EUROPEAN AERONAUTIC DEFENCE AND SPACE COMPANY EADS N.V.

We
MANAGEMENT & GOVERNANCE
03
04
06
08
10
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Letter from the Chairman of the Board
The Board of Directors
Corporate Governance
Chief Executive Ofﬁcer’s Statement
The Executive Committee
Interview with the Chief Financial Ofﬁcer
Strategy

have
16

Success made by EADS

what
24

THE BUSINESS YEAR 2008
Markets and Perspectives
Towards a leaner organisation
AirbusEurocopter
Astrium
Defence & Security

EADS DRIVERS & RESPONSIBILITY
54
56
58
60
62

Innovation
Eco-efﬁciency
Human Resources
Sourcing
Ethics and Compliance

64
66
68

Glossary
Addresses
Shareholder Information

European Aeronautic Defence
and Space Company EADS N.V.
P.O. Box 32008
2303 DA Leiden
The Netherlands
Please refer to www.eads.com
for further information.

This document is also available
at the following addresses:
European Aeronautic
Defence and Space Company
EADS N.V.

We have what it takes.

Annual Review 2008

it takes.
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WWW.EADS.COM

A strong position in international markets

EADS ANNUAL REVIEW 2008
In France
37, boulevard de Montmorency
75781 Paris cedex 16 – France
In Germany
81663 Munich – Germany
In Spain
Avenida de Aragón 404
28022 Madrid – Spain

1

EUROPEAN AERONAUTIC DEFENCE AND SPACE COMPANY EADS N.V.

We
MANAGEMENT & GOVERNANCE
03
04
06
08
10
12
14

Letter from the Chairman of the Board
The Board of Directors
Corporate Governance
Chief Executive Ofﬁcer’s Statement
The Executive Committee
Interview with the Chief Financial Ofﬁcer
Strategy

have
16

Success made by EADS

what
24

THE BUSINESS YEAR 2008
Markets and Perspectives
Towards a leaner organisation
AirbusEurocopter
Astrium
Defence & Security

EADS DRIVERS & RESPONSIBILITY
54
56
58
60
62

Innovation
Eco-efﬁciency
Human Resources
Sourcing
Ethics and Compliance

64
66
68

Glossary
Addresses
Shareholder Information

European Aeronautic Defence
and Space Company EADS N.V.
P.O. Box 32008
2303 DA Leiden
The Netherlands
Please refer to www.eads.com
for further information.

This document is also available
at the following addresses:
European Aeronautic
Defence and Space Company
EADS N.V.

We have what it takes.

Annual Review 2008

it takes.
34
39
40
46
48
50

WWW.EADS.COM

A strong position in international markets

EADS ANNUAL REVIEW 2008
In France
37, boulevard de Montmorency
75781 Paris cedex 16 – France
In Germany
81663 Munich – Germany
In Spain
Avenida de Aragón 404
28022 Madrid – Spain

1

EADS at a Glance
EADS GROUP

IITHE DIVISIONSIVMAJOR PROGRAMMES AND PRODUCTS

VI

THE YEAR 2008 IN REVIEWXIIEADS SHARESXIVEADS GLOBAL FOOTPRINTXVIEADS ORGANISATIONAL STRUCTURE

XVIII

EADS GROUP

We
WWW.REPORTS.EADS.COM

MANAGEMENT & GOVERNANCE
03
04
06
08
10
12
14

Letter from the Chairman of the Board
The Board of Directors
Corporate Governance
Chief Executive Ofﬁcer’s Statement
The Executive Committee
Interview with the Chief Financial Ofﬁcer
Strategyhave
16

We have what it takes

what
24

THE BUSINESS YEAR 2008

leader. Airbus consistently captures about half the market for passenger
Airbus Military develops special mission aircraft and is responsible for the
A400M transport aircraft programme. Eurocopter is the world’s largest

We have what it takes.

Registration Document 2008
FINANCIAL STATEMENTS

FFinancial Statements 2008

products that the world needs. EADS’ innovations foster economic growth,Book3_Titel_4.5_Bel.indd U148799_01EADS GB E Titel 105.05.2009 9:51:54 Uhr05.05.2009 9:50:56 UhrBook 1

Book 2

ANNUAL REVIEW 2008

REGISTRATION DOCUMENT 2008

We have what it takes.

Business, Governance andCorporate Responsibility

Book2_Titel_090504_Bel_02.indd 1

Financial Statements

security and eco-efficiency, driving value for all our stakeholders.

II

54
56
58
60
62

Innovation
Eco-efﬁciency
Human Resources
Sourcing
Ethics and Compliance

64
66
68

Glossary
Addresses
Shareholder Information

EADS DRIVERS & RESPONSIBILITY

consortium, a stakeholder in the missile systems provider, MBDA, andGroup a competitive advantage, enabling us to design, build and service

Markets and Perspectives
Towards a leaner organisation
AirbusEurocopter
Astrium
Defence & Security

EADS ANNUAL REVIEW 2008

Our Defence & Security Division is a major partner in the Eurofighter

technologies, scientific excellence and programme leadership that give the

34
39
40
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48
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Financial Statements 2008

BUSINESS, GOVERNANCE
AND CORPORATE RESPONSIBILITY

helicopter company. Astrium is the European leader in space programmes.

EUROPEAN AERONAUTIC DEFENCE AND SPACE COMPANY EADS N.V.

jets with 100 seats or more. Leveraging Airbus’ commercial expertise,

Our skilled engineers, scientists and managers provide cutting-edge

A strong position in international markets

it takes.

THE COMPLETE EADS ANNUAL REPORT SUITE 2008 CONSISTS OF:

Our staff and pioneering technologies make EADS an aerospace and defence

also supplies comprehensive systems solutions.

Success made by EADSDesigned and produced by HGB Hamburger Geschäftsberichte
Photographs: p. VIII (Ariane 5, Columbus) ESA/NASA, p. 2, 8, 13: HSG Zander,
p. 4 (Lagardère): Pool Bertolin Morin - IP3-MaxPPP; p. 19, p. 58: EADS,
Michael Lange | Written by The Clerkenwell Consultancy | Printed by Kriechbaumer

05.05.2009 9:50:05 Uhr

STRONG 2008 RESULTS were supported by excellent underlying programme results and demonstrated
resilience in the difﬁcult global economic environment.
EADS is in a robust position to face the crisis.
EADS GROUP

Revenues 1)
EBIT

* 1)

Net Income

2)

2008

2007

2006

€m

43,265

39,12339,434

€m

2,830

52

399

€m

1,572

- 446

99

Earnings per share 2)

€

1.95

- 0.56

0.12

Dividend per share€

0.20 3)

0.12

0.12

Net cash position

1)

€m

9,193

7,024

4,229

Order intake 1) 4)€m

98,648

136,799

69,018Order book 1) 4)€m

400,248

339,532

262,810

118,349

116,493

116,805

Employees

REVENUES rose by 11% to € 43.3 billion, reﬂecting strong
top line growth Group-wide.
EBIT of € 2.8 billion resulted from improvements acrossall Divisions.
NET CASH reached the unprecedented level of € 9.2 billion,
supported by better than expected free cash ﬂow.
ORDER BOOK grew by 18% to a record of € 400.2 billion.
The remarkable € 98.6 billion order intake underlined theattractiveness of EADS’ products.

* Unless otherwise indicated, EBIT ﬁgures presented in this report are Earnings Before Interest and Taxes, pre-goodwill impairment and exceptionals.
1) MBDA consolidated at 37.5% in 2008 and 2007, compared to 50% in 2006; ﬁgures of 2006 are not restated; to achieve a comparable basis, the following

impacts of the consolidation change on 2006 ﬁgures have to be taken into account: € - 418 million on Financial Year (FY) 2006 revenues, € -30 million on
FY 2006 EBIT *, € -249 million on FY 2006 Net cash position, € -329 million on FY 2006 order intake, € -1,691 million on FY 2006 order book.
2) EADS continues to use the term Net Income. It is identical with Proﬁt for the period attributable to equity holders of the parent as deﬁned by IFRS Rules.
3) To be proposed to the EADS Annual General Meeting 2009.
4) Contributions from commercial aircraft activities to EADS order intake and order book based on list prices.

EA DS AT A GL A NCE 2008

III

THE DIVISIONSAIRBUS is a leading commercial aircraft manufacturer. Its
customer focus, commercial know-how, technological leadershipand manufacturing efﬁciency consistently win it 40 – 60% of
all orders for aircraft of 100 seats or more.

A350 XWB

(€ m)

2008

2007

Variation

Revenues

27,45325,216

+ 9%

EBIT

1,790

- 881

–

Order intake

82,041

117,323- 30 %

Order book344,818

283,829+ 21 %

In number of aircraft
Deliveries

483

453

+ 7%

Order book

3,715

3,421

+ 9%

Leveraging Airbus’ commercial expertise, AIRBUS MILITARY(formerly Military Transport Aircraft) develops aircraft for
military and security tasks, including in-ﬂight refueling andmaritime surveillance. Airbus Military is also responsible for
the European heavy military transport A400M programme.

A330 MRTT

(€ m)

2008

2007

Variation

Revenues

2,759

1,140

+ 142 %

EBIT

- 16

- 155

–

Order intake

5,083

784

+ 548 %

Order book

22,26919,932+ 12 %EUROCOPTER is the world’s leading helicopter manufacturer.

It captures more than 50% of sales for civil and parapublic
helicopters and has a strongly growing military business.

EC120

IV

(€ m)

2008

2007

Variation

Revenues

4,486

4,172

+ 8%

EBIT

293

211

+ 39 %

Order intake

4,855

6,584

- 26 %

Order book

13,824

13,455+ 3%

Please refer to www.eads.com for further information.

ASTRIUM is Europe’s preeminent space group and the thirdlargest worldwide. It is the leading European supplier ofsatellites, launchers and space services. It plays a key rolein Europe’s institutional and military space programmes.

(€ m)

2008

2007

Variation

Revenues

4,289

3,550

+ 21 %

234

174+ 34 %

Order intake

3,294

4,492

- 27 %

Order book

11,035

12,895- 14 %EBITATV (Automated Transfer Vehicle)

DEFENCE & SECURITY is the main pole for EADS’ militaryand global security activities. It has a wide range of platforms,
including EADS’ role in Euroﬁghter, missile systems, defence
communication systems, defence electronics and services.

Euroﬁghter(€ m)2008 *

2007 *

Variation

Revenues

5,668

5,392

+ 5%

EBIT

408

345

+ 18 %

Order intake

5,287

7,460

- 29 %

Order book17,032

17,836- 5%

OTHER BUSINESSES This includes activities in turboprop aircraft,general aviation and freighter conversion, aerostructure and aircraft seats business as well as its activities managed in the US.
The Business Units ATR, EADS EFW, EADS Sogerma, Socata
and EADS North America fall within Other Businesses.

ATR 72 - 500(€ m)

2008 *

2007 *

Variation

Revenues

1,528

1,407

+ 9%
- 5%

EBIT

80

84

Order intake

1,895

1,963

- 3%

Order book

3,364

2,740

+ 23 %* As of 1 January 2008, the consolidation of EADS North America was changed by transferring parts from Defence & Security Division to Other Businesses.
Nevertheless, the lead of material business elements remains within the respective Divisions. The ﬁgures for FY 2007 and 31 December 2007 are adjusted
accordingly. In the full year of 2008, EADS North America's revenues mainly include revenues linked to the prime contractorship of the LUH programme.
EA DS AT A GL A NCE 2008

V

MAJOR PROGRAMMES AND PRODUCTS | Airbus

A380 Delivering the world’s
most efﬁcient aircraft

The new A380 double-decker is the most
spacious and efﬁcient aircraft ﬂying today.
The aircraft has 525 seats and allows airlines
to offer customers an unrivalled level ofcomfort. Conceived to bring airlines speciﬁc
economic and environmental beneﬁts, it
increases capacity on long haul routes andlowers costs per passenger.

A320 family The world’s most popular aircraft

This single-aisle plane is the best selling family of commercial jets
ever. The A320 family responds to airlines’ needs for optimised
cabin layouts, better baggage and cargo handling, maximum operational ﬂexibility on short- and medium-haul routes and lower
operating costs.

A350 XWB Responding to airline demand

The A350 XWB (extra wide body) is Airbus’ newest aircraft and its
response to demand for a medium-capacity, long-range, wide-bodyfamily. With a fuselage made largely of carbon ﬁbre, its low weightcuts fuel costs and emissions. The wide body gives passengers greater
comfort. Launched in 2006, the A350 XWB is still in development.

A330 | A340 Providing versatility

The A330/340 family has the versatility for either
regional routes or long-range ﬂights. Its airframe
comes in six different conﬁgurations, powered by
two or four engines. The twin-engine A330 is designed to generate maximum revenue and to reduce
operating costs on regional routes, while the fourengine A340 provides ﬂexibility on long-range ﬂights.

VI

AIRBUS MILITARY
A400M Designed for demanding operations

The A400M is designed to fulﬁl the most demanding
operational requirements. Intended to replace ageing ﬂeetsof heavy transport aircraft in service with air forces aroundthe world, it typically has more than twice their payload
and volume.

A330 MRTT Innovative
air-to-air refuelling

The A330 MRTT (Multi-Role Tanker
Transport) is the world’s leading airto-air refuelling aircraft with a huge
basic fuel capacity. It has been selectedby air forces in Australia, the Middle
East, the United Kingdom and theUnited States. Fuel is passed throughan innovative ﬂy-by-wire refuellingboom that delivers a larger refuellingenvelope and gives better control thanother systems. The aircraft is a derivative of the successful Airbus A330/
A340 family.

CN-235 | C-295 World-leading
medium-weight transports

The CN-235 and C-295 are medium-weight,
twin-engine turboprop transport aircraft
capable of operating from short and unpaved
runways. They are world leaders in theircategory, having been sold to air forces allover the world.

EA DS AT A GL A NCE 2008

VII

MAJOR PROGRAMMES AND PRODUCTS | Astrium

EUROSTAR 3000 Carrying an enhanced payload

The Eurostar 3000 is a new-generation, modular geostationary
telecommunications satellite that can accommodate enhanced payloads.
As the latest version of the proven Eurostar series, it has a reputationfor exceptional reliability and in-orbit performance. The Eurostar series
is constantly being upgraded through development and integration of
new technologies.

ARIANE 5 The next-generation launcher

Ariane 5 is a powerful heavy-lift satellite launcher. Its payload capacity of up to ten tonnes meets the evolving demandsof both commercial and government markets. Since becoming
operational in 2005, it has proved reliable and ﬂexible.

SKYNET 5 Telecom service provider for armed forces

Skynet 5 is the world's ﬁrst commercial provider of military satellite
communications. The programme will deliver secure communications
to the UK armed forces up to at least 2020. The Skynet 5 contract is
an innovative Private Finance Initiative scheme worth £ 3.6 billion.

COLUMBUS & ATV Europe contributes
to the International Space Station

The Columbus space laboratory andthe unmanned Automated Transfer
Vehicle (ATV) were successfullylaunched in early 2008.

VIII

Defence & Security

MBDA Delivering innovation and technological excellence

MBDA, the world’s largest missile company, has a record for innovation and technological excellence. The
ASTER 30 SAMP/T, a next-generation medium range surface-to-air missile, is among the most modern missile
systems. The Meteor is a next-generation air-to-air missile with a range exceeding 100 kilometres and a speedof more than Mach 4.

EUROFIGHTER The most modern
combat aircraftEuroﬁghter is the most modern multirole combat aircraft currently in production. Optimised for complex air-to-air
and air-to-surface combat operations, itis network-enabled and extremely agile.
It has a strong order book in Europe,
where deliveries are in progress. Bidding
processes are under way with India,
Greece and Switzerland.

UAV Surveying the enemy

In the ﬁeld of Unmanned Aerial Vehicles (UAVs), EADSDefence & Security (DS) is the only European supplierable to provide both large and small systems. In 2008,
work on the risk reduction study for the Advanced UAV
continued with identiﬁcation of France, Germany andSpain’s capability requirements for an intelligence, surveillance and reconnaissance system. DS also delivered to the
French Air Force the medium-altitude, long-endurance
SIDM UAV, which is now in service in Afghanistan.

SECURITY SOLUTIONS Managing security threats

Threats to security are an increasingly global phenomenon. Their varying nature, and the different security
organisations involved, demands integrated security
solutions. EADS Defence & Security (DS) delivers integrated systems for border security, maritime security,
crisis and emergency response, as well as for the protection of infrastructure and populations. Furthermore,
DS Professional Mobile Radio (PMR) solutions
enable security organisations to communicate effectively, reliably and securely.

EA DS AT A GL A NCE 2008

IX

MAJOR PROGRAMMES AND PRODUCTS | Eurocopter

EC225 | 725 Effectively applying technology

The EC225/725 brings Eurocopter’s latest
rotor and all-weather technology to the
11-ton helicopter class. The EC225 ﬂies foroffshore oil and gas facilities, governmental
VIPs, and search and rescue services. Its
military twin, the EC725, is in service with
the French Army and Air Force. Technology
reduces rotor operating and maintenancecosts, while enabling ﬂying in icy conditions.

NH90 Pioneering multi-role helicopter

The NH90 medium-weight, multi-role military helicopter
has state-of-the-art in rotary wing and mission systems
technology. It has two basic variants, the Tactical Transport
Helicopter and NATO Frigate Helicopter.

EC135 and EC145 Matching innovation to customer needs

The EC135 and EC145 light twin-engine, multi-mission helicopters
are made from the latest carbon ﬁbre technologies. They have bearingless main rotors and innovative tail rotor systems designed toensure outstanding manoeuvrability, as well as an exceptionally quiet
and smooth ride. Variations have been designed speciﬁcally for VIPs,
as well as rescue and police work.

ECUREUIL FAMILY A high-performance helicopter

The Ecureuil family, which carries up to seven passengers, isrenowned for its high performance, safety and low operating costs.
Extensive use of composites, signiﬁcant load-carrying capacity anda roomy cabin give it the ﬂexibility to be used both as a utility
helicopter and for ferrying passengers.

X

TIGER Battleﬁeld efﬁciency

The Tiger is a medium-weight air-to-air
combat and ﬁre support helicopter, ﬁtted
with twin engines. It is difﬁcult to detecton the battleﬁeld – visually, by radar or
infrared. Weapons and associated ﬁre control systems are designed for maximum
efﬁciency.

Other Businesses
ATR The answer for regional routes

The ATR family of turboprop aircraft can land on short runways
and burns relatively little fuel. At the family’s core are the50-seater ATR 42-500, which entered service in 1995, and thestretched 70-seater ATR 72-500 version, which followed in 1997.
They ﬂy regional routes with low passenger per kilometre costs
and proven reliability.

EFW Freighters with Airbus advantages

EFW (Elbe Flugzeugwerke GmbH) is EADS’ centre of competence for converting Airbus passenger aircraft into freighters.
The freighters have all the advantages of commonality andﬂy-by-wire controls associated with Airbus aircraft.

EADS NORTH AMERICAEADS North America is a growing US aerospace and defence
company, contributing more than US$ 10 billion to the local
economy annually. Among other programmes, it is supplying
the US Army’s new UH-72A Light Utility Helicopter.

EA DS AT A GL A NCE 2008

XI

THE YEAR 2008 IN REVIEW

1 FEBRUARY A380 starts alternative fuel tests

The Airbus A380 completed the world’s ﬁrst ever ﬂight
by a commercial aircraft using a liquid fuel processedfrom gas. This three-hour ﬂight between Filton in the
UK and Toulouse in France was the ﬁrst stage of atest programme to evaluate the environmental impactof alternative fuels.
7 FEBRUARY Europe’s space laboratory lifts off

Carried by the US space shuttle Atlantis, the Columbus laboratory – Europe’s contribution to the International Space Station – entered the Earth’s orbit. Built
by Astrium for the European Space Agency, Columbus
brings a new dimension to research in space.
24 FEBRUARY Eurocopter unveils the new EC175

The EC175, Eurocopter’s new 7-ton civil helicopter,
was launched at Heli-Expo 2008. A joint programmewith China’s Harbin Aviation Industry Group, theEC175 deploys the latest technology and is designed
to customer requirements. The maiden ﬂight is scheduled for 2009 and European Aviation Safety Agencytype certiﬁcation is expected for 2011.
27 MARCH EADS-led AirTanker signs UK contract

AirTanker, the EADS-led consortium, signed a 27-year
contract with the UK Ministry of Defence to provide
an air refuelling capability for the Royal Air Force.
From 2011, the Future Strategic Tanker Aircraft programme will deliver fuel by way of 14 new tanker
aircraft, based on the Airbus A330-200.
22 APRIL EADS North America acquires PlantCML

EADS announced the acquisition of California-based
PlantCML, a leading provider of emergency response
solutions and services in North America. The acquisition gave EADS’ fast-growing PMR business accessto the US market.

28 SEPTEMBER Airbus inaugurates
Chinese ﬁnal assembly line

Airbus ofﬁcially opened its ﬁrst ﬁnal assembly line
outside Europe in Tjanjin, China, at a ceremony attended by Chinese Premier Wen Jiabao and Airbus
CEO Tom Enders. The Airbus A320 family ﬁnal
assembly line, a joint venture between Airbus and aChinese consortium, is set to deliver its ﬁrst aircraftin mid-2009.
29 SEPTEMBER Europe’s Jules Verne
mission accomplished

The Jules Verne Automated Transfer Vehicle (ATV),
which docked with the International Space Station(ISS) in April, successfully completed its ﬁnal manoeuvres and disintegrated in the upper layers of the atmosphere over the South Paciﬁc as planned. Designed
and built by Astrium on behalf of the European Space
Agency, the ATV had delivered supplies to the ISS.
25 OCTOBER First anniversary of A380’s
entry into service

The A380 celebrated the ﬁrst anniversary of its entry
into service. By the end of 2008, 13 aircraft had beendelivered to Singapore Airlines, Qantas and Emirates.
At this date, the in-service A380 ﬂeet had ﬂown
more than 2,200 commercial ﬂights, carrying almost
1,000,000 passengers and accumulating 21,000 revenue ﬂight hours.
16 DECEMBER 50th UH-72A helicopter delivered

EADS North America delivered the 50th UH-72A
Lakota Light Utility Helicopter to the US Army. Following its entry into service in 2007, the UH-72A’s
excellent performance and reliability has attracted interest from other US military services. The US Navyhas ordered ﬁve additional UH-72A.
23 DECEMBER Brazil signs historic helicopter contract

26 JUNE First A400M military transport rolls out

The ﬁrst A400M airframe departed its ﬁnal assemblyline in Seville in June 2008, at a ceremony presided
over by His Majesty Juan Carlos I, King of Spain.
17 JULY Airbus announces orders exceeding
US$ 40 billion at Farnborough Air Show

At the Farnborough Air Show, based in the UK,
Airbus revealed transactions covering 256 aircraft,valued at US$ 40.5 billion. These included firm
orders for 247 aircraft and nine commitments. Orders
from DAE Capital and Etihad Airways in the Middle
East dominated.

XII

The Brazilian government ordered 50 EC725 helicopters from a consortium formed by Eurocopter and its
Brazilian subsidiary Helibras. The 11-ton helicopter will
enable Brazil’s armed forces to perform an extremely
wide range of missions.

1 February

7 February

24 February

26 June27 March

22 April

17 July

28 September

29 September

25 October

16 December

23 December

EA DS AT A GL A NCE 2008

XIII

EADS SHARES

2008 WAS A ROLLERCOASTER RIDE FOR EADS SHARES AS THE ECONOMICSLOWDOWN HIT EQUITY MARKETS.

Investors focused primarily on two key drivers of EADS’ performance. Firstly,
the Euro/US Dollar exchange rate and, secondly, the impact of the slowdown
on Airbus through order deferrals, cancellations and customer financing requirements. Other influences included the volatile oil price (the price fell 74%
from its July peak) and difficulties with major programmes (A400M development and A380 ramp-up). Even so, EADS’ solid cash flow, net cash positionand strong order book were viewed as providing resilience.
On 31 December, EADS’ share price closed at € 12.03, 45% lower than yearend 2007, tracking the 43% fall of the CAC 40 index.

Share price evolution
as of 31 December 2008 (close price)
Base 100: 2 January 2006

EADS share price in €

140

45
40

120

35

100

30

80

25
20

60

15

40

10

20

5

0

0

J F M A M J J A S O N D
EADS

2006

CAC 40MSCI World Aero/Defence(in €, adjusted daily USD/€ rate)

XIV

2007

2008

> PROFILEISIN code NL0000235190
Number of shares as of 31 December 2008: 814,769,112
High in 2008 on Paris Stock Market: € 21.35 on 2 January
Low in 2008 on Paris Stock Market: € 9.55 on 16 October

Please refer to www.eads.com for further information.

Shareholder structure as of 31 March 200922.50% Sogeade (Lagardère and Frenchstate holding company Sogepa)
22.50% Daimler *5.49% SEPI (Spanish state holding company)
0.39% Treasury shares(without economic or voting rights)
49.12% Institutional, retail and employee
ownership plus shares held out of thecontractual partnership by the French state* On 9 February 2007, Daimler reached an agreement with a consortium of private andpublic-sector investors by which it effectively reduced its shareholding in EADS by 7.5%,
while retaining its voting rights over the entire 22.5% package of EADS shares.

EA DS AT A GL A NCE 2008

XV

EADS GLOBAL FOOTPRINT

18%
EUROPE
44% OF GROUP REVENUES
2008
Revenues

€ bn

18.9

Sourcing

€ bn

28.4

Order intake

€ bn

23.4

Employees

112,948

EADS leverages Europe’s capabilities and competitiveness. Transforming Airbus is renewing
the spirit of European aerospace, while theramp-up of defence programmes is supporting
growth. Additionally, EADS is expanding its
cooperation with Russia. Sourcing relationships
have grown over decades particularly in EADS’
home countries, taking advantage of the wellestablished European aerospace industry andcovering all areas and materials.

NORTH AMERICA
18% OF GROUP REVENUES

ASIA-PACIFIC
25% OF GROUP REVENUES
2008

2008

Revenues

€ bn

7.8

Revenues

€ bn

10.7

Sourcing

€ bn

7.9

Sourcing

€ bn

0.4

Order intake

€ bn

4.4

Order intake

€ bn

3,217

Employees

Employees

EADS in North America is a supplier and industrial partner to US defence and homeland
security, commercial aviation, telecommunications and services. It has been selected toprovide major equipment programmes for the
Army and the Coast Guard. EADS sources
signiﬁcant, and growing, volumes of engines,
systems and equipment in North America,
building on the local aerospace industry’s
expertise.

XVI

7%

29.2
1,254

Within the Asia-Paciﬁc region, countries like
China, India and South Korea are a high priority. In joint projects such as the EC175, theKHP helicopter development or the set-up in
China of an A320 family ﬁnal assembly line,
EADS has teamed with highly qualiﬁed local
partners combining industrial capabilities withmarket know-how. EADS has to be a committed
citizen in these markets to participate in theirmedium-term growth.

44%

25%

6%

MIDDLE EAST
6% OF GROUP REVENUESREST OF THE WORLD
7% OF GROUP REVENUES
2008

2008

Revenues

€ bn

2.5

Revenues

€ bn

3.4

Sourcing

€ bn

0.06

Sourcing

€ bn

0.2

Order intake

€ bn

28.9

Order intake

€ bn

12.7

312

Employees

Employees

The Middle East is becoming a key market
for EADS. Divisions have either consolidated
their presence or made signiﬁcant breakthroughsin new ﬁelds such as border surveillance or
air-to-air refuelling aircraft. In commercial
aircraft, almost all the region’s major carriers
have chosen to grow and modernise theirﬂeets with Airbus. These are importantcustomers for the A380 and the A350 XWB.

618

Widespread business successes in othergrowth regions provide the basis for EADS’
further internationalisation. All sourcing
efforts are designed to open up the most
attractive markets and to develop the Group’s
industrial base. Latin America is a dynamic
economic region offering numerous commercial
and industrial opportunities for all of EADS’
activities. South Africa is a partner in the
A400M programme.

EA DS AT A GL A NCE 2008

XVII

EADS ORGANISATIONAL STRUCTURE as of 14 April 2009

GROUP FUNCTIONS

Board of Directors

Chief Financial Ofﬁcer
Hans Peter Ring

Chairman:Bodo Uebber *Corporate Secretary
Pierre de Bausset
Chief Strategy
and Marketing Ofﬁcer

Louis Gallois

Marwan Lahoud

Legal Department
Peter Kleinschmidt

Rolf Bartke
Dominique D’Hinnin
Human Resources

Juan Manuel Eguiagaray
Chief Executive Ofﬁcer
Arnaud Lagardère

Jussi Itävuori

Corporate
Communications
Pierre Bayle

Louis Gallois

Hermann-Josef Lamberti
Lakshmi N. Mittal

EADS North America

Compliance Ofﬁce

Ralph D. Crosby Jr.

Pedro Montoya

Sir John Parker
Michel Pébereau
Political Affairs

Wilfried Porth **Chief Technical Ofﬁcer
Jean Botti

François Desprairies (FR)Ditmar Staffelt (GE)Emiliano Mata (SP)Executive
Committee Member* The EADS Board of Directors appointed Bodo Uebber as Chairman of the Board of
Directors to succeed Rüdiger Grube with effect as of 14 April 2009. Rüdiger Grube
resigned after having taken over a new responsibility.
** Wilfried Porth will be proposed for appointment as Member of the Board of
Directors during the EADS Annual General Meeting to be held on 27 May 2009
with immediate effect as from the end of such meeting.

Coordination Spaceand Defence
François Auque

The Board actively shapes the Group’s mission and strategic priorities, which are implemented under
the leadership of the Chief Executive Ofﬁcer (CEO), who provides the impetus for major operational
initiatives. Group Functions and the Divisions operate under the leadership of the CEO.

XVIIIDIVISIONSOPERATING COMPANIESATR
Stéphane Mayer

Premium AEROTEC 2)

Aerolia 2)

Hans Lonsinger

Christian Cornille

EADS Sogerma 2)

Elbe Flugzeugwerke 2)

Cédric GautierAndreas Sperl

Astrium Satellites

Astrium SpaceTransportation

AirbusThomas Enders (CEO)Airbus Military
Fabrice
DomingoBrégier 1) (COO) Ureña-Raso

Eurocopter
Lutz Bertling
Evert Dudok

Alain Charmeau
Astrium
François Auque
Astrium Services
Eric Béranger

Defence Electronics

MBDA

Euroﬁghter

Bernd Wenzler

Antoine Bouvier

Aloysius Rauen 3)

Defence & Security
Stefan Zoller
Military Air Systems
Bernhard Gerwert

Defence andCommunications
Systems
Hervé Guillou

The four Divisions – Airbus, Eurocopter, Astrium and Defence & Security – serve the speciﬁc needs oftheir respective customers, while the Group functions enhance the Company offering through informationexchange, technology sharing and working practice synergies.
1)

responsible as Executive Committee member of a permanent Group-wide mission to ensure
EADS enhanced operational performance.

2) 100% EADS owned, management delegated to Airbus.
3) until 30 April 2009; successor to be nominated by the shareholders of Euroﬁghter GmbH.

EA DS AT A GL A NCE 2008

XIX

EUROPEAN AERONAUTIC DEFENCE AND SPACE COMPANY EADS N.V.

We
MANAGEMENT & GOVERNANCE
03
04
06
08
10
12
14

Letter from the Chairman of the Board
The Board of Directors
Corporate Governance
Chief Executive Ofﬁcer’s Statement
The Executive Committee
Interview with the Chief Financial Ofﬁcer
Strategy

have
16

Success made by EADS

what
24

THE BUSINESS YEAR 2008
Markets and Perspectives
Towards a leaner organisation
AirbusEurocopter
Astrium
Defence & Security

EADS DRIVERS & RESPONSIBILITY
54
56
58
60
62

Innovation
Eco-efﬁciency
Human Resources
Sourcing
Ethics and Compliance

64
66
68

Glossary
Addresses
Shareholder Information

European Aeronautic Defence
and Space Company EADS N.V.
P.O. Box 32008
2303 DA Leiden
The Netherlands
Please refer to www.eads.com
for further information.

This document is also available
at the following addresses:
European Aeronautic
Defence and Space Company
EADS N.V.

We have what it takes.

Annual Review 2008

it takes.
34
39
40
46
48
50

WWW.EADS.COM

A strong position in international markets

EADS ANNUAL REVIEW 2008
In France
37, boulevard de Montmorency
75781 Paris cedex 16 – France
In Germany
81663 Munich – Germany
In Spain
Avenida de Aragón 404
28022 Madrid – Spain

1

EADS at a Glance
EADS GROUP

IITHE DIVISIONSIVMAJOR PROGRAMMES AND PRODUCTS

VI

THE YEAR 2008 IN REVIEWXIIEADS SHARESXIVEADS GLOBAL FOOTPRINTXVIEADS ORGANISATIONAL STRUCTURE

XVIII

Shareholder
Information
FINANCIAL CALENDAR:
Full Year 2008 results release:
10 March 2009

Shareholders’ Information meeting:
25 June 2009, Paris, France

First Quarter 2009 results release:
12 May 2009First Half 2009 results release:
End of July 2009

Annual General Meeting:
27 May 2009, Amsterdam,
The Netherlands

Nine-Month 2009 results release:
Mid November 2009

INVESTOR RELATIONS CONTACT:
Toll-free telephone numbers:
France: 0 800 01 2001
Germany: 00 800 00 02 2002
Spain:
00 800 00 02 2002

are a leading participant in a market that is important for
the future. This world needs aerospace and defence for

Shareholders from other countries
can contact us at:+ 33 1 45 30 85 82

successful and secure living, for the development of oursocieties, for economic growth. We set standards in quality
and innovation. We develop products and technologies

An e-mailbox is dedicatedto answering shareholders’ enquiries:
ir@eads.com

for a cleaner, and safer, world.

Visit our website at:www.eads.com

68

We

ADDRESSES“ The Board is committed
to helping management improve
EADS’ long-term value”
Rüdiger GrubeEADS STRATEGY AND
MARKETING ORGANISATION
Tel + 33 1 42 24 24 24

CHAIRMAN OF THE BOARD

RÜDIGER GRUBE

Fax + 33 1 42 24 26 19

REPRESENTATIVEOFFICES
EuropeAnkara, Turkey
Tel + 90 312 439 89 64
Fax + 90 312 439 70 07
Athens, Greece
Tel + 30 210 69 83 871

AfricaAsia

Johannesburg,
South Africa

Bangkok, Thailand

Tel + 27 11 256 79 00

Fax + 66 2 610 4301

Fax +27 11 256 79 11
Beijing, China
Tripoli, Libya

Tel + 86 10 646 11 266

Tel + 218 21 335 1026

Fax + 86 10 646 10 409

Fax + 218 21 335 1257
Hanoi, Vietnam

Fax + 30 210 69 83 870
Middle East
Brussels, Belgium
Tel + 32 25 02 60 05

Abu Dhabi, UAE

Fax + 32 25 02 30 81

Tel + 971 2 681 28 78

London, United Kingdom

Cairo, Egypt

Fax + 44 207 845 8401

Tel + 20 22 794 86 71
Fax + 20 22 795 73 17

Tel + 7 495 797 53 67

Doha, Qatar

Fax + 7 495 797 53 66

Tel + 974 411 0752

Rome, Italy

Fax +974 411 0784

Tel + 39 06 45 23 291

Muscat, Oman

Fax + 39 06 45 23 4006

Tel + 968 24 601 922

Warsaw, Poland

2

Fax + 971 2 681 10 27

Tel + 44 207 845 8400

Moscow, Russia

Tel + 66 2 610 4300

Fax + 968 24 602 845

Tel + 84 4 943 68 85

Singapore, Singapore
Tel + 65 67 37 50 77
Fax + 65 67 33 58 15
Sydney, Australia
Tel + 61 2 88 64 05 00
Fax + 61 2 88 64 05 01
Taipei, Taiwan
Tel + 886 2 2712 15 94
Fax + 886 2 2712 10 89

Fax + 84 4 943 68 72
North America
Jakarta, Indonesia
Tel + 62 21 573 57 33

Ottawa, Canada

Fax + 62 21 573 59 23

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

Kuala Lumpur, Malaysia
Tel + 60 3 2163 0233
Fax + 60 3 2163 0211
New Delhi, India
Tel + 91 11 4357 9000
Fax + 91 11 4357 9024
Seoul, South Korea
Tel + 82 2 798 49 25
Fax + 82 2 798 49 27

Latin America
Mexico City, Mexico
Tel + 52 55 47 77 51 00
Fax + 52 55 47 77 32 74
Santiago de Chile, Chile
Tel + 56 23 33 43 33
Fax + 56 23 33 47 77

Tel + 48 22 627 05 28

Riyadh, Saudi Arabia

São Paulo, Brazil

Fax + 48 22 627 05 35

Tel + 966 1 46 53 456

Tel + 55 11 3093 2800

Fax + 966 1 46 30 844

Fax + 55 11 3093 2801

E ADS AN N UAL R E V IE W 2 0 0 8

67

MANAGEMENT & GOVERNANCE> Letter from the Chairman of the Board

DEAR SHAREHOLDERS,Over the past year, the far-reaching governance decisions taken in2007 have started to pay off. EADS has gained in focus, unity andefﬁciency. The 2008 ﬁnancial results reﬂect not only the strengthof our underlying business performance, but also the progressachieved in terms of accountability and strategic direction. All inall, it is fair to say that EADS has regained traction. On behalfof the entire Board of Directors, let me thank everyone who
contributed to last year’s outstanding commercial successes andrestored proﬁtability.
Yet, although the results achieved in 2008 are very positive, they
are now behind us and we need to address today’s challenges. The
results show our resilience in the face of the macroeconomic uncertainties that characterise the present and will persist for sometime. Difﬁcult times call for prudent investment decisions as wellas continuous efforts to increase operational efﬁciency. In this context, the Board of Directors is closely monitoring the development
and execution of EADS’ key programmes. As always, the Board iscommitted to helping management improve EADS’ long-term value.
Notably, over the past year, the Group’s management has started to
implement the Group-wide strategic roadmap called Vision 2020,
launched by our Chief Executive Ofﬁcer (CEO) Louis Gallois inlate 2007. Today’s economic environment also underlines the importance of Airbus’ Power8 efﬁciency programme and the recently
launched “Future EADS” integration and change project. The Board
entirely supports our experienced CEO’s implementation of thesetimely initiatives and receives regular progress reports.
To sustain EADS’ global competitiveness and reinforce the Group’s
high ethical and compliance standards, the Board has established a
dedicated compliance organisation with responsibility for the entire
Group. A Chief Compliance Ofﬁcer has been nominated by the
Board. As a key measure, he is introducing a system designed toalert him to compliance breaches. The Audit Committee is supervising his implementation of the EADS Compliance Programme.

The Board conducted a self-evaluation in 2008, which concluded
that it is satisﬁed with its ability to co-operate and to fulﬁl its
duties in the best interest of EADS. Playing to their respective
strengths, all of the Directors have made vital contributions toanalysing the effects of the economic turbulence and ﬁnancial
crisis. I am convinced that the Board’s wider set of skills and experience brings greater insight and enables us to consider situations
from different perspectives.
While we share management’s conviction that EADS is poised to
grow further and become a truly global industry leader, as envisaged in Vision 2020, the Board decided in 2008 to slow down the
Company’s Mergers and Acquisitions (M&A) plans temporarily,
insisting that cash conservation is more important at a time when
future market visibility is low.
Prudence is currently of the utmost importance. Even so, the improved operational performance and the Group’s strong cash ﬂow
lifted earnings per share to € 1.95, enabling the Board to propose
an increased dividend of € 0.20 to the Annual General Meeting.
This recognises your loyalty while demonstrating our conﬁdence
in the Group’s medium-term solidity and long-term outlook.
I am sure that EADS will master the enormous challenges ahead,
thanks to our highly motivated employees and management.

Rüdiger Grube
Chairman of the Board

BODO UEBBER succeeded Rüdiger Grube as
Chairman of the Board of Directors with effectas of 14 April 2009 when Mr Grube resigned due
to his new responsibility as CEO of Deutsche Bahn.

EA DS A NNUA L R E VIE W 2 0 0 8

3

THE BOARD OF DIRECTORS as of 14 April 2009

4

1

2

3

4

5

6

7

8

9

10

11

MANAGEMENT & GOVERNANCE> The Board of Directors

1 BODO UEBBER * (49)

7 HERMANN-JOSEF LAMBERTI (53)

Chairman of the Board of Directors of EADSMember of the Management Board of Deutsche Bank AG

Mr Bodo Uebber is Chairman of EADS and has been a Member of Daimler AG’s
Board of Management since 2003. He is currently responsible for ﬁnance, controlling, corporate procurement and Daimler Financial Services. In 2001, he wasappointed Member of the Board of Management and Chief Financial Ofﬁcer
of Daimler Services AG and subsequently in 2003 Chairman of the Board ofManagement of Daimler Services AG, as well as Deputy Member of the Boardof Management of Daimler AG. He previously held various ﬁnancial positions
within Dasa AG, Dornier Luftfahrt and MTU Aero Engines GmbH. Mr Uebber
graduated in engineering and economics at the Technical University of Karlsruhe.

Mr Hermann-Josef Lamberti has been a Member of the Management Board of
Deutsche Bank AG since 1999 and is the bank’s Chief Operating Ofﬁcer. From
1985, he held various management positions within IBM, working in Europe andthe United States, in the ﬁelds of controlling, internal application development,
sales, personal software, marketing and brand management. In 1997, he wasappointed Chairman of the Management of IBM Germany. He started his careerin 1982 with Touche Ross in Toronto, before joining the Chemical Bank inFrankfurt. Mr Lamberti studied business administration at the Universities of
Cologne and Dublin, and graduated with a Master’s degree.

2 LOUIS GALLOIS (65)8 LAKSHMI N. MITTAL (58)

Chief Executive Ofﬁcer of EADS

Chairman and Chief Executive Ofﬁcer of Arcelor Mittal

Mr Louis Gallois has been Chief Executive Ofﬁcer (CEO) of EADS sinceAugust 2007, after having been Co-CEO of EADS, and President and CEO of
Airbus since 2006. Previously, he served successively as Chairman and CEO of
SNECMA, Chairman and CEO of Aerospatiale and Chairman of SNCF. Earlier
in his career, he held positions in the French Ministry of Economy and Finance,
the Ministry of Research and Industry, and the Ministry of Defence. Mr Gallois
graduated from the École des Hautes Études Commerciales in economic sciences
and is an alumnus of the École Nationale d’Administration.

Lakshmi N. Mittal is the Chairman and CEO of ArcelorMittal. He founded Mittal
Steel Company in 1976 and was the architect of its 2006 merger with Arcelor infounding the world’s largest steel maker. He is widely recognised for the leadingrole he played in restructuring the global steel industry, and has over 30 years’
experience working in steel and related industries. Mr Mittal was awarded
Fortune magazine’s “European Businessman of the Year 2004”, “Business Personof 2006” by the Sunday Times, “International Newsmaker of the Year 2006” byTime Magazine, “Person of the Year 2006” by Financial Times, “2007 Dwight D.
Eisenhower Global Leadership Award, “Grand Cross of Civil Merit from Spain”,“Padma Vibushan” by the President of India and “Fellowship from King’s College”.

3 ROLF BARTKE (62)Chairman of Kuka AG

Mr Rolf Bartke is Chairman of Kuka AG. He was Head of the vans business unit
at DaimlerChrysler AG from 1995 to 2006. Previously, he was Mercedes Benz’s
Managing Director in the ﬁelds of commercial vehicle planning and projects,
commercial vehicle development, marketing and sales planning for Unimog
and MB-trac. He started his career in 1976 as Managing Director of commercial
agents of Unimat GmbH in Düsseldorf. Mr Bartke holds a PhD in industrial
engineering from the University of Karlsruhe.
4 DOMINIQUE D’HINNIN (49)
Chief Financial Ofﬁcer of Lagardère SCA

Mr Dominique D’Hinnin has been Chief Financial Ofﬁcer (CFO) of Lagardère
SCA since 1998. He joined Lagardère in 1990 as advisor to the Chairman of
the Finance Committee of the Group. After that, he held different positions
within the Group, ﬁrst being appointed as Internal Audit Manager, and then
CFO of Hachette Livre in 1993, before being appointed Executive Vice Presidentof Grolier Inc. in the United States. Mr D’Hinnin is an alumnus of the École
Normale Supérieure and is an Inspecteur des Finances.
5 JUAN MANUEL EGUIAGARAY UCELAY (63)
Director of Studies at the Fundación Alternativas

Mr Juan Manuel Eguiagaray Ucelay is Director of Studies at the Madrid-based
think tank Fundación Alternativas. Formerly Spain’s Minister for Public Administration (1991-1993) and Minister for Industry and Energy (1993-1996), he resigned
from Parliament in 2001. Between 1970 and 1982 he taught economics at Deusto
University in Bilbao. Mr Eguiagaray Ucelay holds degrees in economics and law,as well as a PhD from Deusto University.
6 ARNAUD LAGARDÈRE (48)Managing Partner of Lagardère SCA

Mr Arnaud Lagardère has been General Partner and Chief Executive Ofﬁcer(CEO) of Lagardère since 2003. He has been Managing Partner of Lagardère
since 1998, being appointed CEO of both Lagardère Media and Lagardère Active
in 1999. Previously he was CEO of Grolier Inc. in the United States, Head of
emerging activities and electronic media for Matra and Vice President of theSupervisory Board of Arjil bank. He began his career in 1986 as General Manager of MMB, the holding company of Hachette and Europe 1. Mr Lagardère
graduated in economics from the University of Paris Dauphine.

9 SIR JOHN PARKER (66)
Chairman of National Grid

Sir John Parker is Chairman of National Grid and the Non-Executive Directors’Committee of the Bank of England. He is joint Chairman of Mondi, Deputy
Chairman of DP World (Dubai), Non-Executive Director of the Carnival CruiseLine Group, a Member of the International Advisory Board of Citigroup andChancellor of the University of Southampton. His career has spanned theengineering, shipbuilding and defence industries, including some 25 years’
experience as a Chief Executive Ofﬁcer with Harland & Wolff and the Babcock
International Group. He studied Naval Architecture and Mechanical Engineering
at the College of Technology, Queens University, Belfast.
10 MICHEL PÉBEREAU (67)
Chairman of BNP Paribas

Mr Michel Pébereau has been BNP Paribas’s Chairman of the Board since 2003.
He presided over the merger that created BNP Paribas in 2000, becoming Chairman and Chief Executive Ofﬁcer (CEO). In 1993 he was appointed Chairman
and CEO of the Banque Nationale de Paris and privatised it. Previously, he was
Chairman and CEO of the Crédit Commercial de France. He started his careerin 1967 at the Inspection Générale des Finances. In 1970 he joined the French
Treasury where he held various high ranking posts. Mr Pébereau is an alumnusof the École Nationale d’Administration and of the École Polytechnique.
11 WILFRIED PORTH ** (50)
Member of the Board of Management of Daimler AG

Mr Wilfried Porth has been a Member of Daimler AG’s Board of Management
since April 2009. He is currently responsible for Human Resources and for the
Labour relations of the company. Since 2006, he was Executive Vice President,
MB Van and prior to that was Chief Executive Ofﬁcer of Mitsubishi Fuso
Truck & Bus Corp. He previously held various engineering and management
positions within the Daimler Group, including several years’ experienceabroad. Mr Porth graduated in engineering at the University of Stuttgart.
* The EADS Board of Directors appointed Bodo Uebber as Chairman of the Board of Directors
to succeed Rüdiger Grube with effect as of 14 April 2009. Rüdiger Grube resigned due to his
new responsibility as CEO of Deutsche Bahn.
** Wilfried Porth will be proposed for appointment as Member of the Board of Directors during
the EADS Annual General Meeting to be held on 27 May 2009 with immediate effect as fromthe end of such meeting.
EA DS A NNUA L RE VIE W 2 0 0 8

5CORPORATE GOVERNANCE

Shareholder structure
as of 31 March 200922.50% Sogeade (Lagardère and Frenchstate holding company Sogepa)
22.50% Daimler *5.49% SEPI (Spanish state holding company)
0.39% Treasury shares(without economic or voting rights)
49.12% Institutional, retail and employee
ownership plus shares held out of
the contractual partnership by the
French state* On 9 February 2007, Daimler reached an agreement with a consortium of private andpublic-sector investors by which it effectively reduced its shareholding in EADS by 7.5%,
while retaining its voting rights over the entire 22.5% package of EADS shares.

BOARD MEETINGSThe Board met nine times during 2008. The Chief Executive Ofﬁcer
kept it regularly informed of developments through business reports,
including rolling forecasts as well as strategic and operational plans.
Average attendance at the meetings was 80%.
Board members were informed, debated and reached decisions
about the following topics: strategy (M&A matters, competitiveenvironment); operational issues such as the A380 and the A400M
recovery efforts; implementation of the “Future EADS” andPower8 Plus efﬁciency programmes; the A350 development progress;
regular updates on other programmes; approval of budget andoperational plans; reorganisation issues; Group ﬁnancial results andforecasts; and creation of a new compliance organisation.
The Board also dealt with human resources, including management
qualiﬁcation, targets, performance and remuneration.

6

MANAGEMENT & GOVERNANCE> Corporate Governance

From a structural perspective, the Board supported decisions to streamline the Group (merger of Military Transport Aircraft Division and of
Airbus, under the name of Airbus Military; co-ordination between the
Astrium and Defence & Security Divisions to achieve technical andcommercial synergies).
Finally, the Board debated the impacts of the ﬁnancial and economiccrisis on EADS.

COMMITTEES OF
THE BOARD OF DIRECTORS
as of 14 April 2009

AUDIT COMMITTEEHERMANN-JOSEF LAMBERTI (CHAIRMAN)

ASSESSMENT OF THE BOARD’S PERFORMANCEThe 2008 self-assessment of the Board was conducted internally,
based on individual discussions with each director, exploring theBoard’s role and its effectiveness. The Board was generally satisﬁedwith its ability to work as a team and to tackle topics in EADS’best interests. It felt that, as a body, it had matured through its ﬁrst
year of operation, particularly when dealing with issues related tothe crisis. The diversity of the skill set and experience, and the focus
on the agenda, were considered to be the most tangible improvements. The ﬁndings will be further discussed and proposals to improve
the focus of information and the articulation of committees with
the Board will be made. Continuous improvement in governance andmanagement will remain a priority.

DOMINIQUE D’HINNINSIR JOHN PARKER
ROLF BARTKEREMUNERATION ANDNOMINATION COMMITTEESIR JOHN PARKER (CHAIRMAN)
DOMINIQUE D’HINNIN
HERMANN-JOSEF LAMBERTIWILFRIED PORTH *THE AUDIT COMMITTEE

The Audit Committee met ﬁve times in 2008, with an average 75% attendance. It evaluated EADS’ 2007 results, the 2008 half-year results,
the quarterly ﬁnancial reviews and topics like enterprise risk management and compliance.

STRATEGIC COMMITTEETHE REMUNERATION AND NOMINATION COMMITTEEMICHEL PÉBEREAUThe Remuneration and Nomination Committee met four times in 2008,
with a 94% average attendance. In addition to making recommendations
to the Board for major Group appointments, the Committee reviewed
compensation policy (including pension schemes), 2007 performanceand variable pay, the long-term incentive plan and the 2008/2009 employee share ownership plan. It also conducted the Executive Committee
members’ 2008 salary review.

WILFRIED PORTH *BODO UEBBER (CHAIRMAN)LOUIS GALLOISARNAUD LAGARDÈRE

* Subject to Mr Porth’s appointment as a Member of the Boardby the EADS Annual General Meeting to be held on 27 May 2009.

THE STRATEGIC COMMITTEEThe Strategic Committee met four times in 2008. In addition toapproving the Strategic Committee Charter, it monitored the implementation of the Group’s Vision 2020 strategic roadmap, screened
share price movements, made recommendations to the Board on M&A
projects and reviewed the Power8 Plus programme and European
consolidation process.
Registration Document 2008

For more detailed information, pleaserefer to the Corporate Governancesection at: www.eads.com
or to theBUSINESS, GOVERNANCE
AND CORPORATE RESPONSIBILITYFINANCIAL STATEMENTS

REGISTRATION DOCUMENT
2008

Book2_Titel_090504_Bel_02.indd 1

05.05.2009 9:50:05 Uhr

EA DS A NNUA L R E VIE W 2 0 0 8

7

“ Our Group is geared towards
crafting a long-term perspectiveof global leadership”
Louis Gallois

CHIEF EXECUTIVE OFFICERLOUIS GALLOIS

8

MANAGEMENT & GOVERNANCE> Chief Executive Officer’s Statement

DEAR SHAREHOLDERS, EMPLOYEES, CUSTOMERSAND SUPPLIERS,
In past years, EADS often stood out as a company constrained byits own complexities against a background of global growth; today,
in times of worldwide volatility and threats posed by recession, it is
the Company’s resilience and economic stability that stand out. We
have what it takes to envisage our long-term future with conﬁdence.
Record deliveries contributed to last year’s top and bottom line
growth. Revenues rose to € 43.3 billion, the Group’s net income
totalled more than € 1.5 billion. Nobody should be misled by ourgood 2008 results, though. Our customers, our own commercial
businesses and the entire upstream value chain are suffering in thecurrent economic downturn. Yet, we are committed to facing andshouldering the negative effects together with our suppliers, as
far as possible.
The aircraft business has always been cyclical, which is why weare organised to deal with cycles; and this is also the reason why
EADS’ Vision 2020 aims to increase the less cyclical defence, spaceand services business. Vision 2020’s validity has been underscoredby today’s economic challenges, and tangible progress has been madein 2008, for example, by carving out major aerostructure activities
and acquiring PlantCML in the United States. Vision 2020 is avision at work. This holds true, even if the crisis may force us togive priority to organic growth, as we have prioritised the preservation of our robust balance sheet over capturing external growth
opportunities.
While we maintain our course towards future goals, backed by anorder book now worth some € 400 billion, we are diligently managing the present. We are continuously monitoring the market, ourcustomers and suppliers, and have decided to adjust Airbus production rates as a preventive measure. Our solid backlog in defence
and institutional activities provides some protection and stability.

To improve our programme management efﬁciency, we have integrated the Military Transport Aircraft Division into Airbus. Thisis an important step within our “Future EADS” integration programme. The recently launched initiative is creating a leaner organisation, building on the transformation drive initiated two years
ago to strengthen proﬁtability and organisational effectiveness.
Within the framework of Power8, more than half of the targetedsavings of € 2.1 billion by 2010 have already been conﬁrmed.
Additionally, we have launched Power8 Plus, targeting € 1 billion
savings in 2012 at Group level. I believe that what we have learnedin redesigning our Company in the past years will help us to weather
the current downturn and to forge a more integrated, more efﬁcient, more effective EADS. We are better prepared than ever toface the challenges of the next few years.
Our Group is – and has been since its creation – geared towards
crafting a long-term perspective of global competitiveness, employment, and technological leadership. That is why our ambitious
R&D investment level is growing, despite the crisis. We are preparing for the future with prudence, but mindful of the overarching
responsibility this Company has for providing mobility, advancing
security, fostering sustainability and achieving technological breakthroughs. I look beyond the current crisis with conﬁdence. And
because EADS is now more resilient and more efﬁcient, the crisis
could be an opportunity to become even stronger. I believe in what
this Company, its management and employees can achieve. EADS,
for all these reasons, is a valuable enterprise.

Louis Gallois
Chief Executive Ofﬁcer

The difﬁculties encountered in the A400M military transport programme have called for decisive measures. We are conscious of
the implications the delay creates for customers, particularly thosewith demanding operations. We are committed to their requirements
and also convinced that the programme’s challenges can only beresolved through cooperation.

EA DS A NNUA L R E VIE W 2 0 0 8

9

THE EXECUTIVE COMMITTEELOUIS GALLOISHANS PETER RING

THOMAS ENDERS

Chief Executive Ofﬁcer (CEO)

Chief Financial Ofﬁcer (CFO)

Head of Airbus

Mr Gallois was appointed in August 2007, having
been Co-CEO of EADS and Head of Airbus
since 2006. He spent almost 20 years working
for various French Ministries, and was thenChairman and CEO of SNECMA, Chairman and
CEO of Aerospatiale and Chairman of SNCF. He
graduated from École des Hautes Études Commerciales and is an alumnus of École Nationaled’Administration.

Mr Ring was appointed EADS CFO in 2002,
Chief Operating Ofﬁcer in 2005 and Airbus CFO(in a dual role) in 2007. In 1996, he was madeSenior Vice President of Controlling at Dasa andsubsequently at EADS. From 1992, he was CFO
and Board member of Dornier Luftfahrt. He
holds a degree in Business Administration fromthe University of Erlangen-Nuremberg.

Mr Enders was appointed in August 2007. From2005 to 2007 he was Co-CEO of EADS andfrom 2000 to 2005 Head of the EADS Defence
and Security Systems Division. Prior to that,
he was Director Corporate Development andTechnology at Dasa, having joined Dasa in 1991.
Mr Enders holds a Doctorate degree from the
University of Bonn.

STEFAN ZOLLERFABRICE BRÉGIER

RALPH D. CROSBY JR.

Head of Defence & Security

Airbus Chief Operating Ofﬁcer (COO) andHead of EADS Operational Performance

Head of EADS North America

Mr Zoller was appointed in 2005, having held top
management positions within the Division since
2000. Previously, he held various management
positions within Dasa, DaimlerChrysler, Dornierand Senstar/Canada. Mr Zoller graduated fromthe University Tübingen with a PhD.

10Mr Brégier was appointed Airbus COO in 2006,
with additional responsibility for EADS operational performance. He became President andChief Executive Ofﬁcer (CEO) of Eurocopter in
2003. Previously, he was CEO of MBDA. He
joined Matra Défense in 1993 as Chairman of
the Apache MAW and Eurodrone GIEs. He isan alumnus of École Polytechnique and École
des Mines.

Mr Crosby has been Chairman and Head of EADS
North America since 2002. He serves on the
supervisory boards of American Electric Powerand the Ducommun Corporation. Mr Crosby
holds degrees from the US Military Academy,
the Graduate Institute of International Studies
in Geneva and Harvard University.

MANAGEMENT & GOVERNANCE> The Executive CommitteeFRANÇOIS AUQUE

JEAN BOTTIMARWAN LAHOUDHead of Astrium, Coordination Spaceand Defence

Chief Technical Ofﬁcer (CTO)

Chief Strategy and Marketing Ofﬁcer

Mr Botti was appointed in 2006. He joined EADS
from General Motors, where he was Chief Technologist and then Business Line Executive of
the Delphi Powertrain business. He started his
career in 1978 as product engineer for Renault.
Mr Botti holds a degree from INSA Toulouse,an MBA from Central Michigan University, a PhD
from the Conservatoire des Arts et Métiers andis an SAE fellow.

Mr Lahoud was appointed in June 2007. Previously, he was CEO of MBDA. He worked for
Aerospatiale on its merger with Matra and on
the foundation of EADS. Within EADS, he
served as Senior Vice President of Mergers &Acquisitions. Mr Lahoud is an alumnus of École
Polytechnique and graduated from the École
Nationale Supérieure de l’Aéronautique et del’Espace.

LUTZ BERTLINGDOMINGO UREÑA-RASO

JUSSI ITÄVUORIHead of Eurocopter

Head of Airbus Military

Head of Human Resources

Mr Bertling was appointed in 2006, following
a year as CEO of Eurocopter Deutschland. He
joined Eurocopter in 2003 as Head of Governmental Programs, coming from the Defence &Security Division. Previously, he held various
positions at DaimlerChrysler Rail Systems andBraunschweig University. He earned a PhD in
Engineering at Braunschweig University.

Mr Ureña-Raso was appointed in February 2009.
He was previously in charge of the Power8 and“Future EADS” programmes. From 1989 on, heheld various positions at CASA, EADS PZL, theDefence & Security and Airbus Divisions andother companies. Mr Ureña-Raso holds degrees
from the Polytechnic University of Madrid, fromESSEC in Paris and has an MBA from the International Board of Social Sciences (UNESCO).

Mr Itävuori joined EADS in 2001 and becamea member of the Executive Committee in 2003.
Prior to that, he had worked for KONE Corporation, where he began in 1982 and was appointed
Head of Human Resources and a member ofthe Executive Committee of KONE Corporationin 1995. Mr Itävuori graduated from the Vaasa
School of Economics, Finland, and served as an
air force pilot.

Mr Auque was appointed in 2000. He was previously Chief Financial Ofﬁcer (CFO) of Aerospatiale and Managing Director for satellites.
He spent his earlier career with the Suez Groupand the French Cour des Comptes. Mr Auque
graduated from École des Hautes Études Commerciales, Institut d’Études Politiques and is analumnus of École Nationale d’Administration.

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“ Our daily job is to actively
identify and then realise value
creation opportunities”
Hans Peter Ring

INTERVIEW WITH THE CHIEF FINANCIAL OFFICERAs EADS’ CFO, how do you view the 2008 results?
We are proud of this year’s strong results and, in particular, of the healthy cash position we haveestablished through a lot of hard work by the teams in all our Divisions. We have certainly deliveredon our promises in the defence, space and helicopter businesses. We do not think everything is perfect,
however. We realise that the A400M, and also still the A380, need a lot of care and attention before
they are running according to plan.
OK, these are good results but they relate to the past. What about the challenges EADS
is facing now?
Let’s look into 2009 and the following years. The challenges we face are certainly motivating us tosucceed.
There is a mismatch between the top-down macroeconomic scenario and the bottom-up positionof our order backlog at the end of 2008. To understand this, we are closely following the macroeconomic and air trafﬁc developments while micro-managing our delivery positions through close
contact with airlines. From what we learn, we will make proactive decisions about production rates.
To what extent would you say EADS’ efﬁciency drive will help you to weather the economic
storm in the short term?
We are developing a more integrated group, which is not easy, but EADS is making real progress!
With Power8 we launched a reorganisation and integration process at Airbus that we have now
spread to the entire Group with Power8 Plus. As a second step, we are improving the integrationof the Group and its support functions, which is why we have launched “Future EADS”.
From my perspective, improved integration is a signiﬁcant enabler of ﬁnancial performance.

12

MANAGEMENT & GOVERNANCE> Interview with the Chief Financial Officer

How will Finance contribute to the development of long-term efﬁciency in the Group?
I would say that a large part of my team’s job is active performance and cash management. Bothof these functions have a part to play in the efﬁciency and cost saving drives just mentioned.
Active performance management means our daily job is to engage with the Divisions to identify
and then realise value creation opportunities, so that we deliver on our targets and, more strategically,on the goals of Vision 2020. Every one of Vision 2020’s major goals has a performance metricattached. Wherever possible, we need to measure ourselves relative to the performance of our peers,which means permanent benchmarking.

Regarding integration, how will you work constructively with the Divisions?
Every aspect of Vision 2020’s implementation requires active partnership with theDivisions. We don’t want to inhibit the commercial creativity of our sales and programme networks. But it is clear that Finance must actively ensure that new contracts
anticipate and minimise the performance risk to EADS. This requires asking the rightquestions, setting realistic performance criteria and sharing responsibility with ourcustomers and suppliers. The avoidance of ﬁxed price contracts is an important element
here.
We have decided, therefore, to create a more integrated process which, ﬁrstly, links
corporate ﬁnance directly to the CFOs at the respective Business Units in a continuous
feedback loop; secondly, links Vision 2020’s strategic ambitions to operative actions; and,additionally, allows me to directly engage with my CFO network on performance optimisation measures in “real time”.
How are you balancing investment requirements with prudent cash management at a time ofsuch uncertainty?
EADS intends to keep its conservative balance sheet structure, as we believe this is the safest way
to cope with today’s risks while maintaining ﬁnancial ﬂexibility.
As of today, EADS has no reﬁnancing needs. We held € 13.7 billion in gross cash at the end of 2008
and had limited debt totalling € 4.5 billion. We also have substantial ﬁnancial headroom, comprising
an undrawn credit facility of € 3 billion, fully committed by 36 banks. This facility has no ﬁnancial
covenants or material adverse change clause. Additionally, there remains € 1.5 billion available fromour € 3 billion Euro Medium-Term Note programme.

HANS PETER RINGAt the same time, we are diligently protecting our cash by taking a prudent, low-risk approach to
cash management and by closely monitoring the banking system’s ﬁnancial health.
How are you managing ﬁnancial risks?
Our hedging policy affords us substantial protection against US dollar volatility.
Additionally, and importantly, while we are prepared to provide some ﬁnancing to support our customers, this will be approached cautiously and provided on a discretionary basis. Whether we do sowill depend on an airline’s trafﬁc volumes and its proﬁtability. We have a policy, however, of selling
our exposure as soon as the market allows. In 2008, we reached our lowest level of customer
ﬁnancing in 20 years.
So you can see we are working to stabilise our cash to maintain our strong liquidity position.
All these measures protect our investment capacity, allowing us to continue investing in our major
programmes for the long-term future.

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13

Vision 2020 at work

STRATEGY

Through Vision 2020, EADS is now following a clear roadmap for
the future. The current economic challenges underscore the relevanceof our long-term objectives.

SHARING LONG-TERM OBJECTIVES

Following the initiative of CEO Louis Gallois, EADS has formulated a strategic roadmap called Vision 2020. This blueprint for
EADS’ future was presented to the Board of Directors in January
2008. Since then, it has been turned into a Group-wide action
plan, applied by every Division.
HOLDING THE COURSE THROUGH THE CRISISThe unstable economic climate validates the core of our long-term
strategy: to make EADS a better balanced and even more resilientcompany.
More than ever we aim to achieve:> A better balance between commercial aircraft and ourother activities. Commercial aircraft is an extremely capitalintensive and cyclical business, with great sensitivity to the
US Dollar exchange rate. In 2008 it represented 63% of Grouprevenues. Our goal is to increase the share of our other activities,
especially defence and institutional business, in order to reacha 50/50 balance.

14> A better balance between platforms and services. With astrong customer base for advanced platforms and systems, EADS
is in a position to develop high-value related services, which are
not only highly proﬁtable but also counter-cyclical. Our target is
to raise service’s share of revenues from 10% to 25% by 2020.
> A better balance between our European roots and our
global footprint. To gain access to new markets and technology
resources, as well as low-cost and multi-currency-based sourcing,
we need to expand our international footprint. Our target is tohave 20% of employees and 40% of sourcing outside Europe.
Furthermore, we aim to become truly eco-efﬁcient. We aredetermined to demonstrate our responsible attitude and to makeeco-efﬁciency a competitive advantage.
Reaching these targets will require signiﬁcant technologicaland human resources. We will continue to deliver the best ofEuropean technology, and will encourage greater mobility andinternational diversity.

MANAGEMENT & GOVERNANCE> Strategy

TOP PRIORITIES FOR 2009

WE WILL:
ADAPT EADS to the downturn of its commercial
markets, with a clear priority on cash-generating andcost-saving programmes. We will sharpen the focus
on our core business and grow our presence in the
defence, security and services markets.
IMPLEMENT a leaner, faster, more integratedorganisation through “Future EADS”.
RESHAPE A400M contracts via customer and supplier negotiations to achieve a better balance, andwe are also implementing a new A400M programmeorganisation inside Airbus.
VISION AT WORKThe drive to implement Vision 2020 has already achieved signiﬁcantobjectives in 2008:

DEMONSTRATE excellence in delivering
on operations in all Divisions and all major programmes.

> Focusing on our core business, we carved out major aerostructure activities, establishing Aerolia in France and Premium
AEROTEC in Germany. We completed the sale of Filton (UK)and Laupheim (Germany), and 70% of EADS Socata.

ACHIEVE signiﬁcant progress in organic growthof services activities and make acquisitions as
ﬁnancial markets and our cash situation allow.

> Working toward better efﬁciency, we exceeded the targets ofPower8. We launched Power8 Plus and “Future EADS” to further
strengthen proﬁtability and improve organisational effectiveness.

CONTINUE progressing in globalisation with a
special focus on the US and Asia.

> Reinforcing programme management, in 2008 we delivered
12 A380 according to plan and met A350 XWB development
targets. The production of Ariane 5 ramped up as planned. All
Light Utility Helicopters delivered to the US Army were aheadof schedule.
> Continuing globalisation, we acquired US-based PlantCML
in the ﬁeld of secured networks and set up a new A320 ﬁnal
assembly line in China. Partnering with Northrop Grumman,
we won the initial US Air Force tanker competition.
> Expanding services, we deﬁned ambitious roadmaps in all
Divisions, focusing on high-value services.

MOVE towards an eco-efﬁcient enterprise, developing eco-efﬁcient products.
MAINTAIN and develop key competencies and skills.
REINFORCE communication with employees andseek to connect them more closely with the successof the Company.
PROMOTE innovation and reduce the lead time
for implementation.

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WE

16

have

SUCCESS MADE BY EADS

products and services that make more things possible. We have aircraft thatfly further with lower emissions, security systems that make public gatherings
safer, helicopters that fly in extreme conditions. Consequently, we are among
the world’s leading designers and manufacturers of passenger jets, helicopters,
satellites and other critical products.

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GETTING THE BEST FROM ALL OUR PEOPLE
THE SKILLED EADS WORKFORCE IS OUR GREATEST ASSET

The outstanding abilities of our highly motivated employees
drive our success and we are building this expertise to fuel7,081 new EADS employees. New entries 25% women.
44% of workforce with university or college degree.

our future growth. Everyone at EADS is encouraged to take advantage of tailored training
and development programmes. Whether technical experts or business managers, there is a structured
and rewarding career path for all. In this way, we are continuously improving the quality of ourworkforce, for their benefit, and for the benefit of our customers.

18

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19INNOVATIVE TECHNOLOGY MADE BY EADSIDEAS THAT IMPROVE TOMORROW’S WORLDAs a global leader in aerospace and defence, we develop
game-changing technologies that define the future of our industry.

1,088 patents ﬁled in 2008 –up almost 40% in two years.

Just as fly-by-wire controls revolutionised flying, so we are now making it a priority
to invent ‘eco-efficient’ products for a cleaner world. Year after year, wefile countless patents in cutting-edge technologies.

20

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LEVERAGING OUR SYNERGIESINTELLIGENT INTEGRATION MAKES US MORE THAN THE SUM OF OUR PARTS

Across the Group, we work together to get results. This gives us the budgets and shared expertiseto pioneer technologies in areas such as eco-efficiency and develop important management
techniques such as lean processes. It enables us to secure raw materials at competitive prices throughjoint procurement, and it means we can offer fulfilling career opportunities to new engineering talent.

This adds up to a unique competitive advantage.

22

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23WE HAVE

24

what

A STRONG POSITION IN INTERNATIONAL MARKETS

developed and developing economies around the world are increasingly demanding
as they become wealthier over the long-term. Thanks to our extensive internationalpresence, our order books already extend many years into the future.

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RESILIENT, GROWING MARKETS OVER TIME
WHILE OUR MARKETS ARE NOT IMMUNE TO UNCERTAINTY,THEY HAVE PROVED RESILIENT OVER TIME. AS INCOME RISES GLOBALLY,
SPENDING PATTERNS ARE EVOLVING FROM BASIC NEEDS TO MOREDISCRETIONARY ITEMS, INCLUDING TRANSPORTATION AND SECURITY.

As economic power moves East, China and India areseeing growing medium-term demand for air travel.

According to the United Nations, there are
27 emerging or potentially emerging countries witha combined population of almost three billion.

And there is a large number of smaller developing countries
with increasing wealth as well.

In addition, medium-term demand for our products and services is set to growin the developed markets. For example, the United States is forecast to order
twice as many passenger jets as China between now and 2026.1)

1)

26

Source: Airbus Global Market Forecast 2007-2026

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CONTINUAL DEMAND FOR EADS’ DIVERSIFIED PRODUCT RANGEEVEN IN TIMES OF CRISIS OUR EVOLVING WORLD HAS A STEADY NEED FOR THE AIRCRAFT,
DEFENCE & SECURITY SYSTEMS AND SPACECRAFT THAT WILL ADDRESS ITS CHALLENGES.

Demand for more modern, fuel-efficient jets and helicopters is growing.
And our interconnected world wants more satellite communications
and has more security concerns. EADS is able to address all of thesechallenges, as our strong 2008 order book shows.

28

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SOLID FINANCIALS 2008: PROTECTION FOR DIFFICULT TIMESA RECORD ORDER BOOK AND STRONG BALANCE SHEET PROVIDESTABILITY IN A FRAGILE GLOBAL ECONOMY.

Our order book grew 18% to a record € 400 billion.

€ 1,572 million net income
earned in 2008.

We have a record net cash position, which increased from€ 7.0 billion at year end 2007 to € 9.2 billion.
Our free cash flow exceeded expectations at € 2.6 billion.
Excellent performance supported our EBIT of € 2.8 billion.
Strong demand for our products and services lifted revenues by 11% to € 43.3 billion.

30

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31

WE HAVE WHAT

32

it

takes.
A clear vision.

A strategy that combines foresight and pragmatism.
An experienced and dedicated team.
Room for manoeuvre.

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Markets and Perspectives

As air traffic tends to follow the trend in economic growth, there has been a
pronounced fall in passenger and freight volumes. In defence, security andspace, the role of the public sector has reduced sensitivity to the downturn.

Air traffic proven to be a growth market
5in RPK* trillion

4
AIR TRAFFIC HAS DOUBLEDEVERY 15 YEARS

3

2

1

0
1969

72

Source: ICAO, Airbus* Revenue Passenger Kilometres

34

75

78

81

84

87

90

93

96

99

02

05

2008

THE BUSINESS YEAR 2008

> Markets and Perspectives

Passenger trafﬁc fell sharply at the end of 2008,
limiting overall trafﬁc growth for the year to just 1.6%.
This compares with a 7.4% increase in 2007.

In the second half of 2008, after a relatively strong start to the year,
ﬂuctuating oil prices and exchange rates created a more turbulent
environment. At the same time, the credit crisis infected general
growth prospects, household wealth and industry liquidity.
The overall impact of the crisis is difﬁcult to assess as many factors
are unprecedented. Air trafﬁc growth tends to trace economic
growth and, consequently, the slowdown has affected air transportand passenger trafﬁc. However, the immediate ﬁnancial crisis posesa signiﬁcant short-term threat to development.
In the public sector, the effect is less evident and more dispersed
over time. Currently, governments are boosting budgets to stimulate their economies. In the medium term, they may have to makehard choices regarding their investment priorities. Defence spending is, however, closely correlated with geopolitical tensions andsecurity needs. Also, the long-term nature of defence and spaceprocurement contracts reduces their sensitivity to the economy.

COMMERCIAL AVIATION
After several years of expansion, air trafﬁc started to slow at the
beginning of 2008 and fell sharply in the year’s last quarter. Cargo
trafﬁc, which is a strong forward indicator of economic growth,plummeted by 22.6% in December, while international passenger
trafﬁc dropped 4.6% 1). Asia Paciﬁc, recently the fastest expanding
region, shrank more than any other area. Passenger trafﬁc fell by
9.7% in December and freight by 26.0%.
Overall, passenger trafﬁc grew by just 1.6% in 2008, which
is dramatically down from the 7.4% increase in 2007. Full-year
freight trafﬁc fell 4.0%, compared to 4.3% growth in 2007.
Airlines lost US$ 8 billion during 2008 2) due to the combination of high jet fuel prices, which peaked at approximately
US$ 180 per barrel in the summer, and falling trafﬁc volumes.
For 2009, a further loss of US$ 2.5 billion is forecast, basedon a fuel price of US$ 60 per barrel.

Looking forward, aerospace and defence will continue addressing
the challenges of increasing environmental efﬁciency, developing
alternative fuels and integrating emerging economies into supply
chains.

1)

The International Air Trafﬁc Association (IATA) is the source for all air trafﬁc data(ﬁgures do not include some low cost airlines).

2)

IATA, March 2009

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35

Unmanned Aerial Vehicles are fast
becoming essential reconnaissance tools.

Air travel correlates with world Gross Domestic Product (GDP)(in %)
World passenger trafﬁc growth

World GDP growth
5

14
12

4

10
8

3

6
4

2

2
0

1

-2
-4

0

-6
1986

88

90

92

94

96

Source: Global Insight, IATA, OMC, IMF, Airbus

World passenger trafﬁc growth
World GDP growth36

While commercial aerospace manufacturers have record orderbooks, totalling more than 8,000 aircraft at the beginning of 2009,
falling passenger numbers and ﬁnancial losses have led some airlines to delay deliveries. Airlines are having difﬁculty ﬁnancing
orders, as the credit crisis has caused some banks to exit the market
and others to suspend lending. Aircraft manufacturers may have tosupply ﬁnance – either directly themselves, or indirectly.

98

00

02

04

The current crisis will accelerate restructuring of the airline industry. “Low cost carriers” have grown quickly in recent years andneed to adapt to the changing conditions, even if some of them are
winning trafﬁc from legacy airlines. Even so, air trafﬁc growth islikely to continue over time. Airbus forecasts that over the next
20 years the world’s airlines will require 23,385 new passenger
aircraft with more than 100 seats to serve demand for air travel,
which is expected to grow by 4.9% per annum 3).

06 2008

Looking to the longer term, technologies and operational improvements are being tested that will accomplish a step change in the
efﬁciency of air travel. Aircraft manufacturers are developing lighter planes with better aerodynamics. And engine manufacturers are
testing far more efﬁcient propulsion systems. It is likely thatemissions will be signiﬁcantly reduced by 2020 in line with targets
set by the Advisory Council for Aeronautics Research in Europe 4).
This encompasses: simplifying air navigation systems, improving
airport operating procedures and introducing aircraft with considerably lower fuel consumption.
3)

Source: Airbus Global Market 9 2007-2026.

4)

50% reduction of CO2; 80% reduction of NOx; 50% reduction of external noise; green design,
manufacturing, maintenance and disposal product lifecycle.

THE BUSINESS YEAR 2008

> Markets and Perspectives

Average fuel consumption of the world passenger ﬂeet
(Fuel consumption (litres/100 RPK *)DEFENCE

8
History

6

Forecast

1980s
8 litres per
pax/100 km

2026
3 litres per
pax/100 km

42000s
5 litres per
pax/100 km

A380 **

2
1986

91

96

01

06

11

16

21

2026

As defence spending is more correlated with geopolitical tensions
and security needs than with economic trends, it is expected toremain relatively stable in the short-term, although the global
slowdown makes this less certain. Additionally, defence spendingis an efﬁcient way of sustaining a country’s industrial base andsupporting high-technology jobs.
The United States represents by far the largest defence market,
with 50% of world spending. Top-line spending, which includes
baseline and emergency supplemental spending, has more thantripled from 2000 to 2008, and amounted to US$ 663.8 billion in2008. Due to uncertainties surrounding the future of US defence
spending, however, the long-term trajectory is difﬁcult to assess.
Defence spending in Asia Paciﬁc has risen steadily. As India modernises its defence forces, its defence budget has been growing at anannual rate of 7% and is expected to reach US$ 36 billion by 2013.

Source: Airbus.
* RPK: Revenue Passenger Kilometres** Assumed 100% iced factor

US real GDP growth and real growth in US Defence spending(in %)
25
20
15

Across the globe, spending on military aircraft is a major part ofany procurement budget. Particularly helicopters and Unmanned
Aerial Vehicles (UAVs) are expected to attract high expenditure
over the next ten years worldwide. Established military powers are
replacing helicopters bought in the 1960s and 1970s. Meanwhile,
UAVs have become essential for surveillance and reconnaissance.
Today’s military is increasingly tasked with asymmetric warfareand “non-combat” missions such as peace-keeping. Consequently,
defence forces are concentrating spending on equipment that facilitates rapid deployment, precision engagement, improved tacticalinformation systems and co-operation between different forces.

10
5
0
-5
-10
1965 69

73

77

81

85

89

93

97

Source for DoD Budget: DoD FY2009 Greenbook and EADS Analysis
Source for US GDP: US Department of Commerce% Change in US Department of Defense (DoD)
Budget – Inﬂation Adjusted Dollars% Change in real US GDP

01

05 2008

The model for defence ﬁnancing continues to change, with an increasing trend towards long-term partnerships and full outsourcingof capability-based services, which are evolving towards comprehensive support and managed services.

SECURITY
Terrorism remains the greatest external threat to public safety inmany parts of the world, driving signiﬁcant growth in the young
security industry. Technologies and system integration capabilities
are being developed and reﬁned, with the priority to protect civil
populations, critical infrastructure and air transport.

Global Security Market in 2008
43% North America
25% Europe
23% Asia Paciﬁc
6% Middle East
3% Latin & South America

Geographically, the security industry is expanding across the globe.
The complexity of security solutions is increasing, and customers
are demanding the capability to integrate larger systems. In the
United States, Department of Homeland Security spending continues
to increase steadily, and is also growing in Europe, Asia Paciﬁc, theMiddle East and many developing countries.

Source: Frost & Sullivan.

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37

The European Space Agency’s
Ministerial Conference in November 2008
conﬁrmed that its budget will grow at
2.5% per annum until 2013.

120

Within the European Union, the European Security Research
Program has been granted a budget of €1.4 billion to develop
security technologies from 2007 to 2013. This is speciﬁcally toprotect Europe’s citizens from threats such as terrorism, natural
disasters and crime.

100

SPACE

80

The European Space Agency’s ministerial conference in November
2008 conﬁrmed its budget, which will grow at an annual rate of
2.5% from 2009 to 2013. Additionally, key European Union programmes, like Global Monitoring for Environment and Security(GMES) and the Galileo navigation initiatives, have their own
budgets, as do individual European nations.

World revenues by space sector(in US$ billion)
140

123

60
Satellite services

40

Satellite manufacturing

20

Launch industry

0

Ground equipment
2002 2003 2004 2005 2006 2007

Source: Satellite Industry Association (June 2008)

Within the commercial satellite sector, pressure from boththe economic downturn and price competition may impact
the near-term prospects for launchers and satellites.
Yet, the practical application of satellite technology is opening up
new commercial activities for the space sector. Both earth observation imaging and secure satellite communications are growth areas.

38THE BUSINESS YEAR 2008

> Towards a leaner organisation

Towards aleaner organisation
The “Future EADS” programme will deliver cost savings and greater efficiency through sharedservices, a leaner and clearer Group organisation, and better integration of support functions.
Taking a decisive step towards a leaner Group structure, the Board has decided to integrate
the Military Transport Aircraft Division into Airbus, so simplifying supervision of the A400M
programme and improving management of resources. Furthermore, Astrium and Defence &Security Divisions are becoming more closely coordinated, thus ensuring a consistent approach
towards common customers, as well as developing commercial, technical and strategy synergies.

EADS

COORDINATIONAIRBUS

EUROCOPTERASTRIUM

DEFENCE & SECURITY

Airbus Military

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39Airbus

Airbus delivered a record number of aircraft in 2008 and, with ahighest-ever order backlog and ongoing cost reductions, is preparedto face current economic challenges.

The A320 is the world’s best-selling commercial jet.

40

Management is successfully introducing leaner
production processes.

As the A380 completed its ﬁrst year in service, almosta million passengers had ﬂown on the revolutionary
double-decker jet.

THE BUSINESS YEAR 2008

> Airbus

Airbus
(€ m)

2008

2007

Variation

Revenues

27,45325,216

+ 9%

EBIT

1,790

- 881

–

Order intake

82,041

117,323- 30 %

Order book344,818

283,829+ 21 %

In number of aircraft
Deliveries

483

453

+ 7%

Order book

3,715

3,421

+ 9%

COMMERCIAL AIRCRAFT

CREATING A MORE EFFICIENT ORGANISATION

In 2008 Airbus achieved record deliveries, expanded its order bookand exceeded its cost reduction targets.

Costs fell substantially, as the Power8 programme continued toincrease efﬁciency. Exceeding targets for the second year, the programme provided cost savings of about € 1.3 billion. This is morethan half way to the 2010 objective of € 2.1 billion – and Power8
Plus will add a further € 650 million in savings by 2012.

Some 483 civil aircraft were delivered – 30 more than in 2007,
marking the sixth successive year that Airbus has increased its
deliveries.
Airbus’ order book totalled 3,715 aircraft at year end, representing
a list-price value of US$ 438 billion and six years of full production.
New orders were strong, as Airbus booked 777 net orders, witha value of approx. US$ 100 billion at list prices, which represents
a 54% share of its market. This substantial backlog gives Airbus
ﬂexibility to adapt if customers want to reschedule deliveries.
Reﬂecting the higher deliveries, revenues for 2008 increased by
9% to € 27.5 billion (€ 25.2 billion in 2007). The Division recorded
an EBIT of € 1,790 million, lifted by both higher revenues and savings from the Power8 programme. This compares to a € 881 million
loss in 2007, when there were more exceptional charges relating to
the A400M delay, Power8 and the launch of the A350 XWB.

Through a new organisational structure, leaner processes andcareful cash management, Power8 has signiﬁcantly reduced Airbus’
cost base. Power8 Plus, an EADS-wide effort, will meet its targets
through continuing existing cost reduction projects and increasing
production in low-cost countries.
Key to Power8 was the divestment of non-core aerostructure manufacturing sites. The Laupheim and Filton (Germany and UK) sites
have now been sold to long-term Airbus partners, Diehl/Thales
and GKN respectively. Meanwhile, EADS’ new wholly-owned aerostructures companies, Aerolia in France and Premium AEROTEC
in Germany, began operation in December 2008. This enables
Airbus to concentrate on its core business as an aircraft architect
and integrator.
In parallel with Power8, Airbus continues to expand its industrial
footprint. The A320 Final Assembly Line in Tianjin, China opened
in September 2008 and will secure access to the growing Chinese
market, as well as tapping into the country’s engineering talents.

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41

The new A320 production line in Tianjin,
China will secure access to one of theworld’s most promising markets.

NEW A350 XWB, THE PLAYER OF TOMORROW

Airbus’ newest aircraft, the A350 XWB long-range, has alreadywon 478 net orders from 29 customers in the two years since its
launch, including some 163 net orders and 16 customers added
during 2008, which represents a 64% market share in its class.
The development of the A350 XWB progressed well. Having
passed its detailed-deﬁnition freeze review at aircraft level in
December 2008, its architecture is now ﬁnal. Introduction of the“Uniﬁed Planning Tool” in April 2008 accelerated achievement of
this milestone. Also, for the ﬁrst time, Airbus has a single, uniﬁed
DMU (digital mock-up) and a single tool set, uniting the whole
A350 XWB team – both within Airbus and throughout its supply
chain.

Almost a million passengers have ﬂown on the A380, which isalready servicing seven major international routes connecting fourcontinents. While airlines beneﬁt from approximately 20% lower
operating costs, the airport operators have new growth opportunities
in the mid-long term. For example, one A380 can replace two smaller
aircraft – reducing cost, air space occupancy, noise and emissions.
The A380 had a total of 198 orders from 16 customers at year
end, including nine new orders in 2008, which amounts to a
75% market share in this segment.
Airbus anticipates a market of 1,700 aircraft in this category overthe next 20 years, as eco-efﬁciency becomes more critical.
ROBUST ORDERS ACROSS THE RANGEAll key supply chain partners are now on board, with major fuselage work packages assigned, as well as the major work packages forthe wings. In line with the new supplier policy, many packages aremuch larger than before, with suppliers becoming involved earlier
and assuming greater responsibility.
A380 COMPLETES ITS FIRST YEAR IN SERVICE

Twelve A380 were delivered in 2008, in line with programme
targets, and the ramp-up will continue in 2009 as Airbus ﬁnalises
the switchover to “Wave 2” production.

42

The A320 family booked 472 net orders in 2008, raising the
programme’s backlog to around 2,600 aircraft.
To maintain its position as the leading single-aisle family, theA320 is being continuously enhanced. Innovations include a lighterand brighter cabin, a passenger-to-freighter conversion and thepossibility of extending the passenger aircraft’s service life by
10 to 20 years via a programme of “extended service goals” forlonger maintenance intervals. Flight testing was also carriedout on the A320 with new Blended Winglet devices designed toreduce drag.

THE BUSINESS YEAR 2008

> Airbus

Qatar Airways has ordered 80 of
the new A350 XWB, making it oneof the largest customers to date.

Airbus increased single-aisle production to a record 36 aircraft permonth. The planned ramp-up to over 38 aircraft per month was
stopped in December 2008 due to economic conditions and will
be adjusted downwards in 2009. Airbus is constantly monitoringcustomer demand and will adapt production as necessary.
The long-range A330/A340 aircraft family won 138 net orders.
The A330 is particularly in demand and recorded its 1,000th sale,increasing the combined A330/A340 programme order book toaround 1,500 aircraft.
Production of A330/A340 models at Toulouse has reached a record
high of eight aircraft per month.
The family’s newest member, the A330-200 Freighter, is progressing towards ﬁnal assembly and its initial ﬂight in 2009.
Airbus Corporate Jetliners proved popular, with customers placing
ﬁrm orders for 23 aircraft. Orders comprised 14 single-aisle aircraft
and nine wide-bodies – a record number of larger aircraft.

PREPARING TOMORROW’S ECO-EFFICIENT TECHNOLOGY

Airbus continued its research and development of ground-breaking– and game-changing – technologies.
In particular, management is focusing on eco-efﬁciency and hastaken a number of initiatives in this direction. A series of ﬂight
tests trialled Pratt & Whitney’s new “Geared Turbofan” engine
architecture, which is one of a new generation of engines withthe potential to reduce fuel burn substantially. Airbus was also
the ﬁrst to ﬂy with alternative fuels and fuel cells.
Another important development was the ofﬁcial start of the sevenyear European Union (EU) “Clean Sky” joint initiative, in which
Airbus and Saab will lead the Smart Fixed Wing Aircraft Integrated
Technology Demonstrator. The programme’s objectives are closely
related to three of the four environmental challenges set by theAdvisory Council for Aeronautics Research in Europe: to reduce
fuel consumption and CO2 emissions by 50%, perceived external
noise by 50% and NOx by 80% by the year 2020.
In order to improve future aircraft and air trafﬁc operational performance, the EU selected Airbus to support the Single European
Sky ATM Research project to reorganise Europe’s air trafﬁc management systems by 2020. This will increase air trafﬁc capacity
threefold‚ improve safety by a factor of 10 and reduce the environmental impact of each ﬂight by 10%.

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Military Transport Aircraft
(€ m)

2008

2007

Variation

Revenues

2,759

1,140

+ 142 %

- 16

- 155

–

Order intake

EBIT

5,083

784

+ 548 %

Order book

22,26919,932+ 12 %

The ﬁrst A400M air frame
rolled off in Seville in June 2008.

AIRBUS MILITARY(FORMERLY MILITARY TRANSPORT AIRCRAFT)
In order to simplify the management structure and exploit synergies
with Airbus, EADS announced in December 2008 that it would
integrate the Military Transport Aircraft Division into Airbus tocreate Airbus Military. In particular, integration will strengthen
management of the challenging A400M military transport programme, which was delayed in 2008.
This came at the end of a year in which the Military Transport
Aircraft Division achieved a signiﬁcant ﬁnancial advance and won
substantial orders, especially for its tanker airborne refuelling
aircraft. Revenues grew by more than 140% to € 2.8 billion(€ 1.14 billion in 2007), due to the effect of moving the delayed
A400M to early-stage accounting methodology. It also beneﬁted
from higher tanker sales.
EBIT improved correspondingly, moving to € -16 million, up froma loss of € 155 million in 2007. Once again, tankers played a partin this improvement, as did the medium-light turboprop aircraft
range, as well as a tax credit related to the A400M programme.
Buoyant demand for Airbus tankers resulted in the order book
expanding by over a quarter to more than € 23 billion, with theDivision winning approximately € 5 billion of new orders. Acrossthe world, four air forces have ordered a total of 23 tankers.

44

Airbus’ Multi-Role Tanker Transport (MRTT) aircraft won fourout of the ﬁve competitive tenders worldwide, conﬁrming its status
as the most advanced and capable tanker transport. Orders for
A330 MRTT included the UK’s Future Strategic Tanker Aircraft
programme for 14, the United Arab Emirates’ order for three
and Saudi Arabia’s order for one. Additionally, the Northrop
Grumman/EADS KC-45 – based on the A330 MRTT – wasselected in April 2008 by the US Air Force to replace their aging
KC-135 tankers, but the order was cancelled in September pending
a review of tanker requirements by the new US administration.
Development of tankers progressed well. The ﬁrst of Australia’s
A330 MRTT successfully tested its fuel pods during ﬂights in
December and will be delivered in 2009. Furthermore, the Airto-air Refuelling Boom System was ﬁnalised following several
airborne contacts. It enters series production in 2009.
In the medium-light turboprop range, the US Coast Guard orderedan additional three CN-235 maritime patrol aircraft, and has
now bought 11 of these aircraft. The Mexican Navy ordered two
CN-235 maritime patrol aircraft. There were additional orders
for three CN-235 and three C-212.

THE BUSINESS YEAR 2008

> Airbus

The CN-235 is a leading mediumweight transport that has beensold to air forces across the world.

DELAYS ON THE A400M – NEW APPROACH PROPOSEDOUTLOOK

In 2008, the A400M programme suffered further delays. The ﬁrst
ﬂight was postponed mainly due to the unavailability of the engine
software control.

As with most industries, aviation is affected by the economic
recession and Airbus expects the level of new aircraft orders
to fall in 2009.

Management is now working with the engine consortium to
conﬁrm a date for the ﬁrst ﬂight. The turboprop propulsion systemof the A400M is speciﬁcally designed for the most demanding
operational requirements.

Airbus’ priorities for the year are fourfold: to maintain a close
dialogue with customers; to anticipate their needs early;
to manage the order book carefully; and to protect the cash
position.

By integrating the Military Transport Aircraft Division into
Airbus, the EADS Board of Directors has strengthened the A400M
programme’s management. Airbus Military has proposed a new
approach – including a new timetable and certain technical changes– to the European launch customers 1). Regarding the timetable,
the ﬁrst delivery is now expected to take place approximately three
years after the ﬁrst test ﬂight.
The ﬁrst A400M airframe rolled off its ﬁnal assembly line inSeville in June 2008 at a ceremony presided over by His Majesty
Juan Carlos I, King of Spain.

Management will also seek to agree on a new approach to the
A400M with its launch customers, while conﬁrming a new date
for the ﬁrst ﬂight with the engine consortium and therefore
a ﬁrm programme schedule.
With its large order book and the creation of a leaner organisation through Power8, Airbus enters the downturn in a strong
position to face what will be a difﬁcult period for airlines andmanufacturers alike. In the longer term, demand for more
efﬁcient and environmentally friendly aircraft will continue
to rise. Securing long-term competitiveness and employment
remain key objectives for 2009.

There are currently orders for 192 A400M, 180 from the European
launch customers, eight from South Africa and four from Malaysia.

1)

The European launch customers are the members of the Organisation Conjointe de Coopérationen matière d’ARmement (OCCAR), the European organisation formed to organise joint arms
procurement.

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Eurocopter

Eurocopter’s global industrial presence and technological advantages
drove another year of significant growth, with the order book maintaining
its high level.

The EC135 is a light, twin-engine multi-mission
Eurocopter’s production rate has almost doubled
helicopter that provides outstanding manoeuvrability, in the past four years, allowing it to deliver 588
as well as a quiet and smooth ride.
helicopters in 2008.

46

The Brazilian government has ordered 50 EC725
medium-weight helicopters for its armed forces,
demonstrating the value of an international presence.

THE BUSINESS YEAR 2008

> Eurocopter

(€ m)

2008

2007

Variation

Revenues

4,486

4,172

+ 8%

293

211

+ 39%

Order intake

4,855

6,584

- 26 %

Order book

13,824

13,455+ 3%

EBIT

Revenues by markets(in % of external revenues)
45% Civil
55% Defence

At year end, the order book was € 13.8 billion (€ 13.5 billion in2007), the equivalent of 1,515 helicopters or approximately three
years’ production at current rates. Cancellations were limited andconcentrated in the civil/corporate market.
In the United States, Eurocopter’s relationship with the armed
forces expanded, with the US Armed Forces ordering 44 UH-72A
Lakota helicopters. The 50th of the 123 Lakotas ordered by
the US Army was delivered, including the ﬁrst from the new
Mississippi ﬁnal assembly line.
The December announcement that the Brazilian government
signed an agreement for the acquisition of 50 new EC725
medium-weight helicopters for its armed forces demonstrates
the importance of Eurocopter’s international presence. Eurocopter
has been active in Brazil for more than 30 years through its subsidiary Helibras.
EXPANSION IN SERVICES

In 2008, Eurocopter achieved its second highest ever level oforders while delivering more helicopters than ever before. With
the beneﬁt of its global industrial presence and practical technology,
Eurocopter also maintained its leadership in the worldwide civil
helicopter market in terms of deliveries.
Substantial reorganisation of production lines and recently opened
industrial facilities enabled Eurocopter to deliver 588 helicopters in
2008. The rate of production has increased by over 20% comparedwith 2007’s 488 helicopters and has almost doubled in the past
four years.
Revenues rose by 7.5% to € 4.5 billion (€ 4.2 billion in 2007).
EBIT rose to € 293 million (€ 211 million in 2007). A 44% risein self-funded research and development costs, as well as adverse
foreign exchange movements impacted the EBIT margin.
Research and development was mainly related to the new EC175
medium-weight civil helicopter being jointly developed with Chinese partners, as well as new developments to continue making
Eurocopter helicopters the safest and most ﬁt for each purpose.
WELL-BALANCED ORDER BOOK

In line with the goal of making up 50% of sales through services
by 2020, investment in services increased notably, particularly inﬂight simulation. Furthermore, the number of power-by-the-hourservice contracts increased by 20%. In 2008 Eurocopter acquired
German maintenance, repair and overhaul specialist, Motorﬂug.

OUTLOOK
At a time of uncertainty, Eurocopter has a large order bookdiversiﬁed across commercial, corporate, oil and gas, parapublic and military customers. Furthermore, the military
market is still likely to grow as developed nations replace
helicopter ﬂeets and emerging nations build defence forces.
Management is monitoring the ﬁnancial crisis, maintaining
production ﬂexibility and close relationships with key
customers.
Research and development will continue to increase as
Eurocopter maintains product leadership and prepares
the next generation of helicopters.
Strategically, the global industrial footprint will continue
to be developed, as will service capabilities.
Eurocopter has conﬁdence in its customer base and willcontinue to strengthen its competitive advantages.

Eurocopter won orders of € 4.9 billion (€ 6.6 billion in 2007), including 715 new aircraft as well as after-sales service. The orderintake was well-balanced between serial helicopters (59%), supportand services (35%) and development and other activities (6%).
Military and civil products respectively split 36% and 64%, and thetotal export rate amounts to 64%.

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Astrium

Astrium accomplished exceptional, profitable growth, demonstrating how
successful innovation has generated a strong competitive position acrossits businesses.
As part of the new organisation, a coordination between Astrium andDefence & Security Divisions has been installed.

Skynet 5 satellites deliver secure communications to
the UK Ministry of Defence.

48

Improvement programmes are delivering signiﬁcant
efﬁciencies across Astrium.

The docking of EADS’ Automated Transfer Vehicle
with the International Space Station (ISS) was animportant scientiﬁc achievement.

THE BUSINESS YEAR 2008

> Astrium

launcher won 13 orders, more than half of the open market volume. It has proved highly reliable, performing 28 launches in succession since 2003. Also within the Business Unit, France’s newgeneration M51 ballistic missile completed its ﬁnal trial ﬂight.
(€ m)

2008

2007

Variation

Revenues

4,289

3,550

+ 21 %

EBIT

234

174

+ 34%

Order intake

3,294

4,492

- 27 %

Order book

11,035

12,895- 14 %

Revenues by markets(in % of external revenues)
65% Civil
35% Defence

The Satellites Business Unit maintained its market share, winningseven satellites while launching seven telecommunication and two
observation satellites. The European Space Agency awarded Astrium
an order for three major scientiﬁc satellites, Chile and Spain eachordered an observation satellite, and two telecommunications satellites were ordered.
The Services Business Unit reached maturity. The Paradigm securecommunications system became fully operational and capable ofservicing the UK Ministry of Defence following delivery of the thirdand ﬁnal satellite, Skynet 5C. Progress was satisfactory on similar
communications programmes for Germany and the United ArabEmirates, and a ﬁrst service contract was inked with the Pentagon.
COMPLEMENTARY ACQUISITIONSHigh levels of innovation, proven reliability and a sharp focus on
efﬁciency all contributed to a successful year for Astrium, highlighting its strong competitive position. Astrium’s contributions to
the International Space Station (ISS) entered the Earth’s orbit during the year, its Ariane 5 launchers promoted an unrivalled recordof success and efﬁciencies were delivered across the Division.
Revenues increased by 21% to € 4.3 billion (€ 3.6 billion in 2007),with contributions from all three Business Units – Satellites, Services and Space Transportation. Speciﬁcally, telecom satellite sales
grew, the UK’s Paradigm secure communications system was completed and the Ariane 5 launcher production rate was stepped up.
Correspondingly, EBIT rose by 34% to € 234 million (€ 174 million
in 2007). The EBIT margin continued the last four years’ progressive expansion, reaching 5.5% compared with 4.9% in 2007.
This growth was achieved despite adverse currency movements –especially the decline of the UK pound which impacted Paradigm
earnings – and slightly higher research and development costs.
The order book secures around three years of activity, reaching€ 11.0 billion at year end (€ 12.9 billion in 2007).
BROAD-BASED GROWTHThe Space Transportation Business Unit, the prime contractor on
Europe’s contribution to the ISS, made a historic technical achievement as the Columbus laboratory and Automated Transfer Vehicle
connected with the ISS early in 2008. Space Transportation’s growth
was supported by Ariane 5 activities and the powerful Ariane 5

Several acquisitions boosted growth prospects. Services acquired
Imass Ltd, a UK company providing precise positioning products.
It also lifted its stake in Spot Image, the French company that owns
commercial rights to French Ministry of Defence satellite images,
from 40% to 80%. Satellites acquired Surrey Satellite Technology
Ltd, an innovative UK business that designs and manufactures
small and micro satellites.

OUTLOOKAt the end of 2008, all three Astrium Business Units havea strong outlook, beneﬁting from an order book across theDivision equivalent to around three years of activity. The
majority of its products and services are based on technicallymature lines of business, such as Ariane 5 and Eurostar 3000.
Astrium anticipates delivering the Satcom BW secure communications system to Germany’s Defence Ministry in 2009.
Additionally, it looks forward to the European Space Agency
awarding procurement contracts for the reorganised Galileo
satellite navigation system, following the award of the
production contract for the next 35 Ariane 5 launchers to
Arianespace in January 2009.
Management expects further proﬁtable growth, with progressive expansion of the EBIT margin in the medium-term but
is also monitoring closely any potential impact of the current
economic crisis.

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Defence & Security

Defence & Security made a strong contribution to EADS’ financial
performance through profitable growth and successful integration.
As part of the new organisation, coordination between Astrium andDefence & Security Divisions has been installed.

EADS is the only European defence company capable EADS has ambitious targets to increase securityof supplying both large and small Unmanned Aerial
activities, particularly as defence and security
Vehicles.
products converge over the long term.

50

The Euroﬁghter is the most modern ﬁghter planecurrently in production.

THE BUSINESS YEAR 2008

> Defence & Security

BALANCING PRODUCTS AND SYSTEMS INTEGRATION

(€ m)

2008

2007

Variation

Revenues

5,668

5,392

+ 5%

EBIT

408

345

+ 18%

Order intake

5,287

7,460

- 29%

Order book17,032

17,836- 5%

Revenues by markets(in % of external revenues)
3% Civil
97% Defence

Growth across a range of mature programmes as well as efﬁciencies
from site consolidation generated strong ﬁnancial performance.
Additionally, there was order book expansion in export and highgrowth areas such as border and harbour surveillance, radar andsecure communications whereby Defence & Security (DS) acquired
PlantCML, a leading US provider of emergency response solutions.
Revenues increased by 5.1% to € 5.7 billion in 2008 (€ 5.4 billion
in 2007), lifted by contributions from radar, services for airborne
military systems and the consolidation of April’s PlantCML acquisition. Growing proﬁtability in maturing programmes – including
MBDA missiles, radar and services for airborne military systems –drove an 18% increase in EBIT to € 408 million (€ 345 million in2007). The return-on-sales margin rose to 7.2% (6.4% in 2007).
STABLE ORDER BOOK

The order book ended the year at € 17.0 billion (€ 17.8 billion in2007), with the balance continuing to shift towards high-growth
products and services. While the Euroﬁghter, missile and radarbusinesses account for most orders, a growing share is represented
by global security systems.
For Euroﬁghter, the 148 tranche-one multi-role combat aircraft
delivery ended in 2008. Delivery of the export orders for Austria
is well in progress, as are the 236 tranche-two aircraft for the partner nations. Formal bidding processes are progressing with India,
Greece and Switzerland. Discussions are ongoing on Euroﬁghter
tranche three.

Security capabilities continued to expand signiﬁcantly. Acquiring
PlantCML brought access to the US market, notably to sell the new
Professional Mobile Radio (PMR) P25 standard. DS is developing
its PMR TETRA business, which helped to secure the Olympic
Games 2008.
Installation of integrated security systems for Qatar, other Middle
East contracts and Morocco’s new Tanger Med port began. The
Tanger Med system’s versatility is designed to cope with a diverse
range of passenger and container trafﬁc.
For Unmanned Aerial Vehicles (UAVs), DS is the only European
supplier able to provide both large and small systems. Work on
the risk reduction study for the Advanced UAV continued withidentiﬁcation of France, Germany and Spain’s capability requirements.
Delivery milestones were reached for two French programmes,
DRAC and SIDM, and aerial target drones were delivered to the
US Army.
Defence Electronics sold air trafﬁc control radars for Germany’s
military airﬁelds and delivered TRS-3D radar systems to customers
such as the US Coast Guard and the German armed forces. TRS-3D
is the global market leader for medium-range naval radars.
The METEOR realignment contract amendment was signed after
all partners (Spain, France, UK, Germany, Italy and Sweden) signed
the Memorandum of Understanding.
OPERATIONAL EFFICIENCIES

November’s inauguration of the Military Air Systems Centre in
Manching (Bavaria, Germany) was important, as it consolidated
several sites, creating operational efﬁciencies and scale in activities
such as servicing.

OUTLOOK
In 2009, despite tougher economic conditions, the Division willseek to expand its local operations in export countries – bothorganically and by bolt-on acquisition – in order to facilitate
growth in exports.
Management aims to increase security activities, particularly as
defence and security products converge. DS intends to become
the main driver of programmes within Europe and has ambitious
growth targets from a balance of integrated systems, missioncritical products and value-added services.
In order to accelerate organic growth, research & technology
investment is increasing, focused mainly on UAVs, future
generation radars and the System Design Centre.
Finally, improvements will continue to be implemented.

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EADS DRIVERS& RESPONSIBILITY

52

EADS DRIVERS & RESPONSIBILITYBALANCING STRATEGIC OBJECTIVES AND SHORT-TERM PRIORITIESBased on our Vision 2020, we are transforming ourselves. Doing this in
a way that is both commercially and environmentally sustainable means balancing
a range of factors, such as:> Building a global business while ensuring that ethics are an integral
part of our business culture and fostering mutually beneficial supplier
relationships;> Becoming eco-efficient while developing state-of-the-art aerospaceand defence technology; and> Growing talent for the future while sharpening consciousness ofsocial responsibility.
Innovation, Eco-efficiency, Human Resources, Sourcing andEthics and Compliance are all driving forward our evolution – in theinterests of external stakeholders and employees.

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Innovation

The Corporate Technical Office introduced initiatives to support
Vision 2020’s strategic goals, while further improving researchand technology productivity.

54

EADS DRIVERS & RESPONSIBILITY> Innovation

Across EADS, 2008 was a signiﬁcant year for technology development, with notable innovations ranging from civil aircraft fuel cellresearch to synthetic fuel testing.
EADS ﬁled 1,088 patent applications during 2008, up from
792 in 2006. In the United States, EADS ranked fourth for patentapplications in the aerospace sector, according to The Patent Board.
Management is actively marketing EADS-patented technology tocompanies in other sectors.
In 2008 EADS’ Corporate Technical Ofﬁce (CTO) introduced
measures to foster EADS’ sustainable growth by developing leading edge, including “eco-efﬁcient”, technologies. At the same time,
it continued to improve the efﬁciency of Research and Technology(R&T), technical processes and information management.
RESEARCH & TECHNOLOGYThe CTO introduced many measures needed to achieve the R&T
goals associated with Vision 2020. These included establishingroadmaps for key technologies, starting a group-wide “green” technologies group, planning how to recruit sufﬁcient engineering
talent, improving R&T management and taking steps to make its
budget go further.
Measures introduced over the past few years to enhance R&T
management achieved results. EADS now has an R&T leadershipteam across the Divisions, implementing a streamlined approachto capture synergies. For example, EADS Innovation Works, theresearch arm of EADS, and the Defence & Security Division have a
new co-located research facility in Newport, in the United Kingdom.
Management is focusing R&T spending on a number of large
projects, decreasing the number of smaller projects. To maximise
the resources of the R&T budget, EADS continued to increase its
contracting activities with European governments. Additionally,
R&T operations targets are to increase efﬁciency by 10 –15% andto reinvest the proceeds in technology development.
Global R&T collaboration continued to grow outside Europe inorder to access a diverse pool of scientiﬁc and engineering expertise.
Partnerships with leading research institutes expanded in Canada,
India, Russia, Singapore, China and the United States.

IMPROVEMENT PROGRAMMESThe former Corporate Quality Ofﬁce changed its name to Corporate Quality and Business Improvement (QBI) in order to reﬂect
more accurately its role. QBI plays an important role in improving
efﬁciency. “Lean” techniques are being introduced across productdevelopment, manufacturing and the supply chain. The Black Belt
improvement programme delivered signiﬁcant annual savings.
The PHENIX programme was launched, with a target of saving
several million euros annually from streamlining product design
and manufacturing processes and tools. PHENIX, which stands for
PLM Harmonisation Enhanced Integration and Excellence, is successfully creating deeper integration between mechanical, electricaland software components of product development. This will significantly improve the quality of EADS’ product design in the future.
INFORMATION MANAGEMENTEADS appointed Airbus’ Chief Information Ofﬁcer to the roleacross the Group, with a mandate to introduce shared IT services
and to integrate IT infrastructure. This will be implemented throughthe EADS Global Information Management Services initiative.

OUTLOOKThe CTO will continue to introduce measures to support
Vision 2020 for sustainable growth. The business plans of
the Group’s Divisions continue to drive the direction of futuretechnology development, improvement programmes and theinformation management infrastructure.
A three-year R&T operating plan that tracks development andassociated budgets of critical technologies has been developed.
Additionally, the PHENIX and Information Management integration projects will continue to be implemented, as will themore efﬁcient operating culture being introduced.

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Eco-efﬁciency

Moving swiftly to place protection of the environment at the core of
its industrial processes and business model, EADS introduced a newenvironmental policy and took speciﬁc actions to improve its efﬁciency.

56

EADS DRIVERS & RESPONSIBILITY> Eco-efficiency

GREEN ACHIEVEMENTS

At the implementation level, the Group made signiﬁcant progress
towards reducing its environmental impact. By year end, approximately 90% of EADS’ employees operated in facilities covered by
speciﬁc environmental standards – either ISO 14001 or the EU
Eco-Management & Audit Scheme (EMAS). The Group is working
towards ensuring 100% ISO 14001 certiﬁcation for all of EADS,
covering both sites and products.
Balancing protection of the environment with economic successgraduated from strategic goal to operational reality during 2008.
After introducing eco-efﬁciency as a key tenet in its Vision 2020
medium-term strategy blueprint during the previous year, management embarked on transforming the Group’s environmental
credentials.
GUIDING TECHNOLOGY AND PROCESS INNOVATION

A new environmental policy established a framework for managing
the opportunities and risks of eco-efﬁciency. This framework will
guide the development of innovative technologies and processes
aimed at minimising EADS’ environmental impact in the years ahead.
The new policy is now the cornerstone of EADS’ environmental
management system, which intends to cover all activities andproducts globally, with products managed across their lifecycles.
As a broad principle, the policy commits EADS to assessing theenvironmental performance of its products and operations and toﬁnding the best ways of improving them.
When managing its manufacturing and service activities, the policy
states that EADS intends not only to comply with applicable
environmental laws and regulations, but also to develop state-ofthe-art environmental standards.
With regard to products, the Group is striving for environmental
excellence in its technologies. To this end, it is mobilising greater
resources to research, design and development green technologies
and products.
In order to achieve the environmental policy’s goals, management hasengineered a roadmap that details speciﬁc targets for operational
and product performance up to 2020.

EADS is aiming to reduce aircraft carbon emissions substantially,both by itself and in partnership with others. At the European level,
the Group is a leading participant in the EU “Clean Sky” joint
technology initiative, which was launched in 2008, as well as theSingle European Sky ATM Research programme. The former isdeveloping breakthrough aerospace technologies, while the latteris introducing a single European air trafﬁc management system.
Between them, these two programmes will prepare the way forachievement of the Advisory Council for Aeronautics Researchin Europe’s (ACARE) goals by 2020. These are to reduce emissions
as follows: carbon dioxide by 50% through a substantial reduction
in fuel consumption, nitrogen oxide by 80% and external noiseby 50%. ACARE also aims to introduce green product lifecycles.
In February, Airbus completed the ﬁrst ever ﬂight using gas-toliquid (GTL) fuel obtained from natural gas conversion. An A380
super-jumbo ﬂew from Filton to Toulouse with one engine poweredby GTL fuel, which has low sulphur content and attractive characteristics for local air quality. This marked the beginning of aprogramme for studying alternative fuels.
Finally, the Group continued to study ways of designing productsthat will be environmentally friendly throughout their lifecycles,with particular attention to the carbon embedded in products.
Carbon footprint evaluations have been initiated in line with
the internationally recognised greenhouse gas protocol standards.
Lessons have been learned from the PAMELA (Process for Advanced
Management of End-of-Life Aircraft) project completed in 2006.
Through dismantling and deconstructing an A300, the project
established a benchmark for recycling 85% of an aircraft.
EADS is also heavily involved in international initiatives to manage
compliance with emerging regulations such as REACH (Registration Evaluation Authorisation and Restriction of Chemicals). This
European regulation calls for the most hazardous chemicals to be
replaced with alternative substances.

Photo in the middle:
Aerolia has developed and introduced amechanical milling for 3D aerostructure
panels to replace the usual chemical milling. This innovative process drasticallyreduces water and energy consumptions
and does not create any gas harmful tothe ozone layer.
EA DS A NNUA L REVIE W 2 0 0 8

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HumanResources

Human Resources is focusing on preparing EADS’ workforce todeliver Vision 2020’s strategic goals. The core levers are to enhance
employee engagement and increase Group integration.

58

EADS DRIVERS & RESPONSIBILITY> Human Resources

development conferences and Divisional and Group-wide “People
Reviews”. There is now a common process and shared e-HR tool
for performance and development management within the Group.

Human Resources (HR) is preparing for an increasingly international workforce while enhancing EADS’ ability to attract anddevelop the best talents at a time when skilled technical experts
are becoming scarce.
At the same time HR is fostering integration, increasing operational
efﬁciency and reducing costs through shared services.
EADS is addressing topics related to social responsibility, suchas diversity – exceeding regulatory requirements. An agreement
was signed in 2008 with Chaire Dauphine, a French university,
to promote diversity.
SKILLS MANAGEMENT

HR has enhanced its approach to Competency Management,
combining long-term core competency analysis with individual
development planning. The focus of recruitment, training andcareer development is to meet programmes’ evolving requirements
and concentrate on key competencies.
Processes were introduced to anticipate long-term requirements,
while also adjusting to medium and short-term changes inprogrammes.
RECRUITMENT AND CAREER DEVELOPMENTEADS is investing in maintaining its position as one of Europe’s
most recognised employers of engineering graduates, allying with
universities to attract the best talent and facilitate technological collaboration. Agreements were signed with three Spanish universities.
Employees’ careers are being managed through a structured, Groupwide process based on annual interviews with potential and performance assessments. Interviews are followed by departmental

Group talent development programmes are preparing future leaders
for assignments to new, expanded responsibilities. A pan-EADS
leadership development programme, called Leadership 2020, is
being designed to create a management culture suited to achieving
Vision 2020’s goals. Participation in Corporate Business Academy
activities is increasing.
INTERNATIONAL MOBILITY

HR has harmonised legacy divisional policies and introduced acommon EADS International Mobility Policy for the managementof expatriates. A centre of competence for international assignments
will be implemented in 2009.
SOCIAL DIALOGUE

The quality of dialogue enabled Airbus to achieve outstanding
results in spite of signiﬁcant structural changes, particularly thesale and separation of sites in France, Germany and the UK.
EFFICIENCYIn areas like Human Resources Information Systems and payroll,where shared services have been introduced, cost reductions
exceeded 30%. With the launch of the EADS Learning Services
and EADS Recruitment Centre, the implementation of sharedservices is ongoing.

OUTLOOK
During 2009 HR will implement many initiatives introduced
in 2008, recognising the workforce’s role in Vision 2020.
Employees will be asked to complete an “Engagement Survey”
intended to alert HR to areas where management and teammembers’ performance can be optimised.
Implementation of shared services will be extended to recruitment, and EADS Learning Services will become fully operational.
The recruitment centre aims to reduce recruitment lead times
by 50%.
A recruitment and development plan based on Divisions’strategic roadmaps will be introduced, focusing on competencedevelopment. National HR policies and organisations will be
developed in China, India and the United States.

EA DS A NNUA L REVIE W 2 0 0 8

59

Sourcing

Acting as an agent of change, Sourcing significantly contributes toachieving Vision 2020’s strategic goals, and is maximising synergies
across the Group.

60

EADS DRIVERS & RESPONSIBILITY> Sourcing

For the A350 XWB aircraft, EADS is awarding larger work contracts to partners sharing investments, risks and opportunities.
Across EADS, 28 preferred strategic suppliers of engineering
services were selected from the existing pool of around 2,000.
Agreements struck with these suppliers will beneﬁt all Divisions.
PROCURING GLOBALLY

Sourcing functions across EADS worked towards the strategic
Vision 2020 goals of optimising total costs of acquisition, building
focused networks of strong suppliers and creating a more global
supply base.
Sourcing plays an important role in achieving these objectives,as the associated spending equates to approximately 75% of revenues. As EADS concentrates on its core strengths of designing,marketing and assembling, this percentage is likely to rise.

Sourcing planned an implementation roadmap to lift procurement
outside Europe from 25% to 40% by 2020, in line with Vision 2020.
Targets per country have been established for each Division,
focusing mainly on the United States, China, India, Russia,
Eastern Europe, Latin America and Northern Africa.
To assist procurement in China, an ofﬁce was established in Beijingwith a subsidiary in Shanghai.
PLANNING SUPPLY CHAIN ECO-EFFICIENCYREDUCING COSTS AND FOSTERING INTEGRATION

Within Airbus, the “Smart Buying” procurement module is contributing to the cost reductions of the Power8 transformation projectthrough reshaping the supply chain and improving logistics. Similar improvement initiatives are underway in the other Divisions.
Joint procurement across Divisions increased, thus exploiting EADS’scale to secure supplies and reduce costs. All targets were met.
As part of the “Future EADS” programme intended to increase
synergies, all general procurement will be consolidated at Grouplevel. During 2009, a new EADS General Procurement Shared
Services organisation, operated by Airbus, will procure all general
goods and services.
FORMING PARTNERSHIPS

Signiﬁcant steps were taken to form risk-sharing partnerships thatwill consolidate and strengthen the supply chain.
EADS’ focus on core activities led to the establishment of major
new aerostructure partners in France and the UK. Airbus manufacturing sites in Laupheim and Filton were sold to Diehl/Thales
and GKN, respectively, and the formation of French and German
aerostructures subsidiaries – Aerolia and Premium AEROTEC –paved the way for their sale.

Compliance with the ﬁrst phase of the European REACH (Registration, Evaluation and Authorisation of Chemicals) regulation,
which aims to ensure the safety of chemicals, was achieved withthe support of suppliers.
An initiative to improve the eco-efﬁciency of the supply chain
was launched during 2008. Its objectives, including those assigned
to suppliers, will be set during 2009.

OUTLOOK
An immediate Sourcing priority is to monitor and manage
the impact of the economic downturn on suppliers. A system
is being developed to provide an early warning of any supplierdifﬁculties.
In preparation for the longer term, Sourcing will further implement EADS’ Vision 2020 objectives. Procurement’s Shared
Services organisation will begin operations and the Group’s
eco-efﬁciency objectives will be deﬁned and communicatedto suppliers. Continued progress will be made regarding compliance with environmental regulations.
Sourcing will focus on new approaches to develop supplierperformance and to intensify relationship management withmajor suppliers. This will include areas such as supply chain
risk management, supplier development, environmental
performance and social responsibility practices.

EA DS A NNUA L REVIE W 2 0 0 861

Ethics and Compliance

The ﬁrst EADS Ethics and Compliance Forum took place in Toulouse, France on 4 February 2009.

EADS is committed to good ethics, compliance and transparency,with its Vision 2020 making the promotion of ethical behaviour a
key Group responsibility.

62

EADS DRIVERS & RESPONSIBILITY> Ethics and Compliance

Commitment to compliance means ensuring that the Group’sbusiness practices conform with applicable laws and regulations,as well as with ethical principles and best practices endorsed by
the Group.
In order to achieve this goal, the Group believes that its management,
which bears overall responsibility for compliance, should be provided with appropriate support from a compliance resource dedicatedto sourcing proﬁtable business in a compliant way. This resource
should also be entrusted with controlling compliance responsibilities.
The Board therefore decided in late 2008 to appoint a Chief Compliance Ofﬁcer (CCO) who is tasked with setting up the Group-wide,
integrated Compliance Organisation. As CCO, Pedro Montoya isalso designing and implementing the EADS Ethics and Compliance
Programme, which focuses on the Group’s core compliance risks.

The CCO reports to the Chief Executive Ofﬁcer, and his independence is guaranteed through direct access to the Board and its
Audit Committee. He relies on the expertise of divisional compliance ofﬁcers, as well as on Group functional compliance ofﬁcers,building on an existing network of approximately 150 complianceprofessionals across the Group.
EADS’ Chief Executive Ofﬁcer has set the CCO’s mission andobjectives, after discussion with the Audit Committee.
The CCO will regularly report the status of the Ethics and Compliance Programme’s implementation to the Board and the Audit
Committee.

INTERVIEW WITH THE CHIEF COMPLIANCE OFFICER, PEDRO MONTOYA
Why is it so important for EADS to implement an Ethics and Compliance Programme?
To safeguard EADS’ competitiveness and protect it from potential liability by mitigating compliancerisks. It’s a way of ensuring that we remain a top global aerospace and defence supplier. In the US,for example, under the public procurement processes and in the Federal Acquisition Regulations,the government is requesting that contractors show they have effective ethics and complianceprogrammes. If we didn’t put adequate compliance controls in place, our business could suffer. We
have also to face the bad reputation of the defence industry, which is unfair.
We are leading efforts to promote a level playing ﬁeld externally. EADS has promoted Common
Industry Standards in the Aerospace and Defence Industries Association of Europe and we are
now in discussions with our American counterparts to establish these standards globally.
You’re establishing a new organisation. Does this mean that compliance is a new concern
within EADS?
No. There have been processes in place for many years, starting with export controls which are a legal
requirement in defence. In addition, the ﬁght against corruption has long been considered criticalfor our industry and this led us previously to develop our international trade programme. The new
EADS initiative was the outcome of extensive management discussions and studies. To cover allcompliance risks, we are setting up a dedicated compliance organisation throughout the Group, comprising the existing functions in export control and international trade. Previously we may not haveput enough emphasis on the education of people regarding compliance and this is something stakeholders expect. We must understand that it is everyone’s responsibility.
What speciﬁc actions are taking place in 2009?
A compliance risk map will be presented to the Audit Committee and we will establish an alert
system before the end of 2009. We are also working to update the Group’s Code of Ethics andmain Business Ethics Standards.
EA DS A NNUA L REVIE W 2 0 0 8

63

> CLEAN SKY
Europe’s technology research programme designed to makeair travel more sustainable.

CO2
Carbon dioxide. It is a greenhouse gas.

CORPORATE BUSINESS ACADEMYEADS’ proprietary business training college.

CORPORATE GOVERNANCE
The control and monitoring of a company to ensure thatmanagement acts in the interests of stakeholders, no undue
risks are taken and relevant legislation is complied with.

> EADS INNOVATION WORKS

Glossary> ASYMMETRIC WARFARE
Conﬂict between combatants with different characteristics,
for example conventional forces and terrorists.

The Group-wide research centre.

EBIT
Earnings Before Interest and Taxes – EADS uses EBIT
pre-goodwill impairment and exceptionals as a key indicatorof its economic performance.

ATV
Automated Transfer Vehicle – a space cargo vehicle which will
supply the International Space Station (ISS) with scientiﬁc equipment, spares and fuel, together with supplies of food, air andwater. As prime contractor to the European Space Agency (ESA),
Astrium is leading the ATV programme, a key element of theEuropean contribution to the ISS.

> BLACK BELT
EADS’ skills improvement programme.

ECO-EFFICIENCY
The term that describes balancing care for the environment
with economic success.

EASA
European Aviation Safety Agency – responsible for theadvancement, safety and regulation of civil aviation.

ESA
European Space Agency.

EMAS
The European Commission’s Eco-Management & Audit System.

> FLY-BY-WIRE
An aircraft control system relying on electronics rather thanmechanical linkages.

FUTURE EADSThe improvement programme focusing on better transversal
integration of all support functions.

64

GLOSSARY> GDP
Gross Domestic Product – a measure of an economy’s output.

> OCCAR
Organisation Conjointe de Coopération en matière d’ARmement,
the European organisation formed to jointly procure arms.

GMES
The European Commission’s Global Monitoring for Environment& Security programme designed to improve access to timely andaccurate information from satellites.

> POWER8
Turnaround programme to restore Airbus’ competitiveness.

POWER8 PLUS
GREEN
Environmentally friendly.

> HEDGE
Financial tool designed to minimise exposure to adverse foreignexchange rate ﬂuctuations.

Extension of Power8, extending not only across Airbus but acrossall EADS Divisions.

> R&T
Research & Technology – all activities in the ﬁeld of research andgeneric technologies not directly attributable to products, anddesigned to maintain or expand knowledge of the technological base.

> ISO 14001
Certiﬁcation standard for Environmental Management Systems(EMS) developed by the International Organization for Standardization (IOS). International standard requires organisations todevelop an integrated, structured approach in setting and achieving
environmental policies and objectives with the goal of supporting
protection of the environment, prevention of pollution andcompliance with regulatory requirements.

> LCC
Low Cost Carrier.

LEAN PRODUCTION

RAMP-UPThe process of increasing a production programme’s level of activity.

REACH
The European Commission’ Registration Evaluation Authorisation
and Restriction of Chemicals regulation, aiming to replace hazardous chemicals with less hazardous substances.

> RPK
Revenue Passenger Kilometres – a measure of overall airline
volume. It is calculated by multiplying the number of passenger
revenue by the ﬂight stage distance.

The practice of production with minimum waste.

> SECURITY
LONG-RANGE AIRCRAFT
An aircraft capable of exceeding 3,000 nautical miles with a full
payload at normal cruising conditions. Airbus’ long-range aircraft
are the A330, the A340, the A380 and the A350.

LUH
US Army programme for Light Utility Helicopters.

> MRTT
Multi-Role Tanker Transport aircraft.

State security designed for border security, crisis management
and large event protection.

SESAR
Single European Sky ATM Research – the pan-European
programme tasked with creating a single European air trafﬁcmanagement system by 2020.

SHARED SERVICES
Central functions such as Human Resources that are sharedacross EADS.

> NOXGroup of highly reactive gases, all of which contain nitrogen andoxygen in varying amounts and causes a wide variety of health andenvironmental impacts.

SINGLE-AISLE AIRCRAFT
An aircraft with one aisle. At Airbus, single-aisle is used for
the A320 family.

SKYNET 5
The programme to provide the UK Ministry of Defence withthree secure communications satellites.

> UAV
Unmanned Aerial Vehicle.

EA DS A NNUA L REVIE W 2 0 0 865Addresses
HEAD OFFICESIn France:
EADS
37, Boulevard de Montmorency
75781 Paris cedex 16
FranceTel + 33 1 42 24 24 24
In Germany:
EADS
81663 Munich
Germany

EADS HEADQUARTERS

EADS NORTH AMERICA

Tel + 49 89 607 0

European Aeronautic Defence
and Space Company EADS N.V.
P.O. Box 32008
2303 DA Leiden
The Netherlands

In Spain:
EADS
Avenida de Aragón 404
28022 Madrid
Spain

Tel + 31 71 524 56 00

EADS UK
EADS UK Limited
111, The Strand
WC2R OAG London
UK

EADS North America, Inc.
1616 North Ft. Myer Drive,
Suite 1600
Arlington, VA 22209
USA

Tel + 34 915 85 70 00

Tel + 44 207 845 84 00

Tel + 1 703 236 33 00

AIRBUS

EUROCOPTER

Airbus1, Rond-point Maurice Bellonte
31707 Blagnac
FranceEurocopter
Aéroport International deMarseille-Provence
13725 Marignane cedex
FranceAstrium Services
6, rue Laurent-Pichat
75216 Paris cedex 16
FranceDefence Electronics
Wörthstrasse 85
89077 Ulm
GermanyTel + 33 1 77 75 80 00

Tel + 49 731 392 0

Tel + 33 5 61 93 33 33

Tel + 33 4 42 85 85 85
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 Dissart
31027 Toulouse cedex 3
FranceTel +33 5 81 91 40 00
EADS EFW
Grenzstrasse 101109 Dresden
GermanyTel + 49 351 8839 0

ASTRIUM
Astrium
6, rue Laurent-Pichat
75216 Paris cedex 16
FranceTel + 33 1 77 75 80 00
Astrium Satellites
31, rue des Cosmonautes
31402 Toulouse cedex 4
FranceTel + 33 5 62 19 62 19
Astrium SpaceTransportation
Hünefeldstrasse 1–528199 Bremen
GermanyTel + 49 421 539 0
66, Route de Verneuil
78133 Les Mureaux cedex
FranceTel + 33 1 39 06 12 34

66

DEFENCE & SECURITY
Defence & Security
Landshuter Strasse 26
85716 Unterschleissheim
Germany

MBDA
11, Strand
London WC2N 5RJ
UK
Tel + 44 20 7451 60 00

Tel + 49 89 3179 0

OTHER BUSINESSESEADS Military
Air Systems
Rechliner Strasse
85077 Manching
Germany

EADS Sogerma
Aéroport International
20, Avenue Georges Barrès
33700 Mérignac
FranceTel + 49 84 59 81 0

Tel + 33 5 56 55 40 00

Eurofighter
Am Söldnermoos 1785399 Hallbergmoos
Germany

ATR Avions de Transport
Régional
1, Allée Pierre Nadot
31712 Blagnac cedex
FranceTel + 49 811 80 0
Defence andCommunications Systems
Landshuter Strasse 26
85716 Unterschleissheim
GermanyTel + 49 89 3179 0

Tel + 33 5 62 21 62 21

ADDRESSES“ The Board is committed
to helping management improve
EADS’ long-term value”
Rüdiger GrubeEADS STRATEGY AND
MARKETING ORGANISATION
Tel + 33 1 42 24 24 24

CHAIRMAN OF THE BOARD

RÜDIGER GRUBE

Fax + 33 1 42 24 26 19

REPRESENTATIVEOFFICES
EuropeAnkara, Turkey
Tel + 90 312 439 89 64
Fax + 90 312 439 70 07
Athens, Greece
Tel + 30 210 69 83 871

AfricaAsia

Johannesburg,
South Africa

Bangkok, Thailand

Tel + 27 11 256 79 00

Fax + 66 2 610 4301

Fax +27 11 256 79 11
Beijing, China
Tripoli, Libya

Tel + 86 10 646 11 266

Tel + 218 21 335 1026

Fax + 86 10 646 10 409

Fax + 218 21 335 1257
Hanoi, Vietnam

Fax + 30 210 69 83 870
Middle East
Brussels, Belgium
Tel + 32 25 02 60 05

Abu Dhabi, UAE

Fax + 32 25 02 30 81

Tel + 971 2 681 28 78

London, United Kingdom

Cairo, Egypt

Fax + 44 207 845 8401

Tel + 20 22 794 86 71
Fax + 20 22 795 73 17

Tel + 7 495 797 53 67

Doha, Qatar

Fax + 7 495 797 53 66

Tel + 974 411 0752

Rome, Italy

Fax +974 411 0784

Tel + 39 06 45 23 291

Muscat, Oman

Fax + 39 06 45 23 4006

Tel + 968 24 601 922

Warsaw, Poland

2

Fax + 971 2 681 10 27

Tel + 44 207 845 8400

Moscow, Russia

Tel + 66 2 610 4300

Fax + 968 24 602 845

Tel + 84 4 943 68 85

Singapore, Singapore
Tel + 65 67 37 50 77
Fax + 65 67 33 58 15
Sydney, Australia
Tel + 61 2 88 64 05 00
Fax + 61 2 88 64 05 01
Taipei, Taiwan
Tel + 886 2 2712 15 94
Fax + 886 2 2712 10 89

Fax + 84 4 943 68 72
North America
Jakarta, Indonesia
Tel + 62 21 573 57 33

Ottawa, Canada

Fax + 62 21 573 59 23

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

Kuala Lumpur, Malaysia
Tel + 60 3 2163 0233
Fax + 60 3 2163 0211
New Delhi, India
Tel + 91 11 4357 9000
Fax + 91 11 4357 9024
Seoul, South Korea
Tel + 82 2 798 49 25
Fax + 82 2 798 49 27

Latin America
Mexico City, Mexico
Tel + 52 55 47 77 51 00
Fax + 52 55 47 77 32 74
Santiago de Chile, Chile
Tel + 56 23 33 43 33
Fax + 56 23 33 47 77

Tel + 48 22 627 05 28

Riyadh, Saudi Arabia

São Paulo, Brazil

Fax + 48 22 627 05 35

Tel + 966 1 46 53 456

Tel + 55 11 3093 2800

Fax + 966 1 46 30 844

Fax + 55 11 3093 2801

E ADS AN N UAL R E V IE W 2 0 0 8

67

Shareholder
Information
FINANCIAL CALENDAR:
Full Year 2008 results release:
10 March 2009

Shareholders’ Information meeting:
25 June 2009, Paris, France

First Quarter 2009 results release:
12 May 2009First Half 2009 results release:
End of July 2009

Annual General Meeting:
27 May 2009, Amsterdam,
The Netherlands

Nine-Month 2009 results release:
Mid November 2009

INVESTOR RELATIONS CONTACT:
Toll-free telephone numbers:
France: 0 800 01 2001
Germany: 00 800 00 02 2002
Spain:
00 800 00 02 2002

are a leading participant in a market that is important for
the future. This world needs aerospace and defence for

Shareholders from other countries
can contact us at:+ 33 1 45 30 85 82

successful and secure living, for the development of oursocieties, for economic growth. We set standards in quality
and innovation. We develop products and technologies

An e-mailbox is dedicatedto answering shareholders’ enquiries:
ir@eads.com

for a cleaner, and safer, world.

Visit our website at:www.eads.com

68

We

EADS GROUP

We
WWW.REPORTS.EADS.COM

MANAGEMENT & GOVERNANCE
03
04
06
08
10
12
14

Letter from the Chairman of the Board
The Board of Directors
Corporate Governance
Chief Executive Ofﬁcer’s Statement
The Executive Committee
Interview with the Chief Financial Ofﬁcer
Strategyhave
16

We have what it takes

what
24

THE BUSINESS YEAR 2008

leader. Airbus consistently captures about half the market for passenger
Airbus Military develops special mission aircraft and is responsible for the
A400M transport aircraft programme. Eurocopter is the world’s largest

We have what it takes.

Registration Document 2008
FINANCIAL STATEMENTS

FFinancial Statements 2008

products that the world needs. EADS’ innovations foster economic growth,Book3_Titel_4.5_Bel.indd U148799_01EADS GB E Titel 105.05.2009 9:51:54 Uhr05.05.2009 9:50:56 UhrBook 1

Book 2

ANNUAL REVIEW 2008

REGISTRATION DOCUMENT 2008

We have what it takes.

Business, Governance andCorporate Responsibility

Book2_Titel_090504_Bel_02.indd 1

Financial Statements

security and eco-efficiency, driving value for all our stakeholders.

II

54
56
58
60
62

Innovation
Eco-efﬁciency
Human Resources
Sourcing
Ethics and Compliance

64
66
68

Glossary
Addresses
Shareholder Information

EADS DRIVERS & RESPONSIBILITY

consortium, a stakeholder in the missile systems provider, MBDA, andGroup a competitive advantage, enabling us to design, build and service

Markets and Perspectives
Towards a leaner organisation
AirbusEurocopter
Astrium
Defence & Security

EADS ANNUAL REVIEW 2008

Our Defence & Security Division is a major partner in the Eurofighter

technologies, scientific excellence and programme leadership that give the

34
39
40
46
48
50

Financial Statements 2008

BUSINESS, GOVERNANCE
AND CORPORATE RESPONSIBILITY

helicopter company. Astrium is the European leader in space programmes.

EUROPEAN AERONAUTIC DEFENCE AND SPACE COMPANY EADS N.V.

jets with 100 seats or more. Leveraging Airbus’ commercial expertise,

Our skilled engineers, scientists and managers provide cutting-edge

A strong position in international markets

it takes.

THE COMPLETE EADS ANNUAL REPORT SUITE 2008 CONSISTS OF:

Our staff and pioneering technologies make EADS an aerospace and defence

also supplies comprehensive systems solutions.

Success made by EADSDesigned and produced by HGB Hamburger Geschäftsberichte
Photographs: p. VIII (Ariane 5, Columbus) ESA/NASA, p. 2, 8, 13: HSG Zander,
p. 4 (Lagardère): Pool Bertolin Morin - IP3-MaxPPP; p. 19, p. 58: EADS,
Michael Lange | Written by The Clerkenwell Consultancy | Printed by Kriechbaumer

05.05.2009 9:50:05 UhrEUROPEAN AERONAUTIC DEFENCE AND SPACE COMPANY EADS N.V.

We
MANAGEMENT & GOVERNANCE
03
04
06
08
10
12
14

Letter from the Chairman of the Board
The Board of Directors
Corporate Governance
Chief Executive Ofﬁcer’s Statement
The Executive Committee
Interview with the Chief Financial Ofﬁcer
Strategy

have
16

Success made by EADS

what
24

THE BUSINESS YEAR 2008
Markets and Perspectives
Towards a leaner organisation
AirbusEurocopter
Astrium
Defence & Security

EADS DRIVERS & RESPONSIBILITY
54
56
58
60
62

Innovation
Eco-efﬁciency
Human Resources
Sourcing
Ethics and Compliance

64
66
68

Glossary
Addresses
Shareholder Information

European Aeronautic Defence
and Space Company EADS N.V.
P.O. Box 32008
2303 DA Leiden
The Netherlands
Please refer to www.eads.com
for further information.

This document is also available
at the following addresses:
European Aeronautic
Defence and Space Company
EADS N.V.

We have what it takes.

Annual Review 2008

it takes.
34
39
40
46
48
50

WWW.EADS.COM

A strong position in international markets

EADS ANNUAL REVIEW 2008
In France
37, boulevard de Montmorency
75781 Paris cedex 16 – France
In Germany
81663 Munich – Germany
In Spain
Avenida de Aragón 404
28022 Madrid – Spain

1

EADS at a Glance
EADS GROUP

IITHE DIVISIONSIVMAJOR PROGRAMMES AND PRODUCTS

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THE YEAR 2008 IN REVIEWXIIEADS SHARESXIVEADS GLOBAL FOOTPRINTXVIEADS ORGANISATIONAL STRUCTURE

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