Good morning, ladies and gentlemen. This is the Airbus full year 2024 results 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 and 15 minutes. 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 statements that appears in the presentation slide, which applies to this call as well. Please read it carefully. And now over to you, Guillaume.

Thank you, Helene. Good morning, everyone. And thank you for joining us this morning for our full year 2024 results call. I'm happy to be here in Toulouse with Thomas and Helene and to run you through our results. In 2024, we experienced another very strong order intake across all businesses, confirming the demand and positive outlook for our industry and also for our products and services. At the same time, we adapted to our operating environments, concentrating on what matters most. We refocused our efforts to progress on our priorities and secure our trajectory. On Defence and Space, we took further steps to transform the business and the organization. The extensive technical reviews of our space programs have now been completed. On Space Systems, we progressed on our three steps approach. We have fixed what I would call our foundation. We are executing our turnaround plan. And third, finally, we are evaluating strategic options. And in that sense, we have started exploratory discussions with Thales and Leonardo, and I will comment on it later. On Commercial Aircraft ramp-up, we prioritized activities and allocated our resources accordingly. We are upskilling our teams, collaborating closely with our suppliers, while keeping a laser focus on quality and safety. In a nutshell, we are progressing in an environment that remains complex, and as you can see yourself, fast changing. In that context, we delivered 766 commercial aircraft in 2024, including 269 in the last quarter, a year-on-year annual increase of plus 4%. This includes the very first XLR deliveries, A321XLR deliveries, unlocking new opportunities for our customers. We delivered on our revised guidance, and I consider it a real achievement in the environment I described. I am really proud of what the teams have achieved. And let me also underline the dedication of all our partners to come to that result. Now looking at our 2024 financial performance. Our EBIT adjusted stood at €5.4 billion, reflecting our commercial aircraft deliveries and a solid performance at helicopters. It also reflects a €1.3 billion of charges in our space programs for the full year, including a €0.3 billion charge recorded in Q4, resulting from the completion of the technical review, and Thomas will come back to it later. Our free cash flow before customer financing was at €4.5 billion, reflecting the strong performance in all businesses. These financial results with a net income of €4.2 billion and our confidence in our future financial performance supports our 2024 dividend proposal of €2 per share and a special dividend of €1 per share. With all that in mind, let's take a closer look at 2024, starting with financial positioning. So let's now look at our commercial environment starting with commercial aircraft. In 2024, travel demand remained robust, continuing to exceed historical records. This year was a successful one on the commercial front after the 2023 record year. We had customers reordering the same family of aircraft, while some of our product lines welcomed new customers. In 2024, we booked 878 gross orders, including 211 in Q4. On the A220, we booked 17 gross orders, gaining four new operators. Looking at the A320 family, we booked 637 gross orders, including 180 in the fourth quarter, bringing our backlog to 7,210 aircraft, thereof more than two thirds are for the A321. Moving to the widebodies. We recorded 224 gross orders, underpinning the continued momentum for our widebody family. Net orders amounted to 826 aircraft, including 52 cancellations, and our backlog in units increased to 8,658 aircraft at the end of December, reflecting a book-to-bill above 1. At group level, our backlog in value increased to €629 billion in 2024, mainly reflecting the book-to-bill above 1 I mentioned before for all divisions and the strengthening of the US dollar. Looking at helicopters. I see 2024 as an exceptional year for Airbus helicopters. We booked 450 net orders compared to 393 in 2023 with a book-to-bill above 1, both in units and value, highlighting a strong demand for our platforms. And we also secured a good order intake on services. This includes the remarkable performance of the so-called Super Puma family or the H225 family, for which, in the fourth quarter, we signed a contract with the Dutch Ministry of Defence for 12 H225Ms. We continue to see positive momentum in both the civil and military markets, and we remain focused on securing new business opportunities in both our home countries and on export markets. Then in Defence and Space, in 2024, our order intake stood at €16.7 billion, up 6% year-on-year, corresponding to a book-to-bill of around 1.4. It is the record order intake, and this is for the second year in a row, while being more selective on our biddings and more prudent on the risk profiles. I am obviously very satisfied with this. I see it as a proof that we have the right products and services in the current environment and for our customers. Key orders recorded in Q4 reflect a strong momentum across all business lines, and in particular, on the so-called Air Power side. On Eurofighter, we are proud to highlight that the Spanish government has signed the Halcon II contract for the acquisition of 25 Eurofighter aircraft to be assembled, tested and delivered at the Airbus Getafe site. In addition, Italy also placed an order for up to 24 Eurofighters. With this contract, both countries will further expand their existing fleet. Concerning the A400M, Airbus Defence and Space signed two strategic contracts with the organization for Joint Armament Cooperation, the OCCAR. The first is the global support services, called GSS3 contract, which provides a full range of tailored services, and the other being the so-called Block Upgrade zero contract, which represents the first upgrade of the A400M operational capabilities beyond the scope of the original launch contract. On space, we have been awarded a contract by Eutelsat to build the extension of its OneWeb low-earth orbit, LEO, constellation in December. Here, let me recall our plan. Now we have completed the technical reviews, as I said earlier. We continue to execute our turnaround plan and notably with the organization and the workforce adaptation. Additionally, we have started, what I call, exploratory discussions with Thales and Leonardo. These discussions, which are preliminary and nonbinding at this stage, aim at assessing different scenarios to consolidate and strengthen the European space sector and add value to the main stakeholders of this industry. And now Thomas will take you through our financials. Thomas?

Well, thank you, Guillaume. Hello, ladies and gentlemen. Thank you for joining our call. I'm now on Page 6 of the presentation, and I'll take you through our financial performance. So as you can see, our full year 2024 revenues increased to €69.2 billion, which is up 6% year-on-year, and it's mainly reflecting the number of deliveries of commercial aircraft and helicopters and also higher volume in our Air Power business. On R&D, as you can see on the right-hand side of the page, our expenses stood at €3.3 billion in 2024, stable compared to 2023, and indeed, two factors compensated for the slight increase that we had initially anticipated. First, the lead initiative, which I repeat to say is not a cost-cutting program, but which aims at prioritizing activities and projects to focus on what matters, that also resulted in a slightly lower R&D expense for the year. And secondly, the earlier capitalization of our development costs in our commercial aircraft business, which we initiated in the third quarter in order to align with accounting standards also resulted in lower R&D expenses with, of course, the opposite effect on our CapEx. And you remember that I mentioned that effect already in Q3. And now if you look forward, R&D expenses are expected to only marginally increase in 2025, consistent with the lead prioritization initiative, as you have already observed it in Q4. On our EBIT adjusted, our full year 2024 EBIT adjusted decreased to €5.4 billion from €5.8 billion in 2023. And so let's start with a look at 2023 first. As you might remember, 2023 benefited from the progress that we made on our compliance topics, which allowed us then to release provisions for an amount of €0.1 billion in commercial aircraft, but 2023 numbers also contained updated assumptions on some long-term contracts in our space business resulting in a charge of €0.6 billion. Now in 2024, the positive contribution from the higher commercial aircraft deliveries was partially offset by investments to prepare for the future, notably the excess workforce as well as a slightly less favorable hedge rate. And the underlying performance was also supported by the solid performance of our helicopters division. Now in Q4, and as planned, we completed the in-depth technical review of our space programs, notably with a major program that remains to be fully assessed. And that resulted in a charge of €0.3 billion in the last quarter, mainly from the update of key assumptions. And that brings the total charges for the full year to €1.3 billion, which obviously is then the major driver of the decrease in our EBIT adjusted compared to the previous year. And this charge reflects the extensive and profound work done by the team, program by program, leading to revised assumptions and resulting in lowering our risk profile looking forward in a business that remains inherently complex and with increased competition. So let me recall here that this charge accounts for past, present and also future profitability, and hence, only a portion of the charge actually relates to the current period. And therefore, two thirds is probably the right order of magnitude to be normalized in your models. Our focus now about delivering on our plan in a simpler organization with end-to-end accountability and leveraging the reuse of technologies. Now while on Defence and Space, we are progressing in the discussions with our social partners with regard to the division reorganization and workforce adaptation and a restructuring provision is expected to be recognized once the necessary conditions are fulfilled, and the amount is expected to be around €0.2 billion. Now coming to the EBIT adjustments, which were slightly negative in the full year 2024. They included, as you can see on the page, a positive €101 million impact from the dollar working capital mismatch and balance sheet revaluation, of which €247 million in Q4. It included a negative €121 million related to the A400M, of which negative €118 million in Q4. It also included a positive €51 million related to the gain of -- on Airbus OneWeb satellites linked to the acquisition of the remaining 50% of the joint venture, which we recorded already in the first quarter. Then there is a negative €40 million related to the recently announced termination of the Airbus Beluga transport business. And finally, another negative €41 million of other costs, including compliance and M&A, of which negative €31 million in Q4. And so that takes our full year EBIT reported for 2024 to €5.3 billion. As you can also see on the page on the right-hand side, the financial result was a positive €121 million and mainly reflects the revaluation of certain equity investments and the evolution of the US dollar, partially offset by the interest result and the revaluation of financial instruments. If you talk about tax, our tax rate on the core business continues to be around 27%. Now with respect to the French surtax, we confirm our previous assessment of an impact of around €300 million, but we now expect that it will materialize in 2025, both with respect to the P&L and also with respect to the cash flow. Our effective tax rate for 2024 is 25%, and that includes the tax effect on the revaluation of certain equity investments as well as the review of deferred tax positions and tax risk updates. And so the resulting net income is €4.2 billion, with earnings per share reported of €5.36 per share, and our full year 2024 EPS adjusted stood at €5.05 based on an average of 790 million shares. And now based on these results and our confidence in our future financial performance, we will propose for 2024 a dividend of €2 per share, plus a special dividend of €1 per share, which we believe is the most appropriate tool to reinforce our commitment at this point in time. Now on our US dollar exposure coverage, and I'm on Page 8 of the presentation. In 2024, $23.2 billion of forwards matured with associated EBIT impact and euro conversions realized at a blended rate of $1.21 versus $1.20 in 2023. And in the financial year 2024, we also implemented $14.3 billion of new coverage at a blended rate of $1.11. So as a result, our total U.S. dollar coverage portfolio in U.S. dollar stands at $82.8 billion with an average blended rate of $1.21 as compared to $91.7 billion at $1.23 at the end of 2023. And so indeed, as you can see, against the backdrop of the market conditions, we decided to decrease our U.S. dollar coverage by roughly USD 9 billion in 2024. What I should also say is that our portfolio is currently being adjusted by implementing some rollovers to reflect the delivery target for 2025 and also the delivery profile, which we expect to be back-end loaded. Now let's have a more detailed look at our free cash flow, and I'm on Page 9 of the presentation. Our free cash flow before customer financing was €4.5 billion in 2024, and this mainly reflects the level of deliveries as well as the commercial momentum across all our businesses, resulting in a healthy PDP inflow, while the planned inventory buildup reflects the ramp-up across the programs. The A400M continued to weigh negatively on our free cash flow, and our full year 2024 CapEx was negative €3.7 billion, and this obviously reflects the investments in enhancing and upgrading our industrial system and also the change in development cost capitalization that I talked about earlier. To support our ramp-up, we expect CapEx to slightly increase in 2025. The free cash flow was €4.5 billion as well with a very minor impact from customer financing. And in that context, the aircraft financing environment, in our view, remains strong and competitive, and we currently expect sufficient liquidity from diverse sources to finance the 2025 deliveries. And to round it up, our net cash position stood at €11.8 billion as of the end of December, also supported by the strengthening of the dollar towards the year-end. And our total liquidity is now at around €35 billion. And with that, I would like to hand it back to Guillaume.

Thank you, Thomas. A beautiful picture of the 225M in the meantime. So let's start with commercial aircraft, Page 11. In 2024, as already said, we delivered 766 aircraft to 86 customers. Looking now at the situation by aircraft family. On so-called narrow bodies, we delivered 75 A220s and 602 A320 aircraft, of which 361 A321s, representing 60% of deliveries for the family, so 60% of A321 for the family. On A320, we continue to ramp up towards a rate of 75 A320 family aircraft per month in 2027. No change. We are very pleased that our newest aircraft, the A321XLR, entered into service. The first A321XLR was delivered to Iberia in October, followed by two more to Airlink. The A321XLR brings unique capabilities in terms of range, economics and environmental efficiency, great product. We delivered 89 widebodies, of which 32 A330s and 57 A350s, including first deliveries to new operators. On the A330, we are now stabilizing at a monthly production rate of around four per month. Specific supply chain challenges, notably with Spirit AeroSystems, are currently putting pressure on the ramp-up of both the A350 and the A220. On the A350, we continue to target the rate 12 in 2028. So again, no change here. And we are adjusting the entry-into-service of the freighter variant which is now expected in the second half of 2027. And here, it's a change. And on the freighter, the first flight test aircraft will enter the final assembly line this year. On the A220, we continue towards a monthly production rate of 14 aircraft in 2026. So in a nutshell, we are progressing on our ramp-up trajectory. We are still facing some specific supply chain issues. The tensions on engines for narrow-body persist, notably with CFM, and this is already affecting us as we begin to have the so-called gliders, meaning aircraft waiting for their engines -- aircraft being fully assembled, but waiting for their engines. This will result in a low delivery number for Q1. This is something we saw coming already last year, and Q1, which will be lower than last year. We expect this situation to continue until the summer before it normalizes in the second half of the year. As for Cabin & equipment, it is structural, resulting from the air traffic recovery and the demand for customer upgrades. On Aerostructures, and as previously said, our activities are also affected by the supply chain challenges on Spirit AeroSystems. We will provide more color on the ongoing acquisition later. Now let's look at the financials for our commercial aircraft business. Revenues increased 6% year-on-year, mainly reflecting a higher number of deliveries. EBIT adjusted increased to €5.1 billion from €4.8 billion in 2023, with increase in deliveries being partially offset by investments for preparing the future, including some expert workforce. Looking at helicopters. In 2024, we delivered 361 helicopters, which is 15 more than in 2023. Revenue increased 8% to €7.9 billion, reflecting higher deliveries, a solid performance across programs and services growth. As a result, EBIT adjusted increased to €818 million, and the profit margin stood at 10.3%, in line with our ambition for sustained profitability while maintaining our commitment to sound execution and continuous improvement. And let's complete the review with Defence and Space. In 2024, revenues increased 5% year-on-year to €12.1 billion, mainly driven by the Air Power business. EBIT adjusted reflects the €1.3 billion of charges in space, described by Thomas. Here, I would like to recall that 2023 also included €0.6 billion of charges. Both impacts resulted mainly from the update of the estimate at completion assumptions, the EAC assumptions, in our space programs. I'd like to recall what Thomas said earlier. With the extensive technical review now completed, the focus is now about delivering on our commitments in the space business in a business that remains complex. On A400M, we delivered seven aircraft in 2024, including the first for Kazakhstan, an export customer and ninth country to operate the aircraft. In 2024, an additional update of the contract estimate at completion was performed, and a net charge of €121 million recorded, reflecting mainly updated assumptions regarding the new contract amendments with the Launch Nations and OCCAR and risks in the production planning. In light of uncertainty surrounding the level of aircraft orders, the company continues to assess the potential impact on the program's manufacturing activities and risks on the qualification of technical capabilities and associated costs remained stable with no major variation compared to 2023. And yes, before moving to the 2025 guidance, Thomas will give you more color on Spirit AeroSystems.

Yes, happy to do so, and I'm on Page 14 of the presentation. So on Spirit AeroSystems, and as we explained in our H1 call, we signed a binding term sheet agreement, and this is what I would call a defensive move in order to secure both the immediate operations and the future of major Airbus work packages, and it also provided more certainty to the employees and the supply chain contributing to Airbus activities. Since the term sheet signature, we have progressed on our due diligence while assessing the most suitable ways to integrate each production site into our operating model. And because of the number of stakeholders involved, more time is required to finalize the transaction. So as a consequence and as we gain more in-depth knowledge of the operational situation, the financial outlook is more challenging than what we had originally anticipated. And indeed, to support the A350 and the A220 ramp up, we will need to invest in order to increase production capabilities and drive operational efficiency. So therefore, let me say a few words about the expected financial impact based on preliminary assumptions. Assuming a closing date mid of the year, the 2025 impact on EBIT adjusted should be roughly neutral. When it comes to EBIT reported, it will likely have a mid-triple digit positive impact mainly due to the deal compensation to be received from Spirit AeroSystems. And finally, the net cash impact is expected to be roughly neutral as well as the compensation will offset the negative free cash flow impact from customer -- before customer financing. Now in 2026 and 2027, we expect a low triple-digit negative impact on EBIT adjusted and up to a mid-triple-digit negative impact on free cash flow before customer financing per year. And our teams are working hard to deliver this project, which is clearly one of our key priorities for 2025. And with that, Guillaume will now take you through our guidance.

Thank you, Thomas. So Page 16, and as the basis for the 2025 guidance, the company assumes no additional disruptions to global trade or the world economy, air traffic, the supply chain, the company's internal operations and its ability to deliver products and services. And let me be specific. The guidance excludes the impact of potential new tariffs on the company's business. The company's 2025 guidance includes the integration of certain Spirit AeroSystems work packages based on preliminary estimates and a closing assumptions as of 1st of July, as just explained by Thomas. On that basis, the company targets to achieve in 2025, around 820 commercial aircraft deliveries, EBIT adjusted of around €7 billion and free cash flow before customer financing of around €4.5 billion. And we will conclude with our key priorities on Slide 17. We are committed to serving our customers in 2025, while maintaining our strong commercial position across all businesses, which represents a source of strength and stability. In doing so, we'll continue to focus on the commercial aircraft ramp-up and the Defence and Space transformation. When it comes to the ramp-up, we aim at improving our ability to deliver on time and quality. We will continue shaping our industrial systems, notably with the integration of Spirit AeroSystems, and managing a deep and interdependent supply chain with a complex and ever fast-changing environment. Put simply, we will have to be at the top of our game in 2025. On the transformation of Defence and Space, we will keep executing our turnaround plan and pursue the workforce adaptation in close cooperation with our social partners while looking at the different scenarios to create scale in the space business. These priorities are enablers for profitable growth and our ambition to lead the development of sustainable aerospace. Climate change is one critical challenge for humanity, and 2024 was the warmest year on record globally. At Airbus, we aim to decarbonize aviation over the long term. We will, therefore, continue to improve the environmental performance of our products and operations as well as act as a catalyst in the development of sustainable aviation fuels. On hydrogen, we have the ambition to bring a commercially viable, fully electric, hydrogen-powered commercial aircraft into service. This is not changing. We believe fuel cell technology to be the most promising to fulfill this ambition. The scaling up of the hydrogen ecosystem is challenging and is unfortunately progressing at a slower pace than we had previously anticipated. The scalability of fuel cell technologies towards a commercially viable product will also require more time. This is what we have learned through our efforts in the past years. While a commercially viable product is now expected to come later than 2035. We will use this additional time to further develop the performance of the fuel cell propulsion and the liquid hydrogen system technologies. And with all of this in mind, we are entering 2025 with focus, determination and a lot of positive energy. We are now ready to take your questions.

We'll now start our Q&A session. Please introduce yourself and your company when asking your question. Please limit yourself to two questions at a time and this includes sub-questions. Also as usual, please remember to speak clearly and slowly in order to help all participants particularly yourself to understand your question. So Sandra, please go ahead and explain the procedure for the participants.

[Operator Instructions] We will now take the first question. The first question is from the line of Benjamin Heelan from Bank of America.

Can you talk a little bit more about Spirit and the challenges in the second half of the year? And just kind of outline a little bit what actually is happening? What are the challenges, what are they struggling with, is it labor, is it capacity? Just a little bit more color on that.

What are the challenges? I think there's two things. Let me start with the operations of Spirit. As you're well aware, there was a major strike at Boeing, which obviously also affected Spirit because Boeing is a major client, and that led to more disruptions in the work of the company, which is also not helpful for the work packages that we have -- that we want to acquire. And therefore, more support was needed to make sure that Spirit is on a stable path both operationally and also financially. Secondly, as we are, of course, diving deeper into the work packages, we had a better picture of what is the needed investment that we have to make to bring Spirit to a level that it can fully support the ramp-up that we're planning for the A350 and the A220, and that updated knowledge is now reflected in our assumptions. And last but not least, as you can observe, it does take some time to get to a final signature and then also closing of the contract, I think we're in a good way. But of course, with more than two parties involved and a quite complex transaction by nature, this simply took some time. But again, I would say that we're on a good track, making good progress here. And therefore, we have incorporated in our guidance the assumption which I think is very realistic that we will come to closing by the middle of the year.

And another question, I guess, one for Guillaume. Guillaume, you've talked about space and the discussions that you're currently in with Thales and Leonardo. What do you actually -- like what is a good outcome for you from these negotiations? What are you hoping to achieve, is it to create a European champion which Airbus can be part of, is it to consolidate the other assets ourself? Can you just give us a little bit of color, in a good scenario, what do you see is the outcome of these negotiations?

Ben, very early for you. What we expect is to gain scale and speed by consolidating the business. We are in businesses where scale matters, in businesses where technologies grow very fast, so you need to invest. And to invest, you need the scale, to have the reasonable impact on the recurring costs, you need to have scale on the production as well. So we are in a situation where some US players are disrupting the ecosystem and going at scale on new technologies on constellation. We have, in Europe, at Airbus, but also looking at Thales Alenia Space and Telespazio. We have technologies, in some cases, even better ones, but we are missing the scale that we need to be competitive in this new environment. So we want to create the scale. We want Airbus to have a stake in a large company. We would be happy if the end result looks like something like the MBDA model, where we have a significant share with others in a business that can prosper, that can grow, that can invest and that can be successful on a global scale. Now we are looking at different scenarios. And we are not at a point where we can fully answer the questions of what it will look like. But again, what do we want? We want scale and speed in this business. We want to leverage the technologies, the competencies we have. And for this, we need to be up to global competition which is indeed now with much more dollars and much more speed than ever.

And just a very, very quick one. Is there any chance that Ariane could be part of that?

Yes?

Is there any chance that Ariane could be part of that negotiation as well?

The ongoing effort to come to a different result is on satellites and satellite services. It's excluding...

The next question is from Mr. Tristan Sanson from BNP Paribas.

The first one is on raw materials. Can you, Guillaume, give us a quick view on how you see the raw material supply situation in 2025? And how do you think it's going to support the ramp-up plan for the years to come? And the second question is a quick one, but can you confirm that on the Spirit, the financial of the Spirit deal, the revision of the cash costs related to the integration of the assets are in the range of about €1 billion over a period of three years, is that the right magnitude?

I will let Thomas answer the second question. I'm not sure I fully understood the question myself. On the first one, raw material, well, that's been a source of worries and challenges in the past years, especially in the wake of COVID and the war in Ukraine. That has normalized in the meantime, and I don't see raw material on my list of critical bottlenecks for 2025.

So on Spirit, I know that maybe the financial impact is slightly complicated to bring across. So the situation is that we will receive a compensation for taking over the work packages, but this will not be reflected in our free cash flow, but only in our net cash position, but it will compensate for the negative free cash flow in 2025. So therefore, the total cash impact, if you look at our net cash position 2025, will be neutral. But as we indicated in the slide, we do expect a further cash need in 2026 and 2027 of up to a mid-triple digit negative impact per year in each of those two years. So I think coming back to what you said, that then can add up to something which is below €1 billion for those -- for the time frame that we indicated.

The next question comes from the line of Mr. David Perry from JPMorgan.

I just wonder if you can help us a little bit with the delivery guidance. I know you say around 820, but let's just assume it's 820, it's 54 extra planes. Can you just help us think about the different models? I mean, A350 deliveries are actually down in '24. So are they expected to pick up again in '25? And what's it implying for the growth in the A320 in particular?

David, we would like to split by model because that's the flexibility we used along the year to reach the guidance. And we always have ups and downs and challenges here and there, and we count on the volume to not be too wrong when we give a guidance at the beginning of the year. Now the only, well, indication I can give you is that we are struggling with the ramp-up on the A350 and the A220 against the backdrop of one stronger bottleneck, which is Spirit AeroSystems, and that's why we're speaking so much about Spirit AeroSystems. So our trajectory or ramp-up trajectory on those two programs is significantly impacted in 2025 by these difficulties.

And do you think deliveries will actually increase on those two models?

I don't want to answer that question today, David, but the ramp-up is under pressure.

The next question is from the line of Ross Law from Morgan Stanley.

The first one is just on engines. What exactly is driving the lower supply in H1, is this just simply an allocation issue between OE and aftermarket or is there anything else going on with the engine suppliers? And then just on the special dividend, it's going to cost you around €800 million in total, but net cash was €11.8 billion, so about €1.8 billion above the €10 billion threshold. So why wasn't the special dividend slightly higher? Are you saving additional cash for something in particular?

Thank you for the questions, and I will hand over the latter to Thomas. On engines, yes, as well an important one. I would say no specific comments on the widebodies, and we get from Rolls-Royce what we need for 2025 and onwards. There are challenges on engines for our narrow bodies. On the GTF of Pratt & Whitney, we are still limited by the aftermath of the metal powder issues two years ago and the trajectory that was redefined in two waves of negotiation with them, I think, as far as I remember, in 2023. They are on trajectory, but we knew this would come with less engines for new aircraft to support as good -- as reasonably good as possible the in-service fleet, knowing that there's a large number of aircraft, which are on the ground because having their engines in the recall campaign for this technical issue or this production issue. So this is low, but I would say, more or less as planned or even more on plan. What is very different for CFM, CFM encountered in the back end of 2024 several issues, production issues and one also linked to damage one of the plant of their supplier in Florida in the wake of the hurricane that took place. So they found theirselves with a very critical situation on supply of some parts that impacted both aircraft for aircraft manufacturer and to support the fleet. That was the source of a lot of arm twisting between the stakeholders end of last year for the allocation of engine. CFM supported us in the last month to help deliver aircraft to our customers, but we knew there would be some missing hardware this year, beginning of this year, and this is impacting us and our customers. So we are in that situation, and there is a sort of normalization that is planned around midyear. So that's what we tried to explain in the call earlier. So we have different situations for different aircraft.

And on the dividend, I mean let me just recall we said, once we achieve the €10 billion net cash threshold, we would look into the potential further shareholder returns, and that's exactly what we have done last year and that's what we're doing also this year. But we also said it would not be a mechanistic exercise in terms of cashing out exactly the overshooting amount. So we are looking into the factors. Obviously, that matter. One of them is the fact that a non-insignificant part of the overshooting comes from a pure translation effect of our dollar cash reserves, which are translated into euro. And therefore, we felt the right balance would be the €1 special dividend per share also for 2024.

The next question is from the line of Chloe Lemarie from Jefferies.

I have two, if I may. The first one is on the additional charge in Defence and Space. So it seems like it's not linked to the completion of the review on this one project that remained outstanding. So could you please confirm what really drove that revision and your level of confidence you now have fully de-risked the space business? And the second one would be on the 2024 to 2025 EBIT bridge. I was wondering, in particular, if you could split out what you factor in for potential ramp-up cost and inflation, please.

So first, on the charge. Let me be very clear, we did complete the review of all our space programs. We said last time on the call, that there was one major program still outstanding where we only had built a top-down assumption but we had to go through the program in detail bottom-up to fully review what we have in our portfolio, and that we have done. So the review is complete. It was very detailed. And therefore, I would really say that this exercise is now behind us. And as Guillaume said, we can now completely focus on what matters in the business, which is taking orders with a good risk profile, focusing on the execution and the delivery. And therefore, I would say we're done with a cleaning exercise, which, however, does, of course, not mean that it's a business without any risk. Just by nature, I think we will always have some up and downs, but the exercise of 2023 and '24 is behind us. And with respect to the bridge in terms of inflation from 2024 to 2025, yes, we're still assuming a small amount of inflation. Remember, in the past, we said it could be up to €200 million. I would probably say that it could be slightly less than that in 2025.

And ramp-up costs, anything that you factored in?

I mean, we're factoring in the normal ramp-up cost for getting to our rates, but I think this is not a special item in the bridge. So it's part of the inflation and it's part of the excess workforce that we have in 2024. We will continue -- I mean, as you've seen or as you might have seen, we hired 9,000 people in 2024. However, almost 50% of that is scope changes. So the real like-for-like increase is probably more like 5,000 FTEs, and we're expecting that we will continue to hire people, however, at a lower pace than '25 relative to 2024. And if you want to call that ramp-up cost, that is probably what we have in our plan for the current year.

The next question is from the line of Doug Harned from Bernstein.

On the A350, when you look at the slower ramp right now, can you describe how much of the effect is coming from issues at Spirit versus issues with interiors, which have been continuing for some time? That's the first question. And then second, we're in an uncertain environment right now with respect to US tariffs. Can you talk about how you're thinking about the potential impact on Airbus and are there some steps that you're taking to mitigate any potential impact of possible tariffs?

When it comes to the A350, the impact of the Spirit and the interiors manufacturers are of very different nature. When it comes to Spirit Section 15, we just can't build the plane. So that's really slowing us down on the ramp-up itself. When it comes to interiors and what we have experienced so far, we have delays in seats, in monuments and things like this, that is delaying the time at which we can deliver a plane fully completed and deliver it on time. But it's not slowing us down on the ramp-up itself. So the bottleneck that is really the big issue for the ramp-up itself at the moment on the A350 is Section 15 of Spirit, and that's really a pity. That's why we're putting all our efforts on that one because that's what we need to debottleneck and do the ramp-up, which is fully prepared when we look at the rest and plenty of partner suppliers' impatience to deliver and help us in delivering on that ramp-up. So I hope that's answering your question. When it comes to US tariffs, well, we have all our sensors on. We're trying to fully understand and try to reasonably anticipate what could happen, but it's obviously very difficult. We are, like others, facing uncertainty when it comes to the tariffs, the nature of the tariffs, the goods they would impact, the countries that would be more impacted depending on the trade balance they have with the US, depending on VAT they're applying, depending on the currency and the exchange rates, so a lot of factors have been mentioned, and we believe it's very difficult to really anticipate what will come. So we have not taken major actions so far, some minor here and there to adapt or to try to reasonably anticipate. But we have not changed the production system, the sourcing. And we think we have a number of possibilities with that when things will come if and when they come. We have a very strong demand for our products. We have a production system because of supply is oversized at the moment. So we have a number of reasons to believe we could adapt to what would come. We have a very strong demand from outside of the US but we have also a production system in the US. And we've tried to do in the past years what we thought would be necessary to be seen as a major US player in the US to be respected for what we do for US customers, sourcing from US suppliers, having a US workforce, and we hope that, that will pay off. So that's where we are at the moment. And we are more in a wait-and-see mode. We decided as well to issue a guidance in this uncertain environment to share what we think we can do, absent tariffs. And then the tariffs will be what they will be, and we will have to adapt accordingly.

The next question is from the line of Olivier Brochet from Redburn Atlantic.

I have two, if I may. The first one is on the cash flow for '25 to '27. Could you give us a sense of how the A400M outflow evolves over that period and the space cash outflow? That's the first one. And the second one, how do you assess the risk that the issues on the A350 Spirit continue into 2026?

You'll take the first one?

Yes, let me take the first one on the cash flow. So the A400M, let me start by the A400M was still negatively weighting on our cash flow in 2024. But consistent with what we have said in the past, we do expect that the A400M will be more or less neutral in 2025 and then starting to be slightly accretive in 2026 and beyond. So I think that is what we've said in the past, and that is still what we are expecting to come. With respect to space, we are not expecting a negative cash burden through our space business in 2025. Obviously, the charges that we took were mostly P&L related and only to a minor extent, burdening our space business. So it has a negative impact on the profitability, as you can see also through the normalization, but we're not expecting any major cash charges in 2025 going forward, and therefore nothing specifically to be taken in your models.

And when it comes to the A350, as you have heard from my briefing, we continue to target the rate 12 in 2028, which means that we consider ourselves on trajectory for the ramp-up besides the bottleneck of Spirit. It's very important for us to be able to integrate the wealth packages A350, A220 ASAP. We assume that we would be in a position of signing by mid of this year, and having integrated the Spirit work packages by mid of this year. And we believe that having this at Airbus with Airbus, with our experts and capabilities, we could and we will manage to do the ramp-up. Now there are uncertainties, but we see as well as highlighted by Thomas, that the current situation of Spirit as a company has a lot of negative impact on their ability to deliver to us. They are, what I would call, distractions or challenges at Spirit, which are linked to the situation of the company. And that would obviously be cleared when we will be the owner of those work packages, and we will be able to fully deploy our workforce, our power, our engineers, our production specialists at the site. We will be able to put the right investments at the right time to do the ramp-up of those work packages and support us in the ramp-up. So it's important that we can move forward on the integration of the work packages. And this being done mid of the year, I would support the further ramp-ups and reaching the rate 12 in 2028 for the A350.

The next question is from the line of Christophe Menard from Deutsche Bank.

The first one would be on the free cash flow bridge from '24 to '25. Could you help us understand the moving parts? I understand the Spirit aspect has to be excluded, I mean, the compensation. Also from the previous question, I understand that there is no space impact, as you just said. So just to understand the bridge in terms of the free cash flow. And the other question was also related to A400M. Can you comment on the commercial outlook? I mean, you said that you were very more selective on the contract quality. So what commercial outlook are you considering for the coming years? I mean I think the last deliveries is in 2029, as per the current backlog. So what are -- what do you have in mind for other contracts?

So let me start with the cash flow and just be very clear. So on Spirit, as I said, we will -- we are assuming that the transaction will close at the middle of the year. And we will receive a compensation. We indicated the $559 million that we have contractually or that we have in the term sheet. However, they will not be recognized in free cash flow. And therefore, it is a burden to our free cash flow in 2025. However, the compensation that we will receive, of course, will have an impact on our net cash position. So it is cash that we will find in our accounts, and therefore, you will have a negative effect on our free cash flow through Spirit, and you will have a neutral effect when it comes to the net cash position of the company. And that, I think then also explains pretty much the bridge. On the one hand, you have an increase in our operating results through the higher deliveries and obviously, through the non-repeat of the space charges, which, however, were mostly not cash flow in nature, and the positive impact from the operations will be then partly compensated or compensated by the negative impact from Spirit so that you land at the around €4.5 billion, which is very close to what we had in 2024.

And on the A400M, we have, by end of 2024, 48 nondelivered aircraft in the backlog. So that's what we have ahead of us. And we are engaged in export campaigns that take more time to come to conclusions than what I'd like. That's something we need to take into account. We are indeed selective in our orders. The comment was mostly related to space where we took a lot of risks in development contracts with a lot of new technologies between 2018 and 2021. That doesn't relate too much to Air Power. And on the A400M, what we are offering to export customers is very close to what we have already done for our own country customers. So it's, by far, less risk loaded anyway.

The next question is from the line of Robert Stallard from Vertical Research.

A couple of questions for you. First of all, Guillaume, with regard to your delivery forecast of around 820 aircraft, how confident are you that this year, Airbus can meet that delivery given the supply chain challenges and what's occurred over the last two years? And then secondly, specific to supply chain question, does Airbus have any exposure to the Precision Castparts plant that's burned down in Pennsylvania?

So when it comes to the deliveries, and you said what happened in the last two years, suggesting it didn't go well, well, I'd like to look back and with hindsight reflect on the fact that the guidance for -- or the objective we had for 2023 was 720 and the objective we had for '24 was 800, when we found ourselves end of 2022 and looking forward. That makes 1,520 planes. And with the 735, that was 15 more than what we targeted in '23 and the 766, that must make a total that is close to the 1,500. I think we have 1501, if I count correctly. So we are 19 planes behind over two years compared to 1,520, so that's close to 1%. So I would consider that against the backdrop of so many challenges of all the unexpected difficulties, including what you mentioned about Pennsylvania that is not impacting directly Airbus, but it's impacting indirectly Airbus through our supply chain and some of our major Tier 1 suppliers, what we have managed to pull out in terms of deliveries is probably not so bad. And actually, as I said earlier, I'm really proud of how the team have managed to find solutions to those many problems. So if we give -- and because we give a guidance of 820 -- around 820 at this point in the year is because we believe it's a reasonable number, and we are reasonably confident we will be able to deliver around 820 planes this year. We start 2025 with a bit of a specific situation that we know Q1 will be low, will be lower than last year against the difficulties on the CFM, in particular, but not only. So that's a bit of a specific challenge for 2025. But we have also some more visibility on a lot of our suppliers. We see that the tube, I would say that the underlying capability of the system to deliver at rate is strong, it's good. So it's again a challenge coming from the supply chain, and we will need our suppliers to deliver roughly on their commitments, including the ones that have their difficulties, there are known difficulties to deliver on those numbers. Now we took the liberty or the freedom to give a guidance absent tariffs, because we don't know what the tariffs will look like. They might impact if they come and depending on what they look like, they might impact our financials, but it could also create some additional challenges for the supply chain. They're not positive in nature. They create new problems, challenges. But we have also, as I said earlier, a number of levers to adapt to the situation. So it's, again, a year with uncertainties. But with hindsight, '23 and '24 have been very difficult, but not so bad given the context.

The next question is from the line of Ken Herbert from RBC Capital Markets.

I have two questions, if I can. The first is, it looks like the assumptions for free cash flow at Spirit imply a significant improvement in the cash burn in 2026 and 2027, if you assume roughly mid-single-digit -- hundreds of millions on half a year in '25 and a similar amount in '26. Is there anything in particular you can point to or call out that helps with confidence on the free cash flow improvement in '26 over '25 at Spirit? And how deep, as part of your due diligence, have you been able to get into the operations there, specifically on the A350? And then my second question is on the A220, you're maintaining the production guidance implies over a 2x ramp on that program in the next two to three years. Seems like a stretch from where I'm sitting, but maybe anything you can say to help with confidence on that ramp as well would be appreciated.

I think, Thomas, you need to clarify Spirit.

Yes, let me start maybe with Spirit again and the free cash flow. So I think what we're trying to do is giving you a clear picture about Spirit and what the impact of Spirit will be in our numbers in 2025, but then also in 2026 and '27. And so as I said, in 2025, it will be clearly neutral with respect to the overall cash. While in 2026 and '27, we do expect that we have to make investments and turn around the work packages. So I said we are expecting up to a mid-triple digit negative cash impact in each of those two years, and that we will be bake in our guidance for '26 and '27. However, we will come to the guidance for those two years when we get there. And therefore, I think it's too early to talk about that as of today. Today, we're issuing our guidance for 2025, and that is around €4.5 billion, including, as I said, a negative effect from Spirit on the level of the free cash flow and then neutral in terms of the total cash situation for 2025. How good are we in terms of due diligence? I think we have a very, very clear picture now because we were, of course, able to continue to look at what is the situation of the work packages. We have several dozens of people at the sites who are working hand-in-hand with Spirit on a joint improvement project. So therefore, I would say our visibility in terms of what is the situation, what has to be done in the future to make sure that we built the basis for the ramp-up of the A220 and the A350, I would say, is pretty good.

On the 220, we have indeed in front of us, for '25, '26, a very steep ramp up. While it's a success waiting to happen, as we feel that we have invested a lot and we are prepared for that, unfortunately, we have one or two challenges on the way, mainly the wings from Spirit Belfast. That's why we're so focused on this. That's why we are so eager to bring the work package at Airbus, so we can fully control what's happening there. And the other one is the GTF situation that I mentioned a bit earlier that leads to some backloading in the year and in the ramp-ups. But that's part of the challenges we have to overcome this year and next year and it's a positive one. And yes, we're looking forward to report on this moving forward.

We'll now take the last question from the line of Ian Douglas-Pennant from UBS.

Another question on Spirit, but I'm not going to ask you about the free cash flow split again. I'm going to ask a slightly longer-term question. I assume the difference between the EBIT impact and the free cash flow impact next few years is the CapEx requirements, but please correct me if I'm wrong. Once this CapEx program is then -- looks like it's completed in 2027, does the cash flow profile of this business return to something like normal or should we consider a continued weak cash flow, let's say, from 2028 plus? I'm not asking for exact guidance, but just any kind of loose commentary on what that program looks like and the outturn of it, please. And then the second question is on the supply chain. I just wondered, would it be reasonable to see Spirit as some kind of case study for the aerostructure suppliers in general? What I mean by that is, if you did the same work that you've done at Spirits, if you were able to, at other aerostructure suppliers, and that -- and the work that you did at Spirit led you to believe there's much more investment required to support that ramp up, how confident can you be that you wouldn't have that same experience if you looked at other aerostructure suppliers, please?

Maybe I'll start with this one and give you a bit of time to think of Spirit beyond 2028. No, it's a very important question that we addressed actually at Airbus in 2018, 2019 when Mike Schoellhorn, that he's today the CEO of Airbus Defence and Space, was our Chief Operating Officer, really challenging ourselves on what was the model of integration and make or buy common core for the big aerostructures. At that time, we had STELIA for the front fuselage of our planes. We had Premium AEROTEC in Germany for the rear part of the fuselage, some of the central fuselage. And there were subsidiaries that were put together sort of 15 years ago in the wake of Boeing carving out its activity into Spirit. And there was really a question whether we would divest and procure, buy aerostructures or if we would probably more integrate closer to our chest, with a view that this would be core. And we came to that conclusion. We said, well, aerostructure is core. There's a lot of the quality, there's a lot of the speed of integrated changes of the supply chain management and probably even more than the current situation at that time was the view that moving forward through the digitalization, what we call DDMS at Airbus of the design, the manufacturing, we really wanted to have the aerostructure companies as part of our make to be able to run that digitalization exercise, and with also the view that the future fuselages' aerostructure will be more like the chassis of the car with a lot of integrated functions, and therefore, that was an airframer activity more than the one of the supplier. So we decided to create Airbus Atlantic, consolidating sort of, I mean, the STELIA scope of work with some of the Airbus plants in the west of France. And in Germany, we created what is called aerostructure with the consolidation of Premium AEROTEC and part of what we are doing in Hamburg with the fuselage. That's now part of Airbus. We have taken it from internal buy to make. That's really core activities at Airbus. And we have seen, the beginning of last year, that actually Boeing took the decision to reinternalize, to verticalize the activities that were carved out 20 years ago to Spirit probably for similar reasons. So I think that gives you the more strategic answer to your question. Moving forward, we see aerostructures are core image.

Yes, maybe to the future of Spirit and how we look at it. So let me start by saying what is the current situation of Spirit. I think it's characterized by two things. One is the work packages for Airbus are loss making because the efficiency of Spirit has to be improved. There is -- there are processes in place which are not optimal, et cetera. And secondly, Spirit clearly is a bottleneck because they're not able to ramp up and increase the output. And so therefore, that is a drag on the ramp-up of the A350, but also on the A220. Having said that, our focus in the next 3 years is to spend on CapEx to bring them in the position that they can support the trajectory that we have in our plans for the A220 and for the A350. It's about integrating the company into our operations so that the processes will be improved. And finally, of course, it will take some time before we can turn around the work packages, so we have to suffer the operating loss that we have acquired. Having said that, once we are done with the investments and the optimizations we want to make at Spirit, we are expecting that we will turn around these work packages to the same level of cost that we're currently paying externally. And therefore, the impact beyond 2028 should not be a negative one coming from Spirit once we've made the necessary improvements, both in terms of processes but also in terms of capital investment.

Thank you, Guillaume. Thank you, Thomas. This closes our conference call for today. If you have any further questions, please send an e-mail to Olivier, to Victoria, whom we are very happy to welcome on board, or myself, and we will get back to you as soon as possible. Thank you, and I'm looking forward to speaking to you very soon.

Thank you, everyone. Bye-bye.