Airbus Group: Airbus management commits to improving shareholder returns, stock takes off

(BFM Bourse) – The financial director, Dominik Asam, explained that the company will take additional measures to remunerate its shareholders, once the group’s net cash position exceeds 10,000 million euros. Chief Executive Guillaume Faury told him a share buyback was one of the options being considered.

Airbus knows it. The market “shows no mercy” to groups that make “overly ambitious promises that are then not kept,” its chief financial officer, Dominik Asam, said on Friday. on Capital Market Day (“investor day”) of the aeronautical and defense group, the first in three years.

Maybe that’s whyAirbus avoided giving too precise a trajectory during this event aimed at giving investors visibility on the future of the company. During a presentation, Dominik Asam estimated that the group should return to its 2019 level of aircraft deliveries, i.e. 863 aircraft, sometime in 2024, over a twelve-month rolling period. With certainly slightly lower revenues, the group suffers from a less favorable product mix, with more A220s – the group’s smallest aircraft – and fewer jumbo jets, whose price is logically higher. Around 2025-2026, Airbus you should then see your deliveries break the 1,000 aircraft bar.

However, the most anticipated point by the financial community was probably the return to shareholders. And the aircraft manufacturer’s management did not disappoint on this issue.

The market appreciates

Dominik Asam explained that the group would always prefer the distribution of ordinary dividends and would try, in terms of distribution rate, to aim for the upper part of its historical range of 30% to 40% of net income.

The CFO immediately sent the signal the market was waiting for. “Yes, when we have reached our goal of a net cash position of €10 billion, and in the absence of imminent mergers and acquisitions, we will discuss with the board of directors additional means of returning cash to our shareholders,” warned the financial director.

Speaking afterwards, the Executive Chairman ofAirbus, Guillaume Faury drives home the point. “We are committed to growing shareholder returns,” he insisted.

Taking the lead in future questions, the group’s number 1 indicated that share buybacks (“buybacks”) constituted one of the tools planned by the company to improve shareholder profitability, once this threshold of 10,000 million euros was exceeded. net cash position. To be reached.

“We’re not there yet, but it could come soon enough and we look forward to having this discussion with our board of directors,” the leader added. At the end of June 2022, the net cash position ofAirbus amounted to 7,200 million euros.

These statements did not go unnoticed by the market. The action Airbus took off in reaction to comments from Dominik Asam and Guillaume Faury. Around 11:30 a.m., the aircraft manufacturer’s share gained 3% and signed by far the largest rise in a ACC 40 on difficulty (-0.9% at the same time).

An A320 family in incredible demand

Among other highlights of the management presentations, Dominik Asam estimated that the wide-body segment (A330, A350) is expected to break even by 2023. For the A220 programme, this is expected to happen by the middle of the decade. .

As for the A320 family, the group’s best-seller that includes single-aisle aircraft capable of certain long-haul flights, Dominik Asam confirmed monthly production rate targets of 65 aircraft in early 2024, then 75 in 2025. .

Above all, the director underlined a little more the strong appetite of the airlines for this family, a competitor of the Boeing 737. A “latent demand” for these aircraft has been created and Airbus it won’t be able to fully satisfy until 2028, explained Dominik Asam, despite the company’s planned production ramp-up.

Julien Marion – ©2022 BFM Bourse

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