Full Year 2020 Airbus SE Earnings Press Conference
Yeah.
[music].
Our 'twenty 'twenty result.
My name is judicature.
I'm EVP communications and corporate affairs.
Bob.
Presenting the results to you all today.
Oh no.
Gainfully and CFO Domenic at Sun.
We're joining you neither from other than center here into news, where we're applying all the necessary COVID-19 related measures.
Last year as some of you were physically present with us here into news today, However to connect with you were doing it obviously remotely because of the circumstances, we're all very well aware of now.
Last year, we were announcing record commercial aircraft deliveries and strong underlying performance.
Today, the story with sharing is obviously very different.
Our world has had to face.
Health economic and social crisis.
The global impact of the COVID-19 pandemic on air travel has had dramatic consequences for Airbus and our industry.
Kim and Dominic well, therefore explains how Airbus and the teams have faced the crisis in 2020, and how it impacted our financials in the last year.
We also want to share our expectations with you for 'twenty 'twenty one.
We continue to look ahead to pioneer sustainable aviation for the future.
I'm sure you'll have plenty of questions, which is why we've chosen this digital format, which we hope will allow us to accommodate as many of them as possible.
So now coming back to more practical topics. Please be advised that the entire press conference will be conducted in English and then there will be no simultaneous translation.
Our team as always is on hand to assist you and so if you do face any technical issues without interest for conferencing tool. Please send us a message via the chat function.
So now ladies and gentlemen, before we begin please as always familiarize yourselves with the Safe Harbor statement.
You can see it on your screens now.
As you know.
All forward looking statements and this is really important such as in our guidance.
Just on assumptions.
As conditions May change well, so these assumptions may change too.
Now before I hand over to <unk> for an overview of the 'twenty 'twenty year, Tampa, we would like to share a video with you to have a look back at the year and how he Matt boss rose to the COVID-19 challenge.
We'll be back with you in a few minutes.
Q.
Okay.
[noise] [music] together, we faced.
When she story.
'twenty 'twenty one.
Sure.
Sure.
Hundreds of thousands of people.
Minimal.
Cool and economic consequences will be felt for years to come.
Gmail Bush.
Quickly to protect our people and our business.
We adapted.
System.
Teams from new way.
<unk> two.
Society.
We deepened our relationships with customers suppliers and partners to understand and adapt to the new market environment.
And.
What's encouraging is trying to reach to keep trust.
In spite of this unique crisis situations.
Yes.
Moving forced Walsh a worldwide industry recovery.
Walking hand in hand, with all sectors international organizations customers suppliers and partners.
In 'twenty 'twenty one.
<unk> continues a deep transformation of our company, we will remain agile.
<unk> focused on competitiveness.
We reached a total purpose.
So we can continue to invest innovate and growth.
We lead the industry to walk the exciting future of decarbonization and.
And continue to pioneer assist anymore aerospace for a safe and United World.
Oh Wow.
Sure.
I'm certainly glad it's now behind us, but when I look at this video I can't help to be proud of.
Of what our team members has achieved in these extraordinary times for the world and for industry.
It's been tough.
And he's been an incredible human adventure.
Together with our customers and partners, we navigated the worst crisis.
Over to REIT aviation in the face of this overwhelming difficulties, we pulled together to support those flights.
Fighting the pandemic on the front line.
This is why I'm happy to be with you today to look back at how we navigated the.
Europe and showed resilience.
It is good to have so many of you connected with us.
Despite the circumstances, which prevents a physical meeting we wanted to offer you the opportunity to interact with us and.
And we hope you will find this useful.
I think it's fair to say that since our last annual results conference a year ago. All worlds in Airbus was turned upside down we have to react and adapt quickly.
To be resilient and weather the storm.
What did we do first we took care of people.
We adapted our workspace environments to stricter Igene stonehouse.
Protect our employees, we also sourced and transported masks and we used innovation to design and manufacture lifesaving equipment, such as ventilator valves and vials.
We took steps to further bolster our liquidity and we launched immediate cash containment measures, we recalibrated, our English school system by reducing your commercial aircraft production rates by around 40 per cent compared to well pre crisis planning.
We started to resize, our commercial aircraft activities and to adapt our work force to address.
Cost picture.
In this adverse market environments, we worked hand in hand, with our customers suppliers and partners and as a result of that predictive at fault, we delivered 566 aircrafts in 2020.
I would like to thank them all for their loyalty to Airbus in these very difficult times.
Our full year delivery number demonstrates the balancing of production and deliveries as the year progressed.
This is also reflected in our financial performance.
Together with other measures taken early in the coins.
While the euro Gmail dose demonstrated resilience and I would like to sincerely. Thank all the Airbus teams for the great achievements in 2020 in the face of adversity.
Today's clear that the pandemic is not yet over.
And that it will probably continue to be a reality toward a large part of this year too.
We can see progress on vaccination campaigns, but new volume of the virus spreading.
And at the same time, we see reinforced lockdowns maintain all evens kicked out travel restrictions in many regions of the world and global traffic numbers at low levels, especially here in Europe.
We continue to operate in a complex and changing environment, which we expect to continue to impact our business and create uncertainties.
We have to remain humble and eyes open and vigilance.
And we need to continue fostering the resilience, which is part of the Airbus DNA.
Book least thanks to our diverse portfolio of activities in helicopters defence and space as well as commercial aircrafts.
We have issued guidance for 'twenty 'twenty, one to provide some visibility in these volatile environments and we will come.
Come back to that later.
Now let me provide you with a quick overview about 'twenty 'twenty achievements in the commercial aircraft area.
Global Air traffic reached a low point in 2020 at the peak of the Covid pandemic. He does he covered very slowly scenes and at very different paces between regions.
Overall passenger are trafficking F. P case declined by 66% in 2020 compared to 2019.
In this context and follow oil than our initial expectations for the year, we managed to deliver 566 commercial aircrafts from 'twenty to 'twenty working hand in hand, again with our customers.
The delivery and Umbro demonstrates the balancing of production and deliveries either your progress.
On the booking side.
We had 18 customers, placing scaling it in 83 gross orders.
I want to sincerely thank those customers for their continued trust.
Despite the magnitude of the crisis, we only saw 115 cancellations in 2020.
But we will continue to monitor the trends closely in 2021.
Our backlog now stands at 7184 aircraft.
The commercial aircraft backlog value fell by some 100 million euros, reflecting the higher number of deliveries compared to order intake the weaker U S dollar and an assessment of the so-called backlogs recoverability.
So compared to the he called backlog we enjoyed at the end of 2019, we have lost only.
Around 10% in value.
Of the backlog to COVID-19.
Now onto helicopters.
In 2020, Airbus helicopters demonstrated once again, a high degree of resilience, maintaining its leading position in the CBD and therapeutic market. Despite the current environment in total we booked two 189 gross orders.
And they developed countless television military helicopters worldwide.
In 2020, we also gain yes that certification for the most recent additions to our helicopter orange the H 160.
Which will enter into service this year and the five bladed version of the H 145 for which deliveries started already at the end of last year.
Our helicopter business delivered strong performance, mainly driven by a government related activities and reliable pagano.
Execution.
Now onto defence and space.
In 2020, we booked an order intake of 11.9 billion euros.
The prolonged plus 40% versus last year, representing a book to bill above one mainly driven by major contract wins in military aircraft.
This notably includes an older from Berlin to procure 38 year old fighters for the German Air Force a spot of quite a big up program.
In 2020.
We also made progress on a number of projects, which are of critical importance for Europe's strategic autonomy.
On F gas following the offshore signature of the spin industry contracts all see partner nations are progressing towards the formal cooperation agreements.
The 18 month joined concepts Didion's phase one a of the demonstrator position portion are progressing too.
The goal for 'twenty 'twenty, one is for F gas to enter the preliminary the Monsanto development phase for the next generation fighter and the remote carrier aircraft.
With regards to your old wrong, we filled our progress on the negotiation with OCA.
On the phone to them in 2020, despite the Covid challenges, we achieved all deliveries, which we have planned for the euro with nine aircraft deliveries.
With first deliveries to Alexa Umbro in Belgium, All launched nations have now received at least one a phone with them.
Finally in 2020 order intake in space systems was mainly driven by telecommunication satellites and Earth observation and science.
And telecommunication satellites, we see an upturn after her low market in recent years.
Or reaching a very competitive market environment.
Yes.
I think can we take a look at the financial performance. Please.
From your perspective.
Thank you Julie.
Good morning to our media colleagues and to all those who are following at life you introduced a day for this digital press conference.
Let me briefly explain the key highlights of our 2020 financials.
Needless to stress.
What are challenging and extraordinary year 2020 has been for the civil aerospace industry.
And this is of course also reflected in our financial statements.
As you know our focus throughout the year has been to adapt quickly to the crisis.
And to take the necessary measures, including from a financial perspective to be able to navigate the storm and to preserve resilience.
Starting with the top line in 2020, we generated revenues of around 50 billion euros.
29% decrease compared to 2019.
This was obviously driven by the very difficult market environment, which impacted our commercial aircraft business.
We delivered about 34% less aircraft than in the prior year.
Our EBIT adjusted decreased to 1.7 billion euros.
This mainly reflects the weaker commercial aircraft performance.
Strong contributions from helicopters and also from defense and space.
We've taken the necessary steps to adapt our cost structure to the new levels of production.
And the benefits are materializing as we execute our plan.
When you look at the results by Division.
Aircraft EBIT adjusted declined to 618 million euros.
Airbus helicopters EBIT adjusted increased to 471 million euros, that's up 11, 6%.
In Airbus Defence and space to 660 million euros, and Thats up 16, 8% compared to 2019.
The EBIT adjusted also reflects $1 1 billion of charges recorded due to impairment and write off triggered by COVID-19.
Now if you look at the group reported EBIT. This was around minus $4 5 billion euros and included net net negative adjustments totaling about $2 2 billion.
These included notably a 1.2 billion charge related to the company wide restructuring plan recorded already at nine months 2020.
As well as minus <unk> 385 million related to the <unk> hundred 80 program cost and minus four at 80 million impact from foreign exchange revaluation of our balance sheet.
We reported a net loss of minus 1.1 billion euros for the year.
In terms of cash our free cash flow before M&A and customer financing stood at minus $6 9 billion euros of which plus $4 9 billion in Q4.
This reflects the solid level of deliveries in Q4 the.
The performance from the divisions, which continue to provide resilience to the company as the AUM had already explained.
And our strong focus on working capital management we.
We took various measures during the year to maintain a strong liquidity position, which exceeded 30 billion euros at year end.
And thanks to our strong credit ratings, we could limit our interest expenses, while extending the maturities of our funding sources by issuing new bonds.
We finished the year 2020, with a net cash balance of $4 3 billion euros.
Back to volume for a forward look at 2020 and our priorities for the business.
Thank you Dominik.
Well 2020 was a challenging year, our full year results show the resilience we have worked hard for.
And that overall, we took.
The right decisions early in the crisis working closely with all our stakeholders and that we implemented them effectively flow 'twenty 'twenty.
Minions certainties remain in 'twenty and 'twenty, one as the pandemic continues to impact lives.
Knees and societies.
As of today.
We only expect the market to recover between 2023.
And 2025 day.
The pace of recovery will not only depend on the evolution of the pandemic and day rates and effectiveness of vaccinations, but also on the reactions and decisions of governments.
They choose to further tighten travel restrictions during this period of uncertainty all of which I hope restore freedom.
So we have to remain humble and vigilance, we are committed to demonstrated our resilience, but once again and to protecting our competitive position.
In this complex and uncertain situation, we issued guidance for 2021, which aims to provide some visibility.
Let me read it to you now as.
As the basis for the <unk> 'twenty 'twenty one guidance the company assumes no further descriptions to the world economy Air traffic to the company's internal operations and its a beauty to deliver products and services.
The Companys 'twenty 'twenty, one guidance is before M&A.
On that basis.
The company targets to at least achieving 'twenty 'twenty, one same number of commercial aircraft deliveries in 2020.
EBITDA adjusted of 2 billion euros, and breakeven free cash flow before M&A and customer financing.
Given the global environments, there will be no dividend proposed for 2020. These decisions aimed at strengthening the company's financial resilience by protecting the net cash position and supporting its ability to adapt as the situation evolves.
So to wrap up.
What will be our priorities for 2021, while key priorities. This year will remain the people the health and safety, but also their morale and their engagements twenty-twenty has indeed been very difficult for everyone.
We will continue to focus on delivering aircrafts based on the agreements with our customers.
And we will closely monitor the situation on a case by case basis.
We will also finalize the implementation of our historic drilling plan.
Going forwards, we will work to strengthen our interest skill sets up to prepare her short and long term future.
This means we need to continue the transformation of our interest fuels value chain, taking steps to streamline and simplify it in order to improve the quality the competitiveness and assist in the ability of the entire ecosystem.
In that perspective, we consider I always pictures assembly to be a core activity for Airbus.
We are also starting to reconsider how logistics and planning activities, which are key to our resilience and the robust industry or system.
Although the long term our ambition remains an ease to lead the development of a sustainable global aerospace industry. Therefore.
Therefore, we will preserve our.
Our ability to invest in Decarbonize technologies.
They ought to be well positioned to successfully address the future of challenges in the assistant able to win.
In 2021, we will also work to secure strategic multinational military contracts, which are paving the way for this cottage eagleton any of Europe and here I'm thinking about some of our key project such as the future combat Air system. The Tiger amongst weak although you were drawn.
And of course, one of our key priorities will be to deliver on our 'twenty 'twenty one guidance, but we will also flow cusano earnings and free cash flow growth trajectory beyond 2021.
Now back to you Julie.
Thank you Jim.
Okay, everybody. So it's now time for a Q&A session.
From media colleagues, who are connected via the virtual conferencing App, let me share a few points tricky place.
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Any difficulty with the tool use the chat function and we'll do our best to take care. Okay. So let's see.
He is coming through so good morning to you Thomas the first question is from Thomas Hanke from the Handelsblatt.
Yeah, Hello, good morning.
Julie morning, Gil and Dominique.
I hope, you're all well and thank you very much for taking my question.
You said.
The analyst call and also right now that one of your priorities is to strength of the industrial setup and to improve your competitivity.
One obviously to do that seems to lead to a shift perhaps more production to China. Both on the narrow in on wide bodies.
Could you, perhaps tell us if there's anything on the cards regarding.
As possible move and if I may a second question, there's an intense discussion going on.
With the EU Commission with France, and German government and also with the U S. On the Reimbursable launch investments are they is the idea by the EU Commission to replace that eventually totally by a new mechanism and the different instruments.
Could you please tell us where you are standing.
This window through launch eight thank you very much.
Thank you very much to us.
<unk> for your questions well, we have a rather complex industrial or sistema tebo seats or soy beats. The history. So we think theres a lot of potential for simplification and optimization on the European basis.
We of industrial activities in China, and we intend to continue to locate activities in China, moving forwards, but very much looking at the Chinese market are the priority for us will be to make Io structures.
Compared to achieve on the European business. So we will menu look at how to optimize in Europe for Europe. So that's the way forwards.
We do not intend to take big parts of the industry or systemic to keep out of the two days countries. We think there's a there's a lot to do them in Europe on that phones. When it comes to the airlines and it's a very important question well you know theres been a way to fund our programs.
Our large programs are this way of funding has been considered legal by the WTO organization that is very important and we think that's the right way forward. So we ought to have us believe they analyze our importance now we have to be open to a schemes that can provide equivalents.
Level of capacities level of flexibility, but for the moment. The one we believe is the right one or he may India headlines and you highlight again are considered legal by WTO. So that's the way we are looking at it at Airbus.
Thank you. So we have the next question from Alex Mascara.
Hello can you hear us.
I hate it.
Okay.
Can you guys hear me yes. Please go ahead.
Okay.
My our Galena Hill and in a few months ago, you said that there was some Airbus customers in light of the pandemic that was avoiding Airbus calls in order to not take delivery of new commercial aircraft and we saw what happened at the delivery.
And from that Crosby moved his storage facilities now that we are in February 'twenty 'twenty. One can you just update us as to whether or not that is still the case do you still have some airline customers that are avoiding close to refuse.
And then secondly, if I may with the new Biogen Harris Administration, President Macron has 18 to Madden Vice President Kamala Harris just a couple of day to go are you optimistic that they may be able to broker a deal which you finally ended dispute between Airbus embedded thank you so much.
Yes, Thank you Alex.
Thank you very good questions.
Yes.
The point I made a airlines avoiding cores I think it was in the moments where there was so much uncertainty and lack of clarity for them that it was extremely difficult too.
<unk>.
To put a light on the future and in this way a moment in time, where they were a deep changes and the lack of visibility was mainly a as far as I remember March last year, and we had a bit of the same beginning of this year with the third wave in the relapse of the pandemic, nor the situation with our customers to be them.
Those airlines all the I mean, all the partners that I mentioned before we are in very close cooperation with them a very high quality of dialogue and are working together. So we are not in that situation again and I hope we won't be again in that situation.
Well, yes on the tariff situation and the dispute between Europe, and the U S with a background of Airbus Boeing we were the first hit by the tariffs.
More than a year ago now it was end of 19 since the end of 'twenty 'twenty. The situation is rebalanced with you all being allowed to put tariffs on U S goods and indeed, you'll hope has decided to put tariffs on Boeing plane. So now they are tariffs both signs Airbus Boeing on the other goods for many other sectors.
And we really believe it's a lose lose situation for I believe one in particular in the in the pandemic. So we believe the conditions are in place to.
First start with a cease fire to suspend tariffs either negotiation and move forward and that's really what we believe should happen and most likely will happen.
Thank you Sir the next question will be from Chilean Mario <unk> from Dow Jones.
Yes can you any way.
We can hello, yes, sorry.
Michael is open.
Everybody's safety.
Yes.
I don't know to which extent you a degree of caution.
And should provide ADR today, because obviously the most.
Nike June below the consensus.
It is now.
It's all yes, all delivering as much.
At least.
And she 'twenty I.
E 566 thing is can be a big flow considering your.
The increase in rates.
You plan for 2017.
We agree.
Increases in rates it still fits.
G suite.
Five in the force dislocated.
Two questions in one thank you for decades.
Yes so.
Thank you I think it's an important points from forest today.
We are in a.
Moments of time, where we see the situation short term interest in the last week degrading getting worse or the short term is getting worse the midterm to long term to long term is probably getting better.
With the vaccine and the acceleration of on vaccination in number of countries and the outlook for end of 'twenty 'twenty, one and 'twenty 'twenty two is probably slightly bedroom and that this is a contradiction that he is very difficult to manage at a point in time, where we wanted to give you a guidance and provided some visibility. So so we have decided to give the guidance.
We said at least the same number of deliveries or indeed, a 566 and there is more in our production planning slightly more than.
Then these guidance well the point is we don't know what Twitch tipping point things will start to growth again, whether it comes a bit earlier or a week later and can have a significant impact we have in our predictions. He stem as will the ramp up at the start of their own per upon the senior line by truth. He Q4 to prepay our 2022.
That seems quite robust in terms of projected ramp up and we are in that are difficult to.
The balance between short term midterm or long term and we think the guidance. We have provided gives some visibility.
And the last point I'd like to make is 2021 deliveries will be limited by demons.
We have adjusted the production to to fit with that demand with some a bit more additional capacity and to keep it at 2022, but we will be mainly driven by the appetite and the ability of the airlines and the list sales to take delivery of planes in 2021. So that's why we have these guidance with EBITDA.
Complexity, but we think it's better to give one guidance some visibility in these very volatile and uncertain environment to try to give some visibility to everyone.
Thank you very much so the next question.
Good morning will be Christian Schubert from F that said good morning to Christian you're on the air.
Can you on mute.
Kristin.
Uh huh.
Yes.
Kristin.
Christian sorry, I think we may have lost share.
Okay. So we'll go to the next question and we'll do our best to get you back Christian when the connection that SASSA. Good morning, Peggy. The next question will be Peggy hollinger from the ft.
Hello, everyone and thank you very much.
If you are holding the conference.
Apologies from the state of the daughter's bedroom behind me.
Sure.
Jim.
Julian a little bit.
I would like to understand a little bit about the restructuring of the logistics and supply chain that you've talked about what exactly does that mean.
China, but are we talking about bringing more in house Aerostructures being core now are you actively seeking to share.
Supply, perhaps to fewer suppliers bigger suppliers what implications does this have and also you've mentioned on the analyst call as well that from.
Pairing for the next generation of aircrafts, how does your plan for our hydrogen aircraft change that supply chain and you've talked a bit about it.
Propulsion as well.
Does this mean that you are going to become the propulsion maker as well.
So I'd, just like to understand that a bit a bit more.
Moving my mask, a little piggy and are happy.
PTC, you and took two well on the I O structure. So I am trying to make the point, it's not related to China first okay or other countries. It's really the industrial setup, we have mainly in Europe I mentioned, the fact that you'd sell other fragmented and complex industrial system.
A bit more than a decade ago, we placed all I always pictures.
In two subsidiaries Telia in pag with the idea that this could potentially be divested. So the point, we're making here and the way. We are looking forwards is basically with two observations one we need to be more competitive we see the pandemic is putting a lot of pressure on prices and therefore cost. So that's an area where.
We need to simplify and simplify the logistics. We are also our ambitions in reducing your Seo to footprint. So this is driving a number of potential modifications. We at this stage of starting all are progressing on our plans.
And the second probably most important point is for the future of our planes that will be with different architectures, they will be with new energies.
And yanji onboard the popular since his name will be different and therefore, the AOS click share will be an important part of them of the airplane in terms of new architectures and also in terms of <unk> digital design and manufacturing so the connection between the design and the industry or system of Ah I almost pictures and therefore.
We think this has two remaining Airbus that has to be a helicopter with Airbus that was the meaning of my comment are predominantly and then on the second point you make a very important points, but we're not yet there I have said already that for hydrogen we need sort of five years to mature the technologies. We're looking at this.
Ways different different avenues, we call them.
For the technologies that we'd be mall, a power system on balls that we'd be more energy on board and we will have to work with suppliers and partners in a different way. So that it's premature to give an answer to your question. But these are the questions. We want to answer how the course of the next 456.
As we move our so called techno breaks forwards. So we ought to be able to give answers to those questions. Later in the first half of the Decatur.
Thank you again, so we have the next question from there on they can't get enough from let's take a whole bunch of that one Nick.
Hello.
Oh sure.
You hear me.
We can.
Yes.
Moving inhibits muscle.
I've got a couple of questions first one I would like you to commence also what you consider to be the menu items of the market today is it China and explain why.
One yeah as of year end of the outbreak of the COVID-19 crisis has a more precise vision of what the markets would be like after the crisis and watch weighted at the Sweetens items to our risks from Chi Tsang.
I would like also you to comments about our French decision the French government.
I did not to be so.
Four apps Rusty.
What what could you say about that and my final question is about the social plan can.
Can you give us some color about the progress of this plan how many employees have left the company to date. Thank you.
Thank you.
Not easy to make short answer to your first two questions are main drivers of the market. It's the pandemic sorry to say it like this and it's the speed and the measures which are taken and.
The possibility for people to travel again, all nuts, and therefore, all the lockdowns the.
Border closures, the quality times measures, which are really hindering the ability for people to plan and execute their travel.
We are all working very hard to see to which extent the maybe he moved nine months. Thank you.
Working hard to understand the long term consequences on on laser on so called VFR, visiting friends and relatives and business.
Ah well there was a view probably end of last year or middle of last year that the world would never be back to what it was before in addition.
Post pandemic, we see a bit of a different trend and now on the business side, it's very clear for the vast majority of businesses that they need to be able to fly again.
Is it their customers their partners their suppliers everybody is now very eager to restart a projects business because the pace of activity is very very much impacted by.
The impossibility to travel and when we speak to airlines and to other third parties on.
On laser.
People are really now in patients to be able to fly again, so what does it mean for the long term structure of the market not easy to say, but it will probably be a market that will be see me enough to what it was before after her deep crisis with some long term impact obviously, we seen the environmental agile.
Under is probably much more important than it was before COVID-19, and we think this is the main trends moving forward in terms of difference of what it was before.
So I tried to answer to question. That's at the same time, a terminal for shoulder Gordeyev honestly no comment no educated come into the home that to peak on the social plan are we on track.
Obviously it starts hitting the <unk>.
The euro and we had a lot of negotiations we are now.
We have seen already a maybe a third of the people who are supposed to leave the company with a different plans we have agreed upon or.
Or whether you're leaving by end of 2020, and there's more to come we think we have been well supported by governments on a number of devices on schemes like via long term fellow and we have also found from the lot of ways with.
And with the support of our social partners to make the situation manageable. So that's where we ought to day on the on the social plan not at the end, but moving forwards as per plan.
So thank you good morning, Alan we have Alan TV from the telegraph and the UK with us.
Can you hear me, we can Alan Thank you loud and clear.
Laurie good morning.
Two questions just a quick one neutral club social plan you are sort of the way through can you confirm the number of jobs that you expect to shake out.
From Airbus in total and then on the call. This morning, you said Jerome you referred to.
The Brexit trade sales to avoid disruption.
We will continue to work and incredible loans partnership in the UK I was just wondering could you explain that.
That means from a few extra of Airbus from the Uk's.
Is it guarantee that branch in foods.
Wilson.
Activity the guarantee for the future foreseeable future.
Thank you Alan so on the on the social plan.
The number of jobs, which.
Were considered in the social plan of 15000 square free you know Airbus commercial close to 2010, Airbus Defence and space. If I look at our the bulk of each which is Airbus commercial we have from measures who are long term fellow and RMT schemes with governments to be able to retain them.
Roughly a third of the people on those jobs mainly.
Supported by governments this will enable us to a simple the ramp up both in production at a later stage.
Obviously on all the work we have on technologies product innovation moving forward. So basically it means two failed or the 15 thousands of jobs where people will.
Actually leave the company.
On the Brexit well I never give guarantees and businesses. We've seen in 2020, our COVID-19 are arriving and the huge impact. This has had on the industry. So we have always to be prudent in the world. We are using but we are very committed to the U K, we really like the environments, we have there.
Very competitive and we have a strong relationship with our partners over there with the governments are there projects for the future and now Brexit being behind US we're really looking forward as a company was a lot of.
Our connections and presence in France, Germany, Spain, and U K and we are very happy of that ecosystem and we want to bring it forward. So that's the idea of a more corporation more also European mindset, including with the U K moving forwards and obviously innovation is willing to cede the wings.
Well bolt ons filter on us is very very important role to play moving forward for Airbus just that simple.
Thank you Alan So the next question, we have Jorge Pan Alba, calling from ASEAN, a review in Spain, Good morning Jorge.
Good morning, everyone and thank you for it.
The press conference and the <unk>.
Q&A session. Mike My question is about the zero emissions program, which is quite ambitious they should always quite ambitious because the first floods.
20th century, and the first commercial entering service you said will be in 2000 certified go against the investment.
Towards these programs massive but where is that investment pace on your own.
Hum.
Guidance I couldn't find it it's on the 2000 800 million amid research and development.
Or is it affecting indeed, all aspects of business.
As you said the Jewish jokes apart from everything.
So should I take that one.
We have said that the level of research and development expenses in 2021 will be roughly at the same level as in 2020, rather box to put 9 billion. So that's when I talked to one 9 billion and that includes all these activities, we do not break it out further.
Okay. Thank you. So the next question comes from Matt Here have a Shaw from last day.
Far from ex U.
Moving.
Thank you very much for taking my questions I've got two of them actually one is from the financial the value of the commercial backlog.
Do you assess the backlog of Recoverability and what is the share of it and a decrease of the overall value of the backlog and the second one is related to ask US can you give us some clarity on the on the current difficulties regarding the program as there seems to be some tensions with thoughts on the work sharing.
I think the viability backlog. So you have seen that there was a significant reduction in the backlog value, but I think it's very important to take into account that there was a strong depreciation of the U S. Dollar of about 9% over the fiscal year, which had a significant impact on top of that we had a pretty good delivery performance.
Of what Covid related to the industry that was also eating into our backlog because it was not replenished by the same number of orders.
If you really look at the attrition because of Recoverability and cancellations from customers, we talk about roughly 10% of the opening backlog. So 10% is kind of the marks that COVID-19 left on our backlog I'm, just because of the recoverability and cancellation issues.
One D. S cash are we at one of the important milestones of the program.
Negotiating the so called Phase one day in phase II after euros of common work between the partners, Spain as joined a year ago of the polygon, which leads to a large number of discussion in the renegotiation. So it's complex it's challenging it's flipped showing for the what Nick.
30, 40 years, maybe of of activities will they'll negotiation between countries with industrial companies and it's no surprise that it's a difficult moments to finalize this negotiation.
I think we are very well advanced habits. The last mile is probably the most difficult one and that's what's happening now in a timeframe that is a constrain as well by a number of situations in the different countries. So that's where we are today. It's a it's an interesting moment a difficult one but I'm very optimistic that.
We should be able to find the to find solutions because the stake for the if guests are all really very important I mentioned the sovereignty of Europe. This is one of the very structuring programs for the future. So we're doing our best as far as we're concerned to try to find a positive way forwards.
Thank you Vicky and so we have a second try for Christian <unk>, calling from the assets at a Christian cannot can you hear us.
Can you on mute til microphone Christian please.
We don't tell you I'm afraid.
We see you, but we don't hear you.
Now maybe said time lucky.
So so we now have an <unk>, calling from Liza Covid also and good morning.
Hi.
Okay.
Machine.
Yeah.
Yeah.
Okay, Hi, So question was a bit the same one book.
To make it larger it's about or your defense program, which are all very late I'm very controversial between friends from Germany.
It's about zero zone, which is.
It is three years for Lee.
The Tiger program, which is already that's free hedging well.
It's about if cash switches are the subject of <unk>.
Very difficult discussion.
Just wondering what.
What kind of impulse.
And I'll just give you I'll.
The only European group and sealants.
And the other question is about longshore well, you'll still have just to simplify them groups I think.
Dialogue is also complicate some theory, let's I'll ask for on your launch Alliance.
Wondering if you could give us your impression on your analyses about what should be is European launch and items. Thank you.
Thank you Juan well I would not say that those programs on the system really late there are difficult to launch.
These programs are nuts between Germany, and France with more partners. If we look at the IOL drawn.
It's a.
Partnerships between Germany, France, Spain, Italy, So obviously programs, which are very important to organize and structure right at the outset to ensure success and I think that's really the concern of Italy. One there on the table that we arrived to something that works and that can work over time.
Tiger always also with clinicians and if cash is a fantastic condition for Europe with a high level of complexity I am impressed by the speed at which we've been on ex gas. So I would not consider ex cats.
Being late I mean, it wasn't that existing fields ago and look at all the progress we've made we ought to difficult moments in time, but it's been very fast and I think that's also maybe one of the challenges of the of the aircraft. So.
I I would not completely share your view that these programs all eight I think they are at the phase of structuring before launching where we see a fall programs in Europe with different partners and the importance of getting right to the structure at the beginning.
On launches well I think we see a lot of things happening.
In the world around us.
In the U S in China as well, even if it's less public there's a lot happening access to space is probably more important than ever we see a lot of Gabriel mentioned space and we won't Airbus to continue to be an important player for access to space four satellites for services and space.
And we believe the scale will be Europe in the future. So.
We agree with the fact that there is a need for a full walk looking at work in Europe to best click share of the industry. We will play an important role we are an important player while our 50% share.
Shell are ordering Oh man group as you reminded and we'll keep moving.
Moving forward, we're obviously very focused with the programs we have inside a young group already in the eye and six which is a very important one as being or so.
Got hit by COVID-19, so there's already a lot on our plate, but indeed, we are welcoming views and if false of Europe to move forward in a space where or governmental and.
And so Ryan activities are very important as well.
Thank you. So we now have our next question coming through and we've got Venkat joining us from the Wall Street Journal Hello to you then.
And good day, everyone. Just checking you can hear me Ken absolutely.
Alright, perfect. So just a couple of questions from me and the first is just on the 77 match, which we're obviously seeing a return to the skies now Gil I'm just curious maybe you could give us.
The view of where the AC 20, Neo the <unk> hundred 20 family stands against the sensors of Max and how much has changed in that dynamic.
The last couple of years obviously.
Yo Yo competitive across.
The reader is has been struggling going through crisis and then the second thing is just maybe just give us a bit of an update on what you're thinking about wide bodies and the outlook for the <unk> hundred 30, Neo and also the agencies took the AZ.
Steady near sounds like.
At a rate of up to a month is really next year and it's on it's.
On the back book and I do want to that if you do need to reduce production rates again, whether its even feasible to keep production rates as below two.
Two months and so I'm just curious what your thinking is about how the wide body market is going to recover and what the prospects of book maintaining production specifically on the agitating Neal, but it's on the age of 50.
Yes. Thank you Ben well you know on the Max of always been very prudent in commenting so.
I will stick to my line I think given the pandemic and the COVID-19, we are mainly at least on the Airbus signs focusing on delivering from our backlog and this is what we're managing with our with our customers. We'd see later on in the Euro and probably more in 2022 competitions in <unk>.
Campaigns, and we'll be back to pre Covid times P. Max times when it comes to the a competition between Airbus.
And Boeing but I think that's a bit premature to comment and they are in the early stages of their return to service. So like you we are observing and focusing on our own activities on the senior leader when it comes to widebody, we believe that there will be more time than on the single aisle before it.
It goes up again.
It might be a steep home per point it comes because a lot of wide bodies will have been retired in the pandemic and when traffic comes again on international flights there will be a need for planes. So we have to look at things over the long term in addition.
And there is some positives for the wide bodies. We think we have a very competitive product range. The 50, obviously is now very well established in the market are planes. The free fifties, we're flying a lot in the crisis that is confirming what we hear from customers that it's a very competitive playing in very much fitting with the new COVID-19.
<unk> situation with the need for smartphone would use a very competitive low emissions.
That's the situation for the 50 on the 330, new Youre right. We are on the back food because we were at the beginning of the ramp up of the 330, new when the pandemic hit we think we are robust and resilient at a rate of two per month and if it has to go slightly below it's still manageable and we don't see the need.
Foregoing slightly below at the moment, but we remain prudent and when we look as you said on the other side of the river. We she has been an important program that is also a program for the long term that is also at a rate two per month. So we think that the situation of the industry today and again, we think the free 30, new is a very strong set of.
Our product range for both commercial and military derivatives, and we will keep it in their interest to be loud and clear on that topic.
Thank you Cam. So we have the next question Louise Calva from flying is joining us from Spain. This morning.
There is still you hear us.
Uh huh.
Yes, we hear you.
And how did you hear me.
Yeah.
Yeah.
Please go ahead.
Yes.
My question is.
It's a preference.
Oh, yes.
Yes.
When the factories.
And.
And if you have any sort of cash about one day context acquainted with the Spanish government Covid begins.
Lines quite bad it's breaking up.
Yes.
Could you perhaps try again, please with your question.
We prefer to have the new in the room and next year, we will be very happy I hope to welcome you again.
Physically for the press conference absolutely. So hopefully we can come back to Louis will try and we'll try and get you back the teams are working.
Two to help make that happen so well move to the next question we have.
Now with Charlotte, Ryan joining us from paying back good morning Charlotte.
Good morning, everyone and thanks for that.
Checking you can hear me, Okay, clearly, we can see you too green.
And frankly, if I can ask.
Oh the panel so you spoke in the analyst call.
Oh headwind in.
If anyone from Lora pre delivery payment more financing for customers.
I mean, Gee I think.
And you mentioned I T.
It even more difficult to keep costs down this year and what else is to minimize cash side.
And then secondly, if I could ask a broader strategic question.
Yeah.
Right.
Has that hydrogen will be ready for a decade.
I am worried on that.
From a horror with hydrogen.
What's the backup plan if it fell from archive.
Thank you summer.
So on the P. D piece, what we highlighted is that we have been.
Preserving the PD piece, we got already from customers to a large degree in these re phasing discussions with many customers wanted to push the aircraft deliveries to a later.
Point in time, and we have accommodated according to their needs are where we need to do so and on the other hand, when you keep the P. D piece and when you keep both of the schedules of the PDP and general referred to the delivery date. It means there is a certain period, where they pay less PD piece, and then that really correlates with the deferrals of aircraft deliveries.
That's of course, a drain to free cash flow in the coming year.
On the cost side I didn't wanna be understood that we are not going to preserve the cost cuts we have implemented in 2022. The country. What we said is we need to make sure that they are sustainable.
And for that to happen, we need sometimes also I T support that's true and let's not forget that when we talked about the restructuring program.
Still about two thirds to be covered and these two thirds of our head count subject to the restructuring program will gradually leave over the course of this year. So the full year savings effect will only be visible then in 'twenty. Two so we have really measures in place to make sure that we can free the cost base, we've achieved in the COVID-19 crisis over in the years beyond.
Customer financing is very dependent on the strength of the leasing market in the banking market, we still see a pretty robust financial services sector.
We tried to use it as much as possible and also we tried to resuscitate export credit agency finance financing as much as possible. We have already seen some successes in 2020, where the share of our deliveries findings by export credit agencies went up from 2% to 10%. So nevertheless, there might be certain dilip.
Where we need to chip in with our own balance sheet, and we are prepared to do that but only on an exceptional basis.
So now on hydrogen and.
Interesting question, well I think.
There are a lot of challenges when it comes to hydrogen will not all beating on hydrogen, but we really believe that's the technology, which has the potential to come to market. We are working hard on that with many other partners. They are challenges on the plane the auction and he's on the energy supply and distribution there are challenges on the right.
<unk>, so we don't want to.
Overlook those challenges, but I think we have to be very careful as well with the we never work attitude, which has proven so many times to be wrong in so many industries and if we just look at all industry and at Airbus, You'll remember the fly by wire on that was introduced by the F. 'twenty at the beginning with <unk>.
Probably a risky all too much innovative well 30 years later, it's an absolute must if you don't have fly by wire on a commercial aircraft.
You're not really serious in the market. So is hydrogen going to be the same in 30 years I think nobody can predict but if you can't forecast the future shape. It. This is what we want to contribute to we think the laws of physics don't need to change to make hydrogen competitive on planes is just ahead of <unk>.
Lot of work on technologies on demonstrators on testing.
On the regulations on certification to make it work we believe it's feasible within the time frame. We have defined future will tell you. They are challenges there are risks, but it's also the nature of innovation to EFT was welcome challenges. So we said we want to pioneer sustainable Aerospace you cannot pioneer without engaging into.
And Devils and this is one but we seriously believe.
It has the potential it will come and we want to be at the forefront.
Thank you Kim.
Our next question comes from Tom Ballantyne, joining us from Orient Aviation and Australia, Hello to you Tom.
Hello can you hear me all right we can hear you.
Excellent. Thank you very much.
I was going to ask me about it.
Oil production this year.
I already answered that question. So the other question I wanted to ask was to do with that.
Hey recovery, all day long haul market essentially.
No.
Just going to take longer to recover.
Dan.
The domestic market the short haul a single aisle market.
Yes.
Do you have an opinion on which regions are going to recover first I mean are we going to see Asia come out first.
So everything seems to be doing runs our patients from the rest of the.
Your second question has to do with the Chinese.
Hum.
Just going to hate to see you.
But last year was made any difference to the average weighted.
The Chinese market.
From competitors.
Competitors to Airbus.
Fully.
Production market. Thank you very much.
Thank you Tom so on the wide body, where will it he COVID-19 first.
By nature, a widebody all are between the two are very distant countries and each will very much depend on the agreements are bilateral agreements that will be reached absence.
A worldwide agreement on how to restart and you know there are a lot of discussions on the on the vaccination and how this could be done honestly, we don't know and we think it will take more time and it's probably important for the recovery of the wide body. The long distance flights the long haul flights.
That the majority of the world the last part of the World.
We have overcome the pandemic that's why we think he's going to come later.
Chinese industry and Cormack, because we have to differentiate cormack and the Chinese industry. You know we are we have relative suppliers in China, we have partners in China, and we see the Chinese industry moving forwards when it comes to come back well, they're coming closer to the certification of the non why nine we consider it's a competitive products that we.
Come on the market.
Different products it will take time for the 909 to find its place and we've seen other players in other main regions of the world trying to enter into the regional.
He journal markets or even the.
Commercial aviation unsuccessfully so there are many challenges and I think it's too early to say to what degree they will be able to compete with Boeing and Airbus, but we are taking themselves and we all are.
She and carefully what's happening there.
Thank you so next question.
We have Timothy <unk>, joining us from Reuter Hello to you Tim can you hear us.
Yes can you hear me.
Hi, Hi can you hear me okay, yes.
Very well thank you.
All right thanks, very much interest.
A couple of questions going back.
She'll comments from Aerostructures now being a cool you consider that core activity.
So can you just confirm then does that mean that you plan to reverse the carve outs have premium merits action study.
And could you just some idea of what the.
Cost of reintegration might be and perhaps also.
Tell us now.
What are you did you receive any serious office.
And the second question.
Just coming back to deliveries.
You mentioned that your forecast is free.
Deliberately because.
You have to wait to see.
What demand will bring and demand will really drive.
The actual results so I just wanted.
Why did you not decided to wait for that clarity before deciding to increase production that you apply a different risk assessments are adjusted its still sensing a production decision or is it that you're.
Your assessment that your.
Risk assessment has deteriorated since you decided to increase production.
Thank you team saw it.
Please do not over interpret what.
What we have said on iOS pictures.
You said cost of reintegration, well Steelyard N P. G. R T part of Airbus We have divested.
Or are those entities they are.
Organized in our subsidiaries, which is reducing the complexity at Airbus level, but is creating more probably a complexity then.
We could offer all we could we could generate more simplicity by looking at the long term with those activities are considered as a score and this is what is on the agenda. So that does nothing.
New to be se it on on that from today, but obviously, we are indicating that this is something we want to work on and with the idea that I almost pictures will stay.
In Airbus a warehouse.
10, 15 years ago, and still year N. P. G were created it was obviously with the idea that at some point in time this could be divested. Its also important to place. It in the perspective of a new wave of disruption and innovation coming in the field of aviation with the decarbonization not only.
But mainly new ways of propulsion that as I said before will significantly impact the architecture and therefore, the innovation inside a host of pictures and we see as well with our what we call D. G. M. S digital design manufacturing and services that the connection between the design and the production system itself is probably.
By far more important in the new digital world than it was before and therefore, we think it makes sense to keep it connected.
When it comes to our deliveries as you said prudence well. The problem is we don't really know what prudent means today and I was mentioning this tipping points of when are deliveries will really start to pick up. That's that's the question. We have dairies are moving environment at the moment.
And we have not change our views on projection of since we announced our production rates I mentioned also that the increase of production rates is also here to prepare and protect their own Todd that we continue to see in 2022, but there is some uncertainty on if and when we will see that contract we expect very bad.
<unk> 'twenty 'twenty, one and when you have relative back loading on a.
Trajectory, depending on when it happens it has a significant impact on the Johan deteriorates, that's why we.
We have given that guidance I don't know, if it's prudent or not prudent. That's the question. We have we think it can be reasonably achieved.
And there are a number of his enabled circumstances and we have considered it was better to give a guidance.
To put things in perspective of what we believe can reasonably be anticipated for 2021, but I respect the fact that.
It's difficult to make predictions in this very volatile environment.
Okay. So next question, we have Olivier James joining from using their value.
Yeah. Good morning, do you hear us.
Yes, yes, yes.
Super.
Okay.
Just a couple of questions and because of the difficulties of logistic underlined based upon the Indian because they run them.
John would you promotes relocates in Europe, some of the activities of our U S. A.
Players would you try to change a little bit.
Your industrial module for your next program.
Second question can we have news about the new final Assembly line introduced.
Announced last year, Thank you very much.
Okay.
Well you know we all are.
Totally located in our home countries at Airbus.
We all speak about force the the sector is the first exporter.
Out of our force net exporter and replay of similar all at a European level. So for us there's not that much to relocate.
Looking at this and we don't intend to capture value of hallmark suppliers to internalize and locate either so that's more how do we make sure to progress on competitiveness.
With the production system and the location we have today in a very fast changing environment and with changing trends. So I would say in general terms in both terms.
No.
No change in the direction of what you have suggested when it comes to the.
<unk> AC 21 Assembly line in Toulouse well. This was launched at a time, where before COVID-19, there was a <unk>.
<unk> Tong.
Rates production rates to be delivered and the growing share of the 321.
In the single aisle mix, we continue to see that trend of more and more F. 'twenty ones, which we believe is very positive for Airbus. That's a place where we're very competitive but the overall rates are very significantly reduced and there are uncertainties for when we will hit a point again, where we would need a deadline.
So the project is Idaho is an ice it's not stopped.
It's likely that it will.
B a he started later and that's the plan, but its premature and as long as we don't have the visibility we would need to know when we reach the point, where we renewed that line for the FY 'twenty one our global production system, we think it's prudent to wait and see so we are still in this wait and see mode at the moment.
Thank you so we're now joined them.
By Mr. Chen from Xinhua News agency in China.
Hello, do you hear Mr. Chen.
Hello can you hear me, we hear you very well thank you Dan.
Hello, everyone ask a couple of questions from me.
Mr Gere.
How many aircrafts or delivered to Chinese consumers last year and how many.
Others registered for the Chinese market.
In 2020.
And what is your company, new layouts, new clients and key points for the Chinese market in the new year and secondly, according to Euro States, China became the largest export market for the EU Julien.
In 'twenty.
End of 'twenty 2020.
Comprehensive agreements on investments.
Between China and the EU all concluded.
So how come Airbus benefits from these agreements and from this cooperation thank you.
Yeah.
Chichi.
Shallow Hal.
It's a pleasure to speak to you, yes, the Chinese markets Azbine inch Tvs and will continue to be very important for Airbus.
We maintained a stable share of deliveries.
To China in 2020, so roughly 20% I think slightly less than 20 per cent, but not very different from what we have done in the in the postures and we think this will continue.
I don't have in mind, but maybe Dominik will correct me Chinese orders I think in 'twenty 'twenty, one if any it's in very small numbers.
I'll just come with China generically speaking in large quantities given the size of the market and it has not been the case.
In 2020 you.
You know that in China now the all doors and the acquisition will go through our cash for bundled orders. So that's something we are working on and hope and although we let them later hopefully in 'twenty 'twenty, one maybe 2022.
We have been investing in China, we very much welcome the investment agreement, which has been signed recently and we think this will help the global environments of our cross investments between between the regions, but as Airbus. We've started investing long time ago. We are very happy with our presence in China will keep growing in the dark.
And and it's been successful for China, and beneficial for China and for Airbus. So we think we have a very strong partnership with China that we want to continue to extend and we speak to our customers. We speak to all our partners to a regional government and the provinces, but also the central government on how to bring that partnership.
The four walls.
Even more successful manner.
Okay. So thank you. Thank you very much. Thank you Dominic that was the last question. So it concludes our annual press conference. This morning I.
I hope he is now well understood.
The Airbus journey in 2020.
On the financial and obviously the perspectives as we look forward in 2021 and I'd like to take the opportunity to thank all of you who've joined us digitally today either directly on the tour or followed us on social media and the web I'd also like to thank the team has done really an excellent job to make it happen.
And it's not easy being remote.
You know how to find us if you have any follow up questions. Please reach out directly to the team keep.
Keep watching our channels will be with you shortly.
Sure Stacy.
Bye bye thank.
Thank you Judy.
[music].