one area where you might
Eurocopter for example opened five new full flight simulators
adjust the strategy?
Certainly, it’s an area we have to look at. Core EADS defence worldwide, a training centre in Mexico and a support centre
activities, such as Eurofighter and MBDA programmes, remain in Australia. Services now represent 42% of Eurocopter andhighly stable in terms of profitability. But we are realistic about 25% of Astrium revenues. Airbus is also working on increasing
growth prospects within our traditional home markets and its services business through the Satair logistics business andexport markets are becoming fiercely competitive. In addition, Airbus Flight Hour Services, which has made a promising start
the attempted merger with BAE Systems in 2012 showed the with some 100 aircraft already under contract.
high level of complexity in the current environment.
As part of our strategy review, we are looking at shifting the What were the highlights in terms
focus towards margin rather than growth in the defence sector. of order intake?
The new management team within Cassidian is already working At Airbus, clearly, demand has remained very robust. Singapore
Airlines’ order of 20 A350-900s and five A380s was just one
on this.
Indeed improved profitability is a clear strategic priority for highlight. In fact, the momentum has been promising for all
the Group as a whole. Within the institutional sector, Astrium Divisions: Eurocopter, Astrium and Cassidian all recorded yearis working to improve cost and profitability for the Ariane on-year increases in order intake. For Cassidian, the agreement
programme, for example. Airbus, too, needs to continue along signed by Oman for the purchase of 12 Eurofighter was anespecially important signal.
its path towards improved profitability.

23

EADS ANNUAL REVIEW 2012

Markets& perspectives

ANTICIPATING change

Emerging and developing economies werethe main drivers of global economic growth in2012. Increased activity in these countries is
supporting demand for aerospace products,
particularly in the civil aviation sector. Dueto government debt burdens, institutional
markets remain weaker in the US and Europe.

24

The A380 has become an increasingly familiar sight in Asia-Pacific

Hesitant worldwide growth
In 2012, fiscal consolidation and a still-weak financial system
continued to stifle growth in the developed world. Meanwhile,
emerging markets and developing economies proved more robust,accounting for much of the economic growth seen in 2012.

Emerging economies continue to growAccording to IMF figures, emerging markets and developing
economies, including Latin America, Central and Eastern Europe
and the Commonwealth of Independent States, as well as Asian
economies, saw significantly stronger growth, expanding by 5.3%
overall. China and India grew 7.8% and 4.9% respectively. The
Asean-5 countries, comprising Indonesia, Malaysia, Philippines,
Thailand and Vietnam, also saw robust growth at 5.4%.

In its October 2012 World Economic Outlook, the International
Monetary Fund (IMF) estimated global growth at 3.3% in 2012,
Looking to the year ahead, the IMF predicted a hesitant global
following higher growth rates in the previous two years (2010:
recovery, with worldwide growth forecast at 3.6% in 2013.
5.1%; 2011: 3.8%).
According to the IMF, the crisis in the euro area remains theclearest threat to the global outlook. The emerging markets andAdvanced economies, including G7 countries, barely expanded
developing economies, with a projected growth rate of 5.6% forat all, with growth projected at 1.3% for 2012. The Euro debt
2013, were again expected significantly to outpace advanced
crisis continued to undermine market confidence in 2012, as
economies.
southern European countries struggled to rebalance their fiscal
positions. According to IMF estimations, the Eurozone economy
contracted by -0.4% in 2012. The US economy grew 2.2%.

EADS ANNUAL REVIEW 2012

ANTICIPATING change

Markets & perspectives

The OECD, in its November 2012 outlook, predicted that
advanced economies will begin to gather momentum in 2014,
with growth at 2.3%. The OECD outlook forecasts growth inChina at 8.9% in 2014, with increasing momentum also expected
in Brazil, India, Indonesia, Russia and South Africa.
Spending constraints
The need for fiscal adjustment continues to weigh on
government budgets in the advanced economies. According to
the Stockholm International Peace Research Institute (SIPRI), in
2011, the latest year for which data is available, world military
expenditure amounted to $1,738 billion, the equivalent of about
2.5% of global GDP. In real terms, 2011 spending was virtuallyunchanged since 2010, breaking 12 years of spending increases.
The 61 countries that increased their military spending were
almost equally balanced by the 62 that reduced it.

Airbus aircraft production increased in 2012 to meet rising demand

Air travel has proved to be resilient to external shocks(in RPK* trillions)
Gulf
Crisis5.5

Asian
Crisis

9/11
AttackSARS

25

Financial
Crisis5.0
4.5

Long-term “mega-trends”
In its report “Looking to 2060” the OECD predicts that, on thebasis of 2005 purchasing power parities, China will become theworld’s largest economy in a few years’ time. India is expected tosurpass the euro area in about 20 years. By 2060 the combined
GDP of China and India will be larger than that of the entire
OECD area, based on today’s membership. As of 2012, China
and India represent only one third of the OECD combined GDP.

+61%**

4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0

1982

1987

1992

1997

2002

World annual traffic

Economic shifts as well as population growth will drive significant
long-term demographic trends with far-reaching impacts ontechnological development and the environment. Climate
protection and energy security are top of the agenda for many
governments. Climate change is now widely recognised as a
global fact, representing a considerable risk for the years ahead.

2007

2012

Source: ICAO, Airbus** Since 2000

* Revenue Passenger Kilometres

Passenger traffic currently rebounding strongly
World real GDP and passenger traffic (year-over-year, monthly evolution)

8%

While the search for viable sustainable energy sources continues,
the Arctic, with its huge potential reserves of oil and gas, could
become a source of regional tensions.
The trend towards a connected world is expected to continue.
More than 80 billion mobile devices will be connected tothe internet by 2020, according to Frost & Sullivan’s 2020
MegaTrends study. Demand for communication capacity bothfor civil and military use will lead to increasing congestion of
space. Moreover, trends in urbanisation towards more “megacities” will drive new models of public transportation.

March 2013
Passenger
traffic up

6%

4.4%

4%
2%
0%
– 2%
– 4%

2008

2009

2010

2011

2012

Real GDP
Passenger traffic ASK (Available Seat Kilometres)
Source: IHS Global Insight (March 2012 data), OAG (ASKs data), Airbus

2013

EADS ANNUAL REVIEW 2012

ANTICIPATING change

Aircraft demand holds strong nevertheless saw a large fall in profits, due to weak cargomarkets and slower economic growth in China. North American
carriers were expected to end 2012 with a collective net profit
Traffic increases, despite weaker economyof $2.4 billion (2011: $1.7 billion). The improvement compared to
In its December 2012 industry outlook, the International Air the previous year was mainly due to improved asset utilisation
Transport Association (IATA), an organisation representing resulting from industry consolidation. European airlines weresome 240 airlines and 84% of global air traffic, estimated strong expected to break even.
passenger growth at 5.3% for the full year 2012. Airlines were
expected to return a profit of $6.7 billion (2011: $8.8 billion).
Looking to the year ahead, IATA predicted that airline prospects

26

for 2013 will be largely unchanged from 2012, with the mainindustry driver, global economic growth, strengthening only
slightly on 2012. Passenger demand is expected to grow by
4.5%, while cargo demand should increase by 1.4% (2012:-0.2% contraction). With oil prices expected to moderate slightly
in 2013, IATA estimated airline profits would rise to $8.4 billion.
North American and Asia-Pacific airlines are expected to deliver
the largest profit among regions. European airlines are expected
Asia-Pacific carriers were expected to post the largest to break even for the second consecutive year, weighed down
aggregate profit amongst regions at $3.0 billion. Compared by uncertainties in the European economy, high taxes andto the previous year’s figure of $5.4 billion, the region’s airlines inefficient infrastructure.
Despite high fuel prices with oil averaging $109.5 per barrel over
the year and a slowing world economy at little over 2% growthrate, airlines were able to benefit from improved efficiency andindustry restructuring. According to IATA, economies of scale
enabled larger airlines in particular to cope better with thedifficult environment.

Inauguration of the A350 XWB Final Assembly Line in Toulouse

EADS ANNUAL REVIEW 2012

ANTICIPATING change

Markets & perspectives

Eurocopter continued its strategic growth path in global markets

Robust mid-term outlook
In the mid-term, IATA expects airline traffic to return to robust
growth. In its 2012-2016 forecast, published in December 2012,
IATA predicts that passenger numbers will increase by 5.3%
per annum between 2012 and 2016, bringing 500 million morepassengers on domestic and over 330 million on internationalroutes. The emerging economies of Asia-Pacific, Latin America
and the Middle East will see the strongest passenger growth,according to IATA. In Asia-Pacific, passenger traffic is forecast
to grow at 6.7% per annum. Traffic within the Asia-Pacific region
will represent 33% of global passengers in 2016, making this thelargest regional market for air transport.
Over the last 30 years, air traffic has doubled every 15 years,
and in the Airbus forecast is again expected to double in thenext 15 years. Whilst emerging markets are expected to show
increased demand for new passenger aircraft, the traditional
markets in Europe and North America will receive more than 40%
of all new aircraft deliveries in the next 20 years. In order to meet
growth demand, as well as replacement of aging aircraft, Airbus
calculates a need for more than 27,000 new passenger aircraft by
2031. Aircraft production is being ramped up to meet increasing
demand which remains a major challenge for the main aircraft
manufacturers and their supply chains. Production volumes will
have to rise by 45% by 2015, according to Alix Partners.
Oil exploration and security issues drive
helicopter demand
Increasing demand from offshore operators is expected to boost
commercial helicopter sales. The oil and gas sector remains animportant market for civil helicopters, especially as relatively highenergy prices spur exploration activity.
Due to the government debt crisis, the military helicopter market
remained challenging in 2012, and is expected to remain so
in the year ahead. According to Frost & Sullivan research, theglobal market for military platforms is likely to increase at a rate of
only 2.05% between 2011 and 2021. The civil market is expected
to grow at an annual rate of 4.05% over the same period, driven
by steady growth in the parapublic sector. TEAL group forecasts
production of close to 16,000 helicopters worth $195 billion

between 2012 and 2021. This includes 9,500 aircraft for civil use
and some 6,400 military machines.
Within the institutional business, security issues are increasingly
driving demand for helicopters, for example for border control,
environmental monitoring, anti-piracy operations and counterterrorism missions.

27

Emerging markets continue to drive growth
Available Seat Kilometres, year-over-year, monthly evolution (%)
16%

Emerging
Markets
traffic up

12%

9.5%

8%

WesternEuropetraffic up

4%

1.0%

0%
US
traffic up

– 4%

0.9%

– 8%
– 12%

2009

2010

2011

2012

Emerging Markets
Western Europe
US

2013
Source: OAG, Airbus

Civil Helicopter Platforms - Revenue Forecast by Region
Global, 2011-2021 - Compound Annual Growth Rate = 4.05%
8.00
8.00

In $ Bn

7.00
7.00
6.00
6.00
5.00
5.00
4.00
4.00
3.00
3.00
2.00
2.00
1.00
1.00
0.00
0.00

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
North America

Middle East

8 Europe
Asia-Pacific7
Source: Frost & Sullivan analysis.
6
5
4

Latin America
AfricaEADS ANNUAL REVIEW 2012

ANTICIPATING change

Government budgets
under THREAT

Total world defence spending (2011)

US defence spending stays flat
The United States is the world’s biggest military spender by far, andis expected to remain so even after planned cuts in expenditure anddespite a threat of across-the-board cuts if the US government fails
to reach a budget agreement. According to SIPRI data, US militaryspending in 2011 was virtually unchanged in real terms from theprevious year, accounting for 41% of the global total.

42.4%

North America

20.9%

Asia & Oceania

18.8%	Western & Central Europe
7.1%

Middle East

4.6%

Eastern Europe

4.2%	Latin America
2.0%

28

In Asia, Chinese military spending continued to increase,at 6.7% in real terms. China was the second largest militaryspender, accounting for 8.2% of the globalpage
total.
29According
to SIPRI, total military spending for the rest of Asia & Oceania
remained constant. Despite the financial crisis in 2008, many
Asian countries experienced comparatively little fiscal distressand have increased their involvement in global affairs. According
to the report “Asian Defence Spending 2000-2011” (Hofbauer,
Hermann, Raghavan), military expenditure in Asia is projected
to overtake that of the EU in 2012.

AfricaSource: SIPRI

page 28

Russia’s defence spending grew 9.3% in 2011, putting it aheadof the UK and France for the first time since the early 1990s.
Russia was the world’s third largest military spender accounting
for 4.1% of the global total. According to SIPRI, further increasesof around 50% in real terms are expected up to 2014, in linewith plans to replace 70% of Russia’s mostly Soviet-era militaryequipment with modern weapons by 2020.

Amid tighter defence budgets, EADS is developing its services activities further

EADS ANNUAL REVIEW 2012

ANTICIPATING change

Markets & perspectives

A400M

Total Global Space Launch Market (2011)
Percent Sales Breakdown by Application

29.6%

Communications

26.7%

Space Transfer

15.0%	Reconnaissance
7.5%

Earth Observation

7.1%	Exploration
7.1%

Research

6.9%

Navigation

Source: Frost, December 2012

Ariane 5

The biggest three spenders in Western and Central Europe,
the UK, France and Germany, have so far made only moderatecuts in military spending since 2008, by 0.6%, 4% and 1.6%
respectively. The UK and Germany plan further cuts, the UK by
7.5% in real terms up to 2014/15 and Germany by about 10% to2015. France plans roughly constant spending up to 2013.
Military spending in Latin America fell by 3.3% in real terms, due
to an 8.2% cut in Brazil’s expenditure. African military spendingrose 8.6%, driven by a 44% increase in the continent’s largest
spender, Algeria. In the Middle East, spending increased 4.6%
in real terms.
Faced with tight government budgets, defence companies inadvanced economies are adapting their business proposition,offering managed services, off-the-shelf products anddeveloping creative partnering approaches. The US strategy
of rebalancing towards the Asia-Pacific region is expected tocontinue, favouring investment in airborne and naval forces.
The market for security solutions continues to grow, as governments worldwide look to monitor critical infrastructure, securemajor events and enhance border surveillance and security.
According to the 2012 Security Survey of UK industry association ADS Group, the global security market was estimated to
be worth about £ 384 billion in 2011 and is expected to reach£ 535 billion by 2015.

page 29

page 28

European Space Agency budget maintained
According to the latest available data from space industry
association Eurospace, commercial customers, including launchand satellite customers, represented 37% of space revenues in
Europe in 2010, or roughly € 2.2 billion by value.
Institutional customers represented 63% of space industry
revenues, or € 3.8 billion in value. In 2012 the main contributors
to the European Space Agency (ESA) were Germany, France
and Italy, which collectively contributed more than 45% of the
ESA budget.
In 2012, the ESA Ministerial Council agreed a commitment of€ 10 billion for the 2013-2017 period. The amount is similar
to the budget decided during the previous ESA Ministerial
Council in 2008.
The newly agreed budget includes funding for the further
development of the Ariane 5 ME and for definition of the next
generation Ariane 6 launcher. While launcher programmes wereboosted, investments in the International Space Station andearth observation programmes were reduced.

29

03

ACHIEVING
our goals
2012 Performance

EADS ANNUAL REVIEW 2012

Achieving our goals

Airbus delivered a record number of aircraft, while
also beating its target for new orders. Despite
programme challenges, the Division significantly
increased profitability, thanks to higher deliveries,
stronger pricing and operational improvement.

In 2012, Airbus increased aircraft deliveries for the 11th successive
year, while management focused on addressing operationaland ramp-up challenges and beginning industrial productionof the A350 XWB.
The Division’s consolidated revenues grew by 17% to € 38.6
billion (€ 33.1 billion in 2011), benefiting from higher delivery
volume and stronger pricing.
Reported EBIT* more than doubled to € 1,230 million (€ 584
million in 2011), despite one-off charges of approximately € 522
million, mainly due to a shift in the A350 XWB schedule anddevelopment of a permanent fix for the A380 wing rib feet issue.

32

Airbus research and development expense decreased slightly
to € 2.4 billion (2011: € 2.5 billion); € 366 million of A350 XWB
development was capitalised under IAS 38.
Rising deliveries
Airbus reached a historic high of 588 deliveries at the end of2012 (534 in 2011). Despite supply chain pressures, Airbus
successfully reached its production target of 42 single-aisle
aircraft per month. Deliveries of military transport aircraft stoodat 29 (29 in 2011).
After an exceptional order intake in 2011, new orders again
exceeded deliveries, beating the stated target for the year.
Airbus Commercial won a total of 914 gross orders, 833 netof cancellations (2011: 1,608 gross orders; 1,419 net). Airbus
Military won 32 new orders (five in 2011). At the end of 2012, theAirbus Division’s order book stood at € 523.4 billion (year end
2011: € 495.5 billion), valued at list prices.
Strategic initiatives
Airbus adapted its organisation to foster an entrepreneurial
spirit and empower more teams, while maintaining harmonised
processes across all sites. For series programmes, additional
responsibilities and means were delegated to plants for delivery
at increased rates.
As part of the strategy of expanding international presence,
Airbus announced plans to open an assembly line for single-aisle

aircraft in Mobile, Alabama, USA with deliveries to begin in 2016.
By 2018, the facility is expected to produce between 40 and
50 aircraft a year.
Airbus continued to strengthen its services portfolio. Airbus
Flight Hour Services (FHS), which offers airlines faster and easieraccess to spare parts and services, continued a promising startwith around 100 aircraft under contract as of the end of 2012.
The Satair material management business, acquired in 2011,
made positive top and bottom-line contributions.

Airbus Division Outlook
In 2013, Airbus is targeting a further increase in deliveries tobetween 600 and 610 commercial aircraft. Monthly production
rates are set to continue at 42 for the A320, while progressing to10 per month for the A330. To implement the wing rib feet solution,
A380 deliveries will be lowered in 2013, to around 25 aircraft.
Within the challenging A350 XWB programme, management
will be dedicating its utmost attention to achieving a successful
first flight around mid-2013 and preparing the way for a smooth
production ramp-up, with a first delivery targeted for the second
half of 2014.
Airbus expects to win around 700 gross commercial aircraft
orders.
Airbus Military targets a successful first delivery of the A400M
to the French Air Force in the second quarter of 2013. A total offour A400M deliveries – three to France and one to Turkey – areplanned for 2013.
In total Airbus Military expects to deliver at least 28 aircraft andto win around 30 new orders.
Airbus’ underlying profitability (EBIT* before one-off) is expected
to improve significantly, thanks to higher delivery volume, better
pricing and improvement of A380 production performance. Goingforward, the reported EBIT* will be dependent on the Group’s ability
to execute on the A400M, A380 and A350 XWB programmes, inline with the commitments made to its customers.

EADS ANNUAL
ANNUAL REVIEWREVIEW2012
2012

Achieving our goals

airbusResults (€m)

2012

2011

ChangeRevenues

38,592

33,103+17%

Self-financed R&D

2,442

2,482

-2%

EBIT*

1,230

584

+111%

Order intake

88,142

117,874-25%

Order book523,410495,513+6%

REVENUES BY MARKET(in % of external revenues)

95%
Civil
5%
Defence

Scan here and place
your smartphoneon the dedicatedzone or visit www.
reports.eads.com

33

EADS ANNUAL REVIEW 2012

Achieving our goals

AIRBUS

commercial

Airbus Commercial revenues rose to € 36.9 billion (€ 31.2 billion
in 2011), while EBIT* more than doubled to € 1,125 million (2011:€ 543 million), despite one-off charges totalling € 522 million. The
growth in both revenues and profitability reflects higher deliveries
and pricing improvements compared to the previous year. It also
benefited from hedge rate improvement.

34

Malaysia Airlines and Thai Airways International each took
delivery of their first A380s during the year. At the end of 2012,
the A380 order backlog amounted to 165 aircraft; 97 aircraft
were already in service with nine airlines.

A350 XWB makes industrial progress
The A350 XWB (Extra-Wide Body) programme advanced
Following an outstanding 2011, Airbus Commercial also gained towards industrial production. Airbus completed assembly of thea respectable share of 2012 orders, winning 41% of total gross first static test aircraft and the first flying aircraft and successfully
aircraft orders and 41.5% of net orders by value in 2012 (in achieved full power-on. The aircraft’s entry-into-service date was
2011: 56% of total gross orders, 54% of net orders by value). moved from the first to the second half of 2014. A charge of
Airbus Commercial’s order book amounted to € 503.2 billion € 124 million was booked in 2012 to account for the delay.
(€ 475.5 billion, year-end 2011), comprising 4,682 aircraft(4,437 aircraft in 2011).
Offered in three passenger versions, the A350 XWB delivers up
to 25% better fuel efficiency than existing aircraft in its category.
A320 Family
Following entry into service of the 314-seater A350-900, due
Demand for single-aisle aircraft remained robust, in particular for in 2014, first delivery of the A350-800, with 270 seats, is planned
the fuel-saving A320neo, due for first delivery in 2015. Including for 2016. The A350-1000, with 350 seats, is planned for 2017.
Current Engine Option (ceo) aircraft, Airbus Commercial won Major new contracts included Singapore Airlines’ order ofa total of 783 gross single-aisle orders, 739 net (2011: 1,470 20 A350-900s. With 40 gross orders in 2012 (27 net), the total
gross, 1,348 net).
A350 XWB order backlog stood at 582 at the end of 2012.
In 2012, AirAsia became the first airline to receive an A320 fittedwith new, fuel saving Sharklets.
Deliveries of single-aisle aircraft amounted to 455 (2011: 421). The
A320 family order backlog amounted to 3,629 at the end of 2012.
A330 upgrade launched
The A330 continued to attract new customers, with 80 grossorders in 2012 (58 net). An upgraded variant with increased
take-off weight capability was launched, with entry into service
planned for 2015. Widebody deliveries amounted to 103 (including two A340-500). The order backlog stood at 306 aircraft at
the end of 2012.
A380 on track
Airbus continued to focus on improved performance within the
A380 programme. A permanent solution for the wing rib feet issue
was defined and developed, leading to a charge of € 251 million
in 2012. Despite this issue, the programme remains on track toreach the objective of a positive EBIT* contribution from 2015.
As targeted, Airbus delivered 30 A380 (26 in 2011). The A380
won nine orders, including the first order from a Russian airline,
Transaero. Singapore Airlines ordered five more A380s.

(€m)

2012

2011

Change+19%

Revenues

36,94331,159

Self-financed R&D

2,431

2,467

-1%

EBIT*

1,125

543

+107%

Order intake

86,478117,301-26%

Order book503,218

475,477

+6%

2012

2011

ChangeBy number of aircraft
Deliveries

588

534

+10%

Order book

4,682

4,437

+6%

EADS ANNUAL
ANNUAL REVIEWREVIEW2012
2012

Achieving our goals

AIRBUS

35

EADS ANNUAL REVIEW 2012

Achieving our goals

AIRBUS
military

Despite stable deliveries, Airbus Military revenues decreasedto € 2.1 billion (€ 2.5 billion in 2011), due to lower A400M andtanker revenues. In total, Airbus Military delivered 29 aircraft(2011: 29 aircraft). The EBIT* performance at € 93 million(€ 49 million in 2011) reflects a favourable delivery mix with
margin improvements from technically maturing programmes.
Airbus Military saw increased demand for its light and mediumtransport aircraft, in particular from export markets. Airbus
Military’s order backlog stood at 220 aircraft at the end of theyear (217, year-end 2011), worth € 21.1 billion (€ 21.3 billion,
year-end 2011).

36

demonstrations in India and in early 2013, Airbus Military was
selected as preferred bidder for the supply of tanker aircraft
to the Indian Air Force (IAF). The contract is expected to coverproduction of six MRTT aircraft.
Airbus estimates a potential total export market, excluding theUS, of more than 100 tanker aircraft. The backlog stood at
17 aircraft at the end of 2012.

Strong orders in the light and medium segment
Airbus Military continued to lead the market in the light andmedium category, with the C295 and CN235 military transport
A400M on course for first delivery
aircraft winning 32 new orders (five in 2011). Major orders included
The A400M passed key milestones on the road to first delivery, nine C295 aircraft for Indonesia, eight C295s for Oman (three ofand had accumulated 4,500 flight hours by the year-end. which in maritime patrol version) and five C295s for Poland. The
The aircraft performed all flight tests required for aircraft type US Coast Guard awarded a contract for two additional CN235
certification, including high-altitude flight tests at La Paz, Bolivia, maritime patrol aircraft. Total deliveries of light and medium
rough field tests in Germany and the 300 hours of functionality aircraft amounted to 20 aircraft in 2012 (23 in 2011), with an
and reliability testing.
additional four P-3 conversions. The backlog stood at 29 aircraft.
In order to introduce engine modification following an issue
detected during flight testing, the initial plan had to be adapted,
with Civil Type Certificate (TC) and Initial Operating Clearance(IOC) moving to the first quarter of 2013, and first delivery to thesecond quarter of 2013.

In the light and medium segment, a long-term strategiccooperation was initiated in Indonesia. Airbus Military and PT
Dirgantara Indonesia signed an agreement to jointly launch an
upgraded version of the Airbus Military C212-400. The aircraft,
renamed NC212, will be offered to both civil and militarycustomers and has an estimated potential market of 400-450
The A400M has an order backlog of 174 aircraft. Airbus estimates aircraft in the next ten years.
there is a potential for approximately 400 export orders over the
next 30 years.
Tanker maiden voyage
In 2012, Airbus Military delivered a total of five A330 Multi-Role
Tanker Transport (MRTT) aircraft (six in 2011). Known as the“Voyager” in the UK, the A330 MRTT performed its maiden flightin service with the UK Royal Air Force in April 2012.
A fifth and final A330 MRTT was delivered to the Royal Australian
Air Force (RAAF) in November 2012. The initial batch of four aircraft,designated the KC-30A by the RAAF, was handed over in 2011.
Demand for new tanker aircraft from both domestic and export
customers remained promising. In October 2012, the French
Ministry of Defence announced its intention to order 14 MRTTs
in 2013. The MRTT completed extensive flight trials and

(€m)

2012

2011

ChangeRevenues

2,131

2,504

-15%

Self-financed R&D

11

14

-21%

EBIT*

93

49

+90%

Order intake

1,901

935

+103%

Order book

21,13921,315-1%

By number of aircraft

2012

2011

ChangeDeliveries

29

29

0%

Order book

220

217

+1%

EADS ANNUAL
ANNUAL REVIEWREVIEW2012
2012

Achieving our goals

AIRBUS37

EADS ANNUAL REVIEW 2012

Achieving our goals

Eurocopter recorded an all-timehigh in revenues, supported by the
on-going ramp-up in Super Puma
family deliveries, and higher services
activities. EBIT* performance alsosignificantly increased.

In 2012, Eurocopter made progress along its path towards
profitable growth through a continued focus on innovation,
global presence and services.

38

Eurocopter Japan opened a new training and maintenancefacility at Kobe Airport. In Brazil, Eurocopter’s Helibras
subsidiary inaugurated a major new assembly facility for EC725/
EC225 helicopters. An agreement was signed in China for the
Revenues increased by 16% to € 6.3 billion (€ 5.4 billion in 2011), development of a customization and completion centre forprimarily as a result of higher repair and overhaul activities and Ecureuil family helicopters. Eurocopter’s Vector subsidiaryfull consolidation of the Vector Aerospace services business. will grow through additional engine maintenance business inHigher NH90 and Super Puma revenues also contributed to the Australia and South East Asia.
increase. In total, 475 helicopters were delivered (503 in 2011),
representing 49% of Eurocopter’s 2012 revenues. The services Technological advanceshare increased to 42%. Other activities, including the production Following the successful market introduction of Eurocopter’sof doors for Airbus aircraft, made up the remaining 9%.
EC130 T2 and EC145 T2 helicopter upgrades, the first seriesproduction EC175 completed its maiden flight and confirmed the
The Division’s EBIT* increased by 20% to € 311 million (2011: aircraft’s excellent performance. The development team of the€ 259 million), despite a € 100 million charge to reflect the latest X3 hybrid demonstrator won the American Helicopter Society’s
status of on-going renegotiations for certain governmental annual Howard Hughes Award for helicopter technology
programmes. Research and development expenses were higher, improvement.
as expected, in line with Eurocopter’s innovation roadmap.
Operational improvement
Notable 2012 military deliveries included the German Eurocopter launched further measures to enhance company
government’s first batch of four Tiger helicopters optimised performance. Through “Lean” initiatives started late in 2011,
for conditions in Afghanistan, which were deployed at the end Eurocopter aims to reduce lead times and costs, promoteof 2012. The French and Dutch navies took delivery of their a culture of continuous improvement and develop standard
first naval NH90s in the Final Operational Configuration. Italy processes and tools.
deployed the NH90 to Afghanistan in 2012.
Investigations into recent helicopter incidents continue for the
Ecureuil, the root cause was identified and a programme wasestablished to implement a retrofit approved by EASA.
In value terms, Eurocopter’s order intake stood at € 5.4 billion(2011: € 4.7 billion). The services business continued to grow,accounting for some 47% of the order intake. Eurocopter’s
net helicopter orders stood at 469 (457 in 2011). Orders werebooked for 249 EC130 family and 144 EC135/EC145 family
helicopters. Super Puma family orders totalled 37. The orderbook amounted to € 12.9 billion (year-end 2011: € 13.8 billion),comprising 1,070 helicopters (year-end 2011: 1,076 helicopters).
Increasing international presence
Eurocopter continued its strategic growth path in global markets.
72% of revenues in 2012 were from export markets outside thedomestic markets of France, Germany and Spain.

OutlookIn 2013, Eurocopter expects to deliver profitable growth, supported
by increased deliveries and services activities. Goals include
sustaining the delivery pace for Super Puma and Ecureuil families,
as well as NH90 and Tiger helicopters, while also preparing theEC175’s ramp-up.
Discussions will continue with relevant parties on certain
government contractual commitments. With regard to theEC 225 limitations, following some incidents, Eurocopter has
identified root causes and defined solutions. The fleet is expected
to return to service after regulators’ approval later in the year.
From now until 2015, Eurocopter expects to benefit from organicand inorganic growth, with profitability increases driven by
operational improvement, improved programme management
and, from 2014 onwards, favourable mix effects.

EADS ANNUAL
ANNUAL REVIEWREVIEW2012
2012

Achieving our goals

eurocopter
Results (€m)
Revenues
Self-financed R&D
EBIT*

2012

2011

6,264

5,415

+16%

297

235

+26%

Change

311

259

+20%

Order intake

5,392

4,679

+15%

Order book

12,942

13,814-6%

REVENUES BY MARKET(in % of external revenues)

54%
Civil
46%
Defence

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39

EADS ANNUAL REVIEW 2012

Achieving our goals

Astrium saw an increase in both revenues
and profitability, supported by strong
programme execution in all three business
units and efficiency gains resulting fromthe Agile transformation programme.

In 2012, Astrium built on its record of strong programme execution,with Ariane 5 delivering its 53rd consecutive launch success, aworld record in terms of reliability for a commercial launcher.
Integration of Vizada was completed, paving the way for growth inAstrium’s service business and international footprint.
Revenues rose 17% to € 5.8 billion (€ 5.0 billion in 2011) driven
mainly by growth in services including the Vizada integration andoperational performance in Satellites and Space Transportation.

40

business line for commercial satellite communication services
and enhances Astrium’s global presence in the government
business. In 2012, the US Department of Defense pre-selected
eight companies, amongst them Astrium, to sell satellite communications services to several US Government agencies worldwide. Astrium Americas was created in 2012 to bring Astrium’s
global space capabilities to US and Canadian customers.

European space budget confirmed
Despite budget constraints, European governments demonstrated a strong commitment to the space industry at the
ESA Ministerial Council held in November 2012, agreeing
investments of € 10 billion for the period 2013 – 2017. In particular, the Council’s decisions secure the continued development of the Ariane 5 ME, for which Astrium is prime contractor,
as well as the definition study of the next generation Ariane 6
launcher. Ministers also gave full support for the Multi Purpose
Astrium’s order intake reached € 3.8 billion (€ 3.5 billion in 2011). Crew Vehicle (MPCV) programme, the service module of the
At the end of the year, the order book stood at € 12.7 billion NASA new human space exploration vehicle Orion. It paves the(€ 14.7 billion in 2011).
way for Europe and Astrium to explore further cooperation with
the US space agency and US industries.
Notable achievements
The Ariane 5 performed seven launches in 2012 (five in 2011).
Nine Astrium-built satellites were successfully delivered (13 in2011), comprising four telecommunications and five Earthobservation, navigation and sciences satellites. The second
pair of Astrium-built Galileo In Orbit Validation satellites weresuccessfully deployed in orbit, completing the initial constellationof four satellites. Furthermore, the third Automated Transfer
Outlook
Vehicle, named Edoardo Amaldi, successfully completed its
Based on existing orders, the number of Ariane 5 launches andmission with the International Space Station.
satellite deliveries in 2013 should be broadly in line with 2012.
Major European orders included a contract from ESA worth On defence markets, Astrium will maintain its strong position in€ 300 million for the first phase of the Solar Orbiter mission Europe, as a key partner for governmental and NATO programmes.
to study the Sun and its effects on the solar system. Astrium Astrium will target profitable export growth in 2013 and the medium
scored additional successes on export markets with the award term, above all in its civil and defence services and equipmentof a contract for two telecommunications satellites from Russian activities.
Measures introduced with the Agile transformation plan, in particular
operator RSCC.
lean manufacturing methods and standardised processes are
expected to support underlying performance in 2013 and beyond.
Strategic advances
Astrium made further progress in its strategic effort to devel- In an increasingly competitive market environment, Astrium will
op export markets and drive growth in its services business. continue to focus investment on innovation in all its aspects andIntegration of Vizada into Astrium Services creates a new in extending its global presence.
Astrium’s EBIT* increased by 17% to € 312 million (€ 267 million in2011). Research and development activity related to technology
innovation and product investment was higher. Increased volume,
as well as improved efficiency and productivity in all business
units resulting from the Agile transformation programme, drove
the EBIT* rise. The Vizada business also made a positive
contribution.

astrium

Achieving our goals

EADS ANNUAL REVIEW 2012

Results (€m)
Revenues
Self-financed R&D
EBIT*

2012

2011

5,817

4,964

+17%

128

109

+17%

ASTRIUM

Change

312

267

+17%

Order intake

3,761

3,514

+7%

Order book

12,734

14,666-13%

REVENUES BY MARKET(in % of external revenues)

66%
Civil
34%
Defence

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EADS ANNUAL REVIEW 2012

Achieving our goals

Under a newly appointed management
team, Cassidian focused on enhancing
the Division’s competitiveness throughleaner structures, cost reduction andexploration of new growth markets.

42

In 2012, Cassidian demonstrated its resilience while adapting to a Endurance UAS Euro Hawk, a co-development for the German
challenging defence market and preparing the ground for a return Armed Forces, with Northrop Grumman providing the platform
to benchmark profitability in the medium term.
and Cassidian responsible for developing and integrating
the sensor system, progressed towards its first sensor flight,
Revenues were broadly in line with the previous year at € 5.7 billion completed in January 2013.
(2011: € 5.8 billion). Eurofighter and MBDA businesses continued
to be key revenue drivers, representing roughly 60% of Cassidian’s Cassidian strengthened its portfolio and market position in theoverall turnover.
field of sensors through the acquisition of a 75.1% stake in Carl
Zeiss Optronics. The acquired business, under the new name
The Division’s EBIT* declined to € 142 million (€ 331 million in Cassidian Optronics, is expected to open up new opportunities
2011). A total of € 198 million of charges were booked to reflect for civil and military applications, in particular in the field of border
restructuring costs (€ 98 million) and portfolio de-risking (€ 100 security.
million). Mature Eurofighter and MBDA programmes continued
to provide robust underlying margins. Self-funded research and A critical milestone on the Romanian Border Security Project wasdevelopment expenses were lower.
reached with the delivery of the Command & Control Centre, an
18,000 m² building which will host the system data centre and the
Despite tight government budgets, Cassidian’s order intake national operational dispatch centre.
grew to € 5.0 billion (€ 4.2 billion in 2011). Major Eurofighterorders included a sustainment contract of around € 840 million, Cassidian won several contracts to supply Professional Mobile
covering fleet support over the next five years. MBDA received a Radio (PMR) technology, including Chinese contracts for thesubstantial order from India, worth approximately € 400 million at Beijing metro and a tram network in Shenyang.
EADS’ 37.5% share. Within the Allied Ground Surveillance (AGS)
programme, Cassidian won a contract worth around € 300 million
from NATO prime contractor Northrop Grumman for the supplyof mobile ground segments for a surveillance system using highaltitude Unmanned Aerial Systems. At year-end 2012, the orderbook stood at € 15.6 billion (€ 15.5 billion in 2011), equivalent toapproximately three years’ activity.
Transforming the business
Cassidian intensified its efforts to transform the business andadapt to the evolving market situation. Under a new leadershipteam, the Division launched an additional programme to boost
competitiveness and slim down its structures.

OutlookIn 2013, revenues at Cassidian are expected to be broadly stablecompared to 2012, driven mainly by core Eurofighter and MBDA
programmes.
In the medium term, Cassidian aims to achieve a significant
Product and systems development
improvement in profitability through cost reductions, leaner
Cassidian reinforced its activities in the field of Unmanned processes and improved programme execution.
Aerial Systems (UAS), concluding in 2012 the acquisition of While Eurofighter deliveries are secured until 2017, Cassidian will
51% of Rheinmetall Airborne Systems. The High-Altitude Long continue to explore export opportunities worldwide.

EADS ANNUAL
ANNUAL REVIEWREVIEW2012
2012

Achieving our goals

CASSiDIAN
Results (€m)
Revenues
Self-financed R&D
EBIT*

2012

2011

5,740

5,803

-1%

234

275

-15%

Change

142

331

-57%

Order intake

5,040

4,168

+21%

Order book

15,611

15,469+1%

REVENUES BY MARKET(in % of external revenues)

13%
Civil
87%
Defence

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04

preparingfor the future
Key Drivers

EADS ANNUAL REVIEW 2012Engagedpeoplepreparing for the future

EADS is focused on creating value throughits people, seeking to attract the best
candidates from all backgrounds and building
a stimulating culture that helps employees
to realise their full potential.

EADS continued its drive to enhance engagement amongst its
highly-skilled workforce, while seeking to attract talented new
recruits from all backgrounds.
In 2012, 11,080 employees entered employment with EADS
worldwide (8,238 in 2011), while 4,042 employees left the Group
(3,666 in 2011). At year-end the EADS workforce had increased
to 140,405 (year-end 2011: 133,115). The increase in active
workforce was mainly driven by the ramp-up in EADS, businessactivities, which is expected to continue. EADS plans to recruit
another 5,000 people in 2013.

46

In 2012, 21.4% of new recruits to the company were women
and women made up 17.3% of the active workforce. By 2020,
EADS aims to increase the share of women recruited to 25% andthe share of women within the senior manager and executive
community to 20%. In 2012, 250 female employees attended adevelopment programme targeted specifically at talented womenin the early to early-mid stages of their career (124 in 2011).

In terms of nationalities, employees from France with 38.5%(39.4% in 2011), Germany with 32.9% (33.9% in 2011), UK with
9.3% (9.9% in 2011) and Spain with 8.2% (8.6% in 2011) make up
the bulk of the EADS workforce. US nationals account for 1.7%
Given the growth dynamic and mounting competition for highly of employees (1.8% in 2011). The remaining 9.4% (6.5% in 2011)
qualified staff, capacity to attract talent is a key asset for the are nationals of 130 other countries.
company. In 2012, several independent surveys recognised
EADS and its Divisions as employers of choice. According to “My life”
research conducted by international HR services company The Group continued its ‘my life at EADS’ initiative, addressing
Randstad, amongst experienced professionals, EADS and its employee needs in particular with regard to ‘safety’, ‘health,Divisions were ranked in the top three companies in France, wellbeing and stress prevention’, ‘adaptive workplace’, diversity
Germany and Spain. In 2012, French engineering students and ‘childcare’. On childcare for example, existing arrangements
ranked EADS Europe’s number one employer according to both have been reinforced with new facilities set up at several sites.
Feasibility studies are underway for more childcare facilities at
the Trendence and Universum graduate surveys.
EADS’ sites, as well as for arrangements with external childcare
providers close to company workplaces.
Mobility and training
As part of its drive to foster a stimulating and rewarding working
environment, EADS actively supports employee training ambi- The EADS group-wide Engagement Survey, conducted for thetions and career moves within the Group. In 2012 more than third time in 2012, recorded a meaningful increase in employee
7,500 employees took up the opportunity to move to a new engagement and satisfaction. The survey is to continue beyond
EADS department, site or country. In 2012, EADS provided em- the originally planned three waves.
ployees with a total of some 3.2 million hours of training.
On an organisational level, 2012 saw progress towards simplification of company processes, with the integration of EADS
Growing diversity
EADS is committed to diversity, which has been shown to and Airbus HR and Finance functions under a single manageimprove collective performance in many organisations. In ment team. The changes aim to reduce duplications, shorten
2011, the EADS Diversity Board was launched to promote lines of command and contribute to improved shared services
diversity within the workforce. EADS’ diversity strategy focuses for the Group.
amongst others on gender, intergeneration, social and cultural
backgrounds and disability.

EADS ANNUAL REVIEW 2012

preparing for the future

Engaged people

47

EADS ANNUAL REVIEW 2012

preparing for the future

Innovation

EADS remained fully focused on researchand development for future programmes,
while maintaining momentum in the area of
early stage research and technology.

EADS remains fully committed to innovation as a means ofenhancing the Group’s competitive position. In 2012, EADS’
self-financed research and development (R&D) expenses
remained broadly stable at € 3,142 million (2011: € 3,152 million).
In addition, an amount of € 366 million of development costs for
the A350 XWB programme was capitalised.

48

As in the previous year, the A350 XWB programme wasamongst the main drivers of Group R&D activity. R&D investment increased at Eurocopter and Astrium, following strong
innovation initiatives within the Divisions. As well as recently
unveiling its X3 hybrid helicopter demonstrator, Eurocopter in2012 introduced the new EC130 T2 and EC145 T2 helicopter
upgrades and achieved a successful maiden flight of its firstseries production EC175.
Astrium is pursuing a range of development programmes for
the European Space Agency, including an enhancement of the
Ariane 5, known as the Ariane 5 Midlife Evolution (ME), which
will boost capacity by 20% compared to the current launcher.
In the field of radar technology, Cassidian has developed a
new generation of transmit & receive modules improving theperformance of the new Active Electronically Scanned Array(AESA) radars.
Overall EADS engineers filed a total of 972 new patents in2012 (1,018 in 2011). Through its technology licensing initiative,
EADS markets intellectual property, patents and know-how infields such as composites, metallics, green technologies, safety
and security technologies and communications infrastructure.
For example in 2012, licensing rights were sold for the DeltaN
friction-stir welding technology that provides high-quality welds
with metallic alloys in a range of production applications.

In the area of advanced concepts, Airbus unveiled its 2050
vision for “smarter skies”, based on five concepts which could
be implemented across all the stages of an aircraft’s operation to
reduce journey times, fuel consumption, noise and emissions. As
well as sustainable new energy sources, the 2050 vision explores
the benefits of assisted, steep-climb take-offs, formation flightalong efficient “express skyways”, low-noise, free-glide landings
and low-emission ground operations.
EADS’ corporate research and technology is managed by
EADS Innovation Works, which as of 2012, employs over 1,000
scientists and researchers, including doctorates and interns,
at facilities in France, Germany, UK, Spain, USA, Canada,
Singapore, India and China. EADS Innovation Works develops
the Group’s technical potential from technology readiness level
one to three.
Technology award
Amongst major achievements in 2012, EADS Innovation Works,
together with various partners including R&T teams from Airbus
and Ecole des Mines won the JEC Innovation Award in the
aeronautic category for work in the area of composite materials.
JEC is the largest composite industry organisation in the world.
The award was granted in recognition for the LUCIE project(Laser Ultrasonics Composite Inspection Equipment) which
promises major cost and time savings in the detection of subsurface defects in composite structures.

In 2012, EADS signalled its long-term commitment to advanced
technological research in Europe, by signing a Memorandum ofUnderstanding with several partners to launch a high-technology
centre near Munich, Germany. The new centre, named BICAS(Bavarian International Campus Aerospace and Security), will
focus on research in the areas of ‘green aerospace’, public
In addition to activities relating to new products and manufacturing security, integrated systems and autonomous aerial systems.
processes, EADS continues to devote considerable resources to Eurocopter unveiled a project for the construction of a newearly-stage research and technology.
development centre in Marignane, France.

EADS ANNUAL
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preparing for the future

Innovation

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EADS ANNUAL REVIEW 2012

preparing for the future

ENVIRONMENTAL
PROTECTION

EADS’s prominence in aerospace makes it a central player inthe sustainable mobility issue and more broadly, in the evolution
towards a “green economy”. Environmental protection is part of
top-level requirements for the design of any new product.

50

New-generation aircraft
Replacement of existing aircraft fleets with new-generation,
fuel-efficient aircraft is expected to have a major impact on ecoefficiency in the medium-term. The A380, consumes less than
three litres of fuel per passenger over 100 kilometres, offering
a 20% improvement in per-seat fuel consumption against theprevious generation of large passenger aircraft. In addition, theA380 generates only half the noise on departure of previous
generation large aircraft, and three to four times less noise on
landing – while carrying 40% more passengers.

In 2012, the Group continued toinvest significantly in environmental
protection, including sustainableenergy sources and climate
monitoring through satellites.

Sustainable energy
In 2011, Airbus together with the European Commission,and industry partners, launched an initiative to speed up
the commercialisation of aviation biofuels in Europe, withthe objective to reach two million tonnes of production andconsumption by 2020.
As part of the initiative, farmers, refiners and airlines around theworld are being brought together to form regional alternative fuel“value chains”. So far, six value chains are already established:in Australia (Virgin Australia), in Brazil (TAM), in the Middle East
(Qatar), in Romania (Tarom), in Spain (Iberia) and in China (China
Eastern Airlines). Airbus plans to have one value chain in eachcontinent.

Satellite monitoring
As a leading satellite system specialist, Astrium has extensive
expertise and operational mission experience in the field ofenvironmental and climate satellites. Astrium is the prime
contractor for four of the six ESA Earth Explorer missions –Cryosat-2, Swarm, Aeolus and EarthCARE. In 2012, ESA
Improved Air Traffic Management (ATM) also promises significant awarded Astrium a contract to define the CarbonSat satellite.
improvements in eco-efficiency. EADS through its Divisions is CarbonSat will measure the global concentration and distribution
playing an important role in ATM programmes such as “Single of the two most important greenhouse gases – carbon dioxide
European Sky ATM Research” (SESAR) in Europe, and NextGen and methane – with unprecedented accuracy, providing climate
scientists with essential data for climate analysis and forin the US.
refining climate simulation computer models.
According to Airbus Global Market Forecast 2012, thanks to
improved operations and more fuel-efficient aircraft, demand for Cleaner production
jet fuel rose only 3% between 2000 and 2011, while air traffic EADS is working to reduce the environmental impact of its
grew by 53% over the same period. According to industry industrial operations. Airbus has set ambitious objectives for
estimates, aviation contributes 2% of all man-made CO2 (carbon its manufacturing activities such as a 50% reduction in CO2emissions, a 50% reduction in volatile organic compounds
dioxide) emissions.
(VOC) and an 80% reduction in water discharge between 2006
and 2020. The most toxic chemicals are also gradually being
Ambitious targets
Airbus is committed to Flightpath 2050 targets to allow a 75% eliminated as part of the REACH compliance programme. This
reduction of CO2 emissions per passenger per kilometre, a 90% includes looking at the development and implementation of
reduction of nitrogen oxide (NOX) emissions and a 65% noise toxic free alternatives. Efforts are being focused on the use of
reduction by 2050.
renewable sources of energy for buildings. In Toulouse, France,
the A350 XWB final assembly facility has been fitted out with
Five of the seven research and technology groups within the 22,000 square-metres of photovoltaic cells.
Group’s corporate research network address topics related toeco-efficiency. 90% of Airbus’ annual research and development
investment is for environmental benefits.
The A350 XWB, due to enter into service in 2014, offers a 25%
improvement in fuel efficiency against the previous generationof long-range aircraft. The new A320neo family will allow 15% offuel burn savings compared to existing single-aisle aircraft.

EADS ANNUAL
ANNUAL REVIEWREVIEW2012
2012

A321neopreparing for the future

ENVIRONMENTAL PROTECTION

Cryosat51

Astrium imaging services:
satellite view of Bijagos Islands, Guinea-Bissau

EADS ANNUAL REVIEW 2012

SupplyChain

preparing for the future

EADS is keeping a watchful eye on its supply chain,as production ramps up across the Group, inparticular in the commercial aircraft and helicopter
business. The Group continued efforts to reinforce
the supply chain especially outside Europe.

With major production increases in 2011 and 2012, in particular supply chain. In 2011, the volume of spending invoiced from thein civil aircraft and helicopter segments, supply chain capacity US amounted to over US$12 billion and represented some 26%
and quality is being closely monitored by EADS and its Divisions. of EADS sourcing turnover.
The supply chain accounts for a major share of the value of
EADS products. For 2012 the ratio of external sourcing turnover
to EADS revenues is expected to be in line with the previous
year at approximately 70%. In 2011, the latest year for which fully
consolidated data is available, EADS external sourcing turnoveramounted to € 35.2 billion, a 12% increase on the year before.
The overall volume of goods and services newly ordered fromsuppliers in 2011 amounted to € 39.7 billion, an increase of 8%on the previous year.

52

Aircraft propulsion systems accounted for 29% of external
spending, with systems & equipment and structure & airframeeach accounting for 14% respectively.

Improving management and quality
EADS held regular discussions with major suppliers in 2012,
taking a proactive approach in order to anticipate and mitigate
potential supply chain issues, particularly in relation to ongoingproduction ramp-ups and the challenging series production of
the A350 XWB. The approach not only helps to identify areas forintensified strategic collaboration, but also gives early warningof financial or operational issues. When needed, EADS actively
supports suppliers with operational experts helping to diagnose
and fix problems.

At the Division level, procurement organisations have been given
greater end-to-end accountability to manage the supply chain.
Airbus brought together procurement specialists previously
Increasing the share of procurement in US dollars remains a based in operational functions with strategic buyers.
strategic goal for EADS, as a means of hedging exchange raterisk. High US dollar revenues, in particular through the sale of civil Supplier synergies
aircraft, make the Group particularly exposed to fluctuations in Group-wide procurement boards continued to identify synergies
the euro-dollar exchange rate. In terms of turnover, 47% of 2011 between EADS’ four Divisions, exchanging best practices,
external sourcing was booked in US dollars, with 46% in euros. discussing supplier performance, elaborating common strategies
In terms of volume of new orders placed with suppliers the US and meeting common suppliers. In 2012, a Propulsion Board was
dollar share was even higher: US dollar contracts accounted for established, joining the existing boards covering aerostructures,
systems & equipment and materials. The Materials Board plays
56%, while 38% was in euros.
an important part in ensuring EADS’s access to sought-after
commodities such as aluminium, titanium, composites andGlobal sourcing
EADS remains on track with its efforts to extend the supply standard parts.
chain outside Europe. Increased supply chain presence outside
Europe is an important means of gaining access to growth The Group is working to improve the capabilities of the small
markets and increasing natural currency hedging. Country and medium-sized enterprises that form an important part ofsourcing offices in India, China, USA and Brazil are operational. Europe’s supply chain. EADS is a founding member of SPACE,
Investigations into sourcing potential of additional countries in an association dedicated to developing aerospace suppliers.
North Africa, Asia and South America were conducted in 2012.
In 2011, around 30% of external sourcing turnover was fromsuppliers outside Europe.
Following the decision to open an Airbus A320 Final AssemblyLine in Alabama, United States, investigations are under way toselect appropriate suppliers for its construction and support ofoperations. The USA already plays a central role in the EADSEADS ANNUAL
ANNUAL REVIEWREVIEW2012
2012

preparing for the future

Supply Chain

53

EADS ANNUAL REVIEW 2012

Addresses
REGISTERED OFFICEEADS Operational Headquarters

European Aeronautic Defence
and Space Company EADS N.V.
Mendelweg 302333 CS Leiden
The Netherlands
Tel + 31 71 524 56 00

European Aeronautic Defence
and Space Company EADS N.V.
Auriga Building
4, rue du Groupe d’Or - BP 90112
31703 – Blagnac cedex - France
Tel +33 5 81 31 75 00
Fax + 33 5 81 31 79 00

OTHER
CORPORATE OFFICEs
FranceEADS37, boulevard de Montmorency
75781 Paris cedex 16
FranceTel + 33 1 42 24 24 24
Germany
EADS
81663 Munich
GermanyTel + 49 89 607 0

54

Spain
EADS
Avenida de Aragón 404
28022 Madrid
Spain
Tel + 34 915 85 70 000

AIRBUSASTRIUM

Airbus1, rond-point Maurice Bellonte
31707 Blagnac cedex
FranceTel + 33 5 61 93 33 33

Astrium
12, rue Pasteur
92150 Suresnes
FranceTel + 33 1 77 51 80 00
Fax + 33 1 77 51 80 08

Airbus Military
Avenida de Aragón 404
28022 Madrid
Spain
Tel + 34 915 85 70 00
Premium AEROTEC
Haunstetter Str. 225
86179 Augsburg
GermanyTel +49 821 801 0
Aerolia
13, rue Marie Louise Dissard
31027 Toulouse cedex 3
FranceTel +33 5 81 91 40 00

Astrium Satellites
31, rue des Cosmonautes
31402 Toulouse cedex 4
FranceTel + 33 5 62 19 62 19
Astrium Space Transportation
66, route de Verneuil
78133 Les Mureaux cedex
FranceTel + 33 1 39 06 12 34
Airbus-Allee 1
28199 Bremen - Germany
Tel + 49 421 539 0

EADS EFW
Grenzstrasse 101109 Dresden
GermanyTel + 49 351 8839 0

Astrium Services
12, rue Pasteur
92152 Suresnes cedex
FranceTel + 33 1 77 51 80 00
Fax + 33 1 77 51 80 08

EADS NORTH AMERICAEUROCOPTER

OTHER BUSINESSESEADS North America, Inc.
2550 Wasser Terrace,
Suite 9000
Herndon, VA 20171
USA
Tel + 1 703 466 5600

Eurocopter
Aéroport International
Marseille Provence
13725 Marignane cedex
FranceTel +33 4 42 85 85 85

EADS Sogerma
Z.I. de l’Arsenal
CS 60109
17303 Rochefort cedex
FranceTel. +33 5 46 82 82 82

EADS UK
EADS UK Limited
111, The Strand
WC2R 0AG London
United Kingdom
Tel + 44 207 845 84 00

ATR Avions de Transport
Régional
1, allée Pierre Nadot
31712 Blagnac cedex
FranceTel + 33 5 62 21 62 21

EADS ANNUAL REVIEW 2012

Addresses

EADS STRATEGY AND MARKETING ORGANISATION
Tel + 33 1 42 24 24 24 - Fax + 33 1 42 24 26 19
Representative offices
EuropeBrussels, Belgium

Tel + 32 2 502 60 05
Fax + 32 2 502 30 81
Oslo, Norway

CASSIDIAN
CassidianLandshuter Strasse 26
85716 Unterschleissheim
GermanyTel + 49 89 3179 0
Cassidian
MetaPole
1, boulevard Jean Moulin
Z.A.C. de la Clef Saint-Pierre
78990 Elancourt cedex
FranceTel +33 1 61 38 50 00
Eurofighter
Am Söldnermoos 1785399 Hallbergmoos
GermanyTel + 49 811 80 0
MBDA
1, avenue Réaumur
92358 Le Plessis-Robinson cedex
FranceTel + 33 171 54 1000

Tel + 47 22 00 95 50
Fax + 47 22 00 95 51
Warsaw, Poland
Tel + 48 22 627 05 28
Fax + 48 22 627 05 35
Moscow, Russia

Latin America
São Paulo, Brazil

Tel + 55 11 3093 2800
Fax + 55 11 3093 2801
Santiago de Chile, Chile

Tel + 56 (2)*23 33 43 33
Fax + 56 (2)*23 33 47 77
Mexico City, Mexico

Tel + 52 55 47 77 51 00
Fax + 52 55 47 77 32 74
Asia
Sydney, Australia

Tel + 7 495 797 53 67
Fax + 7 495 797 53 66

Tel + 61 2 88 64 05 00
Fax + 61 2 88 64 05 01

Ankara, Turkey

Beijing, China

Tel + 90 312 439 89 64
Fax + 90 312 439 70 07

Tel + 86 10 64 61 12 66
Fax + 86 10 64 61 04 09

London, United Kingdom

Tel + 91 80 4031 2500
Fax + 91 80 4031 2531

Tel + 44 207 845 84 00
Fax + 44 207 845 84 01
AfricaAlgiers, Algeria

Tel + 213 (0) 21 92 77 28
Tel/Fax + 213 (0) 21 92 62 92
Centurion, South Africa

Bangalore, India

New Delhi, India

Tel + 91 11 4580 1100
Fax + 91 11 4580 11 24
Jakarta, Indonesia

Tel + 62 21 57 97 36 15
Fax + 62 21 57 97 36 16

Tel + 27 12 6868 900
Fax + 27 12 6868 911

Kuala Lumpur, Malaysia

Middle East

Singapore, Singapore

Cairo, Egypt

Tel + 20 2 279 486 71
Fax + 20 2 279 573 17
Muscat, Oman

Tel + 968 244 92 760
Fax + 968 244 92 356
Doha, Qatar

Tel + 974 4 411 0752
Fax + 974 4 411 0784
Riyadh, Saudi Arabia

Tel + 966 1 88 07 420
Fax + 966 1 88 07 410
Abu Dhabi, UAE

Tel + 971 2 657 89 00
Fax + 971 2 681 10 27
North America
Ottawa, Canada

Tel + 1 613 230 39 02
Fax + 1 613 230 14 42

Tel + 60 3 2163 0233
Fax + 60 3 2163 0211
Tel + 65 63 25 03 80
Fax + 65 63 25 03 20
Seoul, South Korea

Tel + 82 2 327 96 700
Fax + 82 2 798 49 27
Taipei, Taiwan

Tel + 886 2 2712 15 94
Fax + 886 2 2712 10 89
Bangkok, Thailand

Tel + 662 610 4300
Fax + 662 610 4301
Hanoi, Vietnam

Tel + 844 39 43 68 85
Fax + 844 39 43 68 72
Central Asia
Astana, Kazakhstan

Tel + 771 72 99 05 01
Tel +771 72 79 03 91
Fax + 771 72 79 03 93* from November 24th 2013

55

EADS ANNUAL REVIEW 2012

Shareholder
Informationwww.eads.com

56

Financial
CalendarInvestor Relations
Contact DETAILSFull Year 2012 results releaseToll-free telephone numbers

27 February 2013

France:0 800 01 2001
Germany: 00 800 00 02 2002
Spain:
00 800 00 02 2002

EXTRAORDINARY General Meeting

27 March 2013, Amsterdam,
The Netherlands
First Quarter 2013 results
release14 May 2013
Annual General Meeting

29 May 2013, Amsterdam,
The Netherlands
Private Shareholder
Information meetings

26 June 2013, Paris, France
4 July 2013, Munich, Germany
Half Year 2013 results release

31 July 2013
Nine-Month 2013 results release

14 November 2013

Shareholders from othercountries+ 33 800 01 2001
E-mailir@eads.com
Visit our website atwww.eads.com

www.reports.eads.com

The complete eads Annual Report suite 2012 consists of:Annual Review 2012
Deploying our Talent
for a new era

Registration Document 2012
Financial Statements

EADS would like to thank all those who contributed
to the making of this Annual Report.

Designed and produced by– Written by The Clerkenwell Consultancy – Printed by Chirat.

Slip-Case – Photographs © by EADS: Airbus – Astrium – Cassidian – EADS Innovation works – Eurocopter.
Talents – Photographs © by EADS: Airbus – Astrium – Astrium/ESA – Astrium/Leturcq – Cassidian – EADS Innovation
works – EADS/Custred – Eurocopter – Eurocopter/Penna – X.
At a glance – Photographs © by EADS: Airbus – Airbus Military – Astrium – Astrium/ESA – ATR – Cassidian – EADS
North America – EADS/Abaca-Guibbaud – EADS/Exm-Gousse – Eurocopter – Eurofighter/G. Lee – X.
Annual review – Photographs © by EADS: Airbus – Airbus China – Airbus Military – Astrium – Astrium/ESA –Banque de France – Cassidian – EADS – EADS/Abaca-Guibbaud – EADS/Capa - Bassignac – EADS Innovation Works –EADS North America – EADS/Lange – EADS/Schlaf – EADS/Verzone – Eurocopter – Eurocopter South East Asia –Eurofighter/G. Lee – Thales – Vueling – X.
All rights reserved

www.eads.com
European Aeronautic Defence
and Space Company EADS N.V.
Mendelweg 302333 CS Leiden
The Netherlands
In France
Auriga Building
4, rue du Groupe d’Or – BP 90112
31703 – Blagnac cedex – France
37, boulevard de Montmorency
75781 Paris cedex 16 – France
In Germany
81663 Munich – Germany
In Spain
Avenida de Aragón 404
28022 Madrid – Spain

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