Airbus Group Aktie

Thank you for standing by. Welcome to the Airbus Q1 2026 Earnings Release Conference Call. I am Laura, the operator for this conference. [Operator Instructions] And the conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Jean-Christophe Henoux, Head of Investor Relations. Please go ahead.

Thank you, Laura, and a very warm welcome to everyone joining us today to dive into our Q1 2026 results. I am in Amsterdam with our CEO, Guillaume Faury; and our CFO, Thomas Toepfer. They are here to break down the numbers and take your questions. This call is planned to last 1 hour, including Q&A, and a replay will be available on our website. Today's presentation and detailed financial statements are already available on Airbus website. Before we start, let me remind you that we will be making some forward-looking statements today. I encourage you to take a look at the safe harbor statement in our presentation slides. It's important stuff, so please have a quick read. And with that, let's get things started. Guillaume, the floor is yours.

Thank you, JC, and good evening, ladies and gentlemen, or good morning, depending where you connect from. We are in Amsterdam, as said by JC, and I'm with Thomas to run you through our Q1 2026 results. As I told you in February, the global environment was complex and dynamic, and the situation in the Middle East demonstrates that it remains the case, and it remains fast changing. While today, there's no direct impact on deliveries, we are actively monitoring potential consequences on air traffic and the global economy. Our priority remains the safety of our employees based in the region who are supporting our customers.

On defence, the momentum continues. The focus is on steady execution and ramping up to serve the global demand. On commercial aircraft, we delivered 114 aircraft in Q1. Despite this low number of deliveries, we are ramping up production in line with our plan for 2026 while navigating a shortage of Pratt & Whitney engines. This is directly reflected in our financial results with EBIT adjusted standing at EUR 0.3 billion and free cash flow before customer financing at minus EUR 2.5 billion. Our full year 2026 guidance remains unchanged.

So now let's look at our commercial environment and starting with commercial aircraft. In early 2026, the passenger traffic expanded and air cargo demand showed sustained momentum. Short term, we are monitoring the situation in the Middle East and the global air traffic, and we remain confident in the fundamentals of the industry. During this quarter, we booked 408 gross orders. On the A220, we booked 20 gross orders, and we continue seeing positive momentum. Looking at the A320 family, we booked 336 gross orders. This brings our backlog to 7,418 aircraft, of which approximately 75% are for the A321.

Moving to the wide-bodies. On the A330, we booked 17 gross orders. And finally, on the A350, we booked 35 gross orders. I'm pleased to report our largest freighter order that has been placed by Atlas Air Worldwide for 20 A350 freighters. This also makes them the largest customer for the freight and the first in the U.S., bringing our total freighter backlog above 100 units. Net orders amounted to 398, including 10 cancellations. Our backlog in units increased to 9,037 aircraft at the end of March 2026. Before moving to helicopters, let me highlight a key milestone in our growing services business. Indeed, in order to better deliver digital services to our customers, we have recently merged our flight operations specialist subsidiary, Navblue, with our Skywise digital solutions activities to form a new company called Skywise. It will provide end-to-end digital solutions to aircraft operators.

So now moving on to Helicopters. In Q1 2026, we booked 79 net orders compared to 100 in Q1 2025. We signed strategic long-term framework contracts for the H135, the H140 and the H145 helicopters with 2 significant emergency medical services operators in Europe. At the VertiCon 2026, Airbus Corporate Helicopters announced ACH140, so the corporate version of the H140. So Airbus Corporate helicopters announced launch customers across 3 key regions: the U.S., Europe and Brazil, our leading markets for private and business aviation. The market reaction for the new helicopter for this new helicopter is a positive one.

Finally, looking at Unmanned Air Systems, Garuda Technologies in the U.S. signed a contract for delivery of up to 18 Flexrotor Uncrewed Aerial Systems. Overall, we continue to see good momentum in both the civil and military markets, and we remain fully focused on delivering on expectations, including ramping up. And finally, on Defence & Space, we finished Q1 with a very strong order intake of EUR 5 billion, mostly on the air power side, reflecting the need from our customers for military aircraft and services.

In addition, we continue to strengthen our position in the drone and anti-drone markets. Notably, we are making progress on the [indiscernible] UCCA, Uncrewed Collaborative Combat Aircraft as well as on our Bird of Prey drone interceptor designed to provide armed forces with a cost-effective counter UAS capability. On FCAS, work is ongoing with the French, German and Spanish governments to decide on the project's way forward. At Airbus, we continue to believe in the need for Europe to develop new combat air systems, and we continue to play a leading role in that effort.

In Connected Intelligence, we are advancing on our cybersecurity road map with the signing of the acquisitions of Ultra Cyber Limited in the U.K. and Quarkslab in France. This further strengthens our sovereign cyber capabilities, complementing the 2024 acquisition of Infodas in Germany. Finally, in Space Systems, we continue to observe good order dynamics. We are very proud of our contribution to the Artemis II lunar flyby mission. Indeed, the Airbus design and built ESM, the European Service Module provides essential propulsion, power and thermal control, ensuring the safety and success of this historic journey into deep space.

And now Thomas will take you through our financials. Thomas?

Thank you very much, Guillaume, and hello, ladies and gentlemen. Thank you for joining the call. I'm now on Page 6 of the presentation, and I'll take you through our financial performance. As you can see on the page, our Q1 2026 revenues decreased to EUR 12.7 billion, down 7% year-on-year, and that's mainly reflecting the lower commercial aircraft deliveries in the quarter and also the U.S. dollar depreciation, however, partially offset by a higher contribution from our Defence & Space division. And on R&D, as you can see on the right-hand side, our expenses slightly increased versus Q1 2025 and stood at EUR 0.7 billion. And let me remind you that our R&D expenses are expected to increase in 2026, notably to support the defence portfolio acceleration.

If you turn to the next page, on to EBIT adjusted. Our Q1 2026 EBIT adjusted decreased to EUR 0.3 billion from EUR 0.6 billion in Q1 2025, and it reflects the lower commercial aircraft deliveries as well as a EUR 0.02 hedge rate deterioration, but it also reflects a strong performance in Defence & Space. Now coming to the EBIT adjustments, which were EUR 76 million negative in Q1 2026. You see them on the upper right-hand side, and they included a negative EUR 42 million impact from the dollar working capital mismatch and balance sheet revaluation, mainly reflecting the mechanical impact coming from the difference between transaction date and delivery date.

Secondly, negative EUR 32 million related to the integration of the former Spirit AeroSystems work packages. And last but not least, negative EUR 2 million of other costs, including M&A. And this takes our Q1 2026 EBIT to plus EUR 0.2 billion together. As you can also see on the right-hand side, our financial result was positive EUR 466 million, and that mainly reflects the revaluation of certain equity investments and the tax rate on the core business continues to be around 27%. However, the effective tax rate is 20% in the quarter, including the tax effect on the revaluation of certain equity investments, partially offset by the effect of the French surtax. For 2026 as a whole, we expect the French surtax to be broadly in line with 2025, which you recall was roughly EUR 0.2 billion. So the resulting net income is EUR 0.6 billion with earnings per share of EUR 0.74. And our Q1 2026 EPS adjusted stood at EUR 0.33 based on an average of 787 million shares.

Now on to our U.S. dollar exposure coverage on Page 8. In Q1 2026, $3.4 billion of forwards matured with the associated EBIT impact and euro conversions realized at a blended rate of $1.21 versus $1.19 in Q1 2025. And in Q1 2026, we implemented $5 billion in new coverage over a 5-year horizon with a mix of instruments, including collars and the blended rate of $1.24 for this quarter's additions reflects, in particular, the least favorable rate of the collars, which are primarily weighted towards the outer years of our hedge horizon. And as a result, our total U.S. dollar coverage portfolio in U.S. dollar stands at $77.4 billion with an average blended rate of $1.22 as compared to USD 75.8 billion at a rate of $1.22 at the end of 2025. And as mentioned in the full year 2025 disclosure, we have adjusted our portfolio this quarter by implementing some rollovers to reflect the delivery target and phasing for 2026, which we expect to be back-end loaded.

Now on to a more detailed look at the free cash flow on Page 9. Our free cash flow before customer financing was minus EUR 2.5 billion in Q1 2026. This outflow mainly reflects the low level of commercial deliveries, which leads to a further inventory increase on top of the one that we had already planned for the ramp-up. And our Q1 2026 CapEx was minus EUR 0.6 billion, as you can see on the page, and this supports our ramp-up and the successful integration of the former Spirit AeroSystems work packages. In order to do this, we expect our CapEx to continue to increase in 2026.

Now the free cash flow was minus EUR 2.4 billion, including customer financing for positive EUR 0.1 billion, and we continue to see a diverse and competitive financing landscape in Q1 2026. And at the moment, we expect sufficient market liquidity to finance our 2026 deliveries. And last but not least, as you can see, our net cash position stood at EUR 9.8 billion as at the end of March, and our liquidity remains very strong, above EUR 30 billion. And with this, I would like to hand it back to Guillaume.

Thank you, Thomas. So starting with commercial aircraft. In Q1, we delivered 114 aircraft to 46 customers. Looking at the situation by aircraft family, on the A220, we delivered 19 aircraft. The ramp-up is ongoing, and we continue to target a rate of 13 aircraft a month in 2028. So that's no change. On the A320, we delivered 81 aircraft, of which 55 A321s, representing 68% of deliveries for the A320 family. As mentioned, this low number of deliveries results from a so-called desynchronization between production and delivery. The first element of this is the panel quality issue that you know. On this, we are progressing well, and we confirm the operational impact will be limited -- is limited and will spread mainly over H1 of this year.

Secondly, we faced an administrative delay that affected the delivery of nearly 20 aircraft to Chinese customers. The origin of the issue is behind us and the corresponding deliveries have resumed. So that's something we are putting behind us now. Overall, Pratt & Whitney remains the key pacer of our A320 ramp-up trajectory and deliveries for this year and for next year, so impacting both '26 and '27. As a result, I would say, no change for the A320. We expect to reach a rate of between 70 and 75 aircraft a month by the end of next year, 2027, and stabilizing at rate 75 thereafter.

Now moving to widebodies. We delivered 14 aircraft, of which 3 A330s and 11 A350s. On the A330, no change. We target to reach the rate 5 in 2029 to meet customer demand. And on the A350, no change either. We continue to target the rate 12 in 2028. When it comes to the A350 freighter, the ground testing program is on track, paving the way for the first test flight later this year.

Now let's look at the financials for our commercial aircraft business. Revenues decreased 11% year-on-year, mainly reflecting the lower deliveries and the U.S. dollar depreciation. EBIT adjusted decreased to EUR 0.1 billion from EUR 0.5 billion in Q1 '25, driven by the lower deliveries as well as a less favorable hedge rate.

Moving to helicopters. In Q1 of this year, we delivered 56 helicopters, so 5 more than in the first quarter of 2025. Revenues stayed flat at EUR 1.6 billion, reflecting a less favorable delivery mix in the first quarter. As a result, EBIT adjusted stood at EUR 65 million, reflecting a solid performance from programs, offset by higher R&D expenses. We next complete our review with Defence & Space, where revenues increased 7% year-on-year to EUR 2.8 billion, driven mainly by higher volumes in Air Power. This notably reflects deliveries of 2 A400Ms in the first quarter, including export A400M to Indonesia. This resulted in EBIT of EUR 130 million supported by better profitability across all business units.

Now moving on to our guidance, which remains unchanged. As the basis for its 2026 guidance, the company assumes no additional disruptions to global trade or the world economy, air traffic, the supply chain, its internal operations and ability to deliver products and services. The company's 2026 guidance is before M&A and includes the impact of currently applicable tariffs. On that basis, the company targets to achieve in 2026 around 870 commercial aircraft deliveries. An EBIT adjusted of around EUR 7.5 billion and the free cash flow before customer financing of around EUR 4.5 billion.

Moving on to our key priorities, they have not changed since last year. We remain focused on ramping up across all our programs, ramp-up, ramp-up, ramp- up. With our strong portfolio of products and services, we are fully committed to serving both our commercial and military customers. We continue to rely on our core pillars that underpin everything we do as a company, safety, quality, integrity, compliance, and security. When it comes to the geopolitical environment, we can also rely on our global footprint, diversified backlog and operational resilience. Finally, we continue to deliver profitable growth while advancing our key priorities. And now we are ready to take your questions.

Thank you, Guillaume and Thomas. Before opening the Q&A session, let me set a couple of guidelines. First, please introduce yourself and your company before you dive in. Second, we ask you to limit yourself to 2 questions so that we keep things fair for everyone in the queue. And finally, a small favor for the speakers, please try to keep a steady pace and speak clearly. It really helps us and everyone listening in to fully capture your question.

Now Laura, could you please explain the Q&A procedure for our participants?

[Operator Instructions] We have a first question from Ross Law from Morgan Stanley.

So a couple for me. The first is you're calling out a shortage of Pratt & Whitney engines. I just want to check, is this shortage versus the initial agreement? Or is this a shortage versus the lower number that they proposed to you for this year? And secondly, just on working capital, inventories grew by over EUR 5 billion sequentially in the quarter. How many aircraft do you currently have fully built with engines but are just awaiting the panel fix?

Thomas, do you want to take that?

Yes. Let me maybe start with the -- your last question, Ross. So indeed, we built EUR 5 billion of inventory. That is significantly more than the buildup of last year, almost EUR 1.5 billion more buildup, if you like, and that explains obviously the free cash flow development. And the driver behind that is mainly what Guillaume mentioned in his speech saying that we had an administrative delay. So almost 20 aircraft couldn't be delivered to China. The issue is resolved and the deliveries have resumed after the close of the quarter, but that is the main reason why inventory is so elevated, and it also gives you the order of magnitude of aircraft that essentially have been built and were ready, but could not be delivered for -- because of an administrative topic that we had to resolve.

Shortage of Pratt & Whitney engine. You want me to take it or you take it?

And maybe on Pratt & Whitney directly, Ross, no, the situation has not changed. So the shortage is the same shortage that we were talking about in our full year call. So it's a shortage about what we have requested from them. The situation in terms of what they told us they would deliver for 2026 has since then not changed. So therefore, that is what we have put as the basis for our guidance. And as I said, this is unchanged. So we're on track with it.

Now we have a question from David Perry from JPMorgan.

Two questions, if I can. Can I just follow up on the China deliveries? Because I think we all look at Cirium and noticed there was a nice bounce in the deliveries in the last few days, but maybe that was the China 20 planes. So it looks like the underlying deliveries are still quite low. So I just wondered if you can maybe add some color about the fuselage panel issue, what's kind of going on there? You said it would mostly be resolved in H1, Guillaume, but just any color on the cadence of deliveries for April, May, June might be helpful. And then the second one, just now you've had a few months to poke around Spirit. I just wondered if your views have evolved at all in terms of the work needs to be done? Is everything as expected? Any thoughts or color on the A350 ramp would be great.

David, I hope you're well, too. Thank you. So on the -- well, the Spirit and the first question was on...

The China delivery.

The China deliveries. What I'd like to say is that the -- what supports the deliveries in the year is the production. And the production is moving forward on plan. So that doesn't translate into unplanned deliveries because we have what I call the desynchronization between production and deliveries. That's coming from different factors, which we highlighted earlier. Obviously, as you can imagine, China makes a significant difference, almost 20 planes that's big for 1 quarter, especially the first quarter. But we're also managing this panel issue end of last year, Q1, Q2, and it will be mostly finished by end of Q2.

I'm not granular here on how many will come in April, May, June, but that's an ongoing exercise. So that's going to come somewhere mostly in the second quarter. That leads us to recovery of the situation as we move forward, starting from a very low base in Q1 2026 in terms of deliveries again. But as Thomas commented on before, the increase in inventories actually show that this ramp-up is taking place. And that's something we see, and we trust that we have enabled the deliveries for the next 3 quarters to support the guidance that we have confirmed for a number of aircrafts. I hope that helps. Now Spirit, do you want to say a few words?

Yes. On Spirit, David, no negative discoveries. I would say that we are on track. And therefore, the financial guidance that we've given for Spirit is unchanged. Remember, it's a low triple-digit negative on EBIT and an up to high triple-digit negative on free cash flow. Why is that? Because we have to make investments and focus on the ramp-up of 2 critical parts, one being the wings for the 220 in Belfast and secondly, for the Section 15 in Kinston.

I would say the wings is the slightly easier one because we have our teams in Broughton and so to send experts to Belfast, I would say, is the easier one. Kinston, as you know, is in the middle of nowhere. So this is the slightly more difficult one to send experts and make sure that the ramp-up is happening. But overall, our view is unchanged and the financial guidance for Spirit was also unchanged.

We have a question from Chloe Lemarie from Jefferies.

I have 2 questions, if I may. The first one is on, I think, a comment that was made on the press call about the fact that there is so far no agreement yet with Pratt & Whitney. Could you please elaborate on this? What's slowing this agreement? What does that mean for the supply for the remainder of the year? And is the uncertainty essentially within the typical materiality threshold that you apply to your delivery guidance? And the second one is on the A220 and the A350 stretch, mentioning you're not yet ready to make a decision on those. What would change your mind? Is it just kind of clearing technical hurdle assessing demand? Or is it because you're focused on the current production ramp at the moment?

So for the question on Pratt & Whitney, basically, what I can say is that the number of engines to be delivered by Pratt to Airbus this year is something that is frozen and stable. So no change, and therefore, no reason to impact or suggest there is an impact for the number of deliveries for this year. We have a number of areas of disagreements, but the number of engines to be delivered this year is not an area of disagreement. Well, it takes time to resolve a dispute of that kind.

As I mentioned earlier, we are, on the one hand, trying to resolve and find an amicable resolution of the dispute and the disagreement on the one hand. And on the other side, we are going through the contractual rights that we have to enforce our contractual rights would we not find an amicable resolution of the disagreement. So it always takes time to find a resolution of this kind of topics, especially given the magnitude of the impact that it has for us and obviously, that it has as well for Pratt & Whitney and their airline customers.

When it comes to the second question, well, it's a lot of work to come to the decision of launching a new product or an upgrade of an existing product with the magnitude of what we're speaking here. So it's just an ongoing work to come to technical convergence, industrial enablement, agreement with suppliers, timing, financing, everything. We do the normal work that we do when we go through the milestones, the gates of making decisions for those products. So it takes time, and that's something we want to do, I would say, by the book to not do shortcuts or overlook important aspects of launching a new product. And we do it in parallel of the focus we have on the ramp-up. These are not exactly -- not at all the same teams that are working on development of future products and ramping up of the existing production system. There is a bit of overlap, but not too much. And we conduct the 2 in parallel. These are 2 independent flows of activities. We try to do them -- to do both of them as good as we reasonably can.

We have a question from Milene Kerner from Barclays.

[indiscernible] Guillaume, Thomas, and Jean-Christophe. Milene Kerner from Barclays. One question for me, please. When do you expect delivery rate to structurally converge back towards your production levels?

When do we expect delivery rates to converge with production levels? Well, when you look at the full year performance, Well, generally speaking, there is a certain level of convergence. There is a high degree of convergence. We've had over the past years moments of synchronization, sometimes of significant desynchronization. But a month of December where we have 130 deliveries is the desynchronization in the other direction because we are delivering by far more aircraft than when we produce.

So actually, notionally, we produce in a much more linear and stable way than what we deliver under the influence of a number of parameters that can be customer related, that can be linked to regulatory challenges, can be linked to tariffs coming and having to be managed, can be linked to logistics, can be linked to some specific customer issues, as I said earlier, can be linked to our own industrial problems, having planes almost finished without engines or with panels having to be repaired. And that can be happening in November or December as it happened last year, can be as well another moment in the year. And therefore, we have nonlinearity of deliveries by far more than what we have, fortunately on the production side. That's why we're guiding on a yearly delivery basis.

We don't like to guide or to give rates when it comes to monthly production rates or even quarterly production rates, but it's even less possible to do it when it comes to deliveries. It's something that is nonlinear that tends to be backloaded in the Q2 and in the Q4 in most of the years, not always. And that's something that we are suffering from probably more this year than I remember we've ever suffered in the first quarter. But we believe -- we hope, we believe we should be reasonably back to where we should have been by end of H1. The administrative topic impacting the deliveries to China is resolved. So what has not been delivered in Q1 will be delivered in Q2 on top of the Q2 deliveries.

As I told you earlier, we think the majority of -- the vast majority of the aircraft impacted with the panels will be back on track and delivered. So by end of H1, absent a new situation that could come from the Middle East crisis or I don't know what, we think we should be reasonably resynchronized by end of H1. That's the way I look at it today. I hope not to be proven wrong by, again, something new. So it's not unusual that we have up and downs in deliveries that are significantly higher with more amplitude than what we see on the production. And that's also something we have on helicopters. We have on military products. Especially on military products, we are very vulnerable to customer negotiation as we approach end of the year.

We have a question from Douglas Harned from Bernstein.

When you look at -- clearly, you're working through getting to that 75 a month number on the A320 family. But the first question is, as you look toward that, you talked about stabilizing at 75 a month, but you're sold out well into the next decade. Is there a point when you would look at taking that rate up above 75 a month and thinking about investment for that? And then second question, on Pratt & Whitney, you now have a certification of the GTF Advantage engine on the airplane. And we would expect to start those deliveries perhaps by the end of this year. How do you see the ramp of the GTF advantage-powered A321s moving through the next couple of years?

So on the rate 75, it's a very important topic where we have made the decision to move to rate 75 and stabilize at rate 75 thereafter for long. So never say never, maybe there will be enough reasons to do something else at a point in time, but we are not at that point in time, and that's not the current thinking at Airbus. The current thinking is on the single aisle. We go to rate 75 and then we deliver the backlog at rate 75. We have worked hard. We have invested to have the production system, to have the final assembly lines around the world to support that rate 75 in a stable manner. And it's also a time for us to harvest all the investments because we are much more efficient when we are stable at a given rate than when we ramp up. The ramp-up is a difficult exercise. It requires a lot of working capital of hiring, training, qualification of people for us and for the supply chain.

So 75, as soon as we reach the 75, we stabilize and we keep fit for years, ideally in our perspective, a lot of years. When it comes to the Advantage, so the GTFA, indeed, it's certified. We will be delivering those engines moving forward. And the intention is that this will be the new version of engine that will be delivered as we move forward. So aircraft progressively will be delivered with Advantage engines, which we are very satisfied with. It's an important upgrade of the engine that resolves the shortages, in particular, in terms of durability that we had observed on the previous -- on the existing version of the GTF engine. So that's a very good milestone. And moving forward, we believe this will be recognized by our customers, and they will enjoy this -- the characteristics of this engine.

We have a question from Ken Herbert from RBC CM.

I have 2 questions, please, Guillaume and Thomas. First, it sounds like we should expect a nice relief of working capital in the second quarter just based on some of your delivery commentary. How do you think the cadence looks in terms of free cash flow from the first to the second quarter, which typically sees a pretty good seasonal step-up from the depressed first quarter levels? And then second, have you seen any change in your supply chain in Europe, in particular, as a result of higher input costs associated with the war, energy disruptions, anything like that, that could add any incremental risk into the production ramp within your supply chain?

Yes. Thank you. I think these are, if I may, good questions. The one -- the first one is too difficult for the CEO. I will hand over to the expertise of the CFO. And when it comes to the supply chain, there's no disruption or no change that we observe today, but we are worried about the potential impact of the different aspects of the Middle East crisis, starting with the increased price of oil and therefore, products, derivative products. That's something we are monitoring now very closely. We use the playbook that we have developed through the previous crisis, in particular, the COVID crisis to dig into the supply chain, look at the Tier 2, the Tier 3 suppliers anticipate situation of disruption, gather information, exchange information through industry association in the different countries where we are operating. And we feel that we will see things coming.

Now we are in a rather good place, if I may, entering into this crisis as we have rebuilt over the last 2 years, basically primarily and mainly the buffer stocks target that we had given to ourselves that were really low moving out of COVID. So we don't know exactly what will be coming, but we are really on it. We are prepared to anticipate and to manage a lot of situations. And that's the way we are entering into this new situation that is coming with a number of uncertainties.

Just on the free cash flow, I think, again, what I can fully confirm is it's a pure seasonality issue that is linked to the deliveries that were lower than what we had expected because of the China issue and the inventory that we have built. Indeed, that issue should be resolved also including inventory over the course of the year. So I would fully reconfirm the free cash flow guidance for the full year. And that also means indeed that in Q2, you can expect a reversal and cash flow should be positive, of course, because we will release some of the inventory that we've built in Q1.

Cash flow in Q2 will be positive.

Yes.

We have a question from Robert Stallard from Vertical Research.

A quick question or 2 questions, actually. First of all, on the broader supply chain, excluding engines. Are there any other watch areas that you have on your mind such as seat certification? And then secondly, on the defence side of the business, I was wondering how big a contributor to the growth rate you saw in Q1 was coming from MBDA.

Okay. I will turn to Thomas for the second one. When it comes to the first one, actually, we continue to have the same areas of concern, probably with a lower degree of intensity, interiors, seats, aerostructures. But again, to a lower extent, part of the aerostructure is still now internal challenges when it comes to Spirits, it's now becoming Airbus. And well, the name of the game for this year is obviously on the engine side. Now we have a reduced number of engines as a reference for the 870 deliveries. So as long as we get those engines, and I have no reason to believe it's not the case, that's stable for this year.

The other topics are not necessarily, I mean, impacting deliveries, but they impact the way we deliver, the completeness of the aircraft, especially when it comes to seats. And you might remember that we've delivered and we are entitled to deliver by contract. Aircraft squeeze out the seats when the seats are buyer-furnished equipment and they are late or very late. We don't like to be doing this. We like to find solution with customers, but that's something sometimes we have to do. So that's basically it.

On MBDA, Thomas?

On MBDA, yes. So I mean, just to be very clear, MBDA is not contained in our order intake and the revenues that we show in Defence & Space. So therefore, everything that you see here is purely organic. MBDA is only incorporated in our EBIT adjusted with the respective share that we hold. However, also to be clear here, the uplift that you see EBIT adjusted in Defence & Space, so up from the EUR 77 million to the EUR 130 million, MBDA does not play the key role. It's all organic from all the 3 business segments that we have in Defence & Space that has contributed to that. So essentially, it's really reflecting our organic growth and not our participation.

We have a question from David Strauss from Wells Fargo.

Two-part question. Are you producing any A320 gliders at the moment? That's the first part. And then the second part, you spoke of Pratt impacting your ramp-up not only in '26, but also out in 2027. As you look to 2027, is there any opportunity potentially for GE to take a bigger role in your engine delivery profile?

So no, we are not producing at this moment. And yes, we have worked with CFM to the maximum extent possible. They've supported us to the extent they can to offset part of the missing engines from Pratt & Whitney, but we also have to deal with the mix of engines and the flow in the contract. So that's something we have tried to leverage as much as we can, but it's not enough to offset the significant number of missing engines from Pratt & Whitney.

We have a question from Herve Drouet from CIC CIB.

Two questions as well on my side. The first one, just on the integration cost for Spirit. The figure of EUR 32 million, I believe we've seen in the first quarter, is it something we are likely to see on a recurring basis over the year for Spirit Aero for total in the region of EUR 150 million for the full year? And the second question is on the adjustment regarding part of the panel, which needed rework. I was wondering, I mean, initially, I believe there was an expectation that it should be almost completed by the end of first quarter. What was the reason behind the move a bit towards the end of the second quarter? Was the work scope a bit more than anticipated? And how much has been the effect on the cost side?

So maybe I'll start with the second question to the extent I can. Well, on the panel -- well, the resources required to replace the panel on an aircraft are quite significant. And therefore, we have spread the work to the extent we can, trying to find a good balance between being as fast as we can to deliver to customers, but also managing those resources so that we can repair a number of aircraft at the same time, which is compatible with this availability of resources. So no major news linked to the fact that we had said mostly by end of Q1 and now we say mostly by end of H1. So we have spread the work on 2 quarters or 1 quarter more than what we had said so far, but it doesn't change fundamentally the view I have on the situation. Now maybe on the adjustment for panels and on the integration cost of Spirit, I look at Thomas.

I mean just to be clear, for the effect of the panels, we have not taken any adjustment in our EBIT. It's a phasing effect that we have over the course of the year. And so therefore, this is nothing that we're adjusting for it's operational. And secondly, on Spirit, again, 2 statements. One is the effect of Spirit negatively that you will find in our EBIT adjusted because we have taken over the work packages that were loss-making. If you remember, we got a positive compensation for that is roughly a low triple-digit number, and I can reconfirm that. And of course, there are some integration costs that we are adjusting in our P&L because they are, as I said, classic M&A integration costs. I cannot make an exact prediction for this, but it's fair to assume that they will slightly increase over the course of the year.

That was the last question for -- and before we close, I hand over to Guillaume for the statements.

Thank you, JC. Yes, before we close, I wanted to share with you that we will host a business update at the time of the Farnborough Airshow in July. It will take place in downtown London. And the date that has been earmarked is on Tuesday, the 21st of July in the evening. And it's preliminary information. Logistic details will be shared, JC, I look at you, I think, in the following days. So again, happy to share this with you tonight. Business update on the 21st of July in London. And then back to you, JC, for the conclusion of this call.

For the closing -- thank you, Guillaume, and thank you, everyone. We really appreciate you taking the time to join us today. If you have any further questions, as usual, don't hesitate to reach out to Victoria, Olivier and [indiscernible]. Just send us an e-mail, and we will be answering as quickly as we can. That brings our session to a close for today. Have a great evening, everybody.

Good day. Thank you. Bye-bye everyone.

Thanks. Bye-bye.

Ladies and gentlemen, the conference has now concluded. You may disconnect your telephone. Thank you for joining, and have a pleasant evening. Goodbye.

Good morning, ladies and gentlemen, and welcome to our Airbus event center. Thank you for being here with us today for our annual press conference, where we will present and discuss our 2025 results. And a big thank you for all of you and all of those who are following us online today.

My name is Guillaume Steuer. I look after External Communications and Media Relations for Airbus. And here with me to present the results are Guillaume Faury, our CEO; and Thomas Toepfer, our CFO.

Guillaume will start today by sharing a few highlights about last year, 2025, and Thomas will provide you then more details about our financials. And finally, Guillaume, again, will discuss our outlook and priorities for 2026. And then, we'll move on to our Q&A session, which also those of you following online can take part in by submitting questions using the live e-tool.

As always, with these things, this entire conference is going to be in English, and there will be no simultaneous translations.

So now, ladies and gentlemen, just as usual, please familiarize yourself with our safe harbor statement, which you can now see on your screens. And please remember that in this conference, all forward-looking statements such as in our guidance are based on assumptions. And as conditions may change, so may our projections and plans.

So before I hand over to Guillaume for this overview of 2025, we wanted to share with you another short video, which we think captures some of the key achievements of Team Airbus in 2025. And I hope you enjoy it as much as the teams enjoyed putting it together. So we'll be back with you in a moment after the video.

[Presentation]

Over to you, Guillaume.

Thank you, Guillaume. Two Guillaumes on stage. Thank you, and hello, everyone. Thank you for joining us here in Toulouse and online. You will have seen from the video that last year was a colorful and exciting one. 2025 was indeed a landmark year characterized by very strong demand for our products and services across all businesses in both civil and defense. We navigated a complex and dynamic global environment, our primary focus being to manage supply chain constraints that created a disconnect, a desynchronization between production and delivery over the year.

In Commercial Aircraft, we continue to expand our industrial footprint to support our production ramp-up. We completed the acquisition of certain Spirit AeroSystems work packages with the closing on the 8th of December, and we opened a new final assembly lines in the U.S. and in China for the A320. Going forward, the shortage of engines from Pratt & Whitney will require this year our ongoing focus to secure our delivery trajectory. I will get back to this point in a moment.

Our Helicopter division delivered a strong performance from programs and growth in services. This is true on the civil side, where we are maintaining our leadership position, and on the Defense side, where our market share is growing.

Finally, in Defense and Space, we're reaping the fruits of the transformation of the division, and we're capturing the momentum created by increased defense spending in Europe and worldwide.

Overall, Team Airbus did a great job in 2025. We delivered on our commitments, meeting our updated guidance with 793 commercial aircraft deliveries. This demonstrated our collective resilience in the face of persistent and significant headwinds in our supply chain and in the broader global environment. Overall, this translated into a strong financial performance for 2025 with a record EBIT adjusted of EUR 7.1 billion and a record net income of EUR 5.2 billion, supporting our 2025 dividend proposal of EUR 3.2 per share. Thomas will give you more details on our 2025 financials in a moment.

Now, let's take a closer look at our Commercial Aircraft business. We disclosed our 2025 order and deliveries last month already, and I will go quickly over the numbers. Overall, we delivered, as I said, 793 aircraft to 91 customers, representing a year-on-year increase of 4%. The A320 panel quality issue we faced at the end of 2025 was a significant event that put pressure on our ability to deliver in an already back-loaded year. We took immediate steps to address the challenge, putting a strong focus on quality, and therefore, unfortunately impacting our 2025 deliveries.

During the year, we won repeat orders and key new customers in both single-aisle and widebody campaigns booking 1,000 gross orders, and we ended 2025 with a record backlog of 8,754 aircraft. In 2025, we delivered 607 aircraft from the A320 family, and we booked 656 gross orders, bringing the backlog of the A320 family up to 7,163 aircraft. The A321XLR, our latest addition to the family, also continued to attract new customers.

Almost 39 years ago to the day, actually, on the 22nd of February 1987, the A320 made its first flight. Last year, it officially became the most delivered commercial aircraft of all times. We saw that on the video. I can't resist and take a second to honor the Airbus pioneers who made it possible and to thank the customers who have turned it into such a global success.

And switching to another innovative single-aisle aircraft. On the A220, we delivered 93 aircraft in 2025, representing an increase of around 25% year-on-year, and we booked 49 new orders. So 93 A220s, 607 A320s, that makes 700 single-aisle, and then again, 93 for the widebodies, makes 793. On the widebodies, we delivered 36 A330s and 57 A350s.

Looking at orders on the A330, sorry, we booked 102 gross orders in another strong year, confirming the high demand for this versatile aircraft.

On the A350, we received 193 gross orders, underpinning the good commercial momentum, which was also a successful year for the A350 freighter variant with 28 new gross orders.

Now, looking ahead at the specific production ramp-up plans for each program. On the A220 family, the ramp-up is ongoing and paced by the integration of Spirit AeroSystems work packages and the balance between supply and demand. As we continue to make tactical adjustments on this ramp-up trajectory, we are now targeting a rate of 13 aircraft a month in 2028.

On the A320 family, Pratt & Whitney's failure to commit to the number of engines ordered by Airbus is negatively impacting this year's guidance and the ramp-up trajectory for this year. As a consequence, we now expect to reach the rate of between 70 and 75 aircraft a month by the end of 2027, stabilizing at rate 75 thereafter.

On the A330, there's no change, and we continue to target rate 5 in 2029.

And there's also no change on the A350, where we continue to target rate 12 in 2028.

Helicopters. 2025 was an outstanding year for helicopters, which delivered 392 units, 31 more than in 2024. We booked 536 net orders compared to 450 in 2024 with a book-to-bill well above 1, both in units and value including a strong contribution from the military segment and a good order intake from services. We continue to see positive momentum, in particular, in military markets.

Notable contracts included the order for 100 helicopters from the Spanish Ministry of Defense, the largest helicopter purchase by this customer. The Super Puma family kept performing well on the market with an important contract with the Royal Moroccan Air Force for 10 H225Ms signed in the second half of the year. And we also saw the German armed forces reinforcing their commitment by firming up options for 20 additional H145M military helicopters.

The division's drone range also recorded notable successes with contracts for the Flexrotor small tactical unmanned air system as well as for the larger VSR700 system, a 700-kilogram unmanned rotorcraft, which you see on the picture, which was ordered by the French Ministry of Defense.

And finally, we are actively preparing the future of our helicopter range. The military version of the H160 made its maiden flight last year ahead of force deliveries planned at the end of 2028. And we announced the launch of the H140, which you can also see on the slide, designed to complement our current range of light twin-engine helicopters, particularly for EMS, Emergency Medical Services, and we did that at the Verticon show in Dallas last year.

And now, moving to Defense and Space. 2025 reflected 1 more year of record order intake, which stood at EUR 17.7 billion, corresponding to a book-to-bill of around 1.3. The performance of the division last year was also the result of our transformation efforts, which are now paying off.

Looking more closely at our activities, 2025 was an excellent year for the Eurofighter program. We recorded an order for 20 aircraft from Germany, 8 for Italy, and we also welcome Turkey to the program with an order for 20 aircraft. To support this growing demand, we're ramping up production of the Eurofighter along with our program partners.

In 2025, we also recorded a first order for the new A330 MRTT+, an evolution of the existing MRTT based on the re-engined A330neo, new engine on the 330. It's an important milestone that ensures the world's most successful tanker will remain successful for the next decade.

While on air power and given how much has been written on the topic lately, let me say a word on FCAS. At Airbus, we believe that the European need for an ambitious future combat air system is unchanged. And we also believe an ambition of this scale can only be delivered through cooperation fostering operational interoperability and life cycle synergies for European air forces. But the deadlock of a single pillar should not jeopardize the entire future of this high-tech European capability, which will bolster our collective defense. If mandated by our customers, we would support a 2-fighter solution and are committed to playing a leading role in such a reorganized FCAS delivered through European cooperation.

Now coming back to our 2025 performance and looking at Space Systems. Airbus was selected by Eutelsat to build a further 340 one-way Low Earth Orbit satellites, LEO satellites, complementing the first 100 recorded in 2024. All these satellites will be produced at our Toulouse site, not far from here and will be an important contribution to Europe's efforts to strengthen its sovereignty in LEO constellations.

In Space, last year's agreement with Thales and Leonardo to bring together our Satellite and Space services activities was obviously an important milestone. At Airbus, we firmly believe, led by pulling our resources, skill and capabilities, we'll be able to create a new leader rooted in Europe and able to compete globally. Scale will help increase industrial efficiency, lower cost and ensure that Europe can maintain its autonomy across the strategic space domain. We'll continue to work closely with our partners to ensure this proposed joint venture can be established as quickly as possible while going through all necessary steps and approvals.

And now, this concludes the overview of our 2025 achievements across businesses I wanted to share with you. Handing over to you, Thomas, for a detailed look at our financials.

Well, thank you very much, Guillaume, and good morning to everybody in the room and online. I will now talk and take you through our key financial elements for the financial year 2025. And overall, I think we can say 2025, we delivered very strong financials across the board in the context of many challenges.

Now, starting with the top line, you can see our 2025 revenues increased to EUR 73.4 billion, which is up 4% year-on-year, and it's mainly reflecting the higher contribution from our divisions, the stronger services volumes across the business and also a higher level of deliveries, which was then partially offset by the weakening of the U.S. dollar. Our 2025 EBIT adjusted increased to EUR 7.1 billion from EUR 5.4 billion in '24. And of course, let me remind you that in the financial year '24, after the completion of the in-depth technical review of our space programs, we recorded a total charge of EUR 1.3 billion.

Now, in 2025, the higher commercial aircraft deliveries together with a more favorable hedge rate and lower R&D expenses were partially offset by the impact of tariffs, of which the vast majority actually occurred in Q4, and it also reflects a stronger performance in both of our divisions.

If you look at the earnings by business, the commercial aircraft's EBIT adjusted increased to EUR 5.5 billion from EUR 5.1 billion a year earlier, and that was driven by the increase in deliveries with a more favorable hedge rate and lower R&D expenses. And as I said, it was partially offset by the impact of tariffs, which we had to digest.

If you look at Helicopters, the EBIT adjusted in that division increased 13%, 1-3 percent, year-on-year to EUR 925 million. And that is, of course, reflecting the higher deliveries as well as very solid growth in the Service business.

And finally, our EBIT adjusted at Airbus Defense and Space stood at EUR 798 million, and that is reflecting the higher volumes and also is supported by the improved profitability in line with the mid-term trajectory that the division has given itself, and it's, of course, also a result of the successful transformation plan.

Now turning to the EBIT consolidated reported, this was EUR 6.1 billion with the adjustments totaling a negative EUR 1 billion and namely that negative EUR 1 billion includes a negative impact of EUR 622 million from the dollar working capital mismatch and the balance sheet revaluation. And the resulting net income for 2025 is a record EUR 5.2 billion with a reported earnings per share of EUR 6.61.

Last, but not least, and you can see it on the right-hand side of the page, our free cash flow before customer financing totaled EUR 4.6 billion in 2025. And that mainly reflects the level of deliveries, the commercial momentum across all our businesses, resulting in very healthy pre-delivery payment inflows, and it was only partially offset by the planned inventory buildup, which is associated to the ramp-up across all the programs that we have. So that finally, our net cash position for the year stood at EUR 12.2 billion at the end of December, which is also reflecting the weaker dollar environment. And I would just like to emphasize that our total liquidity is still very healthy and stands at around EUR 35 billion.

And with that, I would like to hand it back to you, Guillaume.

Thank you, Thomas. Our ambition to pioneer sustainable aviation and our corresponding roadmaps remain key priorities for Airbus. We took a number of significant steps in 2025, and let me mention a few. During our Airbus Summit last year, we presented an updated roadmap for our hydrogen aircraft research effort, a road map that takes stock of the slower-than-expected development of the global hydrogen economy and of our ambition to focus our efforts on solution that would enable a commercially viable and competitive product. In line with this approach, we announced in June last year the signature of an agreement with MTU Aero Engines to collaborate on hydrogen fuel cell propulsion, the technology we have identified as the most promising for a future hydrogen aircraft.

In parallel, we continue to mature a number of key technology bricks for our next-generation single-aisle aircraft, which we aim to bring to the market in the second half of the next decade. It will bring a step change in terms of decarbonization and competitiveness, and we aim to reduce fuel burn by 25% to 30% compared with current modern generation aircraft.

On SAF, sustainable aviation fuels, Airbus continues to partner with several airlines to accelerate their development to overcome the logistical challenges of physical delivering -- physically delivering SAF to market. We launched a new book and claim demonstrator, allowing customers to buy SAF and claim the corresponding CO2 emissions. And looking at our own operations at Airbus, in 2025, we used 21% SAF in our aircraft and helicopter flights. This puts us on track to reach our goal to use at least 30% SAF in our operations by 2030.

And now let's have a look at our outlook and priorities this year and beyond. It starts with our guidance, which I will read out to you now. As the basis for its 2026 guidance, the company assumes no additional disruptions to global trade or the world economy, air traffic, the supply chain and its internal operations and ability to deliver products and services. The company 2026 guidance is before M&A and includes the impact of currently applicable tariffs. On that basis, the company targets to achieve in 2026 around 870 commercial aircraft deliveries, EBIT adjusted of around EUR 7.5 billion and free cash flow before customer financing of around EUR 4.5 billion.

In conclusion, what will Team Airbus be focusing on in 2026? The key pillars that underpin everything we do as a company are unchanged. Going forward, we will remain focused on safety, quality, integrity, compliance and security. Last year's events, notably the A320 software recall, the ELAC B topic and the fuselage panel issues have only reinforced our resolve to put safety and quality first.

Our primary focus in 2026 will remain ramping up production in commercial aircraft, where global demand continues to show that people around the world want and need to fly, and in defense, where we intend to play a leading role in supporting Europe's efforts towards sovereignty and security. Across all businesses, we'll continue to prepare the future in order to deliver profitable growth. Across the group, we'll do so by maturing the technologies that will help decarbonize aviation and prevail on tomorrow's battlefields.

The world around us is changing fast and becoming more unpredictable. In this environment, it takes the daily commitment of Team Airbus to make a difference by delivering products that help to connect and protect people, which is why these -- in these volatile times, we remain guided by our purpose to pioneer sustainable aerospace for a safe and united world.

And on that note, inspiring to me, back to you, Guillaume.

Thank you very much, Guillaume and Thomas, for those opening remarks.

So we will now start the Q&A session. [Operator Instructions] So let's begin the session now. We will start by taking questions from the room with our colleagues here. So the floor is yours, please raise your hands. We can start over here. Daniel?

Jens Flottau, Aviation Week. Lars Wagner said in Dublin the other day that he would like to see a lot higher rate of production for widebodies. And I was wondering whether, Guillaume, what's your view on this topic is? Related to this, are you -- how concretely are you looking at A350-2000, stretched A350? And finally, what's the latest on the 220-500?

Thank you, Jens. Well, I agree with Lars. I'd like to see higher rates on the A350 as well because we have very strong demand. Now, we are in a steep ramp up from where we are today to rate 12 in 2028. That keeps us busy, but we're also looking at what it would mean, what it would require and by when to increase, significantly increase the rates on the A350. So it's not for today. I agree with Lars, we would like to see more, but we have to work and do the homework before we take decisions and move forward.

The A350 family relies on a very strong platform. The product is very successful. We booked significantly more than we can produce on the short term. And we see a demand for a larger plane. So that's also something we are looking at. But again, we are in the development phase of the freighter. It's an important year for the freighter. We have to come to deliveries of the aircraft. So we are timing things one by one, but we are seriously looking at what the further potential of the aircraft is and a stretch would be a natural evolution of the product. We're not at a point of decision. We are at the point of working, of analyzing, of listening to customers, but that's indeed something possible.

And for the A220, a lot on our plate as well with the integration of the Spirit AeroSystems work packages and what it means for the A220 program. So we keep ramping up. But we hear loud and clear from the market that there is a strong potential for what is called a 500 that would make plenty of sense. We had the opportunity to say earlier that it's more a question of when than if, whilst we are not yet at the when, and we are not yet there either. As you have seen, we have plenty of things to do, and we want to time things one by one. But this is also something we are seriously considering.

Thank you, Jens. Thank you, Guillaume. We have the next question, just in the middle here.

My name is Jorge Penalba from Avion Revue. My question is for Guillaume about the new company that you are facing with Leonardo and Thales. Can you explain a little more of the process taking so far to integrate the company? What of the goals that they have -- the companies have independently will be merged? And if it has already a name decided?

Thank you. I'll start with the latter. There was a code name for this project at the very beginning, which is Bromo and everybody is speaking about Bromo. So Bromo is not the name of the company, but it starts to become more than a code name. So I don't know. There's no name decided, and we'll come to it later, but we just use now this code name to name this company.

We are not at the point of integration. And actually, by law, we cannot do anything that is related to working together as a team or integrating as long as the closing is not done. But we are working hard together to pass the milestones required to then be able to do the closing of this merger at a point in time. And we are obviously responding and presenting our files, especially on the antitrust side to the authorities and starting with the European authorities. So that's the place where we are. And as long as we are not together, those companies continue to play on the market and compete on the market, as they were doing before.

Thank you, Guillaume. We have a question over there.

Yes. Niklas Zaboji with Frankfurter Allgemeine Zeitung. Guillaume on FCAS, could you please give us some more explanations on the deadlock? So on the one hand, there is this dispute with Dassault on governance. On the other hand, now the German chancellor said clearly that there are also just different requirements between France and Germany. So why the deadlock? And do you still see chances to overcome this dispute? And then, on the 2 fighter solution, are the 3 discussed options equally thinkable, so either Airbus develops and you fight alone or together with Sweden or joins GCAP? Or do you have any preference for 1 of those 3 options discussed?

Well, I think we would be wrong to be right too early. We're in a program that is called FCAS. We've spent a lot of time, energy to support this program that has a number of pillars. The so-called next-generation fighter is one of those pillars, and it's important to say that the other pillars are working well and making good progress, namely the so-called Combat Cloud, the pillar on the remote carriers. The engine pillar also is making progress.

On the next-generation fighter, there is a deadlock that is linked to expectations on the governance that differ between partners on what leadership means, what cooperation means. That's one of the reasons of the difficulties and also under a certain governance on the ability to reach the objective of the program for the different customers. And it belongs to the customers to express themselves on that one. I will not comment. So we believe we are at a difficult juncture of the program. At Airbus, we continue to believe that the program as a whole makes sense and that we should not jeopardize the progress and the relevance of the other pillars, and we need to find a way forward on the NGF pillar, expecting decisions from customers.

And then, we'll see. We are not at the point of deciding next before this step is passed. We believe in European cooperations. We believe if there's a way forward with 2 fighters, it could be an opportunity to have other partners with us, but it belongs to our customers to decide with whom they want to join forces would it be the case. Again, we are not yet at that point.

Thank you. We have a question just here from Robert.

Robert Wall with Aviation Week. Just a quick follow-up on the FCAS and then the A400M question. On FCAS, the German Chancellor has said as part of the requirements review, he does want to ask the question, do they even need a sixth-generation fighter? So I guess the question, if there is an NGF divorce, how sure are you there is going to be -- there's even going to be a German program for Airbus?

And then, on A400M, well, a small housekeeping thing, what was the charge for? And then more broadly, how confident are you of this year getting top-up orders or new customers for the program to keep production stable at 8 a year?

You take the A400M, Thomas, I will take the first one. I think the trend from manned to unmanned is very broad and very strong, and we see the capabilities of autonomous systems moving forward very fast. So the question of going from manned to unmanned is on the table. The timing is very unclear. And the manned, unmanned teaming is also another capability that is being developed. So I think it's fair to raise the question. I think a lot of us believe that there will be a point in time quite far in the future where the manned capabilities will be, to a large extent, replaced by unmanned. And the belief at this stage is that there is still a need for a manned fighter besides growing capabilities in unmanned.

I think the question is on the table for a number of forces of whether they want to directly go to the next one, but then take the risk to be irrelevant for a certain point in time by a lack of modern capabilities of manned fighters or invest a lot of money on the manned fighters and then moving forward to the next capability. There's also the understanding that there could be a way to go to a capability that would be manned and/or unmanned either at the same time or in time moving from manned to unmanned. So these questions are on the table.

Technology is moving very fast on programs that take a lot of time to be developed. And what the Chancellor has expressed is a question that is in industry, that is in defense, and for which FCAS had found an answer. We want a sixth generation fighter. But obviously, this question will remain. And we see other players having not necessarily the same conclusion. I think that's what the Chancellor has reflected in his remark. That's my understanding at least. You should raise the question to the Chancellor directly.

Maybe to answer on the A400M, the most important thing for us is that in 2025, the cash flow of the A400M was positive and so that, I think, is a great success relative to what we have seen in the past years. That is what counts for us most. What you're referring to is a little bit more from the accounting side. You may know the A400M is accounted for as an estimate at completion, so we have to take assumptions for the entire remaining lifetime of the aircraft.

And what is reflected in the charges is twofold: one, assessment of the production cost that we have for the A400M, but also to a certain degree, certain developments, which we still are pursuing in light of the request of the customer. And so those things together, if you take them over numerous years and discount them today, that gives you the charge. But I think nothing really exceptional relative to what the program is delivering.

Thank you, Guillaume and Thomas. We have a question on our left here.

Hakan Celik from Posta and CNN Turk. My question for Mr. Guillaume Faury, in the context of growing transatlantic friction and visible erosion of strategic trust between the United States and Europe, how do you see this dynamic reshaping the defense and aerospace industry? On the other hand, with rising European defense budget and increasing cultural strategic autonomy, how is Airbus positioning?

Thanks for the question. The way we look at it, and we looked at it before the incremental investment of European countries on defense was that Europe was not spending enough money on defense. Data are available. I will not dive into the figures, but not by a small amount, by a huge amount, not enough money on defense, not enough money on defense from European defense manufacturers, therefore, buying by far too much from outside of Europe and not buying smartly in the sense of buying too fragmented and not enough jointly for common needs.

The move that is now visible in front of us is going in the right direction, clear increase of defense budgets, intent to rely much more in the future on European players for Europe to increase resilience, sovereignty of the defense system, and therefore, of the security of Europe and through the efforts that are made on a number of fronts to cooperate and work jointly. We think we are at the very core of this. We can bring military capabilities to Europe at scale through the duality of our products.

We develop technologies with civil and military applications that give scale and speed to our ability to come to the market. We are today the largest EU defense player by order intake, and I think, as well by turnover. And we have capabilities that correspond very well, that are well aligned with the capability needs that have been expressed by Europe looking at the overall picture.

So our strategy is to be there, is to be a defense player for military aircraft, for cyber, for helicopters, in space to provide the systems, the capabilities that Europe needs, but beyond Europe also to serve the allies and the partners of Europe, so therefore, having a growing business. And we believe roughly the speed of growth in defense will be similar to the speed of growth in nondefense activities, in civil activities, therefore, having on the next 5 years horizon a balance between civil and military that would probably remain around 80% for civil, 20% for military.

Thank you, Guillaume. We have a question at the front.

Sebastian Steinke from FLUG REVUE in Germany. I have a commercial aircraft question, please, concerning the 321. It is a huge success. Do you see a market maybe above it, just above it for maybe a bigger version or a separate program? Because the growth of the market in Asia seems to indicate there is a need for a slightly bigger one as well.

And speaking about the 321 and looking ahead to the next family, doesn't the 321 success create a sort of pressure for you to stay close to it? Because it's now like almost global standard. Everybody has it, everybody has pilots, spare parts, knows the family. Will -- can the next family be radical enough? Or does it have to be close to the success model of 321?

Thank you. So indeed, we see that the demand and the core of the market for the A320 family has moved from historically A319, A320 to A320, A321 to A321 and its upper versions, namely the XLR. We have a lot on our plate to deliver on those programs and deliver in terms of production. So we are focusing very much on stabilizing the design to be able to serve production at scale, at speed according to the expectation of our customers. And what I'm suggesting here is as the core of the A320 family market goes to the A321, we will see the percentage of aircraft being A321 or A321 derivatives increase significantly. We suggested it in the forward, but we don't intend to add a next member to the family. We just move the center of the family towards more A321.

When it comes to the replacement, to the successor of the aircraft, we do a transition -- I mean, every 20, 25 years. In that case, it will be more than 40 years. And even if we have increased very significantly the competitiveness of the aircraft, made upgrades, put new engines, new devices on the aircraft, it has to be a significant step. We're targeting 25% to 30% fuel burn improvement compared to the A320 family. And therefore, it will be a very significant -- it will be a very different aircraft, a very significant step. Still, we want to stay in the core of what make the success of the A320 family. So we will see similar philosophies and concepts, but new technologies, new performance and new characteristics. It will be very significantly different at the end.

Thank you. We have another question just in front of us here.

Lynn from Bloomberg. On the 870 target, you're obviously still in conversations with Pratt & Whitney. Could they potentially have bigger output? Are you hopeful that you could actually increase that number this year? Or is this the best it's going to get -- I mean, how elastic is that target?

We release the guidance at the moment we release the guidance, and we do it with the information we have. Pratt & Whitney has resiled from the orders we had placed, and they had accepted for the volumes in 2026. We have to base our guidance on what they tell us now they're willing to commit and deliver. We'll continue to work hard to enforce our contractual rights, which we believe are not respected in that case. But we also know that Pratt is facing a number of challenges. We are not happy with the outcome, but that's what it is today.

As I said earlier this morning, if things change over the course of the year, we'll take benefit of it if it changes, obviously, in the right direction, which we would expect. We have to adjust the production trajectory to at least at the beginning maintain opportunities and that creates complexity in the ramp-up trajectory in the level of inventories we would accept moving forward. We have also to take care of the suppliers, all the other suppliers, which have delivered and which continue to deliver on the ramp-up trajectory. So that creates complexity.

And we're also very much focusing on the 2027 volumes of Pratt & Whitney engines to be back on track at least in 2027 if 2026 is not better than what we see today. So we are where we are. We released the guidance at this point of the year with what we have that is disappointing from Pratt & Whitney, and we'll keep working.

Thank you, Guillaume. We have a question coming up online, which I will read out loud for the benefit of those in the room and on the call. It's a question from Reuters, Tim Hepher. So you mentioned, Guillaume, on the analyst call that Airbus is ready to enforce its contractual rights in the dispute with Pratt & Whitney. What does this mean in practice? Have you initiated? Or are you planning any kind of legal action?

We have a contract, obviously, with our friends from Pratt & Whitney, and we see that they are not respecting their contractual obligations. So we want to enforce our rights. And indeed, we have initiated a process according to contractual requirements of disputes. And I will not say more about it because then it becomes commercial in confidence relationship with them. But we indeed, I confirm, want to enforce our contractual rights.

I think we had a question from the room first over there, and we'll go back to the online questions after.

Yes. Wolfgang Borgmann, AERO International, Germany. I have a question about the future A320 successor. You have been very public about the RISE concept, engine concept that you're supporting. But what about the Pratt & Whitney SWITCH, for example, which you are holding as well, shares? So -- or any other engine option like maybe Rolls-Royce, I don't know? Are there any further developments you'd like to share? And also about the new wing that you're developing, it's very quiet about that, which you presented last year as a concept idea or other technologies that you would include into the new A320 successor?

And my second question would be about SAF. It's more general question, wouldn't it be about time to tell the public that SAF isn't there, that's just an idea? And now the U.S.A., I think, pulling out for the next 3 years at least in the development, maybe SAF will remain just a drop on a hot stone. So maybe 1%, maybe 5% of the fuel needed, but I can't see where it's going to be made, where it's happening and when the general public will benefit from it.

So 2 important topics for us. On the A320 successor, we had the Airbus Summit earlier this year. We've been very transparent and open on what we do. Indeed, there is a number of technology bricks. Propulsion is one of them. Wings is another one. The Wings is Airbus homework, and we're working hard. It's not just an idea or a project. It's a lot of research technologies. Now, we are at the test phase of production processes to prepare for high rate production of composite wings that will be with a very large wing span. And I mean, I don't want to enter into the complexity of the technology, but that's ongoing.

It's ongoing also on the propulsion side, where there's an important choice to be made later on whether we go for open rotor for ducted fan, obviously, in both cases, with gears, with transmissions to optimize the ratio, the propulsion ratio. And that's an important strategic choice that will impact the architecture. And we put these concepts in competition with each other. The open rotor technology is a more modern one, is a recent one. We are working very closely in a very positive way with CFM on what they call the RISE project, and we are their partner to develop this technology and to look at the integration, what it would mean for the plane.

We have important decisions to make later in the decade going to 2030, where we intend to launch the program. We're not at the point of decision, but we are at the point of collecting all data that are required to make an educated decision that will be the best one for the program. And indeed, we are working with all manufacturers that want to work on open rotor. There's one mainly, CFM, and others, including CFM on what alternatives could look like and what would the best traditional geared turbofan -- not traditional, would become traditional geared turbofan option for the next generation.

In both cases, you have pros and cons. They are not the same ones, but we want to make the decision having derisked, having understood, having tested as much as we can. And we are very happy to have this cooperation with CFM to go as far as we can before making a decision on the understanding of what an open rotor technology on a single-aisle aircraft of Airbus would mean and how we would deliver something competitive, we would certify, we would have something reliable in service. And I stop here. There's a lot I would be happy to share, but we have to be conscious of time.

Thank you very much. We have one right here.

Timo Nowack with aeroTelegraph. I've got a question about the A319, please. You don't have many orders for the A319. On the other side, you need the airplane for high altitude airports, as I understand. So the question is, are you thinking about discontinuing the program, the A319? And on the other hand, perhaps as a condition, how are you in developing the high altitude abilities of the A320?

So the answer is actually almost in your question. The specialized aircraft for high altitude used to be traditionally the A319, but we see more and more demand for longer versions, as I said earlier. So A320 high altitude is something we are looking at to bring the high altitude capability on the A320. And we want to respond to the demand of the market that is mostly on the A321, to a smaller extent on the A320 and less and less on the A319. So the high altitude should not stay alone on the A319. Now, we have so much demand that we are not obsessed with high altitude, but that's something we want to continue to retain in the future on the A320 most likely.

Apologies because we forgot the second part of Wolfgang's question, which was on SAF, if I remember correctly, the public acceptance and the public understanding of what SAF so can deliver, correct?

Yes, I'm sorry. I didn't try to escape the question.

No. It's -- I mean, there isn't any stuff, and it might be 1% of the fuel needed, kerosene needed. And we are talking since about 4 years about it, we are at the same level. Nothing is really improving. In Europe, the energy costs are prohibitive, and I can't see where else it would be producing huge numbers right now that would build up what the politicians want, so -- and the airlines and manufacturers hopefully.

So at Airbus, we strongly believe that SAF is a necessary part of the decarbonization roadmap and strategy. It's the one that is less in our hands than the others. The planes, that's very much something within control. SAF is not the case. On the SAF, we are trying to play the role of catalysts. We've been engaging with a lot of people around the world, regulators, governments, airlines, fuel manufacturers, airports, you name it. The progress is slow, it's too slow, but it's not 0.

In Europe, we have a mandate for 2% and then 6% in 2030. And we see the volumes starting to grow in Europe because of the mandates. There's a chicken-and-egg situation with demand and supply. And that's really the conundrum we need to overcome. That's why we, Airbus, want to help by pushing for the book and claim system, which we believe has the potential to help because today, it's not very relevant to produce SAF in a place of the world and then to use it in another place. We have to carry the SAF, and you waste part of the benefit of having a decarbonized fuel because the production of SAF around the world is indeed not where it has to be to fulfill the trajectory.

It's not hopeless. And we see that countries like China, like India, the U.S. with the IRA at a point in time. It's probably not going in the right direction at the moment, but still, there's production of biofuels in the U.S. that is growing in certain areas of the U.S. that there is potential for making this moving forward. But the tipping point of acceleration of SAF is indeed more difficult to pass than we were expecting.

There's a price challenge, an aircraft that burns less fuel is both more competitive and more sustainable. I say economy and ecology are aligned. On the SAF, it's the opposite. A fuel that is more sustainable is less competitive. And therefore, when you compare with your competitors, you're better off from a competitive standpoint with less SAF than the others. We need a global frame -- we need a global understanding at least with the main regions of what SAF percentage would look like. Unfortunately, with the fragmentation of the world at the moment, we are not there. And this is slowing down the SAF, but we should not give up on SAF.

Thank you. We have another question coming up online, which again, I will read out loud. It's from Ben Katz at the Wall Street Journal. Hi, Ben. It's a twofold question on Pratt & Whitney. The first part is, can you explain what is keeping Pratt & Whitney from meeting its requirements? And is this related to the longer-running metallurgy issue?

And the second part is, do the Pratt & Whitney constraints complicate the decision on an A220 stretch? Could Airbus consider an alternative engine provider for a new variant?

I think I will not answer the latter part of it because we're not at that point, and the answer is mostly no, it doesn't impact what we are considering for the A220. I think the first part is indeed important one. I'd rather have Pratt & Whitney answering that question, but I give my understanding of it. They have the combined needs at the moment of serving the production for new aircraft and serving the MRO capabilities for the recall campaign linked to the metal powder and linked to the rather low durability of the engine. And that puts stress on a number of bottlenecks, supply of certain parts, which are too small in numbers to serve completely both needs and the MRO capability to retrofit all engines in service and reduce the number of AOGs. They're confronted to those challenges combined at the moment.

And we are very frustrated that they have decided to reallocate more to the in-service because they miss global capability and to the detriment of Airbus, where we think they should do more on increasing capabilities to serve both needs at the same time. We continue to work with them to make them change the way they manage this. And as I have explained earlier today, we are in those negotiations. So that's the combined needs of the ramp-up on production of aircraft on the retrofit of the metal powder issue and the need for material linked to the rather low durability of the current version of engine before the new version of the GTF, the advantage, comes to the market.

Thank you, Guillaume. We have a question in the room, just here, slightly to your right.

Tom Boon from Simple Flying. I wanted to go back to the open fan engine concept. And I know before you've talked about strapping it to the bottom of an A380 to test it. I wanted to know, is this still the plan? If it is still the plan, what does the timeline for flying it and testing it look like? And finally, do you see the A380 as like a longer-term test bed for you? Or do you think once the open fan is done, that will be it?

So yes, it's still the plan to fly the open fan -- the open rotor engine. It's still the plan to fly it on the A380, as it was indicated before and as we have explained. I don't have the detailed planning in mind, and I would be too incorrect. So I will not dare giving you a date, but we are preparing this. So it's starting to be something now close to us. And the future use of the A380, I'm not sure that we have yet taken a decision. It will be used for the open rotor testing. That's the use we are happy to do with it. Beyond this work, I don't know. But it's a convenient test bed because it's really big, and you can test large engines still remaining small compared to the size of the aircraft. So in terms of safety, in terms of capabilities of testing, that's really convenient. This being said, it's a very large and expensive aircraft. So we'll see moving forward what we do with our test beds in general. But short term, we do the test for the open rotor as planned.

Thank you. We're going to go to our online followers. Again, we have a question from Charlotte Ryan from Aerospace America. Charlotte, I think the first part, you've answered already regarding the Pratt & Whitney's -- the shortage situation. But taking the second part, does the failure to reach an engine agreement with Pratt mean that we should look at this year's delivery target as more of a provisional goal than usual?

Each and every time we give an outlook, we give a guidance that's based on the best and most reliable information we have and with certain risk-taking and prudence at the same time. At this point of the year and under the current negotiation that we have with Pratt, the current guidance reflects what they are telling us they are committed to deliver. And I think I have answered already a lot to the first part of the question. What's holding Pratt back is the -- some of the challenges they have to face and the fact that they don't manage to overcome all of them at the same time.

I'm not sure we can relate it to the supply chain challenges from the pandemic. It's really linked to the need to ramp up volumes for new aircraft, combined with a huge recall campaign, the retrofit plan that they have to manage and the MRO challenges that it is posing to them, both on the availability of material and on the size of the MRO network that needs to be mobilized to do this.

They still have -- we still have too many aircraft on the ground because of missing retrofits, and it's an objective that we support, but we think they can do and they should do better serving both needs. That's why we continue to work on this. If we have better outcomes later in the year, we would further adapt, but it's not the case at this very moment, and we have tried hard and not obtained what we wanted. So I would not take it as something that is very temporary. It's pacing -- at least the beginning of the year and what we think is likely to happen.

Thank you. And we have a question over there to your left.

It's Murdo Morrison from FlightGlobal. I wanted to come back on an earlier question that was asked about A400M and the prospects for that program. And how secure is that program in the medium term, do you feel given the lack of export orders compared to the competition?

And the second more broader question on European consolidation in defense. What do you feel needs to be done in Europe to -- in order for Europe to go forward stronger as a region able to source its own defense requirements rather than perhaps having to rely on U.S. manufacturers?

So first on the 400M, we are in a rather classical situation of going from initial contracts for launch customers to the export market and the second wave, I would say, of orders. We see a very strong and positive feedback from operators, from the air forces that are flying the A400M. A400M, used in operation in a certain number of places of the world, has been seen as very successful, and the Air Forces that operate the A400M speak very positively about it.

We are coming not far from the end of the launch contract. So we continue to have aircraft to deliver, but we see that this is for the next few years. And we're indeed engaged in a number of campaigns that are promising, but take time to materialize, especially in this overall environment. And we see that Europe has defined airlift needs as one of the capability gaps. So we hear very clearly that they will need -- there will be a need for additional A400Ms. But the timing becomes a challenge. So that's really the next use of when those new campaigns kick in and how low do we need to go and for how long on the assembly of aircraft before we see the second wave of aircraft being manufactured. So we think the product is strong, is competitive, is -- I mean, is from a military standpoint very effective, and we are optimistic about the mid-term and the long-term, but we have to navigate that transition. That's what we are doing currently.

What would it need to make Europe stronger? And what about consolidation when it comes to defense in Europe? I think we are probably the ones with the foot -- front foot forward when it comes to European cooperation in defense. That's what we are. That's what we do. And when we think there's a larger need for consolidation, cooperation, for instance, in space, in satellites, we do it, and we are happy to find partners that are doing it as well. I think the short answer to your question is we need consolidation of the supply, as I call it, industrial consolidation of players across borders. That's very often what is difficult. And we need also consolidation of demand, meaning government, customers, military customers coming together for common needs at the same time to trigger scale.

And when we work at scale in Europe, we are very competitive compared to our American colleagues. But when we are very fragmented and we have a smaller demand, not aligned in terms of timing across Europe, it's very difficult to launch and be successful on programs with the right scale. At Airbus, we are trying to be positioned where we can make collaboration in defense in Europe happen. And that's what the current programs we've been discussing this morning about, the A400M, the MRTT, and on the helicopter side, that's what they deliver.

Thank you, Guillaume. We have someone in the room, just in the center here.

Leonard Berberi from the Italian newspaper Corriere della Sera. I have a couple of questions. First one, 2025, after 7 or 8 years, Boeing surpassed Airbus on aircraft orders. How much is that a consequence of your own success in these years because you took a lot of orders in these years because of the -- also the Boeing's missteps? And how much is related to the fact that now Boeing has a new Head of Sales, Donald J. Trump?

And the second question is related to the spat between United Airlines and the engine manufacturer about the A350, if you want to give a comment on that?

Sorry, I missed your second part of the question.

The spat between United Airlines and the engine manufacturer on the A350 is -- I mean, in the last case.

I don't know how to comment smartly on that one. So I will use my joker. So when it comes to the order intake, it's quite unique that we had so many years in a row where our level of order intake was higher, and in some cases, much higher than the main competitor. This has led to a gap, a difference in backlog that is very significant. And as we have a backlog that is so big than what it is today, we have sort of 10 years plus of order intake. And taking, I mean, book-to-bill of 1 in that situation means we continue to extend by 1 year every year. So we're satisfied with it. It's difficult to do more than this. And there is a sort of catch-up effect that takes place and that we were, to some extent, expecting.

Now, it's true as well that the Boeing -- the Team Boeing has been well supported in a number of very large and important campaigns on a more political grounds, and that's something we have to live with. But we continue to believe that competitiveness of the product, relevance of our aircraft, satisfaction of customers, aircraft that deliver performance, competitiveness for the airlines will remain a criteria of choice, and we remain very focused on having the best aircraft, the best plane. We think that's what will protect us moving forward. We are not unhappy with the picture that we have created over the last years. It puts us in a very strong position.

Thank you, Guillaume. And indeed on your other questions, I think that's a question more for United and Rolls in this case. We have a question to the left, again over there.

Olivier Bonnassies with Airfinance Global. A question on commercial and specifically on the A220 program. No question on the 500, don't worry. I noted the amendment on the production rate to 13 aircraft a month by 2028. I think there was a previous forecast maybe 2 years ago on 14 aircraft a month by 2026. You mentioned in your remarks that the production rate will be affected by the integration of Spirit. Can you talk to us a little bit more about the performance of the A220 in terms of sales over the past 2 years because it's been a bit disappointing? And what is your forecast this year? So again, the production rate, is it a reflection of Spirit only or you'll see the performance of the sales on the A220 market?

So indeed, we have adjusted in the last 2 years, I think, the shape of the trajectory. We were initially targeting 14. Now, we say 13 for 2028. That's the result of what we call balance between demand and supply. We think we can stay at rate 13. We can sustain the rate 13 moving forward based on the demand we have. We want also to position the product at the right place when it comes to the price. And therefore, there is a price-volume discussion that takes place to go to profitability to the program, and that's something that is important to us.

So mid-term, that's more balance between demand and supply. Short term, we're navigating the difficulties of the ramp-up on Spirit and on the work packages coming from Spirit, namely the wings. So there's no big change on the short term. It's more tactical changes. And then, going to the rate 13, which we believe is a good balance.

On your comments -- or your question on demand, yes, we have good campaigns ongoing. You saw the news beginning of this year. We think the demand for the 220 is there. The product is making progress in terms of operational reliability, in terms of satisfaction of customers, and it's going to be really where it has to be. So we are very comfortable, and we trust the power of the A220 to continue to be ordered in the numbers we need to sustain the production rates.

Thank you, Guillaume. So we are reaching the end shortly, but we're going to take a quick one from [ Veronique Guermaig ] who's following us online. [ Veronique ], do you expect the Eurodrone program to be abandoned?

It's a bit digital. No, I don't think we are there. There's an ongoing discussion between customers on the way forward. And we have the majority of customers who really want to -- this product continue to back the demand, the program. So I think it's likely to continue.

Thank you. Yes. We have here one last...

Considering the Turkey's involvement in Eurofighter program, by the way, it will be the first non-U.S. jet for the Turkish Air Force and the long-standing partnership with A400M with Turkey, I mean, [Foreign Language] and how do you assess Turkey's deeper integration into the European defense programs in a changing defense in global environment as a NATO member and your partner?

Well, first, on the A400M, the cooperation with Turkey is excellent, and that's a very positive experience on the industrial side, but I believe as well on the cooperation of Turkey with European partners in the program, Turkey as a country and as a customer.

Indeed, the steps made on the Eurofighter are important because it means these European partners support -- agree, support the fact that Turkey will become a partner for this important military capability. And I think that's one more step of cooperation between NATO and Turkey as NATO allies. So that's a step in a broader cooperation with Turkey coming closer to the other European countries. We have to make Eurofighter for Turkey a success like A400M was a success to keep moving forward.

Thank you, Guillaume. And this is going to be the end of the question-and-answer session. Sorry, Stephane, we will discuss later. Thank you all for the great questions. And thank you, Thomas and Guillaume, for the answer. We'll bring our press conference to a close now.

Once again, a big thanks to all of you who joined us either physically or online. And a warm thank you as well to all the great communications colleagues who helped prepare and run the event today. If you have any follow-up questions, of course, please feel free to reach out to your usual contacts in the Media Relations team who will be obviously happy to support. So we wish you all a great rest of the day, and we thank you again.

Thank you very much.

Thank you very much.

Ladies and gentlemen, thank you for standing by. Welcome to the Airbus Full Year 2025 Earnings Release Conference Call. I am Sharon, the operator for this conference. [Operator Instructions] The conference is being recorded. After the presentation, there At this time, I would like to turn the conference over to Jean-Christophe Henoux, Head of Investor Relations. Please go ahead.

Thank you, Sharon, and a very warm welcome to everyone joining us today. We are here to dive into the Airbus Full Year 2025 Results, and I'm thrilled to be with our CEO, Guillaume Faury; and our CFO, Thomas Toepfer, with us to break down the numbers and take your questions. This call is planned to last 1 hour and 15 minutes, including Q&A. If you're joining us via the webcast, a replay will be available for you on our website. Speaking about the website, you can already find the supporting information package there that includes today's slides and the detailed financial statements.

Before we start, let me remind you that we will be making some forward-looking statements today. I encourage you to take a look at the safe harbor statement in our presentation slides. It's important stuff, please have a quick read.

And with that, let's get things started. Guillaume, the floor is yours.

Thank you, JC, and good morning, ladies and gentlemen. I'm happy to be here in Toulouse with Thomas to run you through our full year 2025 results.

2025 was a landmark year, characterized by a very strong demand for our products and services in both civil and defense. While we successfully navigated in a complex and dynamic global environment, our primary focus was managing supply constraints that created a desynchronization between production and delivery throughout the year. Against this backdrop, the year was marked by both resilience and record financials.

In defense, we're observing great momentum and our large portfolio is perfectly aligned with the capability needs. We do this by delivering mission-critical solutions and being the long-term partner of choice for nations in Europe and worldwide. On the strategic front, we're advancing industrial consolidation with Leonardo and Thales to create a world-class space leader. This initiative is key to achieving the global scale and operational depth required in today's fast-evolving global market.

In commercial aircraft, sustained global demand continues to drive the expansion of our industrial footprint. A major milestone in this journey was the acquisition of certain Spirit AeroSystems work packages with the closing on the 8th of December, which allowed us to take control of this production flow, and Thomas will speak more about it later.

The A320 panel quality issue that hit us in December was also a significant event that put pressure on our ability to deliver in an already back-end loaded year. We took immediate steps to address the challenge, putting a strong focus on quality and therefore, unfortunately impacting 2025 deliveries. We expect the residual operational impact to be contained and spread mainly over the first half of the year.

That said, our operations do not function in isolation. While we have secured a critical portion of our trajectory, some supply chain tensions continue, notably with the engine maker, Pratt & Whitney.

On the A320 family, Pratt & Whitney's failure to commit to the number of engines ordered by Airbus is negatively impacting this year's delivery guidance and the ramp-up trajectory into next year. As a consequence, we now expect to reach a rate of between 70 and 75 aircraft a month by the end of 2027, stabilizing at rate 75 thereafter. In this context, I'm very proud of what team Airbus achieved. We delivered on our commitments, meeting our updated guidance with 793 deliveries. Our performance in the fourth quarter was particularly strong with 286 aircraft delivered, and we closed the year with a record year-end backlog. This result demonstrates our collective resilience and our unwavering focus on excellence in everything and everyone.

Now looking at our 2025 financial performance. Our EBIT adjusted stood at EUR 7.1 billion, reflecting our commercial aircraft deliveries and the performance at the Helicopter and Defense & Space divisions. This is also reflected in our free cash flow before customer financing, which stood at EUR 4.6 billion. These results led to a record net income of EUR 5.2 billion that supports our 2025 dividend proposal of EUR 3.2 per share.

With all that in mind, let's take a closer look at 2025. And moving to our commercial environment, starting with commercial aircraft. In 2025, passenger traffic expanded across all regions, while air cargo demand remained resilient. This year was another commercially successful year with repeat orders and key new customers in both the single-aisle and wide-body campaigns. We booked 1,000 gross orders, including 390 in Q4. On the A220, we booked 49 gross orders, and we see positive momentum.

Looking at the A320 family, we booked 656 gross orders. This brings our backlog to 7,163 aircraft, out of which around 75% are for the A321.

Moving to the wide-bodies. On the A330, we booked 102 gross orders, another strong year confirming the high demand for this very versatile aircraft. And finally, on the A350, we booked 193 gross orders, underpinning the good commercial momentum, and it was a record year for our freighter.

Net orders amounted to 889 aircraft, including the 111 cancellation compared to the 1,000, which were largely anticipated and already embedded in our backlog valuation as of December 2024. Our backlog in units increased to a year-end record of 8,754 aircraft. At group level, our backlog stood at EUR 619 billion in 2025, including a strong book-to-bill above 1 for all businesses as well as the weakening of the U.S. dollar.

Looking at Helicopters. In 2025, we booked 536 net orders compared to 450 a year earlier with a book-to-bill well above 1, both in units and value, including a strong contribution from the military segment as well as good order intakes from services. We celebrated orders of 100 Airbus helicopters by the Spanish Ministry of Defense, the largest helicopter purchase by this customer.

Additionally, we want to mention the Super Puma family for which we signed a contract with the Royal Moroccan Air Force for 10 H225Ms in the second half of the year. We also saw Germany reinforcing their commitment by exercising the contractual option for 20 additional H145M helicopters.

Finally, looking at unmanned air systems, Airbus has been awarded a contract from the French DGA for the production of 6 VSR700 systems, while also receiving a framework contract by the European Maritime Safety Agency for the Flexrotor, our modern vertical takeoff and landing uncrewed aircraft.

Overall, we continue to see very strong momentum, in particular on the military market, and we remain focused on our responsibility to deliver on expectations, including ramping up.

Finally, moving to Airbus Defense and Space. 2025 reflected one more year of record order intake, which stood at EUR 17.7 billion, corresponding to a book-to-bill of around 1.3. Key orders recorded in Q4 reflect several strategic wins, particularly in our Air Power and Space Systems business units.

Starting with Air Power, we observed a good commercial momentum with Spain, including contracts for 18 C295s, plus the development and implementation of the new integrated training system for the Spanish combat pilots. Let me also mention that 2025 was an excellent year for the Eurofighter program. Notably, we recorded an order for 20 aircraft from Germany, the activation of 8 options from Italy, and we also welcome Turkey to the program with 20 aircraft. To meet this growing demand, the program has already announced the first production capacity expansion, transitioning from rate 14 to rate 20 per year.

Moving to Space Systems. Airbus was selected by EUTELSAT to build a further 340 OneWeb low earth orbit satellites, LEO satellites, complementing the first 100 recorded in 2024. The 440 satellites will be produced at the Airbus Defense and Space Toulouse facility and will enhance the OneWeb first-generation fleet. In addition, we are proud to highlight a return to the market of OneSat satellites with an additional order from Oman's national satellite operator, providing its position in the telecommunications market, proving its position, sorry.

Finally, within our Connected Intelligence business line, we continued to observe good order momentum throughout the year, in particular, in defense, digital and cyber. The success of the division is the result of our transformation efforts, which ensured an improved performance. As we move into 2026, we remain focused on the division's long-term competitiveness and profitability.

Now let me say some words on FCAS, Future Combat Air System. The need for an ambitious European FCAS is unchanged. We believe an ambition of this scale can only be delivered through cooperation, fostering operational interoperability and life cycle synergies for European air forces. We believe that the deadlock of a single pillar should not jeopardize the entire future of this high-tech European capability, which will bolster our collective defense. If mandated by our customers, we would support a 2-fighter solution and are committed to playing a leading role in such a reorganized FCAS delivered through European cooperation.

Overall, I want to emphasize the commercial performance of both Airbus helicopters and Airbus Defense and Space that delivered record order intake in value in line with our ambition presented in June. Specifically, defense orders, excluding the joint ventures, MBDA, Ariane Group, the order, excluding those joint ventures reached more than EUR 20 billion, meaning around plus 50% upside year-on-year, ensuring robust future growth.

And now Thomas will take you through our financials. Thomas?

Yes. Thank you, Guillaume. Hello, ladies and gentlemen. I'm now on Page 6 of the presentation, and I'll take you through our financial performance. Now as you can see on the page, our financial year 2025 revenues increased to EUR 73.4 billion, up 6% year-on-year, mainly reflecting the higher contribution from our divisions, the strong services volumes across our businesses and a higher level of deliveries, partially offset by the U.S. dollar depreciation.

On R&D, as you can see on the upper right-hand side, our expenses stood at EUR 3.2 billion in 2025, slightly lower than in 2024 as we continue to benefit from the prioritization of our activities this year. And R&D is expected to increase in 2026 globally, in line with revenues, but notably to support the defense portfolio acceleration.

On to EBIT adjusted on Page 7 of the presentation. Our financial year 2025 EBIT adjusted increased to EUR 7.1 billion from EUR 5.4 billion in 2024. And of course, let me remind you that in 2024, after the completion of the in-depth technical review of our space programs, we recorded a total charge of EUR 1.3 billion.

In the full year of 2025, the higher commercial aircraft deliveries, together with a more favorable hedge rate and lower R&D expenses were partially offset by the impact of tariffs, of which the vast majority occurred in Q4. And the result also reflects a stronger performance in both divisions.

The level of EBIT adjustments totaled a net negative EUR 1 billion, and you can see this on the right-hand side in the box, and the adjustments include a negative EUR 624 million impact from the dollar working capital mismatch and balance sheet revaluation, mainly reflecting the mechanical impact coming from the difference between transaction date and delivery date, of which negative EUR 47 million in Q4. It also includes a negative EUR 188 million related to the acquisition and integration of certain Spirit AeroSystems work packages, of which EUR 100 million in Q4, and it includes a negative EUR 105 million related to the Airbus Defense and Space restructuring recorded already in Q1.

On top of that, negative EUR 73 million related to our A400M recorded in Q4 and finally, a negative EUR 56 million of other costs, including compliance and M&A, of which negative EUR 45 million in Q4. So all this takes our full year 2025 EBIT reported to EUR 6.1 billion.

Now let me take a moment to bring some more clarity on the negative EUR 188 million adjustment related to Spirit AeroSystems. This notably includes a EUR 738 million gain resulting from the settlement of the so-called pre-existing relationship as described in our financial statements. In other words, the termination of the favorable contractual conditions. And this is offset by provisions for onerous contracts and an impairment of EUR 500 million related to the A220 program. And this A220 impairment is primarily linked to the impact of the acquisition of certain Spirit Aerosystems work packages with a revisited or revised projected cost structure and ramp-up trajectory for the program. The financial result was a positive EUR 268 million and mainly reflects the revaluation of certain equity investments and revaluation of financial instruments, partially offset by the evolution of the U.S. dollar.

Now the tax rate on the core business continues to be around 27%. However, the effective tax rate is 21.9%, with positive effects from the revaluation of certain equity investments and from the settlement of the pre-existing relationship with Spirit AeroSystems, which both are not subject to income tax, and this is partially offset by the negative effects of the French surtax and the deferred tax asset impairments. For 2026, we expect the French surtax to be in the same order of magnitude as in 2025, and that is true for both P&L and cash-wise. So that the resulting net income is EUR 5.2 billion with earnings per share reported at EUR 6.61 and our full year 2025 EPS adjusted stood at EUR 6.89 based on an average of 790 million shares.

So this strong EPS performance marks a historical record for our company and supports our proposal for a dividend of EUR 3.20 per share for 2025, corresponding to a nearly 50% payout ratio in the very high end of our recently updated dividend policy, and it also reflects the confidence in our future financial performance.

Now on to our U.S. dollar exposure coverage, and I'm on Page 8 of the presentation. In the financial year 2025, $23.6 billion of forwards matured with the associated EBIT impact and euro conversions realized at a blended rate of $1.19 versus $1.21 in 2024. And in 2025, we also implemented USD 16.7 billion of new coverage at a blended rate of $1.19. As a result, our total U.S. dollar coverage portfolio in U.S. dollar stands at USD 75.8 billion with an average blended rate of $1.22 as compared to USD 82.8 billion at a blended rate of $1.21 at the end of 2024.

And in 2025, as in 2024, we continue to streamline our U.S. dollar coverage and continued implementing collars with an addition of USD 3.9 billion in the financial year 2025. And here, let me remind you that the collars will, at this stage, remain at around a single-digit percentage of the overall coverage. And in addition, I would like to say that these collars are reported at their least favorable rate and as a result, increase the total blended hedge rate of our portfolio, hence, providing a protected view.

And our portfolio is currently being adjusted by implementing some rollovers to reflect the delivery target for 2026 and the delivery profile. Now on to a more detailed look at our free cash flow on Page 9. Our free cash flow before customer financing was EUR 4.6 billion in the financial year 2025, and this mainly reflects the level of deliveries, the commercial momentum across all our businesses, resulting in healthy PDP inflows offset by the planned inventory buildup associated with the ramp-up across the programs.

The A400M was broadly neutral from a free cash flow perspective in 2025, which is a success. And our financial year 2025 CapEx was EUR 4 billion, and this reflects the investments in expanding and upgrading our industrial footprint. And to support the ramp-up and the successful integration of the Spirit AeroSystems work packages, we expect our CapEx to continue to increase in 2026.

The free cash flow was positive EUR 4.8 billion, including customer financing for EUR 0.2 billion, and we continue to see a diverse and competitive financial -- financing landscape. And currently, we expect sufficient liquidity to support our 2026 deliveries. Our net cash position, as you can see on the right-hand side of the chart, stood at EUR 12.2 billion as of the end of December, also reflecting a weaker dollar environment, and our liquidity is now at around EUR 35 billion. So in 2025, we delivered, in our view, very strong financials across the board in the context of many challenges.

And with that, I would like to hand it back to Guillaume.

Thank you, Thomas. And let's start with commercial aircraft. In 2025, we delivered 793 aircraft to 91 customers. And looking at the situation by aircraft family and starting with the A220, where we delivered 93 aircraft, reflecting a strong growth. The ramp-up is ongoing and still paced by the integration of Spirit AeroSystems work packages and the balance between supply and demand. As we continue to make what I would call tactical adjustments on this ramp-up trajectory, we are now targeting a rate of 13 aircraft a month in 2028.

Our teams continue to work on the road to reach breakeven, and we remain focused on engine durability improvements while ensuring operational efficiency. On the A320, we delivered 607 aircraft, of which 387 A321s, representing 64% of deliveries for the A320 family, 64% of A321s. We are very pleased that our newest aircraft, the A321XLR continued attracting new operators. This aircraft with its unique capabilities is proving to be a key asset, acting as a route opener for our customers. The ramp-up towards the monthly production rate of 75 aircraft is ongoing.

In 2026, we see shortages of engines from Pratt & Whitney, not matching our needs nor our orders that will limit our aircraft deliveries, and this is really disappointing. In 2027, they must significantly step up their deliveries, which we expect. And as a result, we expect to reach a rate of between 70 and 75 aircraft a month by the end of 2027, stabilizing at rate 75 thereafter. So there were 93 A220s, 607 A320s. That makes a total of 700 single aisle and then again, 93 on the widebodies, easy to remember. So on widebodies, we delivered 93 aircraft, of which 36 A330s and 57 A350s, including the first deliveries to new operators. On the A330, moving forward, no change. We target to reach rate 5 in 2029 to meet customer demand, and you see this is a strong demand. And on the A350, no change either. We continue to target rate 12 in 2028.

In a nutshell, we continue to work with all of our stakeholders, such as cabin suppliers, but more importantly, with our narrow-body engine suppliers, particularly Pratt & Whitney, to fully enable the ramp-up trajectory. Now let's look at the financials for our commercial aircraft business. Revenues increased 4% year-on-year, mainly reflecting the higher number of deliveries and growth in services, partially offset by the U.S. dollar depreciation. EBIT adjusted increased to EUR 5.5 billion from the EUR 5.1 billion in 2024, driven by the increase in deliveries with a more favorable hedge rate and lower R&D expenses being partially offset by the impact of tariffs.

Page 12, looking at helicopters. In 2025, we delivered 392 helicopters, that's 31 more than in 2024. Revenues increased around 13% to EUR 9 billion, reflecting a strong performance from programs and services growth. EBIT adjusted increased to EUR 925 million, reflecting the higher deliveries as well as growth in services, as I said already. And let's complete the review with Defense & Space. Revenues increased 11% year-on-year to EUR 13.4 billion, driven by higher volumes across all 3 business units. This resulted in EBIT of EUR 798 million, also supported by improved profitability in line with the midterm trajectory and the results of the successful transformation plan.

On the A400M program, a contract amendment was signed with OCCAR in the fourth quarter of 2025 to advance 7 deliveries for France and Spain and to further increase the visibility on the program's production. In light of uncertainties regarding the level of aircraft orders, Airbus continues to assess the potential impact on the program manufacturing activities. Risk on the qualification of technical capabilities and associated costs remain stable.

And before we move to our guidance and key priorities, Thomas will go through the acquisition of certain Spirit AeroSystems work packages, which was completed, as we said, in 2025.

Absolutely. As you have seen in December, we successfully closed the acquisition of certain Spirit AeroSystems work packages and transitioned to day 1, and we have begun consolidating the 5 new sites that are located in the United States, Europe and North Africa in order to secure operational stability and continuity.

Regarding the financial outlook, our assessment has evolved as we gained control of this production flow. And while the 2026 EBIT adjusted impact remains consistent with previous guidance, the headwind in 2026 is slightly higher than what we had initially anticipated. And on free cash flow, we expect a further deterioration in 2026, mainly due to the transaction closing shift and the investment needed to support the ramp-up. And from now, these figures will be included into the broader program performance. The strategic rationale remains clear. The integration is fundamental to derisking the A220 and A350 ramp-up and to make sure that we are on a competitive trajectory.

And with that, I would like to hand it back to you, Guillaume.

Page 16, on to our guidance. And as the basis for its 2026 guidance, the company assumes no additional disruptions to global trade or the world economy, air traffic, the supply chain, its internal operations and ability to deliver products and services. The company's 2026 guidance is before M&A and includes the impact of currently applicable tariffs.

On that basis, the company targets to achieve in 2026 around 870 commercial aircraft deliveries. And EBIT adjusted around EUR 7.5 billion and a free cash flow before customer financing of around EUR 4.5 billion.

And to conclude, I want to look forward. Our primary focus remains on the ramp-up with no compromise on the highest standard of quality in everything we do. On defense, the priority is to continue to strengthen our global leading position by leveraging our unique portfolio of products and our international footprint. It means playing a leading role in a fighter project, continuing the good momentum on military products and services as well as strengthening sovereignty and competitiveness in space. We are committed to reinforcing a strong commercial position across all our businesses, continuing on our leadership in commercial aircraft, defense, space and helicopters alike.

Finally, we remain committed to leading the future of aerospace with a focus on the next single-aisle generation. Our vision for the future is anchored to our sustainable aerospace ambition, while we continue to deliver profitable growth. And before taking your questions, allow me to say a word to welcome this year, Lars Wagner and Matthieu Louvot to lead, on the one hand, our commercial aircraft and on the other one, our helicopter businesses. They bring deep operational expertise, industrial knowledge and a real strategic vision. And a big thank you and my sincere gratitude and congratulations to Christian Scherer for all he did over his 40-plus years at Airbus and to Bruno Even for what has been achieved at Helicopters under his leadership. All the best to you both.

And now we are ready to take your questions.

Thank you, Guillaume and Thomas. We are now ready to open up the floor for your questions. [Operator Instructions] All right Sharon, let's get the ball rolling. Could you please explain the Q&A procedure for participants?

[Operator Instructions] We will now go to our first question. One moment, please. And your first question today comes from the line of David Perry from JPMorgan.

I'm not used to being first. I just had one question, please. The guidance probably implies that the margin will be down in Commercial Aircraft in 2026. And I'm just wondering if that is due to any one-off items, maybe the spirit integration and how you see the margin kind of evolution thereafter, if you're willing to comment.

So David, on that question, what we are seeing is that the margin in commercial is not particularly affected on a per aircraft basis, of course. But what we do see is that the delivery trajectory is lower than what we had originally anticipated absent the issue that we're having with Pratt. And on top of that, you're making a correct remark, we are having 2 headwinds that we have to keep in mind.

One is the FX headwind, which is roughly EUR 0.02. You know the math. It's roughly EUR 150 million per EUR 0.01. So that gives you a rough EUR 0.3 billion of headwind. And secondly, we said we would face a low triple-digit headwind from the spirit integration. You can attach a number to that. And of course, those 2 items do play a role when you build the EBIT bridge from 2025 to 2026.

Absent than that, you know that we said for R&D, we would expect an increase in 2026 as well. So of course, we're continuing our lead program. But on the other hand, we have to make the necessary investments in R&D for the future programs that we have on the agenda. So I would say those are the building blocks that you have to take into account for 2026. The margin on a per aircraft basis is healthy, and we're happy with what we have achieved in terms of order intake in 2025.

Your next question today comes from the line of Benjamin Heelan from Bank of America.

The first question for me is on free cash flow. It does come across a lot weaker in 2026 than I was expecting. So could you go through the bridge a little bit? What are the big moving pieces that we can expect there? And then second question is the situation with Pratt. What can you actually do with this situation? And how is it impacting your thinking of engine supply and engine suppliers going forward?

Let me maybe start with the free cash flow bridge. So the main item that you should keep in mind here is Spirit. And again, I'm coming back to what I said in the presentation. We see a deterioration relative to what we assumed before. Remember before, we said it could be up to a mid-triple-digit negative amount. We see this is going to be more negative, mainly because of the late closing of the transaction.

So it's a spillover effect between 2025 and 2026. But of course, now with that effect, we're more talking high triple-digit amount in terms of CapEx and investments that we have to make into Spirit. That is the main item that you should keep in mind for the 2025, 2026 bridge. Other than that, there is continued investments into inventory that we have to make to make sure that our trajectory is intact.

And finally, of course, the impact of Spirit is also negative on free cash flow because we are not excluding that we might have to build gliders depending on the visibility that we have on engine deliveries. So this is also a negative that we face. Other than that, I would say the positive come, of course, from the positive development of our divisions and the, as I said, good margin that we have on a per aircraft basis in commercial.

Maybe on the engine side. Well, that's the one difficult thing we have to face looking at 2026 is that we have a shortage of engines from Pratt & Whitney compared to what was expected and compared to accepted orders from Pratt & Whitney for deliveries of engines in 2026 for 2026 deliveries. That's the one significant thing we have to manage. We want to enforce our contractual rights, but that will obviously take some time. and we had to significantly reduce the number of aircraft planned for deliveries in 2026 due to that situation with some implications, obviously, on profitability and free cash flow.

Our understanding is that it's an issue that will mainly impact 2026, probably to some extent, 2027. We are discussing with Pratt, obviously, as you can imagine, on a daily basis on those topics, and that should go away most likely after 2027. That's why we had to adjust slightly the perspective for reaching the rate 75. We believe we continue to pursue reaching rate 75 by end of next year.

But due to the uncertainties on engine volumes remaining for 2027 from Pratt, we said that we will now reach between 70 to 75 A320 aircraft per month by the end of next year. So we have to sort of bite the bullet in 2026 of that very painful and unsatisfactory situation with impact on 2026, but working hard to restore a good situation moving forward, and that's the work ongoing with Pratt.

Super clear. Just a very quick follow-up for Thomas. How should we think about the Spirit cash flow drag in '27 and into '28. Is there any color that you can provide how that high triple digit will evolve?

I would say in 2027, with the guidance that we originally gave to you was the same as for 2026. So up to a mid-triple digit. There might be a small deterioration also in 2027. But again, I think the visibility is not super high for that. We're working hard to not make it too negative of a drag. The important thing is the focus on '26.

Your next question today comes from the line of Ross Law from Morgan Stanley.

So maybe a bit of a kind of bigger picture question. And just on why engine supplies are impacting the ramp-up. Obviously, I understand the impact deliveries, but not necessarily the manufacturing of aircraft. So is the softening of the ramp-up reflecting risk around Pratt & Whitney engine supplies medium term beyond 26? Or are there other bottlenecks that are driving the slight sort of ramp-up delay on A320. And then just one on Defense & Space. Good margin in the full year, especially in Q4. How sustainable should we view this?

I'll start with the first question. So the shortages of engines are impacting 2026 and to an extent that looks more limited, but still to be completely understood also 2027. That's the reason for slightly changing the moment of reaching rate 75, the fact that we intend to reach between 70 and 75 by end of next year is the Pratt & Whitney engine situation that is not limited by other supply issues where we have a ramp-up trajectory that is well supported. And beyond that point and the Pratt & Whitney issue, we continue to target the same rate 75, the stability and being supported by the supply chain. So it's really this one issue, unexpected issue, at least in the dimension and the timing where it comes that is impacting '26. We think to a more limited extent, 2027 and most likely not beyond.

And on the margin of Defense and Space, you know our view is never over interpret the margin of a single quarter. So I would rather look at the margin of Defense & Space for the full year 2026 -- '25, which we found very satisfactory, and we think it is sustainable and will be improved. So my comment would be, you know we said Defense and Space will achieve a mid- to high single-digit margin by 2028. And I would say we are absolutely on track to achieve that and very pleased with what we have achieved already in 2025.

Your next question comes from the line of Chloe Lemarie from Jefferies.

Apologies, I was on mute. I have 2 questions, please. The first one is on the 2026 delivery guidance, which seems to imply A220 slightly below 60 per month. Despite commentary that production rate had been exceeding that level last year. So how are you dealing with suppliers, which were likely prepared for further ramp. Is just glider production the way to think about it. Or any other measures you're taking to mitigate this? The second one would be on FCAS. Could you remind us of the current revenues that you are generating from the program? Is it all NGF related? And beyond the NGF, what would be your involvement and the opportunity set there?

Yes. On the 2026 A320, we are in a ramp-up, and we'll continue to grow production rates compared to 2025. We will have to adjust the level of production and the expected number of gliders over the year as we navigate the discussion and the difficult negotiation with Pratt & Whitney on the volumes. We don't give up as we are not satisfied with the low level of volume on engines that they are committing on now, which is insufficient. And as I said, already below the order they had accepted for 2026.

And it's very much also a function of the entry into 2027. So we're on the ramp-up on the A320. It's indeed a difficult situation to manage with the other suppliers that are ramping up according to the design, the designated trajectory. But again, we expect to grow significantly in 2027. And therefore, the long-term ramp-up or the midterm ramp-up is not challenged and reaching the rate 75 is in the cards, and we continue to count on our supply chain to deliver on this objective as we have the demand, as we have the industrial system in place and as the very vast majority of the supply chain is in line with this objective.

And on FCAS, I mean, remember, it is a project in the early phase of the development. So there's no material revenues attached to it. The order of magnitude that I would give to you is a low triple-digit number, but that is, of course, mainly covering the cost that we're having in the development phase. So therefore, it's not a material revenue item in our OP period.

Your next question today comes from the line of Sam Burgess from Goldman Sachs.

Firstly, just to return to the Pratt & Whitney conversations you're having. I mean what are the company actually telling you about the real bottlenecks that they are dealing with and their concrete plan to rectify them? Just any color there would be really helpful. And then the second one would be just around the Defense business, clearly performing very well and just continuing to see very high demand. I mean a lot has changed in the world and in particular, in European defense since you presented at the Paris Air Show. Have your expectations for that business evolved?

So on the Pratt & Whitney, which is the single more important topic we are dealing with. I think Pratt & Whitney have explained their situation and the challenge that comes from the number of aircraft so-called AOGs with their airline customers. This number has not gone down as fast as they were targeting and expecting and as the customers were expecting. And Pratt & Whitney want to allocate a large part of their efforts of their material and engines to supporting the fleet, negatively impacting Airbus in its ability to ramp up.

We are very dissatisfied with this. We don't agree with this. They have to increase output more than what they've done so far to be able to serve both needs, but in particular, the needs of Airbus and residing on volumes on orders that have been accepted in the short term as obviously very negative consequences for us on managing the situation with impacts on our own ability to deliver our own profitability, of course, and managing the inventory and therefore, the free cash flow that goes with it.

Therefore, the guidance we are delivering for 2026. As you can imagine, we're in dispute with Pratt & Whitney on this. We want to enforce our contractual rights, but this will obviously take time. And maybe for defense, Thomas?

I mean for defense, yes, I would agree with you. Things are accelerating, and I would just reiterate what Guillaume said also in the speech, we had an order intake for Defense, if you take the defense part of helicopters and the pure defense part of Airbus and Defense and Space, excluding civil satellites, and it was over EUR 22 billion in '25, an uplift of 50% relative to the previous year. So I think that shows the good momentum.

I would say we are at least on the trajectory with Defense and Space that we had laid out in Paris, but of course, it would be premature to give some new guidance, but we're very pleased with the trajectory that we currently have.

And maybe we can say that in our business in Defense and Space, on large systems, it takes time from order intake to delivery and therefore, generating turnover and profits, but it supports very much the long-term trajectory we have for Defense and Space and with the competitiveness of our products. So it's really putting us obviously on the high side of the trajectory.

[Operator Instructions] And your next question comes from the line of Ian Douglas-Pennant from UBS.

It's Ian Douglas-Pennant at UBS. First on -- you made some comments on your -- in your prepared remarks on the panel issue having impacts in H1. The delivery rate that we've seen in January and from what we can see from data providers from February seems to be tracking reasonably slow. Is that related to the panel issue entirely or in the vast majority of that slow, is that the panel issue? Or should we read other issues into that, including Pratt & Whitney?

And my second question is, have you communicated with suppliers to lower their production rates for 2026 already? Or is that something you plan to do? Or will you not lower your communication to them, and that's why your free cash flow guidance is where it is because of inventory build?

So the January and February deliveries are indeed quite low. It is driven by the management of the panel issue, not only but primarily. It's not related to engine topics at the beginning of this year. Indeed, we have to manage the supply chain situation. It's a bit of a case-by-case, supplier-by-supplier adjustment as we want to continue to fully support the ramp-up in the outer years for the A320 as we want to best manage the situation with the supplier to not have shocks in their production rates or 2 nonlinear situations with the suppliers to maintain the reliability of the supply independently from the Pratt & Whitney situation.

As we will navigate and continue to manage the relationship with Pratt and that discussion, we also want to preserve the possibility to have better news at a later stage and to get from Pratt more than what they're telling us today. That's the complex tension between ramping up with uncertainty on engines, but still the need to be there in 2027 and beyond with the right level of volume, the reliability of the supply chain that has done the investments, the ramp-up.

So that's indeed the difficult tension that is reflected in the few numbers we give for the guidance that makes the operational management of the ramp-up trajectory for the 320 in 2026 and probably beginning of 2027 quite challenging. We want to smoothen these difficulties for the supply chain, but we have obviously to adapt here and there, case-by-case, supplier by supplier to optimize the situation.

Could I just ask a follow-up on that? So if Pratt & Whitney do not change what they've committed to or they're promising you today and continue this disappointment, how many gliders do you expect you'd end the year with? I don't know whether you want to give a precise number or just kind of rough indication, that would be very helpful.

I will not give a number, but what I'd like to say is we don't plan gliders for gliders. We do gliders when we are surprised in the short term by an issue and we can't put engines on planes that were already in the production pipeline or when we strongly believe or we reasonably believe that the engines we don't get at the point will come later. And in that case, we produce gliders voluntarily.

But when we are in a planned trajectory of deliveries of engines in that case, with a little hope for change, we don't produce gliders for producing gliders. So that's why the ongoing negotiation, the ongoing discussions we have with Pratt are very important as we need visibility to plan.

And today, we have given a guidance to the market for 2026 that relies on what we -- on the current status of the negotiation and the impact it has on inventory, on buildup of planes. And we'll see later in the year whether we want to end up 2026 with a strong limited number of gliders and how we anticipate some upside and the risk we're taking, that's today with a reasonable prudence in the guidance we're giving, but it's obviously something that will be managed over the year. We are just in February at the moment.

Your next question today comes from the line of Douglas Harned from Bernstein.

First question is on the A350, and we've only seen 2 deliveries so far this year. Could you help us understand what rate you want to be at for the year? And are the -- is the shortfall primarily due to Spirit issues, interior certification or just interiors falling behind? So first question on the A350. And then second, if we go back to last year on the A320 family, the problem was engines from CFM. Can you update us on how things stand right now with respect to the LEAP?

Yes. Maybe I'll start with this one. So the issues we had last year with CFM were linked to the sequence of deliveries over the year. As you remember, they had some industrial challenges. There was a 7 weeks strike at Safran as far as I remember, and we found ourselves with the shortage of engine on the short term with the understanding that came through later in the year that CFM would recover and finally deliver on the number of engines we were expecting by around mid of November. This is what happened.

That led to a very backloaded year in terms of delivery or contributed to a very backloaded year of delivery, but this is now behind us, and we are with the LEAP on a nominal situation where we get engines when we need and when we expect to get in 2026 the number of engines that were committed by CFM, and they have not modified their outlook, their projection for 2026.

So we think we have a reliable source of engines from Pratt & Whitney -- sorry, from CFM from the LEAP this year contrarily to Pratt & Whitney. So the engine issue that we're expecting for 2026 are solely on the Pratt & Whitney engine when it comes to the A320 family.

On the A350, no, I have no specific warning when it comes to the ramp-up. You know that we had a lot of deliveries in the last quarter and in the last month of 2025. So we focused very strongly on those deliveries, and we have now to resume a normal pace of deliveries for the planes in general for the A350. The very backloaded and very challenging industrial situation we had end of last year is negatively impacting the beginning of the year. So we have a rather slow start. It's not very satisfactory, but it doesn't impact the ability to deliver the rates and the number of planes we expect for this year, at least from what I can see today.

[Operator Instructions] And your next question today comes from the line of Olivier Brochet from Rothschild & Co.

I would have 2 questions, please. The first one, continuing on the previous one on the A350. Can you share a bit more about the signals that you see for production. Seats have been an uncomfortable spot for the industry. Spirit is a challenge to integration. Engines have been so far no problem at all for A330 and A350. Do you have any concerns there? Any comfort on the contrary that you could share? And the second question is, you mentioned that you would be happy to have 2 aircraft for NGF. Do you have any view on what the French position is on that topic, please?

So starting with the A350. So 2026 is a year of ramp-up of the A350. Indeed, we had difficulties with interiors, mainly with seats in the past 2 years that has impacted the ability to deliver engines, but not impacting the ramp-up itself. It's not impacting the ability to produce an A350 aircraft. It's impacting the ability to do the customization, the cabin and interiors and then to deliver to customers with the full cabin completed.

We find solution one by one in that case. And in many cases, it's also between the airline and its interior or seat supplier in the frame of what we call BFEs, so buyer furnished equipment coming directly from the equipment supplier to the airline. I don't have specific warnings when it comes to the ramp-up of the 350 contrarily to what we had 2 years ago, where we had to actually postpone by sort of a year the start of ramp-up because of the Spirit situation.

What we have from Spirit going from last year to deliveries this year is supporting the plans we have. So it's all about execution, obviously, this year, and I'm not suggesting there's no complexity in what we do on a wide-body aircraft. But I don't have, at this point in time, significant warnings when it comes to our ability to ramp up on the A350.

On the FCAS, well, we have not said that we would be happy with 2 fighters. What we've said is, would it be the demand of our customers. That's a scenario that we could live with and that we would support in the frame of European cooperation. We are deeply convinced of the need and the relevance of European cooperation in this future combat air system capabilities. That's what -- that's what we think we do reasonably well. We're here to serve cooperation programs, and we are ready to take a leading role if the program has to move in the direction that is not the one of today. So we are a bit in a wait-and-see mode to see how things will move forward on the NGF.

Your next question comes from the line of Ken Herbert from RBC.

Two questions. My first question is, how confident are you now that you've owned the Spirit assets for just a few months here that the guidance fully reflects the downside risk on both EBIT and free cash flow? Or could there be incremental risk as you continue to invest and dig into that business? And then my second question is, again, just on the A350, can you give any more specifics on what kind of ramp we should see this year in deliveries as you think about still hitting 12 in 2028?

So maybe let me start with the Spirit question. I would say we have a reasonably good visibility because as you said, it's only been 2 months that we really own the business, but we have been in -- at the Spirit side with many people already before. So I would say the assessment that we have made is mainly a deterioration for free cash flow, and that is because of the late closing and the spillover of things that already should have been done in 2025, but that now have to be done in 2026.

So therefore, I would say that deteriorated number is part of our guidance, and I see limited downside risk with respect to a further deterioration of Spirit because our visibility is reasonably high into where we are with respect to CapEx needs, but also other things that we have to invest, be it people, be it systems, be it processes. So therefore, I would say the downside risk from Spirit on the financials should be maintained.

On the A350 question, well, we give a guidance of around EUR 870 million for 2026. And as usual, we don't split it by family. You can think of the A350 coming from the rate of 5 to 6 in the past 2 to 3 years as far as I remember, to 12 ideally in a sort of quite linear way. And we want to see a material increase on that trajectory already as soon as in 2026.

We will now go to the next question. And your next question comes from the line of Christophe Menard from Deutsche Bank.

I had 2. The first one, going back to Spirit, can you also give us an update on the EBIT impact on Spirit in '26 and '27? And also, my understanding was you got the compensation in 2025, so the kind of the bridge approach in a way on Spirit at the EBIT level. My understanding was it's EBIT adjusted, not necessarily EBIT reported impact or actually, I mean, the -- it's within the EBIT adjusted also if you could mention or give some details on this. And the other question, it's a rather candid question, but you're mentioning the issues with Pratt deliveries. Is there any way to actually increase the volume of LEAP deliveries in 2026 and 2027 to kind of offset the current situation? Or it's, so to say, already set in stone the production schedule?

I'll start with the second one and give a bit of time to Thomas to tell the story of spirit, which is not an easy one moving from '25 to '26 and '27. On the engine issue, we have obviously discussed a lot with CFM on the possibility to get more engines already in the past. They have accepted already to increase the volume of LEAP. They don't want to do it more now for 2026 than what they had accepted because they have their own challenges and constraints to manage.

They have also the in-service fleet support to provide. And I guess they have also to respect their commitments to other customers. So that's not something that will help, unfortunately, for 2026, at least that's not something CFM is ready to commit on now. We'll continue to have that discussion with them as we move forward in the year. And I told you that we are managing production with the hope that we could improve the picture at a later stage. But I think CFM has been quite clear that 2026 comes with little hope. That's something that could play a role in 2027.

You saw that we said from 70 to 75 by end of 2027. I continue -- we continue to target 75 by end of 2027. And would CFM be capable of providing a bit more in '27 compared to what they have committed to us that could contribute to reaching that objective. Spirit?

Spirit. So again, back to what have we said on the EBIT adjusted impact for Spirit in 2026 and '27. We said it would be a low triple-digit impact negative. And I can fully confirm that for 2026. So plug in a number that is in that range. For 2027, it might be slightly more negative than that, but still within, let's say, a low triple-digit range.

We will now take our final question for today. And the final question comes from the line of Robert Stallard from Vertical Research.

A couple of final questions for you then. First of all, on staffing levels, you've talked about this in the past, how you've been hiring in advance of the ramp. Does that change in 2026 given the 320 adjustment? And then secondly, on foreign exchange and the weakness in the U.S. dollar. At what point does this become a structural issue for operating margins and could require mitigating action?

Starting with the staff. Actually, we have already adjusted the staff hiring, the speed of growth in 2025 for 2026 to stay slightly ahead of the curve, but probably a bit less than what we had done before, being satisfied with the way the staff was serving the ability to ramp up. Indeed, we are currently reviewing, that's an ongoing discussion at Airbus, what needs to be adjusted for 2026. Obviously, slightly lower volumes than we were expecting or significantly lower volumes than we were expecting.

But as I said earlier, with a view that 2027 should be very much -- pretty much similar to what we had expected, maybe with some adjustments. And therefore, the need to manage that dent into the production ramp-up on the A320 this year as we want at a later stage or not to create opportunities, would we get more engines or create -- accept to have gliders by the end of this year as we enter into 2027 to support the 2027 deliveries. So it's an ongoing discussion. We will adjust. The extent to which we will adjust and the timing is still something that we are working on.

And on the U.S. dollar, I mean, let's distinguish between the short term and the long term. Obviously, in the short term for 2026, we are well hedged, and therefore, it's not an issue for 2026. And I would say almost the same is true for 2027 because we do have sufficient hedging in place. I think your question is more in the long term. My answer to that would be, of course, let's look at the current spot rate, which is still more favorable than what we have in our hedge book.

So there is still quite a bit of headroom that we have before the spot rate actually becomes worse than what we have in our book. And secondly, yes, we're actively looking at what are mitigation actions. One is, of course, the general efficiency. This is why we continue to work on the lead program and make sure that we have sufficient headroom in terms of the margin that we produce.

And secondly, of course, we're constantly revisiting how can we better balance the dollar revenue/euro cost mismatch. However, we don't want to run into the risk of mitigating maybe the FX exposure, but then running into other exposures, be it suppliers or other things. And so therefore, it's a careful balancing act when it comes to incurring more dollar costs that we don't run into other dependencies that we don't want to have. But the question, how can we mitigate a potential long-term dollar depreciation is certainly something that we're looking at operationally.

That concludes our Q&A session. I will now hand the call back to Jean-Christophe for closing remarks.

Thank you, Sharon. That brings our session to a close for today. We really appreciate you taking the time to join us. If you have any further questions, please don't hesitate to reach out, just drop an e-mail to Olivier Vitor or myself, and we'll get back to you as quick as we can. Thanks again for your interest in Airbus. We are looking forward to catching up with you very soon again. Q1 '26 earnings release will take place on the 28th of April. Have a great day, everybody.

Thank you, everyone. Bye-bye.

Thank you. Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.

Ladies and gentlemen, thank you for standing by. Welcome to the Airbus' Nine-Months 2025 Earnings Release Conference Call. I am Sharon, the operator for this conference. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to your host, Guillaume Faury, Thomas Toepfer and Helene Le Gorgeu. Please go ahead.

Thank you, Sharon, and good evening, ladies and gentlemen. This is the Airbus' Nine-Months 2025 Earnings Release Conference Call. Guillaume Faury, our CEO; and Thomas Toepfer, our CFO, will be presenting our results and answering your questions.

This call is planned to last around an hour. This includes Q&A, which we will conduct after the presentation. This call is also webcast. It can be accessed via our home page by clicking on the dedicated banner. Playback of this call will be accessible on our 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 you, Guillaume.

Thank you, Helene, and hello, ladies and gentlemen. Thank you for joining us today for our nine-month 2025 results call. We are here in Amsterdam with Thomas to run you through our results.

Our operating environment remains complex and dynamic. Navigating strong demand combined with the specific supply chain tensions, and that have not changed, still requires continuous operational discipline and agility, in particular, in the environment of changing trade policies. We welcome the U.S.-EU trade agreement, which restores a stable and tariff-free environment for trade in aircraft and parts since the start of September. This is a crucial step that allows our global industry to move forward with the predictability it needs to invest and innovate. Yet the still unstable geopolitical situation remains an area of continuous vigilance.

In that context, we are rolling out our plan to reach the A320 family production target of rate 75 per month by establishing 10 A321 capable final assembly lines across four global sites. The recent addition of a second line in the United States and the second line in China marks a critical milestone in our global industrial growth strategy, but also enhances our overall business resilience. We are scaling up our operations and expanding capacity as we move forward with the commercial aircraft ramp-up.

We're also committed to contributing to European defense and remain focused on delivering more competitive and innovative products and services with our two divisions, and we see a growing momentum. When it comes to European strategic autonomy, we have made significant progress towards the consolidation of our space activities together with Leonardo and Thales aiming at establishing a leading European company, and I will come to this in a minute.

In Q3, we delivered 201 commercial aircraft. And as the engine situation is showing signs of recovery, the number of gliders is now at 32 as of the end of September. This brings our year-to-date deliveries to 507 aircraft as compared to 497 last year. Deliveries continue to be back-end loaded as we navigate the engine situation. We have a strong year-end rally ahead of us, and our teams are in the sprint.

Our EBIT adjusted stood at EUR 4.1 billion as of nine months 2025. This reflects the commercial aircraft deliveries and the solid performance at both Airbus Defense and Space and Airbus Helicopters. Our free cash flow before customer financing was minus EUR 0.9 billion. It notably reflects the inventory buildup that supports the Q4 deliveries and the ramp-up. On that basis, we maintain our 2025 guidance, which now includes the impact of currently applicable tariffs, and we'll come back to this later.

Moving to space. We've made a major strategic step forward. We are very pleased with the recent announcement of signing a memorandum of understanding an MOU with Leonardo and Thales to form a new European space player in 2027. If you recall last year, I was clear we needed to focus on fixing our foundations and restore profitability. The turnaround plan is in full motion, and we are pleased with the first results. In parallel, we've been working on strategic options to create scale and increase competitiveness facing global players. The new company aims to unite and enhance capabilities in space by combining the three respective activities in satellite and space systems manufacturing and space services. The MOU is a collective industry commitment to strengthen the European space sector. The next steps include launching the social consultation process with our social partners, preparing to carve out the space businesses and addressing regulatory needs. We have a busy journey ahead, and we are fully committed to this major and exciting project.

Let's now look at our commercial environment, starting with commercial aircraft. Passenger traffic continued its growth momentum, while air cargo demand remained resilient. During the nine months '25, we booked 610 gross orders, including 116 in Q3. On the A220, we booked 40 gross orders. And looking at the A320 family, we booked 371 gross orders. This brings our backlog to 7,105, out of which around 75% are for the A321. And the 7,105 is just for the A320 family, of course.

Moving to the wide-bodies. On the A330, we booked 90 gross orders, confirming the high demand for this versatile product. Finally, on the A350, we booked 109 gross orders, underpinning the continued commercial momentum of what has become the reference in the market. Net orders amounted to 514 aircraft, including 96 cancellations, which were largely anticipated and already embedded in our backlog valuation as of December 2024. Our backlog, total backlog in units stood at 8,665 aircraft at the end of September.

Looking at Helicopters. In the nine months '25, we booked 306 net orders compared to 308 in the nine months '24, so very similar, and this is well spread across the portfolio. We continue to see positive momentum, in particular on the military market, and we remain focused on securing new business opportunities in both our home countries and export markets.

A new Airbus final assembly line will be established in India to build H125 helicopters in collaboration with Tata Advanced Systems, aiming at capturing the full potential of the civil, parapublic and military markets in South Asia.

Let me conclude by highlighting that we have streamlined our small and medium tactical uncrewed aerial systems, UAS, the drones offering into a single comprehensive portfolio managed by the Airbus Helicopters division. This aims at delivering a focused market approach for defense and security customers and provides customers with cutting-edge capabilities for surveillance, intelligence and operational flexibility. Finally, in Defense and Space, order intake stands at EUR 6.8 billion for the nine months. On Air Power, this notably reflects an order from the Royal Thai Air Force for a next-generation Airbus A330 MRTT+. This advanced aircraft is an evolution of the combat proven A330 MRTT, introducing innovations from the A330neo as well as upgraded military capabilities. So, in particular, the new engine of the NEO that is now on the MRTT+.

While on Air Power, let me highlight the recent contract with Germany for the acquisition of 20 Eurofighter aircraft to be produced at our final assembly line in Manching and to be delivered to the German Air Force starting from 2031. The order intake will be recorded once all contractual conditions are met. So the order intake is not yet recorded in the Q3. The momentum for the Eurofighter is also strong on the export market outside of the home countries of the Eurofighter, and that was also demonstrated by this week's commitment from Turkey, Turkey to acquire 20 units.

The Eurodrone program is making progress as we successfully completed the CDR, the so-called critical design review earlier this month. This officially concludes the design phase and paves the way to prototype production and ground tests ahead of first flight.

On FCAS, we remain convinced that Europe needs to have its Future Combat Air System in order to meet its security challenges and further develop its critical skills and know-how in this field. Given the level of effort and investment required, we are convinced -- I am convinced of the benefits of a collaborative approach, and we intend to play a leading role in making it happen in a way or the other.

Overall, on what concerns the defense part of our Airbus Defense and Space and Helicopters businesses, we are observing a growing momentum, and we expect it will continue in the foreseeable future.

And now Thomas will take you through our financials. Thomas?

Thank you very much, Guillaume, and hello, ladies and gentlemen. I'm now on Page 7 of the presentation. And as Guillaume said, I will take you through our financial performance. So, as you can see on the chart, our nine months 2025 revenues increased to EUR 47.4 billion, which is up 7% year-on-year, and it mainly reflects the higher contribution from our divisions with stronger services volumes across our businesses and a higher level of deliveries, partially offset by the U.S. dollar depreciation. And as you can see on the right-hand side, our R&D expenses stood at EUR 2.1 billion for the first nine months of the year, lower compared to the nine months of 2024, and we continue to benefit from the prioritization of our activities, and we now expect that the R&D expenses will be slightly lower in 2025 than in 2024 when we talk about the full year.

Now let's look at EBIT adjusted on Page 8. As you can see, our nine months 2025 EBIT adjusted increased to EUR 4.1 billion from EUR 2.8 billion in the nine months of 2024. And of course, let me remind you that in the nine months of last year, we recorded EUR 989 million of charges in our space business, which obviously did not repeat themselves. As of the nine months of this year, the higher commercial aircraft deliveries embed a less favorable mix, which is offset by a more favorable hedge rate and lower R&D expenses. And it also reflects a stronger performance in both divisions.

So, let me just clarify the impact of the currently applicable tariffs at this point. We expect this to represent anything between EUR 100 million and EUR 200 million for the full year, of which, however, the vast majority will be recorded in Q4. And as you can see on the right-hand side of the page, the level of EBIT adjustments totaled a net negative EUR 0.8 billion, and I'll just walk you through the items. It has in a negative EUR 577 million impact from the dollar working capital mismatch and the balance sheet revaluation, mainly reflecting the mechanical impact coming from the difference between transaction date and delivery date, of which negative EUR 186 million occurred in Q3.

Secondly, it has negative EUR 105 million related to the Airbus Defense and Space restructuring, which we recorded already in Q1, and it has negative EUR 88 million related to the stabilization of certain Spirit AeroSystems work packages, of which EUR 31 million recorded in Q3. And finally, negative EUR 11 million other, including compliance costs and also M&A. So this takes our nine months 2025 EBIT reported to positive EUR 3.4 billion, and the financial result was positive EUR 374 million, and it mainly reflects the revaluation of certain equity investments and the revaluation of financial instruments, partially offset by the evolution of the U.S. dollar.

The tax rate on the core business continues to be at around 27%. However, the effective tax rate is 32.4%, including the tax effect on the revaluation of certain equity investments as well as a net deferred tax asset impairment. And we still expect the French surtax to result in an impact of around EUR 300 million in 2025, both for P&L and cash. And in the nine months of this year, we recorded the part that is related to the year 2024 as well as the part corresponding to the first nine months of this year. And so the resulting net income is EUR 2.6 billion with earnings per share reported of EUR 3.34, as you can see on the chart, and the nine months 2025 EPS adjusted stood at EUR 3.97 based on an average of 790 million shares.

Now with this, let's turn the page to Page 9 and look at our U.S. dollar exposure coverage. Consistent with what we said during our business update, we began to implement a limited number of 0 cost collars, exactly EUR 2.1 billion in the quarter into our hedge portfolio. And the EUR 2.1 billion is dollars, not euros, obviously. Now this strategy aims at addressing the longer-term horizon with an acceptable level of volatility and to potentially capture the favorable evolution of the U.S. dollar, while at the same time being protected against a material weakening of the dollar. And let me just be clear, we do not aim at replacing our forward, but rather to complement our coverage with a limited amount of colors. And as indicated, the collars will, at this stage, remain at around a single-digit percentage of the overall coverage.

Now with the integration of colors, the blended rate now includes the least favorable rate of our colors. And so hence, it provides you with a protected or conservative view. And with all that being said, as you can see on the page, in the nine months of 2025, USD 14.8 billion of forwards matured with the associated EBIT impact and euro conversions realized at a blended rate of $1.18 versus $1.21 in the nine months of 2024. And we also implemented USD 12.7 billion of new coverage at a blended rate of $1.18. And as a result, our total U.S. dollar coverage portfolio in U.S. dollar stands at $80.7 billion, with an average blended rate of $1.21 as compared to $82.8 billion at $1.21 at the end of 2024.

So now let's look at our free cash flow on Page 10. Our free cash flow before customer financing was negative EUR 0.9 billion in the first nine months of the year. And as you can see on the chart, this outflow was mainly driven by the change in working capital, and it notably reflects the planned inventory buildup to support our ramp-up across our businesses, and it also includes a favorable phasing effect of cash receipts and payments.

On the A400M, the aircraft slightly weighted negatively on our free cash flow in the nine months of 2025 as the deliveries of the aircraft are back-end loaded However, we continue to expect it to be broadly neutral from a free cash flow perspective in the full year 2025. As you can also see on the chart, the nine-month CapEx number was negative EUR 2.3 billion, and we continue to expect it to increase in 2025 to support our industrial ramp-up so that the free cash flow was negative EUR 0.8 billion, including customer financing of a positive EUR 0.1 billion. What we can say is that the aircraft financing environment remains strong and competitive, and we expect sufficient liquidity to finance our 2025 deliveries.

So with that, our net cash position stood at EUR 7 billion as at the end of September, also reflecting the dividend payment as well as the weakening dollar environment, but I should stress that our liquidity remains very strong at around EUR 30 billion. And in September, as you might have noticed, Moody's upgraded our credit rating to A1 with a stable outlook, and we think this is underlining our consistent strong credit management and the strength of our balance sheet.

And with that, I would like to hand it back to Guillaume.

Thank you, Thomas. Very clear. So now let's start with commercial aircraft. In the nine months 2025, we delivered 507 aircraft to 79 customers. Looking at the situation by aircraft family. On narrowbodies, we delivered 62 A220s and 392 A320s. And out of the 392 A320 family aircraft, 250 were A321s, representing 64% of the deliveries for the A320 family. We are very pleased that Air New Guinea has taken delivery of its first A220, becoming the 25th global operator of the aircraft, which is now flying with carriers on five continents. The A320 family reached a major milestone, becoming the most delivered aligner in history. There's a bit of pride here, as you can feel. And we continue to ramp up towards a rate of 75 A320 family aircraft per month in 2027. That's no change compared to previous assumptions.

On the A220, the current balance between supply and demand has led to an adjustment of the ramp-up trajectory and the ramp-up ahead of us. We are now targeting to reach rate 12 in 2026, allowing time for the integration of the Spirit AeroSystems work packages, mostly the wings and the progressive introduction of engine durability improvements for our customers. This means more work to reach breakeven, and our team are actually on it.

In the nine months, we delivered 53 widebodies, of which 20 A330s and 33 A350s. On the A330, we're currently stabilizing at a monthly production rate of four. As previously introduced, we are now targeting to reach rate five in 2029 to meet the customer demand for the A330. On the A350, there's no change. We continue to target the rate 12 in 2028. When it comes to the A350 freighter, I'm pleased to say that we started the assembly of the first flight test aircraft in Toulouse with the first flight planned next year. In a nutshell, we continue to produce in line with the plan. The challenges for the year have not changed, notably with cabin and for the A320, the persisting tensions on engines, resulting in 32 gliders at the end of September. The engine situation is showing signs of recovery, and we continue to work closely with the engine manufacturers to deliver on our 2025 commitments.

Now let's look at the financials for our commercial aircraft business. Revenues increased 3% year-on-year, mainly reflecting the higher number of deliveries and growth in services. EBIT adjusted was at EUR 3.3 billion in the nine months, driven by favorable hedges rates and slightly lower R&D expenses, while the increase of deliveries embeds an unfavorable mix.

Looking at helicopters. In the nine months, we delivered 218 helicopters, 28 more than at nine months of 2024. Revenues increased around 16% to EUR 5.7 billion, reflecting a solid performance from programs and Services growth. EBIT adjusted increased to EUR 495 million, reflecting growth in services as well as higher deliveries, as I mentioned earlier.

And let's complete our review with Defense and Space. Revenues increased 17% year-on-year to EUR 8.9 billion, driven by higher volumes across all business lines. EBIT adjusted stood at EUR 420 million, supported by higher volumes and improved profitability, in line with the divisional midterm trajectory.

On the A400M program, we engaged in positive and forward-looking discussions with the launch nations and OCCAR. This was notably marked by the agreement reached in June with OCCAR to advance seven deliveries for France and Spain and to further increase the visibility we have on the production for the program. In light of uncertainties regarding the level of aircraft orders, Airbus continues to assess the potential impact on the program's manufacturing activities. Risks on the qualification of technical capabilities and associated costs remain stable.

And now on to our guidance, which, as you have seen, is maintained. On the basis of its 2025 guidance, the company assumes no additional disruptions to global trade or to the world economy, air traffic, the supply chain, the company's internal operations and its ability to deliver products and services. The guidance now includes the impact of currently applicable tariffs. The guidance also includes the impact of the integration of the certain Spirit AeroSystems work packages based on preliminary estimates and an assumed closing in the fourth quarter of 2025. On that basis, the company targets to achieve in 2025 around 820 commercial aircraft deliveries, an EBIT adjusted of around 700 -- sorry, of around EUR 7 billion. We're not yet there. And the free cash flow before customer financing of around EUR 4.5 billion. Just to clarify my statement on EBIT, it's -- we target an EBIT adjusted of around EUR 7 billion. The anticipated impact of the integration of certain Spirit AeroSystems work packages on the company's guidance remains broadly in line with previous estimates.

But maybe, Thomas, you want to be more precise on some of those elements?

Yes. Let me just add a couple of precisions and details to what you said, Guillaume. So, first of all, on tariffs, as I said earlier, we expect this to represent anything between EUR 100 million and EUR 200 million for the full year, but the vast majority of the total amount will be recorded in Q4. And secondly, on Spirit AeroSystems, when we say broadly in line, what do we mean is that the closing date is now expected before the end of the year, and all parties are putting all necessary efforts into the closing process, and this is on track for the operational readiness for day one. But of course, it is later than what we had anticipated at the beginning of this year when we put out the guidance.

Now this shift of the closing into Q4 comes with a partial relief to free cash flow because we didn't own the business, and therefore, we did not record any negative operational result in our free cash flow. On the other hand, you have also seen in our financial statements that we, of course, provided credit lines to Spirit, which are recorded below the free cash flow line. So in total, this remains broadly neutral in terms of the net cash position for the company. But everything else being equal, you could take this slight free cash flow positive adjustment in the range of a low triple-digit number into your models, if you want. But obviously, the order of magnitude is not such that it led us to change the guidance.

And with that, back to Guillaume.

Thank you, Thomas, for those precisions. And I'll conclude with our key priorities, and they have not changed. We are and we remain fully committed to executing the next steps of our commercial aircraft production ramp-up together with our suppliers. Our focus is twofold: addressing the remaining specific supply chain tensions, in particular, on narrow-body engines where durability remains a headwind as well as cabin while also preparing the integration of the key Spirit AeroSystems work packages.

As we focus on our production goals, we're also maturing the critical technologies that will define the successor of the A320 family in line with our ambition to pioneer the next generation of commercial aircraft. When it comes to Airbus Defense and Space, we are progressing on our transformation and contributing to establishing a European space leader. On European defense, the industry is clearly in motion. We are embracing this challenge by leveraging the combined expertise of our Defense and Space and Helicopters divisions to drive scale and cooperation in Europe.

And now let's turn to your questions in the Q&A.

Thank you, Guillaume. Thank you, Thomas. We will now start our Q&A session. Please introduce yourself and your company when asking a question. Please limit yourself to two questions at a time, and this include sub questions. Also, as usual, please remember to speak clearly and slowly in order to have all participants, particularly ourselves, to understand your question.

So, Sharon, please go ahead and explain the procedure for the participants.

Thank you, Helene. We will now begin the question-and-answer session. [Operator Instructions] We will now go to our first question. And our first question today comes from the line of Benjamin Heelan from Bank of America.

Ben, we don't hear you.

Can you hear me now?

Yes.

Yes. Sorry about that. First question was on the margin. Margin, I think, in Q3 looks pretty positive. Could you just talk through some of the drivers? It looks to me though as a very positive mix in commercial, but any comments there would be helpful.

Well, Ben, I think we're repeating ourselves a little bit when we say that the margin of a single quarter should not be overestimated or over interpreted, I would say. So the margin in commercial indeed was, let's say, positive. That does not necessarily come from the mix. The mix was actually not specifically helping us in Q3, but it was more driven by, let's say, cost discipline in terms of SG&A, R&D, where the LEAP program that we have started is now really showing its full effect. So we're pretty pleased with, I would say, the efficiency that the company has shown over the course of the year and specifically in Q3. So the things that we have done are not, let's say, of short-term nature, but we expect them that we can actually keep them in our trajectory.

And secondly, I would say, in Defense and Space, all divisions are showing a good performance. There's two drivers for it. One, that our improvement program for space is actually showing good effects, and we're very pleased with the results that we see, not only in terms of measures that they take, but first outcome, which is rather better than what we had expected. And secondly, as Guillaume pointed out, a good momentum in defense in general, where we see not only good order intake, but also, let's say, good margins for the first nine months of the year. So, I would not specifically point to the mix, but rather some self-help measures and operational discipline that are helping.

Okay. And then a follow-on. I know you won't give us a delivery number for 2026 today. But are there any building blocks that you can provide to point us broadly in the direction of where we should be headed for next year from a delivery perspective in commercial?

I would say not more today than what you know already in terms of ramp-up trajectory for the A320, the 330 and the 350. There's change, as you have seen on what we target for next year on the A220, where we target to reach rate 12 instead of rate 14. So nothing new on that horizon except this slight modification on the 220, and we'll be targeting rate five for the A330 a bit later. So that's basically a lot of stability in the ramp-up trajectory compared to what we had shared earlier in the year.

Your next question comes from the line of David Perry from JPMorgan.

So, two quick ones from me. Just on this tariff impact, Thomas, if it all falls in Q4, do we annualize that impact going forward? And then on Space, can you just clarify exactly what you're putting in? Unless I'm mistaken, I think you're putting a little bit more than just the manufacturing business, but maybe I've misunderstood on that. And maybe any other comments you want to make in terms of like is this going to have a meaningful impact on the ADS margin going forward, this transaction? Are you making any equalization payments or receiving any?

So, on the two questions, the tariff impact, let me repeat what I said. So the total full year impact will be between EUR 100 million and EUR 200 million. Why is the majority of that occurring in Q4? Because the material that we have shipped or that is necessary has already been shipped into the United States, but we hold it as work in progress so that we will only record the impact of the tariffs once the material is actually built into the aircraft and the aircraft is sold. So therefore, to your question, you should not annualize the Q4 effect. It's a specific, let's say, impact of this year where a lot of the pre-September 1 effects are currently captured in our WIP and will then only materialize when the aircraft is delivered. That is the mechanic behind it.

And on your second question, if I understood correctly, you're referring to BROMO. So what are we bringing into that cooperation? Two businesses essentially, our Space Services business, which is currently mainly in CI and our Space Systems business, which is also a subdivision of Defense and Space. And obviously, what has nothing to do with it is the launcher business, which is completely separate. But we're bringing in both Services and Space Systems.

Okay. And does the transaction have a big impact on the sort of future margin of ADS?

Well, I mean, we do expect that there will be mid-triple-digit synergies five years after the closing of the transaction. So I would say in the medium term, it should be clearly accretive to the margin, and we will then hold a 35% stake in something which is more efficient and more profitable than what we have today. But let's be honest, in the very short term, I would not put in a big impact in the model that you probably have.

Your next question comes from the line of Ross Law from Morgan Stanley.

So the first one on your full year delivery guidance. So given that the engine suppliers have essentially said that they're getting you the engines that you need, what are the main challenges or bottlenecks outstanding from here into year-end?

And then looking ahead to 2026, obviously, engines seemingly becoming less of an issue compared to '24 and '25, supply chain overall performing better. Is there any reason why you won't be able to deliver a double-digit increase in deliveries in '26, which is the growth rate you previously referred to?

Maybe I'll take the questions. When it comes to 2025 and the full year around 820 aircraft, the main challenge is the volume of aircraft that remains to be delivered in the fourth quarter. And what we will have to deliver in the last month is indeed quite unprecedented. We are not yet at the point where we will have all what we need to secure all deliveries. We are still expecting engines in the weeks to come that will support some 2025 deliveries. But the main challenge is indeed volume, backloading of the year and making sure that there's no mishap or no challenge ahead of us that would postpone aircraft and cross the line of the end of '25. So a lot of work the supply chain and the engine situation looks like we're going to make it. But again, still a lot on our plate.

About the engine tensions, they will persist. There is indeed a bigger backdrop of airlines needing more engines for their in-service aircraft on the Pratt & Whitney side, but as well on the CFM side. And the engine makers need to continue to ramp up the production of parts and engines to serve both the manufacturers, the aircraft manufacturers and their airline and lessor customers. So we are not out of the woods when it comes to tension on engine availability. We think we have -- we will have what we need for the trajectory we have sketched out for 2026. But again, we are not at the point of guiding for 2026. But I confirm and I maintain what I said earlier, we are consistent with the ramp-up trajectory that we have given previously this year and next year, namely the reaching the rate 75 on the A320 in 2027, the rate 12 on the A350 in 2028 and the rate on the A330 in 2029 as far as I remember.

On change A220, slightly lower rate for next year. We are in the steep ramp-up on the 220, and we now target to reach the rate 12 for next year, which is still a very steep ramp-up. But we believe this is the best balance between the different constraints we have next year and a lot of work actually on the A220 to get there by next year, including the integration of the wings and other work packages that will come from the integration of Spirit.

Your next question comes from the line of Chloe Lemarie from Jefferies.

The first one would be on the maintained guide. It looks fairly conservative for Q4 given the expected delivery growth. So I understand tariffs are a headwind, but any other moving parts you'd like to share to help us understand the building blocks for the Q4 year-on-year?

And the second one, I think, Guillaume, you commented on the press call about gliders being half of what they were. Could you just clarify whether this is at end Q3 or more recently? And maybe compare and contrast the situation between the LEAP and GTF-powered aircraft, please?

So maybe I'll start with the guidance and the remain to do. So starting from the EUR 4.1 billion as of the nine months. Let's start by saying last year, we did EUR 2.6 billion in Q4 of last year. I would say there's clearly a positive effect from the volume. You can attach roughly EUR 0.5 billion to it if all the deliveries materialize. But yes, then I would say there's at least two headwinds. One is the tariffs. And secondly, R&D, we're expecting that R&D will be slightly lower than last year, but that still could mean that in Q4, R&D would be higher than last year. So that is a headwind that you should have on your list.

On the other hand, yes, I do believe that the two divisions, Helicopters and ADS could be performing positively, and that would be then a positive. So if you take those together, that would bring me then to the around seven.

It all hinges on the deliveries. And as Guillaume said, it's a very, very steep ramp-up. The teams are on it. And if we make the deliveries, obviously, then I think the financial numbers should clearly be in sync with that.

Thank you, Thomas. When it comes to the question on gliders, we stood at 60 gliders by end of Q2, and we stood at 32 gliders by end of Q3, so by end of September, roughly a month ago. The situation obviously is dynamic as we are targeting to be with zero gliders by the end of the year. And as I said earlier, we still need to receive engines in the weeks to come to be fully sure that we will have what we need. But engine manufacturers have confirmed that they will deliver what we need to reach that objective of zero glider and reaching our guidance.

And when it comes to the situation LEAP versus GTF, actually, it's both. And as we speak, it's shared between the engine manufacturers, and I can't be precise enough, but it's not far from balanced between the two, not far from 50-50 between LEAP and GTF. But again, it's a dynamic situation almost by the day as we deliver a lot of aircraft those weeks. So I can't be more precise than this at this very moment.

We will now take the next question. And the question comes from the line of Sam Burgess from Goldman Sachs.

A couple from me. Thomas, can we just circle back on R&D. From memory, your initial expectation was R&D would be a bit above 2024 levels. I might have missed it, but what specifically is driving this trimming of R&D versus your initial expectations? And is that kind of sustainable going forward? Or do we get some catch-up in FY '26?

And the second question, I know you don't want to dwell too much on individual quarters. But in your press release, you do explicitly mention a less favorable mix on deliveries year-to-date. Do you expect that mix to become more favorable in Q4?

So, on R&D, we are roughly EUR 200 million below the 2024 numbers for the first nine months of the year, if I'm not mistaken. that is mainly a function of our lead improvement program where we're focusing on the things that really matter, but have the courage to also terminate some projects where we think they're simply not yielding the results that we feel they should. And that means less external consultants, that means less spending on all kinds of things. So it's not trimming R&D, as you said it, with a lawnmower approach, but it's really very specific and focused with a program where we think let's focus on the things that matter most to the company.

That was pretty successful in our view. And so therefore, while admittedly, we said at the beginning of the year that we would expect R&D to slightly increase, we're now of the view that with the successes that we have, which we think are sustainable, we should be slightly below previous year for the full year, but that still means that in Q4, as I said in my previous answer, there might be a slight increase in R&D. Now going forward, what is unchanged is that we do expect R&D to increase in line with revenue. So as a percentage of revenue, I think you should keep it constant in your model, but of course, starting from a somewhat lower base in 2025.

And then on the mix, it's simply a function that we have delivered more A220s, and you know that they have a lower margin than the rest. So it's just a function of all the ramp-ups and the numbers that we have given you.

Your next question today comes from the line of Ian Douglas-Pennant from UBS.

The first is another on the supply chain. Aside from engines and the acquisition of Spirit being delayed, are there any other pain points that you'd like to call out in the supply chain that are causing the changes to the schedules that you've talked about today or elsewhere?

Secondly, we've seen a number of A320neos being retired this year. I wonder, do you have any comments on why that might be happening? How sustainable you think whether they are edge cases or how we should interpret some very young aircraft being retired?

On the supply chain, of course, the main area of attention and concern are engines, as we mentioned earlier. The rest of the supply chain is actually doing much better than in 2024 and previous years. I mean, significantly better. The number of missing parts and the depth of delays is significantly better than it was before. We continue to have issues and delays on cabin equipment, interiors, seats, and that's probably more of a midterm issue than a short-term one, given the fact that this part of the industry has been since COVID or since the recovery after COVID, sort of overwhelmed by the combination of demand for new aircraft and retrofits and extension of the life of products.

When it comes to your question on the retirement of A320neo, I'm a bit surprised. That's not what I have in mind. Maybe there's a confusion with aircraft being on the ground because of missing engines, in particular, on the Pratt side, but that's not something that is consistent with what I have in mind. It's not retirement of aircraft as much as I know. But we look at your question.

We will now go to the next question. And the next question comes from the line of Douglas Harned from Bernstein.

The first question is, if you could update us on the A350. It looks like deliveries may be a little bit better in October, but this has been very slow. And maybe you could update us on progress with Spirit with interiors related to the A350 and getting those rates up. And then second question is, we've heard some cautious comments from CFM on getting out to 75 a month, particularly most recently from Safran. Where do you stand now in working with the engine providers on ensuring that you can get to that 75 a month at some point, hopefully by the end of 2027.

So, on the A350, we continue to believe we will be consistent with what we have indicated so far, meaning that the ramp-up has been sort of -- the start of the ramp-up on the A350 have been sort of delayed by a year given the challenges and the difficulties we had with the Section 15 of Spirit. So we don't expect an increase compared to 2024 in 2025, but there is indeed a phasing and a quite significant level of backloading in deliveries in 2025. The ramp-up then comes later, and we think we'll catch up in the sense of maintaining reaching the rate 12 by 2028. We are mostly challenged by difficulties and delays on interiors, on laboratories, on seats. That's mainly what we're suffering from on the A350. And it's not different compared to previous quarters and even compared to 2024, unfortunately.

When it comes to the ramp-up of the A320, actually, CFM is in line with us has confirmed regularly that they are in line with us on the need for rate 75 on the ramp-up trajectory. So I'm slightly surprised with the remark because the level of alignment with CFM is very strong. They had significant issues this year that has led to a lot of gliders and delays in delivering their engines, but they're catching up. And again, I'm comfortable that they will be back to where they have to be by end of this year to then deliver on the ramp-up trajectory to support us in '26, '27 until we reach the rate 75. I'm not suggesting they don't have their challenges.

So I don't know what was the nature of the comment precisely. They have their challenges, obviously, but we are moving hand-in-hand when it comes to ramping up the A320 with the CFM engine, at least that's my current perception, and that's consistent with the last weeks and months meetings and interactions with CFM.

Your next question comes from the line of Ken Herbert from RBC.

I wanted to pivot and ask about the A220, if I could. The lower guidance for deliveries still seems relatively ambitious considering sort of where you are today on that program. Can you talk more about challenges with that ramp and what gives you incremental confidence still at the 12 a month in '26?

And then as a second part, there continues to be speculation about maybe a third variant of that program. How do you view the investments in that and the potential return on that program considering what seems to be a more challenging ramp and some incremental comments about some demand pressure.

Yes. Thank you for the question. So, indeed, we are in a steep ramp-up for the A220. The team has a lot on the plate, and now they have on top to integrate the wings and other work packages of the A220. So that's indeed a lot of work to get to where we want to be. So we think the rate 12 for next year is the good balance between the different challenges and the demand and supply situation and the quantity of work to be delivered. Indeed, it's still a significant ramp-up, but what we learned from this year is that a rate 12 for next year reaching 12 next year actually is something we believe is well in the cards.

So, basically, that's all about the quantity of work, all what needs to be achieved, the ramp-up in both Mirabel and Mobile. We have two files, the number of variants with different configurations that we have to deliver and industrial optimization to be able to accelerate the pace of production to that level.

When it comes to the third variant, which is also nicknamed the dash 500, the first two variants being the dash 100 and the dash 300. That's something we believe the program will need and benefit from.

We have demand from airlines and from the airline customers for these variants that on paper looks really as a very competitive product. We have said that the dash 500 is not a question of if, but it's a question of when. And we're still with the same type of statement. But again, we are giving priority to the short-term work and the short-term challenges that we have to perform the ramp-up to move forward to breakeven with the program to digest the Spirit work package that will be now under our responsibility. So that's a bit the way we're looking at the year and the years ahead of us.

We will now take our final question for today. And the final question comes from the line of Olivier Brochet from Rothschild & Co Redburn.

The first one is very simple on tariffs. You mentioned a number. Should we think of the impact on cash to be similar for '25 and '26, please?

And second, on Space, on accounting and the deconsolidation that you might be doing. Should we think of a deconsolidation, sorry, for that? And will it lead to some separation costs, please?

So, the second question is too difficult and the first one as well. So, I hand over to Thomas.

So, the first one, obviously, is easy for me. The answer is yes. I mean, roughly the EBIT and the cash impact is the same. So you can put that into your model. On the space consolidation, so obviously, what we have to do is go from an MOU to signing and then from signing to closing. Closing means in order to be ready for that, we have to carve out the business. And currently, the business is spread over many legal entities and countries.

So to your question, yes, we do have the task as Airbus to create an operationally and legally stand-alone separate business until 2027, which can be then put into the new legal entity. That will come with not insignificant, let's say, separation costs. And we said, however, in the statement on BROMO that they would be in line with industry standards. So I think you can plug in a normal number into your models, but it's not insignificant given the size of it. For 2025, that will not have an impact on our financial results.

Thank you, Guillaume. Thank you, Thomas. This now closes our conference call for today. If you have any further questions, please send an e-mail to Olivier, Victoria or myself, and we will get back to you as soon as possible.

And Helene, I'd like to announce to the audience that you will actually move to new challenges still in the financial director of Airbus under the leadership of Thomas in the commercial aircraft team. And you will have Jean-Christophe Henoux as a successor. Jean-Christophe is joining from the strategic team and will take over on the 1st of December. So very soon, we will have JC, nicknamed JC with us.

And with this, Helene, I would like to thank you very warmly for the pleasure working with you for the quality and the precision of all you've been doing with us for your constant voice on the call and for your very good availability with all our investors and analysts and all the financial community. So I wish you -- we wish you with Thomas, all the best moving forward to your new job, and I'm sure there will be opportunities for you to answer questions on what it is and what you will be doing next. So, again, thank you, Helene, and welcome, JC. And bye-bye, everyone. Thank you.

Thank you. Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant evening. Goodbye.

Ladies and gentlemen, thank you for standing by. Welcome to the Airbus H1 2025 Earnings Release Conference Call. I am Sharon, the operator for this conference. [Operator Instructions] The conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to your host, Guillaume Faury, Thomas Toepfer and Helene Le Gorgeu. Please go ahead.

Thank you, Sharon, and good evening, ladies and gentlemen. This is the Airbus H1 2025 earnings release conference call. Guillaume Faury, our CEO; and Thomas Toepfer, our CFO, will be presenting our results and answering your questions.

This call is planned to last around 1 hour. This includes Q&A, which we will conduct after the 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 our 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 you, Guillaume.

Thank you, Helene, and hello, ladies and gentlemen, and thank you for joining us today for our H1 2025 results call, and I'm happy to be here in Amsterdam with Thomas and Helene.

Let me start by saying that it was a real pleasure to see many of you last month in Paris, the occasion of our business update. It was indeed the opportunity to update you on how we are progressing in what I think we can call an increasingly complex and fast-changing environment. So we updated you, in particular, on the Commercial Aircraft ramp-up. And when it comes to European defense, Bruno and Mike, the CEOs of our two divisions, the Airbus Defense & Space and Helicopters. Bruno and Mike highlighted how our diversified products and solutions portfolio can and will contribute to bridging the so-called capability gap. Since we met since then, NATO confirmed the budget increase during the Hague Summit, and it constitutes an important step forward in that direction.

On global trade, we have taken note of the agreements between the United States and the European Union that will bring our industry back to the tariff-free environment that we have enjoyed since 1979, and which has contributed so much to the success of our industry. Indeed a stable and predictable trade environment is essential for highly integrated global aerospace industry.

Before moving to the H1 results, let me mention the, again, strong commercial momentum that we have observed in the first half of the year across all businesses, and notably during the very active Paris Air Show we had as well as the progress made in the transformation of our Defense & Space division.

When it comes to deliveries, in H1, we delivered 306 commercial aircraft, and consistent with what we told you at Q1, the delivery profile is back-end loaded. Actually, we produced in the first half of the year in line with our plan. But in the absence of engines, it resulted in 60 gliders at the end of June. So 60 aircraft fully produced but with engines missing. This is reflected in our H1 financial results with EBIT adjusted standing at EUR 2.2 billion and free cash flow before customer financing at a minus EUR 1.6 billion. On that basis, our 2025 guidance remains unchanged. I remind you that it is excluding the impact of tariffs, and I will come back to it later.

Now let's look at our commercial environment, starting with Commercial Aircraft. Our latest GMS or global market forecast confirms the industry's fundamentals remain solid with a continued growth trajectory over the next 20 years. We observed strong demand for our aircraft, driven by both growth and fleet replacements as airlines turn to latest generation aircraft offering around 25% fuel burn efficiency gain. This momentum was on full display at the Paris Air Show, where we announced more than -- sorry, 240 orders and commitments, including from new customers.

During H1 '25, we booked 494 gross orders, so close to 500. On the A220, we booked 40 gross orders, and we are pleased to count LOT Polish Airlines as a new customer with their first Airbus order as part of its fleet modernization. Looking at the A320 family, we booked 291 gross orders. This brings our backlog to 7,185 A320 family aircraft, out of which around 3/4, around 75% are for the A321.

Moving to the widebodies. On the A330, we booked 71 gross orders confirming the high demand for this very versatile aircraft, and on the A350, we booked 92 gross orders underpinning the continued commercial momentum of this product. This brings our widebody backlog above 1,000 aircraft. Net orders amounted to 402 aircraft, including 92 cancellations, which were largely anticipated and already embedded in our backlog valuation -- the financial backlog valuation as of December 2024. Our backlog in units increased to 8,754 aircraft at the end of June 2025, again 8,754 aircraft.

Looking at Helicopters. In the first half, we booked 171 net orders compared to 233 in H1 2024. And this 171 are well spread across the portfolio. We've recently announced an order from Greece for 8 firefighting H215. And we also signed a contract with Norwegian Air Ambulance for up to 8 H145. On the defense side, this quarter was marked by some key milestones, notably the French Framework Agreement for the VSR-700, it's an uncrewed aerial system, so a drone. As we launched with our partner, Leonardo, studies to define the long-term evolution of the NH90, the so-called Block 2. And while on the NH90, the first 2 Spanish Navy helicopters were delivered.

We also recently celebrated the H160M, so the military variant of the H160. We celebrated the first flight, the maiden flight of this militarized version of the H160. I would like to add a few words on drones as we have a clear strategy to propose a complete product range to our customers. This was presented by Bruno and Mike, you remember at the business update. The Australian start-up Drone Forge signed an agreement to purchase 17 flex rotor uncrewed aerial vehicles. It's the single largest order for the Flex Rotor to date, and makes me very happy to see these products ramping up. The Flex Rotor is indeed a pivotal component fully integrated into our overarching strategy for advancing crewed, uncrewed teaming capabilities. These all are new words we have to to learn as there's so much happening on that front. And we continue to see positive momentum, in particular, on the military market, and we remain focused on securing new business opportunities in both our home countries but also on export markets at Helicopters.

Moving to Defense & Space, the order intake stands at EUR 5.1 billion in the first half. And before detailing the main orders of the quarter, let me start by highlighting the agreement reached with OCA on the A400M to advance 7 deliveries for France and Spain and, therefore, further increase the visibility on the production for the program. For the agreements, both Airbus and OCA will review the industrial status of the program on a yearly basis, giving the A400M collection setup stability to pursue the evolution of the platform and open and secure hopefully, export opportunities.

While on the A400M, we booked a contract to equip 23 German Air Force A400Ms with a protection system against infrared seeking missiles, further enhancing the capability of the aircraft.

Additionally, NATO has ordered 2 additional MRTT aircraft, bringing the multinational MRTT fleet to 12. This enhances NATO capabilities for refueling, strategic airlift and medical evacuation.

Turning to Eurofighter. We welcome the MOU signed between Turkey and the U.K. for the procurement of Eurofighters. This is a very positive development. As a key partner in the Eurofighter Consortium, Airbus remains committed to supporting the program and its users, contributing to European Defense Corporation. That's what we do, and ensuring our allies are equipped with world-leading capabilities.

Moving now to Space Systems. As you know, we are currently in the middle of a turnaround plan, of a transformation plan aiming to restore competitiveness, and I'm pleased with the progress made by the team, really pleased by what they're doing.

Our new Airbus Defence and Space organization has now gone live and will further support this. This strategic change announced last October ensures better end-to-end responsibility and accountability across our three businesses and optimizes our cost structure benefits we are already seeing today.

On the order front, Airbus has been selected as a prime contractor for the development and manufacturing of 2 new earth observation so-called past 2 radar satellites, further reinforcing Spain sovereign space capability. We are also very pleased with the recent launch of the latest generation optical CO3D drone use satellites, leveraging our one web expertise of constellation production, these satellites will deliver a cutting-edge 3D map of the earth land mass, providing high resolution and high revisit observation capabilities for both government and commercial use. In parallel, as you know, we are in discussions with Leonardo and Thales regarding a potential consolidation of our satellite activities. The due diligence phase is ongoing, and we continue to believe -- I continue to believe this could be a major development, enabling the creation of a unified and competitive European space player.

And now Thomas will take you through our financials. Thomas?

Yes. Thank you very much, Guillaume. And hello, ladies and gentlemen, thanks for joining our call. I'm now on Page 6 of the presentation. And as Guillaume said, I will quickly take you through our financial performance. So as you can see on the slide, our H1 2025 revenue increased to EUR 29.6 billion, which is up 3% year-on-year, mainly reflecting the higher contribution from our divisions, the stronger services volumes across our businesses but then again, partially offset by fewer commercial aircraft deliveries.

On R&D, as you can see on the right-hand side, our expenses stood at EUR 1.4 billion in H1, which is lower compared to H1 2024 and consistent with the lead initiative. And on that note, let me remind you that our R&D expenses are expected to only marginally increase in 2025 with a back-end loaded profile.

Now let's turn to EBIT adjusted on Page 7. Our H1 2025 EBIT adjusted increased to EUR 2.2 billion from EUR 1.4 billion in H1 2024. And of course, you are aware that in H1 '24, we recorded EUR 989 million of charges in our space business, which, of course, did not repeat. Now the lower volume of commercial aircraft deliveries with a less favorable mix is reflected in our profitability and is partially offset by a more favorable hedge rate and lower R&D expenses. And the number also reflects a stronger performance in Defence and Space.

Now coming to the EBIT adjustments, which were negative in the first half of 2025 and you have them on the right-hand side of the page, they included, first of all, a negative EUR 391 million impact from the dollar working capital mismatch and balance sheet revaluation mainly reflecting the mechanical impact coming from the difference between transaction date and delivery date, of which EUR 378 million in Q2. It also contains a negative EUR 105 million related to the Airbus Defense and Space restructuring, which we recorded in Q1. Number three, it contains negative EUR 57 million related to the stabilization of certain Spirit AeroSystems work packages, mostly recorded in Q2. And finally, a negative EUR 34 million other costs, including compliance and M&A, of which minus EUR 10 million in Q2. So this altogether takes our H1 2025 EBIT reported to positive EUR 1.6 billion.

As you can also see, the financial result was positive EUR 490 million and mainly reflects the revaluation of certain equity investments and revaluation of financial instruments, partially offset by the evolution of the U.S. dollar. And the tax rate of the core business continues to be around 27%, now the effective tax rate is 31.5% in H1, including the tax effect on the revaluation of certain equity investments as well as a net deferred tax asset impairment. We still expect the French spare tax to result in an impact of around EUR 300 million in 2025, both P&L and cash wise. And in H1, we recorded the part which is related to the year 2024, as well as the part which corresponds to the first half of 2025. And all of that resulted in a net income of EUR 1.5 billion with an earnings per share reported of EUR 1.93, and our H1 2025 EBIT EPS adjusted stood at EUR 2.15 based on an average of 789 million shares.

Now with that, let's turn the page and look at our U.S. dollar exposure coverage. As you can see in H1 2025, $9.1 billion of forward matured with the associated EBIT impact and euro conversions realized at a blended rate of $1.18 and versus $1.21 in H1 2024. And in H1 2025, we also implemented USD 7.7 billion of new coverage at a blended rate of the $1.14. And as a result of that, our total U.S. dollar coverage portfolio in U.S. dollar stands at $81.4 billion with an average blended rate of $1.21 as compared to $82.8 billion at a blended rate of $1.21 at the end of '24.

Now let's look at Page 9 with a more detailed look at the free cash flow. Our free cash flow before customer financing was negative EUR 1.6 billion in the first half of the year. And this outflow was mainly driven by the change in working capital, and it notably reflects the planned inventory buildup to support our ramp-up across our businesses, but of course, the high level of gliders that Guillaume was mentioning.

And finally, it also includes a phasing effect of cash receipts and payments. The A400M weighted negatively on our free cash flow in the first half of 2025 as the deliveries are back-end loaded, but we continue to expect it to be broadly neutral from a free cash flow perspective in the full year of 2025.

As you can also see on the slide, our H1 '25 CapEx was EUR 1.3 billion. And as we told you at the occasion of the business update, we expect it to continue to increase in 2025 to support our industrial ramp-up. So with that, the free cash flow was negative EUR 1.6 billion with nearly no impact from customer financing, and on that note, the aircraft financing environment remains strong and competitive, and we expect sufficient liquidity to finance our 2025 deliveries, and we keep on closely monitoring the possible impact of tariffs.

So with all of that, as you can see on the slide, our net cash position stood at EUR 7 billion as at the end of June, also reflecting the dividend payment as well as the weakening dollar environment. Nevertheless, our liquidity remains very strong with around EUR 30 billion. And with that, I would like to hand it back to Guillaume.

Thank you, Thomas. And looking at the businesses, starting with Commercial Aircraft. In the first half, we delivered 306 aircraft to 65 customers. And by family, on narrow bodies, we delivered 41 A220 and 232 A320s, of which 143 A321s, representing 62% of A321 deliveries for the A320 family. On A320, no change, we continue to ramp up towards the rate of 75 A320s per month in 2027. After delivering the first XLRs from the Hamburg file we delivered in June of this year, the first one from Toulouse. The integration of XLR capabilities into existing files is part of our global strategy of increasing the flexibility and capacity of the entire production system. It's all about resilience. We are also very pleased that Qantas Airways became the launch operator of the A321 XLR in Asia Pac following the delivery of its first aircraft in June. We delivered 33 widebodies in the first half, of which 12 A330s and 21 A350s. On the A330, we are currently stabilizing the monthly production rate of 4. In order to meet customer demand, we now target to reach rate 5 in 2029, and that's a change compared to previous calls.

As mentioned earlier, specific supply chain challenges, notably with Spirit Aerosystems are putting pressure on the ramp-up of both the A350 and the A220. On the A350 on the target rate, there is no change. We continue to target rate 12 in 2028. And on the A220 here as well, no change. We continue towards the monthly production rate of 14 in 2026 next year.

Overall, with the exception of engines on the A320 family, we produced in line with the plan. The challenges for the year have not changed, notably with the persisting tensions on engines for A320, resulting in 60 gliders at the end of the first half of this year. So by end of June, we were at 60 gliders. We expect it to peak over the summer and before it normalizes. We continue to work closely with our engine partners to recover in the second half of the year and to deliver on our 2025 commitments, and I'm counting on them. Engine partners, if you listen to me, I'm really counting on you.

Now let's look at the financials for our commercial aircraft business. Revenues decreased 2% year-on-year, mainly reflecting the lower number of deliveries against the backdrop of those gliders. EBIT adjusted was lower at EUR 1.7 billion in the first half with a decrease of deliveries and unfavorable mix as well as the excess workforce being offset by a favorable hedge rate and lower R&D expenses.

The company, Airbus is making good progress on the acquisition and the stabilization of the Spirit Aerosystems work packages, while the expected closing date is now shifting into Q4 due to the ongoing regulatory approvals, all parties are putting necessary efforts, all necessary efforts into the closing process and on the route to operational readiness for what I would call day 1.

Looking at helicopters. In H1, we delivered 138. It's 14 more than in the first half of 2024. Revenues increased around 16% to EUR 3.7 million, reflecting a solid performance from both programs and services. EBIT adjusted increased to EUR 249 million, reflecting growth in services as well as higher deliveries, but with a less favorable mix.

And let's complete our review with Airbus Defence and Space. Revenues increased 17% year-on-year to EUR 5.8 billion, driven by higher volumes across all business lines. EBIT adjusted stood at EUR 265 million supported by higher volumes and improved profitability across all businesses, including our two main joint ventures. On the A400M program, we are engaged in positive and forward-looking discussions with the launch nations and OCA. This was notably marked by the agreement reached in June with OCA to advance 7 deliveries for France and Spain and to further increase the visibility we have on the production for the program. And in light of uncertainties regarding the level of aircraft orders, Airbus continues to assess the potential impact on the program's manufacturing activities, risks on the qualification of technical capabilities and associated costs remain stable.

Moving forward to -- on to our guidance, which remains unchanged. As the basis for the guidance this year, the company assumes no additional disruptions to global trade or world economy, air traffic, the supply chain, the company's internal operations and its ability to deliver products and services. And the guidance continues to exclude the impact of tariffs on the company's business. And we are obviously cautiously monitoring the implementation of the recently concluded agreements between the United States and the European Union on tariffs.

The guidance includes the impact of the integration of certain Spirit AeroSystems and work packages based on preliminary estimates and now assumes as I told you earlier, a closing in the fourth quarter of this year. And on that basis, the company targets to achieve in 2025, first, around 820 commercial aircraft deliveries; second, an EBIT adjusted of around EUR 7 billion; and third, free cash flow before customer financing of around EUR 4.5 billion. And the anticipated impact of the integration of certain Spirit Aerosystems work packages on the company's guidance remains in line with previous estimates.

I will conclude with our key priorities. As detailed during the business update, we are obviously focusing on our ramp-up across all businesses, while relying, I'd like to repeat it on the core pillars of the company that underpin everything we do: safety, quality, integrity, compliance and security. These are our five core pillars.

When it comes to the commercial aircraft ramp-up, we continue to work closely with our suppliers while actively preparing the integration of the Spirit AeroSystems work packages. On Defense and Space, we continue executing our turnaround plan to restore competitiveness in the division, and we pursue the workforce adaptation as per the agreement reached with our social partners, while looking at different scenarios, to create scale in the European space business and in particular, the one in consolidating with Thales and Leonardo. And finally, European defense is at an inflection point. We are engaged with Airbus Defence and Space and Airbus Helicopters to contribute to bridging the capability gap that Europe has to bridge. So now I turn back to you, Helene. I guess, we are in the QA.

Absolutely, Guillaume, thank you very much. We will now start our Q&A session. So please introduce yourself and your company when asking a question. [Operator Instructions]. So Sharon, please go ahead and explain the procedure for the participants.

[Operator Instructions] And our first question comes from the line of Chloe Lemarie from Jefferies.

I have two. My first one would be on Defence and Space. So your performance year-on-year in Q2 is pretty much the full impact of the EUR 1 billion charge that you had last year, but the messaging has consistently been that only 2/3 of those charges was nonrecurring. So how should we think of the impact of the non-repeat of that charge from last year versus the underlying margin improvement in the division?

The second one is on Spirits with the closing kind of pushed out Q4, does that affect in any way your plan for Section 15 production improvements? And does that still support the stable delivery target for the A350?

Thank you, Chloe. Thomas?

Yes, Chloe. Yes, let me try to answer your question. So first of all, yes, you're right, we said it would be correct to reverse 2/3 of the charges that we incurred in 2024, so 2/3 of the EUR 989 million. And if you do that, you will find that Airbus Defence and Space actually had a very pleasing performance if you compare it with the underlying operational performance in 2024. So we -- our interpretation of that is we are on a good track, and we do see good momentum in the business with the transformation program being in full swing, and also specifically with the restructuring and space going as expected, and we're very pleased with it. So I think the short message is, yes, we do believe that the underlying performance of ADS has been strong in H1.

And on your second question, Spirit, it's true that the closing is shifting, but the underlying impact both for the 2025 financials should be negligible. And secondly, we believe that we are sufficiently working well with Spirit to also make sure that the Section 15, which, of course, is critical for the ramp-up of the A350 next year and the year after, which is on track. So in our view, no change to our expectations for next year.

Your next question comes from the line of Benjamin Heelan from Bank of America.

I think in one of the earlier remarks, you made some comments maybe to the media about delays with Pratt & Whitney. I was just wondering if you could give us some color on this? And is this new issue since the air show, I don't remember it being talked about at your Investor Day. And then with regards to CFM, obviously, the deliveries have continued to be relatively slow that we see in terms of A320, could you just give us some color how are you seeing the situation play out as CFM and your level of confidence that you're on an improving trajectory around the CFM LEAP-1A deliveries.

Thank you, Ben. So indeed, the Pratt & Whitney issue is, if I call it an issue, I think the gap is a new one. Again, the vast majority of missing engines are CFM engines on the 60 gliders. So it's mainly a CFM problem, but they Pratt engines missing. It's mainly coming from the strike. So they had perturbances and disturbances on the flow we've been impacted, and we expect a recovery by the end of this year. When it comes to CFM, which again, is the lion's share of the missing engines, situation is improving. You know that we had two issues in a row they had, I mean, CFM had two issues in a row one at GE at the beginning of the year that delayed the deliveries of their core to Safran. And then Safran having a long 7 weeks or 8 weeks strike that delayed significantly a large number of deliveries. This is behind them. They're ramping up. Ideally, we would like them to ramp up faster. So we carry some risk, but they have a plan that is consistent with what we need. It will be very backloaded. We don't like to be in that situation of backloading because it's increasing the risk of not getting there. But as of today, the plan from CFM, and mentioned Pratt & Whitney already, but the plan from CFM is consistent with what we need to be at 0 glider by the end of this year and deliver according to our guidance. But I don't want to hide that it will not be a walk in the park, and it's more backloaded than what we like.

Your next question comes from the line of Ross Law from Morgan Stanley.

So two, please. The first, just on gliders. You mentioned that you had 60 at the end of H1. What is that number today? And what do you expect that to go to before it starts to reduce? And the second question is just on the risk of a potential strike at your wings factories in the U.K. Can you just maybe give us an update on the status there and your ongoing discussions? And how should we think about the potential impact going forward?

My answer will be a bit disappointing. I don't know what's the number as we speak for the gliders. And it's changing by day as we are delivering receiving engines, and I don't think that's worth commenting on -- within a month or even on a monthly basis. So directionally, it's plateauing now and is supposed to reduce by -- after the summer and moving to 0 by end of this year. The strike in the U.K., I was discussing it with my Head of HR earlier today. I don't have a clear view of the implications. The team is on it, and we want to find a resolution, obviously, and we think that's possible.

Our next question comes from the line of Christophe Menard from Deutsche Bank.

I had one on the deliveries and the phasing of deliveries in Q3 and Q4. How many planes can you realistically deliver per month or per quarter? I mean do you have also some capacity bottleneck in terms of administration or first flight? And the second question was more on the -- your strategy in UAVs. There was an agreement or there was an announcement with Kratos. What is your strategy? I mean, we've heard that in Paris Air Show that you were also partnering with, I think, Quantum. Do you adopt the strategy of partnership in that field? Or do you intend to develop your own solutions?

Yes. Thanks too for the questions. So on the deliveries, well, there's no bottleneck on deliveries. Deliveries sometimes we have -- if I take the extreme case of a missing document or a financial topic. We have aircraft ready already technically accepted, then you wait for something to be resolved and you have a large number of deliveries. The flow of production is limited. The flow of deliveries can go up and down. And as far as I remember, since I was appointed as CEO, I think we peaked at something like 137 or 138 deliveries in 1 month of December, maybe, by the way, in 2018 or 2019. So you can -- you see we can go significantly beyond 100, but these are deliveries. It doesn't mean that we are producing at that pace, obviously. So -- and it will be very backloaded this year. So we expect a very strong Q4, and therefore, Q3 that will put us in this backloading situation for Q4. When it comes to Kratos and the drones, well, we have a strategy of speed, which means we are doing and we are buying. We are cooperating and we're investing. And the agreements that we have signed with Kratos to investigate the possibility of using their platform is part of this opportunity or this strategy to use opportunities to be much faster to the market. We are putting our mission packages on existing platforms when we don't have the platform waiting for the platform to be developed or signing a long-term agreement for availability of platforms coming from others. But as you have seen, if you were present at the Paris Air Show, we have now a very comprehensive lineup of UAVs of drones with commonalities on ground systems and communication systems. So we are developing a strategy to go to market with a broad and competitive lineup of UAV.

Your next question comes from the line of Ian Douglas-Pennant from UBS.

I'm not afraid I'm going to ask more about gliders, dominating the question dominating the call. First one is really about inventory levels more than gliders itself. Great to hear you plan to reduce the glide number down to 0 at the end of the year. Will inventory levels remain elevated despite this, given that you said in Paris that your strategy with respect to the supply chain as -- seen some nuance change, I guess, in the last year or so providing more financial health to them. Does that mean that you need to keep more inventory on your balance sheet stable state longer term? Secondly, 60 gliders today is a large number. I mean, in the ultimate reality that you had taken delivery of the engine on time and also that you delivered these to the airline, we'd all be asking you whether there's upside risk to your guidance. Is that a rational way to think about it? Or is there just always some semi-finished or finished inventory just sitting around that can't be delivered for one way or another. And therefore, we shouldn't be asking you whether there's in fact upside risk to your guidance.

So let me try to answer those questions. So first of all, on the inventory, obviously, our inventory for the half year is inflated by the number of gliders as you correctly said, and that is also the key explanation why the cash flow is negative EUR 1.6 billion. But it's also clear that, that should normalize over the second half of the year because we want to bring the gliders down to 0. Nevertheless, on the specific question of inventory, as you know, we're still in a ramp-up phase. We are still in a situation where the supply chain is under stress. It's improving, but it's still, of course, a limiting factor. And therefore, we do not foresee that we will reduce inventories before we have reached a stable state of production. So therefore, even if you strip out the effect of gliders, you should expect that inventories will continue to slightly increase in 2025 and then potentially beyond. And they will only be used once we are in a stable state of production. And secondly, on the upside risk...

Just quickly -- just to round off that question, when you say inventory days -- sorry, inventory will increase, would you mean inventory days? Or do you mean in euro terms?

In euro terms. And on the upside risk, I think that is not what we wanted to bring across. So in our view, we will be able to reduce the gliders to 0. And with that, we stick to our guidance of around 820, but I would say no further interpretation around that.

Your next question comes from the line of Olivier Brochet from Rothchild and Company.

Two questions for me. Could you update us on the A320 assembly line extensions in mobility engine and please? And the second one on Spirit. What approvals are still outstanding? And what are the key ones outstanding at the moment, please?

I will give the second one to Thomas, and I take the first one. Well, all on track. What does that mean on track, by next year, we will have those three final assembly lines, additional finance assembly lines in operation. Actually will be inaugurated later this year. That's what we expect. And in Toulouse, I say 3 because 1 is already producing at rate, as you know. And the second 1 is in its completion with first deliveries planned for next year. So it's all on track, and that supports very well the rate 75 that we are targeting for 2027. Spirit?

Yes, it's regulatory approval. As I said, that -- and therefore, I will not make too many comments on it that are related mostly to the Boeing Spirit transaction. You know that our transaction is contingent on theirs. That has to go through antitrust. For that, the final scope has to be known. You know that there was still a little bit of back and forth on some sites. I think that has to be resolved. Once that is clear, I think the FTC approval in the United States should be relatively straightforward. And therefore, we're confident that we will close in Q4 and find quickly a solution to those regulatory things that yes, have to be done relatively quickly. Again, it's not so much on our side, but our transaction hinges or is contingent on the Boeing Spirit transaction.

Okay. Can I ask on mobile when do you think it's going to be online?

As I said, it will be producing planes and delivering planes next year.

Your next question comes from the line of Doug Harned from Bernstein.

Two questions. The first one is, let's assume that the engine delivery problems are resolved by the end of this year. When you look at that 75 a month rate in '27, what are the next things that you look at in the supply chain, in your internal operations? Basically, one of the watch items you would have following the engine issues. And then second, one of the great things Airbus achieved almost 10 years ago was breaking through the national silos and the organization and the ownership, making it into a strong unified company. But right now, you're working through a JV on FCAS, potentially one on space. What do you need to be in place to make these JVs successful, given that we've seen many cross-border JVs run into a lot of issues.

Okay. So what are the three priorities for the rate 75 to succeed engines, engines and engines. We'll keep working with engine makers in 2026. We need their support. They have to deliver on the ramp up, both for us and for the aftermarket as the number of aircraft flying the Neos flying is increasing quite fast. So that will remain the priority and the pacing supply that will support the rate 75. When it comes to the JVs, well, we are in a different situation when it comes to FCAS and when it comes to space. In space, we are actually working with Thales and Leonardo on the project that consists of putting together our space activities in a joint venture, a bit like MBDA. And we have experience in running those JVs, successful experiences, international joint ventures where we are one of the minority partners, and we are defining the guidance, and we have agreed on most of the guidance -- the governance principles with our partners as we by the way, partner with them on other projects. So I'm confident that what we have in mind will work. It will be a normal company with shareholders being Thales, Leonardo and Airbus. When it comes to FCAS, each and every pillar of the future combater system has a different setup and situation. When it comes to the pillars where we are involved, the combat cloud, the remote carriers and the fighter jet. There's no JV. So we are not involved in joint ventures. These are early cooperations mostly on technologies. At a later stage, we might want to change the setup, not even sure. But for the moment, these are so-called program cooperations that don't imply the creation of JVs.

Your next question comes from the line of David Perry from JPMorgan.

Yes. It's just one question I'd like to ask is a bit philosophical, and it's about your relationship with the aero engine companies. A lot of them have reported in the last few days, two big ones will report tomorrow. But the ones that have reported have had quite strong results. And part of those is because they're continuing to deliver quite high numbers of spare engines. So I'm just curious what leverage do you have over them on this? What agreements in place, not just for this year but for next year that they're not only ramping production, but allocating engines to you ahead of selling them as spares.

Thank you, David. So I'm happy that our engine partners are in good shape because we need them in good shape. That's maybe the first statement. The second one is the majority of their support and services businesses goes to the in-service fleet, meaning the aircraft powered by the CFM56 and the V25. When it comes to the LEAP or the GTF, they have to serve the growth of Airbus, I mean, the ramp-up and also the ramp-up of aircraft in service as we deliver new aircraft to airlines, we have the size of the in-service fleet of neos that is growing quite quickly, probably more quickly than we have ever done in the past. And it comes against the backdrop of technical and industrial issues that they've had, slowing down on the way to ramping up production and against the backdrop also of shorter times on wins compared to what was expected requiring more spare parts than we expected. So they are actually benefiting and suffering from the service business of those engines, which are not at the level of performance that was expected. When it comes to us, what is important is that we get the share of engines that they have committed to us and that is supporting the ramp-up. On top of the midterm, long-term volumes we've had in 2025, in the end of '24, beginning of '25, operational issues hindering the engine makers on their ability to deliver short-term to us and to airlines. So we should not hold too many conclusions of the situation we're in with gliders that are really related to short-term issues other than production capabilities and investments supporting those ramp-ups. Now I'm not suggesting. I'm not looking at their ability to further support the ramp-up when we are in '26 and '27 because indeed the number of engines that they will have to deliver to Airbus will continue to grow. At the same time, they have to continue to support their engine -- sorry, their airline customers. That's why we are communicating very closely with them on the size of investments, on their equipment, their ability to serve both line fit and support and services of engines in the market, and they are actually struggling to do the two at the same time. So we know we'll continue to work hard with them and monitor very closely the priority they give to line fit to Airbus and their ability to serve both OEMs, aircraft OEMs like us and the airlines because at the end, it should not be either/or it has to be both, and it's not the case today, unfortunately.

Okay. Can I just sneak one more in as well, please, just before we all go on holiday. A lot of your staff take our holiday in August, it's usually a very low month for deliveries. Given how much you've got to do this year, is there any efforts or moves to try and do more overtime or more people to work through August?

Of course, we are dealing with both, I would say, national culture, regulatory obligations and commitment to deliver. We are not limited today by availability of staff. We are limited by supply. We have produced by far more planes than engines we have to deliver those planes. So actually, the production rate is working. We are on track on the production. It's not that we need overtime or specific management of the situation, no. We will need a lot of availability of people in the back end of the year to continue to produce and deliver what we have to deliver normally. And on top, deliver the aircraft that will get the engines late and that we need to go through the end of the pipeline, the the installation of the engine, then the test, the flight test and the delivery. So we are not limited by availability of people or by capability of the production system at Airbus this year, we are limited by availability of engines.

Your next question comes from the line of Milene Kerner from Barclays.

My first question is a follow-up to your comment, Thomas, on the Defense and Space. Could you provide some additional color on whether the higher volume absorbed across all the business lines in the first half is sustainable through the remainder of the year? And how should we think about the division profitability trajectory given that it's typically weighted towards Q4? And then my second question relates to your working capital requirements. Following the strong performance you had in H1, how should we think about the phasing of your customer advances over the remaining of the year?

So let me start with the first one. On Airbus and Defense space, I mean, of course, you cannot project it linearly from H1 to the second half, but I wanted to suggest is that indeed, they have a strong performance in all the business units that they have. And I think we're on the right track for them to achieve their target. What are the targets? We said they should achieve a mid- to high single-digit margin. And I think they were quite concrete when we were in Paris to say that we should achieve more than EUR 1 billion of EBIT by the year 2028. And that is the guidance and trajectory that we foresee for the division. And I think we are clearly on track to achieve that. H1, I would say, was a good start on to that trajectory and onto that transition for the division. For the working capital, we still believe that the company will generate positive working capital or will have a positive impact from working capital as we grow, which is contrary to many other business because of these PDP payments that we received. You've seen that the order intake was strong. And therefore, if you take it together, I would say despite the fact that we're expecting inventories to increase by the end of the year, overall working capital effect should be rather positive also in 2025.

We will now take our final question for today. And our final question comes from the line of Ken Herbert from RBC.

Two questions, please. First, if we do give you credit for the glider deliveries in the first half, it does imply a delivery rate based on our math of sort of the low 50s a month on the A320. Just curious how you reconcile this with stated production rates that you call out as significantly higher on that program? And second, I did just want to follow up on the Spirit investment. So you've pushed the closing to the right continue to see, it sounds like a $500 million free cash flow impact this year, and it also looks like you're making additional investments now in the Spirit. So it sounds like are you able to accelerate your investments today? Or should we expect perhaps a smaller number than what you called out is the actual $500 million free cash flow impact this year just based on a delay in the closing?

So let me take the one on Spirit. Again, just to be clear, it's not us pushing out the closing. It is the regulatory hurdles, which are not even so much on our side that push it into Q4. We obviously would like to close as quickly as possible. And on our side, all the operational preparations that we're taking in terms of taking over management control, in terms of all the transitional service agreements, I think we're making very good progress. What I said is that the financial impact though of the delayed closing for 2025 should be limited in the sense that, as we said, it should have a negative impact on the free cash flow of roughly EUR 0.5 billion, which will be compensated, though, by the consideration that we received. And therefore, we said the overall impact on the net cash position of the company should be roughly neutral in 2025. That is still what we're expecting. And the impact of the delayed closing on our EBIT is minor, if at all, it should be rather slightly positive. And finally, also to reiterate what I said, because we are very closely working with Spirit in terms of joint improvement programs, we also think that the impact on the Section 15 and also on the wing production is not negative, and therefore, we stick to our view that the ramp-up that we foresee for the 220 and for the 350 next year and the year after should not be negatively impacted.

And when it comes to the question on production rates, not being fully sure I understood. Maybe the short answer is that we've produced in H1 on the single program, exactly in line with the production planning we had end of last year, and it has not changed. And we have not adjusted anything to the supply chain because we have produced according to the plan. And we intend to continue to do it for the second half. Getting the engines in the meantime will bring us to the -- to delivering on the guidance. So that's basically what we see for the first half.

Thank you very much, Guillaume and Thomas. This now closes our conference call for today. If you have any further questions, please send an e-mail to Olivier, Victoria or myself, and we will get back to you as soon as possible. Thank you, and we are looking forward to speaking or to seeing you again very soon.

Thank you, ladies and gentlemen. The conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.

Good morning, ladies and gentlemen, and welcome to the Airbus Business Update 2025. It's been 2 years since we met at the occasion of the Paris Air Show, we have a full agenda for today. But before starting, let me tell you how pleased we are to have you with us this morning. At this point, I would like to welcome our connected guests. Thank you for being with us as well. It's great to have you here.

And before I hand over to Guillaume, let me go through some practical information. Starting with safety. We spoke with the hotel manager today this morning, there is no fire alarm test planned. So in the unlikely event of a fire alarm, I would ask you to proceed to the emergency exits, signaled in green, and we will gather at the meeting point, which is located on the ground floor in front of the main entrants on the right-hand side.

Now some practical information. The event will last about 4 hours, and there will be no break because the agenda is quite dense. You have seen there are cameras. So for your own safety, I would ask you not to stand or walk in front of the cameras. Moving on to our agenda this morning. Our agenda will be split in 3 parts. We will start with a section on commercial aircraft business. We'll address the demand, the positioning, and we will address as well the ramp-up. We will then move to a second section, which will be devoted to our divisions, Airbus Helicopters and Airbus Defense and Space, starting with Airbus Helicopters.

And we will finish with the last section on the financial perspective. Between each parts, there will be Q&A session. So you will have a lot of opportunity to ask questions and to interact with our management. And then my favorite, please remember that throughout this meeting, we will be making forward-looking statements. So I invite you to refer to our safe harbor statement, which you are very well acquainted with and which you can find on our website. Let's sit on tight. Let's get started.

Ladies and gentlemen, please welcome on stage the CEO of Airbus, Guillaume Faury.

Thank you, Helene. I hope you can hear me well. Good morning, everyone. Great pleasure to be with you here today and also online, plenty of people in the room. So I guess, I hope I have time to visit the Paris Air Show as well. These are my last weeks as Chairman of the French Aerospace and Defense Association and in that capacity, I'm also chairing the Paris Air Show, so I hope you have good Paris Air Show, enjoy all the interactions and light display and static display and meeting with plenty of colleagues from the industry.

It's a very active show. As you know, Paris Air Show is the largest air show in the world. It's the largest gathering of aerospace and defense companies, actually by far because the Paris Air Show is more than twice bigger than the second largest air show in the world. We'd like to say it. But that's why we have so many companies, exhibitors. We have 2,400 exhibitors at the show. And this year, and I will conduit is a bit of a special year in terms of level of activity when it comes to international delegations, military delegations.

The formal institutional delegations normally are between 90 to 100 million. This year, it's 200. We have 200 military delegations. So plenty of activities on that side of the equation. And that relates a bit to what I will be saying later on defense and space. And you know that we have 5 days of professional -- 5 professional days and 3 days for the public. And in total, we expect between 350,000 to 400,000 visitors. So that's one of the reasons why we have this day with you today, this business update but also because 2025 for us is a bit of a transition year or a pivotal year. It's coming from recovery of COVID closing and fixing a lot of issues we had to fix.

I will explain also where we are on the defense side, on space, transitioning and turning around some of the activities with plenty of opportunities ahead of us and also, obviously, on helicopters, which is now on a stable and growing trajectory. So we have with us Thomas our CFO, that will be speaking last once the others have set the scene.

But we have also, obviously, Christian, the CEO of Airbus Commercial, Bruno, CEO of Helicopters; and Mike, the CEO of Defense & Space is coming from north of Europe. He took off as early as possible this morning, I think he is about to land in -- as landed in Le Bourget, taking a helicopter to come to the heliport. So he has a special treatment here with you at 9:50 and we don't want to be too fast because if we're too fast, he will not be with us on time, but now anyway, plenty of things to share.

We are in front of you today, in full swing on our activities. It's a very energetic Paris Air Show as far as we are concerned. Obviously, it started with a very tragic note with the accident of our friends of Air India and our thoughts are with the families of the victims. You know that we're working very hard for each and every passenger to land safely at destination. And when these things arrive, it's a tragedy for the industry, we are part of the industry. We are working hard for this not to happen.

Safety is my chief priority every day, every morning, and we have all thoughts with our friends of Air India and India and the U.K. as well because there were plenty of British citizens on board. It started also with the conflict rising between Israel and Iran and another step-up of the function of the security concerns that we have around the world, and it's a growing number of changes around us. So we are in an environment which is fast changing, which is uncertain, which is unstable, and we're operating in that environment. It's an environment that is full of risks and uncertainties, but which is also full of opportunities.

And we are working hard to make the company resilient to be prepared to adapt to changes to risk to difficulties, but also to grow and to take benefits to support those who are in need of our products entities and obviously, it's the case in defense, and I will come back to it a bit more specifically. When it comes to commercial aircraft, which is the bulk of what we are doing from an economic standpoint, we're in the ramp-up. We have sort of turned a corner with the traffic now be significantly stable ahead higher than what we had pre-Covid.

So we've put COVID behind us in terms of traffic. It takes more time to ramp up the industry behind, I mean, the manufacturing industry, and you know that we've gone through a lot of difficulties with our supply chain. But here again, Christian and Florent, the Chief Operating Officer of Airbus Commercial, will share with us where we are, the progress we are making, and we're making good progress. We have, of course, a number of challenges that we are managing today. We operate in a very challenging trade environment.

That's obviously, what we are trying to address each and every day. Almost every day comes with different news, different difficulties, different ideas on how to mitigate the situation and move forward. But also it comes with challenges linked to the fact that it's a trade war that is triggered in the U.S. that is impacting a lot the U.S. and that presents also some midterm, long-term opportunities for us. in the rest of the world provided we manage that situation. We believe, overall, it's bad business. We believe it's very important to be back to the 1979 agreement of a complete level playing field with 0 tariffs for civil aerospace goods, but would it not be the case, we need to be able to navigate and move forward.

We are ramping up, as you know, and there will be an update on where we stand. We know that's very important. That's top of your mind on where we are and the progress we are making, and we will reconfirm an important number of assumptions because we think we have our hands on it. When it comes to the global environment trade is impacting us and plays a big role on how we move forward about security is another dimension of what we are doing. In security, it's interesting to have a few figures in mind. Airbus is the top EU company in defense. We are more known for our civil products for commercial aircraft, but the turnover, we are the 11th largest defense player in the world. We're not in the top 10 and we're not in the top 10 because the amount of money that is spent in Europe for defense is very small compared to U.S.

Roughly, the EU is buying every year, 20% of what the U.S. is buying in terms of defense equipment. And a majority of what the EU is buying is procured from outside of Europe. Well, we are really at a turning point. We've been speaking in Europe for increasing defense budgets. That's happening now. really. And significantly, we will see things moving forward. Europe is getting organized on how to spend that money to spend more money in Europe, buying less from outside of Europe, more from Europe. And buying more smartly, meaning more together. And that's where we, as a European defense company designed to cooperate, to orchestrate cooperations between countries on large systems. I think we have a role to play.

So we see that a bit on Military Aircraft, be it on what we call connected intelligence, be it on space, for defense, on helicopters, we will see opportunities moving forward. And we are preparing ourselves. We are having a lot of dialogue and discussions and conversations at the show, beyond the show, on the ramp-up of activities in Defence & Security. So we are in this very moment with a trajectory that is clear, that is resilient on commercial aircraft. We have to navigate the trade and logistic challenges. That's what we are doing.

And Florent will share with you a number of insights I will share with you where we are on the transition on Defense & Space because we want to capture growth. We want to capture more business, we need to be with our operations generating profits, and we are turning around our space activities. We're fixing programs in space. We are turning around the activity itself, and we are working on a more strategic option to bring our activities together with the one of Leonardo and Thales and create critical mass on space in Europe at the moment where the race for innovation calls for major investments.

So turning around sharing with you where we are, that's working. I like to say that we are doing a bit in dense and space in the division. What we have done, what we have launched sort of a detailed ago on helicopters and that is really paying off now, transforming the way we do business, the way we are structured, we are organized, the way we lead the processes and tools that are applied to be an industrial company in parts, which are complex, sophisticated and in small numbers, but still can be supported by industrial means and entities. So ultimately, Thomas will be on stage and share with you the equity story and the updated way of looking at the future and the way we look at it. And as you have seen also with some adaptation on our dividend policy and Thomas will try to make sense out of it. Without further ado, and we will have time for Q&A afterwards. I suggest to invite on stage Christian and Florent, or Christian first. Christian. So please, Christian. The floor is yours.

Good morning, ladies and gentlemen. Privileged to be here and give you an update together with my teammate Florent on the -- a pretty thrilling world of commercial aircraft in general and at Airbus in particular. Now our business, of course, is a complex business. It's a wide-ranging business, but we're going to try and summarize it with Florent this morning in a focus on the commercial side of the business. And then, of course, the bulk of our engine, which is the operational performance and the ramp-up is Guillaume -- as Guillaume said. So where are we and what's our playing field? Our playing field is the global world with its challenges on its globalities, but fundamentally, ladies and gentlemen, we operate in a pretty fertile garden.

I say this because our customers' business, air connectivity mainly passengers but also cargo remains very, very correlated to economic growth and to the demography around the world in a very simplified way, so long as the world population grows and the disposable income of the average individual growth that individual's propensity to travel by air continues to grow faster than the product of demography and GDP.

Now where do we stand in terms of our global forecast and I say not without a little bit of satisfaction that Airbus' market forecasting has proven extremely, extremely reliable and close to the reality when we look back over the last 30 years or so in which we've published our global market forecast. So you see world GDP, we see growing at about 2.5%. And when I say we, it is not Airbus per se, but of course, we inspire ourselves and triangulate a lot of economic data from proven sources around the world.

The world population, as I mentioned, demography is going to grow by 1.2 billion people, of which most or an even higher number, 1.3 billion people will migrate towards urban environments, which, of course, is where people fly from and fly to world trade and world GDP very, very closely aligned here. You can see 2.6% growth on average over the next 20 years for World Trade. And what's most important, the middle-class people with actually disposable income grows even faster than the world population with 1.5 billion people additional in the middle class.

I'm sorry, I dwell on this a little bit because this is the fundamental soil on which our customers, the airlines operate. We still see the same typical correlation in mature economies. We see mature economies in terms of air travel. I mean the United States, Western Europe, Australia. Typically, the average citizen per year travels more than twice every year. in the faster-growing economies around the world, typically India, but also China or smaller countries like Vietnam, Indonesia, you see an average propensity to travel India, for example, is around 0.1 air trips per inhabitant per year.

So you can see with the demographic growth of a country like India, which is the highest growth market in the world with nearly 9% on average growth per year of traffic. You can see 0.1 trips, the potential it has until it reaches economic maturity is just phenomenal. That's what makes me so excited and so confident fundamentally, despite the various contradictory forces that affect our business in the near term that we are indeed on a continued growth trajectory, which translates in terms of aircraft, which is what we do, translates into over the next 20 years, a need for about 43,500 new airplanes. You might have noticed that, that is not too far away from the projections of our esteemed competitor, so 43,500 new airplanes. We have, again, fertile ground on which to grow our business.

Inside of that humongous number, a couple of precisions. The number of -- the proportion of replacement of older generation aircraft amongst those 43,500 airplanes has increased in recent times. Why is that? That is in a simplified way, the direct result of the pull towards more fuel efficient and therefore, more eco-friendly aircraft because the latest generation aircraft typically offer airlines a reduction in fuel consumption in the order, depending on the segment in the order of 20%, 25% up to 30% versus older generation aircraft so that you can see the pull towards more fuel-efficient and less CO2 emitting aircraft.

In addition to that, I might share with you that only about 30% of the flying world fleet today is of latest generation is composed of latest generation aircraft, of the existing fleet is still last generation aircraft. So you can see the demand the strong demand for our latest generation product is still there and unassumed. So the other number I'd like to share or data I'd like to share on this forecast here is the proportion of wide-bodies versus single-aisle aircraft, it hasn't fundamentally changed. It remains in terms of volume, about 80% of the number of aircraft is single-aisle aircraft on the 220, 320, 321 category, and 20% on wide bodies.

So much for the global background against -- in which we operate. So there is a reason to be excited about our business. Now it's a global business. And of course, we serve the world and the world itself has its geographical, geopolitical ups and downs. Here is how these number of aircraft passenger aircraft. You can see this is about 1,000 airplanes less than the global number I showed you. So we are only focusing on passenger aircraft, the other 1,000 aircraft being cargo aircraft.

Here's the geographical distribution of that. You see a big trend of the center of gravity of demand naturally flowing to where the demographic growth is, which is towards the East pulled very much upwards by India, in particular, as I mentioned, and China but also the large Archipelago of Indonesia and Vietnam and other places. Large proportion of wide-bodies remains in the middle at but we're also seeing an increased number of single-aisle aircraft going into the Middle East. Middle East typically among things large airlines of the golf that operate connectivity through their large hubs because they're really not -- they're really not a very dense population in the Gulf, but it's rather the connectivity offered through the hubs, which explains this large proportion of wide-body aircraft in the Middle East.

Other than that, not much else to say. We see some not stagnation, but the lowest growth of our airline traffic in the United States, domestic United States, it remains slightly positive, but that's where the lowest growth is. And as I mentioned, by definition, the largest, the biggest growth and most energy in the development of our business is in the East. Now let me brag a little bit about our product portfolio here. What are the products and services that we offer against this global demand. Here's a picture of our planes on the left. And on the right, this cascade that you see is the segmentation of our services business, and I'll say a couple of words on that.

So you can see we have a very comprehensive and as a matter of fact, the single most comprehensive product portfolio in this industry ranging all the way from a 3,000-plus range aircraft of a capacity of between 120 and 150 seats to 220 ranging all the way up to the world's reference in terms of long-range intercontinental flying, which is the A350. I hope this isn't too esoteric for some of you, but the way we represent this picture here is the way airlines actually look at aircraft themselves.

You see on the horizontal axis the range of the aircraft, the distance, it's capable of flying typically with a full load of passenger. And on the vertical axis, it's capacity, the number of passengers, the mathematical integral of the surface of capacity versus range. is actually the value, the economic value that an aircraft brings to an airline.

The number of passengers can carry over so many kilometers. That's how typically we represent aircraft together with airlines. So that's our product portfolio, very modern product portfolio on the left, the only comprehensive digital fly by wire product portfolio in the industry all the way up to where it really matters, where technology makes a huge difference over long distances. When you fly 10, 11 hours, a difference in fuel burn becomes a big number at the end of the trip, that's where Airbus sits with the A350, the only modern technology contemporary aircraft in its segment, and that's very important in this industry.

On the right-hand side, our services segmentation, yes, we offer training services we offer operational support to airlines, meaning navigation, optimization, precision navigation and things of that nature, in particular, through a subsidiary of ours called NAVBLUE, the bulk of our services business, which is growing significantly is in the area of maintenance, but in particular, in the area of distribution of spare parts, we own a company called Satair, which is growing higher, faster than the fleet growth and which is extremely profitable and pulls the profitability of our service business up very, very nicely.

Enhancements, it's upgrading aircraft, it's offering airlines connectivity services, et cetera, et cetera. And then finally, expanding. What we mean by that is consulting services, cybersecurity services, engineering services to airlines. I mentioned this because, yes, when one thinks about Airbus, one thinks about airplanes, but our services business, which, in the case of Airbus actually combines in terms of P&L measurement, the cost of supporting our customers and the revenue of selling spare parts or training services. The net result is a very positive and growing result. The order of magnitude, for example, would be, we took last year an order intake in excess of $7 billion. We delivered $5.5 billion, $5.6 billion, I think, of services in double-digit profitability, solid double-digit profitability.

We grow -- we will grow that to an order of magnitude of about $10 billion by 2030. So a nice complement to a very strong product portfolio. So a little bit more of a deep dive on each of the products, the single-aisle products is, of course, our bread-and-butter product, particularly the A320 and A321neo family of aircraft, which have, I dare say it so bluntly a technological significant technological advantage over its direct competitors that are older generation derivatives in the Boeing portfolio.

So needless to say, our market shares on this particular segment is very, very strong. I hasten to add that we really don't pilot our business based on market share. It's something you need to watch, obviously, in a duopoly or quasi duopoly, you do watch market share, but the market shares here are really more the results of the product merits themselves and the market penetration of the A320 family.

A quick word on the 220, which is the latest addition to our product portfolio. As you know, that's the former Bombardier C Series that Airbus acquired many years we've expanded and more than doubled the market penetration and backlog on this airplane since we took over the program it competes primarily with the smaller regional jets, but it sits nicely on top in terms of remember the payload and the range capability of its direct nearest competitor, which is the Embraer family of aircraft.

And so covering that payload range capability nicely, it has been able to secure a leading market share as well. On the widebodies, the widebodies where traditionally, this industry says Airbus is really, really strong in the single-aisle markets. But on the wide bodies, it's really very much still a Boeing dominated or Boeing controlled markets. That's not the case, ladies and gentlemen, our performance on the wide bodies has been remarkable over the last few years.

We've expanded the number of customers, which is a very important metric as well as the global backlog, very significantly, with the A330neo and the A350, which since the launch of the A350 program now command a growing market share of 44% and over the last 2 years, actually a higher than 50% market share. I'll stop talking about market share here because as I said, we are not driving it. We're not driving our business based on market share, but it is a measure of the global acceptance of the product range.

In particular, the A350 is growing. It has 2 variants or 3 variants right now, it's got the 900, the 1,000, which is by far the world leader on range and now the complement the freighter I might add, and this is important, even if it sounds a little bit esoteric. The freighter was launched a few years ago, just like the A321 XLR, the long-range version of the A321. We launched those products on their own merits and on our own belief of the success capability of these airplanes without traditionally seeking so-called launch customers to endorse the product development decision.

We launched them on "speculation". And as you've seen, very, very successfully so because on the A321 XLR, which was just delivered and on the freighter, which will be delivered in 2027. And we have secured significant market penetration already 500-plus orders for the former and over 60 and counting, particularly these days, for the freighter and those are very, very successful launches. So that's what I'll say here. On the A350, in particular, because that's a product of the future still, I did mention it, and it's really, really important, the 350 competing with the Boeing 777. The Boeing 777, which is yet to be certified and has encountered significant delays is a derivative of an older aircraft, it's a heavier aircraft. I'm not here to bash my competitor, not to sell you any airplanes, but it's very, very meaningful when one projects oneself into the future of this market.

It is really on these long-range aircraft that the technology makes the most difference and Airbus has a new technology product offering. When you fly across the Pacific every time an A350 takes off. It takes off with depending on the precise route, somewhere between 35 or 30 and 35 tonnes lower weight to carry for 12 hours across the Pacific than the 777 will do. And that's -- sorry, it sounds very anecdotal, but extremely meaningful when one considers that those are the 2 products that will compete in intercontinental -- in the intercontinental sector in the 20 years to come.

I -- near the end of the formal part of the presentation before I hand over to Florent I just want to tell you a little bit about the latest commercial performance. You've seen -- you see on the left here, the order intake that we've taken the orders that we're -- the contracts that we're signing. You can see that over the last few years since we came out of the core of the pandemic, our book-to-bill on average has been significantly over 1, which is a good thing for an industrial company like ours.

And you can see it's geographical distribution with Asia increasing in proportion of our sales as a reflection of where the growth in the world is migrating towards. Finally, that results in -- or just before I get to the backlog, I just wanted to share with you because I think we shared that with you last time, financing of aircraft in this day and age is not an issue. You can see that manufacturer support, which is the occasional support to junior debt or mezzanine debt for a little bit weaker credits, or difficult deliveries is in the order of 1%. So it's not meaningful.

The market itself is absorbing the financing of aircraft in a very competitive way with leasing companies, in particular, representing now over 50% of the financing, half of which through speculative orders that lessors place with us, the lessors place with us and then go and market aircraft and lease aircraft out, the other half through so-called sale leasebacks of airline orders. So financing of aircraft is still a very well functioning and demand-driven business.

And finally, yes, we are sitting on -- and that's part of the challenge that we're having. We are sitting on a massive backlog of well in excess of 8,500 aircraft against the 43,500 demand. So you can see there's still growth there, but we're sitting on a huge backlog across all product segments and with a geographical distribution that reflects where the world is going. More on it in the Q&A, but having this backlog now, the challenge for our company is to deliver on it. And the man, my teammate who is in charge of it. Florent is going to join me now on stage. 2/3, ladies and gentlemen, of our resources of our roughly 95,000, 97,000 employees in Airbus commercial are engaged in producing aircraft and procuring the parts that are needed, the man who leads that is Florent.

And I hand over to you, Florent to see how are you going to satisfy this backlog. Thank you.

Good morning, everyone. My pleasure to guide you a bit more into our operational world in Airbus. And what does it take to deliver the backlog that you just mentioned, which is a chance for us. Our North Star in an operations is to confirm the rates that you see there, that's been already disclosed. So succeeding getting to rate 75 on a single aisle in 2027, stabilizing the 330 at rate 4, reaching rate 12 in 2028 on the 350 and rate 14 on the 220 in 2026. So this is the North Star. This is what's guiding all our activities every day to make it happen.

What does it take to produce such a big backlog? We need basically 3 main blocks. We need competitive and capable footprint in our internal capacity in Airbus, prepared to cope with the rates, winning the skilled and motivated workforce on the blue collar and white collar side, and we need a full ecosystem behind us. In Airbus, those 3 blocks, and I will cover them in my presentation. It's 30 sites in our footprint and that will increase to 35% post Spirit acquisition, 65,000 people today in operations, which are manufacturing the aircraft at the best quality and safest level every day.

And 10,000 suppliers that we are pulling, guiding and allowing us to track towards the trajectory that we are following. So I will cover the 3 blocks, starting with our internal capacity. So 2 years ago, in the same conference, we shared with you a road map of our capacity increase to prepare the rate 75 on the single aisle with a lot of investments that needed to be done to cover the full flow and the 30 sites, which are manufacturing parts for the single aisle in Airbus world on 3 continents.

Since then and starting with the final assembly lines where everything comes together and allow the aircraft to fly and being delivered to the customers. We opened a new final assembly line in Jean-Luc Lagardere in Toulouse, capable of 321. This year is a big year for us. We will open a new line in Mobile, Alabama, that's just been certified by EASA 2 days ago. We will have a new line in changing the second line capable of producing aircraft by the end of the year. And we are duplicating the line in Jean-Luc Lagardère to have a single aisle in Toulouse, also capable of 321.

So we are actually getting the investment needed on the file side being delivered in a timely manner for the ramp-up and everything will be set up in 2026 to get ready in 2027 for the rate 75. That's the last mile of our process. But all the other sites upstream also receiving a substantial investment to gear up, just to give you an illustration in [indiscernible] for the cockpit, we will open a sixth line that we will inaugurate in July. And this one will be ready already for the rate 75, completing the landscape there.

On the [indiscernible], which is a very nice variant on the 321 family that we delivered for the first time last year. We invested dedicated facilities in [indiscernible] to manufacture the tanks and then integrate that into the aircraft. And that's been delivered over the last 12 months, and those facilities are up and running.

So across the board, the wave of the single aisle investment will be ready in due time to get to the rate 75. Now we enter into a wide-body wave to get ready for the rate 12 in 2028, and we will do the same over the next 2 years to complete all the investment by 2027, so that we reach the rate 12 on the 350 in due time. So those investments are very much important, allowing us to get the capacity and to get also the resilience that we did in the system to accommodate any hiccup we may have down the road on our trajectory.

Then if I look at the past 2 years, 2 years ago, we were having a big supplier called Spirit that was producing aerostructure components for us. And in parallel, we decided in Airbus Atlantic and Airbus Aerostructure to internalize aerostructure activities as a key make capabilities, which were needed in our industrial and business model. Many things happen in Spirit, and I will not go into all details there. But at the end of the day, given the situation, Boeing decided to buy that company. As a consequence, and it was, in a way, a defensive move on our side, we decided to take over on the Airbus products right away, because you can imagine that being -- going a supplier was not really what we are expecting in that world.

So we came very quickly with Christian and Thomas to a term sheet in Q2 last year to define the parameters of the deal it took us a year to get to the signing phase in more details a few weeks ago and targeting now a closing of the deal in Q3 this year. This would add 5 sites to our industrial footprint in the U.S., Kinston, North Carolina on the 350 in Belfast, U.K. for the wind components of the 220 and then Saint-Nazaire, Prestwick and Casablanca.

From a product standpoint, when you read through what we will receive from Spirits, actually, what we do is to complete the portfolio of products that we use to manufacture in our legacy programs in Airbus. So the wing, which is built in Belfast will be attached to our center of competence wings, which are producing wings for the 320, the 350, the 330. And the pylon, which is in Wichita for the 220 will be transferred to our center of competence that we manufacture for the 350, the 330 the 340. The fuselage, which is made in Kinston and Saint-Nazaire composite fuselage, a big part will be attached to Airbus Atlantic in the flow, which is producing the fuselage for the 350, the 330 and the 320.

So you see that actually, by acquiring Spirit, we complete the panorama of our products in the make perimeter in accordance with our strategy defined with the big aerostructure companies we created a few years ago. And that means something else, because we've been in the different sites for 18 months in Belfast, in Kinston, in Saint-Nazaire everywhere with our teams. And I have, as we speak, between 20 and 30 people on each of new sites. People from the center of competencies, the wing of the fuselage, of the pylon, which are used to manufacture those products since decades in Airbus.

And thanks to that, we are basically a fairly well understanding of what needs to be done on the different sites. Obviously, when you enter into any PMI, there will be some discoveries as usual, but 90% of the equation is known by us. And that's why I can tell you we are so eager to take over and to take control of the sites, big road map to deliver the ramp-up, and that's so critical in the 350 and 220 to unlock the Spirit for packages to get to the targeted rates.

We are eager to the control of the sites to deliver on the road map which is quite clear in our mind with all the expertise with injected in the sites, supporting Spirit at the moment and then leading the show in a few weeks' time when closing will be done. So a full industrial system bearing up and in a timely manner, which is so important for us and a big wave on single aisle, which is coming to an end next year for the [indiscernible] . Now having jigs and tools and robots, et cetera, is fine, but if you don't have the people which are able to manage them and to do a proper job in our file and facilities, then it's difficult to ramp. And there is no ramp up without additional efficiency in our production system.

The only way to ramp is to get more and more efficient any time you raise the ladder of the production rates. So we have 65,000 people today. We recruited quite a lot post COVID in anticipation of the wave of the ramp-up. I think it was a very good choice. First of all, because it allowed us to remain very attractive on the market and many people were knocking at the door of Airbus to join us in our different facilities and manufacture of the aircraft and support the manufacturing of the aircraft.

But then what we've seen as well is that the time to get the right level of skills on the different production lines was a bit longer than before. And then we had to reframe, by all our induction schemes through tutor, coupling of a newcomer and experienced people, and we've been much more stringent in the way we've been qualifying our people to get the right skills right first time before entering into our production lines.

So that's been a very strong reinforcement and a strong investment of the company to do so because what we have seen is that by having unexperienced people into the lines doesn't help, doesn't help because the efficiency of the work is not there. Sometimes the quality is not there and you need to correct afterwards. So getting the right skills from the starts and then learning aircraft after aircraft has been a choice and an investment from Airbus, which is paying off, and I see that on the line everyday as we speak, because the less the our people become aircraft more efficient. You see less and less nonquality generated because they gain experience.

And on single aisle, when you do 300 aircraft per year, we have done 300x the same activity and you do it well. So anticipating the was good idea now going forward. What we are insisting on is getting efficiency out of it, lowering the quality levels to be able to accelerate the flow and basically, we will add additional workforce to secure the ramp-up. But the big wave is behind us and what we know is globally to increase efficiency year after year to reach the peak rate in an efficient manner and with the safest standard with our people, which is, as you know, one of the key pillars of Airbus.

Then we talk a lot about supply chain in Airbus in the world, in the industry since COVID. We have a complex supply chain. So problems didn't come with COVID on the supply chain. Over the last decade, we had suffered from the supply chain crisis. For one and simple reason. What we are doing is complex. Every day, we receive 3 million parts. Every day, we deliver between 3 and 4 aircraft. So our job is to manage that complexity, contain it to the maximum and then deliver a smooth flow by anticipating to the best of what we can, missing that may happen in the supply chain.

Having said that, COVID has been quite a difficult period of time for many different parts of the supply chain. And volatility is never good when it comes to anticipating, forecasting investing, having people for different elements of the supply chain. And that's really what we suffered from through COVID, news I'd like to share with you is that since the beginning of the year, we see a real inflection point there. And just by taking one number, we count every day the number of missing elements, which are impacting our line. What I see since the beginning of the year is a reduction by 40%.

So by 40%, we are less disrupted by elements which are not coming in due time in our production facilities. I can tell you this is a big difference, a big difference in our capacity to stabilize the system, to stick to our plans. And what we see since the beginning of the year is actually, we have not deviated to our plans. And the more we confirm the plans, the more stability we are gaining in a way because that allows us to synchronize the full system, the full ecosystem of our supply chain, the 10,000 suppliers which are delivering parts to Airbus are seeing that stability. And that's nice to see in the Paris Air Show in the last 2 days, how -- in a way, trustful, the ecosystem is on our planes, not because they like us, maybe and they do.

But because they see stability in our planning for the last few months, in particular, on the single aisle, what they have not seen since years. So that trust in the ecosystem. That synchronization is improving a lot since the beginning of the year. And as a consequence, we have reached production levels that we never achieved on 3 of the 4 programs we are driving. That's true on the 330neo at rate 4. On the 220, we keep increasing the rate since we took over in 2018. And on the single aisle for the last 4 months, we are above the peak rate to average in 2019.

So those are the news and that's the consequence of the stabilization of stream of what we are receiving from our supply chain. Then it doesn't mean everything is easy. Every day, there are 2 big items I'd like to share with you, which are still mentioning in what we are doing, namely cabin and engine. On the cabin side, well, cabin is a particular world, not so many players, high customization, more and more complex products. Christian was mentioning the wave of wide bodies that we have received. This comes with a lot of customization and differentiation from the airlines, which is absolutely normal, getting to more tier 1, getting to 321 XLR is also calling for more complex cabin products.

So this is our life and then injecting those complex elements into our final assembly line is sometimes a challenge, especially due to the workload that the cabin suppliers are facing across the board to get all those programs ready, each one being specific to a customer, being delivered on time at the right level of quality to our final assembly line. So this is the element of complexity we need to manage.

We have changed our organization to be a better partner to our cabin suppliers. Being starting from the definition to the delivery in the files in full coordination with the customers enabling those 3 parties, coordination and collegiality to take the best decisions to have the best cabin obviously, but it also in due time and in a timely manner at a good level of quality to be introduced into our production system at the easiest way. So this is what we mean very strongly reinforcing and we start seeing the first benefit. It's paying off.

A cabin cycle is 2 years between the customer definition and the delivery to the final. So we started 2 years ago. We see the first benefits, and we'll see more and more benefits all along our ramp-up. The second big element, which is obviously dimensioning is the engines. There, I would like to start by saying that together with Christian and the support of Guillaume, we invested a lot in our relationship with engine manufacturers the last 3 years. And we have done that because there is no success of an OEM like us. If there is no success for any facture. We are all tied to our products and to the success of our products and for the benefit of our customers. We started with Rolls-Royce. And a few years ago, we had a lot of issues with them, starting with industrial deliveries, but not only we reframe our relationship. Today, we have no industrial problem with us, we deliver everything we need on time on the 330neo, on the 350. We have a good road map of product evolution.

So all of that is very positive from a ramp-up and industrial standpoint. On Pratt, Pratt is delivering without any issue on the 220, the engines we need for the delivery in the coming years. So there, no problem. And we have a road map to improve the engines in terms of durability, which is getting more and more concrete and visible from the customer. So we see a real turning point on the perception of part on 220 on the market.

On the single aisle, our relationship with part has been always very good. They are confronted with a legacy problem on powder metal, that has led to a lot of AOG, aircraft on ground. And we navigate with them the best trade between our need and light feet and what needs to be done to melt down the AOGs in service. So that's a direct discussion we are having with them and a very good collaboration to find the right trade off.

Regardless of a strike that happened for 2 weeks in May, we are receiving the engines from Pratt. We are just suffering a few delays at the moment due to this particular event. But for 2025, we don't see any issue with Pratt in going forward. And then we are preparing the trajectory for the next few years. The most critical point at the moment is the CFM situation. But they're also very much different than what we had last year.

Last year, it was a real industrial issue upstream on material availability, transition from 1 technology to the other, and we suffered a lot to get the right number of engines to deliver our aircraft. What we see this year is a different nature and material is flowing and they achieved a very strong ramp up into the core element of the engines. Everything was flowing to the final assembly line of the engines in France, and the strike happened for quite some time, 6 weeks without almost any production of engines during that period of time. 6 weeks is quite long when you're on single aisle.

So the gap that's been created there, CFM now need to recover. They are having a lot of energy to do so. but that remains a challenge on their side to be able to recover that quick enough so that we can attach the engines to our aircraft and deliver them to our customers. As a consequence of the good performance upstream of all our single age system, we are manufacturing aircraft and the aircraft are completed. And one just need to wait for the engines, 95% of the aircraft is completed. We have a few times at the moment into Los anembourg, waiting for engines. Those are completed, we need the engines to come, to be installed, flying and delivering to the customer.

So this is the challenge of the year, not so much linked to real industrial problems, but the social on strike that happened and that created a gap in the production. So as you can see we've been 18 months ago, there were many, many different balls in the air when it comes to industrial maturity, having things aligned and synchronized to deliver the ramp and the situation was staff. The progress made over the last 18 months is very, very usual in some areas. But in our job, we are paranoiac.

And that's the only way to do our job, with 65,000 people, 10,000 suppliers. You multiply those 2 numbers, that's the potential number of problems I have every day more or less. So managing problems is my daily life. It's not so much the issue to air problems. The main issue is to have too many that lasts too long or that are just not anticipating. And what we've been doing with my team is lowering the number of problems by a better anticipation by not creating ones, meaning having a skilled workforce fully capable of doing the job right first time.

And then for the problems which are rising, first, to be reactive enough and then to have the intimacy with our full ecosystem, the 10,000 suppliers to know the problem as soon as it arises and to tackle it with them in full transparency. So we are keeping came. We carry on, as Guillaume was saying, the world is full of surprises sometimes. But our trajectory is clear. That's the only thing we are looking at in operations, delivering the ramp-up, delivering the rates and pulling the supply chain and the full ecosystem to that share targets. And yes, what we have done in the first 6 months is promising on that part.

Thanks a lot, Florent. If I may just add, please don't read anything between the lines on the engine situation, yes, what Florent described is, of course, the reality. Today, we do have a plan from the engine manufacturing CFM, in particular, a recovery plan that should see us with the ability if that plan is delivered by CFM to make our trajectory, including this year. Thank you very much, Florent.

Thank you, Florent. Thank you, Christian, for these 2 presentations. So it's now time for a Q&A session. I will recall the rules of engagement, which are the same then for the quarterly calls. [Operator Instructions] Can we have a mic, and then we will have David just after.

Ben from Bank of America. On the A350, you talked a little bit about cabin. Can you talk about what the big blockages are outside of that? And how should we think about the ramp-up into '26?

So today, when it comes to the file on the cabin side, we are suffering from delays in lavatories, also due to a mismanaged transfer of work between 2 sites. So it's a cost of a transition that was not prepared enough by our supplier. We see that coming back as well. Last month, they delivered a number of lavs, we are expecting. And this month will be the same. I was with them yesterday in the Paris Air Show. So they are turning the corner. Still, we need to recover the backlog.

So I have big aircraft waiting for lavs, which is a pity, but that's the reality of where we are. But then the fundamental element for the '26 to '28 ramp up is, in my view, the section 15, so the product build and manufacture in Kinston, North Carolina by Spirit at the moment where we need to ramp. And that's why I'm so eager to take control of the plane, because today, we do a lot with Spirit to them to manage and support their supply chain management, their practice, but then managing a plant is a matter of leadership, and we need to impulse new leadership there. to accelerate the throughput, reduce the non-quality and get the ramp done.

I might add flow, don't mind the cabin means essentially seats, lavs also but seats, there is a significant pressure on the supply of, in particular, customized seats. We all like to sit on these fancy business class seats with big screens and suites and all sorts of amenities. I want to say that we're driving our teams and beyond our team so ecosystem to more standardization going forward to take away this divergent complexity of cabins at the moment when we ramp up.

I think we had a question of David on this side. And then Doug, I see you afterwards. And I have seen Ken for the 1 after.

David Perry at JPMorgan. So one question each, if I may. For you, Christian, on your product chart, it was interesting that you show the XLR as a separate lane to the A320 family. So I was just wondering how many heads of version are they going to be and whether that's an operational challenge.

And then the question for you, Florent, is you gave the interesting stat about missing parts being 40% better year-on-year. But how would it compare to an undisturbed year end of 2018?

I'll take the first part, Florent, on the XLR, David, thank you. You reminded me, I was standing here saying, I want to say a few more about the XLR because it deserves it. You're right. on the chart, it stands on its own. Why? Because with the XLR, we've actually introduced a new segment in the market, a new product segment in which -- well, let me not say too loudly, but in which we currently are the only one serving it because by definition, we've created it.

And that's long-range flying with a single-aisle aircraft. The XLR is based on a 321, which is our best-selling products, product across the whole product range. We've found a way to put additional range capability into the aircraft, which allows it to fly with a typical full load of passengers over 4,700 miles, meaning large transatlantic capability, opening new markets from smaller cities to smaller cities and avoiding having to go through hubs.

Typically, our first operator was Iberia they introduced it to Boston from Madrid. Wizz Air is now introducing it flying from Central Europe all the way down to the Middle East. So those kind of new routes. That's why we've separated it, and it's basically a new segment on its own, and it stands on its own, which explains its market success with wave of 500 aircraft. But yes, indeed, long-range flying means more amenities means more carbon convexities, Florent, every one of our customers has a very bespoke configuration. If you want to say a few words by definition, it adds complexity. Sure.

To your question on missing parts, I would say, globally speaking, we are probably at the same level of what we are facing in 2018, '19. But at the end of the day, the reference is, should be different because we will ramp up -- we have actually reached production levels that we have never seen before. So -- and all our ecosystem chasing at the end of the day, a much lower number of missing parts to stabilize the situation. .

And we have demonstrated that on the [indiscernible] by having new digital capabilities to anticipate to better make the connection to our system suppliers and on the system, for instance, we are much lower than where we are in 2018, '19. That's typically what we need to achieve on the other commodities on the detailed part, on the aero structure on the cabin so that's when we'll reach 65, 70, 75, actually, we have a level of disruption, which is in line with those levels of production.

We had a question from Doug on the fourth row.

Doug, from Bernstein. Thanks. First question, more on the near-term side. So you're looking at a rapid A220 ramp next year. You've got to get the A350 back up, yet you took -- told us that there would be about as much as Spirit in '26 and '27. So the first question is, how -- what are the mix there? How do you get through the Spirit situation to get that rate up? And then the second one, longer term, you sold out pretty much into the 2030s on A350 on the A320. So when you look at that and you're executing more orders and you need to get flat, how are you thinking about long-term rate? Would you be looking at higher rates when you go beyond 2028 to deal with the high order flow. .

I will take the first one. if I take the 2 main sites on spirits to unlock them, as you say, so Kinston on the section 5 the 350 and the wings in Belfast, 2 different situations. Kinston, we have a complex composite manufacturing facility. There is no supply chain issues there. The supply chain has been clean between Spirit and our teams over the last 18 months. So we have everything we need to produce the parts. So it's really a management of the plant itself.

Today, there are 2 minery works. And minery works means a slowdown of the pace and additional cost. That's what we need to fix, it has a lot linked to workmanship and management workforce. I'll give you an example. When you deposit, you have moods. It's like a cake, if you want, if you don't in the moods between 2 cooking, then you have a problem. That's typically the kind of mistake, which are done in the plant at the moment, that we believe we can correct right away.

On Belfast we are manufacturing the wing. The final assembly of the wing is a stable process and checked by our experts from [indiscernible] , our center of competence on wings. There the key question is the supply chain management and supply chain enablement, upstream of Belfast. So we know the suppliers. We obviously started discussing with them, but to unlock Belfast, it's not the site itself. It's more the supply chain upstream, but we need to gear up and make sure they fully understand what needs to be done.

Up to you. You're the boss, Helene.

I was concentrated on the next one. But we first answer the second question and then we move to Ken.

Okay. So I'll try and be brief. On the rates and the lead times, it's, of course, very tempting to follow the market and continue and continue to grow and anticipate. But right now, our objective is to stabilize at the rates that Florent has mentioned, the 14 on the 220, the 12 on the 350, and 75 on the 320 and the 4 for a change on 330.

Why? One, because it took us considerable more effort than maybe we anticipated and convincing the supply chain that, that was feasible and getting the supply chain organized to enable those rates. So if we move the goalpost again, particularly in a time of uncertainty, I think that could be more disruptive than beneficial. The second, notwithstanding the fact that demand is there, so the sales guy in me wants to.

But the second benefit, one, catch breadth, stabilize demonstrate our credibility with those rates, which is now being achieved and the supply chain, as Florence says, is following us towards those rates. Second point, yes, with this strong demand, I say this carefully, but of course, it enables us to consolidate pricing. We've been through quite a bit of rock and roll, some -- and a lot of it induced by competitors' issues on their product lines. and COVID now is a good time to consolidate pricing as well as we ramp.

There is demand. So it's not impossible that we may move in the future, in particular, I see a lot of demand on the wide-bodies, but that would be premature to go out there today and move the goalpost in my opinion.

So now Ken. .

Ken Herbert with RBC. Two questions. The first is when you look at the engine issues, how much of the shortfall in engines today on the narrow-body side as a result of the strike versus how much is a result of other issues in the supply chain that you might see and then second, lastly, the macro backdrop today, I would argue, is much more uncertain than it's been perhaps in a while. What can you say to give us more confidence in the second half of this year and into '26 and '27 that the risk around tariffs, geopolitical conflict or other areas won't perhaps cause more disruption I mean what are you doing today considering that to really perhaps preventatively or as you think about that to address both near-term and midterm challenges from a macro standpoint?

Maybe quickly on the first question, and then I will hand over to you, Christian. When I look at the current CFM situation, all the engines missing are linked to the strike. Material is there. Material is on the shelves in [indiscernible] been delivered by GE or the supply chain of Safran the IT. So it's a one-to-one correlation between the stop of production and what we are falling short in terms of engine deliveries. Material is there. .

The second doesn't have a simple answer, the second question. In this uncertainty, you referred to tariffs, in particular, what actions are we taking? Well, until the rules of the game are stable. Our view is keep going so far. We need clarity to be able to make clear decisions. Of course, in the long term, what does this uncertainty, tariff uncertainty, geopolitical, polarizations, where does that inspire and inspires obviously, for us to get organized in particular, in supply and operations to derisk our industrial system and our supply system from areas that may be viewed as potentially isolated or difficult to access. So that -- but that is a longer-term can't switch off supply from 1 day to the next, you need to organize it, and that's what we're doing.

There is a clear towards more dual sourcing, double sourcing instead of being depending on a single supplier. Those are the kind of things that the modern world unfortunately inspires us to do for the medium and long term. But we're also trying to influence where we're not a small voice in this industry and together with our ecosystem, you may have seen that there is a very harmonious and uniform position being taken by aerospace, in general, all aerospace players combined that drive and lobby the political powers to be at the -- towards back to a trade -- unrestricted trade environment in the 1975 agreement on commercial aviation, in particular, it's very reassuring to see that all voices on either side of the Atlantic and beyond are saying and singing from the same hymn sheet, and we're seeing quite encouraging signs now in particular with the U.K.-U.S. agreement that was just confirmed and documented.

Whereby U.K. and U.S. have agreed that aviation or aerospace, I should say, is exempted. So one, keep calm until the rules of the game are established. Of course, we're running very different scenarios. You can imagine we're paddling very, very hard under the surface. But until you know, there is no point to spook everyone and change your plans. That's what we're doing, it can lead to derisking supply and areas of potential conflict in the future; and three, of course, orchestrating as best we can with our colleagues a lobby towards trade free environment.

We have a question in the middle, Ian on the second row. And then we have a question at the back, Olivier. And then I will look on the right-hand side as well.

I've also been asked to stand up. So Ian Douglas pennant with UBS. Florent, I wonder whether you recognize a narrative that you have accelerated the support that you're giving to your suppliers quite materially in the last 6 or 12 months always there, but it's just so there's been some step shift recently. What I mean by that is when I talk to some of your suppliers, they said instead of having to lobby for inflationary price increases every year, based on what happened 2 years ago, they have to ask again, you've given them a block price increase, which gives them the confidence they need in the longer term.

You're also appearing to take more inventory when you've had disappointments in production in the past, you've asked your suppliers to help you in holding the inventory on their balance sheet, whereas now you're building gliders, that you're taking more inventory on. Do you recognize that narrative that something has changed in the last 6 months?

What's been your point is actually what I was mentioning in terms of partnership and intimacy with our suppliers. And I think what we have changed together with Christian over the last 18 months is really understanding what was preventing our supplies to ramp. Some of them were having negative margins and de facto, going to your bank and saying I will accelerate, I have a big order with negative margins just increasing the negative margins. So they were not about to ramp up in any case. So we've not been -- we've been surgical on that. We've been surgical meaning supplier by supplier, situation by situation. What is the best portfolio of support we can have on a temporary basis to allow them to create the transfer environment in their structure to do the ramp-up.

So yes, in some cases, we had some repricing. In some cases, we took inventory because it was produced by the suppliers and then too much cash being trapped into the balance sheet for that. In some cases, we bought material or we advance cash for them to get material. So we've been surgical on part of the supply chain to allow them to ramp and to be successful. And then to come back to a real competitive trajectory, one will reach the peak rates where in particular on the aerostructure and retail part supply chain, volume is so important for them to saturate their assets and to get the best out of their fixed cost base.

So that's the way we have seen that in part of the supply chain. And you're right, there's been an inflection last year in the overall, I would say, switch of culture we are pushing in Airbus to really create a partnering ecosystem to become more and more competitive over time.

I want to borrow an expression from Guillaume. You mentioned inventory. In this situation where there is significant demand, and we're ramping up inventory is actually good cholesterol because it puts you ahead of the curve, including inventory by what Florent described in terms of manpower, hiring, training the people we know we will need and giving ourselves the time to train them is good cholesterol. What's bad cholesterol, of course, in any company is fixed costs overheads, et cetera, and that's what we've been attacking and Idea successfully so with our transformation program.

Olivier Brochet with Rothschild & Co Redburn. I have 2 questions, if I may. The first one on services. Christian, you very kindly said that profitabilities out there has been pretty good. Could you give a big bigger picture on the overall services profitability and how it should trend to 2030? And second, on A220, can you give us some -- what can you say to give us comfort on the sustainability of rate 14 with the current backlog and current product range that you have on that one.

Okay. Thanks, on services, if you allow I'll refrain from being too precise, but services market in general in the current day and age is about a year -- on a yearly basis, a $160 billion market. So you see we're still a relatively small player when we deliver $ 6 billion, $ 7 billion, 10 billion or so in 2030. In terms of profitability, I mentioned it's good, solid double digit. In fact, some of the material services, attribution in particular Satis higher than that. It is, on average, diluted a little bit by the more the less profitable, what we call flight hour service agreements, which we are maintaining.

Why? Because it creates a significant customer intimacy, you really get through the flight hour service agreements, which is a service where we organize maintenance component means and airframe maintenance for our customers and then subcontracted out. It creates an enormous amount of customer intimacy and knowledge deep in your customers open, which proves very helpful in the bigger picture, including platform sales. So all in all, deep in the single digits and certainly are ambitious to be in the high single-digit margins in a few years' time. So it's a good business. It's growing and it's contributive to the overall result of the company.

On 220, the rate 14, I believe, is quite sustainable. As a matter of fact, again, this is not a decision or anything like that. But I'm absolutely convinced that the rate on this airplane will continue to grow. But we want to go and stabilize it as early as towards the end of next year for -- on the rate 14. It is not our strongest backlog. I'll concede that. But that is a strength in a market where we cannot, as I think some of our earlier colleague remarked, we cannot serve customers before the 2030s now on single aisle on the A320 and A321. It's actually a good position to be in to have A220s comparable in '27 and '28.

And just at this Paris Air Show, there's actually more happening than meets the eye. We've chosen not necessarily to be vocal on all of the activity given the context, but we see strong traction on the A220. So I stand before you not concerned about the ability to sustain rate 14 on the 220. As a matter of fact, I think, for too long, you'll see it grow. But that's not, it isn't yet.

Thanks very much, Christian and Florent. We will close our Q&A session for commercial aircraft. Now thank you for being generous with your time because we extended a bit on the questions that I felt...

So we have to go back to the show now.

Exactly, Christian. You can head back to the show now or you can decide to stay with us, but thanks very much for being with us this morning. Thank you.

So this brings us to the second part of our agenda, and there will be a Q&A session after that second part, and I will start from the right-hand side in case I have not seen some questions earlier. The agenda now will be devoted to our 2 divisions, Airbus Defense and Space and Airbus Helicopters. Why? Because we stand to our divisions, but also because since a few months, the content of our discussions have evolved. You have more and more questions about what do we do, the portfolio of our products. And we thought with Guillaume, with Thomas, with Mike and with Bruno that it'd be the good occasion to present our divisions, our positioning and our perspectives.

So ladies and gentlemen, freshly arrived from the Northern of Europe. Mike has just answered. And I will now call on stage the CEO of Airbus Editors, Bruno Even.

Good morning, everyone. Very pleased to be with you this morning to update on the Airbus Helicopter trajectory and outlook. I'm glad to be positioned between Christian, Florent and Mike, not only because it gives the opportunity for Mike to be on time this morning, but also because when we look at Airbus Helicopter, I think it's a good bridge revenue between the commercial world and the defense world. We are a dual company as you will see. And we speak both long age, 1 of the civil market and the 1 of the military market. There will be 2 parts in my presentation, first one, quick 1 -- quick update on where we are, where we come from and then projecting ourselves to the midterm and sharing with you what our midterm outlook, starting, of course, with the market.

So where are we? Yes, where -- when we look at Airbus Helicopters. Airbus Helicopters in '24, I'd like to start by sharing that we are a global leader. We are the leader in the helicopter market, both civil and military, 52% market share on the civil, 15% on the military market, so we're clear leader on the worldwide market. This is a result of a clear action, a clear transformation plan that we have launched several years ago, focusing on key pillars.

First, our value, safety, quality, Guillaume it clear at the beginning that really our core values at the link of trust with our customers. That's our license to operate. Clear focus on competitiveness, of course, working on our cost, our structural cost overhead, more importantly, working on production costs with clear action in terms of optimization of our industrial footprint, in particular, through the specialization of our different side. It brought market share, of course, contents, but also financial performance. clear focus on innovation that clearly is the best way to bring value to our customers to position ourselves on the market and gain market share through continuous upgrade and you have seen regularly year-on-year communication and evolution of the product range.

Or a new helicopter like the one we introduced recently the H160 or the 1 we communicated at the beginning of the year and of course, focus on customers in order not only to develop customer satisfaction, but to grow our support and services business. As a result, we gained market share, we grew our revenues from EUR 6 billion in between to EUR 8 billion or close to EUR 8 billion in 2024. We increased our backlog from EUR 15 billion to EUR 24 billion in 2024. Of course, it gives visibility and confidence and trust in the trajectory of the company and financial performance.

We reached in 2023. We confirmed it in 2024, a double-digit profitability performance. This trajectory, this financial performance is, of course, the result of a strong focus on our transformation. But not only it's really based on a strong and robust business model. This business model, which described, well, Airbus Helicopters is based on 3 key pillars.

First one is our product portfolio, we have the broadest and the largest product range on the market, both for civil and military. It's based on 7 dual platform from the light helicopter, [indiscernible] helicopter addressing civil and military and of course, specialized military helicopter like VNH90 and the Tiger, it gives us the opportunity to address any need on the market civil and military. So of course, it's important in terms of market positioning, but it gives also the volume and the volume is not only the growth, it's the competitiveness. is our global footprint, global at local, we have the strategy to be positioned everywhere in the world in the strategic areas.

We have more than 30, 3-0 customer center side, which gives us the proximity with our customers, the ability to capture, and I will come on this just after to capture the support and services. But of course, to know our customers, to speak the same language and us and to position ourselves on the different segment. It's, of course, also about resilience, depending on the dynamic and the momentum we see in the different part of the world, we are well positioned to capture this momentum.

And third pillar, we have a balanced portfolio of activities. When you look at our revenues, in particular in '20 and '24, between civil and military, it's pretty well balanced, 50-50 between military revenue and civil revenues, but also well balanced between our portfolio of program, new helicopters that we deliver on the market and support and services, 54% of our revenues coming from the deliveries of our new helicopters, 46% of revenues coming from the support and services.

So this business model gives, of course, opportunity to grow, as we have demonstrated in the past years, but brings also resilience, and we know since COVID that for a company growth and resilience as really the 2 clear priority for a company in the complex world we live in. Before moving and looking forward, a quick focus on support and services. You have well understood with our business model with the 3 pillars that support and services is really at the core of our business model. it gives opportunity to grow. It gives resilience and why is that? When you look at the track record of the past years, we have been able to grow our support and services revenues by since 2018.

And when we look at the performance in '24, it represents 46% of revenues, where it comes from. It's really important to understand what's behind the performance of the support and services in terms of background, close to 1,000 helicopter in service. And in average, an helicopter is operated between 30 to 40 years. So stay between 30 and 40 years in service. It's a clear set. And we have a clear strategy to capture the opportunity and the business potential, which is behind this fleet in service because in average, a helicopter stay between 30 and 40 years in service.

And in terms of revenues delivered by all this activity, it's an average close to 3x the price of a helicopter. So when we deliver on helicopter, the maintenance and support activities that will be generated over the next 30 and 40 years we represent 3x this price of the helicopter. And we have the strategy to capture this potential. This strategy is based on our international footprint. Helicopter are delivering local services, local activities to have this international footprint give us the proximity and the ability to serve our customers and to capture this business potential. The ground, and it's really important to have in mind. When you look at the business model of Airbus Helicopter, of course, we are an OEM. We deliver platform, we deliver helicopters, but we are -- as well Tier 1.

When we look at the main component of helicopter, of course, we have several components, starting with the engine. But when we look at all the dynamic components, all the blades, all the main gear box, they represent close to 1/3 of the mainland cost of helicopter. And this is an activity that we have verticalized Historically, we produce, we design our gearbox and then -- and when it was not the case, we took the decision to acquire them on the market and the decision we took 2 years ago 2 years ago to buy the activity and the aerospace activity of Zee being now Airbus Helicopter technique in Germany producing the gearbox of the 135, the tiger and the 145.

So this is a verticalized activity, which, of course, give us the activity to grow our support and service activity over time. And third, as part of our strategy, to develop long-term multiservice contract by our contract on the civil market, but when it comes to the military market. developing long-term contract based on commitment, fleet availability, large range of services that we offer to our military customers to help them deliver the critical mission they need some time also to mitigate the challenges they see with their own human resources.

And from our side, of course, to develop key activity and support and services activity. So I just wanted to be quick on this one. It's really important to understand how the support and services activities are structured this because they clearly contribute to the growth of the company, but also to the resilience. Moving forward, what's the outlook -- midterm outlook for Airbus Helicopters, I would like to start with the market and the world market, what's the perspective we see. The first message, when we look at the 2024 worldwide helicopter market, it's the first time. It's back to the level of pre-COVID level of we had in 2019.

What's the message here? First, in 2020, we have progressively recovered, but it just means that in front of us, we see the opportunity to continue to grow despite the uncertainty, despite the complexity we see in our environment, what is important to understand, when we speak about helicopters, of course, on the military market in the context where we see budget increasing in different countries, we see opportunity of growth. But on the civil cat, helicopter are delivering critical mission, medical sizes disaster management, firefighting, search and rescue, see maintain environment, police critical mission that are not directly depending on the economical context.

So back to the level of COVID in 2019 and opportunity to grow both on the civil and military market. The second message, you see this on the slide, we used to explain that the worldwide market is pretty well balanced between civil and military. It's true in units. When we look at the value, the reality, the military market represents 80% of the value of the global worldwide market. And that's clearly a market that we see growing in the future. That's, of course, an opportunity to grow as well for Airbus Helicopters. And third message, beyond helicopter, we see an opportunity, and we see the drone get growing. And that's clearly, as you will see an opportunity, of course, as well for the company to capture the opportunity of the future.

When I speak about opportunity to address the drone market, in particular, the tactical drone market. Here, I have particularly in mind, the governmental and the military business. So in the world, we know worldwide market will come to grow. So it's really a world of opportunity for Airbus Helicopter in the coming years. And as you can anticipating antigour strategy is clearly to continue to deliver profitable growth and to build and execute the strategy to capture the opportunity we see on the market. This strategy is based on 4 axis. The first one on the civil and parapublic market.

We want to grow in value. Today, we have a clear leadership position 52% market share on the market, but we see opportunities to continue to grow. On the light single, light wing segment, by continuing to work on our competitiveness and innovation. Of course, we want to secure our strong positioning. On this segment, we are between 70% and 80% market share by continuing to invest like we have introduced at the beginning of the year, we want to secure this strong position.

On the medium and super medium segment, that's clearly where we have the opportunity to grow in market share. We have introduced recently the 160, 175. We have the most modern and competitive helicopter on the market between 6 ton and 8 ton helicopters. We are gaining market share in particular, for strategic segment like the energy segment, that's really where we see the opportunity to contribute to the growth of our market share in terms of value on the civil market.

On the military market, 15% market share. So you see the potential on the market for scatter on this growing market, and I will elaborate a bit more later in my presentation. Support and services, good track record, good performance in the past 5, 6 years, we see, based on the strategy I just described before, opportunity to continue to grow of course, on support and services. And last pillar of our strategy to continue to deliver profitable growth is not only to grow on the civil and military helicopter market, but also to develop ourselves on new business opportunities and here, I have mainly in mind the drone market, the tactical drone market, in particular, the tactical military market, and I will elaborate a bit more on this later.

Clear strategy to deliver profitable growth in a growing market. It's first about ramp-up. It's first about execution. I just shared with you at the beginning of the plantation. Our backlog has increased from 15 billion to 24 billion, it gives us visibility, and we have the potential, thanks to a strong focus on operation and execution to continue to deliver in the next years this profitable growth, execution ramp-up, it's first about helicopter deliveries.

And I see the example of the 145 helicopter, it's a 3.8-ton helicopter. I think it's the best illustration of the challenge we have in terms of ramp-up. So 145 is a best-in-class on the market for this segment. It's a dual platform addressing civil and military market. That's the one where we have invested in the past years in producing in particular, a new upgrade 3 years ago. So I think it's a good illustration of the challenge and the opportunity we see on the market, close to 75% market share on each segment. 50% ramp-up between '23 and '25.

That's the ambition we have we are in this trajectory to deliver and execute this ramp-up in '24. We delivered 25% more than '23. And that, again, what we target for -- so the ramp-up of our helicopter deliveries that we illustrate here with the 145 is, of course, the first pillars and the first opportunity to deliver this growth, but it's not only about operation. It's also about engineering, 40% of ramp-up of our engineering activity between 23% and 25%. Why is it so important? Of course, our focus on innovation and product evolution is key to keep our competitiveness on the market, but also in the military market, we secured important contract in the past years with our home countries.

And here, I have in mind, in particular, the development of the military configuration of the 160 that we are developing for the French forces, but that we will propose in the export market, the evolution and the upgrade the Tiger helicopter, the attack helicopter, but also all the different contracts that we take on the export market. And for each of them, it's an opportunity to upgrade our product evolution and that's the reason why this ramp-up in engineering is so important, as important as it is for helicopter deliveries.

So execution ramp-up -- we have the backlog to make it, and that really contribute to deliver the profitable growth in the next years. But of course, in parallel, the objective is to execute the strategy I've just described we see opportunity on the market. We have a clear strategy to capture this opportunity. We are executing this strategy, and it starts with the military are and our strategy to grow the military market. There are opportunities on the export market, and we're strong to assess in past years. And of course, we'll continue to develop on the export market. but most of the opportunities, of course, are also coming from increase of the defense budget in Europe.

And from that perspective, helicopter fits well with these opportunities. How do we prepare ourselves to grow in the liquor market? Clear focus on the 4 main important activities, we want to increase the operational availability of our military helicopter and service. First, to give you opportunity for helicopter to deliver the critical mission they need to perform with the helicopters. Of course, it contribute to the development of the support and services, but also it contributes to the competitiveness of the product when it comes to the NH90, when it comes to Lagan it comes to the strong rational availability, it's clearly part of the competitiveness of this helicopter.

Second, deliver on multi-role platform. That's clearly what we hear from our customers. That's also less and learn from the different conflict we see today. More and more, we see a trend for multi-role, affordable, combat-proven helicopter. And that's clearly what we target with our dual helicopter civil and military. And again, the different contract we signed in the past years, I have in mind, in particular, the one in Germany that we signed end of '23, clearly illustrate the polyvalence of the helicopter from the training to the true transport, search on rescue including combat capability.

So our dual portfolio, 145, the 160 introduced on the civil market. But thanks to the development we are doing with the French forces, we will be able to propose this H160 military configuration the export market and of course, Caracal. We want to stay on, of course, specialized military platform, NH90 and Tiger, we secure with France and Spain, a major upgrade with the Tiger. We continue to invest in the NH90 and we signed an important contract major upgrade what we call the subordinate, an opportunity to continue to develop this platform.

And with our partner, Leonardo also, we are part of a project at European level funded by European founded Defense to prepare the next technology for the future military helicopter. And last but not least, we have one clear approach, one Airbus approach when it comes to the positioning on the drone market with Airbus Defense and Space from the tactical drone to the more strategic drone, one Airbus approach to give us opportunity to position us as a leader in this drone market.

So military helicopter market, there are clear opportunity in front of us, and we have a clear strategy to capture these opportunities. Regarding [indiscernible] and Mike will elaborate a bit more also when it comes to the product portfolio for Airbus Defense and Space. Again, when Airbus offer, we want to be in a position to propose a co-product range to our customers. We see needs growing for drone capability. And here, the way we answer to this request we invest by ourselves. We developed some different products and the VSR700 for Airbus Helicopter is one pole.

So self-investment, organic development, acquisition when it makes sense, and the decision we took recently to buy the company Aerovel, designing and producing the Flexrotor, which we consider being really competitive on the market. So acquisition, it's part also of our strategy and partnership because it's not our ambition to be exclusive. We really want also to be in position to propose a large range of product portfolio in partnership. It's part of our strategy. So we want to propose a tactical drone.

We want also to leverage the technology we are developing for this drone to be able to propose unmanned helicopter, which is more and more also a request from the market. And we want to propose global solution based not only on product drone or man helicopter, but also the ability to team to connect drone and helicopter, which is more and more what we see as a request from our customers on the market. I will conclude now on -- with this slide to share with you the midterm outlook we see for the company as you have well understood we see on the helicopter market, a growing market. We see opportunities in front of us. We have a clear strategy to be in position to capture this opportunity to continue to deliver profitable growth for the company to continue to contribute to the growth of Airbus.

And the ambition we have is to cross the line of the EUR 1 billion profitability in 2028, moving from EUR 800 billion EBIT in 2024 and to deliver more than EUR 1 billion in 2028, thanks to our transformation journey, thanks to the execution of our ramp-up, to continue to grow our Support and Services portfolio and of course, take benefit of the opportunities we see on the military market. Beyond 2028, to continue to deliver our profitable growth, of course. And we see here clear opportunities, a clear upside coming from the Europe defense context coming from the opportunity to grow on the civil market to increase our military market share and to leverage and the opportunity we see on the drone market, sorry, exciting perspective, and we are really motivated to continue to deliver this strong opportunities in front of us. Thanks again.

Thank you very much, Bruno. I will let you go back to your seats, and I will call you back for the join Q&A session. Thanks very much. We are moving now to the next presentation. So ladies and gentlemen, please help me welcoming on stage the CEO of Airbus Defence and Space, Mike Schoellhorn. .

So good morning, everyone. And I accomplished something already this week, which was the graduation of my daughter who finished med school. So I'm very happy to be here. There's maybe 3 things that I would like to accomplish in the talk today with you, and for you to take away with you. One is, obviously, you've been hearing about Airbus Defence and Space, ADS, as we say. recently largely in the context of space, write-downs and the losses that we have incurred. I do want to get across the message that the team is doing an excellent job with new leadership to turn the ship around and turning into a profitable and growing business.

That said, the whole division is in transformation. I will speak about it too. Secondly, I do want to convey a little bit the portfolio that we have, which is really I think, of an amazing breadth and depth. I know you're all experts in A320 ramp up, but if I get carried away in speaking too much about my products, then forgive me, please, but I think it's important that you know how we are -- what we have or what we already have in our portfolio today, where we're working on for the future. And then thirdly, where's the beef? What's going to come of this in terms of financial results. And what does rearm Europe mean for us and ADS.

So at a glance, you see the division here with some key numbers, the 36,000 employees all very passionate and motivated and talented to contribute to what we do for our customers and for our countries and for democracies as we're only acutely aware of I'm not going to read all the numbers to you to see a number of locations. You see the partners. I think what is important is that we've already benefited from the uptick in defense spending in the past 2 years significantly.

You see the order intake in '24 was almost EUR 17 billion. We had almost EUR 16 billion in '23 in the year before. Our '24 revenues are 12.1%. So you can do the math. We have a book-to-bill of 1.4 in '24, and we see growth come in our way as well. You might recall that Thomas and Guillaume have talked a lot about what we're doing in terms of transforming and restructuring ADS and a big part of that is creating 3 separate business units that have full end-to-end accountability. You see those 3 units mentioned here -- hang on, that was a little bit too quick. Let's flip back, please. You see the 3 business units depicted here on the right. Air Power, all military aircraft, Space Systems, all of our spacecraft that are in space and including the space systems that we produce and then Connected Intelligence, which is maybe the least known business unit in area.

The division, as such, was created more than 10 years ago with these 3 things bolted together in a very, let's say, tight way but we've come to the conclusion that actually we need to let go a bit more. These things are too different in nature to have a big matrix organization that tries to find synergies where they aren't. So with that, I flip over and speak about Air Power. How is the biggest of the 3 and maybe the most well known and you see a lot of great products also shown here at our display at the Paris Air Show. On the left, transport mission tanker aircraft, I think this is undoubtedly the area that we lead in Europe and partly even globally with our very known products, the A400M, the MRTT, the tanker, the transport and tanker and the C295, all leaders in their respective fields.

I could probably give a sales pitch here about each and every one of these products. You heard or maybe you have read just the news that we secured another year of A400 production. That's always been a question that's been lingering around. We are on a good track to restore the profitability of A400M and are delivering on our missions there. The MRTT is, I would say, the tanker that has captured the whole work market except for the U.S. and very few other countries. And we see with the MRTT, which is a new development, a lot of traction in the market coming our way with all the air forces needing many more flight ores and needing much more time on station as they call it.

So they need to keep the fighters in the air. This means they need more tankers, and that's why we are doubling down on the tanker market. with the MRTTs that we have in development. And the C295 is a smaller aircraft, 9-ton payload clearly the leader in this segment and maybe not so much of a halo product. but racks up a lot of orders very known for the fact that is the first military final assembly line that was created in India for this aircraft that India shows. On Combat, our current product to business is the Eurofighter. We have a total order book of 721 Eurofighters, we don't usually make as much fanfare as others, but I would say the clear #2 in this in Europe has about 200 orders less. You know who that is. So we clearly lead in terms of the order book as the most successful European fighter program. We have about 109 of those aircraft still to build, and we see significant campaigns and significant interest in higher orders. Those could exceed or could go into the 3-digit numbers.

We have, obviously, Germany that has expressed that they will buy additional ones. We have campaigns running in Saudi Arabia. We have campaigns running in Turkey that everybody has read about in the press. It has other things in the making that I don't feel so comfortable to speak and mention them at this point in time, but there's going to be a long life and successful and profitable life of the Eurofighter. It will become a platform that will be able to communicate with other platforms that can guide and fly with unmanned and uncrew aircraft, so still the backbone of many European air forces and Air Forces and other areas.

Future Air Power, FCAS, Future Combat Air System, the future of Air Warfare I think, confirmed also as much as we know, by the recent battle in -- between India and Pakistan, the future of air battle is not platform-centric. It is network centric, and this is what the concept is all about. This is why we continue to stand behind it. We have the same commitment as on day 1, and we need to find a way to make it happen because the principal is the right one. I guess there might be some questions so I keep it short. Service and aerostructures when you fly more, you get more services.

So we're already seeing a good uptick in both top line and bottom line on services because the air forces fly a lot more. They patrol the eastern flank of NATO. They do more exercises. They do a lot of things that they had not done in many years. Aerostructures is a relatively small business that keeps us competent on the specifics of military -- of building military aircraft that sometimes have other requirements than commercial ones like Stealth and like others.

Moving over, if the clicker works. Bruno talked about drones already. And drones is something that many people have in mind now from the Warren Ukraine and many people think of small quadcopters and things that do amazing things in the war. And yes, drones have really accelerated big time in recent years in the conflicts that we see. We have one offer that we have sorted out as far as the portfolio goes, the slide is interesting from its design. It covers more than it shows, but maybe that you see that as an invitation to also visit us at the Paris Air Show because you're going to see most of these birds in the -- on the display there.

And you see a bit the different altitudes at which these aircraft fly, you see very much on the right-hand side, the highest 1 of those, which is what we call HAPS, high-altitude platform station, some people call it a pseudo satellite, a solar propelled glider that can stay in the stratosphere for months, can have Earth observation with a precision that is enabling almost to read the newspaper from there, has military secure communication capabilities is a lot cheaper than a satellite and has a lot more endurance than an aircraft or a drone that can classically fly at much lower altitude.

So this is really a concept that we have developed on our own dime that we expect a lot of traction. We're seeing that coming. It's a unique thing, and I think we will make that a very successful product. You see combo drones there that would point to FCAS and other fields of our activities. You see the euro drone, you see a small drone on the right-hand side called CERT-OP, it's a drone that we developed for Spain in only 3 years and will fly next year. It will be an army drone. It will also be on the Spanish aircraft carrier.

So we have a lot of drones in the portfolio that we maybe don't tell so much about that others do. We also are aware that sometimes other companies, smaller companies, startups are better at building certain types of drones, especially when they're small, when they are very inexpensive when we are to too big to be good enough for that. That's when we team up. You might have read about our partnership with Quantum Systems, a German startup, that's meanwhile a unicorn that is also active Ukraine. So we also think of the whole drone system as an ecosystem because we all need to learn fast.

There's so much happening with a lot of software updates and upgrades that happen in lightning speed in these conflicts, and we need to be ready to accommodate that. I move over to space. In space, we have a lot of discussion currently that also touches on other companies, Leonardo and Thales. You know that in possibilities and plans to potentially come together. I would say we have, again, by a margin, the widest and most complete portfolio. You see we have basically everything that you need in space, and we don't need to hide ourselves against any U.S. competition.

We have some of the most sophisticated earth observation satellites. You see [indiscernible] mentioned here as the one that probably has the highest resolution. We also have smaller ones, more inexpensive ones that now lend themselves to building constellations. Iza is talking a lot about a European resilience system, which is an Earth observation constellation. And I think it's the right thing to think about. We're active still in very much in science and exploration.

That is not always so defense prone, it's a lot of institutional business. It is if you will, also our contribution to fighting climate change. There's a lot of instruments, very sophisticated instruments that we built for exploration and science purses that monitor the climate that measure biomass on the planet as a measure of how much CO2 can be absorbed. And we are a big part at the core of the Artemis mission with the U.S., which is a bit in discussion right now, but we have we have 2 batches of the so-called European service module secured, and we're now seeing what the U.S. comes up with regards to the third batch.

Mills satellite telecommunication is the core at the beginning, if you will, of satellite as an infrastructure. We have shifted very much our focus to more military to MilSatCom. We still remain successful in commercial telecom because that's where the innovation comes from. This is where all the software in a lights actually have been created for and they're making now their way into military. So a bit of the reverse innovation cycle that you usually see where Mitry seems to be advanced and then it trickles over to the commercial side. Navigation, we built the second generation of the Galileo system, a navigation system, a PNS system, that is actually thought to be better than the GPS system.

So Europe can really do things if we get serious. And then we have some what leading space products that I would bet most people don't know here so much. We built them under certain brand names like TSAT and ENaOptronic and [indiscernible] to make very specialized equipment that other space companies also buy from us, but we also build them for ourselves.

And then lastly, to Connected Intelligence. The word intelligence might imply that this is very secretive and that's maybe why it's not so well known. In military lingo, if you think of the sensor to shooter connection that turns sensor information or sensor signals into information, decision and then ultimately sort of tells you what to do. This is what the CIA guys do all the way through. So we have, first of all, to make this all cyber secure. We have a cybersecurity branch in this business. We expand on that. We have bought smaller company last year named Infodas, which really complements our portfolio very nicely. We have a public safety and security business in CI that equips the blue light forces, police, fire departments and other security services with secure communication means.

By the way, we secured the Olympic Games in Paris through our teams and our solutions in public safety and security. Defense Digital is actually the core, especially in a more militarized and more volatile world of what CI does. This is really what -- where the command and control systems get programmed. The things that really connect, again, the sensor to the shooter. We benefit a lot from the additional attention and traction that ground-based air defense gets in Europe with a lot of catch-up that needs to be done. And Space Digital largely lastly is the business that turns the satellite data into valuable information.

There's a big part of commercial business that we have with that. were very, very detailed satellite maps get created, and you can look at them also on the Internet, but obviously also for military and intelligence process. Europe is fragmented still in defense. As many people have spoken about. We are not 1 unique market as the U.S. is or China is. We have several players in Europe. We compete against each other.

So one way of really creating traction and consolidate when you can't consolidate organically, well, from a company point of view, is to create JVs and partnerships. MBDA is a well-known example where Europe had 4 or 5 missile makers in different countries that were all subscale probably none of them would exist today if we hadn't come together in MBDA jointly with BAE Systems and Leonardo, we have a 37.5% stake in NBA as the other joint ventures consolidated at equity, MBDA, as you would assume, benefits a lot from the current situation and has huge growth and needs to now ramp up all of their products, which spend everything from air to air to air to ground to battlefield solution and everything else.

So really a very valuable stake that we have here in this company. Ariane Group is the joint venture that we share with Safran building the only European, heavy launchers and is called Ariane 6, which has had 2 successful flights so far and is ramping out now to a rate 10 and also, we are developing there the first European reusable launch of Myer. You could argue why is that coming so late against SpaceX and everything, but maybe we touch on that if there's questions in the Q&A.

Lastly, I mentioned Eurofighter already is a very successful coming together of the same 3 companies as an BAE Systems, Leonardo and Airbus representing 4 countries, the U.K., Germany, Spain and Italy, and we have 46% of that ownership and we see a lot of good traction going forward. The last partnership is maybe 1 of a special kind. Sometimes we call our competitors that we also team up with competimates in our industry, and that would be the case with Dassault. We compete on fighter aircraft. We partner in FCAS and in Eurodrone.

And Airbus has a shareholding of 10.5% in Dassel the numbers, I'm not going to read them to you, but they are a partner and investment and a competitor at the same time. Let me move on to what does this all lead to now when Europe wants to really double down and rearm and be able to defend ourselves with less and less us support that we can anticipate. Bruno has already shown the main areas that were identified in the EU white paper as priority areas. You see that on the left side, from missile and air defense through our tiller systems, which we don't do all the way down to strategic enablers and critical infrastructure protection, which directly points for instance at space.

And if you take this analysis and project it and transpose it into our ADS portfolio, we have almost something to offer every 1 of these single priority areas and gaps. You see a connection there. We try to depict that a little bit with numbers. So when Europe wants to build their own secure communication constellation in space called Iris Square. Of course, we should be part of it and we have something to offer there, including the way to that constellation. If BD if Europe needs to build now a lot of missiles to equip fighter aircraft with missiles and MDA will benefit from that.

And all the way through, I think the logic speaks itself. So what does that lead to? First of all, we expect quite significant order intake for the next couple of years. That will then lead to obviously top line growth a little bit later because it's then coming in chunks over the years afterwards. So in our estimation, this is scenario that we have modeled a super optimistic one, but not a pessimistic 1 either. Looking at the market, and I would ask you to look at the numbers at the Y-axis, so you don't confuse the sizes of the 3 different markets by the depiction, so they're slightly different, the y-axis but for better legibility.

So we do expect quite an uptick coming on the Air Power side, but it will probably come beyond 2030 because the order intake will now happen between now and '29. There will be growth already, as you see it in 28, but the chunk -- the biggest chunk of the growth will probably come a little bit later. The CAGR should be increasing in our expectation to at least 10% -- 9%, 10% range. On Connected Intelligence where we already have quite a significant growth. We see another uptick. It will only come from cyber, and it will come from what I call the commanding control systems because of all the other systems that get purchased and we equip land companies, air companies with those systems.

And then in space, where we would not have seen growth for the addressable market that we have as a European company, prior to rearm Europe, we see the world changing significantly. So we see, in this case, for the market on average, a 6% CAGR when we would have seen a flat market before. That will cover a lot of the military assets I touched on before. especially by earth observation and by telecommunication both as individual satellites, but also as constellations in the Leo and the low earth orbit. That should enable us, even without the rearm, I will say, because you see the benefits largely happening after 28 to move from this very unsatisfactory situation in '24, where the good work in Air Power and CI was destroyed, if you will, by the bad results in space, and we racked up $600 million in losses. to come to about a EUR 1 billion EBIT contribution for Airbus as a group by 28%.

We will do that through the transformation I spoke about before, you probably have read before. That also entails a job reduction program of more than 2,000 people. We are well progressed on that. We are ahead of the curve. -- and we are delivering on the cost reductions, especially also as far as fixed cost and overhead structures go. We deliver on our space turnaround plan. And also there, we are on track, we are -- we go all the way through. We have changed a lot of things in space from leadership to how we do bids, how risk management how good our project managers look also at contract management in all the little details that you need to do to turn such super complex projects with very ambitious and sophisticated customers into a profitable project at the end.

And we have worked a lot on the portfolio and a bid selectivity. The additional levers that we see beyond 28 should give us even more tailwind. I spoke about European defense and the upside there. We will continue to run and double down with the transformation. This is not a flash in the pan or just a 2-year or 3-year thing. We will make that a whole culture of driving performance, efficiency we see increased demand, and we see a need and an opportunity to become faster. The world in defense is turning much faster, the old times where customers took 3 years to write down books of specifications and handed them down to a few guys that then turned in bids and then 2 years later, somebody got selected developed for 10 years.

That's not going to work anymore, in the times that we see today. Everything will be software-defined, open architectures. We need to anticipate what's coming. We need to live with the fact that our customers don't always know what they might need in 3 and 5 and 10 years. So we need to be ahead of the curve and modify our approaches. So summarizing probably what I want to convey is a lot of focus on execution. I think we have the right portfolio. We have the right product already that we can benefit from with everything that's happening around us as we speak. We need to do the job correctly. We transformed the company in the right direction, and we prepare for the ramp up. I spoke about the Eurofighter before.

In Eurofighter, a few years back, the final assembly line in Germany was idled. It was then ramp back up again for the so-called Tranche 4 of the German efforts. It is now producing -- it was planned to be producing at a rate 10 per year. It is now producing at rate 40, we already have a fixed target to go to 20, and we're already planning to go to 30. So we basically are tripling our build rates on Eurofighter. We invest in light of what I spoke before, of in terms of this -- how do you succeed in this dynamic world of the customer not always knowing what precisely will the requirements of a product in 5 years. So we need to anticipate -- we need to also targetedly invest in areas we know there will be customer traction, where we have the capability to be early enough to the market, and it applies for the Zafeir that I just spoke about that applies for drones as a whole segment. and some very select areas as well that we will accelerate how things get done in the defense world.

And with team up, I spoke about the joint ventures. I spoke about the European programs that we have. There is a lot of work going into the consolidation, the possible consolidation of space of European space with the 3 players. That would be obviously a danger in terms of scale. -- and not only having the technology that we all have today on par with the U.S., but also creating a scale that is then basically at the same level as the big U.S. players. And we foster collaboration not only with the big guys, but with the small guys as well. We partner with drones. We have established an ecosystem way of thinking about future products that is also a culture change. I'm not denying that. That's part of our transformation, and it will help us to get faster and tap into markets and learn from situations that otherwise would be more difficult for us.

So with that, I've come to the close. Thank you very much for your attention. I hope it was not too much and the balance is right between product, portfolio, financials.

Thank you very much, Mike. I will now call back on stage Bruno for a joint Q&A session.

And I will move to the right-hand side of the room to make sure I see questions over there. We have a question on the third row.

Hello. [indiscernible]. So the tactical drone market is really crowded and fast-moving with AGL and ataltested players, as you've acknowledged. So what is Airbus current positioning and market share as you see -- you spoke about market share in all your business units. And given it's early days, if I may say, how do you plan to strengthen your presence? And what is your current strategy to compete effectively on this segment?

I think the first ambition, as you have understood, is to position ourselves on this tactical drone market, mainly driven by military and governmental needs. Our strategy is not to be exclusive, not cover all the need that we see on the market. There are some segments where we have to accept and recognize that in terms of agility and competitiveness were not the best 1 position, and that's the reason why with Mike, we have the view that it's not only developing ourselves by investing in our core product, but also by teaming.

So on your question, no specific ambition in terms of market share. it's really developing ourselves on this market. It's a growing opportunity for Airbus. So by positioning Airbus on this market, it will contribute to the growth the market. So on your question, timing because we also think that the opportunity is not only developing and ping product tactical drone like the one we have Airbus with helicopter like the 1 we have with the VSR700 we are developing the [indiscernible] we just acquired.

But teaming, combining platform and 1 at the end, proposing global solution. It's really where we see also a role for Airbus as a system provider and that's also the reason why you have probably seen communication, recent communication and services edge teaming that not only we have experimented, but that we now propose to the market. So I'm not clearly answer specific answer to your question on the market share. First, it's about developing, capturing opportunity, being a credible partner, proposing globalization based on our own product but again, open architecture that Mike mentioned is a key aspect also not being exclusive.

Some of our customers will have their own product, their own tactical drone and our role as a system provider is also to be able to connect with their own solution. So that's a way from our side to be competitive also in the way of working and that's where we can benefit. And Mike, again, you insist on this, we have in our organization also specific organization, Legolantity in the tactical drone we have in the South of France. So it's the kind of structure, agile, competitive that we can benefit from.

Maybe not much to add. You asked about tactical drones specifically. But if you look at drones as a whole, Europe started late. Let's just admit to that. So if I look at the portfolio that belongs more to ADS, yes, we are behind the U.S. We are book behind Israelis. We're behind the Turkish but I think we're now starting with a lot of pedal to the floor, and that entails, as Bruno said, a lot of partnering, but a lot of good products that we now have in development. and that will augment the few that we have already in service.

There is a question from Sash in the middle of the room, and then I've seen a hand on the right-hand side.

Sash Tusa, Agency Partners. Two questions on defense. First of all, just on the defense restructuring, as far as I can read, you're the only defense company in Europe, in fact, cutting your employees rather than increasing your number of employees. It doesn't give an impression that confident of gaining a lot of the presume increases in purchasing coming from rising defense budget?

And then second point on space. neither you nor [indiscernible] yesterday, were -- gave the impression that the consolidation was necessarily inevitable. I mean I think both of your comments have been quite nuanced. Would it be fair to say that the changes in the relationship between Europe and the U.S., particularly in the first quarter and some of the comments made by Elon Musk about ability to be turned on and off of sort of removed some of the pressure that you felt to consolidate there might be a big enough European market as it is.

Thank you for the questions. On the first one, I don't think I said we're cutting jobs, where we're cutting people. I'd say we're cutting jobs. That doesn't necessarily mean maybe it's a detail that doesn't seem that we're reducing the amount of people. We're cutting jobs that we think we don't need anymore, especially in the overhead and on the fixed cost side. We are actually continuing to hire for the people that we need to do what I've talked about, the ramp-up of the additional opportunities. So there's not a lack of confidence. There is a streamlining of the cost base. That's what's behind it.

On the consolidation in Europe, Well, you could argue that some of the things that Musk said in the U.S. has done have been a lot of almost like a sales agent for Europe for European companies that might be one way to look at it. I still think that the consolidation in Europe makes a lot of sense and is still needed because we do fight in the world market against very large players, not only SpaceX, if you look at the military market, you have Rocket Martin, you have Northrop Gilland, you have Boeing. I mean, they're all a lot bigger than any European company and when it comes exports, when it comes to other things, we're not only thinking of the European market, we face these companies with a lot of strong political push. So I think it would make a lot of sense to -- if you only...

[This call length has exceeded streaming capabilities - Please refer to the preliminary transcript that will be posted shortly.]