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MarketScreener Homepage  >  Equities  >  Euronext Paris  >  Airbus SE    AIR   NL0000235190

AIRBUS SE

(AIR)
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Exclusive: Airbus defence unit sees cash challenge, adopts efficiency plan

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10/09/2019 | 04:14am EDT
FILE PHOTO: 2019 Paris Air Show

LONDON (Reuters) - Airbus Defence and Space has issued an internal warning of significant challenges in meeting cashflow and other targets for 2019 as it rolls out an internal efficiency plan called "Momentum", people familiar with the matter said.

It is the second time in as many years the group's second largest division has been forced to urge its 33,000 staff to save more cash in the final quarter of the year, a period when government customers are often slow in finalising payments.

This year, the squeeze has gained extra urgency as Airbus remains locked in a dispute with Germany over a freeze on arms exports to Saudi Arabia, imposed after the killing of journalist Jamal Kashoggi by Saudi operatives just over a year ago.

Airbus says the moratorium on defence export licences has disrupted an already long-delayed Saudi border systems contract.

Airbus Defence and Space staff have been urged to take steps to improve the division's cash position by the end of 2019, the people said, adding no figures were available.

One part of that effort is Momentum, a new plan aimed at achieving durable improvements in performance over a long term.

Responding to a Reuters query, an Airbus spokesman confirmed the focus on improving cash as well as the new efficiency plan.

"In early fall, as is rather customary, management has reminded the teams inside Airbus Defence and Space that we have to work hard in order to meet our targets by year-end," the spokesman said.

"Our particular focus in 2019 is on achieving our free cashflow objectives. Momentum, in its current phase, is one supporting tool in our instrument box to make that happen."

Airbus took a total of 208 million euros ($228 million) in first-half charges related to the Saudi contract, but has declined to put any numbers on the fallout to its cashflow.

The group is targeting a positive free cashflow before M&A and customer financing of approximately 4 billion euros in 2019 after an outflow of 3.981 billion euros in the first half blamed partly on higher inventories due to delayed jetliner deliveries.

Airbus Defence and Space is the group's second largest division by sales and contributes some 17% of its revenue.

The division supplies aerial refuelling tankers, satellites and military transport planes, and contributes to the four-nation Eurofighter Typhoon combat jet. It has also partnered with France’s Dassault Aviation to study a successor to the Eurofighter and the French Rafale.

Divisional chief executive Dirk Hoke has urged Berlin to relax the Saudi export ban, saying it will not lead to far-reaching changes in the Gulf kingdom. But Chancellor Angela Merkel's government has said there is no reason to alter the moratorium which has been extended to March next year.

($1 = 0.9107 euros)

(Reporting by Tim Hepher; Editing by Mark Potter)

By Tim Hepher

Stocks treated in this article : Airbus SE, Dassault Aviation
Stocks mentioned in the article
ChangeLast1st jan.
AIRBUS SE 0.44% 119.84 Real-time Quote.42.12%
DASSAULT AVIATION 0.00% 1235 Real-time Quote.2.07%
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Financials (EUR)
Sales 2019 70 398 M
EBIT 2019 6 926 M
Net income 2019 4 633 M
Finance 2019 14 810 M
Yield 2019 1,77%
P/E ratio 2019 20,2x
P/E ratio 2020 16,9x
EV / Sales2019 1,11x
EV / Sales2020 1,01x
Capitalization 93 175 M
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Mean consensus BUY
Number of Analysts 25
Average target price 144,67  €
Last Close Price 119,84  €
Spread / Highest target 37,7%
Spread / Average Target 20,7%
Spread / Lowest Target -8,21%
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Managers
NameTitle
Guillaume Faury Chief Executive Officer
Denis Ranque Non-Executive Chairman
Michael Schöllhorn Chief Operating Officer
Dominik Asam Chief Financial Officer
Luc Hennekens Chief Information Officer
Sector and Competitors
1st jan.Capitalization (M$)
AIRBUS SE42.12%102 634
BOEING COMPANY (THE)15.03%209 570
TEXTRON10.09%11 614
DASSAULT AVIATION2.07%11 358
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AVIC ELECTROMECHANICAL SYSTEMS CO LTD--.--%3 249