PROGRESSING, innovating,
TRANSFORMING
eads Annual Review 2011

at a glanceannual review
2011
Contents

04 CONFIDENT today/tomorrow08	Letter from the Chairman of the Board
10	

Corporate Governance

12

The Board of Directors

14	Chief Executive Officer’s Message
16

The Executive Committee

18 ACHIEVING today/tomorrow
22	Interview with the Chief Financial Officer
24	Interview with the Chief Strategy
and Marketing Officer
26

Key export markets 2012-2022

28

Markets & Perspectives

34 LEADING today/tomorrow
38

The Year in Review

40

Airbus46

Eurocopter

48

Astrium

50

Cassidian

52 VERSATILE today/tomorrow
56

Engaged People

58

Eco-efficient Innovation

60	Programme Management
62

Supply Chain

64

Glossary

66

Addresses

68

Shareholder Information

2

EADS
Annual review 2011progressing, innovating,
TRANSFORMINGEADS is on track. We are making progressin our financial performance and in our key
programme developments.
We continue to be at the forefront of innovation,
developing new technologies, launching new
products and providing advanced solutions tomeet customer needs.
And we are building for the future, by adapting
the Company to a changing business environment and growing our business in promising
new areas.
In short, we are progressing, innovating,transforming.

EADS
Annual review 20113

A380 over Hong Kong

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EADS
Annual review 2011

A380

confident today/tomorrow

EADS
Annual review 2011confident today/tomorrow

5

CONFIDENT—
with reserves to go
the extra mile
Today

Airbus delivers the world’s mostinnovative commercial and military
aircraft to customers across the planet.
The flagship A380 is one example.

Scan the QR-code withyour smartphone formore information or visit
www.eads.com

6

EADS
Annual review 2011confident today/tomorrow

tomorrow

By delivering a reduction in fuelconsumption of up to 15%, theA320neo sets new standards for
performance in the high-volume,
single-aisle segment.

A320neoEADS
Annual review 2011confident today/tomorrow

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EADS
Annual review 2011confident today/tomorrow

Letter fromthe Chairmanof the Board
BODO UEBBER

You may remember I wrote last year that EADS would beholding course as it embarked on its flight into the future.
We kept our word. In 2011, EADS improved further despite aturbulent economic environment. This year’s Annual Review
title – Progressing, Innovating and Transforming – nicely reflects
these improvements.
Firstly, EADS progressed both financially and in its major programmes in 2011. Our headline financial figures exceeded
our plans and market expectations. Our share price increaseshows that the market rewarded us for excellent results. EADS
was the best performer in the CAC 40 index and second-bestin the MDax.
The Group also further refined its programme management.
Major programmes such as the A380, A400M, A350 XWB and
NH90 are progressing, and management has clearly flagged
those challenges which have yet to be resolved.
Secondly, 2011 was yet another year of outstanding innovation. I am particularly proud that the Board of Directors wasinvolved in one of our most notable innovations: the A320neo
passenger jet was a bold decision, but its astonishing successwith over 1,200 firm orders last year proved it was also the rightdecision.
The Board also supported Eurocopter’s ambitious innovation
strategy, represented by numerous new platforms anddemonstrators in 2011, and by the launch of the X4 helicopter
programme.
Thirdly, EADS is transforming itself. Success on global markets
requires flexibility, dynamism and willingness to adjust. EADS
incarnates these attributes. For example, Astrium is improving
its overall competitiveness in export markets through the AGILE
transformation programme, which saw its first successes lastyear with landmark deals secured in the US and Malaysia.
Cassidian started a far-reaching transformation to foster

EADS
Annual review 2011confident today/tomorrow

Letter from the Chairman of the Board“Success on global markets requires
flexibility, dynamism and willingness
to adjust. EADS incarnates these attributes.”

globalisation and to adapt to a challenging business environment in the European home markets. And, in 2011, Eurocopter
completed its two-year SHAPE transformation initiative, whichstrengthened its capabilities during the market downturn.
The Board is supportive of these transformation activities as
they lay the foundation for EADS’ future success on its growthflight path.
Our mission in the Board and its Committees is to guide management, challenge the status quo where necessary and validate the strategic direction, to ensure that this unique European
success story stays on course. The Board fully supported
efforts to make EADS progress, innovate and transform in 2011.

It kept a watchful eye on key programmes such as A380,

the Board with full confidence and trust in my successor, as
I assume a regular director mandate. I am very grateful that
our independent directors have agreed to serve for anotherterm – their engagement in the Board of EADS has been
second to none, as indeed has been the commitment of Louis
Gallois and the entire EADS executive management team.
I thank them for a job extremely well done and for engaging infull transparency with the Board. I am convinced Tom Enders
and the new management team will continue accordingly.
We are united in our mission to serve you, our shareholders,and it is with great pleasure that the Board of Directors
proposes to reward your outstanding loyalty with a dividend
payment of 45 cents per share.
Sincerely,

A350 XWB, A400M, A320neo, NH90 and Tiger.

The
Strategic Committee took deep dives into the Group’scountry strategies. The Committee also assessed acquisition
projects and supported the Board in its decision-making.

The Audit Committee laid the groundwork for the Board’squarterly approval and disclosure of EADS’ financial
statements. It also focused on further enhancements of theEnterprise Risk Management and Compliance activities.

The Remuneration and Nomination Committee ensured

that the incentives and compensation scheme, which waschanged in 2010, was properly executed and in accordancewith external benchmarks. Besides regular succession
planning, it supported the Board in preparing the upcoming
management changes.
These changes not only involve the executive management
but also the Board. This is my final letter to you as Chairman
and I feel great pride that I can conclude my term on sucha positive note. Aware of the great successes but also thechallenges EADS is still facing, I hand over chairmanship ofBodo Uebber
CHAIRMAN OF THE BOARD

Arnaud lagardère
Mr Lagardère is expected
to succeed Mr Uebber as
Chairman of the Board,
following the Annual
General Meeting to beheld on 31 May 2012.

9

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EADS
Annual review 2011confident today/tomorrow

Corporate Governance

Focusing on major strategicand operational issues, Board
discussions concentrated on
significant programmes suchas the A350 XWB, acquisitions,management succession, andEADS employee engagement.
BOARD MEETINGSThe Board of Directors met nine times during 2011, withattendance averaging 86%. The Chief Executive Officer
kept it fully informed through business reports and strategicand operational plans.
Throughout the year, the Board monitored the progress ofsignificant programmes, such as the A350 XWB, A320neo,
A400M, A380, Ariane 5, Paradigm, Eurofighter, Talarion andSaudi Border Security. It reviewed the status of the programmemanagement improvement initiatives throughout the Group.
Furthermore, the Board addressed EADS’ strategy and, inline with Vision 2020 objectives, approved the acquisitionsof Vector Aerospace, Satair and Vizada. These acquisitions
strengthened EADS’ position internationally in general and in
the services market in particular.
The Board also focused on the European sovereign debt crisis,
the Group’s financial results and forecasts, asset management,compliance in key business processes, and efficiency andinnovation initiatives. It reviewed Enterprise Risk Management(ERM) results, export control regulations, investor relations andfinancial communication policy, as well as legal risks. Finally,
the Board focused on governance issues and succession
planning in order to facilitate a smooth Board and managementtransition in 2012.
BOARD SELF-ASSESSMENT
The Corporate Secretary conducted the annual self-assessment in early 2012, which concluded that the Board has
matured and is efficient, allowing it to explore new domains
and tackle relevant matters in the best interest of the Group.
Occasional meetings at EADS industrial sites are consideredbeneficial and will be continued.
Most Directors were satisfied that they spent less time
discussing programme challenges than in the past and had
more time to address longer term questions. For the thirdtime, the Board devoted a full day meeting to strategy in2011, including an assessment of country strategies and thecompetitive landscape in industry sectors.
Overall, the Board considers that it assembles a very international, diverse and relevant set of skills, with a strong emphasis
on finance competencies and global strategic experience. In
2011, these skills were applied to discussing the A400M and
A380 stabilisation, the A350 XWB technical and commercial
de-risking, the A320neo launch, large acquisitions, results of theoverhaul of the executive remuneration system, upholding defence activities in times of downward pressure on public spending, regional and segment strategy, and succession planning.

EADS
ANNUAL REVIEW 2011

CONFIDENT TODAY/TOMORROWCORPORATE GOVERNANCE

11COMMITTEES OF THE BOARD
OF DIRECTORS*THE AUDIT COMMITTEE
The Audit Committee met five times, with an 85% averageattendance rate, to review financial results, performance anddisclosure. It also reviewed the compliance organisation’s
processes and achievements, the ERM system’s effectivenessand internal audit.

Audit
Committee
Hermann-Josef
Lamberti (Chairman)
Rolf Bartke
Dominique D’Hinnin

THE REMUNERATION AND NOMINATION COMMITTEEThe Remuneration and Nomination Committee met four times,
with a 94% average attendance rate. In addition to making
recommendations to the Board of Directors for major appointments, the Committee reviewed top talents and succession
planning, discussed measures to improve engagement andto promote diversity, reviewed the remuneration of Executive
Committee members for 2011, the long-term incentive plan andvariable pay. It also proposed the terms of the 2012 employee
share ownership plan.
THE STRATEGIC COMMITTEEThe Strategic Committee met three times, with an 80% average attendance rate. It monitored major strategic and divisional
initiatives, acquisition targets and disinvestment candidates, aswell as the Group’s top priorities. Furthermore, it made recommendations to the Board linked to the competitive landscapeand home countries industrial policy, company perception in
key markets and constraints on defence budgets. A review ofseveral country strategies was also conducted.

Sir John Parker

Strategic
Committee
Bodo Uebber (Chairman)
Louis Gallois
Arnaud Lagardère
Michel Pébereau
Wilfried Porth

Remuneration
and Nomination
Committee
Sir John Parker (Chairman)
Dominique D’Hinnin
Hermann-Josef Lamberti
Wilfried Porth

For more detailed information,please refer to the CORPORATE
GOVERNANCE section in the
REGISTRATION DOCUMENT 2011.

* Current composition. Future composition will be subject to the decisionof the newly appointed Board of Directors, following the Annual General
Meeting to be held on 31 May 2012.

SHAREHOLDER STRUCTURE
as of 31 December 201122.35% Sogeade (Lagardère and Frenchstate holding company Sogepa)
22.35% Daimler*
5.45%

SEPI (Spanish state holding
company)

0.06%

Shares held out of the contractual
partnership by the French state

49.35% Institutional, retail and employee
ownership
0.45%

chiffre pour faire la 3D
effet -> 3D -> extrusion et biseautage
15
25
2
profondeur d’extrusion 20
ombre diffu
option100
76
EADS_ANNUAL_REVIEW_2011_+couv_UK.indd
11

Treasury shares (without
economic or voting rights)* On 9 February 2007, Daimler reached an agreement with a consortium of private
and public-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 sharesat the time of the transaction.

07/05/12 13:54

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EADS
Annual review 2011confident today/tomorrow

THE BOARD OF DIRECTORS*

01

02

07

03

08

04

09

10

01

02

03

BODO UEBBER (52)

LOUIS GALLOIS (68)

ARNAUD LAGARDÈRE (50)Besides his position as Chairman, Mr Uebber
is a member of the Management Boardof Daimler AG responsible for Finance &Controlling as well as the Daimler Financial
Services Division. He previously held various
leadership positions in finance within Dornier
Luftfahrt GmbH, DASA AG and MTU AeroEngines GmbH.

Prior to his current position, Mr Gallois
was successively Chairman and CEO of
SNECMA and of Aerospatiale, Chairmanof SNCF, President and CEO of Airbus,
and an EADS Director since the creationof the Company. Earlier in his career, heheld positions in the French Ministries of
Economy & Finance, Research & Industry,and Defence.

Prior to his current position, Mr Lagardère
held various top management posts,
including CEO of Lagardère Media andLagardère Active, CEO of Grolier Inc. andHead of emerging activities & electronic
media for Matra. Furthermore, he held theposition of Co-Chairman of EADS from2003 to 2007.

Chairman of the Board of Directors of EADS

Chief Executive Officer of EADSGeneral and Managing Partnerof Lagardère SCA

07

DOMINIQUE D’HINNIN (52)08

Besides being Co-Managing Partner of
Lagardère SCA, Mr D’Hinnin is its CFO.
Previously, he held management positions
within Lagardère, successively serving as
Internal Audit Manager, CFO of Hachette
Livre and Executive Vice President of Grolier
Inc. in the US.

Co-Managing Partner of Lagardère SCA

09

SIR JOHN PARKER (69)

LAKSHMI N. MITTAL (61)Chairman of Anglo American PLC

Chairman and CEO of ArcelorMittal

Prior to his current position, Sir John Parker
held several management positions in theengineering, shipbuilding and defence
industries, including the chairmanship of
National Grid until end 2011 and some
25 years’ experience as a CEO with Harland& Wolff and the Babcock International Group.

Mr. Mittal is an entrepreneur who founded
Mittal Steel Company in 1976. The company
has successfully grown over the years andnow known as ArcelorMittal, it has become
the world’s largest steelmaker. Mr. Mittal isrecognised for his leadership in restructuring
the global steel industry.

* Current composition. Messrs Gallois, Bartke and Eguiagaray will not stand for re-appointment as Board Members following expiration of theirterms at the close of the Annual General Meeting to be held on 31 May 2012. Messrs Enders, Trichet and Piqué i Camps have been proposed
as new Board Members, subject to decision by the Annual General Meeting.

EADS
Annual review 2011

THE BOARD OF DIRECTORS

confident today/tomorrow

05

06

Proposed new Board members to be submitted
to the Annual General meeting

thomasenders (53)11

Jean-Claude
Trichet (69)JOSEPPIQUÉ I CAMPS (57)05

06

HERMANN-JOSEF LAMBERTI (56)

MICHEL PÉBEREAU (70)WILFRIED PORTH (53)

Mr Lamberti is the COO of Deutsche Bank
AG, which he joined in 1998. He previously
gained wide experience within IBM, in thefields of controlling, internal application
development, sales, personal software,marketing and brand management.

Mr Pébereau has been the Chairman of
BNP Paribas until end 2011. Previously, he
led BNP bank, presiding over the merger
that created BNP Paribas in 2000. He also
led the Crédit Commercial de France, after
holding various high ranking positions within
the French Treasury.

10

11

04
Member of the Management Boardof Deutsche Bank AG

Honorary President of BNP Paribas

ROLF BARTKE (64)Juan Manuel Eguiagaray (66)

Chairman of Keiper-Recaro-Group

Economic Advisor

From 2005 until 2009 Mr Bartke was
Chairman of Kuka AG. He headed thevans business unit at DaimlerChrysler AG
from 1995 to 2006. Previously, he wasManaging Director in various positions
within Daimler AG.

Mr Eguiagaray is a renowned economist
and formerly Spain’s Minister for Public
Administration (1991-93) and for Industry
and Energy (1993-96). He has also served
as a Professor of Economics at Deusto
University in Bilbao and at Carlos III
University in Madrid.

Member of the Board of Managementof Daimler AG

Mr Porth is Daimler’s Director for Human
Resources. He is also in charge of labour
relations, IT-management and Procurementof Non-Production Material & Services.
He previously held various engineering
management and other top positions within
the Daimler Group.

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EADS
Annual review 2011confident today/tomorrow

Chief Executive
Officer’s
Message
LOUIS GALLOIS

Last year, I expressed my conviction that at the beginning of its
second decade EADS would start to take off, demonstrating
the power of stability and maturity. We have done exactly that.
In 2011, EADS overachieved on all its key financial indicators,
including revenues, order intake, EBIT* and net income. All
Divisions contributed to the better-than-expected EBIT*, setting
a series of new records on the way:

Raising production for the tenth year in a row, Airbus
Commercial achieved a record 534 aircraft deliveries while
Airbus Military delivered 29 units;Airbus Commercial registered a record haul of 1,419 net
orders, thanks above all to the A320neo, the fastest-selling
jet in commercial aviation history;In a difficult market context, Eurocopter achieved record
revenues of € 5.4 billion;O rders and net cash reached record levels, safeguarding
our future and giving us room for new initiatives to develop
the Company.
These records are a testament to the Group’s cuttingedge product portfolio, which contributed to a long list ofachievements in 2011:A
 irbus listened to its customers, fitting the A320 with newengines to significantly improve the economics of air travel.
The new engine option (neo) has proven an inspiration,
showing the huge demand for cost-effective innovations on
proven platforms.

Astrium demonstrated excellent programme execution.
The Ariane 5 performed five launches, bringing up its
46th consecutive successful launch, ensuring Europe’s
autonomous access to space. In order to safeguard thiskey capability, it is essential that we launch the Ariane 5
Midlife Evolution.
E urocopter delivered the 1,000 th Dauphin, the 1,000 th
EC135 and the 100 th NH90. These helicopters are amainstay for many customers – civil or military. The X3
and AS350 hybrid helicopter demonstrators show that
Eurocopter’s ambitious innovation strategy is bearing fruit.

EADS
Annual review 2011confident today/tomorrow

In addition, the commercial helicopter market is recovering
as witnessed by the HeliExpo trade show in early 2012,
where Eurocopter received 191 orders.

Cassidian’s order intake of € 4.2 billion was remarkablegiven the challenging business environment. The Divisionalso delivered its 300th Eurofighter. This European flagshipprogramme is already a success. However, I call upon ourpartner countries to support the integration of a fuller range
of options onto the jet, to boost its exportability.

Chief Executive Officer’s Message

We have made enormous progress since then. I believe my five
years as CEO were fast-paced and successful thanks to thecommitment of a great top management team and workforce.
Tom Enders is the best successor. He knows the Company
perfectly. He embodies its spirit as a driver of change andpromotes the European success story it represents. His new
executive management team shares the same spirit. I wish
them the best of luck in taking EADS on a flight path of growthand success – for the benefit of our employees, partners,
customers and shareholders.

O ther Businesses fared well, too. ATR had an exceptional
year with 119 net orders, representing over 80% of all salesof regional aircraft with between 50 and 90 seats. In March
2012, EADS North America delivered the 200th Light Utility
Helicopter to the US Army out of the planned 345 units.
All deliveries were on time and within budget.
These successes support our growth strategy, as does
our external growth in 2011. Acquiring Vector Aerospace,
Vizada, Satair and Metron will bolster our services offeringsand help to extend our global footprint. We are now focusing
on the smooth integration of these profitable companies. We
remain open to further acquisitions, should opportunities
arise and if the conditions are right. Our cash reserves give
us flexibility to act.
At the same time, we shall continue managing risks andchallenges. Airbus is working to resolve the A380 wing rib feet
issues in the best interest of our clients and to manage thecomplex development of the A350 XWB. This programme isvery challenging. Airbus Military is moving ahead at full speed
to achieve first customer delivery of the A400M on time.
Furthermore, we are monitoring the macro-economic context andon-going discussions with governments, particularly Germany,on the future of defence procurement programmes. It is crucial
that these talks quickly generate mutually beneficial solutions.
Our ability to achieve success and manage risk is only possible
thanks to EADS’ greatest asset: its workforce. The momentum
at the Group is the result of the tireless efforts of 133,000
employees worldwide. They are proud, capable and motivated,which is why they deserve our staunch support. This year saw
a third round of our Engagement process to improve employee
satisfaction. We are committed to translating employees’
feedback into action in order for EADS to be a top employer.
This commitment is shared by the incoming executive
management team and by the Board. When I became CEO
in 2007, EADS needed a new direction and greater cohesion.

Louis Gallois
Chief Executive Officer

Thomas Enders
Mr Enders is expected
to succeed Mr Gallois as
Chief Executive Officer,
following the Annual
General Meeting to beheld on 31 May 2012.

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EADS
Annual review 2011confident today/tomorrowthe executive committee *Sean O’Keefe

Thomas Enders

LUTZ BERTLING

heads EADS North America

leads the Airbus Division

heads the Eurocopter Division

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

As Airbus Chief Executive, Mr Enders
is responsible for the overall successof all Airbus activities, commercial
and military, driving ongoingand development programmes
and strategic initiatives.

Mr Bertling’s mission is to strengthen
Eurocopter’s leading position anddeliver commercial success andcustomer satisfaction on all helicopter
programmes and related services.

leads EADS’ Strategy and Marketing
activities

DOMINGO UREÑA-RASO

is the Chief Executive Officer of EADS

drives Airbus Military

Mr Lahoud is responsible for elaborationand execution of the Group’s strategy
including Merger and Acquisition
operations, as well as the Group’s
international development andmarketing.

Mr Ureña-Raso is in charge of Airbus
Military, responsible notably for the
A400M programme and Tankers.
He reports to the Head of Airbus.

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

Marwan LahoudLouis Gallois* Current composition. Future composition will be subject to the decision of the newly appointed Board of Directors.

EADS
Annual review 2011confident today/tomorrowHans Peter Ring

JUSSI ITÄVUORIFrançois Auqueheads EADS’ Financedrives EADS’ Human Resources

Mr Ring’s mission is to ensure
successful management of EADS’
financial resources to support
operational performance, drive ambition
for value creation and prepare theGroup’s future.

As Head of HR, Mr Itävuori’s role isto ensure that the EADS workforce iscompetent, engaged and efficiently
managed to master present challenges
and anticipate future talent needs.

heads the Astrium Division and coordinates
Space and Defence activities

Fabrice Brégier

Jean Botti

STEFAN ZOLLER

leads Group-wide improvement initiatives
and the operations of Airbus

steers EADS’ Research and Technology,
Innovation, Technical means and policies

Mr Brégier is Airbus COO and manages
its operations and Power8. He has
the additional permanent mission ofenhancing operational performanceacross the EADS Group.

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

leads the Cassidian Division

Mr Zoller is in charge of driving
successful business performanceat Cassidian while preparing theDivision’s future.

the executive committee

17

Mr Auque is responsible for the successof Astrium and coordinates between theGroup’s defence, security and space
activities to foster synergies.

Photograph taken at the Astrium facility in Les Mureaux, France.

18

EADS
Annual review 2011

achieving today/tomorrow

ACHIEVING—
with the capacity tosustain results long-term
Today

Cutting-edge technology makes
innovative aircraft such as
the Eurocopter EC145 T2 quieter
and more fuel-efficient.

Scan the QR-code withyour smartphone formore information or visit
www.eads.com

EC145 T2

EADS
Annual review 2011

achieving today/tomorrow

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EADS
Annual review 2011

X 3 helicopter demonstrator

achieving today/tomorrow

EADS
Annual review 2011

achieving today/tomorrow

tomorrow

The new X3 high-speed, long-range
helicopter demonstrator combines
the vertical lift-off capability ofa helicopter with the speed of a plane.

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EADS
Annual review 2011

achieving today/tomorrow

Interview with
the Chief Financial
OfficerHans peter ring

What in your view are the most important messages
to be taken from EADS’ financial results of 2011?
First of all the overall message is a good one. We beat ourguidance on all key indicators. Our revenues increased by
7% to € 49.1 billion, despite the volatile macro-economic
environment. Our order book grew significantly to € 541 billion.
It’s a formidable basis for future business. Our EBIT* before
one-off increased 34% to € 1.8 billion. And the improvement isflowing through to the net income which increased by 87% to€ 1,033 million. Our 2011 results do confirm our equity story!

In 2011, EADS made a number of significant
acquisitions. Is your approach to cash management
evolving?
I would say that our ability to make strategic acquisitions,like those of Vizada, Vector Aerospace, Satair and Metronin 2011, is mainly thanks to our careful approach to cash
management. This remains a key priority for us. The investmentof approximately € 1.5 billion into acquisitions in 2011 is morethan financed by the Free Cash Flow before acquisitions.
Our net cash position at the end of 2011 amounted to a solid€ 11.7 billion. This puts us in a position to invest in organic
growth, or acquisitions, in the years ahead.

EADS is proposing a dividend of € 0.45 per sharein 2012. How do you explain the increase?
I am pleased that we have been able to share our good
performance with shareholders through the increased
dividend. Compared to last year’s dividend of € 0.22 per sharethe increase is a significant one and is in line with the improved
financial performance of the Company. Based on earnings per
share (EPS) for 2011 of € 1.27, the pay-out ratio is similar tosector and industry peers. As the Group matures, this dividend
policy should serve as the orientation for the future.

EADS
Annual review 2011

achieving today/tomorrow

Interview with the Chief Financial Officer“In financial terms, I think the Company issounder than ever, with strong revenues,
a huge backlog of orders, and a very solid
financial profile.”

How do you estimate the currency risk for EADS
going forward?
In the past, EADS has suffered from the continuous weakeningof the US dollar against the euro. In 2011, the hedge rate
deterioration compared to the previous year had a negative
impact of around € 200 million on Airbus’ EBIT* before one-off.
Over the next two or three years, however, we don’t foreseesignificant impacts on EBIT* from hedge-book deterioration.
Looking further ahead, we continue to target an increase indollar procurement and global industrial footprint as a meansof reducing our exposure. We’re also making progress in oureffort to increase euro contracting with airlines, which we
successfully started in 2011 with more than US $ 5 billion worthof future aircraft revenues converted to euros. And of course
we continue with our successful hedging policy.

What financial performance should we expect fromEADS in the coming year?
Assuming that the world economy and air traffic grow in linewith prevailing forecasts and the euro stays around a rate of€1= $ 1.35, we expect revenues to grow above 6% in 2012. Withproduction increases underway, Airbus deliveries should riseto around 570 commercial aircraft. Group EBIT* before one-off
should increase to above €  2.5 billion in 2012 due to volume
increases at Airbus and Eurocopter, better pricing at Airbus
and A380 improvement. That’s a significant improvement.

Where do you see the main risks going forward?
Our future profitability depends to a large extent on our ability
to execute on our major complex programmes. The A400M
is advancing towards first customer delivery. The A380 series
production is making progress, with deliveries up from 18 in2010 to 26 in 2011. Management is focused on delivering along-term solution to the issues affecting rib feet inside theaircraft’s wings. Clearly, the A350 remains our biggest industrial
challenge and is demanding the Company’s utmost attention.
The programme is very challenging: the schedule is tighteningas Airbus progresses towards its next milestones.
Another risk area where we need to be vigilant is the macroeconomic environment and its impact on GDP growth, airtraffic growth, governments’ ability to invest and on the highvolatility of the financial markets.

In 2012 you step down as CFO after some ten years
in this role. What would you say have been your mainachievements?
My years as CFO have been very eventful and I’m certainly
proud of the way that EADS has evolved as a leading company
in its sector. In financial terms, I think the Company is sounderthan ever, with strong revenues, a huge backlog of orders, anda very solid financial profile. This is the achievement of a strong
management and finance team based on a changed governancefive years ago. I have thoroughly enjoyed exchanging with thefinancial market in many personal meetings and conferences.
It has been a pleasure and a privilege to share and convey theviews of shareholders, analysts and experts as passionate
followers of this industry and I’m grateful for the trust of many
people I met.
More importantly, looking into the future, I believe the Company
is well set for top and bottom-line growth. I am convinced the
new management team with my successor, Harald Wilhelm,
who has been a strong pillar of my finance team, is ideallyplaced to open a new chapter of our success story.

* Unless otherwise indicated, EBIT* figures presented in this report are Earnings Before Interest and Taxes, pre-goodwill impairment and exceptionals.

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EADS
Annual review 2011

achieving today/tomorrow

Interview with the Chief Strategy
and Marketing Officer
Marwan Lahoud

In terms of EADS strategy, what would you say were
the highlights of 2011?
Clearly, 2011 was the year we stepped up our efforts towards
reaching our longer term goals through targeted acquisitions. The
companies we acquired – in particular, maintenance specialist
Vector Aerospace, satellite communications provider Vizada,spare parts logistics expert Satair and air traffic management
specialist Metron – will help us to increase the services share ofour business, and to extend our global footprint.
We’ve also made some important strategic advances throughjoint ventures. For example, in Kazakhstan, where we alreadyhad a strategic partnership in the space field. In 2011, Eurocopter
signed an agreement to formalise its Kazakhstan Engineering
joint venture. The new organisation has started assembly anddelivery of the first of 45 EC145s to be acquired by the Kazakh
government up to 2016. Eurocopter also created a joint venturewith Korea Aerospace Industries to support Korean Utility
Helicopter marketing and support.

Can you explain how the acquisitions fit your strategy?
As you know, we have a target of increasing the services share
of EADS business to 25% by 2020. At the same time, we want
to extend our global footprint in order to access new markets,
especially in North America and in emerging countries where
there is strong growth. And we want to diversify our currency
base. The acquisitions we made in 2011 will help us to achievethese goals, while also contributing positively to EADS’
profitability growth.
Vector Aerospace, for example, is mainly located in Canada
and in the UK, and enjoys an important presence in the US andSouth Africa. As a leading provider of multi-platform helicopter
maintenance services, Vector Aerospace clearly complements
Eurocopter’s existing competencies, while it also has a strong
base of both civil and defence customers.

Vizada likewise will strengthen EADS’ presence on the
North American market being a major supplier to the US
government as well as to a range of civil customers. Vizada
is present on five continents and is a perfect complement to
Astrium’s existing mainly governmental and secure satellite
communications portfolio. Both Vizada and Vector Aerospaceare profitable businesses, too.

What about the other acquisitions?
Satair too fits perfectly with EADS’ strategy. It will significantly
enhance Airbus’ services offering in aircraft material management and its revenues are distributed broadly equally between
the US, Asia and Europe. Metron Aviation, another Airbus
acquisition, will help the Company expand its air traffic management activities in the US.

2011 was in many ways a difficult year for the
global economy. How would you summarise EADS’
marketing achievements in this context?
In terms of the macro-environment, 2011 was indeed a difficult
year, with uncertainties over the sovereign debt crisis, aweakening growth dynamic in developed economies, pressures
on government budgets and unexpected events such as thedisaster in Japan.
Nevertheless, EADS won € 131 billion worth of orders and theorder backlog has grown to a record level of € 541 billion. It’s
an indication of how resilient our business is. And it’s further
confirmation of the importance of the Asia-Pacific market
in particular, which has been a clear focus of our marketing
activities in recent years. The Asia-Pacific region accounted
for more than 50% of total EADS orders in 2011, not only withrespect to civil aircraft orders, but also for defence. Our 2011
orders also show the growing importance of the Latin American
market, which is seeing increasing weight in the EADS orderbook. This is mainly related to civil aircraft orders, but we seehere strong potential also in the military transport market.

EADS
Annual review 2011

achieving today/tomorrow“The acquisitions
we made in 2011 will
help us to increase
the services shareof our business andextend our global
footprint.”
Clearly civil aircraft orders accounted for by far
the largest part of EADS orders in 2011. How will
this affect EADS’ strategy of balancing its portfolio
in the years ahead?
The record order intake at Airbus Commercial is clearly areason for us to be pleased. At the same time, it is true that
our other businesses will have an enormous challenge tomatch growth projections for the civil aircraft business. It’san ambitious aim, certainly, but we continue to have it in oursights. Eurocopter has seen a recovery in the civil helicopter
market. Despite pressures on governmental budgets, both
Astrium and Cassidian saw continued order momentum whiletransforming their businesses. Astrium scored important
export breakthroughs with Directv in the US and the
MeaSat telecom satellite in Malaysia. And Cassidian won
an important systems integration contract in the United ArabEmirates through its joint venture EMIRAJE Systems.
As mentioned, our recent acquisitions should help us to improvethe balance, certainly. Despite a total investment of some€ 1.5 billion, our net cash remains at a very healthy € 11.7 billion.
So we continue to have the means to manœuvre, when newopportunities arise.

Interview with the Chief Strategy
and Marketing Officer

25

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EADS
Annual review 2011

achieving today/tomorrow

KEY EXPORT MARKETS
2012-2022
EADS: a European company in a global environment

RUSSIA

CHINA

industrial and technological capabilities offer EADS
- Russia’scontinues to increase its share of the largest market- EADS

harbours the ambition of building a true strategic- EADS

successful execution of a well-planned industrial- Thegreat potential for partnerships.

partnership with Russia in aerospace, defence and security.

TURKEY- Turkey is a large, fast-growing market with substantial andcompetitive industrial, technological and human capabilities,
which will play an important and enduring role in the region.
- As a European industrial leader, backed by its various homecountries, EADS is eager to develop its cooperation withTurkey.
- EADS’ interests lie in developing the common business andindustrial cooperation established in the past by strengthening
these relationships in future, and making Turkey a strategic
partner in aerospace and defence activities.
BRAZILis one of the fastest-growing economies in the world,- Brazil

and aims to become a global player in aerospace and defence.

intends to become Brazil’s accepted industrial partner,- EADS
assisting it in fulfilling its ambitions.
MIDDLE EAST
Middle East will continue to have one of the highest- Theregional growth rates for commercial transportationworldwide, being located at the crossroads of the globe’s
most dynamic markets.
region remains an important market for defence- The
and security, with a special emphasis on homeland andborder security.
is helping to establish local industry, providing- EADSdiversification from the oil economy.

for commercial aircraft in the world.

strategy has positioned the Group as the most successfulforeign aerospace company in China.

KOREA
Korea, which aims to be a leading international econ- Southomy by 2020, has made aerospace an industrial priority.
It has very high ambitions for its aerospace and defence
industry, through co-development with the sector’s majorinternational companies.
the success of the Korean Utility Helicopter- Followingprogramme, developed in strong partnership with local
industry, EADS is well positioned for other major industrial
programmes in the near future.
MALAYSIA- In
 the past decade, EADS has become the first foreign
customer of the Malaysian aeronautical industry. Malaysia
and EADS have developed a long-term strategic partnership,delivering benefits to every EADS Business Unit.
successes in commercial aviation have been
- Outstanding
supported by significant achievements in the defence sector,
and by the development of a strong industrial partnershipwith the local industry, notably in composites.
next step of EADS’ cooperation with Malaysia includes- The
increased sourcing, development of services, training andresearch and technology.

EADS
Annual review 2011

achieving today/tomorrow

KEY EXPORT MARKETSRUSSIA

CHINA

TURKEYMIDDLE
EAST

SOUTH
KOREA

INDIA

RUSSIAMALAYSIAINDONESIA

BRAZILCHINA

TURKEYMIDDLE
EAST

SOUTH
KOREA

INDIA
MALAYSIAINDONESIA

BRAZIL

Around € 10 billion

Market potential

Based on Airbus Global Market Forecast 2011-2030 and internal estimates

INDONESIA- Indonesia is one of Asia’s most promising markets with good

growth prospects.
- EADS has become the Indonesian aeronautical industry’s
main partner and is committed to strengthening this longterm industrial partnership.
- The Group aims to participate in the commercial market’s
opportunities – Indonesia being one of the fastest-growing
civil aviation markets – and to be the partner of choice on
governmental and defence programmes.
INDIA- India represents one of EADS’ largest aerospaceand defence markets, with vast opportunities acrosscommercial aviation, defence and space.

- With strong ambitions to build up a thriving aerospaceindustry with global reach, India offers EADS theopportunity to establish a strong local industrial base, todevelop support and services hubs for the sub-continent,
and to benefit from large research and development
investments, leveraging a rich pool of engineering andinnovation talent.
- EADS’ challenge will be to penetrate the promising defence
market further, through winning major contracts and joint
development programmes.
- India also offers largely untapped opportunities in security
solutions and services.
In space, EADS expects further expansion of its fruitful- 
partnership with India’s space agency.

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EADS
Annual review 2011

achieving today/tomorrow

Markets& Perspectives
The global economy slowed in2011, yet aviation continued its
growth trend. Meanwhile, highlevels of public sector debt are
putting pressure on government
spending within the defence,
security and space sectors.
Recovery under threat
Weaker economic growth
Worldwide economic growth slowed in 2011, following a strong
rebound in 2010 from the preceding global economic crisis.
In 2011, the global economy was hit by a barrage of shocks,
including the devastating Japanese earthquake and tsunami,
unrest in Middle Eastern oil producing countries and financial
turbulence in the eurozone area. Markets were also unsettled
by ambivalent data on US economic growth, raising fears
that the world’s largest economy might slip into recession.
A protracted dispute within the US Congress over raising thedebt ceiling added to the financial uncertainty. In August 2011,
Standard & Poor’s lowered the US credit rating for the first time.
According to the International Monetary Fund (IMF) in its
September 2011 World Economic Outlook, the world economy
was suffering from a weaker recovery in advanced economies,
combined with a large increase in financial uncertainty. In thesame study, the IMF forecast global growth of 4.0% for 2012.

IndiGo A320neo

World economic growth is a key driver of air traffic, which drives
to a large extent demand for new aircraft. A clear correlation canbe drawn between growth in global gross domestic product(GDP) and air traffic growth rates, measured in available seatkilometres (see diagram).

EADS
Annual review 2011

achieving today/tomorrow

In terms of growth rate, emerging countries continue to outpace
the advanced economies. While the advanced economies were
expected to grow in 2012 at an average rate of 1.9%, the IMF
forecast growth of 6.1% in emerging economies, with China
growing fastest at 9.0%. India was expected to grow 7.5% andBrazil 3.6%. Growth projections by the National Intelligence
Council (NIC) indicate that Brazil, Russia, India and China willcollectively match the original G-7’s share of global GDP by
2040-2050. Africa, though lagging far behind, will have manyof the fastest growing economies in the world in 2012, with
Ghana, Uganda and Mozambique joining Nigeria as energy
producing countries.
Within the advanced economies, a gap in predicted growth
rates between the US and the eurozone countries emerged.
The IMF forecast US growth of 1.8% in 2012 and eurozone
growth of 1.1%.

Markets & Perspectives

in particular, played an important role in providing liquidity to
the airline industry. Through sale and lease-back arrangements
as well as direct deliveries, lessors accounted for 40% of all
Airbus deliveries in 2011.
Overall, the volatile economic situation, in particular the
debt crisis, led to a heightened sense of caution towards
future developments, posing a challenge to industry and thecompetitiveness of the industrial and technological base.

Air travel has proved to be resilient
to external shocks(in RPK* trillions)
9 /11
AttackAsian Crisis
SARS

Gulf Crisis

5.5

Financial
Crisis

5.0

Sovereign debt crisis mounts
The high level of public debt in advanced economies is widely
seen as a risk to future growth. In its September 2011 report,
the IMF observed that markets were more sceptical about
the ability of many countries to stabilise their debt. Whereas
initially concerns were reserved to a few small countries on
Europe’s periphery, through the course of 2011 more countries
were subjected to critical scrutiny in Europe and beyond - fromJapan to the US. Following the US downgrade, nine eurozone
countries had their credit ratings downgraded by Standard &Poor’s in January 2012.
In the US, the world’s biggest spender on defence, budgets arebeing reduced after a decade when the annual defence budget
doubled to reach nearly US $ 700 billion in 2010. The pressures
are also great in Europe. According to figures published in2011 by the Stockholm International Peace Research Institute(Sipri), European defence expenditure fell 2.8% in 2010.
Defence spending grew, however, in regions such as SouthAmerica (5.8%), the Middle East (2.5%) and Asia and Oceania(1.4%). At the end of 2011, the US administration announced
an increased Pacific focus as part of its priorities as well as afocus on the Middle East.
Banks in Europe are adapting to recent economic turbulence
and newly introduced “Basle III” banking recommendations
by building capital reserves and tightening lending. Moreover,
European banks are facing higher costs to access US dollars,
the main aircraft financing currency. Despite these pressures
Airbus surpassed its deliveries target for 2011. Higher margins
made aircraft financing more attractive to those financial
institutions that have access to US dollars. Leasing companies,

4.5+53%**

4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
1981

1986

1991

1996

2001

2006

2011

World annual traffic* Revenue Passenger Kilometres** Since 2000

Source: ICAO, Airbus

passenger traffic in line with GDP(in %)
10
8
6
4
2
0
-2
-4
-6
2007

2008

2009

Real world & forecast GDP growth

2010

2011

2012

Traffic ASK (Available Seat Kilometres)

Source: IHS Global Insight (March 2012 data), OAG (ASKs data), Airbus

29

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EADS
Annual review 2011

achieving today/tomorrow

Toronto Airport, Canada

A380 Emirates

Commercial aviation
continues growth path

Supply chain fragility

Expansion continues
Over the past decades, air traffic has proved remarkably
resilient to external shocks (see graph). In 2010, worldwide
air travel measured in revenue passenger kilometres was
45% above 2000 levels despite two of the worst downturns
the industry has experienced in the intervening years. In its
December 2011 forecast, the International Air Transport
Association (IATA) said it expected that passenger demand
would grow 4% in 2012.

nologies agreed to buy Goodrich for US $ 16.5 billion. Fur-Longer-term growth in air traffic will be driven above all by
emerging countries. According to Airbus Global Market
Forecast (GMF), emerging countries, including Brazil,
Russia, India and China, together accounted for 69% of theworld population in 2010 and will generate 56% of the world’s
economic growth from 2011 to 2030.

Mounting competition

As manufacturers increase production, pressure has grown
for suppliers to consolidate. In September 2011, United Techther consolidation may continue amongst lower tier suppliers
seeking to meet demand for more integrated systems.
Tighter credit in the wake of the “Basle III” banking recommendations could prove a threat to smaller suppliers in particular,
especially with increased production planned for the coming
years.

Despite the growth dynamic, aviation remains fiercely competitive. According to its December 2011 report, IATA expected airlines to deliver a net profit margin of 1.2% in 2011 and of 0.6%
in 2012. As governments reduce their stakes in national carriers, consolidation in the air industry is likely to increase. In Brazil, the merger of TAM and LAN will create one of the world’s

Aircraft manufacturing resilience
In spite of recent economic uncertainties, the main aircraftmakers have amassed record order backlogs. Buoyed by robust
growth in countries such as China, Asia-Pacific airlines were
expected to generate the largest profits both in 2011 and 2012,according to IATA’s December 2011 report. The Asia-Pacificregion accounts for 32% of Airbus deliveries projected for 2012.

largest airlines. In the US, too, some consolidation is expected.
Fuel is one of the largest operating expenses incurred by theaviation industry and the volatility of crude oil prices is a major
challenge for airlines. During the second quarter of 2011,
oil prices briefly rose more than 25% above the levels thatprevailed in January 2011.

EADS
Annual review 2011

EC175

Markets & Perspectives

achieving today/tomorrow

A320 production line, Hamburg, Germany

Introduced in January 2012, the European Union’s Emissions
Trading Scheme (ETS) is set to charge airlines additionally forCO2 emissions. Airline companies and manufacturers have already made progress to improve eco-efficiency. According toAirbus GMF, in the decade to the end of 2010 air traffic grewby 45%, while fuel consumption rose by only 3%. According to
IATA, the ETS is expected to cost airlines € 900 million in 2012
and up to € 2.8 billion in 2020. High fuel prices and regulations
on emissions have driven demand for efficient new aircraft
such as the A320neo.

60% of global demand. China is expected to offer significant
new opportunities following the opening up of low altitude
airspace for civil helicopter use. Forecast International estimatesthat manufacturers will deliver some 18,000 rotorcraft, worth
around US $ 80 billion, in the years from 2011 to 2020.

As well as airlines, aircraft manufacturing is expected to see
increased competition, as emerging countries build up theirlocal industry. China, Brazil and Russia are all nurturing aircraft
manufacturing industries, with additional development progressin countries such as India, South Korea and Turkey amongst
others.

(in number of trips* per capita in 2010)

Emerging economies on the edgeof strong travel growth10
IrelandSingapore
Hong Kong

1

Costa Rica

South Korea
Saudi Arabia

USA

UK

Spain

FranceGermanyJapan

BrazilChina
Russia0.1

Helicopter orders recoverWithin the helicopter sector, order levels are recovering fromtheir recession lows. The oil and gas sector is driving demand,as relatively high energy prices are leading to exploration
activity. For some helicopter suppliers, continuing military
production is helping to fund new development in anticipationof civil recovery. Recovery in the US and Europe is critical to thecommercial rotorcraft market, as these markets account for

India
World average
0.01

0.001
0

5

10

15

20

25

30

35

40

45

50

55

US $ (000’s) 2010 GDP per capita*Passengers originating from respective country
Source: IATA PaxIS, Global Insight, Airbus

31

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EADS
Annual review 2011

achieving today/tomorrow

Eurofighter

NH90

Defence, security and spacesectors adapt
Pooling EU resources
After a decade of increasing defence budgets, world military
expenditure slowed in 2010. Within the European Union (EU),the need to reduce expenditure has led governments like
Germany to ask for existing orders to be renegotiated. In somecases governments have sought to sell on contracted orders
to export countries.
Europe’s budgetary crisis has led to calls for governments to pool
resources. The UK and France launched in 2010 a programmeof bilateral cooperation. Following an initiative of EU defence
ministers in 2010, the European Defence Agency has identified
promising areas in which member states could gain by pooling
resources, such as helicopter training, maritime surveillance,

air-to-air refuelling and satellite communications. Nato’s “Smart
Defence” initiative, launched in 2011, has spurred similar efforts
for nations to share resources at a transatlantic level.
Evolving threat scenarios
Despite budget pressures, Nato campaigns in Libya and Afghanistan have shown a clear need for European investment,
especially in enhanced interoperability and in air-to-air refuelling.
Recent operations have also shown the importance ofunmanned aerial systems (UAS) for surveillance and combat
missions when faced with asymmetric threats. According to
Teal Group’s 2011 forecast, approximately US $ 94 billion willbe spent on UAS platforms between 2011 and 2020. America’s
Federal Aviation Administration (FAA) is moving towards
opening up civil airspace for small UAS. This could lead to a
civil market for these platforms.
Cyber-security is another growth area. According to EADS
estimates, the combined French, German and UK cybersecurity market was worth around € 7 billion in 2010 and wasprojected to grow by approximately 10% per year. The market
for large-scale security solutions is also expected to grow, as
governments in Europe and worldwide look to monitor criticalinfrastructure, secure major sporting events and enhanceborder surveillance and security.

worldwide Fighter aircraft
market forecast(in US $ billion)
20

15

Increased investment outside Europe
While EU defence budgets are flat or will be reduced, emerging
and Middle Eastern countries are continuing to invest in
defence and security solutions. According to Sipri, India’s
defence expenditure in 2010 rose 15% above the previous year
to US $ 41.2 billion. In the same period, defence spending rose

10

5

0
2012

2013

2014

2015

Source: Teal Group - Fighter/Attack Aircraft - February 2011

2016

EADS
Annual review 2011

Ariane 5Markets & Perspectives

achieving today/tomorrow

International Space Station

10% in Russia to US $ 58.7 billion and 10% in Saudi Arabia
to US $ 45.2 billion. Further into the future, the Arctic could
become a focus for security activity as oil and gas exploration
gives rise to competing interests.
European space spending
The space industry as a whole continues to be strongly driven
by national interests and institutional activities. European
interests are represented by the European Space Agency(ESA). For the European space industry, 78% of revenues are
generated in Europe, 22% are for export. By far the largest
customer in Europe is ESA, followed by Arianespace. In recent
years, Europe’s space industry has remained robust despite
increased competition in the launcher segment. Technologicaladvances in satellite communications, satellite navigation andimaging have led to multiple innovations and new space-related
service industries.
The next ESA Ministerial Council, in late 2012, is expected to
set budgets for the coming five years, laying the foundations for
Europe’s new initiatives in the field of space transportation andsatellite applications. While the space industry has been robust
in recent years, the outcome of this meeting will be closely
watched given the difficult budgetary context.

US administration is looking at shifting from government
owned and operated launchers towards a more commercial
approach. The recent trend towards reusable launch vehicles
promises lower cost for space access.

Global Military Spending(in 2010)

Total: US $1,612 billion

USA

7%

China

4%

UK

4%

France4%

Russia

3%

Japan

3%

Saudi Arabia

3%

Germany

3%

India

2%

Italy

2%

Brazil22%

Rest of World

Source: SIPRIWorld Civil Helicopter fleet by region(as of November 2011, in % of aircraft)

Outside Europe and the US, China is moving forward with its
space programme. Russia’s space industry, though beset bytechnical setbacks in 2011, continues to provide access to theInternational Space Station (ISS).
According to America’s FAA there were 74 space launches
worldwide in 2010, of which 23 were commercial. The
23 commercial launches in 2010 were valued at approximately US $ 2.5 billion according to FAA. Increasingly, the43%Source: Eurocopter

45%

USA and Canada

23%

Europe9%Australia and New Zealand7%

Latin America

3%South Africa

2%

Japan

1%

China

1%

India

9%

Rest of World

33

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EADS
Annual review 2011leading today/tomorrow

LEADING—
Assuring mission
success

Eurofighter “Typhoon”

EADS
Annual review 2011leading today/tomorrow

35

Today

Cassidian provides state-of-the-art
systems and services for armed
forces, the police and civil protection
authorities around the world.

Scan the QR-code withyour smartphone formore information or visit
www.eads.com

36

EADS
Annual review 2011leading today/tomorrow

Tomorrow

Cassidian pioneers groundbreaking technology, suchas those integrated within theEuro Hawk UAS, to safeguard
sensitive infrastructure andmonitor terrorist hot spots.

Euro Hawk

EADS
Annual review 2011leading today/tomorrow

37

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EADS
Annual review 2011leading today/tomorrow

the Yearin Review

16 May 2011
X3 HELICOPTER demonstrator
EXCEEDS SPEED TARGET.
The innovative Eurocopter X 3 fixedwing helicopter demonstrator pushes
the boundaries in helicopter flight byachieving an air speed of 430 km/hour,
surpassing its original target.

Virgin buys the A320neo

17 January 2011
A320NEO STARTS RECORD YEAR.
Virgin Air ways announces the firstfirm order for the A320 new engine
option, starting a record year in which
the eco-efficient aircraft wins 1,226 firm
orders, becoming the fastest-selling new
aircraft ever.

Zehst, Zero Emission High Speed Technology

X 3 helicopter demonstrator

20-26 June 2011
EADS INVITES YOUNG TALENT
TO paris air show.
In a year when EADS hires approximately
5,000 employees, the Group invites talented young people and experienced
professionals to the Paris Air Show tomeet its top management and engineers.

21 June 2011
ZEHST HIGH-SPEED CONCEPTREVEALED.
EADS presents a futuristic concept of anaircraft designed to fly above the atmosphere at four times the speed of sound,with limited impact on the environment,
aiming to develop demonstrators by 2020.

ATV-2

16 February 2011
PERFECT SPACE RENDEZVOUS
FOR 2ND ATV.
After a flight of 4 million kilometres inspace, Astrium’s second unmanned
supply vehicle, built for the European
Space Agency, docks with the International Space Station.

Paris Air Show, June 2011

EADS young employees at Paris Air Show

22 June 2011
AIRBUS WINS RECORD AIR SHOWORDERS.
At the Paris Air Show, Airbus lands orders and commitments worth US $ 72.2
billion for a total of 730 aircraft from
16 customers, setting a record for thelargest number of orders ever won at an
air show.

EADS
Annual review 2011leading today/tomorrow

1 December 2011
NEW ARIANE 5 LAUNCHERAPPROVED.
The European Space Agency approves
Astrium’s design for the new Ariane 5
Midlife Evolution satellite launcher,pending budget approval at the ministerial meeting scheduled for 2012.

30 June 2011
EUROCOPTER MAKES SERVICESACQUISITION.
Eurocopter announces acquisition of
Vector Aerospace, marking EADS’ push
into aerospace services. Later in 2011,
Airbus and Astrium respectively acquire
the Satair and Vizada services businesses.
21 July 2011
FIRST EURO HAWK TOUCHES DOWN.
The first Euro Hawk unmanned aircraft
for the German armed forces, jointly
produced by Cassidian and Northrop
Grumman, touches down in Manching,
Germany, prior to delivery plannedfor 2012.

the Year in Review

Eurofighter

18 October 2011
DELIVERy of the 300th
EUROFIGHTER TYPHOON.
Cassidian delivers the 300 th Typhoon,
making the Eurofighter the only newgeneration, multi-role fighter aircraft tohave such a large fleet in service.

Ariane 5

Euro Hawk

19 August 2011
ATR DELIVERS FIRST OF NEW
TURBOPROP FAMILY.
ATR delivers its first ATR 72-600 tolaunch customer Royal Air Maroc.
Thanks to high demand for its fuelefficient aircraft, ATR wins 119 net
orders in 2011.

A400M Final Assembly Line

23 November 2011
AIRBUS MILITARY BEGINS A400M
FINAL ASSEMBLY.
Airbus begins final assembly of thefirst A400M modern military airlifterfor delivery to a customer. The French
Air Force will receive the aircraft in thefirst quarter of 2013.

9 December 2011
Airbus starts joining the first
A350 XWB front fuselage
Airbus starts joining the first 21-metre long
front fuselage section for the A350 XWB
in Saint-Nazaire, France. This will be thefirst major section of the A350 XWB toenter the Final Assembly Line.

A350 XWBATR 72-600

39

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EADS
Annual review 2011leading today/tomorrow

Major programmes advance
Airbus made significant progress on its major new production
and development programmes.

In 2011, Airbus won a record
number of orders, thanks to thesuccessful launch of the A320neo(new engine option), while it also
broke its previous deliveries record.
Airbus had a record year for commercial orders and deliveriesin 2011, while significant progress was achieved on major
development programmes.
Airbus consolidated revenues grew by 10% to € 33.1 billion(€ 30.0 billion in 2010), reflecting higher commercial deliveries.
EBIT* increased by 91% to € 584 million (€ 305 million in 2010).
As expected, research and development costs rose in 2011,
mainly due to the A350 XWB.
Record deliveries and orders
The Airbus Division set a new record of 534 commercial aircraft
deliveries in 2011 (510 in 2010). A record was also achieved
by Airbus Military with 29 deliveries (20 in 2010), including
six A330 MRTT.
Airbus Commercial won a total of 1,608 gross orders in 2011,
1,419 net of cancellations (2010: 644 gross orders, 574 net).
The order intake of 2011 broke the previous record achievedin 2007 of 1,458 gross orders, 1,341 net. The A320neo alone
accounted for 1,226 firm orders. The aircraft is now the fastestselling commercial jet ever. At the year’s end, the Airbus
Commercial order book amounted to € 475.5 billion (year-end
2010: € 378.9 billion), comprising 4,437 aircraft (3,552 aircraftin 2010).
The commercial aircraft order book is geographically welldistributed. Europe accounts for 12%, the US and the Middle
East each account for 11%, and Latin America represents 7%.
The high-growth Asia-Pacific region, including India and China,
represents 37%.
In a challenging market environment, Airbus Military won five
new orders, compared to 21 in 2010. The order backlog stands
at 217 (241 in 2010).

Deliveries of the A380 were above the set target and roseto 26 in 2011, compared to 18 in 2010. Airbus is working toresolve wing rib feet issues in the best interest of its customers.
A380 programme losses should significantly decrease in the
mid-term thanks to volume and process improvements.
First major sub-assemblies of the A350 XWB were delivered to
Toulouse in 2011 ahead of final assembly. In line with Airbus’“stop and fix” approach, which aims to ensure a robust andefficient production process, the start of final assembly was
rescheduled to April 2012, with entry into service planned
for the first half of 2014. This led to an EBIT* charge of€ 200 million in 2011.
The A400M successfully performed its critical flight test programme in 2011, reaching a total of more than 2,600 flight
hours. The fifth A400M flight test aircraft joined the campaign
at the end of 2011, completing the test fleet.
Strategic acquisitions
As part of the Group’s strategy of increasing service-related
business, Airbus acquired Satair, a leading distributor of
aviation parts, for € 351 million. Satair is supplier to a broadinternational customer base, supporting all major commercial
aircraft families. This acquisition will help Airbus’ materials
management division to grow.
Airbus also acquired US-based Metron Aviation, a leading
provider of advanced Air Traffic Management (ATM) products
and services for the global aviation industry.
Alternative fuels
Airbus is working to reduce the environmental impact ofaviation by integrating technological innovations into new
aircraft and by supporting the search for alternative sourcesof fuel. Airbus, the European Commission and a number ofother industry organisations launched the “Biofuel Flightpath”
initiative, aiming to refine two million tonnes of biofuel annuallyfor aviation by 2020.

EADS
Annual review 2011leading today/tomorrow

airbus41

Airbus division1)
(€m)

2011

2010

Variation

Revenues

33,10329,978+10%

Self-financed R&D

2,482

2,321

+7%

EBIT*

584

305

+91%

Order intake

117,874

68,223+73%

Order book495,513400,400+24%

1) Airbus reports in two segments: Airbus Commercial and Airbus Military.
Eliminations are treated at the Division level.

A380 China Southern Airlines

42

EADS
Annual review 2011leading today/tomorrow

airbus commercial
Airbus Commercial revenues rose to € 31.2 billion (€ 27.7 billion
in 2010), reflecting increased deliveries, a higher proportionof large aircraft and pricing improvements compared to theprevious year. Airbus Commercial EBIT* of € 543 million(2010: € 291 million) benefited from operational improvement
including a favourable pricing effect, partially offset by hedge
rate deterioration and higher research and development costs,
particularly for the A350 XWB.
Airbus Commercial won 56% of total gross aircraft orders(above 100 seats) by value in 2011 and 54% of net orders
by value.
Best-selling A320 Family
In terms of commercial aircraft orders, 2011 was the year of
the A320neo. The A320neo combines advances in engine
fuel-efficiency with “sharklet” wing-tip devices that enhance
aerodynamics to burn up to 15% less fuel than today’s singleaisle aircraft. An important milestone was achieved in 2011
with the first flight of an A320 fitted with “sharklets”. The
A320neo is scheduled to enter into service in 2015. Overall
gross A320 family sales totalled 1,470 in 2011, representing
70% of all units sold within the single-aisle category.
At the end of 2011 the A320 family had won a total of
8,292 orders with 3,345 still to be delivered. In 2011, Airbus
successfully increased the monthly production rate to 38 froma previous rate of 36. Further increases are planned during
2012 up to rate 42.
A350 XWB makes industrial progress
The A350 XWB family consists of three passenger versions
with long-range capability up to 8,500nm/15,580km. In atypical three-class configuration, the A350-800 will offer 270
seats, while the A350-900 and the A350-1000 will offer 314
and 350 seats respectively. The total order backlog for theA350 XWB family stood at 555 at the end of 2011.
Manufacturing and pre-assembly of the A350-900 progressed
across all pre-final assembly sites in 2011. Final assembly of thefirst static test A350-900 started in April 2012. The first flight of
the A350-900 is scheduled for the first half of 2013, with entry
into service planned for the first half of 2014.
The A350-1000 design was enhanced in 2011, to offer
customers additional range, payload and thrust. Entry into
service of this model is now set for 2017. Entry into service of
the A350-800 is scheduled for 2016.

A380 series production accelerates
Series production of the A380 accelerated in 2011 above
the rate of two a month. In 2012, the A380 is due to reacha production rate of three per month. At the end of 2011, theorder backlog stood at 186 aircraft.
Two airlines – China Southern and Korean Airlines – took
delivery of their first A380s in 2011. At the end of 2011, 67 A380
aircraft were in service with seven airlines and approximately
18 million passengers had flown on A380 flights.
Airbus won 29 gross firm orders for the A380 (19 net) during
2011, including repeat orders from Lufthansa and Qatar
Airways. Additionally, Transaero Airlines signed a memorandum of understanding for four A380s, making it the aircraft’s
launch customer in Russia.
Mid-range A330 adds to order book
The A330 won 99 new orders in 2011 (85 net), demonstrating
its continuing competitiveness in the mid-range market. At theend of 2011, the total order backlog for the A330 stood at 351
aircraft. Due to strong demand, Airbus decided early in 2011 toraise the monthly production rate from eight to nine in early 2012,
before reaching rate ten in the second quarter of 2013.
Four A330 freighters were delivered in 2011, and seven neworders were received.
Airbus continues to invest in technical enhancements for theA330 directed towards reducing the cost of operation andimproving eco-efficiency.
Airbus terminated the A340 programme at the end of 2011.
Customers operating this aircraft type will continue to receive
support from Airbus.

(€m)

2011

2010

Variation

Revenues

31,15927,673+13%

Self-financed R&D

2,467

2,311

+7%

543

291

+87%

EBIT*
Order intake

117,301

68,210+72%

Order book475,477

378,907

+25%

2011

2010

Variation(number of aircraft)
Deliveries

534

510

+5%

Order book

4,437

3,552

+25%

EADS
Annual review 2011leading today/tomorrow

A330-200 Freighter

A330 Final Assembly Line, Toulouse, France

Air Asia A320neo

airbus

43

44

EADS
Annual review 2011leading today/tomorrow

A400M and C295

A400M Final Assembly Line, Seville, Spain

A330 MRTTEADSAnnual review 2011leading today/tomorrow

airbus MILITARY
While Airbus Military’s revenues decreased to € 2.5 billion(€ 2.7 billion in 2010), EBIT* rose significantly to € 49 million(€ 21 million in 2010), due to a favourable mix, operational
improvements and overhead cost reductions.
A400M begins series production
The A400M made important technical progress. By the endof 2011, the A400M had achieved more than 2,600 of the total
3,700 flight hours foreseen for the test campaign. Testing willproceed aggressively in 2012, as the fifth aircraft joins thecampaign, following its maiden flight at the end of 2011.
A400M series production was launched early in 2011 and final assembly of the first customer aircraft began in November
2011. The first delivery is due to be made to the Frenchcustomer by end of March 2013. Six serial aircraft were in
production by the end of 2011. The total order backlog for the
A400M stood at 174 aircraft.
Airbus estimates a potential for approximately 400 export orders over the next 30 years on top of the current firm orders.
A330 Tanker enters service
The first six A330 MRTT aircraft were handed over to customers during 2011. These included the first four deliveries to theRoyal Australian Air Force.
Within the UK Future Strategic Tanker Aircraft (FSTA) programme, the aircraft obtained its civil certification in July and its
military certification in August 2011. Airbus remained on course

(€m)

2011

2010

Variation

Revenues

2,504

2,684

-7%

Self-financed R&D

14

10

+40%

EBIT*

49

21

+133%

Order intake

935

152

+515%

Order book

21,315

22,819

-7%

2011

2010

Variation

In number of aircraft
Deliveries

29

20

+45%

Order book

217

241

-10%

airbusto deliver the full capacity of 14 MRTTs to the UK Royal Air
Force by 2016. The first aircraft is due to enter into service in2012. The Royal Air Force contract includes integrated aircraft
service over a 24 year period.
The existing worldwide fleet of aerial tankers consists of 630
aircraft, averaging 44 years of age. Airbus estimates a potential
total export market, excluding the US, of more than 100 tanker
aircraft. The most capable in-flight refuelling platform available,
the A330 MRTT, is well positioned to win export orders.
Record Medium and Light aircraft deliveries
In a difficult market, Airbus Military continued to lead themarket for medium and light-weight transport and surveillance
aircraft. A record 23 aircraft were delivered during the year, up
from 20 in 2010.
Budget pressures depressed the number of new orders in theyear, with five received, compared to 21 in 2010. Two of thesewere follow-on orders from existing customers.
Airbus Military continues to develop specialist applications
for its C295 and CN235 medium and light military transport
aircraft. A new radar housing structure, called a rotodome,
underwent flight testing on a C295 in 2011, with the aim ofdeveloping a new market segment for high-performance
airborne early warning and control systems.

AIRBUS DIVISION Outlook
In 2012, Airbus is targeting a further increase in deliveries toapproximately 570 commercial and 30 military aircraft. Monthly
production rates are set to be ramped up to 42 for the A320,
9.5 per month for the A330 and towards three per month for the
A380 by the end of 2012. Gross commercial aircraft orders are
expected to be above the number of deliveries.
The “sharklets” for the A320 family will complete testing, aheadof certification before the year’s end. A400M production willramp up in preparation for delivery of the first aircraft to the
French Air Force by the end of March 2013.
In financial terms, Airbus Commercial underlying profitability (EBIT*
before one-off) is expected to improve significantly, thanks tohigher delivery volumes, better pricing and improvement of A380
production performance. Going forward, the reported EBIT* will
be dependent on the Group’s ability to execute on the A400M,
A380 and A350 XWB programmes, in line with the commitments
made to its customers.

45

46

EADS
Annual review 2011leading today/tomorrow

Eurocopter beat expectationsin 2011, achieving record
revenues, improved profitability
and a significant increase in new
helicopter orders. The Division
began to benefit from its innovationand efficiency drive, while paving
the way for further growth.
In 2011, Eurocopter demonstrated significant progress in its
financial performance. Through its strategy of product innovation, internationalisation, services expansion and operational
improvement, Eurocopter is positioning itself to benefit from a
recovering market.
Eurocopter revenues grew by 12% to € 5.4 billion (€ 4.8 billion
in 2010). The increase reflected the consolidation of Vector
Aerospace, as well as a favourable mix effect in commercialdeliveries and higher services and support sales. In total, 503
helicopters were delivered (527 in 2010). Deliveries of helicopters
represented 51% of Eurocopter’s revenues, while support andservices accounted for 38% of the total. The remaining 11%
was generated by development and other activities.
EBIT* rose by 42% to € 259 million (€183 million in 2010),
supported by the favourable mix effect in commercial deliveries
and support activities, as well as improved operational
performance.
In a recovering market, Eurocopter booked 457 net helicopter
orders (346 in 2010). The order intake amounted to € 4.7 billion.
E xpor t sales outside the company’s home countries
represented 77% of order bookings. Civil contracts accounted
for 68% of the order volume, with military orders representing
the remaining 32%. At the end of 2011, the Eurocopter orderbook stood at €13.8 billion.
Increasing international presence
and services activities
Eurocopter expanded its services activities and enhanced its
presence in North America and the UK with the acquisition of
Vector Aerospace for € 460 million. This acquisition, the largest
in Eurocopter’s history, will help the Division bolster its activities
in both civil and governmental markets.

Among other international developments, a joint venture wassigned in Kazakhstan for local assembly of the EC145 and in
Korea for marketing of the new Korean Utility Helicopter.
Support and services activities were further reinforced by the
opening of new training centres in Russia and China, alongwith a support and service centre in Scotland.
Emphasis on innovation
Eurocopter introduced a series of new helicopter innovationsin 2011. Unveiled at the Paris Air Show where it performed
impressive flight displays, the X3 demonstrator combines amain rotor with two propellers, giving it superior speed andrange at affordable costs. Eurocopter also pioneered flighttesting of a hybrid helicopter, combining an internal combustion
engine and electric motor. The division also unveiled its new
upgraded EC145 T2 version, offering enhanced performance,
lower noise and state-of-the-art avionics.
Operational improvement
Eurocopter inaugurated its new global logistics centre in Marignane, France, and advanced the “Systemhaus” project at
Donauwörth, Germany, to concentrate resources, skills andequipment in one location. Progress was made in the newfacility project to be built at Le Bourget Airport near Paris,
France. The site is to become a worldwide benchmark in theconception, manufacture, maintenance and overhaul of helicopter blades.

OutlookIn 2012, Eurocopter aims to continue its ambitious innovation
programme, while growing its international footprint and further
expanding services.
Development of the next-generation X4, Eurocopter’s successor
in the Dauphin segment, will be a priority for 2012, as will the inauguration of the EC725 assembly line in Brazil, and the phasingin of an aerostructure production facility in Mexico. Eurocopter
will also continue discussions with the German government on
defence programmes.
In the next 5 years, Eurocopter is anticipating a gradual global
recovery in the civil market, especially outside Europe. Eurocopter
expects deliveries to return to pre-crisis levels in the next few
years and a significant improvement in its mid-term profitability.

EADS
Annual review 2011leading today/tomorrow

Eurocopter

47

(€m)

2011

2010

Variation

Revenues

5,415

4,830

+12%

Self-financed R&D

235

189

+24%

EBIT*

259

183

+42%

Order intake

4,679

4,316

+8%

Order book

13,814

14,550-5%

REVENUES BY MARKET (in % of external
revenues)

47%

53%

Defence

Civil

chiffre pour faire la 3D
effet -> 3D -> extrusion et biseautage
15
25
2
profondeur d’extrusion 20
ombre diffu
option100
76
124
couleur ombre 100 83 14 64

EC225

48

EADS
Annual review 2011leading today/tomorrow

(€m)

2011

2010

Variation

Revenues

4,964

5,003

-1%

Self-financed R&D

109

85

+28%

EBIT*

267

283

-6%

Order intake

3,514

6,037

-42%

Order book

14,666

15,760-7%

REVENUES BY MARKET (in % of external
revenues)

34%

66%

Defence

Civil

chiffre pour faire la 3D
effet -> 3D -> extrusion et biseautage
15
25
2
profondeur d’extrusion 20
ombre diffu
option100
76
124
couleur ombre 100 83 14 64

Ariane 5

EADS
Annual review 2011leading today/tomorrow

Astrium demonstrated again its
excellent programme execution,
maintaining revenues at 2010 level
despite a challenging institutional
market and increased competition.
The transformation programme
AGILE delivered first results,
supporting successes in export
markets. Significant progress
towards future expansion wasachieved through the acquisitionof Vizada.
In 2011, Astrium reinforced its impressive record for programme execution, in particular through the 46th consecutive
Ariane 5 launch success, and achieved important commercial
successes in satellite activities. Meanwhile, the Division madesignificant progress towards its strategic goal of becoming a
global leader in space services.
Despite an increasingly competitive environment, revenues
were stable at € 5 billion (€ 5 billion in 2010), with significant
contributions from military and institutional activities.
While performance of the satellite, defence and launcher segments improved, 2011 saw lower services activity due to achanging market environment. Astrium’s investment in futurecompetitiveness led to higher research and development andnon-recurring costs related to the AGILE transformation plan.
EBIT* declined slightly to € 267 million (€ 283 million in 2010).
New orders of € 3.5 billion demonstrated continued momentum
in both commercial and institutional space markets, though at
a lower level than the exceptional previous two years. The orderbook stood at €14.7 billion at year-end (€15.8 billion in 2010).
Notable achievements
The Division successfully delivered 13 Astrium-built satellites(compared to ten in 2010), including five telecommunication
satellites and the first two Galileo In-Orbit-Validation satellites. Contract wins for two telecommunication satellites for
EUTELSAT, for the US Directv and the Malaysian Measat
operators proved Astrium’s competitiveness on the global
market. In total, Astrium won contracts for four telecommunication and three Earth observation satellites, representing
20% of the commercial satellite market.

Astrium

In 2011, the Ariane 5 heavy launcher successfully completed
five launches. ESA approved the design of the new Ariane 5
Midlife Evolution. The new launcher, due to enter service in2017, will offer a 20% improvement both in capacity and cost
per kilogram. Moreover, Astrium was commissioned by ESA
to manage the continued operation and exploitation of theEuropean components of the International Space Station (ISS)as the leading partner in an industrial consortium.
Also in 2011, the second Automated Transfer Vehicle space
craft, “Johannes Kepler”, successfully docked with the ISS
and a third vehicle, named “Edoardo Amaldi” was delivered toKourou for launch in 2012.
Within Astrium Services, a major public private partnershipcontract was signed with ESA to design, deliver and operate theEuropean Data Relay System, a constellation of geostationary
satellites which will transmit data at high speed from othersatellites in low-Earth orbit. Following the successful launch in
December 2011 of the very high resolution Earth observation
satellite Pléiades 1A, Astrium Services will be the exclusive
commercial distributor of the Pléiades constellation.
Major services acquisition
As part of its strategy to extend its global footprint andincrease the services business, Astrium completed in2011 the acquisition of Vizada. This company is a leading
independent provider of global satellite-based communication
services, with a strong US governmental business. It generated
revenues of approximately € 450 million in 2011.

OutlookIn 2012, Astrium will continue the drive to improve its competitiveness through the transformation programme AGILE,
launched in late 2010.
Revenues are expected to be stable in 2012, while pressure on
institutional markets will weigh on services profitability. In thefollowing years, Astrium is expected to return to benchmark
profitability, in line with the Group’s ambitious targets for 2020.
In 2012, budget constraints will put pressure on order intake frominstitutional customers both in the defence and space exploration
sector. The ESA Ministerial Council, due to take place in late2012, is expected to provide clear perspectives on the future
direction of European space programmes.

49

50

EADS
Annual review 2011leading today/tomorrow

Cassidian achieved stablerevenues in a challenging market
environment, while profitability
was in line with expectations. The
Division is adapting to the changing
defence market by targeting growthoutside Europe and developing
new offerings in the security field.
Cassidian introduced a far-reaching transformation plan in
2011, spanning performance and cost improvements and a
new structural set-up to counterbalance challenges from thechanged business environment. The previous business unit
structure was replaced by a matrix structure with a country andbusiness line dimension to improve proximity to international
markets and customers. Targeted gross savings will be mainly
used for investment in new products and services, to fundglobalisation and to secure Cassidian’s profitability ambitions.
Revenues were stable at € 5.8 billion (€ 5.9 billion in 2010).
The Eurofighter programme and MBDA missile programmes
continued to be key revenue drivers, while security programmes also contributed.
The Division’s EBIT* declined in line with expectations to€ 331 million (€ 457 million in 2010), due to a significant
increase in self-funded research and development, a
restructuring charge and a negative charge on programmes.
While the order flow in Europe slowed somewhat due to thetightened budget situation, important international orders werebooked in 2011, in particular within the integrated systems
business. The order intake amounted to € 4.2 billion in 2011.
At the end of 2011, Cassidian’s order book stood solid at€ 15.5 billion (€ 16.9 billion in 2010).
Progress in core programmes
The Eurofighter programme achieved its 300th delivery in 2011,
making it the only new-generation multi-role combat aircraft
to reach this milestone. A Letter of Intent was signed withpartner nations to continue full scale development of the next
generation Eurofighter E-scan radar. In April 2011, Eurofighter
was short-listed by India as one of two remaining contenders
for an order of 126 advanced multi-role combat aircraft. In
January 2012, India selected the competitor as the preferredbidder pending contract signature.

Within the Integrated Systems business, the contract for the
first phase of the United Arab Emirates command and control
system, won by Cassidian joint venture EMIRAJE Systems LLC,
represented one of the year’s most significant contracts, at avalue of approximately US $ 550 million.
Tomorrow’s products and systems
Cassidian continued to develop its UAS capabilities.
The high-altitude long-endurance UAS Euro Hawk, a codevelopment with Nor throp Grumman, successfully
performed its ferry flight from California to Germany in July
2011. Following this flight, the signal intelligence systemdeveloped by Cassidian was successfully integrated in
Manching.
In 2011, Cassidian signed UAS collaboration agreements with
Turkish Aerospace Industries and with Alenia Aermacchi of
Italy. In late 2011, Cassidian signed a further agreement with
Rheinmetall to pursue UAS activities together with EADS
within a new entity.
The global UAS market shows significant growth potential.
Cassidian is investing in new technologies and the development of a future advanced UAS to support the need forsurveillance and reconnaissance capabilities in the armed
forces in Europe.
Cassidian introduced the Spexer™ range of radars for bothwide area protection of sensitive infrastructure and coastal
surveillance. Cassidian also introduced a new generation ofnaval radars, the TRS-4D, which utilises advanced E-scan
technology for maritime surveillance.
OutlookDuring 2012, Cassidian will continue to adapt to the changing
global business environment. Cassidian will continue to invest
in technologies, technology demonstrators and globalisation
to secure future business, while managing risks and pursuing
its transformation process through efficiency improvements,
headcount adaptations and development outside Europe.
Beyond 2012, Cassidian aims to return gradually to benchmark
profitability confirming ambitious long-term targets for growth,
profitability and cash generation.
In the medium term, Cassidian expects to be generating morethan 50% of its total business outside the traditional home countries, compared to 32% in 2010. In the long term, Cassidian aims
to increase the security-related share of its revenues to 50%
compared to 22% in 2010.

EADS
Annual review 2011leading today/tomorrow

(€m)

2011

2010

Variation

Revenues

5,803

5,933

-2%

Self-financed R&D

275

251

+10%

EBIT*

331

457

-28%

Order intake

4,168

4,312

-3%

Order book

15,46916,903-8%

Cassidian

51

REVENUES BY MARKET (in % of external
revenues)

92%

8%

Defence

Civil

Eurofighter

52

EADS
Annual review 2011

Automated Transfer Vehicle (ATV)

versatile today/tomorrow

EADS
Annual review 2011versatile today/tomorrow

53

VERSATILE—
Securing accessto spaceToday

In 2011, the most complex cargospacecraft ever produced inEurope, the Astrium-produced
Automated Transfer Vehicle
Johannes Kepler, successfully
docked with the International
Space Station.

Scan the QR-code withyour smartphone formore information or visit
www.eads.com

54

EADS
Annual review 2011versatile today/tomorrow

Ariane 5

EADS
Annual review 2011versatile today/tomorrow

Tomorrow

Astrium is prime contractor for
future developments of the proven
Ariane 5, which has alreadyachieved 46 successful launches insuccession. The next major upgrade
aims to provide an increased
payload of up to 12 tonnes.

55

56

EADS
Annual review 2011versatile today/tomorrow

ENGAGED PEOPLEEADS is focusing on building
an even more engaging workplace
for its people, while anticipating
the key skills it will need in the
future. In 2011, progress wasachieved in both areas.
EADS made further progress towards its goal of creating
a more engaging working environment for its people, andstrengthening the culture of innovation. Working with relevant
stakeholders within the businesses, Human Resources (HR)also took important steps in mapping existing competencesand defining those EADS will need to develop in future.
Enhancing engagement
In 2011, EADS and all its Divisions launched numerous initiatives to improve employees’ engagement. Empowerment
was increased through streamlining of decision-making processes, while recognition was enhanced through specific
events and awards.
People management skills have been further developed via
dedicated trainings, and two Group-wide engagement forums
identified best practices which have been widely communicatedto all managers. Dialogue between employee and manager was
further strengthened in 2011 through the roll-out of a mid-year
review, in addition to the existing annual interview meetings.
2011 also saw the launch of the “my life at EADS” initiative,
which aims to create a better working environment and enhance employees’ wellbeing. Seven local initiatives in areas
such as health and safety, stress prevention, childcare solutions and flexible working arrangements were honoured in
December 2011 with “my life at EADS” labels.
Planning competencies
As from 2011, employees throughout the Group are mapping
their individual competencies and assessing them against
those required for their jobs as part of the mid-year review with
their managers. EADS offers employees a wide range of training opportunities to develop and fill perceived competencegaps. In 2011, EADS invested over € 200 million in training of
its employees.

Diversity
At EADS, diversity is seen as a performance driver. A Groupwide diversity board was set up in 2011 to foster gender, social,
cultural and intergenerational diversity as well as to support
those with disabilities.
In 2011, the EADS management deployed a leadershipdevelopment programme targeting more than 700 talented
women. By 2020, EADS intends to employ women in 20% of
all executive and senior manager positions. In 2011, 21% of
new recruits at EADS were women and women made up 17%of the active workforce.
Attractive workplace
EADS continues to attract highly qualified people. Engineering
graduates voted EADS the most desirable employer in France
and the third most desirable in Europe according to independent surveys.
In 2011, 8,238 employees worldwide entered employment with
EADS (5,047 in 2010). At the same time, 3,666 employees left
EADS (3,213 in 2010). At year-end, the EADS workforce wascomposed of 133,115 employees (year-end 2010: 121,691 employees). The increase in active workforce was driven by bothbusiness ramp-up and perimeter changes, in particular withthe consolidation of Vector Aerospace (2,419 employees),PFW Aerospace (2,155 employees), Vizada (719 employees),
ND Satcom (301 employees) and Satair (377 employees).
HR proximity and efficiencies
The new HR Delivery Model – relying on three pillars:
HR Business Partners, Centres of Competence and Shared
Services – became operational in 2011.
As planned, the number of HR Business Partners, ensuring
HR proximity support to employees, will be increased to one
for every 200 employees in 2012, representing a 34% increase.
HR Shared Service Centres are taking on greater amountsof administrative work and creating efficiencies. In 2011, their
total revenue was close to € 200 million and they achieved theirplanned cost savings.
Employee Share Ownership plan
In 2011, the Employee Share Ownership Plan (ESOP) waschanged to a matching plan concept and an all-time record
number of 23,371 employees (18.8% of the workforce) invested
in the Company as part of the ESOP.

EADSAnnual review 2011versatile today/tomorrow

ENGAGED PEOPLE

EC225 Final Assembly Line, Marignane, France

DEVELOPING
THE SKILLS OFTOMORROWInterview with
Sabine Haman,
Head of HR Strategy &Competency Development,
EADS

What is being done to make sure these skills are in place?
Based on a structured mapping of our existing competencies
and a prospective process to anticipate future capability
needs, we are putting in place policies and action plans at
both Division and Group levels. Our long-term recruitment
strategy is focused particularly on young generations andinternational profiles to support “EADS Vision 2020” goals.
We are also working closer with universities both within
Europe and in other countries to make sure future graduates
have the competences we need.

How will the skills EADS needs in 10 years differ
from what you have in the workplace today?

How does long-term management of EADS’ skills base help
employees to have rewarding careers?

Our competitive environment and our ambition to remainmarket and technology leaders mean we have to carefully
monitor our strategic capabilities. We need to acquire newcompetencies as well as secure existing know-how to deliver
best-in-class products and services to our customers.
For example, we will need to increase the skills we have incyber security and air traffic management, both new areas
where we expect growth.

In order to secure our key competences, for example inengineering, industrial processes, programme management
and services, we are investing in development programmes
for employees at all stages of their careers. Employees
therefore have a chance to develop through specific training,professional certifications and assignments under thecoordination of the Academies at divisional level and Shared
Colleges at Group level. Furthermore, we are reinforcing
the leadership skills of our managers.

57

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EADS
Annual review 2011versatile today/tomorrow

Flight with 100% biofuel from algae

ACCELERATINGNEW TECHNOLOGYInterview with
Guy Gallic,
Head of Technology
Competence Centre Innovative Concepts,
EADS

What technologies will it use to do this?
Zehst will use turbofans compliant with ACARE requirements,a rocket engine to climb, and ramjet to cruise at highaltitude. Use of hydrogen as fuel means the system will not
produce CO2. Engines will be designed so as to produce
as little NOx as possible. The choice of flight profile, andaeroshape will contribute to a major reduction in sonic boom
footprint, as well as noise in general.
How are you likely to use what you have learned from Zehst?

How does Zehst potentially improve the environmental
performance of air travel?
Zehst aims at zero emissions of CO2 particles, and reductionof NOx emissions compared to the current standard. It also
aims at reducing noise during the entire flight: from take-off
to landing, including high-speed legs of the journey.
Zehst’s environmental objectives are aligned to the European
Commission goals for aviation, elaborated by the Advisory
Council for Aeronautics Research and Innovation in Europe(ACARE). Zehst will also dramatically shorten travel times.

Zehst can be viewed as an accelerator for new technologies
that have potential use in more conventional aerospace
fields. Such technologies include high temperature materials,
environmental control systems, green fuel, low emissions
propulsion systems, reusable launchers and cryogenics
technology. It is also a unique opportunity to cross-fertilise
aeronautics and space worlds.
How long will it be before this sort of advanced concept
leads to a new generation of aircraft?
The general plan is to have unmanned demonstrators(on ground and in flight) by 2020 to validate criticaltechnologies and concepts. Then a manned prototype
could be designed and tested by 2030.

EADS
Annual review 2011versatile today/tomorrow

eco-efficientinnovation
EADS is developing newtechnologies to overcome today’senvironmental challenges, andstudying advanced concepts
to pave the way for zero-emissions
flight in future decades.
The pace of innovation at EADS continued in 2011. Overall,
self-financed research & development spending as a proportion of Group revenues for the year stood at 6.4% (2010: 6.4%)
and the Group filed a total of 1,018 new patents (2010: 1,007).
A major portion of EADS’ innovation activity is focused on improving the fuel-efficiency and environmental performance of
the Group’s products and manufacturing plants. EADS regards
this as a means of gaining a competitive edge and ensuring thelong-term growth of the overall aviation industry as companies
face stricter regulations on emissions and high fuel prices. Fiveof the seven research and technology groups within Innovation
Works, the Group’s corporate research network, address ecoefficiency-related topics.
Signifying the growing importance EADS is assigning toeco-efficiency, the Corporate Environmental Affairs office
was established in 2011. This will seek to better anticipate
environmental issues, to share best practices across the Divisions
and to help the Divisions comply with their reporting obligations.
fuel efficient aircraft
Replacement of existing fleets with new-generation, fuel-efficient aircraft is expected to bring the greatest improvement ineco-efficiency in the medium term. The A380 double-decker,
which consumes less than three litres of fuel per passenger
over 100 kilometres, provides significant efficiency gains compared to older models, as will the A350 XWB, which is due toenter service in 2014.
Confirming commercial appetite for eco-efficient aircraft,
Airbus sold more than 1,200 new A320neo passenger planes
in 2011. The A320neo will deliver up to 3,600 tonnes of CO2
savings annually per aircraft through new engine technology
and wing-tip devices.

eco-efficient innovation

Industrialising biofuels
To promote industrialisation of biofuels in aviation, Airbus, theEuropean Commission and a number of other industry organisations introduced in 2011 an initiative labelled “Biofuel Flightpath”. This is a roadmap with clear milestones which targets
an annual production of two million tonnes of sustainably produced biofuel for aviation by 2020.
Additionally, Airbus and Corporate Technical Office are working on a number of “value chain” projects across the world,
forming joint ventures with airlines and other organisations tostudy efficient ways of producing biofuels. It is also supporting
airlines such as Lufthansa, Air France and Interjet that are using
drop-in biofuels on commercial flights.
Technology demonstrators
As a starting point for research into radically new aircraft designs which could pave the way for zero emissions air travel,
Innovation Works presented in 2011 two new advanced concepts, Zehst and VoltAir.
Zehst, for Zero Emission High Speed Technology, represents
a future aircraft which could fly through the stratosphere
30 km above the ground, at a speed exceeding MACH 4.
A technology demonstrator is planned by 2020, and the aircraft
could conceivably be ferrying passengers by 2050.
The all-electric aircraft technology concept VoltAir combines
a fuselage design that minimises drag with highly-efficient,super-conducting electric motors. The high-performance batteries it would need are likely to be available in twenty years
from today.
Satellite monitoring
Within Astrium, satellites such as Cryosat, which monitors ice
cover, are providing intelligence into the causes of global warming. Astrium’s REDD+ (Reducing Emissions from Deforestationand forest Degradation) international workshop, held in October 2011, attracted more than 80 world experts. Astrium is also
actively addressing the sustainability of space around the Earththrough de-orbiting of used satellites and launcher elements
and innovation for active debris removal.
Cleaning up production
EADS Divisions continued to take action to reduce emissions
from their production sites, for example through the Airbus
BLU-5 initiative, a roadmap for cutting everything from energy
consumption to volatile organic compound emissions. EADS
innovations such as additive layer manufacturing have an important role to play in further reducing waste production.

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Annual review 2011versatile today/tomorrow

PROGRAMMEMANAGEMENT
By introducing best practices andtraining specialists in the field,
EADS is seeking to improve its
capacity to manage programmerisks and opportunities.
Following systematic introduction of programme management
policies and guidelines across the EADS Group in 2010, benefits could already be seen within the programmes in 2011,
both in the major aircraft developments at Airbus and in key
programmes at other Divisions.
Some 17 common policies have now been deployed acrossDivisions with the aim of improving programme management and sharing best practices throughout the Group.
In 2011, approximately 400 people set out to obtain EADS
Programme Management Certification. A further 6,000 professionals of all disciplines have received training in specific skills
relating to programme management since 2010.
Programme improvements
Independent reviews, introduced as part of the drive to improve
programme management, are now routinely conducted at
critical programme milestones throughout the Group. During
such reviews, experts from across EADS come together toassess key issues such as resource plans, time plans andtechnological maturity. The external character of these reviews
creates a more challenging environment, requiring thoseleading the programme to prepare with a greater level of detail.
Independent reviews have been conducted successfully on the
A320neo, as well as for the Eurocopter X4 in 2011.
In order to improve the control of major programmes, earned
value management (EVM) approaches are being promoted
across the Group. EVM requires definition of milestones
and work packages so that those managing the programme
can compare technical progress with the associated costs.
EVM has been successfully implemented on the A400M

programme, where the approach has been audited andapproved by the customer, OCCAR, and has led to an
unprecedented level of transparency between customer andmanufacturer. EVM is also being applied to the A350 XWB,
where the approach contributed to the early decision to shiftentry into service by six months in order to stabilise the overall
production process.
New policies
One of the new policies deployed in 2011 is related to the
independent pre-launch assessment applied to the A320neo.
In future, all major programmes will be independently assessedin this way. Two others concern the supply chain – one
seeking to strengthen collaboration with key suppliers throughconsistent practices, and the other for assessing the maturityof suppliers.
At the request of the managers of major EADS programmes,
three further policies were designed and will be deployed in2012. These are focused on preparing supplier work packages
effectively, learning from mistakes and preparing to support
customers early in new programmes.
Developing professionals
EADS regards programme management as a core company
skill and is building a pool of qualified programme managers.
Approximately 400 people have applied for programmemanagement certification at EADS. From 2012, all candidates
selected to manage an Airbus programme will be required tohave a relevant certification.
Professional programme managers receive the same training
across the Group and are therefore qualified for programmemanagement responsibilities in any Division. By the end of
2012, some 800 candidates are expected to have applied for
certification.
In addition to those who have chosen a programme manager
career path, many more individuals have received training inspecific policy areas. In 2011, 3,000 people were trained inprogramme and risk management, while 550 people weretrained in earned value management.
Over the next year, activities in the field of programme management improvement will shift further from defining policies toactively supporting the Divisions’ deployment of them.

EADS
Annual review 2011versatile today/tomorrow

PROGRAMME MANAGEMENT

A380 Final Assembly Line, Toulouse, France

MAKINGPROGRAMMEMANAGEMENTA STRENGTH

establishing rules in areas such as project control, risk
management and reporting. Obviously such standards makeprogramme managers’ lives easier.

Interview with
Jean-Jacques
Salvator,

Until quite recently it was considered normal for a good engineer
to be given the task of managing a programme, without
specific training. It is now widely recognised that programmemanagement is a discipline in its own right. In 2011 we launched
the Eurocopter certification programme for programmemanagers, and a first set of 30 applications were received.
From 2012 our target is to have all programme managers
certified. On top of that, around 700 people received training
in different aspects of programme management in 2011 thus
spreading this new culture.

Head of ProgrammeManagement Organisation,
Eurocopter

How have you gone about improving programmemanagement at Eurocopter?
We started at Eurocopter in the frame of EADS ProgrammeManagement Improvement three years ago with three main
focus areas: process improvement, people adaptation
and best-practice sharing. In 2010, in line with the EADS
programme categorisation approach, we detailed what
processes need to be applied to all programmes according
to their size, scope and risks. EADS policies implementation
made it possible to introduce a structured approach –What progress has been made in terms of training?

What practical improvements are you seeing?
A lot of things have changed, making it possible for us to focus
more on real programme issues. Better synergies have beencreated in the project teams through the set-up of an operational
Programme Management Organisation. On top of this,independent EADS reviews on our key programmes such as theX4 programme have brought valuable inputs to set a robust basis.

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Annual review 2011versatile today/tomorrow

A400M Final Assembly Line, Seville, Spain

AIRBUS
WATCHTOWERInterview with
Olivier Cauquil,
Head of Procurement
Strategy & Operations,AirbusWhy is it so important for you to monitor
the supply chain at Airbus?
At Airbus we have a very close relationship with our
suppliers. Most of the parts we buy in are Airbusspecific, rather than standard products. They requirea significant prior investment, have long lead times andare usually sourced from a single supplier. Moreover,
80% of Airbus’ recurring costs are outsourced.
So we have to pay close attention to the sustainabilityof our supply chain.

What specific processes do you have in place?
We introduced a supplier watchtower process during the2008 credit crisis. As part of the watchtower, we closely
analyse suppliers’ financial statements for signs of stress.
On average around 250 suppliers are included in the scope.
We regularly review the outcome of the analysis withinprocurement. If we discover difficulties, we of course workon recovery plans. We try though to mitigate risks before
they occur, by helping suppliers to secure funding, or bysupporting consolidation of suppliers.
Airbus supply chain experts are integrated in this process.
Often financial stress has an industrial root cause. Our experts
can help suppliers to improve their industrial processes.
If you look at the success Airbus has had in maintaining
production rates in recent years, despite the economic crisis,
I think our approach has been very effective so far.
Is the sovereign debt crisis increasing the need for vigilance?
We cannot say for sure that suppliers are faced with ashortage of credit, but we have to be careful because thefinances of some small and mid-sized suppliers remain fragile
after the last crisis. The situation is not ideal at a time when
we are ramping up key programmes. This is why we have tocontinue to be pro-active.

EADS
Annual review 2011versatile today/tomorrow

SUPPLY CHAIN
EADS is adapting the way
it manages the supply chain
to support performance during
the coming years of growth,transition and global expansion.
With production increases underway in major core programmes
and new programmes about to ramp up, the supply chain will
be increasingly important to EADS’ success in the coming
years. In 2011, as in the previous year, external procurement
represented approximately 70% of EADS’ annual revenues.
Realising synergies
In order to ensure a stable and efficient supply chain, EADS
has been streamlining its approach to major suppliers, seeking, wherever possible, to strengthen relations, bundle volumes Group-wide and obtain optimum conditions for all its
businesses.
Procurement of all supplies which are not directly productrelated is now managed centrally for the whole Groupthrough the shared services unit EADS General Procurement(EGP). With an annual procurement volume of approximately€ 8 billion, EGP became fully operational in 2010. It remained oncourse in 2011 to achieve total savings as targeted.
A dedicated EADS Lead Buyer Network is managing the mostcritical materials for the Group as a whole, such as aluminium,
titanium, composites, electronics and standard parts, which
together account for approximately 9% of EADS’ annual
spend. Commodity strategies covering material and parts havebeen implemented to support both programme ramp-ups andthe global supply chain.
Supplier performance
While many suppliers are large conglomerates with a broad
and international customer base, some smaller suppliers
make the bulk of their business with top-level aerospace manufacturers like EADS. To ensure all suppliers are capable ofmeeting ramp-up targets, a watchtower approach has been
introduced at EADS, through which the performance andfinancial health of critical suppliers is routinely monitored andreported within the Group.

SUPPLY CHAIN

Airbus has increased its supply chain and quality team inprocurement to monitor and support critical suppliersin the ramp-up of the current series production and theA350 XWB programme. Eurocopter has also decided tobuild a dedicated team in that area. A concept for sustainablesupplier performance development was designed in 2011 andwill be implemented across the Group in 2012.
Strategic fit meetings were held with suppliers throughout 2011
to review performance and, if necessary, to propose remedialactions. In some cases, EADS actively supported suppliers,
helping to diagnose and fix problems.
Global sourcing
As part of its long-term plans for global growth and in order
to increase dollar-based procurement, EADS is aiming todevelop its supply chain outside Europe. In 2010, 29% of theGroup’s external sourcing volume was procured from countries
outside Europe. By the year 2020, EADS aims to be sourcing
40% of its supplies from non-European countries, mirroring
the globalisation of the business. A common framework was
introduced in 2011 to make sure that the Group as a wholeremains on course to reach this target, while taking into
account constraints within specific businesses.
Country sourcing offices in China and India were expanded in2011, and worked to develop local supplier relations. Additionalsourcing offices were opened in the United States and Brazil.
Sourcing in emerging countries is being extended beyond
aerostructures and raw materials to general procurement andhigher-value systems and equipment.
Responsible procurement
EADS’ expectations towards suppliers are set out in the
EADS Supplier Code of Conduct – Growing Together. EADS
requests that suppliers comply with standards in the areas ofenvironmental management, organisational governance, fair
operating practices, human rights and labour practices andpromoting a culture of respect.

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EADS
Annual review 2011

GLOSSARY
ADDITIVE LAYER MANUFACTURING
A revolutionary new method of manufacturing that promises
greater precision, improved raw material performance andsignificantly less waste.
AGILE
Short for Ambitious, Globally growing, Innovative, Lean and
Entrepreneurial. Astrium’s improvement programme designed
to increase efficiency and drive new business.
ADVISORY COUNCIL FOR AERONAUTICS RESEARCH IN
EUROPE (ACARE)
A European research organisation founded by government andindustry that aims to make Europe’s commercial aviation more
affordable, cleaner, safer and quieter.
AIR TRAFFIC MANAGEMENT
Air traffic management is the process for making sure that aircraft
are safely guided from take-off to landing. It comprises airspace
management, air traffic flow and capacity management, and air
traffic control.
AIR TRANSPORT ACTION GROUP (ATAG)
A global coalition of air transport industry companies andtrade associations that have united to foster aviation industry
improvements in an environmentally responsible manner.
AUTOMATED TRANSFER VEHICLE (ATV)The space cargo vehicle that is supplying the International Space
Station with scientific equipment, spares and fuel, together withfood, air and water.
AVAILABLE SEAT KILOMETRES (ASK)
Available seat kilometres measure an airline’s passenger carrying
capacity. The measure is calculated by multiplying the numberof seats available by the distance flown.
BIOFUEL
Fuel made from a range of biomass sources. Biofuels are
regarded as carbon neutral because the biomass they arederived from consumes CO2 as is grows. Second generation
biofuels do not compete with agriculture for land.
BLUECOPTER
Bluecopter is the name of the European technology demonstrator
that showcases “green” technologies, including a fuel-efficient,
low-emission propulsion system.

CARBON DIOXIDE (CO2)
A greenhouse gas identified as contributing to climate change.
CLEAN SKY
Funded equally by the European Commission and Europe’s
aviation industry, this Joint Technology Initiative is designed to
speed up the technology breakthroughs needed to achieve
ACARE’s environmental goals.
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.
CYBER SECURITY/WARFARE
Cyber security is the emerging field of protecting computer
systems and data from interference through the internet.
DEMONSTRATOR
A prototype used to demonstrate new technologies ahead of
their incorporation into new products.
EARNINGS BEFORE INTEREST AND TAXES (EBIT*)EADS uses EBIT* pre-goodwill impairment and exceptional items
as a key indicator of its economic performance.
ECO-EFFICIENCY
Term used to describe the management philosophy of creating
economic value while minimising economic impact.
EMERGING MARKET/COUNTRY
An emerging market is loosely defined by the International
Finance Corporation of the World Bank as an economy with
low-to-medium per capita income.
EMISSIONS TRADING SCHEME (ETS)The European Union’s scheme for reducing greenhouse gas
emissions, by making large industrial organisations pay a pricefor emissions higher than a specified level.
ENGAGEMENT SURVEY
A survey of EADS employees intended to canvass their level ofengagement across a range of measures.
ENTERPRISE RISK MANAGEMENT (ERM)
A common process applied across EADS and its businesses to
identify potential events that may affect EADS, to manage risks
and provide reasonable assurance regarding the achievementof EADS’ objectives.

EADS
Annual review 2011EUROPEAN DEFENCE AGENCY (EDA)
A European Union agency tasked with improving European
defence capabilities, and sustaining European security anddefence policy.
EUROPEAN SPACE AGENCY (ESA)The European organisation backed by 19 member states thatplans and executes Europe’s space programme.
FEDERAL AVIATION ADMINISTRATION (FAA)
The US national aviation authority, which has the authority
to regulate and oversee all aspects of civil aviation within
the country.
FUTURE EADSEADS programme aimed at improving integration of support
functions across the Group, to deliver efficiency gains and cash
savings.
GROSS DOMESTIC PRODUCT (GDP)GDP is a basic measure of a country’s economic output, or themarket value of all goods and services produced by a country
in a year.
HEDGE
A form of financial instrument that protects against a specificmarket risk. Through currency hedge contracts, EADS agrees
with a counterparty to convert future revenues, usually dollars
from aircraft sales, into euros at an agreed time and rate ofexchange, the “hedge rate”. EADS uses currency hedges toprotect itself against the risk of worsening exchange rates.
INTERNATIONAL AIR TRANSPORT ASSOCIATION (IATA)
The airline industry’s global trade association.
INNOVATION WORKSEADS’ global organisation that conducts strategic research,
inventing the technologies needed for product development.
INTERNATIONAL SPACE STATION (ISS)An inhabitable satellite in low-earth orbit that provides a platform
for conducting scientific research.
LIGHT UTILITY HELICOPTER (LUH)
The US Army’s Light Utility Helicopter programme is supplying
the UH-72A Lakota helicopter for administrative, logistic andmedical evacuation purposes, as well as to support army training.

GLOSSARY

LONG-RANGE AIRCRAFT
Long-range aircraft, such as the Airbus A330 or A350 XWB, aremainly used for long-haul, intercontinental flights. Such aircraft
are generally larger and carry more passengers than singleaisle aircraft. They are also often referred to as “wide-bodies”
or “twin-aisles”.
NITROGEN OXIDESNOx are a group of gases that contribute to climate change.
POWER8An Airbus efficiency programme that introduced a range ofimprovements including leaner processes and better cash
management.
RAMP-UPAn industry term to describe a production programme’s
increasing level of output.
SHARED SERVICES
Support functions that an organisation’s various entities sharein order to increase efficiency and reduce cost.
SHARKLETThe “sharklet” is a wingtip device designed to improve anaircraft’s aerodynamics and so to reduce fuel consumption.
SINGLE-AISLE AIRCRAFT
An aircraft having one passenger aisle running the length ofthe cabin. Single-aisle aircraft are mainly used for short andmedium-haul flights. The Airbus A320 family consists of singleaisle aircraft. See also long-range aircraft.
SOURCING
Sourcing is another term for procurement from the supply chain.
SUPPLY CHAIN
A supply chain consists of an organisation’s network of external
and internal suppliers.
UNMANNED AERIAL SYSTEM (UAS)An unmanned aircraft with ground control system, often used formilitary or security purposes, such as reconnaissance.
VISION 2020
Vision 2020 is EADS’ strategic vision for guiding the Group’s
development until 2020.

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Annual review 2011

Addresses
E ADS HEADQUARTERS

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

H
 EAD OFFICESIn France:
EADS
37, boulevard de Montmorency
75781 Paris cedex 16
FranceTel + 33 1 42 24 24 24
In Germany:
EADS
81663 Munich
GermanyTel + 49 89 607 0
In Spain:
EADS
Avenida de Aragón 404
28022 Madrid
Spain
Tel + 34 915 85 70 00

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

AIRBUS
Airbus1, rond-point Maurice Bellonte
31707 Blagnac cedex
FranceTel + 33 5 61 93 33 33
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
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FranceTel +33 5 81 91 40 00
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ASTRIUM
Astrium*
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FranceTel + 33 1 77 51 80 00
Fax + 33 1 77 51 80 08
Astrium Satellites
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FranceTel + 33 5 62 19 62 19
Astrium Space Transportation
66, route de Verneuil
78133 Les Mureaux cedex
FranceTel + 33 1 39 06 12 34
Airbus-Allee 1
28199 Bremen - Germany
Tel + 49 421 539 0
Astrium Services*12, rue Pasteur
92152 Suresnes cedex
FranceTel + 33 1 77 51 80 00
Fax + 33 1 77 51 80 08* As of 2 July 2012

EADS NORTH AMERICAEADS North America, Inc.
1616 North Ft. Myer Drive,
Suite 1600
Arlington, VA 22209
USA
Tel + 1 703 236 33 00

EUROCOPTER
Eurocopter
Aéroport International deMarseille-Provence
13725 Marignane cedex
FranceTel + 33 4 42 85 85 85

OTHER BUSINESSESEADS Sogerma
Aéroport International
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33700 Mérignac
FranceTel + 33 5 56 55 40 00
ATR Avions de Transport
Régional
1, allée Pierre Nadot
31712 Blagnac cedex
FranceTel + 33 5 62 21 62 21

EADS
Annual review 2011

Addresses

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

Latin America

EuropeSão Paulo, Brazil

Brussels, Belgium

Tel + 32 25 04 78 12
Fax + 32 25 04 78 28
Athens, Greece

CASSIDIAN
CassidianLandshuter Strasse 26
85716 Unterschleissheim
GermanyTel + 49 89 3179 0
Cassidian
Air Systems
Rechliner Strasse
85077 Manching
GermanyTel + 49 84 59 81 0
Eurofighter
Am Söldnermoos 1785399 Hallbergmoos
GermanyTel + 49 811 80 0

Tel + 30 210 69 83 871
Fax + 30 210 69 83 870
Oslo, Norway

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

Tel + 7 495 797 53 67
Fax + 7 495 797 53 66
Ankara, Turkey

Tel + 90 312 439 89 64
Fax + 90 312 439 70 07
London, United Kingdom

Tel + 44 207 845 84 04
Fax + 44 207 845 84 01
AfricaTel + 55 11 3093 2807
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Santiago de Chile, Chile

Tel + 56 23 33 43 33
Fax + 56 23 33 47 77
Mexico City, Mexico

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

Tel + 61 2 88 64 05 00
Fax + 61 2 88 64 05 01
Beijing, China

Tel + 86 10 64 61 01 92
Fax + 86 10 64 61 07 76
Bangalore, India

Tel + 91 80 4031 2530
Fax + 91 80 4031 2531
New Delhi, India

Tel + 91 11 4580 1100
Jakarta, Indonesia

Cassidian Systems
Landshuter Strasse 26
85716 Unterschleissheim
GermanyTel + 49 89 3179 0

Algiers, Algeria

Cassidian Electronics
Wörthstrasse 85
89077 Ulm
GermanyTel + 49 731 392 0

Middle East

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

Tel + 968 244 92 760
Fax + 968 244 92 356

Tel + 82 2 798 49 25
Fax + 82 2 798 49 27

Doha, Qatar

Taipei, Taiwan

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

Tel + 27 12 6868 900
Fax + 27 12 6868 911
Cairo, Egypt

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

Tel + 62 21 57 97 36 17
Fax + 62 21 57 97 36 16
Kuala Lumpur, Malaysia

Tel + 60 3 2163 0233
Fax + 60 3 2163 0211
Singapore, Singapore

Tel + 65 63 25 03 80
Fax + 65 63 25 03 20
Seoul, South Korea

Tel + 974 4 411 0752
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Tel + 886 2 2712 15 94
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Riyadh, Saudi Arabia

Bangkok, Thailand

Tel + 966 1 88 07 421
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Tel + 662 610 4300
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Abu Dhabi, UAE

Hanoi, Vietnam

Tel + 971 2 681 28 78
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North America

Tel + 844 39 43 68 85
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Ottawa, Canada

Central Asia

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

Tel + 771 72 99 05 01

Astana, Kazakhstan

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Annual review 2011

Shareholder Informationwww.eads.com

Financial
CalendarInvestor Relations
Contact

Full Year 2011 results release:Toll-free telephone numbers:

8 March 2012

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

First Quarter 2012 results
release:16 May 2012

Shareholders from othercountries:

Annual General Meeting:+ 33 800 01 2001

31 May 2012, Amsterdam,
The Netherlands

E-mail:ir@eads.com
Private Shareholder
Information meetings:

28 June 2012, Paris, France
4 July 2012, Munich, Germany
Half Year 2012 results release:

27 July 2012
Nine-Month 2012 results release:

8 November 2012

Visit our website at:www.eads.com

www.reports.eads.com

The complete eads Annual Report suite 2011 consists of:Annual Review 2011
Progressing, Innovating,Transforming

Registration Document 2011
Financial Statements

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

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

Slip-Case - Photographs © by EADS: Airbus/Fixion - Astrium - Eurocopter/Deulin - Eurofighter/G.Lee
Leaflet - Photographs © by EADS: Abacapress/Guibbaud - Airbus/Fixion, Goussé - Airbus Military/Mongo-Molinos Astrium - Astrium/Watbled - ATR - EADS/Exm-Gousse, T.Goisque - EADSD/Dannenberg - EADS North America/
Ted Carlson - ESA - Eurocopter/Deulin, Penna.
Annual Review - Photographs © by EADS: Abacapress/Guibbaud - Airbus/Bengt-Lange, Fixion, Goussé - AustrianAir force/Zinner - Astrium - ATR - EADS/Capa-Bassignac, Epicure, Gouhier, N.Roberts - EADSD/Dannenberg - ESA Eurocopter/Deulin, Penna - Eurofighter/G.Lee - Michael Mahovlich - Paolo Verzone.
All rights reserved

www.eads.com
European Aeronautic Defence
and Space Company EADS N.V.
Mendelweg 302333 CS Leiden
The Netherlands
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

Cover image: Tail rotor of diesel-electric
hybrid helicopter concept, developed
by EADS Innovation Works.