Airbus SE

Airbus SE

Lagardère production plant in Toulouse, France
Formerly	Parent company: European Aeronautic Defence and Space Company NV (EADS) (2000–2014) Airbus Group NV (2014–2015) Airbus Group SE (2015–2017) Subsidiary: Airbus Industrie GIE (1970–2001) Airbus SAS (2001–current)
Type	Public
Traded as	Euronext Paris: AIR Template:BMAD Template:FWB CAC 40 component Euro Stoxx 50 component DAX component
ISIN	NL0000235190
Industry	Aerospace, defence
Predecessor	Aérospatiale, CASA, DASA, Matra
Founded	28 December 1998 (1998-12-28) (as European Aeronautic Defence and Space Company NV)
Area served	Worldwide
Key people	Guillaume Faury (CEO) René Obermann (Chairman)
Products	military aircraft, civilian airliners, helicopters, missiles, rockets
Revenue	€58.76 billion (2022)
Operating income	Template:Steady €5.33 billion (2022)
Net income	€4.25 billion (2022)
Total assets	€115.94 billion (2022)
Total equity	€12.98 billion (2022)
Owner	SOGEPA (French Government): 10.9% Template:Ill (German Government): 10.9% SEPI (Spanish Government): 4.1%
Number of employees	126,495 (2021)
Divisions	Airbus Defence and Space Airbus Helicopters
Subsidiaries	Airbus Group, Inc. Airbus Corporate Jets ArianeGroup (50%) ATR (50%) Eurofighter (46%) MBDA (37.5%) NAVBLUE Panavia Aircraft (42.5%) Stelia Aerospace Testia
Website	https://airbus.com
Footnotes / references Financials as of 31 December 2022.

Airbus is committed to pioneer sustainable aerospace for a safe and united world.

Airbus, a leading aerospace manufacturer, is globally recognized for its unwavering dedication to innovation and excellence. Spanning aircraft design, propulsion systems, and defense technologies, Airbus provides state-of-the-art solutions that cater to the ever-changing demands of the aviation and defense sectors worldwide. Emphasizing a robust commitment to research and development, the company constantly pushes the frontiers of technology, aiming to elevate the performance, efficiency, and sustainability of its offerings. Furthermore, Airbus actively fosters collaborative partnerships within the industry to accelerate progress and shape a more promising future for aviation and defense.

With Airbus implementing strategic growth approaches and factoring in relevant assumptions, our analysis suggests a potential 42% return over the next five years, translating to an average annual growth rate of about 8.4%. This implies that a £100,000 investment in Airbus could potentially increase to approximately £142,000 within five years. These projections stem from insights gathered from Stockhub users, our comprehensive DCF model, and the present market valuation.

Operations

Airbus is a global pioneer in aerospace industry, operating in the commercial aircraft, helicopters, defence and space sectors. Airbus is a leader in designing, manufacturing and delivering aerospace products, services and solutions to customers on a worldwide scale.

With around 134,000 employees and as the largest aeronautics and space company in Europe and a worldwide leader, Airbus is at the forefront of the aviation industry.

Airbus has built on its strong European heritage to become truly international – with roughly 180 locations and around 18,000 direct suppliers globally. The company has aircraft and helicopter final assembly lines across Asia, Europe and the Americas.

Product Divisions:

COMMERCIAL AIRCRAFTS

The product line includes passenger aircrafts , freighters and private jets.

Passenger Aircrafts:-

Airbus aircraft have become the preferred choice for passengers and operators around the globe. The company's aircrafts fly on every continent. Airbus's passenger aircrafts include:

1. 

   Airbus A320
   Airbus A220 - single aisle 100 to 150 seat aircrafts
2. Airbus A320 - undisputed leader in the single-aisle category
3. Airbus A330 - twin-engine ; can cover long-range requirements
4. Airbus A350 - The A350 epitomises Airbus’ five decades of experience and expertise in shaping the future of air travel. By creating an aircraft family that meets market requirements for size, range, revenue generation, passenger comfort and the environment, Airbus has delivered a new-generation passenger aircraft that is at the pinnacle of modern aviation
5. Airbus A380 - The double-deck A380 is the largest Airbus aircraft and introduced many key innovations that are now embedded in the latest generation of aircraft.

Freighters:-

The demand for cargo has been boosted by e-commerce, and it is expected that express freight will grow by 4.7% per year and general cargo by 2.7%. Overall, over the next 20 years there will be a need for some 2,440 freighters, of which 880 will be new-build.  

Airbus provides a range of freighters with different capacities and capabilities to service the market enabling supply chain networks to transport a full range of cargo – from high-value consumer goods, manufacturing parts to express packages and perishables as well as medical supplies.

The newest freighter to the large cargo market is the A350F, bringing latest-generation innovation from the A350 with reduced fuel burn and CO2 emissions.

- The A330-200F is a new-generation cargo aircraft that meets the needs of the freight business in the mid-size and long-haul segment.

- The A330P2F and A321P2F are passenger aircraft that have been converted to a freighter providing a cost-effective and highly efficient option to customers.

- For the airlift of oversized cargo loads, Airbus operates a fleet ofA300-600ST Beluga Super Transporters that support the manufacturing flow within the company’s European production network, operated by the Airbus Transport International affiliate.

HELICOPTERS

Airbus helicopters are in service across more than 150 countries worldwide. The company’s product line offers the full spectrum of rotary-wing aircraft solutions for civil, government, military, law enforcement and parapublic uses.

Civil Helicopter Portfolio:

• H125, H130 - intermediate single engine
• H135 , H145 - Light twin engine
• H155 ,H160 - Medium twin engine
• H175 - Super medium twin engine
• H215, H225 - Heavy twin engine

Military Helicopters

More than 100 armed forces worldwide place their trust in Airbus products, making Airbus one of the world's largest suppliers of advanced military helicopters.

HForce

HForce is a unique and flexible weapon system designed to meet the requirements of defence agencies looking for light attack mission capabilities to complement their existing fleet of specialised attack helicopters.

It is the latest generation of Airbus' weapon system. Modular and incremental, HForce can be fitted onboard military versions of Airbus’ commercial helicopter range (H125M, H145M, H225M).

HForce offers a wide range of modern weapons, and is easy to operate – with a level of targeting accuracy that formerly was reserved for high-end attack helicopters.

Military Support Centres

Airbus Helicopters operates Military Support Centers (MSC) for the French and German Armed Forces.

Airbus Tiger - combat proven attack helicopter

German MSC

Airbus Helicopters operates a Military Support Center (MSC) for Bundeswehr (German Armed Forces) helicopters. Based in Donauwörth, Germany, the center’s approximately 900 employees guarantee a constantly available global service for maintenance, support and engineering services covering almost all Bundeswehr rotorcraft:

• NH90
• UH-Tiger
• CH-53 (different versions)
• Sea King Mk41
• Sea Lynx Mk88A
• H135/H145
• Cougar

The German MSC supports around 270 helicopters for the German Armed Forces, representing 36,000 flight hours per year.

French MSC

Airbus Helicopters created a dedicated Military Support Center (MSC) in France in January 2015. This new entity offers a centralized portfolio of services for the French government, fully dedicated to support more than 500 helicopters operated by the French Armed Forces. Based in Marignane, France, Airbus Helicopters’ French MSC brings together all of the company’s resources needed to support the French military’s helicopters while offering a fully dedicated customer interface. These include:

• Technical, industrial, and logistics support
• Extensive aircraft MRO capabilities
• Support for combat deployment of the French armies
• Transversal management of fleets, such as the Tiger, NH90, and Cougar, to ensure an optimum aircraft availability
• Business support such as Quality, Human Resources, Finance, and business improvement

Around 500 employees and 10,000 square meters of workshops are dedicated to serving this customer. In addition, 30 technical representatives and logistics field representatives have been dispatched to various customer bases.

ACH [Airbus Corporate Helicopters]

Airbus Corporate Helicopters is Airbus Helicopters’ high end and bespoke brand dedicated to private and business aviation customers.

ACH Line

ACH Line:

Based on Airbus Corporate Helicopters’ in-house style concept, this interior cabin line is the perfect response for those looking for a light and efficient design.

ACH Exclusive:

ACH Exclusive

This interior line responds to those looking for a truly excessive environment with the highest standards of refinement, luxury and comfort.

ACH Edition:

A portfolio of Airbus Corporate Helicopters special collaborations and partnerships with high-end brands and designers, ranging from Mercedes Benz Style and Aston Martin to designs by world renowned designer Harrison Eidsgaard.

ACH Edition

DEFENCE

Airbus brings interoperable and collaborative solutions to ensure superiority for combat systems across the five operational domains: land, air, sea, space and cyber.

Airbus C295

Airbus know-how is underscored by its prime contractor role for Europe’s Future Combat Air System (FCAS) – a network of manned and unmanned platforms from fighter and drones to satellites; its development of the Multi-Domain Combat Cloud (MDCC) – a decentralised, cyber-resilient, collaborative information network using cloud-based technologies; and implementation of the Network for the Sky (NFTS) – a resilient global-mesh military communications solution that allows aircraft to be fully part of a high-speed connected battlespace.

Airbus Eurofighter Typhoon

The company’s world-class portfolio of products includes the Eurofighter Typhoon swing-role combat aircraft; the A400M, C295 and CN235 air lifters; the A330 Multi-Role Tanker Transport; along with robust, dependable unmanned aerial systems (UAS). For networks and systems, Airbus’ secure and resilient communications capabilities provide comprehensive bandwidth and best-in-class capabilities.

SPACE

Airbus has been helping to answer big questions from space and advance space exploration for more than 50 years. Supplying reliable systems that range from electronic components to full telecommunications relay platforms, scientific satellites and crewed spacecraft, developing the technology to send spaceships to planets – Airbus provides solutions for customers and their programmes around the globe.

ArianeGroup, a joint venture with Safran, is the prime contractor for Europe’s record-breaking Ariane launcher. Applying the expertise of two leading contributors to modern launch vehicles, ArianeGroup develops innovative and competitive space solutions. Airbus Defence and Space has accumulated over 30 years of in-orbit operation, launching its first Earth observation satellite in 1986.

Juice:-

Airbus has developed and built JUICE (JUpiter ICy moons Explorer) spacecraft for the European Space Agency, which will study Jupiter and its icy moons. Signed as prime contractor in 2015, Airbus has led a consortium of more than 80 companies during the course of the project.

JUICE Highlights

In April 2023, JUICE began an approximately 8 year cruise to Jupiter to spend four years in the Jovian system. Its main mission will be to explore the huge planet’s three largest icy moons in the hope of determining whether life is possible on these dwarf planets.

SECURITY

Airbus's Security portfolio includes:

• Marittime
• Critical Infrastructure
• Public Safety
• Crisis management

Research and Development

CityAirbus NextGen

The CityAirbus NextGen represents an advanced prototype of an all-electric, four-seat vertical take-off and landing (eVTOL) aircraft. It follows a lift and cruise design, offering an 80-km operational range and a cruise speed of 120 km/h, making it an ideal choice for a wide range of flight operations within urban areas and communities.

Solar flight

Venturing into the stratosphere with unmanned aerial vehicles is a pioneering feat that Airbus is currently spearheading. The company's latest endeavors in solar cell technology promise to revolutionize the capabilities of these aircraft, allowing them to soar at high altitudes for prolonged periods, solely powered by sunlight.

The primary focus of Airbus's work in solar flight encompasses several key aspects:

1. Advancing Photovoltaic Solar Panels: Airbus is dedicated to developing cutting-edge photovoltaic solar panels that not only weigh less but also possess greater flexibility, while maximizing the capture of solar energy per square meter of surface area.
2. Efficient Energy Conversion: The captured solar energy is ingeniously converted into electrical energy to propel an electric-driven system, enabling smooth operation of the aircraft and powering various onboard equipment.
3. Uninterrupted Flight: One of the most remarkable achievements in this endeavor is harnessing solar energy to charge a rechargeable energy storage system. This breakthrough allows the aircraft to continue flying autonomously during the night, eliminating any dependence on traditional fuel sources.

At the forefront of Airbus's solar-powered flight initiatives stands the remarkable Zephyr program. Functioning as a high-altitude pseudo-satellite, the Zephyr aircraft relies solely on solar power to operate effectively, setting new standards for sustainable and limitless flight possibilities.

Airbus's relentless pursuit of solar-powered aerial technology is poised to reshape the future of unmanned aerial vehicles, unlocking vast potential for extended, environmentally friendly missions in the stratosphere. With the Zephyr program leading the way, the sky's the limit for solar-powered aviation.

Market

Total Addressable Market

The Total Addressable Market (TAM) for Safran SA is defined as the global aerospace and defense market. According to industry reports, the global aerospace and defense market was valued at $855.62 billion in 2023 and is projected to reach $1076.56 billion by 2027, experiencing a compound annual growth rate (CAGR) of 5.9%.

Serviceable Available Market

The Serviceable Available Market (SAM), representing the global aviation market, is projected to experience growth from USD 333.96 billion in 2023 to USD 386.21 billion by 2028, at a CAGR of 2.95% during the forecast period (2023-2028).

Serviceable Obtainable Market

The Serviceable Available Market (SAM) for Safran SA is focused on the commercial aviation segment within the global aviation market. The Commercial Aviation Market is anticipated to experience significant growth, projected to increase from $218.97 billion in 2023 to $271.96 billion by 2028, representing a Compound Annual Growth Rate (CAGR) of 4.43% during the forecast period from 2023 to 2028.

Competition

Competitors

	Airbus	Boeing	General Dynamics	China Aerospace Science and Technology	United Aircraft Corporation
	Airbus is a company that provides aerospace products, services, and solutions.	Boeing is an aerospace company that develops, manufactures, and services commercial airplanes, defense products, and space systems.	General Dynamics (GD) is an aerospace and defense company that offers a portfolio of products and services within the aviation, marine, combat systems, and related technology fields.	China Aerospace Science and Technology Corporation (CASC, 中国航天科技集团有限公司) is a company engaged in the research, design, manufacture, and supply of space products and services.	United Aircraft Corporation (UAC, Объединенная авиастроительная корпорация) is an aerospace and defense company.
Founding Date	1970	1916	1952	1999	2006
Type	Public	Public	Public	Private	Public
Locations	Blagnac, FR	Arlington, US	Reston, US	Moscow, RU	Xi'an, CN (HQ)
Employees	134,267	156,000	106,500	180,521	98,000
Valuation ($)	114.1B	120.9B	57.6B	N/A	N/A

Competitive advantage

Airbus's competitive advantage lies in its broad product portfolio, technological innovation, fuel efficiency, global reach, strong customer relationships, production efficiency, established brand, collaborative approach, and government support.

Team

Board of Directors

Chairman of the Board of Directors

René Obermann is the Co-Head of Europe and Managing Director at Warburg Pincus Deutschland GmbH, a leading global private equity firm. He also holds positions as Deputy Chairman of the Supervisory Board at IONOS Group SE, a prominent European web hosting and cloud company, and as a Member of the Board of Directors at ISAT Connect Bidco Limited, a satellite network provider. Prior to joining Warburg Pincus, he served as CEO of Ziggo BV and held various executive roles at Deutsche Telekom Group from 1998 to 2013, including serving as CEO of Deutsche Telekom AG from 2006 to 2013. René's diverse and accomplished career trajectory showcases his deep expertise and broad perspective in the corporate world.

Chief Executive Officer

Guillaume Faury became Airbus Chief Executive Officer (CEO) in April 2019, leading the Company's Executive Committee. Before his CEO role, he was the President of Airbus' commercial aircraft business since February 2018. In addition to his position at Airbus, Guillaume serves on the board of directors of AXA SA, and he is the President of the Groupement des Industries Françaises de l’Aéronautique et du Spatial (GIFAS) and the Aerospace, Security and Defence Industries Association of Europe (ASD). Guillaume has a background in engineering and has held various leadership positions at Airbus Helicopters, Peugeot, and the Direction Générale de l’Armement (DGA). He is a qualified pilot and flight-test engineer with a deep passion for aviation.

ESG and Sustainability Outlook

Airbus measures its progress on sustainability against strict criteria codified in globally-recognised and highly-respected frameworks and standards. Airbus was the first aircraft manufacturer to disclose Scope 3 figures for the aircraft that it delivers to customers.

Airbus has been a supporter of the Task Force on Climate-related Financial Disclosures (TCFD) since December 2020. And in addition, in 2022 , the company committed to having its near-term greenhouse gas emissions targets assessed by the Science Based Targets initiative (SBTi), which is acknowledged as the gold standard in CO2 target setting methodology. These targets were approved by the SBTi in early 2023.

Airbus has been a signatory to the UN Global Compact since 2003. Their sustainability commitments are aligned with and support  the UN Sustainable Development Goals, a global call to action to ensure a more sustainable future for people and the planet by 2030. Airbus was among the first in its industry to formally adopt the SDGs as a framework for its social responsibility practices.

Materiality Matrix 2022

In regards to overall sustainability reporting, Airbus has chosen to report against the Global Reporting Initiative (GRI) standards, one of the most internationally used and recognised reporting standards today.

Airbus SE's commitment to UN SDG

2022 Sustainability Highlights:-

• The A330 MRTT became the world’s first tanker aircraft to be certified for automatic air-to-air refuelling boom operations.
• The first test flights of A400M and C295 aircraft partly powered by sustainable aviation fuel (SAF) took place during the year. Separately, Airbus worked with the UK’s Royal Air Force and industry partners to conduct a test flight of an in-service A330 MRTT using 100% SAF in both of its engines.
• In Space Systems, a number of satellites are in development to support climate change monitoring.

Risks

Airbus SE's risks can be categorised into:

1. Financial Risks
2. Business-Specific risks
3. Legal Risks

Key risks in each of these categories are detailed as follows:

Financial Risks

• Market disruptions and economic downturns can quickly develop due to various factors such as credit crises, recessions, high commodity prices, energy shortage, currency exchange rates, geopolitical events, and pandemics like COVID-19.
• The company's global presence, including operations in Europe, the US, and Asia, makes it susceptible to weak market and economic conditions in these regions.
• Economic changes can impact customer demand for the company's products and services, particularly in the commercial aircraft industry, which is cyclical and influenced by GDP growth and passenger demand for air travel.
• Weak economic conditions can lead to financial distress for airlines and customers, order cancellations, reductions in defence and space spending, and increased sales financing requests, affecting the company's results.
• The company faces foreign currency exposure, mainly with revenues in US dollars and costs in euros, and exchange rate fluctuations can impact profitability.
• Credit risk is present in sales financing activities, and defaults or decreases in the value of financed aircraft can adversely affect the company's business and financial condition.
• The company manages liquidity risk by maintaining cash reserves, committed credit facilities, and diversified funding programs, while adopting a prudent approach to managing liquidity.
• Any termination or reduction of future funding or cancellations or delays impacting existing contracts may have a negative effect on the Company’s financial condition and results of operations.
• In instances where several countries undertake to enter together into defence or other procurement contracts, economic, political or budgetary constraints in any one of these countries may have a negative effect on the ability of the Company to enter into or perform such contracts.

Business-Specific Risks

• The commercial aircraft market is influenced by cyclical trends due to changes in passenger demand, air cargo share, and economic variables such as GDP growth, private consumption, and population size.
• Airbus SE faces stiff competition with new entrants seeking to operate in the Company's exiting markets.
• Factors affecting the market for commercial aircraft include fleet age and technical obsolescence, aircraft retirements, load factors, airline pricing, financial health, financing availability, fuel prices, regulations, environmental constraints, and market evolution.
• The COVID-19 pandemic and geopolitical events like Russia's invasion of Ukraine have amplified the impact of these factors on the commercial aircraft industry.
• Cybersecurity risks are also significant, with potential threats to data, industrial systems, products, and services.
• Physical security, terrorism, pandemics, and other catastrophic events can negatively affect public perception of air travel, reducing demand for commercial aircraft.
• Airbus depends on key suppliers and subcontractors, and their performance and financial health can impact the company's operations and financial condition.
• There can be no assurance that the Company’s products or services will be successfully developed, manufactured or operated or that they will perform as intended.
• Contract cancellations pose a serious risk for the company . In addition, the company may also incur significant costs or loss of revenues in connection with remedial action required to correct any performance issues detected in its products or services.

Legal Risks

• The Company is, from time to time ,subject to government inquiries and investigations of its business and competitive environment due, among other things, to the heavily regulated nature of its industry.
• The Company is required to comply with applicable anti-bribery laws and regulations in jurisdictions around the world where it does business.
• Ethical misconduct or non-compliance with applicable laws and regulations by the Company, its employees or any third party acting on its behalf could expose it to liability or have a negative impact on its business.
• The Company may be subject to administrative, civil or criminal liabilities including significant fines and penalties, as well as suspension or debarment from government or non-government contracts for some period of time.
• The export market is a significant market for the Company. In addition, many of the products the Company designs and manufactures for military use are considered to be of national strategic interest. Consequently, the export of such products outside of the jurisdictions in which they are produced may be restricted or subject to licensing and export control requirements.
• The Company’s ability to market new products and enter new markets may be dependent on obtaining government certifications and approvals in a timely manner.

Financials

Historical Figures:

Latest Year

In the fiscal year 2022, Airbus experienced a notable surge in its financial performance, with reported total revenue reaching €58.76 billion. This impressive achievement showcases a remarkable growth of approximately 17% in comparison to the preceding year's revenue of €52.15 billion. However, amidst this revenue upswing, the company also recorded a net income of €4.25 billion, underlining a positive trajectory.

Past Four Years

Looking back at the preceding four years, Airbus' financial landscape displayed a degree of variability. Commencing at €70.48 billion in 2019 and culminating at €58.76 billion in 2022, the revenue trend exhibited fluctuations reflective of the dynamic aerospace sector. During this span, net income experienced significant shifts, oscillating between €4.25 billion and a loss of €1.36 billion in response to the industry's evolving challenges.

Financial Performance Analysis

Airbus has encountered a downturn in its financial performance over the recent years, and several factors may have contributed to this decline.

Airbus Financial Performance Summary (2019-2022)

A significant factor impacting Airbus' recent financial challenges is the Covid-19 pandemic, which resulted in widespread disruptions across the aviation industry. With travel restrictions and reduced passenger demand, the aviation sector experienced a substantial decline, affecting the demand for new aircraft and related products offered by Airbus.

Another key element affecting Airbus' financials is the escalation in operating costs, particularly those linked to crucial manufacturing components. The escalating prices of essential materials used in aircraft production exerted pressure on profit margins, making it intricate to uphold previous levels of profitability.

Furthermore, the fluctuations in exchange rates between the euro and other major currencies have also played a role in shaping the company's financial results. Operating in a globally interconnected market, Airbus conducts business transactions in various currencies, subjecting its revenues and costs to uncertainty due to currency fluctuations.

It's essential to recognize that these challenges extend beyond Airbus and have reverberated throughout the aerospace industry. The pandemic-induced disruptions have significantly impacted not only Airbus but also its peers, underscoring the intricate and interconnected nature of the aviation sector and its responsiveness to global economic shifts.

Discounted Cash Flow:

Detailed below is the DCF for Airbus SE. Bloomberg Terminal has been used for computation.

Current Share Price: 130.50 EUR
£ million	Historical					Projected
	2018	2019	2020	2021	2022	2023	2024	2025	2026	2027	2028
Income Statement
Revenue	63707	70478	49912	52419	58743	64067	71765	81425	90050	92496	92356
% growth		11%	-29%	4%	13%	9%	12%	13%	11%	3%
Cost Of Goods Sold	52149	54920	59973	44250	42518	48192	53049	58926	66318	75103	76490
% of revenue	86%	85%	89%	82%	82%	83%	82%	81%	82%	81%	83%
Gross Profit	9,223	10,505	5,662	9631	10571	11018	12838	15107	16189	17898	15867
% of revenue	40%	36%	18%	31%	33%	34%	36%	36%	37%	38%
Total Operating Expenses	4156	3935	5101	4599	5278	5004	5450	5805	5424	5536	3990
% of revenue	7%	6%	10%	9%	9%	8%	8%	7%	6%	6%	4%
Operating Income/ EBIT	5067	6570	561	5032	5293	6013	7388	9301	10765	11857	11877
EBITDA	7511	9467	3392	7357	8009	8677	10138	12207	13915	14587	14692
Tax Expense	1361	3772	425	887	1108	2719	3574	4336	3803	4619	5095
Effective tax rate	29%	57%	103%	17%	19%	45%	48%	47%	35%	39%	43%
Cashflow
D&A	2444	2927	2831	2325	2716	2663	2750	2906	3150	2730	2815
% of revenue	4%	4%	6%	4%	5%	4%	4%	4%	3%	3%	3%
Capital Expenditure	2285	2340	1759	1928	2464	2579	2732	2955	3139	3265	3291
% of revenue	4%	3%	4%	4%	4%	4%	4%	4%	3%	4%	4%
Change in NWC	-465	-3638	9744	-379	491	1760	2471	4205	2065	2679	3056
% of revenue	-1%	-5%	20%	-1%	1%	3%	3%	5%	2%	3%	3%
Unlevered FCF						1471	1153	681	4493	3736	3004

Input Considerations and DCF summary

Given below is the WACC and perpetuity growth growth considered in computing the DCF:

WACC	9.5%
Perpetuity Growth Rate	2%

Valuation

What's the Current Value of Airbus SE?

As of August 9th, 2023, Airbus shares have reached a value of 131.66€, showcasing a consistent trajectory of recovery following the repercussions of the Covid-19 pandemic. This current stock value is nearing its previous historical peak of 133.40€, documented in November 2019, signifying an encouraging upward trend in the market. This positive momentum underscores Airbus' resilience and potential for growth.

Airbus Current Valuation - August 2023
Share Price (@09/08)	[€]		131.66
Shares Outstanding	[#M]		789.06
Equity Value	[€B]		102.99
Add: Net Debt at Dec. 31, 2022	[€B]		6.48
Enterprise Value	[€B]		96.51

In our analysis of Airbus's valuation, we employed two distinct methods:

• Discounted Cashflow: Using the EBITDA multiple approach, we arrive at Airbus SE's implied share price to be €145.87 , thereby resulting in an estimated implied upside of 42%.
• Trading Comps: In reference to our estimates derived from the comps analysis, where the Price-to-Earnings (P/E) ratio yielded an estimated value of 388.57€ and the Enterprise Value-to-EBITDA (EV/EBITDA) ratio yielded an estimated value of 218.65€, Airbus' current stock value of 131.66€ prompts an evaluation of its alignment with our projected valuation ranges.

What's the expected return of an Investment in the Company?

According to Stockhub users' projections utilizing our DCF model and prevailing market value, an investment in Airbus is anticipated to yield an approximate 42% return over the next five years. In simpler terms, a £1,000 investment in Safran is expected to increase to £1,420.00 in five years.

If an investment achieves its projected return of 8.4%, which aligns with a 'suitable' 8% annual return over a five-year period, it is deemed a viable choice for investing in the company.

Monte Carlo Simulations

Data

Presenting our state-of-the-art Monte Carlo simulation designed for analyzing Airbus' stock price dynamics. Through the utilization of this sophisticated computational technique, our goal is to offer you valuable perspectives on how Safran's stock may evolve across time.

Historical price of Airbus' equity

The Airbus-tailored Monte Carlo simulation entails conducting a multitude of random simulations using various input variables, encompassing historical price data, volatility, and other crucial market factors. Through this approach, we construct an extensive probability distribution of potential outcomes, enabling you to assess the possible risks and rewards associated with investing in Airbus.

Logarithmic distribution of past prices

Simulations

Through our simulation, you can make informed choices based on data and enhance your comprehension of the unpredictability surrounding Airbus' stock performance. Embrace the forefront of equity research and delve into the extensive array of potential scenarios to strategically enhance your investment strategies.

Price paths of Airbus' stock 50 days in the future for 100 simulations

By utilizing our Airbus-specific Monte Carlo simulations, you can visualize numerous trajectories across 100 simulations, granting insights into potential outcomes. However, for a more profound and holistic comprehension of the results, we advise conducting a more extensive number of simulations. This approach allows us to create probability distributions that emphasize the chances of Airbus' stock price reaching specific levels. Such an approach ensures a heightened precision and insightful analysis, empowering you to make well-informed decisions with assurance.

Final stock price distribution in 50 days for 1,000,000 simulations

Furthermore, we incorporates the calculation of the likelihood for the stock to achieve or exceed its current value of 131.66€. The resulting probability, standing at 48.38%, indicates that considering its historical returns, the stock is slightly overvalued.

The current valuation of Airbus stock appears to be relatively high when assessed against historical returns. However, our valuations indicate that the stock's value surpasses its present price when considering future cash flows. This suggests the presence of potential intrinsic value that warrants a more comprehensive evaluation.

Appendix

Financial statements

Income Statement (In thousands of €)

Year end date	TTM	12/31/2022	12/31/2021	12/31/2020	12/31/2019
Total Revenue	55,113,000	58,763,000	52,149,000	49,912,000	70,478,000
Cost of Revenue	44,965,000	48,192,000	42,518,000	44,250,000	59,973,000
Gross Profit	10,148,000	10,571,000	9,631,000	5,662,000	10,505,000
Operating Expense	5,011,000	5,319,000	4,798,000	4,998,000	9,483,000
Operating Income	5,137,000	5,252,000	4,833,000	664,000	1,022,000
Net Non Operating Interest Income Expense	-132,000	195,000	2,000	-703,000	-274,000
Pretax Income	5,008,000	5,075,000	5,027,000	-1,130,000	1,064,000
Tax Provision	945,000	939,000	853,000	39,000	2,389,000
Net Income Common Stockholders	4,146,000	4,247,000	4,213,000	-1,133,000	-1,362,000
Diluted NI Available to Com Stockholders	4,146,000	4,247,000	4,213,000	-1,133,000	-1,362,000
Basic EPS	-	5.4	5.36	-1.45	-1.75
Diluted EPS	-	5.39	5.36	-1.45	-1.75
Basic Average Shares	-	787,081	785,326	783,178	777,040
Diluted Average Shares	-	787,753	785,762	783,178	777,040
Total Expenses	49,976,000	53,511,000	47,316,000	49,248,000	69,456,000
Net Income from Continuing & Discontinued Operation	4,146,000	4,247,000	4,213,000	-1,133,000	-1,362,000
Normalized Income	4,446,182	4,528,990	4,520,100	-1,216,250	-1,413,000
Interest Income	132,000	188,000	88,000	140,000	228,000
Interest Expense	330,000	412,000	353,000	436,000	385,000
Net Interest Income	-132,000	195,000	2,000	-703,000	-274,000
EBIT	5,338,000	5,487,000	5,380,000	-694,000	1,449,000
EBITDA	7,662,000	-	-	-	-
Reconciled Cost of Revenue	44,965,000	48,192,000	42,518,000	44,250,000	59,973,000
Reconciled Depreciation	2,324,000	2,716,000	2,325,000	2,831,000	2,927,000
Net Income from Continuing Operation Net Minority Interest	4,146,000	4,247,000	4,213,000	-1,133,000	-1,362,000
Total Unusual Items Excluding Goodwill	-370,000	-346,000	-370,000	111,000	68,000
Total Unusual Items	-370,000	-346,000	-370,000	111,000	68,000
Normalized EBITDA	8,032,000	8,549,000	8,075,000	2,026,000	4,308,000
Tax Rate for Calcs	0	0	0	0	0
Tax Effect of Unusual Items	-69,818	-64,010	-62,900	27,750	17,000

Balance Sheet (In thousands of €)

Year end date	12/31/2022	12/31/2021	12/31/2020	12/31/2019
Total Assets	115,944,000	107,047,000	110,095,000	114,409,000
Total Liabilities Net Minority Interest	102,962,000	97,561,000	103,639,000	108,419,000
Total Equity Gross Minority Interest	12,982,000	9,486,000	6,456,000	5,990,000
Total Capitalization	22,089,000	21,069,000	18,989,000	12,866,000
Common Stock Equity	12,950,000	9,466,000	6,445,000	5,975,000
Capital Lease Obligations	1,734,000	1,736,000	1,798,000	1,560,000
Net Tangible Assets	-3,818,000	-6,901,000	-9,754,000	-10,616,000
Working Capital	10,407,000	7,993,000	8,629,000	-5,651,000
Invested Capital	22,199,000	21,191,000	20,269,000	13,099,000
Tangible Book Value	-3,818,000	-6,901,000	-9,754,000	-10,616,000
Total Debt	10,983,000	13,461,000	15,622,000	8,684,000
Net Debt	-	-	858,000	-
Share Issued	788,205	786,084	784,149	783,173
Ordinary Shares Number	787,558	785,629	783,716	782,311
Treasury Shares Number	647.5	454.735	432.875	862.61

Cash Flow (In thousands of €)

Year end date	TTM	12/31/2022	12/31/2021	12/31/2020	12/31/2019
Operating Cash Flow	4,655,000	6,288,000	4,639,000	-5,420,000	3,753,000
Investing Cash Flow	-3,597,000	-3,113,000	-2,719,000	4,126,000	-2,864,000
Financing Cash Flow	-2,126,000	-2,115,000	-2,179,000	6,833,000	-958,000
End Cash Position	13,786,000	15,823,000	14,572,000	14,439,000	9,314,000
Capital Expenditure	-2,036,000	-2,464,000	-1,928,000	-1,759,000	-2,340,000
Issuance of Debt	-	-	0	7,102,000	402,000
Repayment of Debt	-	-	-2,295,000	-445,000	-562,000
Repurchase of Capital Stock	-	-	-	-	-31,000
Free Cash Flow	2,619,000	3,824,000	2,711,000	-7,179,000	1,413,000

Trading Comparables (Comps)

In our evaluation of Airbus and its peers, we utilize both the Price-to-Earnings (P/E) ratio and the Enterprise Value-to-EBITDA (EV/EBITDA) ratio as integral components of our comparative analysis.

Method	Median ratio	Price per share
P/E	15.42	388.57
EV/EBITDA	11.35	218.654