Full Year 2021 Airbus SE Earnings Press Conference

February 17, 2022

Well, we'll present to you today, the 2021 results.

My name's Julie Kitcher, I'm EVP Communications and Corporate Affairs, which includes sustainability.

Which includes sustainability.

And I'm here to present the results today with CEO Guillaume Faury and our CFO Dominik Asam.

Once again this year, we're joining you live from our event center here in Chile.

He will be joined we were joining you life from the IR event center here in Chile.

We would have loved to welcome you all here in person, but of course, due to reasons that we're all very familiar with now, we're digital again and I can only say how happy you will be to find you once again face to face as soon as possible. So from wherever you're connecting today, thank you for being with us.

So today Guillaume and Dominik will explain how team Airbus demonstrated resilience in 2021 and how the company managed to transition from navigating the COVID-19 pandemic to focusing on recovery, growth, and long-term street strategic priorities.

And long term street strategic priorities P.

Guillaume is going to share the key achievements of the company and in each of our businesses and then we'll dive deeper into the 2021 financials with Dominik.

And finally, thereafter we'll explain our expectations and priorities for 2022.

And of course, I'm sure you'll have plenty of questions. So we'll do our best to keep the opening remarks relatively short to make sure we can accommodate as many of them as possible.

So on that note, let me first please share a few housekeeping points.

First, please be advised that the entire press conference will be conducted in English and that there will be no simultaneous translation.

Then, for our media colleagues joining digitally using the conferencing tool, in case you do experience technical issues, please send us a message via the chat function or call the hotline number which you should see on the screen now.

So, ladies and gentlemen, as usual, please now familiarize yourselves with the Safe Harbor statement, which you should be able to see on your screens now, Remember that forward-looking statements such as in our guidance are based on assumptions and as conditions may change, so may our projections and plans.

And as conditions may change, so mail projections and plans.

And now before I hand over to Guillaume for an overview of 2021, I'm really pleased to share this video with you, which is a great reminder of the key achievements of team Airbus in 2021. I hope you enjoy it. I will be back with you in a few minutes. Thank you.

For Airbus, 2021 was a year of recovery.

A year of transition.

A year of leadership.

People began flying again in greater numbers.

Aerospace reminded the world, what you had been missing and our sector embraced the path to net zero.

We learned to live with complexity.

We adjusted to new ways of working, socializing and managing family life.

Socializing.

Managing family life.

In an evolving market, we won orders for fuel-efficient aircraft and launched the 8350 freighter.

Our defense and space businesses made us proud monitoring our planet, protecting people, saving lives, and defending the values we stand for.

Helicopters had an outstanding year. The H160 giftcom was launched and the next generation of City Airbus was unveiled.

And the next generation of Citi Apple was unveiled.

The Airbus Summit in September brought the industry together for the first time in two years.

And deepened the necessary Corporation for a decarbonized future for air travel.

As we begin 2022, Airbus is confident the top off to the future is the right one. We will succeed through transformation, keeping safety and quality at the heart of all we do changing as a company.

Learning new skills and building fresh alliances. Investing, innovating.

Best in innovating.

We will pioneer the sustainable future of aerospace with confidence, with humility, together as Airbus.

With humanity.

Together as Airbus.

Great video.

Hello, everyone.

2021 was truly remarkable.

I think it's fair to say, that our 2021 financial results are strong.

They reflect the higher number of commercial they're called deliveries. The good performance of how defense and space divisions as well as a bunch of new defaults in terms of cost containment and competitiveness.

As well as a bunch of new defaults in terms of cost containment and competitiveness.

Dominik will take you through the figures in the moments.

We'll take you through the figures in the moments.

We ended the year with a record net income and a stronger net cash position.

And the stronger mid cush position.

These underpin our proposal to lean toward use dividend payments going forwards with 1.5 euros to share for 2021.

Almost two months in 2022, we already see that complexity and volatility remain.

In that context, we will deliver while laying the foundations for our long-term strategy priorities.

We will deliver while laying the foundations for a long term strategy.

Priorities.

Our guidance for 2022 reflects both a recovery of shingle aisle deliveries as well as growth in investments for the future. I will reach into a moment.

But, before I do so, I'll start by providing you with an overview of the 2021 highlights across all of our US businesses.

I'll start by taking you through our 2021 achievements in the commercial across the room.

In a context, which remains volatile, we delivered 611 aircrafts in 2021 and therefore achieved our guidance for the year.

This represents a year on year increase of 45 aircraft.

On the bookings side, we had 29 customers, placing 771 gross orders.

This notably included the first orders for our new AC50 freighter.

Showing an enthusiastic customer response for these aircraft, which will set new standards of performance and efficiency in the market.

Our commercial performance, especially towards the end of last year, also underscored the strength of our singular familiar in terms of efficiency, sustainability, and competitiveness.

Especially towards the end of last year are.

Also underscored the strength of our singular familiar in terms of efficiency sustainability and competitiveness.

At the end of December 2021, our backlog stood at 7082 aircrafts.

As planned, we started ramping up production again towards our objective of reaching a monthly production rate of 65 for the Airbus SE family by Summer 2023.

We are currently assessing what the trajectory should look like beyond 2023, and I expect we should be able to share more about this by the middle of the year.

And of course, you will have seen the news coming from the Singapore Airshow this week, which confirms crystal no appetite for a range of commercial helicopters.

Now onto helicopters.

In a great picture.

In 2021, Airbus helicopters, add another toll while delivering civil records in terms of final for performance.

We booked fallen in 19 gross holders. There is 289 in 2020, and then unveiled 338 helicopters worldwide compared to 300 in 2020.

But in 2021, the book-to-bill well above one in units and in value.

We saw strong commercial momentum from our home countries, we've kick on Tox, including 40 H160s, 8 H225M, and two H145's impulse, 36 H135's in Spain, as well as 8 H145's for Germany.

8 H225M and two H145's impulse.

36 H135's in Spain, as well as 8 H145's for Germany.

Meanwhile, the increase in orders for light helicopters reflected the recovery of the CD and voluntary market.

This was also a very special year for the H160, with the first helicopter being delivered to a customer in Japan, while the development of the military H160, and volumes was formally launched with a phone call and talked from homes defense procurement agency.

With the first helicopter being delivered to a customer in Japan, while the development of the military H160, and volumes was formally launched with a phone call and talked from homes defense procurement agency.

Overall, our helicopter business delivered strong performance driven by Wolf and services, high yield deliveries, as well as reliable program execution and cost focus.

Now onto defense and space.

In 2021, we booked an order intake of $15.7 billion euros up 15% compared to 2020 and representing a book-to-bill of around 1.3.

15% compared to 2020, and representing a book to bill of around one three.

This was mainly driven by major contract wins in military aircraft such as an order for 50 sheets rulings hypothetical lifters by the Indian Air Force, who will use the time to replace each aging fleet of transport aircrafts.

In order for 50 sheets sheets rulings hypothetical lifters by the Indian Air Force, who will use the time to he place each aging fleet of transport that cross.

An order placed by the Republic of Kazakhstan for two for one of them.

Demonstrating the exporting trust for these type, which was also confirmed by your Nordea from Indonesia for two additional info items, even for this is not your controls and two major complex for the in-service support of the German and Spanish fighter fleets.

Which was also confirmed by your Nordea from Indonesia for two additional info on Williams, even for this is not your controls.

And two major complex for the in-service support of the German and Spanish fighter fleets.

In 2021, we also continued to work on a number of projects, which are of critical importance for Europe's economy.

First do you hold on projects.

It's received budgetary approval from all partner nations, Italy, France Germany, and Spain, paving the way for contract signature of this key collaborative program.

Your old one will also be

It will be the first product to be fully designed and developed from the start using our new G. G. M S digital design manufacturing and services concept.

And on ask [inaudible] we continue to work with our industry partners with the objective to move onto the next development phase in 2022.

Finally, in our space system business,

Highlights included a contract to design and manufacture six Galileo satellites.

Before we move on,

I would just like to highlight the critical role that our defense and security solutions in helicopters, light, in defense and space, play to enable the peace stability and security, without which sustainability can simply not exist.

As such, we are proud to see our products and services contribute to a safe and united world, and we are committed to a strong positioning in defense.

With that I'll

hand back to you Julie.

Thank you very much. So now Dominic let's take a look at the financial performance for 2021 from your perspective. Please.

Over to you.

Thank you Julie.

Good morning to our media colleagues and to all those who are following us live today.

I will talk you briefly through the key highlights of our 2021 financials.

As Guillaume said earlier, 2021 was a remarkable year, during which team Airbus delivered a strong performance. This of course is also reflected in our financials.

Starting with the top line.

In 2021, we generated revenues of around 52 billion euros up 4% compared with 2020.

This of course reflects the higher number of commercial aircraft deliveries, even though it was partially offset by depreciation of the average U S dollar exchange rate.

Our fiscal year EBIT adjusted increased to $4.9 billion euros. The strong year on year improvement was driven mainly by the commercial aircraft performance, but also by our efforts on cost containment and competitiveness.

It also reflects a reduction of risk exposures, which enabled us to leave some provisions.

We notably reviewed the COVID-19 related charges booked in 2020,

and reassessed our level of exposure, which positively impacted our EBIT adjusted notably in the second half of the year.

When we look at the results of the divisions, commercial aircraft EBIT adjusted increased to $3.6 billion euros, driven by the aforementioned factors.

Airbus helicopters EBIT adjusted increased to $535 million euros, and that's up 13.6%. Whereas Airbus Defence and space EBIT adjusted increased to $696 million,

Up five 5.5% compared with 2020.

Now coming to our consolidated EBIT reported this was around $5.3 billion euros and included net positive adjustments totaling about half a billion half a billion euros.

We reported a record net income of $4.2 billion euros for the year.

In terms of cash, our

free cash flow, before M&A and customer financing, stood at a positive $3.5 billion euros.

This reflects our efforts on Kashi containment, as well as [inaudible] degrees decrease in working capital

Mainly driven by inventory improvements.

At the end of the year

our net cash position had improved to 7.6 billion euros, and our liquidity position remained strong for us a very strong and stood at $28.7 billion.

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

With that back to Guillaume for a forward look at 2022 and our priorities for the business.

Thank you Dominik. I think we can agree that 2021 was a remarkable year in many aspects.

And now we have a lot on our plate for 2022, as we work to deliver on our commitments while closely managing our business risks.

Our guidance for 2022 reflects our expected growth trajectory as well as the investments required to prepay our future.

Let me read it to you now.

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.

On that business, the company targets to achieve in 2022 around

720 commercial aircraft deliveries

EBIDTA adjusted of $5.5 billion euros, and free cash flow before M&M customer financing of

$3.5 billion euros.

So,

looking beyond the numbers, what will our priorities be in 2022?

First and foremost we'll continue to focus on our people,

who are key to the success of both our short term recovery and our long term future.

This means focusing on the safety of our teams while developing the skills and competencies and also seeking the new tenants we need for the future.

We recently announced a global plan to hire around 6000 new recruits worldwide and this is the beginning.

Not only do we want to acquire the new skills

that Airbus needs in the post Covid world, but we will also reinforce diversity in team members to be ready to pioneer assist enabled aerospace.

Of course ramping up the production of our 80/20 family will remain at the heart of our priorities and we'll continue to work closely with our suppliers to make it happen.

This hump up will also be made possible by the transformation of our industrial system, which already achieved major steps in 2022 with the go live of Airbus Atlantic in France, and an agreement with our social partners in Germany to establish a fully integrated [inaudible] company

in July .

All these changes will put us in the right position to prepare the next generation of products and deliver on our ambition to lead sustainable aerospace.

And on this note,

I think you've heard

enough of us talking, so now it's time for us to hear your questions. Back to you Julie. Thank you Guillaume. Thank you. So ladies and gentlemen, we're now about to begin our Q&A session.

For our media colleagues, who are connected through the virtual conferencing App, let me share a few points. So if you would like to ask a question. Please click on the hand icon in your Bluejeans interface and when prompted you accept the moderator's request, this is key, and it will switch you

into speaker mode so that you can go into the queue and ask your question. So you can already start now, make sure you find that hand icon and click on it, please if you'd like to ask a question. I'll let you know of course, when it's your turn to speak. Please keep your microphones muted until then

to avoid any any noise interference. It will up mute them, unmute them, sorry, for you.

And if you can, please turn on your web Cams, we would very much like to see you, even if you're not here with us in person.

If you have several questions, please ask them all at once because it's difficult to get you back again. And as I said earlier, any

problems or issues that you encounter trying to ask your question, the team is here to help, so please use the chat function or the hotline. And finally, please ask your questions in English. So you can start now please raise your virtual hand, and we'll be right with you.

Okay. Thank you. So we have the first are the first question from Louise Calva, Fly News.

Good morning, I would like to ask Mr. Faury for an assessment of the meeting with Petro Sanchez the other day in Madrid,

And whether the yeah contracts agreed, but not find [inaudible].

Buenos dias, Luis.

It's a pleasure to

answer your question. It was indeed, a very good meeting that we had it's something now that we do

on a yearly basis, with the

Prime Minister and with President Sanchez and also some ministers and,

and we review the progress of the relationship

in commercial, in defense, in helicopters, and space, trying to look forward.

It's more a general review of the relationship than individual contracts, which remain the privilege of the different administrations and divisions at Airbus and we're really making progress moving forwards in our overall relationship with Spain. So overall very good feedback of the meeting, which I think was reflected in the prices were in

two weeks ago.

Thank you Guillaume, and thank Luis.

So we go to the next question, we have Charlotte Ryan from Bloomberg, good morning, Charlotte joining us live.

Good morning, everyone.

Thanks for taking the question. And

Firstly on the financials, you've set a higher delivery target for this year, but the free cash flow target looks

a little conservative

Around the same level of last year, just wondering why that is and do you expect higher cost this year or is it just more of a reflection of caution at this point?

And then secondly, if I could ask a question on the legal dispute

with Qatar airways,

that battle has

drawn a lot of attention in the industry, if you could take the liberty to Airbus' decision

to cancel

the 321neo contract

I just wonder what you'd say to airline customers who are concerned at how

This is all playing out.

Thanks.

Cash flow. Should I have a stab at that? So on the cash, I mean first of all on the guidance on EBIT you have seen that we are raising from $4.9 to $5.5 billion for 2022 and that is really reflecting the increase in our deliveries, but there are some headwinds. So

We have decided to really step up the pace of investment in the future

in the tune of about half a billion, if you include everything and that's expensive,

that will weigh on the results. There's a little bit of a forex foreign exchange headwind and yes, you also have to take into account inflation.

So if you put all that together you will see that this is a quite

ambitious increased to $5.5 billion. Now on the cash flow,

there are certain items

where we've taken provisions in the past, you can mention the [inaudible], you can mention to A220 program, where we took some provisions when we bought the program, and also there's still

some provisions on the compliance side, and this is explaining why and how we come from the $5.5 billion euros of EBIT down to the $3.5 billion of free cash flow. So I would not say this is a conservative guidance, it simply reflects our best assessment of

what we see today.

Good morning, Charlotte Good to see you are on the screen.

When it comes to the dispute with Qatar

Airways,

Well, that's something we don't feel good about, we don't like to be in that situation, it's quite a unique situation.

It's a very public dispute and this has been made very public by our their own customer.

We need to deal with the situation and there is no legal case ongoing, we have to take steps to protect ourselves and

protect the company, that's basically what we are doing. But obviously, we continue to try to resolve the situation in more amicable way if possible.

Great. Thank you Guillaume.

So now we'll turn to the chat and we have a question from Julia Marion, [inaudible] Dow Jones. Bonjour, Julia.

So three questions here,

So there's no firm commitment yet for rates 70 and 75 for the A320 per month,

Is it still a possibility for 'twenty 'twenty, four and 'twenty 'twenty five?

The second one, is your guidance cautious? And the third, what challenges are you facing for the ramp up?

So I'll take the first one.

As we have already indicated,

we are ramping up

to reach rate 65 per month

On the A320 family, by the end of next year.

And we are

assessing the situation and the demand and the supply capacity to decide what we want to do for 'twenty four, 'twenty five, and beyond.

We have not yet taken decisions and we expect to take decisions by mid of the year, to be ready for 'twenty, four and 'twenty five. And we are indeed, considering rates beyond 65, 70, 75, is making sense, but again no decision has been taken yet and we think it's going to be the case around

mid of this year.

I'll answer the third part of your question at the same time. We guided last year for seek somehow deliveries and we've done 611. We're guiding this year for 720 deliveries.

So from 600 to 720, that's plus 20%. It gives an indication of the challenge itself because it's the speed of ramp up which is quite unique.

We are with a production system that is already in place, we produced almost a tight 65 just before COVID-19. But we need to take a rewind to supply chain ourselves

from rate 40 we had last year own in COVID-19 to this rate 65. And we do this in an environment that is complex, there's a sort of

post COVID-19 crisis to ramp up in the industry not only from aerospace, and we see difficulties with raw materials, with logistics, or with the cost of energy, and also hiring people back,

across the globe and in different businesses again. So we have a complex environment and the challenge for the ramp up is linked to the speed of ramp up in this harder, complex environment. But we think we've given a guidance that we can reach 720

roughly this year. So,

that's the challenge for the year.

Dominik, do you want to take the... I think, of course the most important drivers of the guidance is the deliveries you have commented extensively on how we assess that.

I'd say the transmission of these deliveries into earnings and free cash flow is as always a balanced guidance, we take

To balance the risks and opportunities around that guidance.

Thank you. So onto the next question, we have Thomas Spoon with us from Simple Flying. Hello Thomas.

Hi, Thanks for having me.

I just wanted to touch briefly on the Airbus A220, obviously with the orders that you've placed in Singapore that's now got over 700 orders, and last summer Christian was saying

about a potential stress, stretch to the aircraft, that you've got the capability of it but you want to get it to its cruising altitude first.

But I just kind of wanted to know sort of where you see the cruising altitude of the A220 before you look to stretch it and when we might reach

that target?

Thank you Thomas.

I like to hear questions on the threshold of the 220, because what we call the dash 500

will be a good version and very good version of the A220, but again, we are not yet there. We are not at the cruising altitude, we are gaining entry to it.

We have the targets to be breakeven by the middle of the decade, to reach the rate 14 at that point in time. We've just put in place the pre fall in Mirabel. So we are in that phase of the program to continue to ramp up production to deliver performance with the existing Dash 100, and Dash 300. So your question is a very good one but,

any answer from my side would be premature.

Thank you. Okay, we're going on to another live question from we've got Richard Sherman

On the, on the screen from Air Insight. Hello to Richard.

[inaudible]

Yeah. Good morning. Good morning, I have a couple of questions.

So I listened to the analyst poll and

I know you said Mr. Faury that the

aero structure units

in Germany is ready to

start in July, July [inaudible].

Can you elaborate a little bit more what's the situation

now? I just saw the press release that was issued by

[inaudible] on every one.

What is now the situation on the

German Aerostructures business?

My second question is your research and development spending was down last year

over 2020

[inaudible] said it will go up to $2.9 billion in 2022.

Can you specify how much do you invest now in the Zero E Hydrogen projects.

Okay Richard.

Thanks for the questions.

The situation on the [inaudible] in Germany is the following, on the first of July

we will set up the new company very similar to what we have done on the first of January

with Airbus Atlantic in France that will have in scope the plans that work on aerostructures by somebody in Germany coming from what is Airbus commercial today in [inaudible] aerotech and this will be put in place and will start running on the first of July. And that's what we have agreed

with

our social partners. When it comes to the [inaudible]

We're still evaluating

together with the company called Mubea and our partners IG Metall what is the best way forwards and we've given to ourselves a couple of months to come to conclusions. But your question on [inaudible] is very clear, we build a company and it will start running on the first of July.

[inaudible]

When it comes to Zero E, we are not

indicating the amount of money we spend bipolar on when it comes to research and preparation of the future, but as you probably see and also through the partnerships, we are all sitting around the hydrogen and the fact that the industry is really accelerating that's a program that is very important for Airbus, we are very

committed to entering to service in 2035 the first two hydrogen plane and therefore, we are investing significant amount of money to be ready for that timeframe.

Thank you. Thank you so you've got another one coming through now on the chat from Yang Cushioning ARINC personnel. Thank you Yang.

So, how do you analyze the flurry of orders for easy tolls?

Is there are share of speculation from investors?

Thank you for the question, Yang. There's a lot of momentum around the EV doors and as a former helicopter guy and

with love for vertical slides

I can only welcome this appetite for EV doors.

Well a lot needs to happen before we have a market that is structured and then start to creates revenues and margins, and there's still a lot of development to be made on the technology on the certification on the regulation for operations.

So we are investing at Airbus, we see many of us are investing, and there's a lot of money going into that segment.

But I believe there's still, as I said, a lot of work to be done before we come to real commercial operations, and that's going to be probably more for the second half of the decade. And therefore, there might be some attrition compared to what we see today in the numbers of companies working on editors, a smaller number of concepts will make it to the market,

And the jury is out on who's going to make it first and what kind of concepts will win. But any way for us, at Airbus, we like the fact that EBIT dollars

are relying on electric flying, and all what we do on electric flying will be used for other products and in particular for commercial aviation at a later stage. So it makes a lot of sense for us to be a

part of the EV sold very Boylan eco system.

Thank you, Guillaume. We are turning live now to Delphine Tia from Investia.

Yes, hello.

I'd like to, could you hear me? Yes, hello.

Nice to see you.

Just two

small questions. You spoke about inflation, but quickly is it possible to have some more details?

Maybe to understand how much inflation on the raw materials, wages, or energy will cost to Airbus this year, and the second one,

It's also on features you spoke about Qatar Airways, but I don't see you ever registered some provisions on the risk.

Yes, it's relative, but and we don't know which will be the end. That's a, is there provision in the picture for this year?

Thank you.

Okay. So on inflation, it's a quite complicated question you ask here because there's many factors we have to take into account. First on the revenue side, we have what is called escalation clauses to protect us against certain developments on the inflation side.

On the cost side, we also have contracts, which many of which are fixed price where inflation is not a big issue, but we also source

certain ingredients like electric power, where inflation has actually played a major role to be specific here, we really suffered

Low triple digit million increase in cost on that front. So it's a complicated question.

But it's fully embarked in the numbers you've seen, but it's a significant item we need to take care of and the key question is not so much 2022, but it's really the longer term development on that front.

Kept them.

That's all.

I'm not sure I want to comment on Qatar and we are in legal proceedings. So,

as I said, that's not a situation we like very much and we want to resolve it. But I won't comment on anything more on Qatar.

Okay. Thank you, Delphine. So the next question is also live. Joining us from the Wall Street Journal, Ben Kent. Hello, Ben.

[inaudible]

Hey, guys.

I think you can see.

So two questions from me, the first is just

Am I right in thinking that you're turnaround rate 17 rig 75 seems a little bit different to what it was kind of last year, when you guys indicated to the market that you were asking suppliers to kind of investigate getting stuck ramp I remember Christian saying last year to lose that

Demand would show even

Support even potentially go beyond 75. I guess I'm interested whether anything has kind of changed and it sounds like the you know the situation with the supply chain, maybe has changed your expectations to kind of get to that rate as quickly as we speak of, spoken about before. And then the second one is just on the resources that you mentioned, maybe you can be a little bit more

specific about which specific resources you're seeing as being stretched, or things significant price hikes.

Thanks. Hello, Ben. Good to see you.

The demand is still very strong, and probably even stronger than what we thought a year ago on the senior line. So I would not say that there is any change from that side of the equation. But when we need to make decisions for rates moving forward, we need to look at the balance between demands and

supply, and the ability of the supply chain to accelerate at a certain pace.

Already for this year and next year, that's a very steep slope and we need to see to what level we want to go. Yes, we are still discussing about 70 75, the numbers have not changed in that perspective, but we want also to look at the sustainability of what we do and to what extent

a rate would remain for a number of years. So we are still in the assessment of that situation, we are coming closer as I said, we want to make a decision by mid of this year, if we want to be ready for 'twenty, four and 'twenty five and that's the plan.

In terms of resources, well there then there's a lot of complexity and depends on each and every supplier, and the bottlenecks, and the challenges on the same by commodity, by region, by type of equipment system parts we are buying, so it's a lot of complexity. But I try to reflect the main drivers by saying it's access to

raw material, and the price of raw material as well.

It's the complexity in logistics,

And energy prices and

what we see happening on the markets in general. And more than the rest and the ability to find the skills, the human resources, in quantity and quality I mean, the right skills at the right place at the right moment and this is an area where many companies are struggling around the globe. So we need to factor this in

when we define the ramp up plans, because then we need to be able to execute on the plans.

Thank you, Guillaume. So we have that the next question also live from Sylvia Pfeifer from the Financial Times. Good morning, Silvia.

Sylvie sorry [laughter].

[inaudible]

We don't hear you I'm afraid.

We need to on unmute.

Hi, sorry can you hear me now?

Good morning.

Hello, Good morning.

I just have one question to

Guillaume Faury. You stressed in your introductory remarks how important defense is to sustainability,

and I just wondered if you could give a, talk about a little bit about how worried you are that this rise in ESG investing

and defense as a sector being labeled as unsustainable

and if you're sort of seeing any

banks in particular, warning about not being able to provide capital,

if that sort of environment is changing. Thanks.

Thank you, that's a very important

subject for us.

We believe,

we are convinced that defense contributes to stability, to peace, and therefore to prosperity. And we think that prosperity, that stability, that peace is absolutely indispensable for all the transformations that the world

needs to go through, and especially the Decarbonization. We think defense security play a very important role, especially in this very moment,

with a world that has become a bit more dangerous. Therefore, we believe defense would be considered as something positive in terms of ESG and,

the role it plays for societies.

And for people. Indeed, we've seen some negative trends

in that direction, and we are working,

communicating with a lot of players, political players and others, to explain and try to convince that actually defense and security should be seen positively in terms of contribution to ESG. Things are changing, I think it's moving, again all now in the good direction, but it requires a lot of explanation, a lot of discussions,

and a lot of convincing. But I believe, Europe in particular, all eyes on the [inaudible], that it needs to support its own defense industry to have a strong defense and security system for Europe at times, where

strategy, autonomy, resilience situate you have Europe is at stake so I think it's moving in the right direction.

Okay. Thank you Sylvia.

And so now we're coming back to the chat with Yen Sotto from Aviation Week.

Morning, to you Yen. So Yen's question, are you concerned that high fuel prices, and particularly, higher interest rates will impact your customers ability to fund new aircraft?

Okay. Should I take that? So yeah,

of course, these factors play a role in the cost of flying an aircraft.

But I think we have not reached levels yet where the higher fuel prices would really curb the demand for air travel given the part of the cost in that bucket when interest rates, let's not forget we have been in an extremely low interest rate environment, which was kind of abnormal. So I would characterize what we currently see is a little bit of a normalization

On that front. And for Airbus specifically, there are actually also some upsides on higher interest rates, we have a pension deficit, which would shrink with high interest rates, we have a net cash balance which would benefit from higher interest rates. So a certain normalization on that front is not something we are scared about.

Okay. Thank you very much Dominik. So I think now are we turn live again to Alex. Alex Mckea.

Hi, Good morning can you hear me? Morning, we can hear you yeah here we go.

Okay, one question to Dominik, and one to Guillaume. Dominic last night, we were hearing regarding the Vienna talks, to resurrect the Iran Nuclear deal that they are in a crucial stage. Iran Aviation Authority Chief has said that if there is progress and they do resurrect that deal they are hoping to resume deliveries of Airbus aircraft.

Is the Iran situation anything that you guys are factoring into the 2022 outlook, hoping to be able to resume deliveries if you're able to?

And to Guillaume,

Mr. Faury, a few years ago at the delivery of the world's first A250 1000 [inaudible]

A brief pressure at the time of the

commented on the high expectations of the airline and said that with the next CEO beyond Faury, each A350 will quote, "satisfy every requirement", now twenty of those A350s are grounded in Delhi, in the year of the World Cup. Will Airbus publicly commit to establishing a root cause

for the issue? And is Airbus willing to completely lose the Gulf carrier to Bowing? Thank you.

Maybe I'll start with that one.

I don't know, where you were referring to a specific

type of analysis, where actually we disagree with the more fundamental assessment, which is made

that the pension issue is a safety concern and has an impact on their worthiness, and that's basically what we are challenging and disagreeing with and that's the

he main reason why we are in the disagreement with Qatar Airways. I mean, as I said before, I don't like this situation, but we take it serious and we want to defend our product at a time, where we think

what he said is not appropriate, so that's basically where we are today.

Dominik, on the other one. On the Iran question, the answer is no I think that is completely premature at this stage. So we do not have any assumptions on deliveries for 2022, but of course, we monitor the situation very closely.

Okay. Thank you.

So.

A question come through from Olivier James, [inaudible] Nouvelle. Bonjour, Olivier.

Is the new final assembly line in Toulouse for the A321 now operational?

Hello, Olivier. The answer is we are on track with the timetable. We had set to ourselves, which plans for an entry into service, if I may call it like this, the start of production and delivery of airplanes from the year 2021

fall, in Toulouse, next year.

Thank you, Guillaume.

We have a new question knock on Wolfgang Stefan from Targa Black.

Hello Wolfgang.

Good morning, good good morning from Hamburg.

On your chart [inaudible], Guillaume

do you think the new company

in Germany

will target on [inaudible]

Hmm.

Well I think we've lost the connection.

We'll try and get your back, and in the meantime,

we'll go to a question from the chat. So we have [inaudible] Bonjour Mattieu. So on the F. Cats discussions are continuing with [inaudible] what are the hurdles to reach an agreement and is failure to reach an agreement an option that you can sit on?

Good morning, Mattieu, and thank you for the question.

These are complex discussions because it's about a new program

that looks into the future with a lot of new technologies. And the discussions are around the [inaudible] and the responsibilities of of both companies, and it takes more time than what we expected, but it's not

not uncommon to be in those kind of discussions and negotiation before signature of a contract of that size.

Is failure to reach an agreement an option? Well that's not the way we look at it we think F Cats are front and center to the strategy of Europe , I think Germany, France, Spain are very committed to the program. And as Airbus, we're trying to do well that's most to resolve

The issues and find an agreement and move forward.

Okay. So we are while we wait for the connection with Stefan we go for another one on the chat. So Wolfgang Hosch Hamburger and [inaudible] black.

Beginning this year and you'll receive six eight creative back from Lufthansa what are you planning to do with the plane?

Would you finance your own airline, like the Beluga?

And on the second one ramping out Patria 'twenty production, so far around half the machines have come from Hamburg, well the split remain in the future?

Thank you for the questions.

We don't plan

the new activity

as an operator with the [inaudible]

So that's not on our plan. And when it comes to the A320 production when we have four lines in Hamburg,

they still continue to ramp up we are not at the mature level of production

recovering from

COVID-19 in particular. There's more and more A321 in our prediction, and Hamburg plays a very important role. And on top

The entry into service of the A321 XLR will be done in Hamburg. So in terms of work for Hamburg

you have a number of planes, but you have also the growing mix and complexity of the planes, we deliver from Hamburg, there is, that a very big role for Airbus. We continue to have the same assembly lines around the world. So the splits will remain probably the same but with more and more focus and importance

Of the 321, and the 321 XLR in Hamburg.

I Hope it answers you on your question.

Thank you, Guillaume.

So we move to the next question please.

Thank you. So we have a question from Veronique [inaudible]

Are you worried about the evolution of exchange rates between dollar and euro? What is your estimate of the impact this year, how do you assess the geopolitics and the geopolitical risk so tensions between Russia, the Ukraine in the China Sea

to your investments and facilities?

I will start with the second part of the question and Dominik will try to answer, or will answer, I'm sure the first part.

We are as human beings and citizens of course worried about the evolution

Around the number of conflicts around the world, and we believe

Putting edition back on is important commercialization to make sure people can travel and meet each other and contribute to easing of resolving the tensions, that's

maybe the first points. But of course, this more complex environment in terms of geopolitical tensions is something we are monitoring. We don't feel exposed or significantly exposed on the short term, but should major disruption happen

as a result of a new conflict, this is something we would have to evaluate and assess

Of course on a case by case.

On U S dollar,

we actually have quite let's say prudent hedging policy. So for 2022, we are largely hedged. So the exchange rate will not play a major role there is a slight depreciation of the exchange rate in our hedge book. So we will have a little bit of a headwind in 2022. But it's very manageable,

low triple digit million. And in the long run we actually like a strong U S dollar because our revenues are that

predominantly denominated in U S dollars. So we benefit from the strong U S. Dollar we currently see.

Thank you so going back to a live system, we have a question life and Tim [inaudible] from Reuters. Good morning, Tim.

Hi, I hope you can hear me okay.

<unk>.

Great.

Just going back to the A350 and Qatar.

Firstly, other final Qatar could

you tell us how many airlines have now reported problems with the surface deterioration on the A350, and

have you agreed to compensate any of them?

And secondly,

If I could just go back to your decision to cancel the A321 contract.

That did surprise quite a few people because you've canceled the whole A321 contract, but

only two of the A350s,

And everyone is aware that you have a lot of demand for A321s, but very little demand for A350s.

So it could be seen as a as a self interested

approach. What do you say to people like Willy Walsh and others, who have expressed concerns that you have

That

aircraft manufacturers should not exploit their market space?

Thank you.

Thank you Tim.

So on A350 we are

in discussion with

with all airlines when it comes to

the, so called, surface degradation and we've been super transparent in explaining the situation to all of them and I'm happy to say that

no other airline than Qatar Airways, sees it as an [inaudible] issue, we consider it's not, and this is also the assessments and the one of the

the [inaudible] that is the primary authority for the A350.

On the A321, no it's not self service, no at all.

It comes from the

contractual situation with

Qatar Airways, we are now, as I said, in a legal dispute and we have to take steps, which are really linked to that very specific situation. So,

again, it's not

anything else than the situation we're in with Qatar Airways, unfortunately.

Thank you, Guillaume. Can we go back to the chat to the question from Hassan Medef from L'usine Nouvelle?

Good morning to you. So concerning the A400m program now. Airbus announced new provision, what are the reasons for such a provision in a mature program? And after Kazakhstan and Indonesia, does the group expect new export sales this year?

First I'd like to say, we are very happy to see

exports customers interested with the A400m, and signing for the A400m.

And yes, indeed, we expect more to come in the future.

And when it comes to the

situation, the financial situation on the A400m, as you know it's been a difficult program, although the euros, we all know progressively

improving the picture in the situation, but there's still a bit of work and I think that's what the 2021 results reflect as well. But

I would say, all of what has happened with Kabul and the role that the A400m, of many many countries of the world, played in the evacuation of Kabul has shown again the importance of having that kind of capacity for airlines around the world and I'm very happy to see that there is momentum, commercial momentum,

Around the a400m, and we think the planes really deserve it.

Thank you Jim So we're gonna take alive now on CCTV in China.

Hi can you hear me?

Yes, we can hear you.

Okay. Thanks for the question.

For the opportunity. I have two questions, first is regarding supply chain we know that a lot of industries have been disrupted.

We want to know, how is Airbus are coping with that problem? Are there still parts that are in shortage, and what measures are being taken? The second question is about hydrogen fuel. We know that Airbus and Singapore has recently signed a contract to further the research, so when would we see that

hydrogen fuels

Aircrafts being put into use? That's my questions. Thank you.

Thank you [inaudible]. Actually two important questions.

We don't see on our supply chain

disruptions as such.

But it's the result of a lot of work and thanks to, in particular, all what we've put in place during COVID-19, to manage the COVID-19 situation in particular, in what we call our watch towers, which is a way to gather information, to monitor

the situation with all suppliers, and in particular, the ones that we consider the most critical ones, and gain anticipation and adding the ability to look at

with anticipation gives us the ways, the time, to react, to correct, and find solutions, and that's what we've done so far. So we are in this very complex and challenging environments, but because of our ability to to look with our suppliers, much ahead of the problems, we can find solutions before it hits our production.

And for the moment, we continue to ramp up at the pace we have given to ourselves and we think we'll continue to ramp up at that pace. So,

so far, so good and I think we have the systems in place to continue to move forward positively in this environment.

When it comes to hydrogen.

Indeed, if it comes back to the previous question, we are sealing partnerships.

We have to prepare for the entry into service of the hydrogen plane in 2035. Which means we need to have the plane, the technologies, the certification stand downs, but as well, the infrastructure to produce green hydrogen,

To transport, to distribute at the airport, and that's what we're doing with for the moment. We are partnering with reward ecosystem to make sure that this ecosystem will be ready on time, it's not just about the plane. It's about all the infrastructure and the other players taking their share. And that's what we're doing at the moment.

And I'm very happy to see the very positive momentum with your own around hydrogen around the world in the last two years in moving forwards. That's very gives me a little energy to see that many players believing in hydrogen as well.

Thank you Guillaume, so we're back again with Mattieu from I S. T E.

You recently said, Guillaume, in an interview that Airbus would be able to build electric engines by itself in the future.

Is this a leverage in your negotiations with the motorist on ramp up beyond rate 65, or do you signal a long term shift in strategy.

Thank you Mattieu.

Don't trade in my answer more than when I say it.

The question was about the ability in the future of

Airbus to potentially

be in this kind of of products.

And I said potentially yes, but it would require a change of strategy and I have not indicated that we have changed our strategy on that one so for the current jet engines,

the situation is what it is, and I said I think very clearly that we don't think we would be able to compete in that segment, and I said moving forward with new technologies theoretically we could

decide to do this. What I want to say as well, it is we have so much on our plate today

that the strategy is to remain [inaudible]

OEM.

But moving forward, working with our partners and working with our suppliers it's

theoretically possible, and it's not something we would rule out completely, but more looking at its a case by case. So I have not announced that we will become

an engine manufacturer, that's not what I said and I want to insist on it.

Thank you, okay. So we're not turning to Jorge [inaudible] from Ivy and Review in Spain. With the investment of $1.2 billion in Mirabel together with the Quebec government, what is the production capacity you expect to reach in the final assembly line, and is the date of 2030

still the target date to make the program breakeven?

So these investments is supporting the ramp up in investments, we are making on the A220.

The target is to reach rate 14 by mid of the decade, by 2025, that will be a 10 in Mirabel and four in

In the U S in mobile. And we think we're going to be breakeven on that program around the middle of the Decade. So again around 2025, not 2013 much earlier than what you were suggesting in your in your question, but no change on that front, that's what we have indicated already,

quite a number of times now.

So thank you. Thank you Guillaume, Guillaume Faury, CEO of Airbus.

Dominik Asam, CFO.

Thank you so much for being with us this morning and answering the questions. That concludes ladies and gentlemen, our and Annual Results Press conference. Thank you so much for connecting and watching today.

If you have any follow up questions or any feedback comments you'd like to share,

you know how to find us. The media relations team is available to answer your questions.

We wish you a really great rest of the day and hope to be with you in person again. Thank you and a big thanks to the team for

helping to make this event a success. Thank you very much. Bye bye.

Thank you, Julie. Thank you everyone. Bye bye, have a good day.

[music].

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