Full Year 2021 Airbus SE Earnings Call

Speaker 1: Ladies and gentlemen, thank you for standing by. Welcome to the Airbus 2021 results release conference call.

Ladies and gentlemen, thank you for standing by welcome to the Caribou.

Thank you want results release conference call and casino operator for this conference. So you know that's what the duration of the presentation. All participants will be on listen only mode and the conference is being recorded.

Speaker 1: All participants will be on listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to your host,

The presentation, there will be an opportunity to ask questions. At this time I would like to turn the conference over to your host young for German U S N E and M divulge it.

Thank you Katrina.

Good morning, ladies and gentlemen.

Is the average full year 2021 results release conference call.

Speaker 2: Guillaume Faurie of CAO and Dominique Azam of CFO , will be presenting our results and answering your questions. This call is planned to last...

<unk> and Dominik <unk>, our CFO will be presenting our results and answering your questions.

This call is planned to last around one hour and 15 minutes.

This includes Q&A, which we will conduct a study initially presentation.

Speaker 2: This includes Q&A, which we will conduct after the initial presentation.

This call is also webcast.

It can be accessed on base.

Speaker 2: it can be accessed via our homepage, where we have set a special banner.

Well, we have set a special banner.

Playback of this call will be accessible on the website, but there is no dedicated phone replay service.

Speaker 2: Playback of this call will be accessible on the website, but there is no dedicated phone replacement.

The supporting information package was E mailed to you earlier this morning.

Speaker 2: The supporting information package was emailed to you earlier this morning.

Speaker 2: It includes the slides, which we will now take you through, as well as the financial statements.

It includes the slides, which we will now take you through as well as the financial statements.

Throughout this call, we will be making forward looking statements.

The package you received.

Speaker 2: The package you received contains the safe harbor statement, which applies to this call as well. Please read it carefully. And now, over to Guillaume.

The safe Harbor statement, which applies to this call as well.

Please read this carefully and now over to you.

Thank you Ian and good morning, ladies and gentlemen.

Thank you for joining us today for full year 2021 this quarter.

Speaker 3: Thank you for joining us today for our full year 2021 results call.

I'm happy to be here.

Speaker 3: I'm happy to be here with Dominique to review our results.

We need to earn your well results.

2021 has been another challenging year.

Speaker 3: 2021 has been another challenging year, but it was also a year of transition where our attention shifted from navigating the crisis towards recovery and growth.

It was also a year of transition.

Our attention shifted how navigating the crisis too.

Recovery and growth.

Speaker 3: In the early months of 2021, we still had to demonstrate our resilience in a global context of low air traffic and an overall lack of predictability.

In the early months of 2021, and we still have to demonstrate our resilience.

Global context.

And a number of or lack of predictability.

We gained visibility as we progressed in the euro we saw that.

Speaker 3: We gained visibility as we progressed in the year. We saw that air traffic accelerated quickly once travel restrictions were lifted, starting in key domestic markets and demonstrating the fundamental need for connecting people and cultures worldwide.

Accelerated quickly once the restrictions were lifted.

To domestic markets and demonstrating the fundamental need for connecting people and cultures worldwide.

Speaker 3: This visibility, together with the strengthening of our customers' demands, gave us confidence to set our ramp-up trajectory, engage our supply chain, and launch all necessary actions to prepare for a strong recovery in the single-line market.

This visibility together with the strengthening of our customers' demands gave us confidence to sit on a ramp trajectory engage our supply chain and launched all necessary actions to prepare for strong recovery in the senior loan market.

Speaker 3: 2021 has also been a remarkable year for Airbus, thanks to the resilience and efforts of our teams to deliver outstanding industrial, commercial and financial results.

2021.

<unk> also been a remarkable year for rambus, thanks to the resilience and efforts of our teams.

Deliver outstanding industrial commercial and financial results.

Let's now look at our conventional accompany the reason our financials, both showing that we delivered on the guidance we provided in October .

Speaker 3: Let's now look at our commercial aircraft deliveries and our financials, both showing that we delivered on the guidance we provided in October .

In Q4.

Speaker 3: We delivered 187 aircraft.

We delivered on.

187 aircraft.

Taking your full year 'twenty, one delivery number to 611 and eight.

Speaker 3: taking our full year 21 delivery number to 611, an 8% increase compared to 2020, and in line with our 2021 guidance.

8% increase compared to 2020 and in line with our 2021 guidance.

I am proud of these achievements by team members together with our customers and suppliers.

Speaker 3: I'm proud of this collective achievement by Team Airbus, together with our customers and suppliers.

For the full year of 'twenty, one maybe to just TD was $4 9 billion and free cash flow before him and and Christina financing was $3 5 billion.

Speaker 3: For the full year 2021, our EBIT adjusted was €4.9 billion and our free cash flow before M&A and customer financing was €3.5 billion.

Excluding 2021 financial results.

Speaker 3: and in some ways they are very strong, reflect the number of commercial aircraft deliveries, the good performance of our divisions as well as our cost containment and efforts on competitiveness.

And in some ways they are very strong.

Say the number of commercial aircraft deliveries.

The good performance of our divisions as well as our cost containment efforts on competitiveness.

While carefully managing our cost base for the Euro we progressively resumed activities to prepare the future and we will further accelerate in 2022.

Speaker 3: While carefully managing our cost base through the year, we progressively resume activities to prepare our future, and we will further accelerate in 2022.

I'll repeat that just isn't also benefited from the reduction of risk exposures, which enabled us to release some provisions.

Speaker 3: Our rebates adjusted also benefited from the reduction of risk exposures, which enabled us to release some provisions.

While our record net income of $4 2 billion euros together with our strengthening net cash position of $7 6 billion euros.

Speaker 3: a record net income of 4.2 billion euros, together with our strengthening net cash position at 7.6 billion euros. And Dominique will comment on both later.

Dominik will commence on both later.

Speaker 3: They underpin our proposal to reintroduce dividend payments going forward, which will amount to 1.5 euros per share for 2021.

They underpin our proposal to reintroduce dividend payments going forward.

Which will amount to one five <unk> per share for 2021.

Today.

As we enter 2022, the pandemic is not yet fully behind us.

Speaker 3: As we have entered 2022, the pandemic is not yet fully behind us.

We experienced additional complexity coming from the global macroeconomic landscape, including pensions on supply logistics and labor.

Speaker 3: We experience additional complexity coming from the global macroeconomic landscape, including tensions on supply, logistics and labour. Nonetheless, we continue to deliver on our production ramp-up as planned, while closely monitoring and managing the associated challenges.

Nonetheless, we continue to deliver on our production ramp up as planned while closely monitoring and managing the associated challenges.

Speaker 3: Let's now look at our commercial environment.

Let's now look at our commercial environments.

After a sharp decline in 2020 and in spite of the Seaton challenges in 2021 to global economy rebounded.

Speaker 3: After a sharp decline in 2020 and in spite of persistent challenges in 2021, the global economy rebounded.

The air traffic will super risky covered well into Europe .

Speaker 3: The air traffic also progressively recovered from the year.

Speaker 3: Even though the crisis is not over yet, the aviation industry continues to emerge from it.

Even until the crisis is not over yet.

The industry continues to emerge from it.

Speaker 3: It has become clear that people want to fly again, and they do so as soon as travel restrictions are relaxed.

It has become clear that people want to fly again.

They do so as soon as Cuddled with frictions are relaxed.

Yet 2021 has also shown that some key markets remain volatile and we will.

Speaker 3: Yet, 2021 has also shown that some key markets remain volatile, and the Omicron variant has confirmed once again that the path to food recovery is not linear.

Let me come volumes as confirmed once again that does.

Path to full recovery is not linear.

Speaker 3: These uncertainties are not, today, of a nature to change our expectations that the market will recover between 2023 and 2025, with domestic and regional markets clearly leading the way.

These uncertainties are not today.

To change our expectations that the market will recover between 2000 22025 with domestic and Canadian oil markets clearly leading the way.

Speaker 3: This is underpinned by our customers' strong demand for our latest generation of fuel-efficient aircraft, which reinforce their competitiveness and lower their fleet emissions.

This is underpinned by our customers strong demand for our latest generation fuel efficient aircraft, which reinforced the competitiveness and lower emissions.

Speaker 3: In fact, latest generation aircraft represent today only around 13% of global fleets, underlining the strong potential of fleet replacement to decarbonize commercial aviation with today's technology.

In fact, <unk> latest generation aircraft represents today only around 13%.

Global fleets underlining the strong potential of fleet replacement to Decarbonize commercialization with today's technologies.

Speaker 3: Let me now remind you of our orders and backlog, which also reflect a strong commercial activity in Q4.

Let me now remind you of.

All those in backlog, which also reflects the strong commercial activity in Q4.

Speaker 3: For the full year 2021, we booked 771 gross orders.

For the full year of 2021, we booked 771 gross orders.

Speaker 3: In Q4, we recorded 501 gross orders, including 43 A220s, 46 A320 family aircraft, and 32 white bodies.

In Q4, we recorded 501 gross orders, including 48 to <unk> 46, <unk> hundred thousand semi aircraft and 32 wide bodies.

Speaker 3: This includes the first A350 freighter orders which, together with several commitments, mark an important milestone for this program.

This includes the first <unk> hundred 50, <unk> orders, which together with several commitments Mark an important milestone for this program.

I am pleased by these great commercial performance.

Speaker 3: I am pleased by this great commercial performance, and we at Airbus appreciate the strong endorsement from our customers who placed new orders for 2021 to answer both passenger and freighter market demands.

And we appreciate the strong endorsement from our customers and placed new orders for 2021 to answer both passenger and freighter market demands.

We sold 264 can solutions in 2021.

Speaker 3: We saw 264 cancellations in 2021. As a result, net orders were positive at 507 aircraft, and our backlog in units amounted to 7,082 aircraft at the end of 2021.

As a result net orders were positive 507 aircraft and our backlog in units amounted to 7082 aircraft at the end of 2021.

Speaker 3: At group level, our backlog in value increased to 398 billion euros in 2021, mainly reflecting the strengthening U.S. dollar.

At group level, our backlog in value increased 298 billion in 2021, mainly reflecting the strengthening U S dollar.

I'd like to say a few words about the situation. We are unfortunately experiencing experiencing with one of our customers kept on highways.

Speaker 3: I'd like to say a few words about the situation we are unfortunately experiencing with one of our customers, Qatar Airways.

We had to make the decision to exercise our rights and terminated 250 dash 1000 delivery slots in the <unk> hundred 21 contracts.

Speaker 3: We had to make the decision to exercise our rights and terminate two A350-1000 delivery slots and the A321 control.

This decision followed many attempts to find mutually beneficial solutions.

Speaker 3: This decision followed many attempts to find mutually beneficial solutions.

Speaker 3: and we continue to hope for an amicable solution.

And we continue to hope for an amicable solution.

Speaker 3: And I'd like to say as well that for us at Airbus, this relationship with our customers is of the utmost importance. And we will continue to work hard to serve them.

And I would like to say is we are in that for us at Airbus. This relationship with our customers is of the utmost importance and we will continue to work hard to serve them.

Looking at helicopters.

In 2021, we achieved a record year of bookings book to Bill well above one which confirms the positive momentum for campaigns in our home countries as well as the good performance of our support and services business.

Speaker 3: In 2021, we achieved a record year of booking. We've booked to be well above one, which confirms the positive momentum for campaigns in our home countries, as well as the good performance of our support and services business.

Speaker 3: Over the year, we booked a total of 414 net orders, compared to 216.

Although the euro we booked a total of 414 net orders.

Compared to 268 in 2020.

This includes 50 to <unk> 60 helicopters.

Speaker 3: This includes 52 H-160 helicopters.

Of which confirm all deal by the French DGA for 30 units of the <unk> hundred 60 <unk> production.

Speaker 3: of which the firm order by the French DGA for 30 units of the H-160 military version as a first batch of the light joint helicopter program, which plans for an overall total of 169 units.

First batch of the light joined helicopter program, which plans for a new global total of 169 units.

Speaker 3: In addition, we recorded in Q4 an order for 36 H-135 helicopters by the Spanish Ministries of Defence and Interior. Finally...

In addition, we recorded in Q4 in order for 56, H <unk> helicopters by the Spanish ministries of defense in Indiana.

Finally.

In defence and space.

In 2021, our order intake was at 15 7 billion euros.

Speaker 3: In 2021, our order intake was at 13.7 billion euros, up 15% year on year, corresponding to a book to bill of around 1.3.

<unk> to century on euro corresponding to a book to bill of <unk>.

One three.

Speaker 3: This commercial performance includes key orders in our military aircraft business, such as two major contracts for the in-service support of the German and Spanish Eurofighter fleet.

This commercial performance includes key orders in our immediate area across business such as two major contracts for the in service support of the German and Spanish or fighter fleets.

Speaker 3: The Indian order for 56 C295 to replace the Air Force Legacy fleet.

The Indian order for 56, <unk> hundred 95% to replace the Air Force legacy fleet.

<unk> related orders from the United Arab Emirates, the UAE and Spain.

Speaker 3: MRTT-related orders from the United Arab Emirates, the UAE and Spain, as well as the export contract with the Republic of Kazakhstan for 2,400 M.

As well as Dx both contract with the Republic of Kazakhstan fluctuate from one of them.

Speaker 3: In our space systems business, we are granted the contract to design and manufacture six Galileo second generation satellites.

Space systems business, we were granted a contract to design and manufacture.

Six <unk> second generation satellites.

And in 2021, we launched 10 space crossed into one way of constellation deployment reached 394 satellites, so close to 400.

Speaker 3: And in 2021, we launched 10 spacecraft, and the one-web constellation deployment reached 394 satellites, so close to 400.

Speaker 3: We received orders for 12 more spacecraft, and importantly, 20 of our satellites are now involved in climate change monitoring, with 20 more in development.

We received orders for 12 more space craft and importantly, 20 of our satellites.

Involved in climate change monitoring with 20 more in development.

For yoga drawn.

Speaker 3: For Eurodrone, we welcome the recent budgetary approval by Spain, following that of France, Germany and Italy. Eurodrone will be the first product to be, from the start, designed and developed through our new digital design manufacturing and service concept.

We welcome the recent budgetary approval by Spain.

<unk> that of France, Germany, and Italy.

<unk> will be the first product to be from the start.

Designed and developed who will new digital design manufacturing and service concepts.

On <unk>, we continue to work with our industrial partners with the objective to move on to the next development phase later in the year.

Speaker 3: On FCAS, we continue to work with our industrial partners with the objective to move on to the next development phase later in the year.

No.

The niche.

Speaker 3: Dominique, Dominique will take you through our financials. Thank you, Guillaume, and good morning, ladies and gentlemen.

Dominik will take you through our financials.

Thank you <unk> and good morning, ladies and gentlemen.

Our fiscal year 2021 revenues increased to $52 1 billion euros.

Speaker 4: Our fiscal year 2021 revenues increased to €52.1 billion, up 4% year-on-year, mainly reflecting the higher number of commercial aircraft deliveries, partially offset by a weakening average US dollar exchange rate.

Up 4% year on year, mainly reflecting the higher number of commercial aircraft deliveries.

Partially offset by a weakened weakening average U S dollar exchange rate.

On a fiscal year EBIT adjusted increased to $4 9 billion euros.

Speaker 4: Our fiscal year EBIT adjusted increased to €4.9 billion, up from €1.7 billion in 2020, which included €1.1 billion of charges due to the impairments and write-offs triggered by COVID-19.

Up from $1 7 billion euros in 2020, which included $1 1 billion euros of charges due to the impairments and write offs triggered by COVID-19.

Speaker 4: The strong year-on-year improvement of our EBIT Adjusted is mainly driven by the commercial aircraft delivery performance and our efforts on cost containment and competitiveness.

The strong year on year improvement of our EBIT adjusted.

Mainly driven by the commercial aircraft delivery performance and our effort on cost containment and competitiveness.

Speaker 4: It also reflects a reduction of risk exposures, which enabled us to release some provisions. In particular, we reviewed the COVID-19 related charges and reassessed the level of exposure, which had a positive impact on our EBIT adjusted, mainly in the second half of the year.

It also reflects the reduction of risk exposure, which enabled us to lease some provisions.

In particular, we review with the COVID-19 related charges and reassess the level of exposure, which had a positive impact on our EBIT adjusted mainly in the second half of the year.

On research and development expenses in 2021 stood at $2 7 billion.

Speaker 4: On research and development, our expenses in 2021 stood at 2.7 billion euros, slightly below the 2020 level.

Slightly below the 2020 level.

The R&D expenses are expected to increase to around $2 9 billion euros in 2022.

Speaker 4: The R&D expenses are expected to increase to around 2.9 billion euros in 2022.

Speaker 4: Our fiscal year earnings per share adjusted stood at €4.33 per share based on an average of 785 million shares outstanding.

Our fiscal year earnings per share adjusted stood at four <unk> 33 per share based on an average of 785 million shares outstanding.

Our fiscal year free cash flow before M&A and customer financing was $3 5 billion euros.

Speaker 4: Our fiscal year pre-cash flow before M&A and customer financing was 3.5 billion euros.

Speaker 4: It reflects our efforts on cash containment and a decrease in working capital, mainly driven by inventory improvement. It also includes the divestment of one of our sites in France. All in all, we saw a very strong...

It reflects our efforts of cash containment and a decrease a decrease in working capital mainly driven by inventory improvement it.

It also includes the divestment of one of our sites in France.

All in all we saw a very strong performance in 'twenty one.

While we are still managing our costs in a crisis mode in the first half of the year and benefited from efficient releases, mainly nature to it.

Speaker 4: while we were still managing our costs in a crisis mode in the first half of the year and benefited from provisional releases mainly in H2, we progressively resumed activities to prepare our future, and this will further accelerate in 2022.

Regretfully resumed activities to prepare our future and this will further accelerate in 2022.

Speaker 4: This mainly includes additional investments in research and development, digitalization, and cybersecurity, and efforts to support the single-isle ramps up.

This mainly includes additional investments in research and development digitalization and cyber security and efforts to support the single aisle ramp up.

Now onto the next slide regarding our profitability.

Fiscal year 'twenty, one EBIT reported was $5 3 billion.

Speaker 4: Fiscal year 2021 EBIT reported was 5.3 billion euros. The level of EBIT adjustments total a net positive of half a billion euros including

The level of EBIT adjustments totaled a net positive of half a billion euros, including <unk>.

Speaker 4: Plus $274 million related to the A380 program, of which 84 were booked in Q4.

Plus $274 million related to the <unk> hundred 80 program of which 84 were booked in Q4.

Speaker 4: Plus $122 million gain on disposal from the sale of the aforementioned site in France recorded in Q4.

122 million gain on disposal from the sale of the aforementioned site in France recorded in Q4 <unk>.

Speaker 4: minus 212 million euros related to A400M, of which minus 209 in Q4.

<unk> 212 million related to <unk> <unk> profit.

It's minus 292 and up 9% in Q4 minus.

Speaker 4: minus 38 negative impact from foreign exchange and balance sheet relation, of which plus 127 in Q4.

Minus 38 negative impact from foreign exchange and balance sheet relation of which plus 127 in Q4.

Speaker 4: and 331 million euros of other adjustments, mainly including around 0.2 billion of provision releases related to the restructuring plan and payments by suppliers.

331 million of other adjustments, mainly including around <unk> $2 billion of provision release is related to the restructuring plan and payments to suppliers by suppliers.

Speaker 4: Plus 285 million were booked in Q4.

Plus $285 million were booked in Q4.

Earnings per share reported includes minus $350 million of financial result, it mainly reflects minus 246 million of net interest result, as well as the revaluation of financial instruments and of certain equity investments.

Speaker 4: Earnings per share reported include minus $315 million of financial results. It mainly reflects minus $246 million of net interest results, as well as the revaluation of financial instruments and of certain equity investments.

The tax rate on the core business is around 27%.

Speaker 4: The tax rate on the core business is around 27%. The effective tax rate on net income is 17%, including the positive effect from tax risk updates and the tax effect on the revaluation of certain equity investments, as well as a net release of deferred tax assets impairments, mainly due to an updated business outcome.

Effective tax rate on net income is 17%, including the positive effect from tax risk updates and the tax effect on the revaluation of certain equity investments.

As well as a net release of deferred tax assets impairments, mainly due to an updated business outlook.

All this resulted in a record net income of $4 2 billion with earnings per share reported of 536%.

Speaker 4: All this results in a record net income of 4.2 billion euros, with earnings per share reported of 5.36 euros.

Speaker 4: Regarding our hedging activities in fiscal year 21.

Regarding our hedging activities in fiscal year 'twenty one.

$20 9 billion of hedges matured with associated EBIT impact at a rate of 120 versus $1 19 in the prior year.

Speaker 4: $20.9 billion of hedges matured with associated EBIT impact at a rate of $120 vs $119 in the prior year.

Speaker 4: During the year, we adjusted the phasing of our hedges by implementing around $5 billion of rollovers, mainly in Q1.

During the year, we adjusted the phasing of our hedges by implementing around $5 billion of rollovers, mainly in Q1.

Speaker 4: He also implemented $29.5 billion of forwards at a rate of 121, of which $6.7 billion in Q4, at a rate of 118, mainly for the years 2022 to 2025.

We also implemented $29 5 billion of forward at a rate of 121 of which $6 7 billion in Q4 <unk>.

At a rate of 118, mainly for the years 2020 to 25.

Speaker 4: As a result, our total hedging portfolio in US dollar, including 1.2 billion of hedges disqualified in Q1 2021, stands at 88.3 billion dollars with an average exchange rate of 1.25 versus 1.26 in December 2020.

As a result, our total head total hedging portfolio in U S dollar, including $1 2 billion of hedges <unk> qualified in Q1 'twenty one stands at $88 3 billion with an average exchange rate.

125 versus $1 26 in December 2020.

Speaker 4: Now let's look at our cash evolution in 2021. Our gross cash flow from operations of 4.5 billion euros mainly reflects our EBIT adjusted and includes a 0.6 billion provision consumption related to the restructuring plan.

Now, let's look at our cash evolution in 'twenty one hour.

Our gross cash flow current cash flow from operations of $4 5 billion euros, mainly reflects our EBIT adjusted and includes a $4 6 billion provision consumption.

Related to the restructuring plan.

Speaker 4: Our working capital has decreased by a billion euros. It mainly reflects the reduction in inventory. With the deliveries of the last A380s and the continued optimization of our white-body inventories, largely offset by contracts, assets, and liabilities.

Our working capital has decreased by 1 billion euros.

It mainly reflects the reduction in inventory with.

With the deliveries over the last eight years <unk> and the continued optimization of widebody inventories largely offset by contract assets and liabilities.

Speaker 4: Year to date, the A400M continued to weigh on our free cash flow before M&A, but less so than in 2020.

Year to date in April and continued to weigh on our free cash flow before M&A, but less so than in 2020.

2021, Capex was around minus $1 9 billion slightly higher than in 2020, we.

Speaker 4: 2021 capex was around minus 1.9 billion euros, slightly higher than in 2020.

Speaker 4: We expect our capex to be around minus 2.4 billion euros in 2022.

We expect our capex to be around minus two 4 billion in 2022.

Speaker 4: Flea cash flow reported was 3.5 billion euros.

Free cash flow reported was $3 5 billion.

Speaker 4: M&A activities accounted only for minus $32 million, while customer financing represented an inflow of $28 million.

M&A activities accounted only for minus $32 million.

Customer financing represented an inflow of $28 million.

The aircraft financing environment in 2021 remained solid with sufficient liquidity and financial markets for our product.

Speaker 4: The aircraft financing environment in 2021 remains solid with sufficient liquidity in financial markets for our products.

Speaker 4: We also benefited from the support of export credit agencies.

Also benefited from the support of export credit agencies.

Going forward.

Speaker 4: Going forward, a low level of customer financing may not be sustainable and we anticipate some usage of cash in the coming years.

A low level of customer financing may not be sustainable and we anticipate some usage of cash in the coming years.

Our net cash position has improved to seven 6 billion euros as of the end of December and our liquidity position remained strong and stood at $28 7 billion euros as.

Speaker 4: Our net cash position has improved to €7.6 billion as of the end of December and our liquidity position remains strong and stood at €28.7 billion. As mentioned during our last quarterly disclosure, we have extended the maturity of our €6 billion revolving syndicated credit facility by one year in Q4. Going forward, we will continue to adopt an active approach when it comes to managing our liquidity with the objective of maintaining our robust credit rating.

As mentioned during our last quarterly disclosure, we've extended the maturity of our 6 billion revolving syndicated credit facility by one year in Q4.

Going forward, we will continue to adopt and active approach when it comes to managing our liquidity with the objective of maintaining a robust credit rating.

Back to you.

Speaker 3: Thank you Dominique. Now on to commercial aircraft.

Thank you Dominik now onto commercial aircraft.

Speaker 3: In 2021, we delivered 611 aircraft to 88 customers.

In 2021, we delivered 611 aircraft to 88 customers.

Speaker 3: of which two operating leases without revenue recognition at delivery.

For which to operating lease without revenue recognition of delivery.

Speaker 3: This delivery performance represents a year-on-year increase of 45 aircraft.

This delivery performance represents a year on year increase of 45 aircrafts.

In 2021, and we also provided additional visibility to our suppliers and in particular, we secured the production rates for the <unk> hundred 2070 up to summer 2023, which is mid of next year.

Speaker 3: In 2021, we also provided additional visibility to our suppliers and in particular, we secured the production rate for the A320 family up to summer 2023, which is mid of next year.

In addition, we continued the development of our product portfolio with the launch of the <unk> freighter and to progress on the <unk> hundred 21 X at all.

Speaker 3: In addition, we continue the development of our product portfolio with the launch of the A350 freighter and the progress on the A321XLR.

Speaker 3: Let's now look at the more detailed situation by aircraft family. On the A220, we delivered 50 aircraft.

Let's now look at the more detailed institution by our questioning on.

On the 820, we delivered 50 aircraft.

Speaker 3: We continue to ramp up and are on track for rate 14 that we envisage by the middle of the decade.

We continue to ramp up and are on track for rate 14 that we envisaged by the middle of the decade.

Speaker 3: The prefile in Mirabel is now operational and will support this roundup.

<unk>.

<unk> is now operational and will support this ramp.

On <unk> hundred 20.

Speaker 3: We delivered 483 aircraft, of which 221 A321.

We delivered around it.

<unk> hundred <unk> aircraft of which 221 <unk> hundred 20 ones.

Speaker 3: We continue to deliver on our production ramp-up and we are on our trajectory to achieve rate 65 by summer 2020.

We continue to deliver on our producer in loan book and we are on a trajectory to achieve rate 65.

So now 2023.

We continue to derisk, the ramp up including by enabling all of us on the sites to become <unk> one rig.

Speaker 3: We continue to de-risk the ramp-up, including by enabling all our assembly sites to become A321 ready.

Speaker 3: for production rates beyond 2023. We're still in the assessment phase, and we are working with our suppliers to potentially enable an increase above rate 65.

From a production rates beyond 2023, we are still in the assessment phase and we're working with our suppliers to potentially enable and increase of both rate 65.

Speaker 3: On the A321XLR, the first of three development aircraft entered the FAL in Hamburg in November .

On the <unk>. The first of three development aircraft entered the funnel in Hamburg in November .

Speaker 3: Desacorte will perform the flight testing and type certification program starting this year to pave the way for service production and entering into service next year, 2023.

These aircraft will perform the flight testing and type certification program, starting this year to pave the way for series production and entry into service next year 2023.

On April 30, we delivered 18 aircraft of which <unk>.

Speaker 3: On A330, we delivered 18 aircraft, of which 3 MRTTs.

Speaker 3: The A330-800 received its 251-ton max takeoff weight certification in December .

The AC 30 Dash 800 received <unk> 251 tonne.

Mexico <unk> certification in December .

Speaker 3: And as previously announced, we target to increase our monthly production rate to almost three aircraft at the end of 2022.

And as previously announced we target to increase our monthly production rate to almost three aircraft at the end of 2022.

On the <unk> hundred 50.

Speaker 3: On the A350, 55 aircraft were delivered. We continue to expect to increase the A350 production rate from around five per month to around six in early 2023.

55 aircraft were delivered.

Continue to expect to increase the production rate from around five per month to around six in early 2023.

On the <unk>, we delivered five aircraft in 2021 of which the last produced.

Speaker 3: On the A380, we delivered five aircraft in 2021, of which the last produced A380 to Emirates.

Two in the rates.

Speaker 3: The F380 will continue to fly with our support for many, many years.

We will continue to fly without support for many many years.

Speaker 3: Let's now look at Airbus commercial financials for the year. Revenues increased by 6% year-on-year, mainly reflecting the higher deliveries as compared to 2020.

Let's now look at Airbus commercial financials for the year.

<unk> revenues increased by 6% year on year.

Mainly reflecting the higher deliveries as compared to 2020.

The increase in EBIT adjusted is mainly driven by the delivery performance.

Speaker 3: The increase in 8-bit adjusted is mainly driven by the delivery performance.

Speaker 3: our efforts on cost containment and competitiveness.

Our efforts on.

Containment and competitiveness.

Speaker 3: In addition, we released some provisions reflecting, among others, the good progress made on the remarketing of unplaced aircraft resulting from COVID. Finally, let me remind you that our full year 2020 a bit adjusted, including included 1.1 billion euros of charges due to impairments and write-offs triggered by COVID-19.

In addition, we released some provisions reflecting among others. The good progress made on the remarketing of unplaced aircraft, resulting concluded.

Finally.

Let me remind you that's a full year of 2020 EBIT adjusted including included $1 1 billion euros of charges due to impairments and write offs triggered by COVID-19.

Yes.

Speaker 3: Looking at helicopters, in 2021, we delivered 338 helicopters, which is 38 more than in 2020. And it includes the first H160 delivery.

Looking at helicopters in 2021, and we delivered 338 helicopters, which is <unk> more than in 2020 and it includes the first <unk> hundred 60 delivery.

Revenues increased by 4% year on year to $6 5 billion.

Speaker 3: Revenues increased by 4% year-on-year to €6.5 billion reflecting growth in services and higher deliveries.

<unk> seen growth in services and higher deliveries.

Speaker 3: EBIT adjusted increased by around 14% year-on-year to 535 million euros, mainly driven by support and services, program execution and cost.

EBITA adjusted increased by 14.

14% year on year to 535 million, mainly driven by support and services from Huntington accretion and cost focus.

As a result, the profit margins towards in 2021 that eight 2% compared to seven 5% in 2020.

Speaker 3: As a result, the profit margin stood in 2021 at 8.2%, compared to 7.5% in 2020.

Speaker 3: And let's complete our review of 2021 with Defense in Space.

And <unk> completed our review of 2021 with defense and space.

Speaker 3: Revenues are slightly lower compared to 2020, mainly driven by military aircraft, partially offset by space travel.

Revenues are slightly lower compared to 2020, mainly driven by immediate <unk> graft.

Partially offset by space systems.

Speaker 3: The increase in EBIT adjusted reflects cost containment continuation. As a reminder, the performance of 2020 was impacted by the COVID-19 on multi-year projects.

The increase in EBIT adjusted reflects cost containment continuation as a reminder, the performance of 2020 was impacted by recruiting 19 on multiyear projects.

On the phone with them, we delivered eight aircraft in 2021.

Speaker 3: On the A400M, we delivered eight aircraft in 2021. We've continued with development activities towards achieving the revised capacity roadmap.

With continued with development activities towards achieving the revised capacity roadmap.

Speaker 3: Retrofit activities are progressing in close alignment with the customer.

Retrofit activities are progressing in close alignment with the customer.

Speaker 3: In the fourth quarter, we recorded a charge of €0.2 billion, mainly reflecting the updated estimates of delivery pattern of the launch contract and the associated impact on unabsorbed costs.

In the fourth quarter, we recorded a charge of $2 2 billion.

<unk>.

Mainly reflecting the updated estimates of <unk> zone of the launch contract and the associated impact on Unabsorbed costs.

Okay.

I'm sorry.

Speaker 3: sorry, risks remain on the development of technical capabilities and associated costs, on aircraft operational reliability, in particular with regard to power plants, on cost reductions, and on securing export orders in time as per the revised baseline.

<unk> remain on the development of technical capabilities and associated costs.

On aircraft operational reliability in particular with regard to power plants on cost reductions and on.

Securing export orders in time I'll spare the revised baselines.

Now, let's move to 2022 .

Speaker 3: Now, let's move to 2022. And let me read.

And.

Let me read our 2022 guidance to you.

Speaker 3: As the basis for its 2022 guidance, the company assumes no further disruptions to the world economy, air traffic, the company's internal operations, and its ability to deliver products and services.

As the basis for its 2022 guidance. The company assumes no further descriptions to the world economy Air traffic the company's internal operations.

Ability to deliver our products and services.

Speaker 3: The company's 2022 guidance is before M&A.

The company's 2022 guidance is before M&A.

Speaker 3: On that basis, the company targets to achieve in 2022 around 720 commercial aircraft deliveries.

On that basis, the company targets to achieve in 2020 to around 720 <unk> aircraft deliveries.

Speaker 3: a bit adjusted of 5.5 billion.

EBITA adjusted of $5 5 billion.

Speaker 3: and free cash flow before M&A and customer financing of $3.5 billion.

Free cash flow before him and customer financing of three five.

No.

Speaker 3: This guidance reflects our expected growth trajectory and the investments we are making to prepare our future and the future of aviation.

This guidance reflects our expected growth trajectory and the investments we are making to prepare all future industry shareholder position.

And now a few words to wrap up.

Speaker 3: And now a few words to wrap up and address key priorities.

Address key priorities.

In 2021, we delivered on our commitments.

Speaker 3: In 2021, we delivered on our commitments. We intend to do so again this year, while, as I said, we lay the foundations for our future.

We intend to do so again this year, while as I stated, we laid the foundations for our future.

We will remain focused on managing our contracts and deliveries and as we speak we have to adapt to the effects of Omi chrome.

Speaker 3: We will remain focused on managing our contracts and deliveries. And as we speak, we have to adapt to the effect of Omicron.

Speaker 3: We will also focus on further strengthening our backlog across businesses.

We will also focus on further strengthening our backlog across businesses.

Speaker 3: Ramping up our S320 family production will be at the heart of our priority.

Ramping up our FY 'twenty family pollution will be at the heart of our priorities.

Speaker 3: We continue to work closely with our suppliers to execute our plan.

We continue to work closely with our suppliers to execute our plans.

We also announced a global plan to liquids around 6000, new employees across the entire group.

Speaker 3: We also announced a global plan to recruit around 6,000 new employees across the entire group.

To support both the ramp up and the company long term projects and ambitions.

Speaker 3: to support both the ramp-up and the company's long-term projects and ambitions.

The production ramp up will also be supported by our investment in.

Speaker 3: The production ramp-up will also be supported by our investment in upgrading and transforming the industrial value chain.

Our grading and transforming the industry value chain.

We achieved major steps early in the Euro we launch the launch of our new Woody owned subsidiary <unk> homes.

Speaker 3: We achieved major steps early in the year. We launched the launch of our new Wollion subsidiary, Airbus Atlantic in France, and the agreement with our social partners in Germany to establish a fully integrated, similar aerostructures assembly company, which will be operational on the 1st of July this year, 1st of July 2021.

And the agreement with our social partners in Germany to establish a fully integrated <unk> now I will touch on this on the company, which will be operational on the first of July this year first of July 2020.

Looking forward.

Speaker 3: Looking forward, let me mention our future A321 final assembly line in Toulouse.

Let me mention our future <unk> hundred 21 final Assembly line in Toulouse.

Which we fully benefit from our latest progress in digitalization and robotics.

Speaker 3: which will fully benefit from our latest progress in digitalization and robotics.

The transformation of our company, including a continued focus on ultra Ashwin on excellence across the group is key to prepare the future.

Speaker 3: The transformation of our company, including a continuing focus on operational excellence across the group, is key to prepare the future of aviation.

Aviation.

This brings me to our long term ambition to lead the development of sustainable and aerospace, which remains at the center of what we do and who we are as a company.

Speaker 3: This brings me to our long-term ambition to lead the development of sustainable aerospace, which remains at the center of what we do and who we are as a company.

Speaker 3: We have all seen how aerospace plays a critical role in society over the last years, connecting people and culture, and driving prosperity, which will ensure the availability of the levels of investment required to meet the world's ambitious climate targets.

We have all seen how aerospace plays a critical role in society, although the lost euros connecting people and culture.

And driving prosperity, which will ensure the availability of the levels of investments required to meet the worlds ambitious climate targets mid.

Speaker 3: Making our sector carbon-free is essential to ensure aerospace can continue to play this vital role.

Making our signal carbon free SM.

Essential to ensure in our space can continue to play this vital role.

The decarbonization of Air travel is a key pillar of Airbus sustainability strategy.

Speaker 3: The decarbonization of air travel is a key pillar of Airbus's sustainability strategy, and this objective was given a renewed impetus last year with the commitment of the entire sector to reach net zero emissions by 2050.

And the subjective was given a renewed impetus last year with the commitment of the entire sector to reach net zero emissions by 2015.

Speaker 3: This was reinforced by the recent so-called Toulouse Declaration signed earlier this month by the 27 EU member states.

This was reinforced by the recent so called Todos Declaration signed earlier this month by the 27 EU member States.

Speaker 3: At Airbus, we'll continue to invest and to grow our skills and know-how in order to meet this objective.

<unk> will continue to invest and to grow our skis and knowhow in order to meet these objectives.

By maturing the enabling technology bricks and continuing to work on reducing our own emissions as a company.

Speaker 3: by maturing the enabling technology bricks and continuing to work on reducing our own emissions as a company.

Furthermore.

Speaker 3: Furthermore, our industry will ensure we benefit from peace, stability and security, without which sustainability can simply not exist.

Power industry, we can ensure we benefit from pes stability and security.

We felt which sustainability can simply not exist.

Speaker 3: As such, we remain proud to see our defence and security solutions contributing to a safe and united world.

As such we remain proud to see our defense and security solutions contributing to a safe and June 19th World.

Finally.

Speaker 3: Finally, and before taking your questions.

And before taking your questions let.

Speaker 3: Let me reiterate that delivering on our guidance will remain one of our top priorities in 2022.

Let me reiterate that delivering on our guidance will remain one of our top priorities in 2022.

Speaker 3: Strong financial results will secure our ability to invest in our long-term ambitions across our portfolio.

<unk> financial results will secure our ability to invest in our long term ambitions.

Most of our portfolio.

Speaker 3: And now we are ready to take your questions. Thank you.

And now we are ready to take your questions. Thank you.

We now start our Q&A time.

Please introduce yourself and your company when asking a question.

Speaker 2: Please introduce yourself and your company when asking a question.

Please limit yourself to two questions at this time. This concludes our question.

Speaker 2: limit yourself to two questions at a time. This includes sub-questions.

Also as usual, please remember to speak clearly and slowly in.

Speaker 2: Please remember to speak clearly and slowly in order to help all participants, particularly ourselves, to understand your question.

I would like to help all participants, particularly offset.

As part of your question.

So could you. Please go ahead and explain the procedure for the participants.

Speaker 2: So, Claude Fields, please go ahead and explain the procedure for the buttocks.

Speaker 1: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press 01 on your telephone keypad. If you wish to remove yourself from the queue, please press 02 on your telephone keypad. Participants are requested to use only handsets while asking your question. Anyone who wishes to ask a question may press 01 on your telephone keypad. The first question is from Madam Sigyn Fornaro from UBS. Madam, please go ahead.

Thank you we will now begin the question and answer session anyone who wish to ask a question press one on your telephone keypad.

We wish to remove yourself from the queue. Please press <unk> will only today. Thank you bet participants a request to use only handsets what asking your question anyone of which Jeff quick question. Your question.

When you take that.

First question is from Morgan <unk> from UBS.

Ed.

We also have the one good morning, thanks for taking my question.

Speaker 5: Oui, bonjour everyone. Good morning. Thanks for taking my questions.

Speaker 5: So, first of all, well done on the 2021 results and also it's good to see some of the non-Airbus divisions, you know, having record margins, I would say. And on that, my first question would be for the defence performance towards the last quarter of the year.

So first of all well done on the 2021 result, and also it's good to see some of the non Abbott divisions.

Having record margins I would say.

And that's my first question would be for the defense performance.

Towards the last quarter of the year.

Speaker 5: maybe a little bit the dynamics there and how sustainable that performance is and similarly for helicopters when we're thinking about you know 2022 but also maybe the midterm

Just explain maybe a little bit the dynamics, there and how sustainable that performance and similarly for helicopters.

And our 2022, but also maybe the mix.

Sure.

Speaker 5: And then my second question would be regarding your delivery outlook for 720 deliveries. If you could also maybe try to explain to us how you're thinking about the inventory levels that you're ready to, I would say, take towards this year compared to the levels that you've ended around in 2021, which was around 100. And what level do you think you would see towards the end of the year? Thank you.

And then my second question would be regarding your delivery outlook for 720 degree if at all.

But also maybe try to explain to us how you.

Thinking about the inventory levels.

We're ready to.

Take towards <unk>, congrats on the levels that you've ended around 2021, which was around 100 and what level do you think.

You would see.

Towards the end of the year. Thank you.

Okay.

Speaker 4: Okay. Thank you, Celine. Maybe I can take these questions. So on the performance of our divisions, Defence and Space and Helico, they are normally, as this year again, notoriously back-end loaded. So I would not recommend extrapolating from the Q4 performance into the future. I think what we can say is that we don't expect much change in the profitability in the coming year. We see some opportunities to gradually, over a five-year planning horizon, move the margin slightly up.

Thank you Lynn.

I can take these questions. So on the performance of our divisions, the defence and space and illegal.

Normally this year again notoriously backend loaded so I would not recommend extrapolating from the Q4 performance into the future.

I think what we can say is that we don't expect much change in the profitability.

In the coming year, we see some opportunities to gradually and over a five year planning horizon move the margins slightly up.

Speaker 4: On the question of deliveries 720 and how that would correlate with the inventories

On the question of delivery of 770 <unk>.

And how that would correlate with the inventories.

Speaker 4: First of all, yes, you're right. We mentioned that we had close to a hundred aircrafts which were finished Of course, I finished and not delivered end of last year year 2020

First of all yes, Youre right. We mentioned that we had close to 100 aircrafts, which were finished a quasi finished and not delivered end of last year.

20.

Speaker 4: End of 21, we were slightly down, so a couple handful I would say.

Some end of 'twenty, one we were slightly down so a couple a handful I would say very much wide bodies, which we could place you'll recall, we had some unplaced aircraft and we were successful in placing them not all of them have been placed so we will see further progress sorry, all of them have been placed but not delivered so that we will see in 'twenty three 'twenty four there will be delivered.

Speaker 4: very much white bodies which we could place, you recall we had some unplaced aircraft and we were successful.

Speaker 4: In placing them, not all of them have been placed, so we will see further progress. Sorry, all of them have been placed, but not delivered.

Speaker 4: So now we will see in 2023-2024 that they will be delivered so that will reduce.

So that will reduce and we will also see a.

Speaker 4: And we will also see a slight reduction on Singular. But still, let's not forget the situation is very dynamic.

Slight reduction on singular, but still let's let's forget the situation is very dynamic. So we all have to have to match the specific granular customer demand customer demand with our manufacturing and that will in that turbulent periods still mean, a certain high level.

Speaker 4: So we always have to match the specific granular customer demand with our manufacturing. And that will, in that turbulent period, still mean a certain high level.

Speaker 4: of that inventory which over time as things normalize can be worked down because pre-crisis yes we were lower with these singularized inventories at year end.

That inventory, which over time as things normalized can be worked down because pre crisis, yes, we were lower with this singular inventories at year end.

And sorry, just a quick follow up on that Dominik when would you expect the normalization of the inventories level towards 2023, or you think that would be true.

Speaker 5: And sorry, just a quick follow-up on that, Dominique. When would you expect a normalization of the inventories level? Towards 2023, or you think that would be too early?

I think it could take a little bit longer but a gradual decrease in again, we're not talking about huge numbers, we talk about a mid double digit potential there in terms of deliveries over the next two three years I'd say.

Speaker 4: I think it could take a little bit longer, but a gradual decrease, and again, we're not talking about huge numbers, we're talking about a mid-double-digit potential there in terms of deliveries over the next two, three years, I'd say.

Thank you.

Okay.

Speaker 1: Next question is for Mr. Tristan Sonson from Bank Bay Paribas Exxon. Please go ahead.

Our next question is from Mr. Tristan Sanson from BNP Paribas. Please go ahead.

Thanks, Tom.

Now we took it I'm sorry can you hear me yes.

Yes, its okay now.

Speaker 6: And apologies for that. So it's Tristan from DNP Paribas. So first question, please. Guillaume, can you give us a few hints of where you see the bottlenecks, the main bottlenecks that you need to monitor?

Apologies for that facilities placed off identify though.

So first question please.

Jim can you give us a few Hughes of where you see the Boston next the main bottlenecks that you need to monitor.

Speaker 6: in the management of deliveries in 2022? Is it as a delivery center? Is it on the supplier side? Is it HR related?

In the management of deliveries in 2022 is it as a delivery center.

On the supplier side is it HR related.

Speaker 6: That would be quite helpful. And maybe a question for Dominic, if you could give us some elements of the main moving parts of the bridge for 2022. You provided some helpful comments of about 150 million euro of cost increase from R&D. What are the other big moving parts that we should be aware of for 2022?

It would be quite helpful and maybe a question for <unk> you could give us some other months.

Main moving parts of the bridge for 2002, you provided some helpful comments also about 150 million euro of cost increase from R&D.

What are the other big moving parts, we should be well.

Yes.

Yes, maybe I'll take the first one.

Speaker 3: Yes, maybe I'll take the first one, hello Tristan, well the bottleneck at the moment and most probably for the whole year is on the supply chain.

Keystone.

The bottleneck at the moment and most probably for the woodyard is on the supply chain.

Speaker 3: and with a large diversity of situations. What are the root causes of those bottlenecks at the supply chain? Well, that's just basically having been idle for.

And with a large diversity of situations what are the root causes of those bottlenecks or supply chain when <unk>.

Been idled for for a while with COVID-19, having to ramp up again in a very complex environment.

Speaker 3: for a while with COVID-19, having to ramp up again in a very complex environment of high prices and scarcity of raw material, difficulties with logistics around the world and incredible prices, by the way, energy situation is complex.

Hi price seasons scarcity of raw materials.

Difficulties too with logistics around the world and incredible prices by the way.

Energy situation is complex and.

Speaker 3: a number of places around the world and for a number of skills where it's really difficult to find the resources again. But at Airbus, we don't have too much of this HR challenge.

Number of places around the world and phone number of Skus, where it's really difficult to find the resources again.

We don't have too much of these HR challenge.

Speaker 3: this year in 2022. We think 2022 will be okay. Moving forward, this will continue to remain a point of attention.

This year in 2022 within 2022 will be okay. Moving forward. This will continue to remain a point of attention.

Maybe on the bridge from the extra the $4 9 billion EBIT adjusted in 'twenty, one through the $5 five this guidance for 2012.

Speaker 4: Maybe on the bridge from the actual 4.9 billion EBIT adjusted in 2021 to the 5.5 we've guided for 2022.

Speaker 4: So you mentioned already the R&D increments. So we are stepping up the R&D effort to $2.9 billion. That's a couple hundred million roundabout. We will also resuscitate and accelerate on our digital roadmap, including the famous DDMS project, which is paramount to our future success and competitiveness.

So.

You mentioned already the R&D.

Increments. So we are stepping up the R&D effort with $2 9 billion with a couple of hundred million dollars all about we.

He will also resuscitate and accelerate on our digital roadmap, including the famous <unk> project, which is paramount to our future success and competitiveness.

Speaker 4: And will we do time to market, another 0.2 billion-ish?

And we'll reduce time to market.

Another.

2 billion ish.

And last but not least we'll also invest more than in the prior year in the ramp up securitization because of these challenges you were mentioning so altogether that's cutoff.

Speaker 4: And last but not least, we'll also invest more than in the prior year in the ramp-up securitization because of these challenges you were mentioning. So altogether, that kind of investment in the future, as we call it, and again, it's technically not investment, it's expenses, is half a billion roundabout.

Investment in the future as we call it and again its technical level of investment expenses is up 1 billion roundabout.

If I add the kind of.

Speaker 4: protection we take on inflation risks and the $0.02 of dollar depreciation, that's another half billion. So take that together, you're at a billion.

Protection, we take on inflation risks and the two cents of the dollar depreciation that's another half period. So you take that together you're at $1 billion and then let's not forget that is the kind of non repetition of these releases of provisions which are about <unk> 4 billion. So if you take all that together, you'll see that for the incremental aircraft deliveries and don't forget in the <unk>.

Speaker 4: And then let's not forget there is a kind of non-repetition of these releases of provisions which are about 0.4 billion. So if you take all that together, you see that for the increment of aircraft deliveries and don't forget in the increment, there are also A220s which don't add margin, we actually do a pretty good job to bring the incremental deliveries to a healthy contribution margin addition, including the mix.

Increment. There also 800, Twenty's, which don't add margin, we actually do a pretty good job to bring the incremental deliveries to a healthy contribution margin addition, including the mix effect.

Speaker 4: We had 46% A321 deliveries in 2021. And you see the backlog disclosed is now at 59% A321. So that will also help to add the margin from the incremental delivery. So that's how you can easily walk from 21 into 22. That is great.

We had 46% <unk> hundred 21 deliveries in 2021 and you see the backlog disclosed is now at 59% <unk> hundred 21. So that will also help to add the margin from the incremental delivery. So that's how you can that will easily walk from 'twenty one to 'twenty two.

That's great color. Thank you.

Thank you Sir our next question is from Mr. Benjamin <unk> from Bank of America Merrill Lynch. Sir. Please go ahead.

Speaker 1: Thank you, sir. Next question is from Mr. Benjamin Heaton from Bank of America Meridian. Sir, please go ahead.

Speaker 7: Yeah, morning guys. Thanks for the question. So I've got a question first on the production rates for the 320. You said you're still in the assessment phase for Beyond 23. When do you anticipate that you can make some decisions here and what do you see as the hurdles to this? Is it demand? Is it supply chain? I think you've just talked about supply chain, so any incremental color there would be great. And then my second question is on the kind of more medium term. I think in your key priorities, you highlight that you're focused on cash and earnings growth Beyond 22. How should we think about the margin potential of this business medium term and any potential for a capital markets day at some point? Thank you.

Yes. Good morning, guys. Thanks for the question. So I've got a question first on the production rates to the 320.

And you said you said in the assessment phase for beyond 2003, when do you anticipate.

You can make some decisions here and what do you see as the head of today is it demand is it supply chain and Keith just talked about supply chain side.

Any incremental color that would be great and then my second question.

Is on the kind of more medium term I think in your key priorities you highlight that you're focused on cash and earnings growth beyond 'twenty two how.

How should we think about the margin potential of this business medium term and any potential for a capital markets day at some point. Thank you.

Yeah.

Speaker 3: I will let the question two and three to Dominique. Hello Ben, good speaking to you. Production rates, well that's front and center for the first half of this year. We want to be in a position to decide by mid of the year.

We let the Cushing to in situ to Dominik.

And <unk> been good speaking to you <unk>.

Production rates.

That's contact center for the first half of this year.

We want to be in a position to decide by mid of the year.

Speaker 3: And this would be the right timing for decision for 2024-2025, so that's why we're targeting mid of the year.

And this would be the right timing.

<unk> decision for 2012 25, so that's why we are targeting mid of the year.

Speaker 3: And it will be all about the balance between demand, and the demand is very strong. We could go quite high, actually, if we would just look at the demand. But we have to balance it with the supply and the supply capacity.

And each will be all about the balance between demand and the demand is very strong we could go quite high actually if we would just look at the demand, but we have to balance it with the supply and the supply capacities.

Speaker 3: And as I said before, the result of the assessment of the world's supply chain and its capacity and willingness to go to higher levels.

And as I said before the results of the assessments of the world supply chain and its capacity and willingness to go to higher rates and we need to look at it.

Speaker 3: and we need to look at it over time. We need to have sustainability of the rate we will consider for beyond the mid of 2022.

Over time, we need to assist and ability of the rates we will consider.

Beyond the need of 2023.

Speaker 3: So the short answer is, by mid of this year, we want to have concluded on what we do for 24, 25, and beyond.

The short answering by middle of this year, we want to have concluded on what we do for 'twenty four 'twenty five and beyond.

Speaker 3: Dominic, the two other ones? So on the margin prospect, I mean, now we've guided 22. So I think you have quite solid data points to start extrapolating a little bit from 21, 22, and into the coming years. Yeah, it's clear that there are certain opportunities we have, because the year is 23.

Dominik the two other ones so on the margin.

Prospect I mean now we've guided 22, so I think you have quite solid data points to start extrapolating a little bit from 'twenty, one 'twenty two.

Into the coming years, yes, it's clear that there are certain opportunities we have because of the year is 23.

Yes.

Speaker 4: still burdened by a lot of activities. I mean, there is the introduction of the XLR, which is, of course, only giving us the harvesting 24-25 timeframe. And freighter entry into service 25, where we have now all the burden of the investment, and then we'll benefit. And yes, on the R&D.

Burdened by a lot of activities I mean, the introduction of the <unk>.

<unk>, which is of course, only giving us the harvesting from 2435 timeframe.

Greater entry into service 25, where we have now all the burden of the investment and then we'll benefit.

And yes on the R&D.

Speaker 4: And we're also stepping up BDMS, the project I just mentioned, is kind of the highest spent rate in these years, 23, 24. So there is opportunities to expand the margin. I mentioned the mix, the positive mix, that we have 59% of A321 in the backlog.

Have you also stepping up.

The project that just mentioned is cutoff.

Spend rate in these years 'twenty three 'twenty four or so so there is opportunities to expand the margin I mentioned the mix the positive mix that we have 59% of <unk> hundred 21 in the backlog now the reason why we don't want to give a specific guidance, what I would say middle of the decade.

Speaker 4: Now, the reason why we don't want to give a specific guidance for, say, middle of the decade is that we have a couple of imponderabilities which are still quite speculative. So what's the widebody pricing on the open slots?

Is that we have a couple of important abilities, which are still quite speculative what's the widebody pricing on the open slots in the timeframe that we have the big question about inflation now what does it really mean in the short term as I mentioned, we can handle quite quite well, but in the longer term it might cause an issue and then.

Speaker 4: in the time frame. We have the big question about inflation now. What does it really mean in the short term? As I mentioned, we can handle it quite

Speaker 4: quite well, but in the longer term it might cause an issue. And then there is always the question of R&D, invest, what's the product policy, what reaction is needed towards what the competitor is doing, so that's out of our control. And all these topics together make us cautious in terms of really giving you a precise number. But yes, there are ingredients which give us hope that there is potential to go to higher margins beyond 22, 23.

There is always the question of R&D invest of both the product policy what reaction is needed sem towards what the competitors doing so that's out of our control and all of these topics together make us cautious in terms of really giving you a precise number but yes. There are ingredients, which gives us hope that there is potential to go to higher margins beyond 'twenty two 'twenty three.

Okay and capital market stay at some point is that something that you've thought about.

Speaker 7: OK, and Capital Markets Day at some point, is it something that you've thought about?

Speaker 3: that to Hélène to comment. I would like to do one, let's put it that way. But again, I mean, it's more that we regularly have done it in the past. Don't expect any miracles on that day. I think one topic we want to really, really work on is on also the ESG related topics. There's always a debate about defense, which is currently heating up. I think we need to invest time with our investors. So I'm looking for opportunities to do that. Yes.

And then to comment.

I would say our dividend.

I would like to do one let's put it that way, but again, it's more that we regularly have done it in the past don't expect any miracles on that I think one topic you've done a really really work on is on also the ESG related topics.

There's always a debate about defense, which is currently heating up I think we need to invest in time with our investors. So.

Looking for opportunities to do that yet.

Cool Thank you guys.

Speaker 1: Thank you, sir. Next question is from Mr. David Perry from DP Morgan. Please go ahead.

Thank you Sir our next question is from Mr. David Perry from Jpmorgan. Please go ahead.

Speaker 8: Yes, good morning Graeme and Dominic. So my two questions. The first one, yesterday afternoon some headlines popped up on Reuters about Airbus undertaking a review of its defence activities. So maybe Graeme you could...

Yes, good morning agreement and Dominic So my two questions. The first one yesterday afternoon, some headlines popped up on voice.

Voices about Airbus undertaking a review of its defense activities. So maybe Glen you could make some comment on that if there's anything to say.

Speaker 8: make some comment on that if there's anything to say. The other one is also some press reports a few days ago of the threat of a strike in the UK. I believe it's about policy on a pay. So just more broadly, I mean, in this high inflation world, what will your policy be on pay? And can you just remind us how much of it will be covered, any pay increases are covered by the escalation clauses?

The other one is also some press reports a few days ago.

The threat of a strike in the U K I believe it's about policy on a peg. So just just more broadly I mean in this high inflation world what would your policy.

And can you just remind us how much of it will be covered and you pay increases are covered by the escalation clauses and Keith.

Right.

Speaker 3: So I'll take those questions, thank you. I think the first one is you're referring to the paper on the defense review at Airbus. Well, there's no real news here. We are conducting strategic reviews with the board on our different business lines every year and that's something I believe we'll continue to do. And I think that's what the paper was about, so there's nothing I can comment.

I'll take those questions. Thank you.

I think the first one is you are referring to the.

Paper on the defense, we view at Airbus.

Sure.

There is no news here.

On the team.

<unk> reviews with the bolt on on the home business lines is the euro.

And that's something I believe we'll continue to do and I think thats whats to the paper was about so.

Nothing I can comment on that topic.

Speaker 3: um strike in the uk

Striking the U K.

Speaker 3: Let me take maybe a step back. We had two very difficult years. I think Airbus employees have really done a great job.

The.

Let me take maybe a step back we had two very difficult channels I think abbott's employees have really done a great job.

Speaker 3: As you have seen, we have decided to put the dividend again in place.

As you have seen we have decided to.

Could the dividend.

Again in place and.

Speaker 3: And that's about moving forward now and finding the right balance between the different stakes, the short-term, the mid-term, the long-term. And I respect the fact that employees want to to have a fair share of the results that they have contributed to to create. So we need to find a solution case by case. You might remember we had a situation to manage.

That's about <unk> moving forward now in finding the right balance between the different stakes.

Short term the near term the long term and I respect the fact that employees want to have reception.

The results that they.

Contributing to create so we need to find a solution case by case you might remember we had a situation to manage a similar situation to manage in Germany by end of last year, we resolved the institution by negotiation, we are controlling the company to find solution and to work together.

Speaker 3: a similar situation to manage in Germany. By end of last year, we resolved the situation by negotiation. We have a culture in the company to find solution and to work together for the good of the company. And I guess that's what we will do again in that.

For the good of the company and I guess Thats, what we will do again in that case.

Speaker 3: Moving forward, and Dominique made some comments about it, there are a number of areas of uncertainty we think will continue to perform, but we need to be all together finding those right trade-offs to make sure this will continue to be the case, and that's the kind of discussion we are used to have with our unions and social representatives and employees, and that's what we're going to do in the UK as well.

Moving forward into Dominion made some comments about it there are a number of areas of uncertainty. We think will continue to perform but we need to be put together finding those right tradeoffs to make sure. These will continue to be the case and thats. The kind of discussion we are used to have with our.

Unions, and social Representatives and employees and Thats, what were going to do in the UK as well.

Speaker 8: Okay, thank you. And maybe just to clarify, if there are pay increases, I mean, what is allowable in the escalation clauses in the contracts with the customers?

Okay. Thank you and maybe just to clarify if theyre all pay increases I mean, what is allowable in the escalation clauses in the contracts with the customers.

Speaker 3: Well, there are pay increases given the environment we're in, and given the fact that we were very prudent in 2020 and 2021, so it's clear that there will be increases in the pay.

They all pay increases given the environment, we're in and given the fact that we were very prudent.

2020 in 2021, so it's clear that there will be increases in the PE.

The.

And in the contracts.

Speaker 3: are taking reference to indexes which are by far more general data points and there is no direct correlation between what we do on salary in one country or one division and where the contracts are protecting us.

Taking risks Ernst to indexes, which are by far more general data points and there is no direct correlation between which we do on salary in one country or one division.

And.

Where the contracts protecting us.

Speaker 3: on inflation and the way escalation is managed. So we have an overall protection from the contract, and then we have to manage our costs, and by the way, all costs, to make sure this remains quite balanced. And in a situation where inflation is popping up very quickly and to a very high number, that's quite of a challenge, and that's what Demit tried to explain before.

Inflation.

With conditions manage so we have an overall protection from the contract and then we have to manage our cost and by the way all costs to make sure. This remained quite balanced and in a situation where.

<unk>, putting a very quickly into very high number.

Quite a challenge and that's why it's the new <unk> seen before.

Okay. Thank you very much.

Thank you.

Speaker 1: Thank you, sir. Next question is from Mr. Neil Green from Credit Suisse. Sir, go ahead.

Thank you Sir our next question is from Mr. Neil Glynn from credit Suisse.

Ed.

Speaker 9: Good morning, everybody. I'll also ask two questions, please. The first one is following on from the previous comment on R&D over the medium term. I appreciate there are moving parts here, but just interested in your take as to whether the R&D level will eventually step up from the 2.9 in 2022 towards a 2019 level of 3.4 or something like that. I'm keen to understand how you think about that progression and recovery.

Well good morning, everybody.

Two questions. Please the first one following on from the previous comment on R&D over the medium term I. Appreciate there are moving parts here, but just interested in your take as to whether the R&D level will eventually step up from the $2 nine in 2022 towards 2019 level of $3 four or something.

Like that.

Towards the fab, how you think about that progression and recovery.

Speaker 9: Then the second question, you mentioned a low level of customer financing not sustainable and obviously that's been very, very low for some time.

The second question, you mentioned, a low level of customer financing not sustainable.

And that's been very very low for some time.

Speaker 9: Could you give us some additional color as to whether the issue changing your, I guess, necessary approach to that activity is driven by pockets of weakness, for example, in Southeast Asia? Or are there any other changes you're observing in the appetite from financiers as interest rates rise that may prompt you to have to step into the breach? Thank you.

Could you give us some additional color as to whether it's the issue changing your.

Necessary approach to that activity is driven by pockets of weakness for example in southeast Asia or are there any other changes you are observing in the appetite from finance here as interest rates rise that may prompt you to have to step into the breach. Thank you.

Yes, so on R&D.

Yes, I think as a trend, we see R&D scaling a little bit with the deliveries going up.

Speaker 4: Yes, I think as a trend we see R&D scaling a little bit with the deliveries going up and I think your assessment is a reasonable starting point But once we're back to what we've seen in 2019, we might be at a similar level of R&D So there's nothing I can say that would make that kind of unplausible

And.

I think your assessment is a reasonable starting point.

But once we are back to what we've seen in 2019, we might be at a similar level of R&D.

So there's nothing I can say that could make them.

<unk>.

Speaker 4: But as I said, also we need to review year by year what we exactly do there. On the customer financing, what we wanted to highlight is that we have been really going down and reducing that exposure to close to nothing.

But as I said also we need to review year by year, what we exactly do there on the customer financing. What we wanted to highlight is that we have been really going down and reducing that exposure too close to nothing.

Speaker 4: We do have some certain obligations going forward like buybacks, you've heard some stories on A380 buybacks, some financing will be required. We don't see that the market itself will weaken, I mean obviously we have to monitor the interest rate environment, should there be a massive increase in interest rate.

We do have certain obligations going forward like buybacks you've heard.

Some stores or on <unk> hundred 80 buybacks.

Some financing required we don't see that the market itself will weaken I mean, obviously, we have to monitor the interest rate environment should there be a massive increase in interest rates that might have a negative impact.

Speaker 4: That might have a negative impact, but on the other hand, that has positive impacts for Airbus. Recall, we have a net cash position, we have a pension liability, which would benefit from higher interest rates.

On the other hand, it has positive impacts for Airbus recall, we have a net cash position, we have a pension liability, which would benefit from higher interest rates.

Speaker 4: So, these are the things that we look at. I just wanted to highlight that the fact that we reduce our finance portfolio every year is not something we can continue because simply it's close to zero and that there are some obligations we need to fulfill going forward.

So these are the things that we look at I just wanted to highlight that the fact that we would do with our up into financing portfolio every.

Every year is not something we can continue because simply it's close to zero and that there are some obligations, we need to fulfill going forward.

Understood. Thanks.

Speaker 1: Thank you, sir. Next question is from Madame Mylène Kerner from Barclays, and please go ahead.

Thank you Sir our next question is from again from back Barclays. Please go ahead.

Yes.

Speaker 2: Thank you for taking my question. I have two related to the free cash flow. First, Dominique mentioned that the A400M cash outflow was lower in 2021 than it was in 2021.

Denis Canon and everyone. Thank you for taking my question I have two related to the free cash flow.

First Dominic you mentioned that the April .

Damn cash outflow was lower in 2021 than it was in 2020.

Speaker 2: Could you comment what you expect for 2022 and the total amount that is left to cash out over what time frame? And then secondly, also can you help us, how should we think about the PDP inflow from now on as you're going to ramp your production on the E320?

Would you comment what you expect for <unk>.

22, and the total amount that is left to cash out over what timeframe and then secondly also can you help us how should we think about the PDP inflow from now on as Youre going to ramp your production on the <unk>. Thank you.

I mean on that Christian of April and I would like to add also the April 'twenty. Because these are the two big blocks, which caused a kind of negative bridge from.

Speaker 4: I mean, on that question of A4 and M, I would like to add also the A220, because these are the two big blocks which have caused a kind of negative bridge from...

Speaker 4: in cash conversion, so from the earnings down to the free cash flow, and the guidance I want to give you is that for this year, 2022, I think that the sum of the two will be a headwind in that cash conversion calculation of about half a billion. I don't want to sing loud any of the two, but that's just the rough order of magnitude. There is a little bit of headwind left from provision payouts for restructuring and from cash flow. So, let's go ahead and get started. So, let's go ahead and get started.

And cash conversion so from the earnings down to the free cash flow and the guidance I would give you is that for this year 22, I think that the sum of the two will be a headwind in that cash conversion calculation with about half a billion I don't want to single out any of the two but that's just the rough order of magnitude.

Little bit of.

Headwinds left from provision payout for restructuring and from.

The.

Yes.

Speaker 4: the compliance case where we will need to spend some money. And this is explaining why we go from the $5.5 billion EBIT adjusted down to a $3.5 billion free cash flow. So it also shows you that if you adjust for these two effects I mentioned, we actually are on a super trajectory to convert EBIT into cash at once. So it's actually quite solid for 2022 if you think about these headwinds, which, as you know, will stop over time or reduce over time.

The and compliance case, where where we would need to spend some money and this is explaining why we go from the $5 5 billion EBIT adjusted down to a $3 5 billion free cash flow. So it also shows you that if you adjust for these two effects I mentioned.

Actually are on a super trajectory to convert EBIT into cash at work.

It's actually quite quite solid for 2020, if you think about these headwinds, which as you know will stop overtime or reduce overtime.

Speaker 4: PDP flows, you have heard us comment on this deferral discussion that we basically were clinging on to our PDPs in the COVID times, have been deferring aircraft. You've seen that this has cost us quite some cash flow in 2021.

PDP flows you have heard us comment on this deferral discussion that we basically were clinging onto our PDP is an appropriate times have been deferring aircraft you have seen that this has caused us quite some cash flow in 'twenty one and.

Speaker 4: And you have already disclosed the full cash flow statement, so you see what's happening there.

You have already disclosed the full cash flow statement, so youll see whats happening there.

Speaker 4: It was less pronounced than what we thought because we had actually a very good commercial activity. We were collecting a lot of PDPs in 2021 and that combination of seeing less of that hangover of the COVID kind of issue plus picking up in commercial activity should bode well for actually the cash conversion and we should not see a repetition of such a negative PDP inflow in 2022.

It was less pronounced than what we thought because we had actually a very good commercial activity. We're collecting a lot of PDP in 'twenty, one and that combination of seeing less of that hangover of the <unk> cutoff issue plus picking up and commercial activities should bode well for actually.

The cash conversion and we should not see a repetition of such a negative PDP inflow in 2000.

Thank you very clear.

Speaker 1: Thank you, madam. Next question is from Mr. Christophe Menard from Deutsche Bank. Please go ahead.

Thank you Martin next question is from Mr. Stefan <unk> from Deutsche Bank. Please go ahead.

Speaker 10: Yes, good morning. I had two quick questions. Could you comment please on the supply chain constraint, raw material and logistic cost? Have you seen any worsening of the situation? I mean, following your comments in January , essentially. And I'll follow up on the second question afterwards.

Hi, Yes, good morning, I had two quick questions could you.

Common piece on the supply chain constraint raw material and logistic costs.

Have you seen any worsening of the situation.

I mean following your comments in January essentially I'll follow up on the second question.

Speaker 3: No, I would not single out significant modifications.

No I would not.

<unk> significant modifications since <unk>.

Speaker 3: Since January , that remains the same environment, nothing significantly different.

Generally that means the same environments.

Nothing significantly different.

Speaker 10: And no, nothing on titanium, for instance, and still.

And.

Nothing on the titanium for instance, still.

Speaker 10: You're not seeing any additional constraint on that specifically, I'm not sure.

Youre not seeing any additional constraint on that specific loan mature.

No.

Speaker 10: And the second question was on the 2024-2025 production levels. We understand it's a supply issue with suppliers. Is it also tied to their capacity to deliver some cost reduction? Is your decision linked to or fostered by their ability to cut the cost? Or is it just, I mean, to ensure the supply of parts?

And the second question was on the.

2020 for 2025 production levels.

Is I mean, we understand it's a supply issue with suppliers.

It also tied to their capacity to deliver some cost reduction I easier decision linked to oil.

Fostered by their ability to cut the cost or is it just.

To ensure the supply of off parts.

Speaker 3: We are having discussions on rates and on cost at the same time with suppliers.

We are having discussions on.

On the rates.

On cost at the same time, we have suppliers.

Speaker 3: But I guess the outcome of the decision will be mainly the results.

I guess the outcome of the decision will be mainly the results of that.

Speaker 3: of the ability of the supply chain to do that ramp-up and having the certainty on the demand side that there is enough sustainability in the demand to make sure that once we have ramp-up we can stay at a higher level of ramp-up. We don't want to ramp-up at a peak and then ramp-down immediately. That would be meaningless for most of us.

The ability of the supply chain too.

To do that and I think the certainty on the human side that there is.

Sustainability in the demand to make sure that once we have home hub, we can stay at the higher level of Lumpiness, we don't want to ruin per tablet pekin enrolled on community that would be meaningless for most of us. So that's a complex balance of the different stakes and Thats why it takes time and when we get there we have to stick to what.

Speaker 3: So that's the complex balance of the different stakes. And that's why it takes time. And when we get there, we have to stick to what we have decided.

We will have decided so balloons between demand supply and the ability to keep that level of activity from Hawaii.

Speaker 3: balance between demand, supply, and the ability to keep that level of activity for a while.

Okay. Thank you very much.

Thank you Sir our next question is from Mr. Paulo from vertical research. Please go ahead.

Speaker 1: Thank you, sir. Next question is for Mr. Robert Staller from Vertical Research. Please go ahead.

Thanks, so much good morning.

Speaker 11: Thank you. A couple of questions from me. First of all, Guillaume, on the whole Qatar issue, has this had any negative ramifications on the broader A350 demand environment? So I was wondering if you could comment on that. And then Dominic, for you, you've given us quite a few components on the 2022 cash guidance, but I was wondering if you could give us some idea of your assumptions on what working capital is going to be doing.

Good morning, Hi, good morning couple of questions.

A couple of questions from me.

First of all Jim.

On the whole Qatar issue as this had any negative ramifications on the broader <unk> hundred 50 demand environment.

I Wonder if you could comment on that and then Dominic <unk>, you've given us quite a few components on the 2022 cash guidance, but I was wondering if you could give us some idea of your assumptions on what working capital is going to be doing thank you.

Speaker 3: I take the first question. No, I don't see any impact on the broader A350 situation. And as you have seen, we are quite successful on the launch of the A350 freighter. The commercial launch is now a number of customers having signed or committed to the A350 freighter in the last month. So, no, I don't see any repercussions so far.

I can tell you. The first question no I don't see any impact on the border of FTC tuition.

<unk>.

As you have seen we are quite.

Quite successful.

On the launch of the <unk> <unk> launch is now in a number of customers I think signs are committed through the <unk>. During the last months. So no I don't see an execution so far.

Okay. So on working capital I mean I already.

Speaker 4: Okay, so on working capital, I mean, I already hinted to some of the topics.

Some of the topics.

Speaker 4: The first big thing is always the kind of net PDP flows, which you find under contract assets and liabilities in the cash flow statement, which was a negative $2.3 billion in 2021. And I mentioned that this will come to an end because we will start collecting better PDP. So I'm anticipating that this is really turning neutral, if not slightly positive.

The first big thing is always the net PDP flows, which you'll find on the contract assets and liabilities and the cash flow statement, which was a negative $2 $3 billion in 'twenty, one and I mentioned that this will come to an end because we will start collecting better PDP. So I'm anticipating that this is really turning neutral it looks slightly positive.

Speaker 4: On inventories, yes, while on the one hand we can still divest some of the finished goods and get cash out of them, there is a big heavy lifting happening on the single island ramp, so I see that more as a trend, as a headwind on working capital. And then there are some other accruals where, for instance, we had a very strong...

On inventories, yes, while on the one henriquez still.

Divest some of the finished goods.

And get cash out of them there is a big heavy lifting happening on our single aisle ramp so I see that more as a.

From a trend.

It is a headwind on working capital.

And then there are some other accruals where for instance, we had a very strong.

Speaker 4: target achievement in 21 and now this needs to be paid in 22, so these are the hints I can give you. But overall, if you form it all together and embark the big items like A4.M and the

Target achievement in 'twenty one.

Now.

This needs to be paid in 2002.

So these are the hints I can give you, but overall if you followed it altogether.

And embark the.

Big items like <unk>.

And the.

Speaker 4: A220 headwind because of loss-making contract provisions which are used.

820 headwind because of loss, making contract provisions, which are used to offset the cash burn and give you a neutral EBIT on cash burn.

Speaker 4: to offset the cash burn and give you a neutral ebbet on cash burn, 3.5 billion is what kind of embarks all of that.

The $3 5 billion is it.

What kind of inbox all of that.

That's very helpful. Thank you.

Thank you Sir our next question is from Mr. Andrew Humphrey from Morgan Stanley Sir.

Speaker 1: Thank you, sir. Next question is for Mr. Andrew Hemphrey from Morgan Stanley . Sir, please head.

Speaker 3: Good morning and thank you. Could I come back to defence and David's question earlier? I've got a couple on that if I may.

Hi, good morning, and thank you could I come back to defense.

And David's question earlier.

Couple of them that if I may.

Speaker 3: Would it be fair to assume that this year's review of defence activities and strategy

Would it be fair to assume that this year's review of defense activities and our strategy is focused on primarily on SaaS.

Speaker 3: is focused on, or primarily on, FCAS and

Yes.

Okay.

Speaker 3: what are the scenarios you're considering in relation to that?

The scenarios, you're considering in relation to that.

The second question is.

Speaker 3: What are the areas where you perceive a most pressing or acute need for strategic partnership?

What are the areas where you perceive.

Pressing or acute need for strategic partnership and defense.

Speaker 12: So, FCAS is obviously an important part of the defense review, but the strategy is not FCAS. It's one brick of the strategy. We are already in partnership in many areas in defense, and that's very much the nature of the defense business, especially in Europe , and I will not comment on what we consider on.

So if cash is obviously an important part of the.

The defense review, but the strategy is.

Yes.

It's one week of the strategy.

We are already in partnership in many areas.

In defence and that's very much the nature of the defense business, especially in Europe .

I will not comment on what we consider in line.

Speaker 12: should be doing for the future. That's part of the strategic review and that's not something

We should be doing for the future on it that's part of the strategic review and.

That's.

And that's something that we comment on.

Okay. Thank you.

Thank you Sir our next question is from Mr. Harry breach from Stifel. Please go ahead.

Speaker 1: Thank you, sir. Next question is from Mr. Harry Breach from CIFO. Please go ahead.

Yes can you can you hear me.

Speaker 4: Yes. Good morning, Kier. Good morning. Thank you. Good morning, Kier. Good morning, Dominic. Thank you for taking my question. Just two for me. First, maybe A400M revision to the delivery schedule, small charge that you announced today. Good.

Yes, loud and clear okay. Thanks.

<unk> good morning, good morning, gentlemen, thank you for taking my question.

Just two from me.

First maybe a 400 today.

The revision to the delivery schedule small charge that you've announced today.

Right.

Can you can you give us any any understanding or in light of when we can get to stable production rates stable cost of completion and the order backlog the order intake will need need to get that.

Speaker 8: Can you give us any understanding or any light of when we can get to stable production rates, stable cost at completion, and the order backlog or the order intake? We'll need to get.

Speaker 8: And second one, maybe more generally on the sales campaign activity, we had a very strong end to last year. You know, I think the Dubai Airshow, the commercial success you had there, you know, certainly surprised me very strongly. Can you give us some sense about the level of sales campaign activity at the moment?

And second one maybe more generally on the sales campaign activity, we had a very strong end to last year.

By Ash shows.

As a success you had that certainly surprised me very strongly.

Can you give us some sense about the level of sales campaign activity at the moment.

Speaker 8: Is it, would you still characterize it as being strong? Is it strong and getting stronger, about the same? Any hesitation caused by Omicron? Any feeling for that?

Would you still characterize it as being strong as it is strong and getting stronger about the same and the hesitation caused by omicron.

So that would be.

Yeah, maybe on starts <unk> speaking by the second one.

Speaker 12: Yeah, maybe I'll start Guillaume speaking by the second one.

Speaker 12: Yes, the end of the year was very strong in terms of bookings, and it was also a bit of a surprise for me compared to what we were expecting a year ago, but indeed it represents an acceleration that is a steady beginning of this year.

Yes, the <unk>.

End of the year was very strong in terms of.

Bookings in.

It was also a bit of a surprise for me compared to what we were expecting a year ago.

Indeed, it presents an acceleration.

It is steady.

Beginning of this year.

Speaker 12: It's very much in line with what I said with the airlines being now very active to look into the future, becoming by far more optimistic, looking beyond Omicron for sure on the future.

It's very much in line with what I said with the airlines be noga reactive to look into the future becoming by pharma optimistic looking beyond <unk>.

<unk>.

Domestic markets, but as well for international flights and long distance lines. So.

Speaker 12: domestic markets but as well for international flights and long-distance flights.

Speaker 12: So I would consider it as a trend, as a solid trend.

So I would consider it as a trend as a solid trend.

Speaker 12: always remaining very prudent when it comes to forecasting the future but yes it's very active at the moment and we see as well that the Singapore air show is a bit of that nature so I take it as something that is that is rather positive moving forward.

Always remain very prudent when it comes to forecasting the future, but it's very active at the moment and we see as we are in the <unk> is a bit of that nature.

So I take it as something that is.

It is another positive moving forward.

Speaker 4: I mean, you mentioned the charge we've taken before, yes, there's still a charge, but I would also like to mention that if you compare how we've kind of reduced these charges over time, they're really kind of...

And if you want to take the other one on <unk> hundred <unk> I.

I mean, you mentioned the charge we've taken Q4, yes.

But I would also like to mention that if you compare <unk> cutoff we.

<unk> reduced these charges at what time do you really kind of converging in stabilizing the program is a very tricky program. So you can never be entirely sure, but we think the worst is behind us and on top of that we had some export success.

Speaker 4: converging, stabilizing. That program is a very tricky program, so you can never kind of be entirely sure, but we think the worst is behind us. On top of that, we had some export successes.

Speaker 4: And the assumptions we have embarked in our provisions in loss-making contract provisions on the program are such that we feel confident that we should be on the right trajectory. And so all what we can see today is that we are not anticipating huge charges going forward and that the trend is our friend actually.

And the assumptions, we have embarked on our provisions and loss, making contract provisions on the program.

Such that we feel confident that you should be on the right trajectory.

So all what we can see today is that we are not anticipating huge charges going forward and that the trend is our friend actually left.

Speaker 9: Dominic, you spoke earlier on about the level of cash burn on A400M, I think together with the A20, I think you talked about around a half billion number, what sort of run rate level should we think about maybe in next year in 2023 or 2024 for those two programs and do they get to break even in cash out in any year? Yeah. Absolutely. Absolutely.

Okay.

You spoke earlier about the about the level.

Cash burn on a 400 Gabon.

Together with the <unk>.

Thank you Bob around a half billion number.

When do we sort of run rate level should we think about maybe.

And next year in 2000 22024 for those two programs and did they get to breakeven and cash out in EMEA.

Speaker 4: First, I have to highlight we are not talking about the cash burn directly here. What I mentioned is the offset between earnings and cash that's different. Because we will also have some losses on A220, so there's higher cash burn than what is embarked in that 500 million-ish for both of them.

First I have to highlight we're not talking about the cash burn directly here, what I mentioned is the offset between earnings and cash.

Because we will also have some losses on April 20.

So there is higher cash burn than what has embarked in that $5 million for both of them.

Speaker 4: I mean, I mentioned we had half a billion roundabout last year, so in the year prior, it was lower this year. So we're trending down. We're trending towards kind of, I'd say, low triple-digit numbers over the coming years every year. But it should also be over next couple, two to three years. So we're not talking about massive cash out on the A400M. It's stabilizing and trending down to levels which are clearly below the half billion or so we've seen in the prior years.

I mean, I mentioned, we had half a billion run above last year for the year. Prior it was lower this year. So we are trending downward trending towards kind of let's say low triple digit numbers over the coming years every year, but it should also be over the next couple two to three years. So we're not talking about massive cash out on the April them.

It's stabilizing and trending down to.

Levels, which are clearly below the half billion. So we've seen in prior years.

Great. Thank you. Thank you both.

Thank you.

Speaker 1: Thank you, sir. Last question is from Mr. Jeremy Bragg from Redburn. Please go ahead.

Thank you. Sir next question is from Mr. Jeremy Bragg from Redburn. Please go ahead.

Speaker 8: Good morning. So my first question please would be to you, Guillaume, and it would be...

Good morning.

So my first question, please from <unk> and <unk>.

It would be.

Speaker 8: How confident do you feel, what's the level of visibility on the 720 deliveries in 2022? Do you see this as a realistic number or potential?

How come.

Do you feel what's the level of visibility on the 720 deliveries in 2022 do you see this as a.

Realistic number or.

Potentially a flaw.

Speaker 8: And then the second question, please, is a medium term one on capital allocation. You've restarted the dividend.

Then the second question please.

Tim one on capital allocation, you've restarted the dividend.

Speaker 8: What level of net cash buffer do you think you need medium-term? Is that still around 10 billion euros?

What's level of net cash buffer do you think you'd need medium term is that still around $10 billion.

Euros and.

Speaker 8: how are you thinking about capital allocation in the medium term? Because you're quite quickly gonna get to 10 billion of net cash. Thank you.

How are you thinking about capital allocation in the medium term because you're quite quickly going to get to $10 billion of net cash. Thank you.

Yeah.

Speaker 12: Thank you, Jeremy. The second question is obviously too difficult for me, so I will hand over to you, Dominique. Sorry for that. Visibility on the 720? Well, we guide it for 2021 600.

Thank you Jeremy the second questions, obviously too difficult for me to have Windows to you Dominik. So recently.

Visibility on the 720, when we guided for 2021.

600.

Speaker 12: If you look at the semi-normal and 20, it's plus 20%.

If you look at 720.

20%.

Speaker 12: Actually, we did the 611, which I consider a very strong result compared to the 600. So it just gives you an indication that...

Actually we did the 611 and we try to consider on a very strong result, compared to the 600. So it just gives you an indication.

Speaker 12: 720 is a balance and we think it's not going to be easy but we think we can reasonably do it that's why we we guide on it.

700 <unk> balance.

And we think it's not going to be easy.

But we think we can only be doing it that's why we guide on it.

Speaker 12: Significantly more is, in my view, extremely difficult, so I would not bet, if I were you, on significantly more than 720. It's a challenge and we need to earn our right to reach this 720 every month, every week, and maybe every day. It's a difficult ramp-up.

Significantly more ease in my view extremely difficult so.

And with no debt.

On significantly more than 720 to challenge and we need to earn the right to HD 720 every month every weekend maybe every day.

A difficult comp.

Now the more difficult, one, but well, it's actually not that difficult because we again reiterate what we said before him 10 billion net cash seems to us to be a reasonable target don't forget our net cash definition is excluding the pension liability.

Speaker 12: Now the more difficult one, Dominique. Well, it's actually not that difficult because we, again, reiterate what we said before. $10 billion net cash seems to us to be a reasonable target. Don't forget our net cash definition is excluding the pension liability. The pension liability has benefited clearly from the increase in interest rates. So interest rates have moved up, and the pension liability is now reduced to more than $7 billion. It used to be $10 billion plus, now it's $7 billion plus. And we will need to close that gap.

The pension liability has benefited clearly from the increase in interest rates. The interest rates have moved up in the pension liability.

Reduced more.

More than $7 billion, we used to be 10 billion plus node 7 billion plus.

And we will need to close that gap over time.

Speaker 4: Obviously, how much cash will be used for that is very much dependent on further development of interest rates. So that's why it's hard to predict and that will also be a question in the capital allocation. So yeah, I guess we work very hard to bring it up to 10 billion as quickly as possible, but there are some...

Obviously, how much cash will be used for that is very much dependent on further.

A level of interest rates. So that's why it's hard to predict and that will also be a question and the capital allocation.

So yes.

Yes, we worked very hard to bring it up to 10 billion as quickly as possible, but there are some.

Speaker 4: some items we have to take care of before we can think about measures beyond the dividend. And obviously also with the earnings growing, we also want to see the dividend evolving accordingly.

Some items, we have to take care of before we can think about measures beyond the dividend and obviously also with the earnings growing we also want to see the dividend evolving accordingly.

Thank you and you mentioned to compliance.

Speaker 8: charge this year. Could you just remind me what that was? No, I mean we have previously told you and that there is still some provisions that will need to be settled so to speak and it's not about taking more provisions it's about paying these provisions but I think the good news is that I think we at some point in time said it could be as high as a mid to high triple digit million I think I'm a little bit more optimistic today for what's left to be paid. Okay thank you. Thanks very much.

Charged this year could you just remind me what that was.

I mean.

We have previously told you.

There is still some provisions that will need to be settled so to speak and it's not about taking more provisions it's about paying these provisions.

I think the good news is that I think we at some point in time said it could be as high as the mid to high triple digits.

I think I'm, a little bit more optimistic today.

What's left to be paid.

Okay. Thank you thanks very much.

Thank you.

This concludes our conference call for this time.

Speaker 2: If you have any further questions, please send an email to Philippe, Gustave, or myself, and we will get back to you as soon as possible.

If you have any further questions. Please.

Thank you.

Yes.

Yes.

And we will get back to you as soon as possible.

Speaker 2: Thank you and I'm looking forward to seeing you or speaking to you again soon.

Thank you and I'm looking forward to seeing you are speaking to you again.

And clearly one bye bye have a good day.

Speaker 1: Ladies and gentlemen, this concludes the conference call now. You may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.

Ladies and gentlemen, this concludes.

The conference call you may disconnect. Your telephone thank you for joining Heaven Goodbye.

Okay.

Okay.

Okay.

Yes.

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