Airbus Se Unsp/Adr

Ladies and gentlemen, thank you for standing by. Welcome to the ERBUS full year 2022 results release conference call. I am Melanie, the operator for this conference. Please note that for the duration of the presentation, all participants will be in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask a question. At this time, I would like to turn the conference over to your hosts, Guillaume Faury, Dominique Assam, and Hélène Legorgeux.

Thank you, Melanie. Good morning, ladies and gentlemen. This is the Airbus full-year 2022 results release conference call. Guillaume Faury, our CEO, and Dominique Assam, 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 after the initial presentation. This call is also webcast. It can be accessed via our homepage by clicking on the dedicated banner. Playback of this call will be accessible on the website, but there is no dedicated phone replay service. The supporting information package was published on our website earlier today. 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. I invite you to refer to our safe harbor statement that appears in the presentation slides, which applies to this call as well. Please read it carefully. And now, over to Guillaume.

Thank you, Ellen, and good morning, everyone. Thank you for joining us early this morning for our full year 2022 results call. I'm happy to be here in Toulouse with Dominique to run you through our results. Again, in 2022, we faced an adverse operating environment. On the one hand, last year resoundingly confirmed that people want to fly, and they do so even at higher ticket prices. Airlines have returned to long-term fleet planning and are preparing for long-term growth. In this context, with the reconfirmed long-term visibility on demand, we decided last May to ramp up our A320 family to a monthly production rate of 75 in the middle of the decade. On the other hand, 2022 has also been a year of multiple disruptions, mainly driven by the cumulative impacts of COVID and the Russian invasion of Ukraine, international sanctions, the energy crisis, aggravated already existing tensions on logistics, materials, components, and also skilled workforce. Our supply chain, facing these rather severe circumstances, did not recover at the pace we had anticipated. As a consequence, we had to adapt our operations in the associated production plan for the year, eventually leading to our December announcement. I have to say the situation has been quite frustrating last year. Obviously, we were not satisfied with the number of aircraft we delivered in the end. As you know, in Q4, we delivered 226 commercial aircraft, taking our full year 2022 deliveries to 661 aircraft. While this represents an 8% increase compared to 2021, this is about half the increase we had initially planned. As you will see when I come to our guidance, this means that it will take us two years to achieve what we had planned to do in one. Nevertheless, we met our financial targets. For the full year 2022, our EBIT adjusted stood at 5.6 billion euros. Our EBIT adjusted reflects our deliveries, but also our efforts on competitiveness and further benefited from the overall positive impact of non-recurring elements. Our free cash flow before M&A and customer financing stood at 4.7 billion euros, 4.7, and has been supported by a favorable foreign exchange rates environment, as well as a strong positive phasing impact from working capital. These solid financial results with a net income of 4.2 billion euros and confidence in our future financial performance underpin our dividend proposal for 2022 of 1.8%. As we enter 2023, we see strong demand in all areas of our business, while at the same time, we are facing persistent supply tensions. This year, we expect our commercial aircraft delivery profile to be back-loaded again. In light of ongoing geopolitical and macroeconomic turbulences, risks of further disruptions remain. Before we look at our commercial environment, let me mention that the three-year probation period under the terms of the deferred prosecution agreements with the French so-called Parquet National Financier, the UK SFO, and the US Department of Justice, this has ended on the 31st of January 2023, a couple of weeks ago. We are awaiting the formal determination by the authorities that Airbus has complied with the terms of the GPAs and to close the prosecution against Airbus in line with the procedural requirements of each country. Airbus will continue to meet its obligations under the consent agreement extended until October 2023 as mutually agreed with the U.S. Department of State. Let me say as well that over the past years, we have implemented company-wide a strong culture and governance with respect to ethics and compliance which we will maintain and continue to develop going forward. Let's now look at our commercial environment. In 2022, commercial air traffic continued to recover with domestic and regional markets leading the way. International traffic has progressively been closing the gap, strengthening our confidence in the wide-body segment outlook. Air travel demand came back even faster than we expected during summer, and the trend was confirmed by the strong activity around the end of the year, where global traffic was already trending close to previous levels. The recent reopening of China is proving to be a strong positive driver for air traffic as it progressively recovers. All regions should now converge towards normalized levels. Let me remind you of our orders and backlog for the year. We booked a total of 1,078 gross orders, of which 222 in Q4. On widebodies, we booked 63 orders, including 24 freighters, and further progressed on the remarketing of our aircraft, confirming the increasing commercial momentum on widebodies. We saw 258 cancellations, of which only 49 in Q4. The cancellations in the year were already largely anticipated and embedded in our backlog valuation as of year-end 2021. As a result, net orders were positive at 820 aircraft, and our backlog in units amounted to 7,239 aircraft at the end of December 2022, including 6,093 A320 family aircraft, so more than 6,000 for these families. Our net book-to-bill significantly above 1 illustrates the strong appetite of our customers for our well-positioned and diversified portfolio. This was once again evidenced by the large Air India order we were honored to receive earlier this week, which is obviously not yet reflected in our order book as of the end of December 2022. So really honored by this order. At group level, our backlog in value increased to €449 billion, so close to €450 billion in 2022, mainly reflecting our book-to-bill above one, as well as the strengthening of the US dollar. Our robust and diversified backlog would support the company's resilience in case macroeconomic conditions were to deteriorate. Looking at helicopters, in 2022, we booked 362 net orders compared to 414 in 2021, with a book to build above one, both in units and value. Orders are well spread across programs and include 12 H160s for which we secured customers on all targeted segments. 2022 was spectacular. a solid year, I should say a good year, with ongoing market recovery and positive momentum on both civil and military markets. Finally, in defense and space, 2022 turned out to be a difficult year in a complex geopolitical and macroeconomic environment. Russia's attack on Ukraine had consequences that spread to many sectors and businesses, One of the direct consequences is the loss of access to the Russian Soyuz launches. At the same time, Iron 6 is experiencing further delays, and Vega-C is temporarily grounded following the launch failure in December. All in all, in 2022, Europe has lost most of its capacity to access space. This also directly impacted our space business, In addition, across our defense and space division, the rising inflation impacted our long-term contract, in particular the F-400M program, and we were not immune to disruptions in the supply chain. Still, we also had some successes, important ones. The Airbus-built ESM, European Service Module, successfully brought NASA's Orion spacecraft safely around the moon and back home, and we secured important orders, such as the FCAS, the future combat air system demonstrator phase 1B and Eurodrone, two important defense programs for the decades to come. They will be critical for Europe's security and strategic autonomy. We also booked orders, other orders, which we will as well play an important role in our future business, such as the contract to deliver 20 latest generation Eurofighters to the Spanish Air Force, as well as the renewal of two contracts for the in-service support of the Spanish fleet, the order by the Republic of Indonesia for two Airbus A400M and services, becoming effective, which makes Indonesia the 10th operator of this aircraft, and the contract to provide two high-performance optical Earth observation satellites and services to Poland. This confirms the confidence of our customers in our company and products and takes our order intake to 13.7 billion euros, corresponding to a book-to-bid of around 1.2. Voilà. Now, Dominique will take you through our financials.