Amsterdam, October 25th, 2000

EADS
S1 2000 Semi annual reporting
Philippe CAMUS - Rainer HERTRICH
Chief Executive Officers
Axel ARENDT
Chief Financial Officer

CF/IRKey points

Integration on trackBusiness opportunities risingValue creation targets confirmedControl of consolidation in Europe

CF/IR1MERGER INTEGRATION
ON TRACK

CF/IREADS will operate as a single integrated company
and will create additional value:






A merger integration team has been formed early 2000
reporting to the 2 CEO and the executive management.
More than 400 projects proposals to create additional value
and realize integration.
Information and communication effort all over the group toensure motivation and involvement of the EADS employees.
Project of New value based management metrics:
set value based goal

reward value
creation

decide and planon basis of value

measure and evaluate value creation
CF/IR2

Business opportunities
on the rise

CF/IRAirbusStrong business environment:
ÎÎÎ

Î



305 A/C firm orders (end Sept.)
representing 22.9 Bn US$(237 SB, 68 LR), including:ILFC: 42 SB & 11 LR
TWA: 20 SB
UAL : 22 SB
SAS : 12 SB & 10 LR
4 new customers , total 171
218 A/C delivered (end Sept.)(168 SB, 46 LR, 4 WB)
Total backlog: 1527 A/C

Creation of AIC which will
enhance efficiency and profitability







Global market forecast projects air
traffic growth at 4.88% pa over thenext 20 years representing over15000 A/C to deliver, a business
worth $ 1.3 trillion
Economic growth drive strong
demand for air travel in Asia which isrebounding, Europe and US
Sustained level of profitability ofAirlines strengthen new A/C orderpace
Strong opportunities in the freighter
marketProduction rate to increase to all timehigh in Airbus of 30 SB and 8 LR permonth.
First A340-600 in the Final assemblyline in Toulouse

CF/IR3

Military transport A/Cg

Goal: Consolidate market leadership in current products(C212, C235 and C 295) and expand the family with thenew heavy military airlifter A 400M.
ÎÎ

Active commercial campaigns in the light and medium
segment (Spain, Greece, Middle East, Asia …)
Announcement of the commitment of the sevenparticipating countries to order 225 A400M A/C for avalue of about 19.1 Bn€ with a first flight end of 2005
and EIS end of 2007 and a production program up to2020. Strong export opportunities will also drive furtherup the overall profitability of the program

CF/IRAeronautics

EurocopterÎÎ

Î

Î



452 A/C booked (end Sept.)
Major deal secured: NH90
industrial and serial production of243 helicopters plus 55 options forFrance, Germany, Italy,
Netherlands
8400 helicopters flying in 135
countries representing over 650 mof € of recurrent support business
164 A/C delivered (end Sept.)

A world leader in helicopterswith a firm businessenvironment

EurofighterÎ
ÎÎ

Î

Î



First delivery of center fuselage
Total home market of 620 A/C plus
90 options
Deliveries starting in 2002, growing to50 A/C per year from 2004
Excellent export opportunities suchas 60 A/C to Greece
62.5% of the program controlled
within EMAC

Maintenance and transformationof AircraftÎÎTake advantage of growth of services
for airlines and military customers
benefit from the strong growth offreighter market

CF/IR4

SpaceMajor contracts landed
since the beginning ofthe year:ÎÎSuccess of the heavy
satellite platform
Eurostar 3000 from
Astrium: Contracts withInmarsat, IntelsatÎÎand Hotbird (Eurostar2000)


7 successful launches ofAriane 4 & 5(10 satellites)

Focus on improvement ofcompetitiveness and profitability
through process and organization
optimization

On-going Plan to improve cost of
Ariane 5 to meet future competition
Optimization of site resources,procurement, R&D in satellites
business

Additional growth to capture inservices businesses and solution
providerGet prepared for the next steps ofconsolidation in the space industry

CF/IRDefence & Civil Systems
Trend to recovery in US andsome export markets withpriority to information dominance
Growth of services businesses
TelecomÎMissiles
No1 in Europe, No 2 in the world
Î Strong backlog of 6.8 Bn € at 12/99
Î Meteor decision in May is of a major
importance for the success of thisbusiness: With export opportunities
the program can generate between
8 and 16 Bn €Î Important missiles contracts
awarded during summer such as
Sea Wolf, Scalp, Exocet and Micafor Greece, first Aster export
contracts, Mistral and Milan newcontracts



Booming telecom market
plus very attractive growth
opportunities in(para)military telecom
together with Nortel

Defence electronics
ÎÎstrong position in all major
platform programs is thebasis of Airborne System
success (NH90,Eurofighter,Tiger)
Encouraging order from theUS for F18 radar system

CF/IR5

Value creation targets
confirmed

CF/IR

Commitment to Value Creation


Value creation target = € 500 m value, net of € 180 m restructuring
expenses distributed evenly from 2000 to 2003
Additional savings coming from the creation of AIC= 80 M€ for EADS
Synergies will come mainly from:
Defence & Civil Systems
Space12%Purchasing

Aeronautics50%
5%
15%
30%

Financialengineering
Sales increase
resulting fromincreased
opportunities

10%

15%

2% Military Transport
Aircraft

11%Headquarters

50%Airbus

Internal cost basereduction (R&D, production,…)Value creation schedule: 10% in 2001, up to full effect in 2004

CF/IR6

Value creation targets confirmed
Pushing integration andincreasing profitability:

First examples:ÎTop down additional value
generation targets have been set
early to all units
Promising response bydivisions/functions and business
units: total projects proposals
stands at more than 400

Initial target of 580 M € confirmed

Integration of reporting systems tomonitor overall and individual
performance

Rewarding success: by stock
options plan and significant
variable part of compensation

Î

ÎÎÎ

Î

New optimized global
marketing organization
Rationalization and adoptionof common tools between thedifferent aerostructures
centers of competence
Savings already started inprocurement (total of 280
million € identified)R&D specialization andoptimization
Streamlining of 3
Headquarters into 1
...

CF/IR

Implementing consolidation
to create value

CF/IR7

Implementing consolidation to create valueFinalize consolidation through joint companies whereEADS will be in control and generate added value

Creation of AIC: exceptional potential of value
creation making Airbus more than equal to Boeing,Creation of New MBD, a world leader in missiles,
catalyst of great hi-tech programs (Meteor, Stormshadow, Aster),

Creation of EMAC, giving us a large control of theEurofighter program and its profit potential,Creation of Astrium plus, the European leader,
to improve efficiency.

CF/IR

Strategic challenges
Strong presence in defence and commercialmarketsFinalize consolidation in Europe

Focus on cooperation with US companies

Expand our industrial base into product relatedservices

CF/IR8

FINANCIALS

CF/IR

Pro-forma key financial highlights
S1 2000

Revenues
EBIT DA *EBIT *EBIT margin *€M
10,585
1,016
553
5.2%

* pre-goodwill and exceptional

Order Intake
Backlog

23,988
118,720

CF/IR

9

Revenues and operating income by division
S1 2000
Revenues

FY 1999

EBIT*

Revenues

EBIT*

6,821

516

12,639896

74(35)

241(21)

Aeronautics

1,951

53

4,280

202

Space Systems

1,084

29

2,518

99

Defence & Civil Systems

1,068

(62)

3,830

86

Eliminations and others**(413)

(12)

(955)

100

€MAirbus
Military Transport

Income from associates

Total

64

83

10,585 553

22,553 1,445* pre goodwill and exceptional** includes pro forma adjustments/intercompany transactions and headquarter sales

CF/IR

Pro forma Statement of Income€M

S1 2000

FY1999

Revenues
Cost of sales
Gross margin
Selling, administrative &others
R&D
Other operating income
Goodwill amortization

10.585(8.415)2.170(1.293)
(594)
132
(198)

22.553(18.278)
4.275(2.213)(1.324)475(398)Income before financial income
and income Tax
Financial income (expense)
Income Tax
Minority interest

217

815

(644)
73
(5)

(1.846)2(2)Net income(359)(1.009)CF/IR

10

Pro forma Operating Margin
€M

2000

1999

Average $ / € rate for recorded sales

0.98

1.09

Operating income

217

815

Goodwill amortisation

198

398

Depreciation on fair value adjustments

74149

Income from investments

6483

553
5.2%

1,445
6.4%

EBIT (pre-goodwill/exceptional)
in % of sales

In line with year-end expectations
CF/IRIndustry seasonality
AEROSPATIALE
MATRA *
55%45%73%DASA **S2 99

S1 9927%

Sales Operating
income

54%

46%

71%

29%

Sales Result before
Fin. inc. & tax

Above using respectively French and US accounting principles* Dassault prorata consolidation** Operating units ex-MTU and Temic, ex-HQDefence, Helicopters and Space revenues
traditionally skewed towards year end

CF/IR11

Pro forma change in cash position
S1 2000€M

Net Cash as of Dec. 31, 99(946)Cash flow from operations
Working capital reduction
Cash flow from investing activities659
132(959)

Amortisation anddepreciation amount to€ 463, not includingthe goodwill and fairvalue adjustment
impact(168)Cap. Expenditures of€ 837

Free Cash Flow
Dividend payments
Others(31)
30

Net Cash as of June 30, 00(1.115)

CF/IR

Proforma 99 balance sheet correction€M

pro-forma: original 99

corrected 99

Fixed Assets

19,591

19,711

Current Assets

13,664

13,684

4,750
8,894

4,750
8,914

Deferred Tax Assets
Pre-paid Expenses
Total Assets

1,734
651
35,6402,239
651
36,285

Shareholders´ Equity
Minority interest
Total Accrued Liabilities
Other Liabilities
Deferred Tax Liabilities & Income

8,123
159
7,421
15,846
4,091

8,343
188
7,477
16,186
4,091

Total Shareholders´ Equity & Liabilities

35,64036,285of which Cash & Equivalents,Securitiesof which Working Capital Assets

CF/IR

12

Balance sheet€M
Fixed Assetsof which intangible assetsof which property, plant & equipmentof which financial assets

Current Assets

S1 2000
20,253

1999
19,711

7,775
8,347
4,131

7,710
7,950
4,051

13,614

13,684

4,971
8,643

4,750
8,914

Deferred Tax Assets
Pre-paid Expenses
Total Assets

2,355
1,055
37,2772,239
651
36,285

Shareholders´ Equity
Minority interest
Total Accrued Liabilities
Deferred Tax Liabilities & Income
Other Liabilities

8,093
246
8,121
4,129
16,688

8,343
188
7,477
4,091
16,186of which launch aidof which trade liabilitiesof which debt

1,967
3,723
6,086

2,102
3,734
5,696

of which cash & equivalents,securitiesof which working capital assets

Total Shareholders´ Equity & Liabilities

37,27736,285

Net indebtedness @ € 1,1 bn
CF/IR

Capital increase€ Bn
Stockholders Equity (30/6/00)

8.1

Capital Increase (10/7/00)

1.5

Stockholders Equity post increase

9.6

Net Cash balance (30/6/00)
Net Cash balance (10/7/00)

(1.1)
0.4

Strong liquidity means flexibility forstrategic initiatives and development
CF/IR13

Outlook







Revenues growth in 2000 expected about 7%
2000 EBIT should show a better performance
than 1999 when backing out positive effect ofsextant sale
Strong backlog, in excess of expectations
Significant growth of revenues and earnings
from 2002 to 2004 to reach our 8% EBIT
marginA continuing strong dollar will have a positiveeffect from 2003

CF/IR14