Within an uncertain macro-economic environment EADS registered a remarkable order intake reflecting the quality of its commercial and defence product portfolio. The Group confirms its full-year 2008 EBIT guidance of 1.8 billion euros in spite of an A380 charge.

"EADS is delivering strong results. Our order book is at a record level as our products and our technologies are outstanding. The recent Farnborough air show proved this impressively. In the commercial market our fuel and eco-efficient range of excellent products meets the core of customers' demand. In terms of economic performance we are progressing thanks to far- reaching efforts involving all five Divisions," said EADS CEO Louis Gallois.

"To maintain competitiveness, EADS has to tackle the ongoing US dollar weakness. Beyond the successfully running Power8 initiative we are launching Power8 Plus aiming at an additional euros 1 billion savings and efficiency improvement in the years following 2010."

Airbus continued to ramp-up deliveries and handed over 245 aircraft (H1 2007: 231 aircraft) to its customers. Just recently, Emirates became the second operator of the A380, receiving its first aircraft from the delivery centre in Hamburg.

The Military Transport Aircraft Division rolled out the first A400M from the final assembly line in Seville; first flight is expected in autumn. Eurocopter registered a strong order intake bringing its order book to a record high. Astrium made substantial progress in completing the military satellite communication system Skynet 5. The Defence and Security Division expanded its secure communications business and forged ahead in its Unmanned Aerial Vehicle (UAV) activities.

Revenues increased by 8 percent to euros 19.7 billion (H1 2007: euros 18.4 billion) reflecting growth across all five Divisions despite a negative US dollar headwind. Higher Airbus deliveries (245 units, including four A380s, compared to 231 aircraft in the same period of 2007), increased volumes at Eurocopter, Astrium and Defence and Security and an A400M milestone achievement demonstrate the strong commercial momentum in the first half of 2008.

EADS' EBIT (pre goodwill and exceptionals) for the first half of 2008 reached 1.16 billion euros compared to 358 million euros in the first half of 2007, when Airbus' EBIT in particular was heavily burdened by Power8 restructuring provisions and A350 launch charges. The growth resulted from improvements across all Divisions.

At Airbus, strong operational performance and achievement of Power8 cost savings were partly offset by a euros 715 million charge in the context of the A380 programme review announced in May. Nevertheless, in the first six months of 2008, Group EBIT benefited from under-proportional R and D expenses but this benefit will reverse in the second half of the year.

In the first six months of 2008 a negative US dollar impact of around euros 700 million led to loss-making contract adjustments and put pressure on the Group's EBIT. Deterioration of hedge rates was compensated by temporary excess volume of matured hedges.

In line with the Group's EBIT development, EADS improved its Net Income to 403 million euros (H1 2007: 71 million euros), or earnings per share of 0.50 euros (earnings per share H1 2007: euros 0.09). To further address the weak US dollar and to secure future profitability, EADS is taking decisive actions with regard to its hedging activities.

The Group started to complement its hedging positions buying a significant amount of US dollar options.

Self-financed R and D expenses decreased slightly to 1,130 million euros (H1 2007: euros 1,266 million), but are expected to grow over the full year mainly in the context of Airbus' aircraft development programmes, especially for the A350.

Free Cash Flow before customer financing increased significantly to euros 962 million (H1 2007: euros -29 million) driven by improved cash flow from operations and reduced capital expenditure. The improvement in operating cash flow mainly related to a stronger inflow of customer advance payments; it additionally benefited from a much lower build-up of inventories.

Consequently, Free Cash Flow including customer financing improved to euros 1,043 million (H1 2007: euros -67 million) despite a cash-out for the acquisition of PlantCML.

An additional benefit came from a net contribution from sell-down of customer financing assets compared to a cash-out in the first half of 2007. In the first half of 2008, Cash Flow is significantly less impacted by capital expenditure, settlement payments and restructuring expenses than it will be over the rest of the year. At the end of June, the Net Cash Position reached euros 8.1 billion (year-end 2007: euros 7.0 billion).

In the first six months of 2008, EADS' order intake reached a remarkable level of euros 51.2 billion compared to a record of euros 70.1 billion in the first six months of 2007, when the order intake was strongly supported by the extraordinary high order flow at the Paris air show.

Up to the end of June 2008, the Group's order book remained at a record level of euros 354.2 billion (year-end 2007: euros 339.5 billion). Orders for 247 aircraft received during the recent Farnborough air show are not yet included in H1 order book.

The growth in order book was achieved despite a euros -17 billion revaluation due to the weaker US dollar at the end of June. Orders within the commercial aircraft business are based on list prices. The Group further expanded its defence order book mainly thanks to its Military Transport Aircraft Division; the defence order book closed the first half at euros 57.7 billion (year-end 2007: euros 54.5 billion). At the end of June, EADS had 117,198 employees (year-end 2007: 116,493).

Group-wide efficiency measures are progressing well. The Power8 restructuring programme is ahead of schedule and achieved around euros 400 million EBIT contribution in the first half of 2008. Airbus has made considerable progress in overhead reductions and secured approximately 40 percent of the target for this module.

The Group-wide selection of 28 preferred suppliers of engineering services out of an existing pool of 2,000 marked a significant step towards implementing a global sourcing strategy. In terms of Smart Buying, Airbus is changing its supplier contracts to life-cycle of programme contracts for selected aerostructures, systems and equipment suppliers to limit non-recurring costs.

General procurement targets are already secured to 2010, driven by quick wins and new sourcing initiatives as well as optimized logistics. The site divestment strategy is maintained and the creation of the new French and German aerostructures companies is progressing. These companies must comply with the full original Power8 cost saving targets.

The sale of Laupheim (Germany) to Diehl/Thales is nearing completion, negotiations on divestment in Filton (UK) are ongoing. Early July, EADS opened exclusive negotiations with the Group DAHER for acquisition of a majority interest within EADS Socata. Given the progress and prospects registered on the Power8 programme so far, EADS and Airbus maintain the previously communicated Power8 targets regarding EBIT and Cash savings.

In addition to the successfully running Power8 programme EADS is launching a Group-wide Power8 Plus programme to expand current initiatives after 2010. EADS will strengthen its focus on increasing its global footprint for engineering and manufacturing.

Power8 Plus targets a more internationalised cost base (compared to a current one dominated by the Euro) and is intended to deliver a further annual EBIT benefit of euros 1 billion from across the Group in 2011 to 2012. The measures will be presented to the European Works Council in autumn. OutlookThe EADS guidance is based on a closing spot rate at year-end 2008 of euros 1 = US$ 1.45.

EADS expects Airbus to capture above 850 aircraft orders in 2008.

EADS revenues are expected to exceed euros 40 billion in 2008, with about 470 aircraft deliveries for the full year.

EADS expects its 2008 EBIT to reach euros 1.8 billion. The strong underlying performance generated across all businesses in the first half of 2008 provides some upside potential. Nevertheless, EADS remains cautious regarding the A400M programme.

The Group expects that the results of the first flight tests and further negotiations with customers and suppliers will provide a sound basis for the finalisation of the cost-at-completion exercise on the A400M programme.

The weakening of closing spot rate at year-end 2008 could have negative impacts on earnings linked to the revaluation at a deteriorated US dollar rate of some Airbus balance sheet items, including loss-making contract provisions.

Before the impact of customer financing, EADS expects 2008 Free Cash Flow at above euros 1 billion if the current trend is confirmed and while bearing in mind that this is the most volatile item to predict. Divisions: Vitality in business performanceThe Airbus Division's revenues increased to euros 13,586 million (H1 2007: euros 12,889 million) driven mainly by high volumes.

Airbus delivered 245 aircraft including 4 A380s (H1 2007: 231 aircraft). Revenue growth was further supported by higher service activities and an A400M revenue milestone recognition reflecting Airbus' internal work share. The increase came despite a negative US dollar impact. In the first six months of 2008, EBIT surged to euros 712 million compared to euros 19 million in the first half of the previous year, when it was burdened by exceptional restructuring and A350 charges.

The higher EBIT reflected the excellent delivery performance for single-aisle and A330 aircraft as well as Power8 savings. EBIT increased despite the pressure resulting from charges for the A380 programme (euros 715 million, representing the loss-making contract adjustment of the revised production ramp-up announced in May) and the US dollar burden.

Airbus experienced continuing strong demand for new aircraft over the first half of 2008 and achieved a total of 525 gross orders (487 net orders). This market success reflects the outstanding efficiency of Airbus' product portfolio in times of high fuel prices. The order intake led to a market share of 52 percent. The new gross orders taken over the first six months of 2008 comprise 335 A320 Family aircraft, 105 A330s, 82 A350s and three A380s.

As of 30 June, the Airbus order book amounted to euros 294.8 billion (year-end 2007: euros 283.8 billion) based on list prices. Five A380s are performing extremely well in daily airline operations; first delivery to Emirates has taken place just recently. The contracts for 247 aircraft signed during the recent Farnborough air show - thereof 98 A350s - are not included in the H1 order book. In terms of units the overall order book further increased in the period up to 30 June to a record of 3,663 aircraft (year-end 2007: 3,421 aircraft) translating into an equivalent of around six years' production.

The Military Transport Aircraft Division's revenues grew in the first half of 2008 to euros 898 million (H1 2007: euros 307 million) thanks to A400M Power-On milestone revenue recognition - shifted from 2007 and worth around euros 400 million - compared to no revenue recognition in the first half of 2007. The Division's EBIT improved slightly and stood at euros -20 million (H1 2007: euros -29 million).

The pressure on the A400M programme remains, but progress was marked by the roll-out of the first A400M taking place at the final assembly line in Seville (Spain) end of June. The aircraft is undergoing a comprehensive test programme targeting first flight in autumn.

In the context of the partial re-opening of the US Air Force's tanker competition, EADS and its partner Northrop Grumman remain confident of offering the most suitable tanker aircraft. The partners welcome the customer's decision to complete the tanker re-competition in an expeditious time frame and are prepared to respond quickly to the amended Request for Proposal.

Supported by tanker orders from the UK and Saudi Arabia and by contracts for two CN-235s, the order book of the Military Transport Aircraft Division increased by the end of June 2008 to euros 23.2 billion (year-end 2007: euros 19.9 billion).

Eurocopter continues to gain momentum across its business activities. Revenues further rose by 9 percent to euros 1,795 million (H1 2007: euros 1,644 million). This came from ongoing delivery ramp-up in serial helicopters and higher development activities for customers. EBIT tripled to euros 104 million compared to euros 35 million in the same period of 2007, when it was burdened by an exceptional charge for the NH90. Eurocopter's EBIT increase reflected a positive volume effect; it was achieved despite an unfavourable US dollar impact and higher R and D expenses.

In the first six months of 2008, Eurocopter handed over 254 helicopters to customers compared to 209 units in the same period of the previous year. Out of the production line in Columbus, Mississippi, Eurocopter delivered 14 UH-72A helicopters in the first half 2008 - all on or ahead of schedule. The NH90 production ramp-up is progressing: In the first half of 2008, nine helicopters were delivered, among them the first to Finland.

The Division further extended its international industrial presence and signed an industrial co-operation agreement with the Brazilian government in June. Eurocopter derives more than 30 percent of its revenues from services.

To strengthen this activity Eurocopter acquired the MRO specialist Motorflug Baden-Baden in Germany (antitrust confirmation is pending). From January to June 2008, Eurocopter sold 475 helicopters (H1 2007: 481), bringing the order book to a total of 1,609 helicopters (year-end 2007: 1,388) or a record value of euros 14.6 billion (year-end 2007: euros 13.5 billion).

Astrium's results in the first six months of 2008 reflected a strong focus on efficiency and innovation. The Division continued to increase its revenues, which amounted to euros 1,701 million (H1 2007: euros 1,420 million). This 20 percent growth was mainly fuelled by an increased Ariane 5 production rate and the ramp-up of Paradigm services.

EBIT surged to euros 88 million (H1 2007: euros 47 million). This rise is in line with the development of revenues and operational improvements compared to the same period of the previous year. EBIT growth more than made up for the unfavourable impact of the declining GB Pound against the Euro.

In the Paradigm programme Astrium has completed the Skynet 5 military satellite communication fleet with the successful launch of the third Skynet 5 satellite in June. Astrium subsidiary Paradigm is providing enhanced services to the UK Ministry of Defence. With the docking of Columbus onto the International Space Station ISS, the launch of the Automated Transfer Vehicle ATV by a more powerful version of Ariane 5 and the docking of the ATV onto the ISS, Astrium has achieved three brilliant successes.

In July, Astrium expanded its earth observation activities through the acquisition of a majority share in Spot Image. The European Space Agency ESA awarded a service agreement related to the European part of the ISS to Astrium. In the area of earth observation the Division won two contracts for ESA's EarthCARE and Sentinel-2 satellites. Together with further telecom satellite orders such as Express AM4, this led to an Astrium order book of euros 12.8 billion at the end of June 2008 (year-end 2007: euros 12.9 billion).

The revenues of the Defence and Security Division rose to euros 2,167 million, compared to euros 2,063 million for the same period of 2007. The growth was driven by stronger contributions mainly from Eurofighter, Defence Electronics and first time consolidation of the acquired PlantCML.

The Division's EBIT grew strongly to euros 134 million (H1 2007: euros 70 million) thanks to operational improvements across all activities, particularly in the Eurofighter and missiles businesses, and lower structural costs. In the context of the MBDA consolidation change, H1 2007 figures have been adjusted taking MBDA into account at 37.5 percent.

The Division continued its success in the Unmanned Aerial Vehicle (UAV) business and received flight acceptance for the SIDM system. A first batch of 25 DRAC systems has been delivered to the French Ministry of Defence and a second batch of 35 of these mini-UAV systems has been ordered. EADS is currently the only European company capable of meeting requirements ranging from strategic to tactical through the supply of both large and mini-UAV systems.

In the area of secure networks the Division achieved export orders from Hong Kong, Qatar and Brazil. Additionally, EADS has submitted Eurofighter proposals to India and Switzerland. In early July, EADS was awarded a contract to replace air traffic control radars for German military air fields. The Division's order book slightly improved to euros 18.0 billion (year-end 2007: euros 17.8 billion).

Headquarters and Other Businesses (not belonging to any Division):Other Businesses' (ATR, EADS EFW, EADS Socata, EADS Sogerma and EADS North America) revenues stood at euros 688 million (H1 2007: euros 668 million). Other Businesses' EBIT stood at euros 35 million in the first half of 2008 (H1 2007: euros 45 million).

In the first six months of 2008, regional aircraft manufacturer ATR delivered 22 aircraft (compared to 20 units in H1 2007) to its customers and received new orders for 7 aircraft. This led to a total order book of 180 aircraft by the end of June. EADS EFW was burdened by an unfavourable product mix caused by lower deliveries of converted freighters but a stronger aerostructures business compared to the same period of the previous year.

Future business will benefit from the co-operation with Lufthansa Technik for the conversion and modification of Airbus aircraft and the link-up with Russian partners for the A320 freighter conversion. EADS Socata handed over 21 TBM 850s to customers and has an order book of 91 aircraft. Early July, EADS opened exclusive negotiations for the acquisition of a majority interest in EADS Socata by DAHER. EADS Sogerma achieved a solid business performance in the first six months of 2008.

On 30 June 2008, the order book of Other Businesses stood at euros 3.0 billion (year-end 2007: euros 2.7 billion). Headquarters/Consolidation EBIT contracted compared to the same period of the previous year, when it benefited from the sale of EADS' stake in Embraer and corporate real estate sales.

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