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Flying ahead

l ANNUAL REPORT 2015 l

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Contents
GROUP OVERVIEW
/01 Flying ahead: Highlights
/10 Key Figures 2015
/12 Letter from the Chairman of the Board
/14 Interview with the Chief Executive Officer
/16 Group Executive Committee
/18 Interview with the Chief Financial Officer
/20 Airbus
/22 Airbus Helicopters
/24 Airbus Defence and Space
/26 Corporate Social Responsibility
/28 Innovation Highlights
/30 Share Information

REGISTRATION DOCUMENT

FINANCIAL STATEMENTS

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AIRBUS GROUP ANNUAL REPORT 2015 l 01 l

Flying ahead

At Airbus Group,
we make it fly is our motto.
Day in and day out, the
Companys men and women
deliver more than just
products. They make a
difference to our customers
through innovative solutions,
game-changing
engineering, manufacturing
excellence and corporate
responsibility.
We are flying ahead
moving ahead with our
strategy and staying ahead of
the competition.

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AIRBUS GROUP ANNUAL REPORT 2015 l 02 l

Innovation
H160

H160

A game-changing design
in the helicopter market
Flight testing of the highly innovative production use of Blue Edge main
H160 helicopter got underway during rotor blades cuts exterior sound
2015, paving the way for its planned levels by 50%.
entry-into-service in 2018. The aircraft
raises the standards for performance, The H160 is the first-ever,
cost effectiveness, passenger comfort fully-composite civil helicopter,
and environmental impact to create resulting in an airframe that is lighter,
the benchmark in the medium-class more robust, resistant to corrosion
rotorcraft sector. and fatigue, while requiring less
maintenance.
The H160 offers nose-to-tail
breakthroughs in design and With a cruise speed of 160 knots,
systems and integrates as many as the H160 can carry 12 passengers at
68 company-patented technologies. distances of up to 120 nautical miles
for oil and gas missions, and has a
To help improve performance and 450nautical mile range with 20-minute
flight stability, the aircraft includes reserve in public service or search and
the largest-ever canted Fenestron rescue tasks.
shrouded tail rotor, while the initial

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AIRBUS GROUP ANNUAL REPORT 2015 l 03 l

Where breakthroughs come from

A320neo

A320neo

Technical advances offer


airlines greater efficiency
Following a rigorous flight testing unbeatable fuel efficiency but also
programme, the A320neo (new engine significant environmental benefits
option) received type certification from with nearly a 50% reduction in noise
safety authorities in Europe and the footprint compared to previous
U.S. towards the end of 2015. The first generation aircraft.
delivery followed in early 2016, while
almost 4,500 firm orders had been During 2015, Airbus launched the
received by the end of 2015. larger A321LR variant which offers
the longest range of any single-aisle
Being a great example of incremental airliner at 4,000 nautical miles and a
innovation, the A320neo incorporates maximum take-off weight of 97 tonnes.
latest technologies such as new The aircraft, which is due to be
generation engines and Sharklet delivered from 2019, includes an
wing-tip devices, which together additional fuel tank in the forward
deliver a 15% fuel burn reduction underfloor hold as well as minor
and 20% by 2020 through cabin improvements on the wing and
innovations and further engine fuselage to provide the additional
efficiency improvements. range. The A321LR is able to fly longer The stories
The A320neo offers not only routes such as the transatlantic. continue non-stop on
annualreport.airbusgroup.com

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AIRBUS GROUP ANNUAL REPORT 2015 l 04 l

Disruption
ONEWEB

ONEWEB

Bringing the web


to the whole world
Half the world currently has no way Resources and expertise are being
to connect to the Internet. Under a leveraged from across Airbus Group,
pioneering business model, Airbus including techniques developed for
Group has teamed up with OneWeb large volume commercial aircraft
to provide an affordable Internet production.
connection for everyone by developing
a constellation of hundreds of small The first 10 satellites will be designed
telecommunications satellites. and manufactured in Toulouse by
a new Joint Venture between Airbus
In 2015, Airbus Defence and Space Defence and Space and OneWeb
was chosen as OneWebs industrial known as OneWeb Satellites. Full
partner to design and manufacture series production will take place at
900 satellites weighing around a dedicated plant in the U.S. with the
150kilogrammes each. In an industry first satellites due to be launched into
first, several satellites will be built daily low Earth orbit from 2018.
and require the development of
innovative designs and industrial
processes to dramatically lower the
cost structure involved for these high
performance spacecraft.

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AIRBUS GROUP ANNUAL REPORT 2015 l 05 l

How we are challenging the status quo

A 3 AND AIRBUS VENTURES

A3 AND AIRBUS VENTURES

Silicon Valley outposts defining


the future of flight
To help maintain its market-leading the Group and the industry.
position and accelerate the pace of In early 2016, A3 undertook a pilot
innovation, Airbus Group established project for an on-demand
a dedicated innovation centre and a transportation service using
corporate venture fund in Californias AirbusGroup helicopters.
Silicon Valley during 2015. These
business units will enhance the Airbus Ventures was set-up with an
Groups ability to identify and initial commitment of US $ 150 million
capitalise on innovative and and a mission to invest in promising,
transformational technologies and disruptive and innovative business
business models while increasing opportunities around the globe.
its global presence. It announced its first investment in
Known as A3, the innovation centre is early 2016 with a U.S.-based company
optimised for speed of execution and combining open-innovation
risk tolerance while maintaining a development and micro-manufacturing.
strong link to Airbus Groups core A3 and Airbus Ventures complement
businesses. It is pursuing the existing activities of Airbus Group
opportunities for technological, Innovations and Airbus BizLab network
manufacturing and process disruption of aerospace business accelerators. The stories
with a goal of disrupting both continue non-stop on
annualreport.airbusgroup.com

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AIRBUS GROUP ANNUAL REPORT 2015 l 06 l

Operations
GLOBAL PRESENCE

GLOBAL PRESENCE

U.S. Manufacturing Facility


opens in Mobile
In September 2015, Airbus opened its in the Groups strategy to further
first U.S. Manufacturing Facility in increase its international industrial
Mobile, Alabama. Aircraft deliveries footprint, including in North America.
from the new plant begin in 2016.
By the end of 2017, it will manufacture The US $ 600 million, 53-acre facility at
A319s, A320s and A321s at a rate of the Mobile Aeroplex at Brookley shows
four per month. Airbus significant commitment to
the U.S. which is the largest market
This complements existing assembly in the world for single-aisle aircraft.
lines in France, Germany and China, The vast majority of A320 Family
allowing Airbus to produce aircraft aircraft produced in Mobile will be
around the clock from its plants on delivered to North American
three continents. The Mobile facility customers.
opening also marks an important step

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AIRBUS GROUP ANNUAL REPORT 2015 l 07 l

Delivering efficiency globally

PRODUCTION RAMP-UPS

PRODUCTION RAMP-UPS

Increasing the output


of key aircraft
A major priority for 2015 was to decisions are supported by the record
ramp-up production on key aircraft Airbus backlog and supply chain
programmes. On the A350 XWB, commitments. With certification of the
deliveries increased to 14 in 2015 A320neo achieved in November 2015
compared to one during 2014 as and the first delivery following in
Airbus heads towards its targeted January, Airbus prepared the ground
monthly production rate of 10 aircraft for its production ramp-up in 2016.
by the end of 2018.
Rising production was also a priority
A decision was taken during the year on the A400M programme as well as
to increase the A320 Family aircraft improving the industrial efficiency and
production rate to firstly 50 per month military capabilities of the aircraft.
in 2017 and then to 60 a month in In total, 11 A400Ms were delivered in
mid-2019. Furthermore, the A330 rate 2015 compared to eight in 2014.
will again increase to seven aircraft per
month from 2017. These rate increase

The stories
continue non-stop on
annualreport.airbusgroup.com

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AIRBUS GROUP ANNUAL REPORT 2015 l 08 l

Engagement
LEADERSHIP UNIVERSITY

LEADERSHIP UNIVERSITY

Prioritising leadership
development
The Leadership University creates or mentoring sessions. Overall,
opportunities for all leaders and aspiring more than 55,000 days of leadership
leaders to develop, connect and share, development were delivered.
reflect and learn, innovate and support
Entrepreneurs and start-ups are also
a culture of collaboration and autonomy
involved in the development of Airbus
within Airbus Group. The University
Groups leaders, inspiring and
proposes a wide portfolio of leadership
encouraging collaboration and open
development solutions such as modular
innovation, while partnerships with other
programmes, short courses, blended
companies and universities enable
learning solutions, conferences, events,
leaders to stay connected with latest
learning expeditions, team workshops,
business practices and industry trends.
coaching, 360 degree feedback,
mentoring, and assessment through The main campus of the Leadership
self-assessment and structured University is due to open in the autumn
assessment centres. of 2016 near the A380 Final Assembly
In 2015, around 760 team workshops, Line in Blagnac (France). Local
1,260 facilitated 360 degree feedback campuses located at key Group sites
sessions, 1,000 sessions of leadership across Europe opened in 2015, with
courses and programmes were run. In more to follow in 2016 both in Europe
total, 465 employees received coaching and internationally.

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AIRBUS GROUP ANNUAL REPORT 2015 l 09 l

Going beyond the bottom line

AIRBUS FOUNDATION

AIRBUS FOUNDATION

Supporting humanitarian
initiatives around the globe
Airbus Group is able to intervene with and relief supplies to Kathmandu.
support at every phase of a disaster Airbus Helicopters also provided
and as part of its efforts to support the rotorcraft based solutions to the
humanitarian community, the Airbus affected areas through the Airbus
Foundation carried out a number of Helicopters Foundation. In March
relief operations in 2015 using the 2015, the Airbus Foundation together
Companys products and services. with Aviation Sans Frontires
transported clothing and medical
As the first major contribution from the supplies to Manila from Toulouse
Defence and Space Division, a mobile aboard the delivery flight of Cebu Airs
rescue hospital capable of providing latest A330-300 aircraft.
medical support for up to 5,000 people
was donated to the German Red Cross Many of the Foundations flights have
in 2015 as part of the Groups been part of a cooperation agreement
response to the refugee crisis. In other with the International Federation of
areas, an A350 XWB test aircraft Red Cross and Red Crescent
completed a humanitarian mission to Societies. This long-standing
Nepal following the devastating partnership will deepen after a new
earthquake there and the delivery Memorandum of Understanding was
flight of a Nepal Airlines A320 was signed between both parties in The stories
used to transport medical specialists November 2015. continue non-stop on
annualreport.airbusgroup.com

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AIRBUS GROUP ANNUAL REPORT 2015 l 10 l

Key Figures 2015

ORDER INTAKE (1) EARNINGS PER SHARE (2)

159.0 bn
2014 l 166.4 bn l - 4%
REVENUES
3.43
2014 l 2.99 l + 15%

ORDER BOOK(1)
64.5 bn
2014 l 60.7 bn l + 6%
DIVIDEND PER SHARE (3)

1,005.9 bn
2014 l 857.5 bn l + 17%
EBIT* 1.30
2014 l 1.20 l + 8%

4.1 bn
2014 l 4.0 bn l + 1%

GOVERNANCE

Ethics and Compliance

79,691

Number of online training sessions: 64,748


Number of face to face/classroom sessions: 14,943

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AIRBUS GROUP ANNUAL REPORT 2015 l 11 l

2015

2015 RESULTS
Airbus Group reported solid 2015 results
with its guidance achieved for all key
performance indicators, reflecting
continued operational improvement.
Airbus received 1,080 net commercial
aircraft orders.
EMPLOYEES

136,574
2014 l 138,622 l -1%

NET CASH POSITION

10.0 bn
2014 l 9.1 bn l + 10%
R&D EXPENSES PROFITABILITY

NET INCOME (2) 3.5 bn


2014 l 3.4 bn l + 2%
While Group revenues increased
6%, reported EBIT* rose slightly
to 4,086million. Net income

2.7 bn
2014 l 2.3 bn l + 15%
and earnings per share each
increased by 15%.

GROUP REVENUES
Africa / Central and
Europe Asia-Pacific North America Middle East South America and Others

31% 29% 16% 13% 11%


* Unless otherwise indicated, EBIT* figures represented in this report are Earnings Before Interest
and Taxes, pre goodwill impairment and exceptionals.
The stories
(1) Contributions from commercial aircraft activities to Order Intake and Order Book based on list prices.
continue non-stop on
(2) Airbus Group continues to use the term Net Income. It is identical with Profit for the period annualreport.airbusgroup.com
attributable to equity owners of the parent as defined by IFRS Rules.
(3) To be proposed to the Annual General Meeting 2016.

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AIRBUS GROUP ANNUAL REPORT 2015 l 12 l

Preparing for the Future


LETTER FROM DENIS RANQUE, CHAIRMAN OF THE BOARD

Dear Shareholders, Dear Stakeholders,

W
hile financial markets over the past year have been volatile, our
Company continues to make sound progress on numerous
fronts, operational and strategic, but also from a governance
perspective.

On the operational side, managements sharp focus on


programme execution is paying off. In 2015, commercial
aircraft deliveries reached a new record of 635 units, the
A380 reached its breakeven target and the A350 ramp-up
advanced in line with plans. Furthermore, the A320neo was
certified before the year-end. The H160 new generation
helicopter programme commenced flight tests and progress
was made on the industrial situation of the A400M, although
challenges remain.
At the same time, important contracts were signed
underpinning the Groups business for many years to come.
With over a thousand new commercial aircraft orders, Airbus
over-achieved its booking target for the year; as did Airbus
Defence and Space, thanks in particular to satellite and MRTT
orders as well as to the Ariane 6 development contract.
The Board of Directors is playing an active role in supporting
management towards achieving Airbus Group goals and in
steering our Companys strategic course in the best interest
of its shareholders.
Throughout 2015, the Board closely monitored the technical The dividend, coupled with our ongoing 1 billion share
and commercial progress of the Groups major programmes. buyback launched in November 2015, is a reflection of the
It reviewed Enterprise Risk Management results, the internal Companys improving performance and of our commitment
audit plan and reoriented the Groups compliance programme to delivering shareholder value.
by implementing a reinforced anti-corruption policy.
Governance is another area where we continue to improve.
In support of the Groups strategic development, the Board The 2016 Annual General Meeting is rather special with many
initiated the Groups digital transformation and supported Board mandates up for renewal. In fact, only one mandate is
managements initiative to establish a corporate venture not up for election, that of Amparo Moraleda. Our aim here
fund as well as an innovation centre in Silicon Valley to help is to transition towards a best practice governance model,
the Company capitalise on transformational technologies combining annual election of Board members with the ability
and business models. Together with the rest of the Board, to retain and build on members experience. In the new
I strongly support this drive to make our Company more staggered model, one third of the Board will either be replaced
agile and quicker to market. That too, I believe, will bring or reappointed every year; hence the different mandate lengths
shareholder value in years to come. proposed this meeting. After this exceptional staggering
exercise, future Board mandates will be for three years.
Thanks to the Groups continued financial success, we are This year, we welcome three new Board members, Catherine
able to propose a dividend increase for the sixth year in Guillouard, Claudia Nemat and Carlos Tavares, who bring
succession at 1.30 per share, an amount which, based a fresh injection of highly relevant competences and skills.
on earnings per share of 3.43, is in line with our policy of a Overall, the new Board composition also reflects a more
payout ratio of between 30% and 40%. appropriate level of gender diversity, with 25% women now.

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AIRBUS GROUP ANNUAL REPORT 2015 l 13 l

BOARD OF DIRECTORS AS OF 1 JANUARY 2016

Denis Ranque
Chairman of
Our Company continues the Board of Directors
to make sound progress, of Airbus Group

also from a governance Tom Enders


Chief Executive Officer
perspective of Airbus Group

Denis Ranque Manfred Bischoff


Chairman of the Board of Directors Chairman of the
Supervisory Board
Daimler AG

Ralph D. Crosby, Jr.


Former Member of the Executive
Committee of Airbus Group and of
Northrop Grumman Corporation

Hans-Peter Keitel
Vice President of
the Federation of German
Industries (BDI)

Hermann-Josef Lamberti
CHAIRMAN OF AUDIT COMMITTEE
Former Member of the
Management Board
of Deutsche Bank

Anne Lauvergeon
Founder and CEO of ALP

Lakshmi N. Mittal
Chairman and Chief
Three members are not seeking renewal of their mandates Executive Officer
and are standing down at the end of this meeting at their of ArcelorMittal
own request. I would like to thank Anne Lauvergeon for her
valuable contribution to the Board over the last three years Amparo Moraleda
and Michel Pbereau for some nine years of outstanding Former General Manager of
IBM Spain and Portugal
service to the Company. A special word should be reserved
for our third departing member, Manfred Bischoff, a true giant
of the aerospace world by any standards. His contribution to Sir John Parker
CHAIRMAN OF
the consolidation of the European aerospace industry and to REMUNERATION, NOMINATION
the creation of EADS, but also his continued dedication to AND GOVERNANCE COMMITTEE
Chairman of
Airbus Group, cannot be overestimated. It is hard to imagine
Anglo American PLC
how Airbus Group could have come into existence without
Michel Pbereau
the vision and tireless efforts of Manfred Bischoff. Honorary President of
His foresight and convictions will continue to serve as a BNP Paribas and Chairman
shining example to us all. On that note, I would also like to of BNP Paribas Foundation
thank you, our loyal shareholders, for the trust you bring to our
Jean-Claude Trichet
management and to the Board. Let me assure you that we Honorary Governor of Banque
are determined to repay that trust. de France and former President
of the European Central Bank

Denis Ranque

AUDIT COMMITTEE REMUNERATION, NOMINATION AND GOVERNANCE COMMITTEE

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AIRBUS GROUP ANNUAL REPORT 2015 l 14 l

Improving Competitiveness
INTERVIEW WITH TOM ENDERS, CHIEF EXECUTIVE OFFICER

H
Atthe same time, weve invested into the future with various
new and revamped products as well as new international
sites and partnerships.
At Defence and Space, we achieved our order bookings
thanks to good demand for satellites, A330 MRTT aircraft
and the important Ariane 6 development contract. In fact, the
book-to-bill ratio was above one within this Division which
is a healthy sign. And we shouldnt forget the landmark
ow would you sum up Airbus agreement we signed with OneWeb to design and build
Groups 2015? 900 small telecommunications satellites, to provide internet
access all around the globe.
Difficult to sum up a full business year in a few sentences
I would also like to say that I am very proud of the tireless
but Ill give it a shot. We have described the past year as
efforts of our employees. It is largely thanks to their hard work
one of solid performance. It means nothing less than: 2015
that we were able to record a 15 percent rise in earnings per
was a successful year! This becomes most apparent in our
share and deliver our 2015 financial guidance. And, obviously,
Commercial Aircraft business: we turned out more aircraft than
we want our shareholders to benefit from this positive
ever before and again scored over 1,000 new orders. Our order
development as well: our proposed dividend of 1.30 a share
book exceeded 6,800 aircraft at the end of the year and this
and the share buyback of 1 billion approved during the year
record backlog certainly supports our decision to raise the
show our strong commitment to increase shareholder returns.
single-aisle production rate to 60 jets a month in mid-2019.
In 2015, we also progressed in our other businesses.
What were your operational highlights?
AtHelicopters, we successfully defended our leading position
despite very tough market conditions. We have been resilient For our commercial aircraft business, in a nutshell,
because we acted quickly in the face of a slowdown in first deliveries of our new A350 to airline customers, the
the commercial helicopter market and launched a rigorous certification of the A320neo, the break-even of the A380
transformation plan three years ago. This is paying off now. programme, after 15 years of heavy investments and losses,
and the opening of our new Final Assembly Line in Mobile,
Alabama.
In helicopters, our highlights were the first flight of the brand-
new H160, as well as the good market reception of the H175
and H145.
In defence, the improvement of the industrial and quality situation
We want our of the A400M is certainly worth mentioning and in space, Ariane
5 once again scored an impeccable launch record.
shareholders
to benefit from What progress did you make in reshaping
this positive the Group to face its upcoming challenges?
We continued implementing our strategy to focus on core
development businesses. We sold off another large portion of our holding
in Dassault Aviation and signed an initial agreement for the
Tom Enders sale of our commercial satellite communication business.
Chief Executive Officer We expect to make further progress during 2016 with the
other divestments within Defence and Space, most notably
the electronics business.
And I hope that, despite delays, we can soon conclude
our new launcher JV with Safran, in order to improve our
competitiveness in this important industry sector. However, as
necessary as consolidation of Defence and Space is, the new
division head, Dirk Hoke, has the task to capture and develop
new growth opportunities in military aircraft and space.

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AIRBUS GROUP ANNUAL REPORT 2015 l 15 l

We have a lot to do in
2016 and the coming
years but all the
foundations are there to
deliver our growth story
Tom Enders
Chief Executive Officer

In 2015, we also made significant progress in fostering Thirdly, on the A400M programme, we need to advance the
innovation and digital transformation: our new innovation-to- military functionalities, control costs and improve operational
business centre, known as A3, was set up in record time in the reliability. Despite the progress made in 2015, the A400M
Silicon Valley and we also created a corporate venture fund continues to be challenging. Its the number one priority for
. Airbus Ventures for investments into start-ups worldwide. Defence and Space.
Both Valley initiatives are already fully operational and have Apart from programme execution and continuous operational
started their first activities. Digital transformation is also a improvement, the main focus is on the three Is: Integration,
strategic imperative and will be central to our operating system Internationalisation and Innovation. All this will require
for the foreseeable future. We need to get faster, bolder and, at significant efforts of everyone in the Company. We have a lot
the same time, better in operational execution! Its all about that. to do in 2016 and the coming years but all the foundations
are there to deliver our growth story and to improve our
What are your key priorities going forward? competitiveness for the coming decade!
Operationally, I see three major challenges on our key
programmes in 2016. First and most important is the
transition from CEO to NEO on our A320 family programme
and, at the same time, raising the production rates. The A320
is our bread-and-butter business and with the cooperation of
our engine partners, we will hopefully be able to deliver on our
customer commitments. The A320neo and its strong market
position holds huge promise for Airbus, its the main driver of
our growth story for the years ahead.
Secondly, the A350 XWB ramp-up; we are targeting more The stories
than 50 A350 deliveries in 2016. Thats a steep increase continue non-stop on
from last year. annualreport.airbusgroup.com

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AIRBUS GROUP ANNUAL REPORT 2015 l 16 l

AS OF 1 JANUARY 2016

Flying
with a clear 13
05
02

heading
09
08 04
10
11

Group Executive Committee

THE BELUGA
Five Beluga aircraft transport large
components between Airbus production
sites in Europe with over 60 flights a week.
A larger version, known as the Beluga XL and
based on the A330-200 freighter, is being
developed to address capacity requirements
in view of the A350 XWB ramp-up and other
production rate increases.

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AIRBUS GROUP ANNUAL REPORT 2015 l 17 l

01

TOM ENDERS
Airbus Group
Chief Executive Officer

02 03

FERNANDO ALONSO FRANOIS AUQUE


Airbus Defence and Space Airbus Defence and Space
Head of Military Aircraft Head of Space Systems

04 05

THIERRY BARIL JEAN BOTTI


Airbus Group and Airbus Airbus Group
Chief Human Resources Officer Chief Technical Officer

12 06 07

01
03 14
06
15
07
FABRICE BRGIER GUILLAUME FAURY
Airbus Airbus Helicopters
Chief Executive Officer Chief Executive Officer

08 09

BERNHARD GERWERT JOHN HARRISON


Airbus Defence and Space Airbus Group
Chief Executive Officer Group General Counsel

10 11

MARWAN LAHOUD JOHN LEAHY


Airbus Group EVP International, Airbus Chief Operating
Strategy & Public Affairs Officer - Customers

12 13

ALLAN MCARTOR KLAUS RICHTER


Airbus Group, Inc. Airbus Group and Airbus
Chairman and CEO Chief Procurement Officer

14 15

HARALD WILHELM TOM WILLIAMS


Airbus Group and Airbus Airbus
Chief Financial Officer Chief Operating Officer

DIRK HOKE
succeeded Bernhard
Gerwert on 1 April 2016

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AIRBUS GROUP ANNUAL REPORT 2015 l 18 l

Delivering on Commitments
INTERVIEW WITH HARALD WILHELM, CHIEF FINANCIAL OFFICER

Including the proceeds from divestments, chiefly a portion


of our Dassault Aviation participation, our free cash flow
reached 2.8billion, leading to a net cash position by the
end of 2015 of 10 billion. So all in all, were on track. Were
We have a clear laying the groundwork now for our production ramp-ups.
commitment to And were doing that in a disciplined way.
improving Whats driving the free cash flow improvement?
shareholder The improvement is driven by a strong performance in
returns deliveries, a very healthy inflow of advances on the commercial
side, and our focus and control on the working capital.
Harald Wilhelm We are ramping up the A350 and A400M and preparing first
Chief Financial Officer for rate 50, then for rate 60 on the single aisle as well as the
transition to the NEO. But at the same time, were making
progress in inventory management, improving inventory turns
on programmes and reducing the number of days in which
we have highest value items in the Final Assembly Line. We
also have a rigorous approach to PDP collection.

What about the commercial environment:


any signs of a slowdown?
The market environment for commercial aircraft was again
good in 2015. We won more than 1,000 net orders. Wehave
a record backlog of 6,800 aircraft, which supports our

ow would you summarise

H the 2015 results?


2015 was a year of solid financial and operational
performance. We delivered on our commitments
and achieved the guidance for all KPIs, while
maintaining our outlook for 2016 and beyond.
Going through the numbers, revenues were up 6 percent
CONSISTENT GROWTH
IN ORDER BOOK

to 64.5 billion, mainly driven by Commercial Aircraft, with Order Book by Region
deliveries up again to a record level of 635 aircraft, including
14 A350 XWBs. Helicopter revenues were up 4 percent,
mainly thanks to higher services activities. That is a great
performance when you consider the soft overall helicopter
market. And at Defence and Space, revenues were broadly
stable, despite the deconsolidation of some of the launcher 16%
business. On a comparable basis revenues increased by 31%
4percent. Looking now at our underlying performance, the 12%
EBIT* before one-off, we achieved slight progress over 2014,
driven by performance improvements in all Divisions, and in 18%
particular the A380, which is now at break-even. 23%
At Helicopters, lower delivery volumes were compensated by
our services business and progress on the transformation
plan. The improvement at Defence and Space reflects
strong programme execution across all business lines and
transformation efforts.
Bottom line impact, ie net income and EPS, grew by Asia-Pacific Middle East
15 percent. Notwithstanding the heavy investment phase Europe Africa / Central and
in our programmes, our free cash flow also improved to North America South America and Others
1.2billion before M&A.

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AIRBUS GROUP ANNUAL REPORT 2015 l 19 l

EARNINGS PER SHARE (1) AIRBUS GROUP DIVIDEND


PERFORMANCE (in ) Gross dividend per share (in )

4 4 1.5 1.5

3.43 1.30 (2)


1.20
2.99 1.2 1.2
3 3

0.9 0.9
0.75
2 1.86 2

0.6 0.6

40% 40% 38%


1 1
0.3 0.3

0 0 0 0
2013 2014 2015 2013 2014 2015

Pay-out ratio
(1) FY2015 Average number of shares: 785,621,099 compared to 782,962,385 in FY2014. (2) To be proposed to the Annual General Meeting 2016.

ramp-up plans to rate 60 on the single-aisle in 2019 and back Our R&D spending should normalise at a lower level than
to 7 per month on the A330 in 2017. Deferral activity is normal todays, even with some buffer for incremental innovation.
and net cancellations are at a very low level. And finally, of course, we continue to drive competitiveness
Despite a difficult market environment linked to global initiatives across our businesses.
softness and weaker oil and gas, Airbus Helicopters So all in all, looking from todays standpoint, as long as we
defended its market position. deliver on our programme execution plans, Id say the best
We saw very healthy momentum on the Defence and Space is yet to come!
side, with a book-to-bill above 1. That was driven very much
by military aircraft, especially tankers, but we did well on How much of the improvement do you expect
telecommunications satellites, too. to flow through to shareholders?
Of course, were also watching the macro-environment very We have a clear commitment to improving shareholder
closely and we have the appropriate risk management tools returns. We have more than doubled the dividend since
in place to manage backlog. Air traffic continues to grow at a 2012. We introduced a formal dividend policy at the end of
higher pace than global GDP. The low oil price is supporting 2013: a sustainable growth in dividend within a payout ratio of
the profitability of our airline customers, they are now reporting 30-40%. This has provided shareholders with more visibility of
unprecedented margins. Low interest rates and high liquidity returns for their investment.
also make it a favourable environment for aircraft financing, as On top of that, weve returned value to our shareholders
commercial aircraft is an attractive asset class. through our share buybacks, with an additional 1 billion
launched in October 2015. Capital allocation matters to
How do you see the Groups performance us! We will continue to review our capital allocation policy
in the years ahead? against our cash performance, cash position and future
As weve clearly said in our guidance, we expect to deliver cash needs.
more than 650 aircraft in 2016 and the commercial order
book is expected to grow. We expect 2016 EBIT* before one- The stories
off and EPS* before one-off to be stable, based on a constant continue non-stop on
perimeter. 2016 is a year of consolidation while we deliver on annualreport.
our challenging programme targets, and with lower A330 EBIT* BEFORE ONE-OFF(3) airbusgroup.com
deliveries as we proactively reduced the rate. (in bn)
Looking at 2017 and in particular 18 and 19, we see
significant earnings growth potential, from the building blocks
5 5
we have in place.
6.7% 6.4%
So what are the main profitability drivers? 4 4
6.1%
Firstly, we have strong A320 volume potential as we follow the
path to rate 50 in 2017, then rate 60 in 2019. The A320neo 3 3

premium will come on top of that from 2018.


Then we have the A350. We are targeting rate 10 by the 4.07 4.13
2 2
end of 2018. On that basis, the programme should reach 3.54
breakeven before the end of the decade. This is a significant
1 1
improvement from today, where we have to bear the usual
losses of the early industrialisation phase.
0 0
On top of that we have the favourable FX environment. Were
2013 2014 2015
fully hedged for 2016 and almost completely hedged for 2017, For more detailed information,
too. But were taking the full benefit of the upside for 2018 and please refer to the
beyond, which will feed through into our earnings. (3) In % of Revenues. FINANCIAL STATEMENTS

Airbus_RA_2015_2016 web_IPEDIS.indd 19 11/05/2016 10:26


AIRBUS GROUP ANNUAL REPORT 2015 l 20 l

Supported by robust global


commercial aircraft demand, Airbus
order backlog continued to grow,
while aircraft deliveries also increased
year-on-year to a historically high
level. Progress was made in key
programmes, and the A380 achieved
its break-even target.

G
lobal demand for commercial
aircraft remained strong in 2015.
Airbus won 1,080 new net orders,
comprising 945 single-aisle aircraft
and 135 widebodies, comfortably
beating the target of a book-to-bill
above 1. As a result, the backlog reached a new
industry record of 6,831 aircraft, representing
ten years of production at current rates. In value
terms the backlog was worth 952.5 billion at
list prices. A380
01. Lorem Ipsum

With 635 new aircraft delivered to 85 customers,


Airbus also beat its previous delivery record set
improvement, with a strong contribution from the version of the A350-900. This variant, capable
in 2014, and succeeded in increasing deliveries
A380 programme. of performing 19-hour flights, will allow the
for the 13th year in a row. In 2015, 491A320
airline to start non-stop services from Singapore
Family aircraft, 103 A330s, 27 A380s, and
PRODUCTION INCREASE to New York and Los Angeles. In addition,
14A350 XWBs were handed over to customers.
A major highlight of the year was the official important progress was made on the A350
Revenues rose 8% to 45.9 billion (2014:
opening of Airbus first US factory at Mobile, programmes next variant, the A350-1000, with
42.3billion), reflecting a favourable evolution of
Alabama. Between 40 and 50 single-aisle major components and structures entering into
the US dollar rate as well as the delivery mix.
aircraft will be produced there annually by 2018. production at various Airbus plants.
EBIT* before one-off increased by 10% to
2.8billion (2014: 2.5 billion), due to operational Based on the robustness of the backlog and
supply chain capability, the decision was taken
to increase overall single-aisle production to a
KEY PRIORITIES for 2016
rate of 60 per month in mid-2019, up from 42
in 2015. Meet A350 delivery targets, focus on
As planned, the A320neo achieved its ramp-up and cost control.
certification from European and US aviation Achieving a smooth entry-into-service
authorities before the end of 2015, paving of the A320neo with our customers and
the way for entry-into-service and the first securing the industrial transition from
CEO to NEO.
A320neo was delivered in January 2016.
Production of the A330neo started, with the Raising production of the single-aisle
family as we build towards rate 50 in
machining of the first engine pylon and centre 2017 and rate 60 in mid-2019.
wing-box components. Additional A330 orders, Develop A330neo in accordance with
in particular from China, enabled Airbus to plan milestones.
for a smooth transition towards the A330neo. Reaching and going beyond our
Airbus and Chinese partners signed a framework efficiency and competitiveness targets
agreement to set up an A330 Completion and for 2016.
Delivery Centre in Tianjin, China. Introducing a roadmap and programme
for the use of digital technology
throughout Airbus.
A350 PROGRESS
Strengthening our focus on people
In 2015, Singapore Airlines became the first development.
customer to order a new Ultra-Long Range

Airbus_RA_2015_2016 web_IPEDIS.indd 20 11/05/2016 10:26


AIRBUS GROUP ANNUAL REPORT 2015 l 21 l

A350 XWB

1,080
NET ORDERS
57%
MARKET SHARE
6,831
AIRCRAFT ORDER
635
DELIVERIES
1ST
US MANUFACTURING
(IN UNITS) (BY NET ORDERS) BOOK (IN UNITS) FACILITY OPENS

KEY FINANCIAL FIGURES EXTERNAL REVENUES ORDER BOOK(1) BY REGION


BY ACTIVITY
in million 2015 2014 Change (Platforms / Services split)

Order Intake 9% 18%


139,062 150,085 -7.3% 29%
(net) 6%
Order Book 952,450 803,633 +18.5% 1%
Revenues 45,854 42,280 +8.5% 95% Platforms 20%
5% Services 6%
EBIT* 2,301 2,671 -13.9% Lessors
R&D
2,702 2,667 +1.3%
expenses

(1) 11% of undisclosed customers 2% Freighters

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AIRBUS GROUP ANNUAL REPORT 2015 l 22 l

Airbus Helicopters proved resilient The Division continued to lead the worldwide
in a challenging environment for civil and parapublic market, with a 45% market
the helicopter market, delivering share of deliveries (turbine helicopters over a 1.3t
increased revenues while making Maximum All Up Weight MAUW).
progress in its product renewal and Airbus Helicopters EBIT* before one-off stood
business transformation initiatives. at 427 million (2014: 413 million), thanks to
services activity and progress on the Divisions
transformation plan, despite lower volumes.
espite weak market conditions,

D Airbus Helicopters won orders


amounting to 6.2 billion in value
(2014: 5.5 billion), comprising 333
net helicopter orders (2014: 369).
The new-generation H175 and
H145 helicopters received a favourable market
PRODUCT RENEWAL
In the civil market, the all-new, medium-weight
H160 civil helicopter was unveiled and started
flight testing, with a planned entry-into-service
in 2018. In addition, the next-generation heavy- MARKET DEVELOPMENT
In 2015, Airbus Helicopters continued to
NH90

response, with 36 H175 orders, including 27 for lift X6 helicopter, tailored for the civil market,
oil and gas market players Bristow and Milestone, entered its two-year concept phase. consolidate its international footprint in Asia and
and 107 orders for the H145, notably 53 Lakota Airbus Helicopters unveiled a redefined, Eastern Europe.
Light Utility Helicopters for the US Army. comprehensive services offering. The new HCare The Company was selected by Korean
At the end of 2015, the order book amounted offering is indeed a product of the company-wide Aerospace Industries as a strategic partner in
to 11.8 billion in value (2014: 12.2 billion), transformation initiative, focusing on continuous the LCH-LAH development based on the H155
comprising 831 helicopters (2014: 893). improvement and customer satisfaction. platform, ten years after the two companies
Despite lower overall deliveries of 395 helicopters In the military segment, the H145M was certified partnered for the development of the Surion.
(2014: 471), revenues rose to 6.8 billion (2014: by EASA and delivered to the German Armed A new partnership was also signed with the aim
6.5 billion), including higher services activity. Forces in December. Airbus Helicopters also to open a Final Assembly Line for the production
Civil and military activities each represented 50% launched the development of an upgrade of the of 100 H135s in China, where Airbus Helicopters
of revenues in 2015. While Platforms contributed H135 equipped with the Helionix digital avionics is the leader in the civil and parapublic market.
53% of revenues, the remaining 47% came from suite already available on the H145 and H175. In November 2015, the heavyweight H215 was
Support & Services. introduced. This helicopter will be produced
in Romania as a modern and cost effective
solution for utility and peacekeeping operations.
In Europe, the Polish Ministry of Defence pre-
selected the H225M military helicopter for the
test phase of its multi-role helicopter tender.

KEY PRIORITIES for 2016

Airbus Helicopters will pursue the


execution of its strategy in 2016 by:
Improving further, based on 2015s
successes, the fleet availability of our
customers, timely deliveries of spares,
and operational costs.
Ensuring the entry-into-service of new
variants such as the H175 VIP, Panther
MBe and the achievement of our key
development milestones on H160.
Focusing on major military campaigns
and concluding contracts with pre-
selection status.
Continue the focus on transformation to
deliver on operational, financial targets
and prepare the future in anticipation of
a commercial market recovery.

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AIRBUS GROUP ANNUAL REPORT 2015 l 23 l

H175

395
ROTORCRAFT
333
NET ORDERS
H160
FIRST FLIGHT
831
ORDER BOOK
45%
SHARE OF CIVIL AND
DELIVERED BOOKED (IN UNITS) PARAPUBLIC MARKET

KEY FINANCIAL FIGURES EXTERNAL REVENUES EXTERNAL REVENUES


BY ACTIVITY BY ACTIVITY
in million 2015 2014 Change (Platforms / Services split) (Defence / Civil split)

Order Intake
6,168 5,469 +12.8%
(net)
Order Book 11,769 12,227 -3.7%
Revenues 6,786 6,524 +4.0% 53% Platforms 50% Defence
EBIT* 427 413 +3.4% 47% Services 50% Civil
R&D
325 325 0.0%
expenses

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AIRBUS GROUP ANNUAL REPORT 2015 l 24 l

Airbus Defence and Space saw


KEY PRIORITIES for 2016
strong order intake across business
lines, while making further progress Deliver what we promise to make our
in its transformation and portfolio products and services a success for our
optimisation. Underlying profitability customers and achieve our operational
and financial targets.
benefited from good programme
Deliver A400M capability and ramp up.
execution and progress on
Prepare the future by increasing focus
the transformation programme. on the Innovation chain, winning key
sales campaigns and translating growth
ommercial momentum proved strategy into product policies.

C strong in 2015 with among others


14 A330 Multi-Role Tanker Transport
(MRTT) orders, of which 4 from
new customer South Korea. The
Space business won orders for
5telecommunications satellites, including the
Boost competitiveness through
digitalisation initiatives and a reinforced
continuous improvement culture.
Engage people by attracting, retaining
and developing talents with a focus on
diversity while maintaining high safety,
ethical and environmental standards.
first contract for the fully reconfigurable Quantum
satellite with Eutelsat and the European Space
Agency (ESA), and an order from Inmarsat for two
next generation mobile communications satellites. AIRBUS DEFENCE AND SPACE
2015 RESULTS
SPACE HIGHLIGHTS Airbus Defence and Space order intake
The European Space Agency (ESA) and Airbus amounted to 14.4 billion (2014: 12.2 billion). At
Safran Launchers laid the foundations for the year end, the order book stood at 42.9 billion
future launcher business with the signature of a in this sector. Besides the strategic win in South (2014: 43.1 billion).
contract covering the development of Ariane 6. Korea, the MRTT won confirmation from France Revenues in 2015 were broadly stable at
Another major Space milestone was the award for eight more aircraft and Australia put in a 13.1 billion (2014: 13.0 billion), despite the
by OneWeb of a contract for 900 small satellites, repeat order for two. The MRTT has now been de-consolidation of some launcher revenues
which will be used to deliver affordable Internet selected by nine nations plus the European (around 500 million) that are now part of the
access globally. The first satellites are due to be Defence Agency. Airbus Safran Launchers Joint Venture.
launched in 2018. Eurofighter secured the 200 million Phase Seven satellites were launched into orbit. With
ESA orders included the contract for a 3 Capability Enhancement (P3E) contract to 6launches in 2015, Ariane 5 brought up its 69th
spacecraft, named JUICE, to study Jupiter and enhance greatly its swing-role capability, in consecutive launch success.
its icy moons, and a service module for Orion, particular with the introduction of the Brimstone
the future US manned space capsule. 2 precision air-to-surface missile, and also Military aircraft deliveries included 11 A400Ms,
demonstrated release of the MBDA Storm 4 A330 MRT Ts and 19 light and medium
MILITARY AIRCRAFT HIGHLIGHTS Shadow long-range stand-off missile. Flight trials transport aircraft.
Military Aircraft booked 17 light and medium of an Aerodynamic Modification Kit showed
aircraft orders, maintaining its market dominance remarkable potential for future gains in agility. PROGRESS ON A400M PROGRAMME
During 2015, the A400M industrial situation
improved even if challenges remain on delivering
military capabilities and controlling associated
costs during the ramp-up phase. 2015 saw
the first export customer delivery to Malaysia.
Discussions with customers on the mission
capability roadmap and delivery plan continued.
EBIT* before one-off increased to 1,060 million
(2014: 920 million), driven by good programme
execution as well as progress on transformation.
After a 290 million charge related to the A400M
A330 MRTT REFUELLING A400M programme, reported EBIT* stood at 745
million (2014: 409 million).

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AIRBUS GROUP ANNUAL REPORT 2015 l 25 l

EUTELSAT E3000

14
ADDITIONAL
5
TELECOMMUNICATIONS
69TH
CONSECUTIVE SUCCESSFUL
900
SATELLITES TO BE BUILT
A330MRTT ORDERS SATELLITES BOOKED LAUNCH FOR ARIANE 5 FOR ONEWEB

KEY FINANCIAL FIGURES EXTERNAL REVENUES REVENUES BY BUSINESS LINES


BY ACTIVITY
in million 2015 2014 Change (Platforms / Services split)

Order Intake (1) 10%


14,440 12,225 +18.1%
(net)
41% 20%
Order Book 42,861 43,075 -0.5%
(2)
Revenues 13,080 13,025 +0.4% 74% Platforms
Electronics 29%
EBIT* 745 409 +82.2% 26% Services
CIS (3)
R&D Space Systems
344 360 -4.4%
expenses
Military Aircraft

(1) On a constant perimeter +23% (3) Communications, Intelligence & Security


(2) On a constant perimeter +4%

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AIRBUS GROUP ANNUAL REPORT 2015 l 26 l

Corporate Social Responsibility

Airbus Group is a signatory to the United


Nations Global Compact (UNGC) and believes QUALITY EDUCATION
in the capacity of the private sector to make the SDG 4: Ensure inclusive and equitable quality education
world a better place. The Group supports the and promote lifelong learning opportunities for all
Sustainable Development Goals launched by
the UN in 2015. This report highlights the way As well as providing continuous training for the company workforce, the Group actively encourages
in which Airbus Group is directly contributing science, technology, education and maths (STEM) education for school children, backing a
to some of these goals. number of science museums and school programmes in Europe and worldwide. The Airbus
Foundation Flying Challenge is a youth mentoring programme, supporting disadvantaged and
disengaged youth across six different Airbus sites in Europe and the US.
THE GLOBAL GOALS
Number of participants to training: Employee training: more than

226,692 in 2015 2 million hours in 2015


AIRBUS FOUNDATION
FLYING CHALLENGE 2015

611 students attended


208 employees volunteered
STEM UK PROGRAMMES
1 No poverty 10 Reduced
inequalities
2 Zero hunger
3 Good health 11 Sustainable cities More than 150,000
and well-being and communities young people
4 Quality education 12 Responsible
5 Gender equality
consumption WORLD SPACE WEEK
and production
6 Clean water and
13 Climate action
sanitation schools and local
7 Affordable
14 Life below water
15 Life on land
856 organisations visited
and clean energy
8 Decent work and 16 Peace and justice
economic growth strong institutions
9 Industry, innovation 17 Partnerships for GENDER EQUALITY
and infrastructure the goals
SDG 5: Achieve gender equality and empower
all women and girls

DECENT WORK AND


ECONOMIC GROWTH WOMEN IN
THE WORKFORCE 2015
SDG 8: Promote sustained, inclusive and
sustainable economic growth, full and productive
employment and decent work for all 21.9% Recruits
The aviation industry supports 58.1 million jobs
worldwide and US$ 2.4 trillion in GDP.* These jobs 17.2% Active Workforce
are spread across the aviation industry, its suppliers,
businesses induced by aviation industr y and 10.9% Senior management/
tourism. The industry is set to continue expanding. executive
The Airbus Global Market Forecast for 2015-2034
anticipates that air traffic will grow at 4.6% annually. We develop our leaders, especially our managers, to create an inclusive and engaging climate
to enable diverse teams to flourish.We recognise the value that diversity bringsand weensure
If aviation were a country, it would rank
that everyone has the skill sets required towork together towards the best possible outcomes.
The Group is committed to advancing women in the workplace and developing female talent.
21st in size by GDP Itis determined to increase the percentage of female new recruits to 30% and is committed to
significantly increase the number of women in senior management positions. In 2015, the Group
* According to Aviation Benefits beyond borders, a report launched Balance for Business, its brand new network to foster gender balance involving more
published by the Air Transport Action Group based on analysis than 3,000 employees.
by Oxford Economics.

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AIRBUS GROUP ANNUAL REPORT 2015 l 27 l

The stories continue non-stop


on annualreport.airbusgroup.com

INDUSTRY, INNOVATION AND INFRASTRUCTURE RESPONSIBLE


CONSUMPTION
SDG 9: Build resilient infrastructure, promote inclusive AND PRODUCTION
and sustainable industrialisation and foster innovation
SDG 12: Ensure sustainable
consumption and production patterns
GEOGRAPHICAL SPLIT
OF SUPPLY CHAIN Industrial facilities are continually modernized to
reduce energy consumption and CO2 emissions,
while new manufacturing practices and processes
are cutting waste and water consumption, as well
3% as volatile organic compound (VOC) emissions.
Environmental reporting is embedded across the
Group and is externally audited.
28%

69% ENVIRONMENTAL FOOTPRINT


Airbus operates a global network of accelerator REDUCTIONS*
facilities called Airbus BizLabs to speed up
the transformation of ground-breaking ideas into
valuable business propositions. In developing its

in energy consumption

in water consumption
BizLab concept, Airbus leveraged the experience of

in waste production
start-up support programmes from other sectors

in VOC emissions
in CO 2 emissions
Europe
having forged collaborations with such companies North America
as Microsoft Ventures, Orange Fab and Google. Rest of the world
Airbus Group has established sourcing offices in
China, India, the United States and Brazil. Within
Europe, both Airbus Helicopters and Airbus 3
Defence and Space support SMEs performance BizLabs opened in 2015
-35.2% -37.6% -22.0% -38.4% -62.3%
in the supply chain.
* 2006 baseline, Revenue based, Airbus Group legal entities scope of reporting.

CLIMATE ACTION PEACE, JUSTICE AND STRONG INSTITUTIONS


SDG 13: Take urgent action to combat SDG 16: Promote peaceful and inclusive societies for sustainable
climate change and its impacts development, provide access to justice for all and build effective,
accountable and inclusive institutions at all levels

Good governance both prevents corruption and provides a platform for creating shareholder
value. Airbus Group has strong corporate governance frameworks, including controls and
risk management, and ethics & compliance. In 2015, it significantly increased ethics and
compliance training.

64,748 online sessions 14,943 classroom sessions

PARTNERSHIPS FOR THE GOALS


SDG 17: Strengthen the means of implementation and revitalize
the global partnership for sustainable development

Airbus supports the civil aviation sectors agree- Alongside the many partnership activities of
ment on a CO2 standard for aircraft technology the Group to meet social and environmental
announced by the UNs International Civil Aviation challenges, Airbus Group actively supports
Organisation ICAO. The Group also suppor ts the Airbus Foundation which signed in 2015
ICAOs work towards an agreement on a global a Memorandum of Understanding with the
Market Based Measure to offset CO 2 emissions International Federation of the Red Cross
from civil aviation, to be agreed at the ICAO General (IFRC) and Red Crescent Societies covering:
Assembly in 2016. product and service support during natural
Airbus Defence and Space plays a key role in disasters, brokering support with Group cus-
climate monitoring. Its CryoSat-2 satellites measure tomers and operators, staff exchange and
changes in the thickness of polar ice and the training, and support for innovative solutions.
Sentinel-6 satellites, to be launched in 2020 and
2026, will measure changes in sea level.
FOUNDATION ACTIVITIES WITH PARTNERS IN 2015 (INCLUDING IFRC)

25% 20% 50 160 1 9


less CO2 emissions less CO2 emissions flight hours using tonnes of aid to Malawi, rescue station for humanitarian flights
A350 XWB* A320neo by 2020* Airbus Helicopters the Philippines, a refugee camp using Airbus aircraft
for relief activities in Yemen, Nepal, near Munich
Vanuatu, Dominica Vietnam and Dubai
*Compared to the aircraft it replaces and Chile.

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AIRBUS GROUP ANNUAL REPORT 2015 l 28 l

Innovation Highlights

SATELLITE MILESTONE ELECTRIC FLIGHT

Developed in an Airbus Group-led European programme, the E-Fan


demonstrator was designed from the outset specifically for electric power
a world first. In July 2015, the E-Fan became the first all-electric aircraft to
cross the English Channel taking off and landing under its own power.
The E-Fan demonstrator sets the stage for subsequent production versions:
first, the two-seat E-Fan 2.0, scheduled to make its maiden flight late in 2017.

X6 CONCEPT PHASE LAUNCHED

Heralding a new generation of reconfigurable The next-generation, twin-engine X6 helicopter aims to be the benchmark for
satellites, Quantum is the first satellite able to the heavy helicopter sector for the next decade and beyond. Amongst its major
adapt its coverage, bandwidth, power and innovations will be the fly-by-wire flight control system. While initially targeting oil
frequency and even change its orbital position and gas missions, the X6 will also be suited to search and rescue, VIP and other
to suit changing customer requirements. applications. The X6 will share commonality features with the companys latest
In 2015, Airbus Defence and Space signed rotorcraft. The concept was launched in 2015 and entry-into-service is planned
the first Quantum satellite contract with Eutelsat for the 2020s.
and the European Space Agency (ESA).

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AIRBUS GROUP ANNUAL REPORT 2015 l 29 l

DATA PROTECTION BIONIC 3D PRINTING


AND THE DIGITAL JOURNEY

Airbus Group is strongly focused on data as a vital Airbus and Autodesk have unveiled the worlds largest 3D-printed airplane
raw material to be protected and utilised for new cabin component: a bionic partition to separate the passenger cabin from
business opportunities. Based on new methods of the galley. The innovative design mimics the organic cellular structure and
data sharing, manufacturing processes are being bone growth found in living organisms. The result is a partition that is very
speeded up. Through its network of business strong but also lightweight, weighing 45% (30 kg) less than current designs.
incubators and innovation centres, Airbus Group is This is a groundbreaking development for a sector in which less weight
working with start-ups and academia to explore equals less fuel consumption. When applied to the entire cabin and to the
new business models, such as a pilot project for current backlog of A320 planes, Airbus estimates that the new design
on-demand air transportation. approach could save up to 465,000 metric tonnes of CO2 emissions a year.

REUSING SPACE LAUNCHERS STRATOSPHERE GLIDER

The Adeline (ADvanced Expendable Launcher with INnovative engine The Perlan engineless glider is preparing for a
Economy) programme is a concept being developed by Airbus Defence record-breaking flight to the edge of space in 2016.
and Space. A re-entry module rather than a launcher in its own right, Riding air currents to 90,000 feet, the glider will
Adeline will enable the launchers main engines and avionics, representing provide new insight into climate change and the
between 70% and 80% of the total value of the launch vehicle, to be upper atmosphere. Because it does not have an
recovered and refurbished. The concept could be implemented on the engine, Perlan can explore the stratosphere without
Ariane 6 launcher or any other launcher. polluting the atmosphere it will study. Perlan is
supported by Airbus Group and other sponsors.

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AIRBUS GROUP ANNUAL REPORT 2015 l 30 l

Share Information

SHARE PRICE EVOLUTION CAPITAL STRUCTURE


As of 31 December 2015
Base 100 as of 2 January 2013 Airbus Group share price in

2013 2014 2015


250
70 11%

11%
60 4%
200
74%
50

150
40

100 30
Free Float (1)
SOGEPA (French State)
GZBV (German State)
J F M A M J J A S O N D SEPI (Spanish State)
Airbus Group CAC 40 MSCI Aerospace (in , adjusted daily US $/ rate) (1) Include Treasury shares (<0.2%) without economic
or voting rights.

After seeing a period of consolidation with growing concerns over the Greek debt cri-
in 2014, Airbus Group shares made sis, geopolitical turmoil, particularly in the Middle FINANCIAL CALENDAR
a strong return into positive territory East, and the fall in commodity prices to his-
in 2015. Despite macroeconomic torical lows. In addition, market uncertainties in FULL YEAR 2015 RESULTS RELEASE
instability and volatile stock markets, emerging countries and declining growth rates 24 February 2016
the share advanced 50% during in China brought overall markets down.
the course of the year, supported FIRST QUARTER 2016 RESULTS RELEASE
Early in October, the US Federal Reserve de- 28 April 2016
by the Groups solid operational
layed an expected interest rate increase, giv-
and financial performance and a
ing equity markets a boost. For Airbus Group ANNUAL GENERAL MEETING 2016
euro-dollar tailwind.
investors, the nine-month results release on 28 April 2016
30October 2015 provided further grounds for
Starting from its low of 41.35 at the close of
optimism, with news of a further single aisle HALF YEAR 2016 RESULTS RELEASE
31 December 2014, the Airbus Group share
production rate increase and confirmation of a
price breached for the first time ever the 60 27 July 2016
1billion share buyback.
mark at closing on 11 March and reached in
August and November two new all-time highs
of 67.18 and 68.44, respectively, each time During the last month of the year, the stock de-
following the disclosure of Airbus Group results. clined, despite several target price increases by INVESTOR RELATIONS AND
analysts, following new historical lows in the price FINANCIAL COMMUNICATION
In the first months of the year the Airbus Group of oil and a slightly stronger euro against the dollar. CONTACT DETAILS
share progressed, supported by favourable EUR/ On 31 December 2015, the Airbus Group share
price closed at 62.00. Toll-free telephone numbers
USD rates, following the launch of additional
quantitative easing measures by the European France: 0 800 01 2001
Central Bank towards the end of January 2015, Thanks to the strong year on year performance
Germany: 00 800 00 02 2002
and Airbus Groups announcement in February of the Airbus Group share price outperformed
a production rate increase within the single-aisle the MSCI Aerospace benchmark and wider Spain: 00 800 00 02 2002
programme to 50 aircraft per month by 2017. markets. In the same period, the CAC40 rose
8.5%, while the DAX and the MDAX moved up International number: + 33 800 01 2001
The positive trend continued until the middle 9.6% and 22.7% respectively. TheEuroStoxx50 E-mail: ir@airbus.com
of the year, when a period of turbulence set in, climbed 3.9%.

Airbus_RA_2015_2016 web_IPEDIS.indd 30 11/05/2016 10:26


Registration
Document
l 2015 l

AIRBUS GROUP REGISTRATION DOCUMENT 2015 l 01 l


Airbus Group SE (the Company and together with its dates they are made, and the Company disclaims any obligation
subsidiaries the Group) is a Dutch company, which is listed to update forward-looking statements, except as may be
in France, Germany and Spain. The applicable regulations with otherwise required by law. The forward-looking statements in
respect to public information and protection of investors, as well this Registration Document involve known and unknown risks,
as the commitments made by the Company to securities and uncertainties and other factors that could cause the Companys
market authorities, are described in this Registration Document actual future results, performance and achievements to differ
(the Registration Document). materially from those forecasted or suggested herein. These
On 27May 2015 at the Annual General Meeting of Shareholders include changes in general economic and business conditions,
(the AGM) of Airbus Group N.V., the conversion into a as well as the factors described under Risk Factors below.

X RISK
European Company was approved with the overwhelming
majority of 99.99%. The conversion became effective on This Registration Document was prepared in accordance
28May. AirbusGroupN.V. is now called AirbusGroupSE. with Annex 1 of EC Regulation No. 809 / 2004, filed in
In addition to historical information, this Registration Document English with, and approved by, the Autoriteit Financile
includes forward-looking statements. The forward-looking Markten (the AFM) on 5 April 2016 in its capacity as

FACTORS
statements are generally identified by the use of forward- competent authority under the Wet op het financieel
looking words, such as anticipate, believe, estimate, toezicht (as amended) pursuant to Directive 2003/ 71/EC.
expect, intend, plan, project, predict, will, should, This Registration Document may be used in support of
may or other variations of such terms, or by discussion of a financial transaction as a document forming part of a
strategy. These statements relate to the Companys future prospectus in accordance with Directive 2003/ 71/ EC only
prospects, developments and business strategies and are if it is supplemented by a securities note and a summary
based on analyses or forecasts of future results and estimates approved by the AFM.
of amounts not yet determinable. These forward-looking
statements represent the view of the Company only as of the

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Registration Document
l 2015 l

Risk Factors

1 Informationon GroupActivities

2 ManagementsDiscussion
andAnalysisofFinancial Condition
andResultsofOperations

3 GeneralDescription ofthe
CompanyanditsShareCapital

4 Corporate Governance

5 Entity Responsible
fortheRegistrationDocument

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Financial Statements
Statements 2015
2015
1 2 3 4 5 1 2 3 4 5

02

Risk Factors 07 ManagementsDiscussion and


AnalysisofFinancial Condition 59
andResultsofOperations
1. Financial Market Risks 08
2. Business-Related Risks 12
3. Legal Risks 19 2.1 Operating and Financial Review 60
4. Industrial and Environmental Risks 21 2.1.1 Overview 61
2.1.2 Significant Accounting Considerations,
PoliciesandEstimates63
2.1.3 Performance Measures 64
01 2.1.4 Results of Operations 68
2.1.5 Changes in Consolidated Total Equity
(IncludingNonControllingInterests)71
Informationon
23 2.1.6 Liquidity and Capital Resources 73
GroupActivities
2.1.7 Hedging Activities 76
2.2 Financial Statements 76
1.1 Presentation of the Group 24 2.3 Statutory Auditors Fees 77
1.1.1 Overview 24 2.4 Information Regarding the Statutory
1.1.2 Airbus 28 Auditors77
1.1.3 Airbus Helicopters 36
1.1.4 Airbus Defence andSpace 39
1.1.5 Other: AirbusGroup,Inc. 47
03
1.1.6 Investments 48
1.1.7 Insurance 49
GeneralDescription ofthe
1.1.8 Legal and Arbitration Proceedings 50 79
1.1.9 Research and Technology, Intellectual Property 51
CompanyanditsShareCapital
1.1.10 Corporate Social Responsibility 53
1.1.11 Employees 55 3.1 General Description of the Company 80
1.2 Recent Developments 56 3.1.1 Commercial and Corporate Names,
SeatandRegisteredOffice80
3.1.2 Legal Form 80
3.1.3 Governing Laws and Disclosures 80
3.1.4 Date of Incorporation and Duration
oftheCompany82
3.1.5 Objects of the Company 82
3.1.6 Commercial and Companies Registry 82

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REGISTRATION DOCUMENT 2015 GENERAL TABLE OF CONTENTS

04
3.1.7 Inspection of Corporate Documents 82
Corporate Governance 103
3.1.8 Financial Year 82
3.1.9 Allocation and Distribution of Income 83
3.1.10 General Meetings 83 4.1 Management and Control 104
3.1.11 Disclosure of Holdings 84 4.1.1 Corporate Governance Arrangements 104
3.1.12 Mandatory Disposal 86 4.1.2 Dutch Corporate Governance Code,
3.1.13 Mandatory Offers 87 ComplyorExplain123
3.2 General Description of the Share Capital 87 4.1.3 Enterprise Risk Management System 124
3.2.1 Issued Share Capital 87 4.1.4 Ethics and Compliance Organisation 129
3.2.2 Authorised Share Capital 87 4.2 Interests of Directors and Principal
3.2.3 Modification of Share Capital ExecutiveOfficers130
orRightsAttachedtotheShares88 4.2.1 Remuneration Policy 130
3.2.4 Securities Granting Access 4.2.2 Long-Term Incentives Granted totheChief
totheCompanysShareCapital89 Executive Officer 140
3.2.5 Changes in the Issued Share Capital 89 4.2.3 Related Party Transactions 141
3.3 Shareholdings and Voting Rights 90 4.3 Employee Profit Sharing
3.3.1 Shareholding Structure at the end of 2015 90 andIncentivePlans141
3.3.2 Relationships with Principal Shareholders 91 4.3.1 Employee Profit Sharing
and Incentive Agreements 141
3.3.3 Form of Shares 94
4.3.2 Employee Share Ownership Plans 141
3.3.4 Changes in the Shareholding of the Company 95
4.3.3 Long-Term Incentive Plans 142
3.3.5 Persons Exercising Control over the Company 95
3.3.6 Simplified Group Structure Chart 95
3.3.7 Purchase by the Company of its Own Shares 97
3.4 Dividends 99 05
3.4.1 Dividends and Cash Distributions Paid 99
3.4.2 Dividend Policy of the Company 99
Entity Responsible
3.4.3 Unclaimed Dividends 99 147
fortheRegistrationDocument
3.4.4 Taxation 100

5.1 Entity Responsible


fortheRegistration Document 148
5.2 Statement of the Entity Responsible
fortheRegistration Document 148
5.3 Information Policy 149
5.4 Undertakings of the Company
regarding Information 149
5.5 Significant Changes 149

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Risk Factors
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X
FACTORS
RISK

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2015 Financial
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Statements 2015
2015
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Risk Factors

1. Financial Market Risks 08

2. Business-Related Risks 12

3. Legal Risks 19

4. Industrial and Environmental Risks 21

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1 Financial Market Risks

The Company is subject to many risks and uncertainties that may affect
its financial performance. The business, results of operation or financial
condition of the Company could be materially adversely affected by
therisks described below. These are not the only risks the Company faces.
Additional risks and uncertainties not presently known to the Company
or that it currently considers immaterial may alsoimpair its business
andoperations.

1. Financial Market Risks


Global Economic and Sovereign Debt Concerns

As a global company, the Companys operations and of the euro. The progressive implementation of an institutional
performance depend significantly on market and economic framework for Eurozone has decreased the immediate pressure
conditions in Europe, the US, Asia and the rest of the world. on EU sovereign debt but risks for medium term economic
Market disruptions and significant economic downturns may prospects remain.
develop quickly due to, among other things, crises affecting
Improving economic fundamentals such as in particular the low
credit or liquidity markets, regional or global recessions, sharp
unemployment rate in the US have triggered the first increase in
fluctuations in commodity prices (including oil), currency
interest rates of 0.25% by the Federal Reserve in nearly a decade
exchange rates or interest rates, inflation or deflation, sovereign
signalling confidence in the continued strength and sustainability
debt and bank debt rating downgrades, restructurings or
of a US recovery. The strong labour market, the recovery of the
defaults, or adverse geopolitical events (including those in
housing prices, and low energy cost support the recovery of the
the Near and Middle East, Ukraine, Africa and other regions).
US economy. However, a further strengthening of the US dollar,
Any such disruption or downturn could affect the Companys
the slowdown of growth in Emerging Countries, the fall of equity
activities for short or extended periods and have a negative
markets and more globally the development of risk aversion may
effect on the Companys future results of operation and financial
reduce the growth dynamic in the US. Risks on growth and more
condition.
importantly deflationary risks linked to the drop of oil price might
In recent years, European financial markets have experienced reduce the pace and magnitude of the further normalisation
significant disruptions as a result of concerns regarding the of the US monetary policy. Medium term concerns about the
ability of certain countries in the euro-zone to reduce their budget increasing budget deficit and the sustainability of sovereign
deficits and refinance or repay their sovereign debt obligations debt will likely have to be addressed over the next several years
as they come due. The European Central Bank and euro-zone through a combination of tax increases, agreed budget cuts
policy makers have so far succeeded to stabilise the euro- or budget sequestration in defence and entitlement spending,
zone and the European banks. However, austerity measures combined with an increase in the debt ceiling to finance further
as well as lower credit supply to the real economy have slowed borrowing. This could negatively affect economic growth in
down economic activity and as a result consumer prices are the US and worldwide, the creditworthiness of US Treasury
far below the target levels. The European Central Bank has securities and the exchange rate of the USdollar against other
amplified its expansive monetary policy in order to fight against major currencies (in particular euro or pound sterling), which may
deflationary trends, induce economic growth and complement in turn adversely impact the Companys sales in the defence
structural reforms. The policy includes negative deposit rates sector, the market value of the Companys investments or the
and a quasi open-ended quantitative easing programme started exchange rates at which the Company is able to hedge its
in March2015 and further extended in December2015 to an foreign currency exposure.
equivalent of about 1.5trillion which triggered a weakening

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China has acknowledged additional downward revisions in its despite any security interests the Company might have in the
GDP growth targets, confirming fears of a slowdown in the underlying aircraft;
worlds largest growth engine. This reversion in Chinese demand
further reductions in public spending for defence, homeland
is exacerbating pressures on global commodity markets and security and space activities, which go beyond those budget
subsequently to other economies with high exposure on consolidation measures already proposed by governments
commodities such as Russia, Middle East or Brazil. Beside around the world;
the diverging policies of European Central Bank and Federal in
financial instability, inability to obtain credit or insolvency
parallel, the reduction of monetary easing by the Federal Reserve of key suppliers and subcontractors, thereby impacting
Bank and the expected increase of US treasury yields impact the Companys ability to meet its customer obligations in a
financial markets of emerging countries, in particular those satisfactory and timely manner;
with high current account deficits. The noticeable slowdown
continued de-leveraging as well as mergers, rating
of emerging markets results in cuts of policy rates and the downgrades and bankruptcies of banks or other financial
devaluation of local currencies against USdollar. The continued institutions, resulting in a smaller universe of counterparties
reallocation of investments to the US and the devaluation of and lower availability of credit, which may in turn reduce the
emerging market currencies deteriorate the external refinancing availability of bank guarantees needed by the Company for its
conditions for issuers from emerging countries including our businesses or restrict its ability to implement desired foreign
customers in these countries. currency hedges;

default of investment or derivative counterparties and other
If economic conditions were to deteriorate, or if more pronounced
financial institutions, which could negatively impact the
market disruptions were to occur, there could be a new or
Companys treasury operations including the cash assets of
incremental tightening in the credit markets, low liquidity, and
the Company; and
extreme volatility in credit, currency, commodity and equity
decreased performance of the Groups cash investments due
markets. This could have a number of effects on the Companys
to low and partly negative interest rates.
business, including:

requests by customers to postpone or cancel existing orders The Companys financial results could also be negatively
for aircraft (including helicopters) or decision by customers to affected depending on gains or losses realised on the sale
review their order intake strategy due to, among other things, or exchange of financial instruments; impairment charges
lack of adequate credit supply from the market to finance resulting from revaluations of debt and equity securities and
aircraft purchases or change in operating costs or weak levels other investments; interest rates; cash balances; and changes
of passenger demand for air travel and cargo activity more in fair value of derivative instruments. Increased volatility in
generally; the financial markets and overall economic uncertainty would

an increase in the amount of sales financing that the Company increase the risk of the actual amounts realised in the future on
must provide to its customers to support aircraft purchases, the Companys financial instruments differing significantly from
thereby increasing its exposure to the risk of customer defaults the fair values currently assigned to them.

Foreign Currency Exposure

A significant portion of the Companys revenues is denominated variations arising from order cancellations, postponements or
inUSdollars, while a major portion of its costs is incurred in delivery delays. The Company may also have difficulty in fully
euro, and to a lesser extent, in pounds sterling. Consequently, to implementing its hedging strategy if its hedging counterparties
the extent that the Company does not use financial instruments are unwilling to increase derivatives risk limits with the Company,
to hedge its exposure resulting from this foreign currency and is exposed to the risk of non-performance or default by
mismatch, its profits will be affected by market changes in the these hedging counterparties. The exchange rates at which the
exchange rate of the USdollar against these currencies. The Company is able to hedge its foreign currency exposure may
Company has therefore implemented a long-term hedging also deteriorate, as the euro could appreciate against the US
portfolio to help secure the rates at which a portion of its future dollar for some time as it has been the case in the past and
USdollar-denominated revenues (arising primarily at Airbus) are as the higher capital requirements for banks result in higher
converted into euro or pound sterling, in order to manage and credit charges for uncollateralised derivatives. Accordingly,
minimise this foreign currency exposure. the Companys foreign currency hedging strategy may not
protect it from significant changes in the exchange rate of the
There are complexities inherent in determining whether and
USdollar to the euro and the pound sterling, in particular over
when foreign currency exposure of the Company will materialise,
the longterm, which could have a negative effect on its results
in particular given the possibility of unpredictable revenue

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of operation and financial condition. In addition, the portion of ability to compete with competitors may be eroded to the extent
the Companys USdollar-denominated revenues that is not that any of the Companys principal currencies appreciates
hedged in accordance with the Companys hedging strategy in value against the principal currencies of such competitors.
will be exposed to changes in exchange rates, which may be
The Companys consolidated revenues, costs, assets and
significant.
liabilities denominated in currencies other than the euro are
When effectively hedged, the Company recognises fair value translated into the euro for the purposes of compiling its financial
changes of the derivative portfolio in equity until instruments statements. Changes in the value of these currencies relative
maturity. If the US dollar appreciates against the euro compared to the euro will therefore have an effect on the euro value of the
to the rate at which the Company has hedged its future Companys reported revenues, costs, earnings before interest
USdollardenominated revenues the mark to market of the and taxes, pre-goodwill impairment and exceptionals (EBIT*),
derivative portfolio becomes negative. Hence, the Companys other financial result, assets and liabilities.
equity is accordingly reduced which could eventually result into
See Managements Discussion and Analysis of Financial
restrictions of equity otherwise available for dividend distribution
Condition and Results of Operations 2.1.7 Hedging Activities
or share buy-backs. Currency exchange rate fluctuations in those
for a discussion of the Companys foreign currency hedging
currencies other than the USdollar in which the Company incurs
strategy. See Managements Discussion and Analysis
its principal manufacturing expenses (mainly the euro) may affect
of Financial Condition and Results of Operations 2.1.2.3
the ability of the Company to compete with competitors whose
Accounting for Hedged Foreign Exchange Transactions in
costs are incurred in other currencies. This is particularly true
the Financial Statements for a summary of the Companys
with respect to fluctuations relative to the USdollar, as many of
accounting treatment of foreign currency hedging transactions.
the Companys products and those of its competitors (e.g., in the
defence export market) are priced inUSdollars. The Companys

Sales Financing Arrangements

In support of sales, the Company may agree to participate in decrease below projected amounts. In the event of a financing
the financing of selected customers. As a result, the Company customer default at a time when the market value for a used
has a portfolio of leases and other financing arrangements aircraft has unexpectedly decreased, the Company would be
with airlines and other customers. The risks arising from the exposed to the difference between the outstanding loan amount
Companys sales financing activities may be classified into two and the market value of the aircraft, net of ancillary costs (such
categories: (i)credit risk, which concerns the customers ability as maintenance and remarketing costs, etc.). Similarly, if an
to perform its obligations under a financing arrangement, and unexpected decrease in the market value of a given aircraft
(ii)aircraft value risk, which primarily relates to unexpected coincided with the exercise window date of an asset value
decreases in the future value of aircraft. Measures taken by guarantee with respect to that aircraft, the Company would be
the Company to mitigate these risks include optimised financing exposed to losing as much as the difference between the market
and legal structures, diversification over a number of aircraft value of such aircraft and the guaranteed amount, though such
and customers, credit analysis of financing counterparties, amounts are usually capped. The Company regularly reviews
provisioning for the credit and asset value exposure, and its exposure to asset values and adapts its provisioning policy
transfers of exposure to third parties. No assurances may in accordance with market findings and its own experience.
be given that these measures will protect the Company from However, no assurances may be given that the provisions
defaults by its customers or significant decreases in the value taken by the Company will be sufficient to cover these potential
of the financed aircraft in the resale market. shortfalls. Through the Airbus Asset Management department
or as a result of past financing transactions, the Company is
The Companys sales financing arrangements expose it to
the owner of used aircraft, exposing it directly to fluctuations in
aircraft value risk, because it generally retains security interests
the market value of these used aircraft.
in aircraft for the purpose of securing customers performance
of their financial obligations to the Company, and/or because it In addition, the Company has outstanding backstop
may guarantee a portion of the value of certain aircraft at certain commitments to provide financing related to orders on Airbus
anniversaries from their delivery to customers. Under adverse and ATRs backlog. While past experience suggests it is unlikely
market conditions, the market for used aircraft could become that all such proposed financing actually will be implemented,
illiquid and the market value of used aircraft could significantly the Companys sales financing exposure could rise in line with

* Unless otherwise indicated, EBIT* figures presented in this report are Earning before Interest and Taxes, pre-goodwill impairment and exceptionals.

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future sales growth depending on the agreement reached defaults by its customers or significant decreases in the value
with customers. Despite the measures taken by the Company of the financed aircraft in the resale market, which may have a
to mitigate the risks arising from sales financing activities as negative effect on its future results of operation and financial
discussed above, the Company remains exposed to the risk of condition.

Counterparty Credit

In addition to the credit risk relating to sales financing as However, there can be no assurance that the Company will not
discussed above, the Company is exposed to credit risk to the lose the benefit of certain derivatives or cash investments in case
extent of non-performance by its counterparties for financial of a systemic market disruption. In such circumstances, the
instruments, such as hedging instruments and cash investments. value and liquidity of these financial instruments could decline
However, the Group has policies in place to avoid concentrations and result in a significant impairment, which may in turn have
of credit risk and to ensure that credit risk exposure is limited. a negative effect on the Companys future results of operation
and financial condition.
Counterparties for transactions in cash, cash equivalents and
securities as well as for derivative transactions are limited to Moreover, the progressive implementation of new financial
highly rated financial institutions, corporates or sovereigns. The regulations (Basel III, EMIR, CRD4, Bank Restructuring
Companys credit limit system assigns maximum exposure Resolution Directive, Dodd Frank Act, Volcker Rules, etc.) will
lines to such counterparties, based on a minimum credit rating have an impact on the business model of banks (for example,
threshold as published by Standard & Poors, Moodys and the split between investment banking and commercial banking
Fitch Ratings. Besides the credit rating, the limit system also activities) and on the capital structure and cost of such banks
takes into account fundamental counterparty data, as well activities in relation to over-the-counter derivatives, and
as sector and maturity allocations and further qualitative and therefore on the funding consequences of central clearing and
quantitative criteria such as credit risk indicators. The credit collateralisation of over-the-counter derivatives for corporations
exposure of the Company is reviewed on a regular basis and like the Company. This may ultimately increase the cost and
the respective limits are regularly monitored and updated. The reduce the liquidity of the Companys long-term hedges, for
Company also seeks to maintain a certain level of diversification example, as banks seek to either pass-on the additional costs
in its portfolio between individual counterparties as well as to their corporate counterparties or withdraw from low-profit
between financial institutions, corporates and sovereigns in businesses altogether.
order to avoid an increased concentration of credit risk on only
a few counterparties.

Equity Investment Portfolio

The Company holds several equity investments for industrial the fair value of Dassault Aviation and that of other associated
or strategic reasons, the business rationale for which may vary companies. For equity investments other than associates, which
over the life of the investment. Equity investments are either make up only a fraction of the Companys total assets, the
accounted for using the equity method (associated companies), Company regards the risk of negative changes in fair value or
if the Company has the ability to exercise significant influence, impairments on these investments as non-significant.
or at fair value. If fair value is not readily determinable, the
Treasury shares held by the Company are not considered to
investment is measured at cost.
be equity investments. Additionally, treasury shares are not
As of 31December 2014, the Companys principal investment regarded as being exposed to risk, as any change in value of
in associates was Dassault Aviation. The book value of this treasury shares is recognised directly in equity only when sold
investment was 2.4 billion. Following the partial sale, the to the market and never affects net income. Treasury shares are
remaining equity investment in Dassault Aviation has been primarily held to hedge the dilution risk arising from employee
reclassified as asset held for sale. As such, the Company is still stock ownership plans and the exercise by employees of stock
exposed to the risk of unexpected material adverse changes in options.

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Pension Commitments

The Company participates in several pension plans for Necessary adjustments of such provisions are driven by (i)the
both executive as well as non-executive employees, some discount factor (dependent in part on interest rates) and the
of which are underfunded. For information related to these inflation rate applied to calculate the net present value of the
plans, please refer to the Notes to the IFRS Consolidated pension liabilities, (ii)the performance of the asset classes
Financial Statements Note29.1: Post-employment benefits which are represented in the pension assets, and (iii)additional
Provisions for retirement plans. Although the Company has cash injections contributed by the Company from time to time
recorded a provision in its balance sheet for its share of the to the pension assets. The Company has taken measures to
underfunding based on current estimates, there can be no reduce potential losses on the pension assets and to better
assurance that these estimates will not be revised upward in match the characteristics of the pension liabilities with those of
the future, leading the Company to record additional provisions the pension assets as a long-term objective. Nevertheless, any
in respect of such plans. required additional provisions would have a negative effect on
the Companys total equity (net of deferred taxes), which could
in turn have a negative effect on its future financial condition.

Tax Issues

As a multinational group with operations and sales in or independent tax counsel, and, to the extent necessary, on
various jurisdictions, the Company is subject to a number of rulings or specific guidance from competent tax authorities.
different tax laws. It is the Companys objective to adhere to There can be no assurance that the tax authorities will not seek
the relevant tax regulations in the different countries and to to challenge such interpretations, in which case the Company or
ensure tax compliance while structuring its operations and its affiliates could become subject to tax claims. Moreover, the
transactions in a tax-efficient manner. The structure of the tax laws and regulations that apply to the Companys business
Companys organisation and of the transactions it enters into may be amended by the tax authorities, which could affect the
are based on its own interpretations of applicable tax laws and overall tax efficiency of the Company.
regulations, generally relying on opinions received from internal

2. Business-Related Risks
Commercial Aircraft Market Factors

Historically, order intake for commercial aircraft has shown operations. The market for commercial aircraft could continue
cyclical trends, due in part to changes in passenger demand to be cyclical, and downturns in broad economic trends may
for air travel and cargo activity, which are in turn primarily have a negative effect on its future results of operation and
influenced by economic or gross domestic product (GDP) financial condition.
growth. Other factors, however, play an important role in
The commercial helicopter market could also be influenced
determining the market for commercial aircraft, such as (i)the
by a number of factors listed above and in particular with the
average age and technical obsolescence of the fleet relative to
significant drop of the price of oil in 2015, the Company is
new aircraft, (ii)the number and characteristics of aircraft taken
impacted by a postponement of investments in the acquisition
out of service and parked pending potential return into service,
of new platforms by offshore helicopter players and a reduction
(iii)passenger and freight load factors, (iv)airline pricing policies,
of flight hours. The uncertainty on the lead time of the market
(v)airline financial health and the availability of outside financing
recovery and the low oil price may have an impact on Airbus
for aircraft purchases, (vi)evolution of fuel price, (vii)deregulation
Helicopters financial results and could lead to cancellations or
and (viii) environmental constraints imposed upon aircraft
loss of bookings.

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Terrorism, Pandemics and Other Catastrophic Events

As past terrorist attacks and the spread of pandemics (such for all or certain types of its aircraft or other products, and
as H1N1 flu) have demonstrated, terrorism and pandemics the Companys customers may postpone delivery or cancel
may negatively affect public perception of air travel safety and orders.
comfort, which may in turn reduce demand for air travel and
In addition to affecting demand for its products, the occurrence
commercial aircraft. The outbreak of wars, riots or political
of catastrophic events could disrupt the Companys internal
unrest in a given region may also affect the willingness of the
operations or its ability to deliver products and services
public to travel by air. Furthermore, major airplane crashes
to customers. Disruptions may be related to threats to
may have a negative effect on the publics or regulators
physical security and infrastructure, information technology
perceptions of the safety of a given class of aircraft, form
or cyber-attacks or failures, damaging weather or acts of
of design, airline or air traffic. As a result of terrorism,
nature and other crises. Any significant production delays,
geopolitical instability, pandemics and other catastrophic
or any destruction, manipulation, theft or improper use of the
events, an airline may be confronted with sudden reduced
Companys data, information systems or networks could have
demand for air travel and be compelled to take costly security
a significant adverse effect on the Companys future results of
and safety measures. In response to such events, and the
operation and financial condition as well as on the reputation
resulting negative impact on the airline industry or particular
of the Company and its products and services.
airlines, the Company may suffer from a decline in demand

Security Risks

The Company is exposed to a number of different types to our systems, and can be exacerbated if we extend trusted
of potential security risk, arising from actions that may be connections to partners or suppliers. APT could be used
intentional and hostile, accidental, or negligent. Industrial to impact the security of our products through direct cyber
espionage, cyber-attacks (including systems sabotage), data attack on the product itself, or through the compromise of the
breach, identity theft and Intellectual property breach are the products security design, or active disruption of the products
main types of risk that the Company may face in this category. security functions, either of which could take place at any stage
The risk to the availability and integrity of our industrial control of the products lifecycle. While the Company has undertaken
systems, manufacturing processes and products is growing, significant effort to prevent such events from happening, no
with the increase of interconnectivity and digitalization, and assurance can be given that these efforts will successfully
with a growing gap developing between the defences of older, prevent attacks or damage from such attacks.
relatively insecure industrial systems and the capabilities of
Malicious software (including but not limited to petty cyber-
potential attackers.
criminality) of a more general kind predominantly poses a threat
In this context, the Companys extensive information and to the integrity and availability of our products and business
communications systems are exposed to cyber security risks, systems, potentially impacting our business continuity.
which are rapidly changing, and increasing in sophistication
The occurrence of one or several of such risks could lead
and potential impact.
to severe damage including but not limited to significant
As of the date of this Registration Document, the most serious financial (including through additional investment required),
cyber security risk is the Advanced Persistent Threat (APT), contractual or reputation performance degradation as well as
where technically capable and determined attackers use loss of Intellectual property data and information, operational
sophisticated methods, frequently including carefully crafted business degradation or disruptions, and product or services
malicious software, to covertly extract information from our malfunctions.
systems. These risks mostly arise from external connections

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Dependence on Key Suppliers and Subcontractors

The Company is dependent on numerous key suppliers and As the Companys global sourcing footprint extends, some
subcontractors to provide it with the raw materials, parts, suppliers (or their sub-tier suppliers) may have production
assemblies and systems that it needs to manufacture its facilities located in countries that are exposed to socio-political
products. unrest or natural catastrophes which could interrupt deliveries.
Country-based risk assessment is applied by the Company
The Company relies upon the good performance of its suppliers
to monitor such exposures and to ensure that appropriate
and subcontractors to meet the obligations defined under their
mitigation plans or fall-back solutions are available for deliveries
contracts. Supplier performance is continually monitored and
from zones considered at risk. Despite these measures, the
assessed so that supplier development programmes can be
Company remains exposed to interrupted deliveries from
launched if performance standards fall below expectations. In
suppliers impacted by such events which could have a negative
addition, the Company benefits from its productions lead times
effect on the future results of operation and financial condition
inherent flexibility to compensate for a limited non-performance
of the Company.
of suppliers, protecting the Companys commitments towards
its customers. In certain cases, dual sourcing may be utilised Suppliers (or their sub-tier suppliers) may also experience
to mitigate the risk. No assurance can be given that these financial difficulties requiring them to file for bankruptcy
measures will fully protect the Company from non-performance protection, which could disrupt the supply of materials and
of a supplier which could disrupt production and in turn may parts to the Company. However, financial health of suppliers
have a negative effect on its future results of operation and is analysed prior to selection to minimise such exposure
financial condition. and then monitored during the contract period to enable the
Company to take action to avoid such situations. In exceptional
Changes to the Companys production or development
circumstances, the Company may be required to provide
schedules may impact suppliers so that they initiate claims
financial support to a supplier and therefore face limited credit
under their contracts for financial compensation. However
risk exposure. If insolvency of a supplier does occur, the
the robust, long-term nature of the contracts and a structured
Company works closely with the appointed administrators to
process to manage such claims, limits the Companys exposure.
safeguard contractual deliveries from the supplier. Despite these
Despite these mitigation measures, there could still be a negative
mitigation measures, the bankruptcy of a key supplier could still
effect on the future results of operation and financial condition
have a negative effect on the future results of operation and
of the Company.
financial condition of the Company.

Industrial Ramp-Up

As a result of the large number of new orders for aircraft recorded factors is also complicated by the development of new aircraft
in recent years, the Company intends to accelerate its production programmes in parallel, across the three Divisions, which carry
in order to meet the agreed upon delivery schedules for such their own resource demands. Therefore, the failure of any or all
new aircraft (including helicopters). The Companys ability to of these factors could lead to missed delivery commitments,
further increase its production rate will be dependent upon a and depending on the length of delay in meeting delivery
variety of factors, including execution of internal performance commitments, could lead to additional costs and customers
plans, availability of raw materials, parts (such as aluminium, rescheduling or terminating their orders. This risk increases
titanium and composites) and skilled employees given high as the Company and its competitors announce even higher
demand by the Company and its competitors, conversion of production rates. Good progress has been made in 2015 and
raw materials into parts and assemblies, and performance the supply chain is in general more stable. Specific areas of
by suppliers and subcontractors (particularly suppliers of risk with suppliers of cabin equipment continue to be carefully
buyer-furnished equipment) who may experience resource managed.
or financial constraints due to ramp-up. Management of such

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Technologically Advanced Products and Services

The Company offers its customers products and services A350 XWB, A400M, H175 or H160 and to modernisation
that are technologically advanced, the design, manufacturing, programmes such as the A320neo and the A330neo. See
components and materials utilised can be complex and Programme-Specific Risks below.
require substantial integration and coordination along the
In addition to the risk of contract cancellations, the Company
supply chain. In addition, most of the Companys products
may also incur significant costs or loss of revenues in connection
must function under demanding operating conditions. Even
with remedial action required to correct any performance issues
though the Company believes it employs sophisticated design,
detected in its products or services. See Managements
manufacturing and testing practices, there can be no assurance
Discussion and Analysis of Financial Condition and Results of
that the Companys products or services will be successfully
Operations 2.1.1.3 Significant programme developments,
developed, manufactured or operated or that they will perform
restructuring and related financial consequences in2013, 2014
as intended.
and 2015. Moreover, to the extent that a performance issue is
Certain of the Companys contracts require it to forfeit part of considered to have a possible impact on safety, regulators could
its expected profit, to receive reduced payments, to provide a suspend the authorisation for the affected product or service.
replacement launch or other products or services, to provide
Any significant problems with the development, manufacturing,
cancellation rights, or to reduce the price of subsequent sales
operation or performance of the Companys products
to the same customer if its products fail to be delivered on
and services could have a significant adverse effect on the
time or to perform adequately. No assurances can be given
Companys future results of operation and financial condition
that performance penalties or contract cancellations will not be
as well as on the reputation of the Company and its products
imposed should the Company fail to meet delivery schedules
and services.
or other measures of contract performance in particular
with respect to new development programmes such as the

Dependence on Public Spending and on Certain Markets

In any single market, public spending (including defence and where several countries undertake to enter together into
security spending) depends on a complex mix of geopolitical defence or other procurement contracts, economic, political
considerations and budgetary constraints, and may therefore or budgetary constraints in any one of these countries may have
be subject to significant fluctuations from year to year and a negative effect on the ability of the Company to enter into or
country to country. Due to the overall economic environment perform such contracts.
and competing budget priorities, several countries have reduced
The Company has a geographically diverse backlog. Adverse
their level of public spending. This is especially true with respect
economic and political conditions as well as downturns in broad
to defence and security budgets, where certain countries have
economic trends in certain countries or regions may have a
already implemented substantial reductions. Any termination or
negative effect on the Companys future results of operation
reduction of future funding or cancellations or delays impacting
and financial condition.
existing contracts may have a negative effect on the Companys
future results of operation and financial condition. In the case

Availability of Government and Other Sources of Financing

Since 1992, the EU and the US have operated under an Trade Organization (WTO). While both sides have expressed
agreement that sets the terms and conditions of financial support a preference for a negotiated settlement that provides for a
that governments may provide to civil aircraft manufacturers. level playing field when funding future aircraft developments,
In late 2004, however, the US sought to unilaterally withdraw they have thus far failed to reach agreement on key issues.
from this agreement, which eventually led to the US and the The terms and conditions of any new agreement, or the final
EU making formal claims against each other before the World outcome of the formal WTO proceedings, may limit access

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by the Company to risk-sharing-funds for large projects, may mentioned above. Moreover, the availability of other outside
establish an unfavourable balance of access to government sources of financing will depend on a variety of factors
funds by the Company as compared to its US competitors or such as market conditions, the general availability of credit,
may in an extreme scenario cause the European Commission the Companys credit ratings, as well as the possibility that
and the involved governments to analyse possibilities for a lenders or investors could develop a negative perception of the
change in the commercial terms of funds already advanced Companys long- or short-term financial prospects if it incurred
to the Company. large losses or if the level of its business activity decreased due
to an economic downturn. The Company may therefore not
In prior years, the Company and its principal competitors
be able to successfully obtain additional outside financing on
have each received different types of government financing of
favourable terms, or at all, which may limit the Companys future
product research and development. However, no assurances
ability to make capital expenditures, fully carry out its research
can be given that government financing will continue to be made
and development efforts and fund operations.
available in the future, in part as a result of the proceedings

Competition and Market Access

The markets in which the Company operates are highly the competitive pressures it faces in all business areas will not
competitive. In some areas, competitors may have more result in reduced revenues or market share.
extensive or more specialised engineering, manufacturing and
In addition, the contracts for many aerospace and defence
marketing capabilities than the Company. In addition, some of
products are awarded, implicitly or explicitly, on the basis of home
the Companys largest customers may develop the capability
country preference. Although the Company is a multinational
to manufacture products or provide services similar to those of
company which helps to broaden its domestic market, it may
the Company. This would result in these customers supplying
remain at a competitive disadvantage in certain countries,
their own products or services and competing directly with
especially outside of Europe, relative to local contractors
the Company for sales of these products or services, all of
for certain products. The strategic importance and political
which could significantly reduce the Companys revenues.
sensitivity attached to the aerospace and defence industries
Further, new enterprises with different business models could
means that political considerations will play a role in the choice
substitute some of the Companys products and services. There
of many products for the foreseeable future.
can be no assurance that the Company will be able to compete
successfully against its current or future competitors or that

Major Research and Development Programmes

The business environment in many of the Companys principal Successful development of new programmes also depends on
operating business segments is characterised by extensive the Companys ability to attract and retain aerospace engineers
research and development costs requiring significant up-front and other professionals with the technical skills and experience
investments with a high level of complexity. The business plans required to meet its specific needs. Demand for such engineers
underlying such investments often contemplate a long payback may often exceed supply depending on the market, resulting
period before these investments are recouped, and assume a in intense competition for qualified professionals. There can
certain level of return over the course of this period in order to be no assurances that the Company will attract and retain the
justify the initial investment. There can be no assurances that personnel it requires to conduct its operations successfully.
the commercial, technical and market assumptions underlying Failure to attract and retain such personnel or an increase in the
such business plans will be met, and consequently, the payback Companys employee turnover rate could negatively affect the
period or returns contemplated therein achieved. Companys future results of operation and financial condition.

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Restructuring, Transformation and Cost Saving Programmes

In order to improve competitiveness, offset rising procurement efforts may not generate the level of cost savings it expects
costs and achieve profitability targets, among other things, going forward, could negatively affect its future results of
the Company and its Divisions have launched several operation and financial condition.
restructuring, transformation, cost saving and competitiveness
In addition to the risk of not achieving the anticipated level of cost
programmes over the past several years. These include
savings from these programmes, the Company may also incur
group-wide programmes, as well as Division- or Corporate-
higher than expected implementation costs. In many instances,
specific programmes such as the Airbus Defence andSpace
there may be internal resistance to the various organisational
restructuring plan.
restructuring and cost reduction measures contemplated.
Anticipated cost savings under these programmes are based Restructuring, closures, site divestitures and job reductions
on estimates, however, and actual savings under these may also harm the Companys labour relations and public
programmes may vary significantly. In particular, the Companys relations, and have led and could lead to work stoppages
cost reduction measures are based on current conditions and and/or demonstrations. In the event that these work stoppages
do not take into account any future cost increases that could and/or demonstrations become prolonged, or the costs of
result from changes in its industry or operations, including new implementing the programmes above are otherwise higher
business developments, wage and cost increases or other than anticipated, the Companys future results of operation
factors. The Companys failure to successfully implement these and financial condition may be negatively affected.
planned cost reduction measures, or the possibility that these

Acquisitions, Divestments, Joint Ventures & Strategic Alliances

As part of its business strategy, the Company may acquire or deliver the expected synergies once integrated or separated.
divest businesses and form joint ventures or strategic alliances. In addition, the Company may incur significant acquisition or
Acquisitions and divestments are inherently risky because divestment, administrative and other costs in connection with
of difficulties that may arise when integrating or carving out these transactions, including costs related to integration or
people, operations, technologies and products. There can be separation of acquired businesses. While the Company believes
no assurance that any of the businesses that the Company that it has established appropriate and adequate procedures
acquires can be integrated or carved out successfully and as and processes to mitigate these risks, there is no assurance
timely as originally planned or that they will perform well and that these transactions will be successful.

Public-Private Partnerships and Private Finance Initiatives

Defence customers, particularly in the UK, increasingly request The Company is party to PPP and PFI contracts, for example
proposals and grant contracts under schemes known as public- through Paradigm with Skynet5 and related telecommunications
private partnerships (PPPs) or private finance initiatives services, and in the AirTanker (FSTA) project. One of the
(PFIs). PPPs and PFIs differ substantially from traditional complexities presented by PFIs lies in the allocation of risks
defence equipment sales, as they often incorporate elements and the timing thereof among different parties over the lifetime
such as: of the project.

the provision of extensive operational services over the life


There can be no assurances of the extent to which the Company
of the equipment;
will efficiently and effectively (i)compete for future PFI or PPP

continued ownership and financing of the equipment by a party


programmes, (ii)administer the services contemplated under
other than the customer, such as the equipment provider;
the contracts, (iii)finance the acquisition of the equipment and

mandatory compliance with specific customer requirements


the on-going provision of services related thereto, or (iv)access
pertaining to public accounting or government procurement
the markets for the commercialisation of excess capacity. The
regulations; and
Company may also encounter unexpected political, budgetary,

provisions allowing for the service provider to seek additional


regulatory or competitive risks over the long duration of PPP
customers for unused capacity.
and PFI programmes.

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Programme-Specific Risks

In addition to the risk factors mentioned above, the Company A400M programme. In connection with the A400M programme,
also faces the following programme-specific risks (while this the Company faces the following main challenges: finalising
list does not purport to be exhaustive, it highlights the current the development, tests and associated documentation to
risks believed to be material by management and could have a enable progressively enhanced aircraft capabilities through
significant impact on the Groups results and financial condition): standard operational clearance (SOC1 to3), such as cargo
management and aerial delivery, self-defence and protection,
A350XWB programme. In connection with the A350XWB
air to air refuelling; continuing production ramp-up; managing
programme, after fourteen successful deliveries to four
the retrofit campaign and and finalising the development of
airlines in 2015, the Company faces the following main
in-service support goods and services as well as providing
challenges: ensuring satisfaction of first operators and high
high levels of service for integrated logistic support. Industrial
quality support to its operations; maintaining supply chain
efficiency, military capability and associated costs remain a
performance and production ramp-up; controlling and reducing
challenge during the rampup phase. Management is working
the level of outstanding work in final assembly line; managing
with the customers to agree a schedule of military capability
recurring costs beyond the initial ramp-up phase; maintaining
enhancement and deliveries as well as reviewing the escalation
customisation and head of versions ramp-up; and maintaining
formulae. Industrial recovery measures have been identified
the development schedule of A350-1000XWB to ensure entry
and management is focused on delivery, but risk remains.
in service as planned.
The mission capability roadmap (including the achievement
A380 programme. In connection with the A380 programme, of the respective milestones) and the delivery plan remain
the Company faces the following main challenges: secure order under negotiation with OCCAR/Nations and are expected to
flow in order to maintain current rate of production in the medium be finalised in 2016. For further information, please refer to the
term; making continued improvements to lower the resources Notes to the IFRS Consolidated Financial Statements
and costs associated with designing each customised head Note10: Revenues, cost of sales and gross margin.
of version aircraft for new customers, in order to allow a higher
NH90 and Tiger programmes. In connection with the NH90
number of head of version to be completed each year; and
and Tiger programmes, the Company succeeded in the
managing maturity in service. Further reduction of fixed costs
negotiations of contract amendments with France and Germany,
to protect break even at lower volumes has started. However
whilst renegotiations of some other contracts are still ongoing.
the success of some of the running sales campaigns will be
In connection with multiple fleets entering into service it faces
key to mitigate the risk of the reduced backlog.
the challenge of assuring support readiness.
A320neo programme. In connection with the A320neo
H175 programme. In connection with the H175 programme
programme, the Company faces the following main challenges:
produced in cooperation with Avic, the Company faces the
management of stress in the supply chain as a result of the
following main challenges: after the certification by EASA and
industrial ramp-up; meeting the engine development status
the delivery of the nine first H175 for Oil and Gas operations, the
including performance targets, and its schedule; ensuring the
Company is proceeding with the industrial ramp-up, mastering
availability of skilled personnel for the programme; ensuring
the maturity plan of the aircraft and further certifications for new
maturity and service readiness for early operations. The
missions planned for 2016 and 2017.
transition from A320ceo (current engine option) to A320neo
(new engine option) has begun in 2016 and will finish in 2019. The Border security. In connection with border security projects,
main focus will be with the slower start of PW engine deliveries the Company faces the following main challenges: meeting the
for A320neo, as well as further ramp-up. schedule and cost objectives taking into account the complexity
of the local infrastructures to be delivered and the integration of
A330 programme. In connection with the A330 programme,
commercial-off-the-shelf products (radars, cameras and other
the Company proactively addressed the current market situation
sensors) interfaced into complex system networks; assuring
by reducing production to rate 6 per month. The commercial
efficient project and staffing; managing the rollout including
transition has been secured at the lower rate, which helps
subcontractors and customers. Negotiations on change
mitigate against production gaps. The A330neo development
requests and schedule re-alignments are currently ongoing.
progresses as planned and no new challenge emerged in 2015.

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3. Legal Risks
Dependence on Joint Ventures and Minority Holdings

The Company generates a substantial proportion of its revenues in ventures in which its interests are aligned with those of its
through various consortia, joint ventures and equity holdings. partners, the risk of disagreement or deadlock is inherent in a
These arrangements include primarily: jointly controlled entity, particularly in those entities that require

the Eurofighter and AirTanker consortia; and the unanimous consent of all members with regard to major

three principal joint ventures: MBDA, ATR and Atlas Electronik. decisions and specify limited exit rights. The other parties in
these entities may also be competitors of the Company, and
The formation of partnerships and alliances with other market
thus may have interests that differ from those of the Company.
players is an integral strategy of the Company, and the proportion
of sales generated from consortia, joint ventures and equity In addition, in those holdings in which the Company is a minority
holdings may rise in future years. This strategy may from time to partner or shareholder, the Companys access to the entitys
time lead to changes in the organisational structure, or realignment books and records, and as a consequence, the Companys
in the control, of the Companys existing joint ventures. knowledge of the entitys operations and results, is generally
limited as compared to entities in which the Company is a
The Company exercises varying and evolving degrees of control
majority holder or is involved in the day-to-day management.
in the consortia, joint ventures and equity holdings in which
it participates. While the Company seeks to participate only

Product Liability and Warranty Claims

The Company designs, develops and produces a number of While the Company believes that its insurance programmes
high profile products of large individual value, particularly civil are adequate to protect it from such liabilities, no assurances
and military aircraft and space equipment. The Company is can be given that claims will not arise in the future or that such
subject to the risk of product liability and warranty claims in insurance coverage will be adequate.
the event that any of its products fails to perform as designed.

Intellectual property

The Company relies upon patent, copyright, trademark and trade In addition, although the Company believes that it lawfully
secret laws, and agreements with its employees, customers, complies with the Intellectual property rights granted to others, it
suppliers and other parties, to establish and maintain its has been accused of infringement on occasion and could have
Intellectual property rights in technology and products used in additional claims asserted against it in the future. These claims
its operations. Despite these efforts to protect its Intellectual could harm its reputation, cost it money and prevent it from
property rights, any of the Companys direct or indirect offering certain products or services. Any claims or litigation in
Intellectual property rights could be challenged, invalidated this area, whether the Company ultimately wins or loses, could
or circumvented. Further, the laws of certain countries do not be time-consuming and costly, injure the Companys reputation
protect the Companys proprietary rights to the same extent as or require it to enter into licensing arrangements. The Company
the laws in Europe and the US. Therefore, in certain jurisdictions might not be able to enter into these licensing arrangements
the Company may be unable to protect its proprietary technology on acceptable terms. If a claim of infringement were successful
adequately against unauthorised third-party copying or use, against it, an injunction might be ordered against the Company,
which could adversely affect its competitive position. causing further damages.

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Export Controls Laws and Regulations

The export market is a significant market for the Company. Operating worldwide, the Company must comply with several,
In addition, many of the products the Company designs and sometimes inconsistent, sets of sanctions laws and regulations
manufactures for military use are considered to be of national implemented by national/ regional authorities. Depending on
strategic interest. Consequently, the export of such products geopolitical considerations including national security interests
outside of the jurisdictions in which they are produced may and foreign policy, new sanctions programmes may be set up
be restricted or subject to licensing and export controls, or the scope of existing ones may be widened, at any time,
notably by the UK, France, Germany and Spain, where the immediately impacting the Companys activities.
Company carries out its principal military activities as well as
Although the Company seeks to comply with all such laws and
by other countries where suppliers come from, notably, the
regulations, even unintentional violations or a failure to comply
US. There can be no assurance (i)that the export controls to
could result in suspension of the Companys export privileges,
which the Company is subject will not become more restrictive,
or preclude the Company from bidding on certain government
(ii)that new generations of the Companys products will not
contracts (even in the absence of a formal suspension or
also be subject to similar or more stringent controls or (iii)that
debarment).
geopolitical factors or changing international circumstances
will not make it impossible to obtain export licenses for one or Furthermore, the Companys ability to market new products and
more clients or constrain the Companys ability to perform under enter new markets may be dependent on obtaining government
previously signed contracts. Reduced access to military export certifications and approvals in a timely manner.
markets may have a significant adverse effect on the Companys
business, results of operation and financial condition.

Anti-Corruption Laws and Regulations

The Company seeks to comply with all applicable anti-bribery diligence of the environment of the business operations and all
laws and regulations and is fully committed to preventing the stakeholders associated with it. All due diligence follows
corruption in all operations conducted by the Company or by a risk-based approach and is based on internal and external
third parties acting on its behalf. To that end, an anti-corruption information and expertise. Moreover, the anti-corruption
programme has been put in place to ensure adequate programme provides comprehensive targeted training and
identification, assessment, monitoring and control of corruption communicates applicable policies to all Company employees.
risks. This programme oversees business development
Although the Company seeks to comply with all such laws and
activities and various other operations such as mergers and
regulations, even unintentional violations or a failure to comply
acquisitions, financial investments or procurement activities.
could result in administrative, civil or criminal liabilities including
The anti-corruption programme ensures a long-term view on
significant fines and penalties, suspension or debarment of the
the evolution of the corruption risk and continuously updates
Company from government or non-government contracts for
and, as the case may be, reinforces the Company controls
some period of time, and could also have a significant adverse
and procedures to prevent corruption while aiming at ensuring
effect on the reputation of the Company.
business success. These controls are based on extensive due

Legal and Regulatory Proceedings

The Company is currently engaged in a number of active legal predict the outcome of these proceedings, it is possible that they
and regulatory proceedings. See Information on Group will result in the imposition of damages, fines or other remedies,
Activities 1.1.8 Legal and Arbitration Proceedings. The which could have a material effect on the Companys business,
Company expects to continue to incur time and expenses results of operation or financial condition. An unfavourable ruling
associated with its defence, regardless of the outcome, and could also negatively impact the Companys stock price and
this may divert the efforts and attention of management from reputation.
normal business operations. Although the Company is unable to

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4 Industrial and Environmental Risks

In addition, the Company is sometimes subject to government could negatively affect the Companys reputation and its ability
inquiries and investigations of its business and competitive to attract and retain customers and investors, which could
environment due, among other things, to the heavily regulated have a negative effect on its business, results of operation and
nature of its industry. In addition to the risk of an unfavourable financial condition. See Corporate Governance 4.1.4
ruling against the Company, any such inquiry or investigation Ethics and Compliance Organisation.

4. Industrial and Environmental Risks


Given the scope of its activities and the industries in which it environmental laws relating to contaminated sites can be
operates, the Company is subject to stringent environmental, imposed retrospectively, on a joint and several basis, and
health and safety laws and regulations in numerous jurisdictions without any finding of non-compliance or fault. These potential
around the world. The Company therefore incurs, and expects liabilities may not always be covered by insurance, or may be
to continue to incur, significant capital expenditure and other only partially covered. The obligation to compensate for such
operating costs to comply with increasingly complex laws and damages could have a negative effect on the Companys results
regulations covering the protection of the natural environment of operation and financial condition.
as well as occupational health and safety. This expenditure
In addition, the various products manufactured and sold by
includes the identification and the prevention, elimination or
the Company must comply with relevant health, safety and
control of physical and psychological risks to people arising
environmental laws, for example those designed to protect
from work, including chemical, mechanical and physical agents.
customers and downstream workers, and those covering
Environmental protection includes costs to prevent, control,
substancesand preparations, in the jurisdictions in which they
eliminate or reduce emissions to the environment, waste
operate. Although the Company seeks to ensure that its products
management, the content of the Companys products, and
meet the highest quality standards, increasingly stringent and
reporting and warning obligations. Moreover, new laws and
complex laws and regulations, new scientific discoveries,
regulations, the imposition of tougher licence requirements,
delivery of defective products or the obligation to notify or provide
increasingly strict enforcement or new interpretations of existing
regulatory authorities or others with required information (such as
laws and regulations may cause the Company to incur increased
under the EU Regulation known as REACH, which addresses
capital expenditure and operating costs in the future in relation
the production and use of chemical substances) may force
to the above, which could have a negative effect on its results
the Company to adapt, redesign, redevelop, recertify and/or
of operation and financial condition.
eliminate its products from the market. Seizures of defective
If the Company fails to comply with health, safety and products may be pronounced, and the Company may incur
environmental laws and regulations, even if caused by factors administrative, civil or criminal liability. In the event of an accident
beyond its control, that failure may result in the levying of civil or or other serious incident involving a product, the Company may
criminal penalties and fines against it. Regulatory authorities may be required to conduct investigations and undertake remedial
require the Company to conduct investigations and undertake activities. Employees, customers and other third parties may
remedial activities, curtail operations or close installations or also file claims for personal injury, property damage or damage
facilities temporarily to prevent imminent risks. In the event of to the environment (including natural resources). Any problems
an industrial accident or other serious incident, employees, in this respect may also have a significant adverse effect on
customers and other third parties may file claims for ill-health, the reputation of the Company and its products and services.
personal injury, or damage to property or the environment
(including natural resources). Further, liability under some

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Chapter

1.
X
FACTORS
RISK

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GroupActivities

1.1 Presentation of the Group 24


1.1.1 Overview 24
1.1.2 Airbus 28
1.1.3 Airbus Helicopters 36
1.1.4 Airbus Defence andSpace 39
1.1.5 Other: AirbusGroup,Inc. 47
1.1.6 Investments 48
1.1.7 Insurance 49
1.1.8 Legal and Arbitration Proceedings 50
1.1.9 Research and Technology, Intellectual Property 51
1.1.10 Corporate Social Responsibility 53
1.1.11 Employees 55

1.2 Recent Developments 56

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1.1 Presentation of the Group


1.1.1 Overview

Due to the nature of the markets in which the Company operates and
theconfidential nature of its businesses, any statements with respect to
theCompanys competitive position set out in paragraphs1.1.1 through1.1.6
below have been based onthe Companys internal information sources,
unlessanother source has been specified below.
With consolidated revenues of 64.5billion in 2015, the Group huge backlog execution challenge. Therefore, the proven
is Europes premier aerospace and defence company and management of cycles and shocks needs to be continued
one of the largest aerospace and defence companies in the and the efforts to mitigate against cycles and shocks
world. In terms of market share, the Group is among the top has to be even further strengthened through focusing on
two manufacturers of commercial aircraft, civil helicopters, innovation, services and a more global approach.
commercial space launch vehicles and missiles, and a leading
supplier of military aircraft, satellites and defence electronics. 2. Preserve leading position in European defence, space
In 2015, it generated 82% of its total revenues in the civil sector and government markets by focusing on military
(compared to 82% in 2014) and 18% in the defence sector aircraft, missiles, space and related services
(compared to 18% in 2014). As of 31 December 2015, the
Defence can no longer be a tool to manage and hedge
Groups active headcount was 136,574employees.
against commercial cycles, but our ambition is to remain
strong and actively shape our defence, space and
Strategy governmental business. The focus will involve (i)developing
After the introduction of the new Group strategy in 2013, the high-performing, low-equity businesses such as missiles,
Group has successfully executed its rebranding and Airbus launchers, combat and transport aircraft, entering into new
has become the reference on our various markets. The growth areas when they are backed by government funding,
restructuring of our defence and space business is ongoing; and (ii)focusing on productivity improvements both through
with progress in executing the portfolio decisions around the internal means and in the context of European optimisation
mission statement we make it fly. Furthermore, the internal to enable efficiencies and improve the Groups positioning
transformation programme at Airbus Helicopters has made on export markets. In Space, Airbus Group intends to
significant progress. strengthen its position increasing its stake in Arianespace
and developing Ariane6, if it is able to conclude the creation
AirbusGroup continues to focus on leadership in commercial
of Airbus Safran Launchers in its full scope.
aeronautics, military aircraft, and space markets. The Group
is driving incremental innovation, globalization, services and Some business areas have been divested or are in the
value-chain optimisation, all of which will result in improved process to be divested as they do not fit the strategic
profitability and performance. AirbusGroup raises its ambition goals and the Company sees possibilities to increase
by adding Digitalization as a further lever for change and by their development potential in different set-ups. These
developing a new innovation strategy to pioneer and foster include satellite communication services (excluding key
disruptions in our industry. governmental business), Rostock System-Technik, ESG,
The 8 strategic paths of the AirbusGroup Strategy are as follows: or Fairchild Controls. The Group also maintains its path, of
an orderly exit from Dassaults capital to maximise value.
1. Strengthen market position and profitability while Despite the Companys strong track record and good
remaining a leader in commercial aeronautics prospects, this minority stake has no strategic interest for
AirbusGroup and a 18.8% stake has been sold in the first
Airbus aims to be largely self-sufficient going forward, rather
half of 2015 taking Airbus share down to 23.4%. Further
than attempting to rely on a balanced Group portfolio. Focus
divestments are planned, e.g., the Professional Mobile
upon on-time, on-cost, on-quality is paramount given the

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Radio business, and defence electronics, that have better 5. Adapt to a more global world as well as attract and

1.
perspectives in ownership structures more tailored to the retain global talents
nature of these businesses.
With 77% of our backlog and 69% of our revenues coming
To achieve this goal, AirbusGroup is using the following from outside Europe, AirbusGroup remains, more than
strategic levers: ever, a global company. The strategy and the constant
effort to globalize our businesses, especially in countries
3. Pursue incremental innovation potential within product with substantial growth, have paid. This global footprint is
programmes while pioneering and fostering disruptions also reflected in the diversity of our staff and skills, with
in our industry, and developing necessary skills and employees outside Europe almost doubled in the last five
competencies required to compete in the future years. Workforce in Asia and Latin America experienced the
most important growth. Locally, products may need to be
AirbusGroup innovates every day to increase its competitive
adapted and definitely serviced, but the main logic going
advantage by enhancing product performance, creating
forward is that the industry will retain its global products for
new customer benefits, and reducing costs. Our cutting-
local markets dynamic. Greenfield approaches have proven
edge technologies and scientific excellence contribute to
to ensure the Group a controlled entry and real citizenship,
global progress, and to delivering solutions for societys
whilst partnerships and acquisitions are complementary
challenges, such as environmental protection, mobility, and
tools. The setup of training JVs in Singapore and Malaysia
safety.
as well as greenfield training investments in Mexico are
After many new product developments in recent years, the the best example of the implementation of this strategy.
majority of the Groups revenues are generated today in AirbusGroup is streamlining its set-up by consolidating
segments where we have competitive, mature products that its international presence, for example in India, China, and
are far from the end of their lifecycle. Innovation will therefore Middle East (Dubai), using a one-roof policy under the
target maintaining, expanding, and continually leveraging Airbus name.
the competitiveness of the current products.
6. Focus services on and around the Groups platforms
The Group raised its ambitions to pioneer and disrupt the
The strategy going forward is to focus on services where
aerospace industry in areas that will shape the market and
the Group can differentiate and add value for its customers
our future and made a substantial effort in breakthrough
according to the motto no one knows our products better
innovation. Giving broader populations access to the
than we, aiming at developing long-term customer intimacy
3 rd dimension by fostering air mobility is a dedicated
and bring competitive advantage to its customers. As
target of the Group. In 2016, the Group will further explore
services are executed locally, the portfolio will be adapted to
innovation hot-springs beyond the Silicon Valley where the
the increasingly global customer base. The Group revenues
new Corporate Venture Capital fund and the Innovation
in the service segment are around 13% of its total business.
Centre A3 are currently ramping up their activity. Other
The ongoing acquisition of Navtech aims at supporting our
examples include the Groups engagement in the OneWeb
strategy by strengthening our offering of flight operations
low cost satellite constellation of 900units as well as the
solutions. Cooperation with military customers is set to
further expansion of dedicated facilities and tools for early
increase substantially through maintenance and support
stage innovation (e.g., Airbus Bizlab).
services thanks to the new platforms to be delivered in the
4. Exploit digitalization to enhance our current business coming years, including over 250 Eurofighters, over 150
as well as pursue disruptive business models A400M aircraft, around 250 NH90s and 50 Tiger helicopters.
In commercial, with production rates above 600aircraft
At AirbusGroup, we realise that digitalization is a mega trend a year, the installed base is expanding rapidly, and new
that needs to be addressed at a strategic level and also at innovative services are being offered successfully.
all levels of the organisation. Our business can become
more efficient with a mature use of digital technologies to 7. Strengthen the value chain position
drive higher quality of services, cost efficiency and improved
The Groups core capability is to master programme
operations performance. Therefore, digitalization has been
management and architect / integrator capabilities in
validated as the 8th strategic path for AirbusGroup. This
order to market, develop, and manufacture large-scale
new initiative will support the Groups transformation
aeronautics/ space platforms, integrated systems, and
by focusing on 5 main axes: (i)enabling high employee
related services. As the Group is much based on a strong
engagement, (ii)digital operational excellence, (iii)mastering
platform prime role, managing the supplier base towards
our product data value chain and turning product data into
delivering to the final customer is key. We aim to strengthen
insight, (iv)capturing the end user experience and (v)driving
and optimise selected strategic value chain areas to protect
our business agility.

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our Intellectual property, manage risks, increase profit, In 2015, Airbus recorded total revenues of 45.9 billion
access services, and differentiate our offerings. The Groups representing 71% of the Groups revenues. See 1.1.2Airbus.
suppliers provide a large proportion of the value in our
products, necessitating a robust supply-chain governance Airbus Helicopters
framework. This is supported by processes and tools that Airbus Helicopters (formerly Eurocopter) is a global leader
foster partnership, risk mitigation and supplier performance in the civil and military rotorcraft market, offering one of the
development. most complete and modern ranges of helicopters and related
services. This product range currently includes light single-
Deliver the result of the strategy:
engine, light twin-engine, medium and medium-heavy rotorcraft,
8. Focus on profitability, value creation and market which are adaptable to all kinds of mission types based on
position; no need to chase growth at any cost. Actively customer needs.
manage portfolio Airbus Helicopters delivered 395helicopters in 2015 (471 in
2014) and received 403gross orders in 2015 (compared to
Thanks to strong organic growth potential, mainly in the
426gross orders in 2014). Order Intake amounted to 6.2billion
commercial airplane business, the Group currently goes
(2014: 5.5billion) including 383 net orders before cancellation
through a series of production ramp-ups and associated
of 50 NH90 and Tiger from Germany and France. Civil contracts
financial needs. On top of that, targeted investments will help
and military sales accounted each respectively for 50% of this
to position the Group for the future. The financial strength
order volume. At the end of 2015, Airbus Helicopters order book
of the Group is an imperative to master these challenges,
stood at 831 helicopters (2014: 893 helicopters).
and to ensure that we have enough room for manoeuvre
for strategic moves. A prerequisite is that the AirbusGroup In 2015, Airbus Helicopters recorded total revenues of
stays attractive for investors, notably compared to its peers. 6.8billion, representing 11% of the Groups revenues. See
And further efforts are planned to optimise our portfolio of 1.1.3 Airbus Helicopters.
business and to improve performance of our organisation.
Airbus Defence andSpace
Organisation of the Groups Businesses Airbus Defence andSpace is Europes number one defence and
space enterprise, the second largest space business worldwide
Airbus Group organises its businesses into the following
and among the top ten global defence enterprises. Airbus
three operating Divisions: (i)Airbus, (ii)Airbus Helicopters and
Defence andSpace puts a strong focus on core businesses:
(iii)Airbus Defence andSpace. The chart set out in General
Space, Military Aircraft, Missiles and related systems and
Description of the Company and its Share Capital 3.3.6
services.
Simplified Group Structure Chart illustrates the allocation of
activities among these three Divisions. Airbus Defence andSpace is composed of four Business Lines:
Military Aircraft; Space Systems; Communications, Intelligence
Airbus & Security (CIS); and Electronics. It develops and engineers
Airbus is one of the worlds leading aircraft manufacturers of cutting-edge products in the field of defence and space,
passenger airliners, ranging in capacity from 100 to more than enabling governments, institutions and commercial customers
544 seats. Across all its aircraft families Airbus unique approach alike to protect resources and people while staying connected
ensures that aircraft share the highest commonality in airframes, to the world. Airbus Defence andSpace solutions guarantee
on-board systems, cockpits and handling characteristics. This sovereignty in foreign affairs and defence matters.
significantly reduces operating costs for airlines. In 2015, Airbus Defence andSpace recorded total revenues of
Since it was founded in 1970 and up to the end of 2015, 13.1billion, representing 20% of the Groups revenues. See
Airbus has received orders for 16,351 commercial aircraft 1.1.4Airbus Defence and Space.
from 387 customers around the world. In 2015, Airbus
delivered635aircraft (compared to 629deliveries in 2014) and Investments
received 1,190 gross orders (compared to 1,796 gross orders Among its significant investments, as of 31December 2015,
in 2014), or 55% of the gross worldwide market share (in value the Company held a 23.60% stake in Dassault Aviation, a
terms) of aircraft with more than 100seats. After accounting major participant in the world market for military jet aircraft
for cancellations, net order intake for 2015 was 1,080aircraft and business jets. As of 31March 2015, the remaining equity
(compared to 1,456aircraft in 2014). As of 31December 2015, investment in Dassault Aviation has been classified as an asset
Airbus backlog of commercial orders was 6,831 aircraft held for sale (reported in Others/ HQ/ Conso. segment) as
(compared to 6,386aircraft in 2014). AirbusGroup intends to pursue market opportunities to sell
the remainder of this investment. See 1.1.6 Investments.

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Summary Financial and Operating Data


The following tables provide summary financial and operating data for the Group for the past three years.
CONSOLIDATED REVENUES BY DIVISION FOR THE YEARS ENDED 31DECEMBER 2015, 2014 AND 2013
1.
Year ended Year ended Year ended
(in m) 31December 2015 31December 2014 31December 2013
Airbus 45,854 42,280 39,494
Airbus Helicopters 6,786 6,524 6,297
Airbus Defence andSpace 13,080 13,025 13,121
Total Divisional revenues 65,720 61,829 58,912
Other/ HQ/ Consolidation(1) (1,270) (1,116) (1,345)
Total 64,450 60,713 57,567
(1) Other/ HQ/ Consolidation comprises the Groups activities managed in the US, the holding function of the Groups Headquarters, the AirbusGroup bank and other
activities not allocable to the reportable segments, combined together with consolidation effects.

CONSOLIDATED REVENUES BY GEOGRAPHICAL AREA FOR THE YEARS ENDED 31DECEMBER 2015, 2014 AND 2013

Year ended 31December 2015 Year ended 31December 2014 Year ended 31December 2013
Amount in bn In percentage(1) Amount in bn In percentage(1) Amount in bn In percentage(1)
Europe 20.1 31.1% 20.3 33.4% 20.3 35.3%
North America 10.2 15.9% 9.7 16.0% 8.7 15.1%
Asia/ Pacific 18.8 29.1% 19.4 31.9% 19.3 33.4%
Rest of the World(2) 15.4 23.9% 11.3 18.7% 9.3 16.2%
Total 64.5 100% 60.7 100% 57.6 100%
(1) Percentage of total revenues after eliminations.
(2) Including the Middle East.

CONSOLIDATED ORDERS BOOKED FOR THE YEARS ENDED 31DECEMBER 2015, 2014 AND 2013

Year ended 31December 2015 Year ended 31December 2014 Year ended 31December 2013
Amount in bn In percentage(1) Amount in bn In percentage(1) Amount in bn In percentage(1)
Orders booked (2)

Airbus(3) 139.1 87.1% 150.1 89.4% 199.2 91.9%


Airbus Helicopters 6.2 3.9% 5.5 3.3% 5.8 2.7%
Airbus Defence
and Space 14.4 9.0% 12.2 7.3% 11.8 5.4%
Total Divisional orders 159.7 100% 167.8 100% 216.8 100%
Other/ HQ/ Consolidation (0.7) (1.4) (0.4)
Total 159.0 166.4 216.4
(1) Before Other/ HQ/ Consolidation.
(2) Without options.
(3) Based on catalogue prices for commercial aircraft activities.

CONSOLIDATED BACKLOG FOR THE YEARS ENDED 31DECEMBER 2015, 2014 AND 2013 (1)

Year ended 31December 2015 Year ended 31December 2014 Year ended 31December 2013
Amount in bn In percentage (2)
Amount in bn In percentage (2)
Amount in bn In percentage(2)
Airbus (3)
952.4 94.6% 803.6 93.6% 625.6 91.8%
Airbus Helicopters 11.8 1.2% 12.2 1.4% 12.4 1.8%
Airbus Defence
and Space 42.9 4.2% 43.1 5.0% 43.2 6.4%
Total Divisional backlog 1,007.1 100% 858.9 100% 681.2 100%
Other/ HQ/ Consolidation (1.2) (1.4) (0.6)
Total 1,005.9 857.5 680.6
(1) Without options.
(2) Before Other/ HQ/ Consolidation.
(3) Based on catalogue prices for commercial aircraft activities.

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Relationship between AirbusGroupSE andtheGroup


AirbusGroupSE itself does not engage in the core aerospace, agreements have been put in place with the subsidiaries and
defence or space business of its Group but coordinates services are invoiced on a cost plus basis.
related businesses, sets and controls objectives and approves
For management purposes, AirbusGroupSE acts through its
major decisions for its Group. As the parent company,
Board of Directors, Group Executive Committee, and Chief
AirbusGroupSE conducts activities which are essential to
Executive Officer in accordance with its corporate rules and
the Group activities and which are an integral part of the overall
procedures as described below under Corporate Governance.
management of the Group. In particular, finance activities
pursued by AirbusGroupSE are in support of the business Within the framework defined by AirbusGroupSE, each Division,
activities and strategy of the Group. In connection therewith, Business Unit and subsidiary is vested with full entrepreneurial
AirbusGroupSE provides or procures the provision of services responsibility.
to the subsidiaries of the Group. General management service

1.1.2 Airbus

Airbus is one of the worlds leading aircraft manufacturers of To support the A350 XWB ramp-up and other production
passenger airliners, ranging in capacity from 100 to more than increases, a new super transporter is under development, with
544seats. Across all its aircraft families Airbus unique approach the first of five Beluga XL aircraft to enter into service in 2019.
ensures that aircraft share the highest commonality in airframes,
on-board systems, cockpits and handling characteristics. Expanding its Customer Services Offering
This significantly reduces operating costs for airlines. See Airbus seeks to remain at the forefront of the industry by
1.1.1Overview for an introduction to Airbus. expanding its customer services offering to meet customers
evolving needs. As a result, Airbus has developed a wide range
Strategy of value-added and customised services which customers
Airbus primary goal is to deliver strong results in a sustained can select based on their own make or buy policy and needs.
manner, while commanding a further increased share of the This approach provides Airbus operators with solutions to
worldwide commercial aircraft market over the long-term and significantly reduce their operating costs, increase aircraft
expanding its customer services offering. To achieve these availability and enhance the quality of their operations.
goals, Airbus is actively:
Market
Building a Leaner, More Fully Integrated Company
Market Drivers
In order to build a leaner, more fully integrated company and
The main factors affecting the commercial aircraft market
thereby bolster its competitiveness, Airbus is adapting its
include passenger demand for air travel, cargo activity,
organisation to foster an entrepreneurial spirit and empower
economic growth cycles, national and international regulation
more teams, while maintaining harmonised processes across
(and deregulation), the rate of replacement and obsolescence
all sites. For series programmes, additional responsibilities and
of existing fleets and the availability of aircraft financing sources.
means have been delegated to plants for delivery at increased
The performance, competitive posture and strategy of aircraft
rates.
manufacturers, airlines, cargo operators and leasing companies
Developing the Most Comprehensive Line ofProducts as well as wars, political unrest, pandemics and extraordinary
inResponse to Customer Needs events may also precipitate changes in demand and lead to
short-term market imbalances.
Airbus continuously seeks to develop and deliver new products
to meet customers evolving needs, while also improving its In recent years, China and India have emerged as significant
existing product line. The A330neo (new engine option) is one new aircraft markets. According to internal estimates, they
of the evolutions to the A330 Family and the A320neo (new are expected to constitute the first and fourth most important
engine option) is one of many product upgrades to the A320 markets by aircraft delivery value, respectively, in the next
Single-Aisle Family to maintain its position as the most advanced twenty years. As a result, Airbus has sought to strengthen its
and fuel-efficient single-aisle aircraft family. commercial and industrial ties in these countries. New aircraft
demand from airlines in the Middle East has also become
Airbus is also currently pursuing (i)development and production
increasingly important, as they have rapidly executed strategies
on the A350 XWB programme, and (ii) research on the
to establish a global presence and to leverage the benefits the
development of new aircraft in the short-range, medium-range
region can deliver.
and long-haul segments.

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The no-frills / low-cost carriers also constitute a significant end of 2015, Airbus commercial backlog stood at 6,831aircraft,

1.
sector, and are expected to continue growing around the world, representing more than ten years of production at current rates.
particularly in Asia, where emerging markets and continued Through careful backlog management, close monitoring of the
deregulation should provide increased opportunities. While customer base and a prudent approach to production increases,
Airbus single-aisle aircraft continue to be a popular choice for Airbus has successfully increased annual deliveries for 14years
these carriers, demand for Airbus range of twin-aisle aircraft running, even through the economic crisis of 2008-2009.
may also increase as some of these carriers develop or further
Regulation / Deregulation. National and international
develop their long-range operations.
regulation (and deregulation) of international air services and
Overall growth. The long-term market for passenger aircraft major domestic air travel markets affect demand for passenger
depends primarily on passenger demand for air travel, which aircraft as well. In 1978, the US deregulated its domestic air
is itself primarily driven by economic or GDP growth, fare levels transportation system, followed by Europe in 1985. The more
and demographic growth. Measured in revenue passenger recently negotiated Open Skies Agreement between the
kilometres, air travel increased in every year from 1967 to US and Europe, which became effective in 2008, allows any
2000, except for 1991 due to the Gulf War, resulting in an European or US airline to fly any route between any city in the
average annual growth rate of 7.9% for the period. Demand EU and any city in the US. Other regions and countries are
for air transportation also proved resilient in the years following also progressively deregulating, particularly in Asia. This trend
2001, when successive shocks, including 9/11 and SARS in is expected to continue, facilitating and in some cases driving
Asia, dampened demand. Nevertheless, the market quickly demand. In addition to providing greater market access (which
recovered. may have formerly been limited), deregulation may allow for the
creation and growth of new airlines or new airline models, as
More recently, the financial crisis and global economic difficulties
has been the case with the no-frills/ low-cost airline model,
witnessed at the end of 2008 and into 2009 resulted in only
which has increased in importance throughout major domestic
the third period of negative traffic growth during the jet age,
and intra-regional markets since deregulation (e.g., in the US
and a cyclical downturn for airlines in terms of traffic (both
and Europe).
passenger and cargo), yields and profitability. Preliminary
figures released at the end of 2015, by the International Civil Airline network development: hub and point-to-point
Aviation Organisation (ICAO), confirmed that some 3.5billion networks. Following deregulation, major airlines have sought
passengers made use of the global air transport network for their to tailor their route networks and fleets to continuing changes
business and tourism needs in 2015. The annual passenger total in customer demand. Accordingly, where origin and destination
is up 6.4% compared to 2014. They also stated the number of demand prove sufficiently strong, airlines often employ direct,
departures reached approximately 34million globally, and world or point-to-point route services. However, where demand
passenger traffic, expressed in terms of total scheduled revenue between two destinations proves insufficient, airlines have
passenger-kilometres (RPKs), posted an increase of 6.8% with developed highly efficient hub and spoke systems, which
approximately 6,562billion revenue passenger kilometres being provide passengers with access to a far greater number of
performed. air travel destinations through one or more flight connections.

In the long-term, Airbus believes that air travel remains a growth The chosen system of route networks in turn affects aircraft
business. Based on internal estimates, Airbus anticipates a demand, as hubs permit fleet standardisation around both
growth rate of 4.6% annually during the period 2014-2034. If the smaller aircraft types for the short, high frequency and lower
actual growth rate equals or exceeds this level, Airbus expects density routes that feed the hubs (between hubs and spokes)
that passenger traffic, as measured in revenue passenger and larger aircraft types for the longer and higher density
kilometres, would more than double in the next fifteen years. routes between hubs (hub-to-hub), themselves large point-
to-point markets. As deregulation has led airlines to diversify
Cyclicality. Despite an overall growth trend in air travel, aircraft
their route network strategies, it has at the same time therefore
order intake can vary significantly from year to year, due to the
encouraged the development of a wider range of aircraft in
volatility of airline profitability, cyclicality of the world economy,
order to implement such strategies (although the trend has
aircraft replacement waves and occasional unforeseen events
been towards larger-sized aircraft within each market segment
which can depress demand for air travel. However, new product
as discussed below).
offerings and growth across the market has resulted in good
levels of order activity in recent years. In the last four years, Airbus, like others in the industry, believes that route networks
order totals comfortably exceeded record Airbus deliveries thus will continue to grow through expansion of capacity on existing
strengthening both order book and backlog totals. routes and through the introduction of new routes, which will
largely be typified by having a major hub city at least at one
Despite some cyclicality in air traffic, Airbus aims to secure
end of the route. These new route markets are expected to be
stable delivery rates from year to year, supported by a strong
well served by Airbus latest product offering, the A350XWB.
backlog of orders and a regionally diverse customer base. At the
In addition, the A380 has been designed primarily to meet the

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significant demand between the major hub cities, which are and Europe, the Asia-Pacific region uses a greater proportion of
often among the worlds largest urban centres (such as London, twin-aisle aircraft, as populations tend to be more concentrated
Paris, New York and Beijing). Airbus has identified 47major in fewer large urban centres. The tendency towards use of twin-
hub cities in its current market analysis, with this number aisle aircraft is also reinforced by the fact that many of the
expected to grow to over92 by 2034. Airbus believes that it is regions major airports limit the number of flights, due either
well positioned to meet current and future market requirements to environmental concerns or to infrastructure constraints that
given its complete family of products. limit the ability to increase flight frequency. These constraints
necessitate higher average aircraft seating capacity per flight.
Alliances. The development of world airline alliances has
However, Airbus believes that demand for single-aisle aircraft in
reinforced the pattern of airline network development described
Asia will grow over the next 20years, particularly as domestic
above. According to data from Ascend, a UK-based aviation
markets in China and India and low-cost carriers continue to
industry consultancy, just over one-third of the worlds jetliner
develop in the region. Aircraft economics will also help to drive
seats being flown today are operated by just 13 airlines as of
aircraft size, with airlines looking to reduce the cost per seat
January2016. In the 1990s, the major airlines began to enter
through higher density aircraft cabins and the use of larger
into alliances that gave each alliance member access to the
aircraft types and variants where possible.
other alliance members hubs and routings, allowing airlines to
concentrate their hub investments while extending their product Competition. Airbus has been operating in a duopoly since
offering and market access. Lockheeds withdrawal from the market in 1986 and Boeings
acquisition of McDonnell Douglas in 1997. As a result, the
Market Structure and Competition market for passenger aircraft of more than 100seats is now
Market segments. According to a study conducted by Airbus, effectively divided between Airbus and Boeing. According to the
a total of 17,350passenger aircraft with more than 100seats manufacturers published figures for 2015, Airbus and Boeing,
were in service with airlines worldwide at the beginning of 2014. respectively, accounted for 45% and 55% of total commercial
Currently, Airbus competes in each of the three principal market aircraft deliveries, 58% and 42% of total net orders (in units), and
segments for aircraft with more than 100seats. 54% and 46% of the total year-end backlog (in units), an industry
record. Airbus commercial aircraft deliveries (635 in 2015) were
Single-aisle aircraft, such as the A320 Family, have 100 to
the 14thyear in a row of increased production at Airbus.
more than 200seats, typically configured with two triple seats
per row divided by one aisle, and are used principally for short- Nevertheless, the high technology and high value nature
range and medium-range routes. of the business makes aircraft manufacturing an attractive
industry in which to participate, and besides Boeing, Airbus
Twin-aisle or wide-body aircraft, such as the A330 /
faces aggressive international competitors who are intent on
A350 XWB Families, have a wider fuselage with more than
increasing their market share. Regional jet makers Embraer and
210seats, typically configured with eight seats per row and
Bombardier, coming from the less than 100-seat commercial
with two aisles. The A330/ A350XWB Families are capable of
aircraft market, continue to develop larger airplanes (such as
serving all short- to long-range markets.
the new 100- to 149-seat C-Series launched by Bombardier).
Very large aircraft, such as the A380 Family, are designed to Additionally, other competitors from Russia, China and Japan will
carry more than 400passengers, non-stop, over very long-range enter the 70- to 150-seat aircraft market over the next few years.
routes with superior comfort standards and with significant
cost-per-seat benefits to airlines, although such aircraft can Customers
also be used over shorter ranges in high-density (including As of 31December 2015, Airbus had 387customers and a
domestic) markets. total of 16,351 Airbus aircraft had been ordered, of which
9,520aircraft had been delivered to operators worldwide. The
Freight aircraft, which form a fourth, related segment, are often
table below shows Airbus largest commitments in terms of total
converted ex-passenger aircraft. See Regional Aircraft,
gross firm orders by customer for the year2015.
Aerostructures, Seats and Aircraft ConversionEFW.

Airbus also competes in the corporate, VIP business jet market Customer Firm orders(1)
with the ACJ, an A319-based Corporate Jetliner, and the A318 Indigo 250
Elite. As well as these, other members of the Airbus family can Wizzair 110
serve the business jet market in private, corporate shuttle and Avianca 100
in government/ VIP roles. IAG Group 65

Geographic differences. The high proportion of single-aisle GECAS 60

aircraft in use in both North America and Europe reflects the Air Lease Corporation 59
predominance of domestic short-range and medium-range International Air Finance Corporation
(Saudi Arabian Airlines) 50
flights, particularly in North America due to the development of
(1) Options are not included in orders booked or year-end backlog.
hubs following deregulation. In comparison with North America

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Products and Services


The Family Concept Commonality across theFleet
Airbus aircraft families promote fleet commonality. This
To ensure this market leader keeps its competitive edge, Airbus
continues to invest in improvements across the product line,
1.
philosophy takes a central aircraft and tailors it to create including development of the A320neo (new engine option)
derivatives to meet the needs of specific market segments, Family. The A320neo incorporates many innovations including
meaning that all new-generation Airbus aircraft share the same latest generation engines, Sharklet wing-tip devices and cabin
cockpit design, fly-by-wire controls and handling characteristics. improvements, which together will deliver up to 20% in fuel
Pilots can transfer among any aircraft within the Airbus family savings by 2020. The A320neo received joint Type Certification
with minimal additional training. Cross-crew qualification across from the European Aviation Safety Agency (EASA) and the
families of aircraft provides airlines with significant operational Federal Aviation Administration (FAA) in November2015. The
flexibility. In addition, the emphasis on fleet commonality permits A320neo with Pratt & Whitney engines was the first variant in
aircraft operators to realise significant cost savings in crew the Neo Family to receive Type Certification. The A320neo with
training, spare parts, maintenance and aircraft scheduling. CFM engines wil be certified later followed by the A321neo and
The extent of cockpit commonality within and across families A319neo in both engine variants.
of aircraft is a unique feature of Airbus that, in managements This new engine option will be available for the A321, A320 and
opinion, constitutes a sustainable competitive advantage. A319aircraft models, with an entry-into-service of the A320neo
In addition, technological innovation has been at the core first, to be followed by the A321neo and the A319neo. With
of Airbus strategy since its creation. Each product in the 4,508 firm orders received from 79 customers since its launch
Airbus family is intended to set new standards in areas crucial in December2010, the A320neo Family has captured 60% of
to airlines success, such as cabin comfort, cargo capacity the market.
performance, economic performance, environmental impact The first A320neo has been delivered in January2016 to launch
and operational commonality. Airbus innovations often provide customer Lufthansa.
distinct competitive advantages, with many becoming standard
in the aircraft industry. In October2015, Airbus announced the decision to further
increase the production rate of the Single Aisle Family to
A320 Family. With more than 12,400aircraft sold and more than 60aircraft a month in mid-2019, following thorough studies
6,800delivered, Airbus family of single-aisle aircraft, based on on production ramp-up readiness in the supply chain and in
the A320, includes the A319 and A321 derivatives, as well as the Airbus facilities.
corporate jets family (ACJ318, ACJ319, ACJ320 and ACJ321).
Each aircraft in the A320 Family shares the same systems, To enable the ramp-up, an additional production line is being
cockpit, operating procedures and cross-section. built in Hamburg, which is being financed by equity, and will
be operational in 2017. In parallel Airbus will integrate cabin
At 3.95 metres diameter, the A320 Family has the widest furnishing activities for A320aircraft produced in Toulouse into
fuselage cross-section of any competing single-aisle aircraft. the final assembly line in Toulouse, and thereby harmonizing
This provides a roomy passenger cabin, a high comfort level the production process across all A320 Family production sites
and a spacious under floor cargo volume. The A320 Family worldwide.
incorporates digital fly-by-wire controls, an ergonomic cockpit
and a lightweight carbon fibre composite horizontal stabiliser. In 2015, Airbus received 1,015gross orders for the A320 Family
The use of composite material has also been extended to of aircraft (945net), and delivered 491aircraft.
the vertical stabiliser. The A320 familys competitor is the
Boeing737 series.

A320 FAMILY TECHNICAL FEATURES (CURRENT VERSION)

Model Entry-into-service Passenger capacity(1) Range (km) Length (metres) Wingspan (metres)
A318 2003 107 5,750 31.4 34.1
A319 1996 124 6,850(2) 33.8 35.8
A320 1988 150 6,100(2) 37.6 35.8(3)
A321 1994 185 5,950(2) 44.5 35.8(3)
(1) Two-class layout.
(2) Range with sharklets.
(3) Wingspan with sharklets.

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A330 Family. With 1,603aircraft sold and 1,257delivered, variant delivered to Delta Airlines in May2015 and subsequently
the A330 Family covers all market segments with one twin- for the A330-200.
engine aircraft type and is designed to carry between 247
Airbus is also adapting the A330-300 to rapidly growing
and 277passengers. The A330 Family offers high levels of
markets, where the aviation infrastructure is struggling to
passenger comfort as well as large under-floor cargo areas.
keep us with surging demand. The A330 Regional, the lower-
The competitors of the A330 Family are the Boeing767, 777
weight variant will carry up to 400 passengers on shorter haul
and 787aircraft series.
missions resulting in significant cost savings. Saudi Arabian
The newest evolution to the A330 Family is Airbus A330neo Airlines became the A330-300 Regional launch customer with
(new engine option), comprising the A330-800neo and A330- an order announced in June2015.
900neo versions. These aircraft incorporate latest generation
Airbus is investing hundreds of millions of euros per year in
Rolls-Royce Trent 7000 engines. The first delivery is scheduled
the A330 Family to keep the aircraft at the leading edge of
for end 2017.
innovations.
In 2015, Airbus received 52 net orders for the A330neo.
In 2015, Airbus received 156gross orders for the A330 Family
The platform for developing the Neo is Airbus 242-tonne of aircraft including 52 for the A330neo (136 net), and delivered
maximum take-off weight A330 variant. This upgrade was first 103aircraft to customers.
applied to the A330-300 with the first enhanced A330-300

A330 FAMILY TECHNICAL FEATURES (CURRENT VERSION)

Model Entry-into-service Passenger capacity(1) Maximum range (km) Length (metres) Wingspan (metres)
A330-200 1998 247 13,450 59.0 60.3
A330-300 1994 277 11,750 64.0 60.3
(1) Three-class configuration.

A380. The double-deck A380 is the worlds largest commercial 15,200km, the A380 offers superior economic performance,
aircraft flying today. Its cross-section provides flexible and lower fuel consumption, less noise and reduced emissions. The
innovative cabin space, allowing passengers to benefit from A380s competitor is the Boeing 747-8.
wider seats, wider aisles and more floor space, tailored to the
In 2015, Airbus received 3gross orders for the A380 (2net),
needs of each airline. Carrying 544passengers in a comfortable
and delivered 27aircraft.
four-class configuration and with a range of 8,200 nm /

A380 TECHNICAL FEATURES

Model Entry-into-service Passenger capacity(1) Maximum range (km) Length (metres) Wingspan (metres)
A380-800 2007 544 15,200 73.0 79.8
(1) Four-class layout.

A350 XWB Family. The A350 XWB is an all-new family of With the Ultra-Long Range version of the A350-900 launched
wide-body aircraft, designed to accommodate between in 2015, the A350XWB demonstrates its versatility by offering
280 and 366 passengers. The A350 XWB features A380 the capability to perform flights of up to 19 hours.
technology, a wider fuselage than that of competing new
We also continue to develop the A350-1000, with an entry-into-
generation aircraft, and a greater use of composite material.
service in mid-2017.
The A350XWBs main competitors are the Boeing787 and
777aircraft series. In 2015, Airbus received 16gross orders for the A350XWB
Family (-3net), and delivered 14aircraft to 4 operators (Qatar
Airways, Latam, Vietnam Airlines and Finnair).

A350XWB FAMILY TECHNICAL FEATURES

Model Entry-into-service Passenger capacity(1) Maximum range (km) Length (metres) Wingspan (metres)
A350-900 2014 325 14,350 66.8 64.7
A350-1000 2017 366 14,800 73.7 64.7
(1) Two-class layout.

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Customer Services team has accumulated decades of expertise in aircraft finance.

1.
Airbus Customer Services prime role is to support its customers When Airbus finances a customer, the financed aircraft generally
in operating their Airbus fleet safely and profitably and to the serve as collateral, with the engine manufacturer participating
satisfaction of passengers all around the world. As a result of in the financing. These elements assist in reducing the risk
its continued growth, Airbus customer base has increased borne by Airbus. Airbus customer financing transactions are
consistently over the past years reaching 8,600 aircraft in- designed to facilitate subsequent sell-down of the exposure to
service operated by 400airlines. The Airbus fleet is maintained the financial markets, third-party lenders or lessors.
by 100Maintenance and Repair Organisations and partially In 2015, Airbus continued to benefit from market appetite
owned by 100 leasing companies. for both aircraft financing and sale and leaseback lessor
A worldwide network of more than 5,000people covers all areas opportunities. The markets, however, remain unpredictable
of support from technical engineering/ operational assistance and Airbus continues to allow for potential additional financing
and spare parts supply, to crew and maintenance training. exposure. Management believes, in light of its experience, that
Hundreds of technical specialists provide Airbus customers the level of provisioning protecting Airbus from default costs is
with advice and assistance to Airbus customers 24hours a adequate and consistent with standards and practice in the
day, 7days a week. There are more than 250 representatives aircraft financing industry. See Managements Discussion
positioned around the world in more than 150stations close to and Analysis of Financial Condition and Results of Operations.
the airlines they serve, and an international network of support
Asset Management
centres, training centres and spares warehouses.
The Airbus Asset Management Division was established
Beyond the core customer support activities, Airbus Customer in 1994 to manage and re-market used aircraft acquired by
Services department has developed a wide range of modular Airbus, originally as a result of customer bankruptcies, and
and customised services driven by the unique added value subsequently in the context of certain buy-back commitments.
that an aircraft manufacturer can bring. These services are The Division operates with a dedicated staff and manages a
clustered around five main domains of activity: Flight Hours fleet comprised of used Airbus aircraft across the range of
and LRU Solutions, Upgrades Solutions, Material and Supply models. Through its activities, the Asset Management Division
chain Solutions, training solutions and e-Solutions for Flight helps Airbus to respond more efficiently to the medium- and
Operations, Engineering and Maintenance. Innovative and long-term fleet requirements of its customers.
integrated solutions have been developed in these domains,
such as Power by the Hours Tailored Support Package (FHS- Its key roles comprise commercial and risk management of the
TSP), which provide integrated engineering, maintenance and Airbus used aircraft portfolio, as well as the enhancement of all
component packages to enable customers to reduce their Airbus products residual value. Most of the aircraft are available
investments and support costs while increasing operational to customers for cash sale, while some can also be offered on
reliability. operating lease whereby the Airbus Asset Management team
then focuses on the sell down of the aircraft with lease attached.
Part of Airbus growth strategy in the area of customer services
consists of industrialised development. One recent step in At the end of 2015, the Airbus Asset Management portfolio
implementing this strategy is the creation of a 100% Airbus contained 47aircraft. Across the year2015 the Airbus Asset
subsidiary company named SATAIR Group: a world leading Management Division succeeded to place 21 used aircraft.
supplier of aircraft parts and service solutions for aircraft The Asset Management Division also provides a full range of
maintenance. The merger of the state-of-the-art service remarketing services, including assistance with entry-into-
& support portfolios manager Satair and Airbus Material service, interior reconfiguration and maintenance checks.
Management enhances availability of product and service for
airlines daily operation. Production

Customer Finance Industrial Organisation


Airbus favours cash sales, and does not envisage customer Each task in the building of Airbus aircraft (from design to
financing as an area of business development. However, Airbus production) is allocated to a designated plant. The Airbus plants
recognises the commercial need for manufacturers to assist are typically organised around different aircraft components
customers in arranging financing of new aircraft purchases, and sections, in component delivery teams. Each component
and in certain cases to participate in financing those aircraft delivery team is either in charge of one aircraft programme, or
for the airline. organised by manufacturing technology clusters depending on
the optimum solution for each plant. Every plant is organised with
Extension of credit or assumption of exposure is subject to
production, engineering, quality, supply chain, manufacturing,
corporate oversight and monitoring, and follows strict standards
engineering and logistics capabilities to ensure a seamless
of discipline and caution. Airbus dedicated customer finance
production flow of operations.

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A transversal Industrial Strategy & Systems Centre of Regional Aircraft, Aerostructures, Seats
Competences is in charge of ensuring that harmonised and andAircraft Conversion
standardised processes, methods and tools are developed and
implemented across the plants, in order to increase efficiency, ATR
based on best practices. ATR (Avions de Transport Rgional) is a world leader in the
50to74seat regional turboprop aircraft market. Its aircraft are
Following production by the respective plants, the various
currently operated by more than 200 airlines in over 100countries.
aircraft sections are transferred between the network of sites
ATR is an equal partnership between AirbusGroup and Alenia
and the final assembly lines using dedicated transport means,
Aermacchi (Finmeccanica Group), with AirbusGroups 50%
such as the Beluga Super Transporters. To support the A380
share managed by Airbus. Headquartered in Toulouse in the
production flow, Airbus has also integrated road, river and sea
south of France, ATR employs more than 1,200people, with
transport. Programme management is then responsible for
major operations in the Midi-Pyrnes and Aquitaine regions
the final assembly line activities. The programme management
of France. Since the start of the programme in 1981, ATR
works closely with the plants to secure delivery of aircraft
has registered net orders for 1,796aircraft (473ATR42s and
sections to the final assembly lines on time, cost and quality.
1,063ATR72s).
A new Airbus A320 Family final assembly line was constructed
in Mobile, Alabama (US) and started production in 2015, with a Market
first delivery of a Mobile-assembled aircraft expected in 2016. The regional turboprop aircraft industry has experienced
growing concentration over the years. During the 1990s, a
Engineering number of regional aircraft manufacturers merged, closed or
Airbus Engineering is a global organisation that develops civil ceased production, leading to the withdrawal from the market
aircraft and aircraft components, and that conducts innovative of BAe, Beechcraft, Fokker, Saab and Shorts, among others.
research applicable to the next generation of aircraft. Airbus Currently, the worldwide market for turboprop aircraft of 50-
Engineering operates transnationally, with most engineers 70seats in production is dominated by two manufacturers:
employed in France, Germany, the UK and Spain. A growing ATR and Bombardier.
population of experienced aerospace engineers is also employed
After a number of years of declining activity, the regional
worldwide at five other engineering centres in Wichita (Kansas,
turboprop aircraft market has experienced sustained growth
US), Mobile (Alabama, US), Moscow (Russia), Bangalore (India)
since 2005 due to the advantages of turboprop aircraft over
and Beijing (China).
jet aircraft in terms of fuel efficiency and CO 2 emissions. In
A key part of the Airbus engineering organisation is the architect 2015, ATR delivered 88new aircraft (compared to 83 in 2014)
and integration centre, which ensures, together with a team of and recorded firm orders for 76 new aircraft (compared to 160
senior aircraft architects and the programme chief engineers, in 2014). In 2015, ATR received its 1500thfirm order since the
that a consistent and multi-disciplinary approach is applied beginning of the programme.
during aircraft development.
As of 31December 2015, ATR had a backlog of 260aircraft
In 2015, Airbus successfully achieved Type Certification of (compared to 280 in 2014). The relative lower operating cost
the A320neo, equipped with Pratt & Whitney engines, and and reduced CO2 emissions of turboprop aircraft, in an ever
began flight tests of the A320neo with CFM engines. The passenger-yield constrained environment, are expected to lead
A330neo and BelugaXL successfully achieved the End of to sustained market activity over the coming years.
Concept phase and the A350XWB Ultra-Long Range project
has also been launched. Research & Technology activities Products and Services
delivered incremental innovations for existing aircraft, matured ATR42 and ATR72. Commencing with the ATR42 (50-seat),
breakthrough technologies, with reinforced focus on industrial which entered service in 1985, ATR has developed a family of
aspects. Airbus Engineering is a major contributor to numerous high-wing, twin turboprop aircraft in the 50- to 74-seat market
international initiatives dedicated to the preservation of the that are designed for optimal efficiency, operational flexibility and
environment and the reduction of noise and CO 2 emissions. comfort. In 1995, in order to respond to operators increasing
Fully integrated change projects are also implemented to demands for comfort and performance, ATR launched the
continuously implement innovative and efficient ways of ATR 42-500 and two years later, the ATR 72-500 (70-seat)
working. series. In 2007, ATR launched the new -600 series with improved
engines, new avionics and a new cabin. Like Airbus, the ATR
range is based on the family concept, which provides for savings
in training, maintenance operations, spare parts supply and
cross-crew qualification. By the end of 2015, ATR had delivered
1278aircraft.

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Customer service. ATR has established a worldwide customer In the crew seats segment, STELIA is the joint world leader and

1.
support organisation committed to supporting aircraft over their offers support from design to production, including after-sales
service life. Service centres and spare parts stocks are located service. More than 40,000 seats have been delivered since 1973
in Toulouse, Paris, the greater Washington D.C. area, Miami, and STELIA manufactures 2,500 pilot seats per year.
Singapore, Bangalore, Auckland, Kuala Lumpur, Toronto and
STELIA also designs and manufactures luxurious custom-
Johannesburg.
made business and first class passenger seats for more than
ATR Asset Management also responds to the market for second- 40 airlines in the world.
hand aircraft by assisting in the placement and financing of used
and end-of-lease aircraft. By providing quality reconditioned
aircraft at attractive prices, ATR Asset Management has helped Premium AEROTEC
both to broaden ATRs customer base, in particular in emerging Premium AEROTEC is a wholly owned subsidiary of the
markets, and to maintain the residual values of used aircraft. Company (consolidated within Airbus) which was formed from
In the past, clients for such used aircraft have subsequently the spin-off of the former German Airbus sites in Nordenham
purchased new aircraft as they have gained experience in the and Varel and the former Airbus Group site in Augsburg
operation of ATR turboprops. pursuant to the aerostructures reorganisation strategy initiated
In 2015, ATR continued to build its presence across the world under the Power8Programme. Premium AEROTEC has its own
by establishing a new representative office in Beijing. ATR was development unit with its main facilities at its Augsburg site
also introduced the first ATR 42-600 in Japan with Amakusa and offices in Bremen, Hamburg, Munich / Ottobrunn and
Airlines taking delivery of this aircraft. Manching. The management headquarters for the operational
units are in Varel, while the company itself is headquartered
Production in Augsburg. Premium AEROTECGmbH also has a plant for
The ATR fuselage is produced in Naples, Italy, and ATR wings processing aircraft components in Ghimbav/ Brasov County
are manufactured in Merignac near Bordeaux, France. Final in Romania.
assembly takes place in Saint Martin near Toulouse on the The core business of Premium AEROTEC is focused on structures
Airbus production site. Flight-testing, certification and deliveries and manufacturing systems for aircraft construction and related
also occur in Toulouse. ATR outsources certain areas of development activities. The aim of Premium AEROTEC over the
responsibility to Airbus, such as wing design and manufacturing, coming years is to further expand its position as the leading
flight-testing and information technology. tier1 supplier of civil and military aircraft structures.

Premium AEROTEC is a partner in all major European aircraft


STELIA Aerospace development programmes, such as the commercial Airbus
aircraft families, the A400M military transport aircraft programme
At the end of 2014, Sogerma and Aerolia merged to become
and the Eurofighter Typhoon. It plays a significant role in the
STELIA Group with effect from January2015. The merger of
design of new concepts in such fields as carbon composite
Aerolia and Sogerma gave rise, on 1 January 2015, to the
technologies.
world No.3 (as regards its turnover) in aerostructures, seats
and aeronautical equipment.

STELIA Aerospace is a wholly-owned subsidiary of the Elbe Flugzeugwerke GmbH EFW


AirbusGroup, which offers global solutions for aeronautical EFW (consolidated within Airbus) combines various aviation
manufacturers and airlines, as well as designs and produces and technology activities under a single roof: development and
aerostructures, crew seats and business and first class manufacturing of flat fibre-reinforced composite components for
passenger seats. With a turnover of 1.8billion in 2015 and more structures and interiors, the conversion of passenger aircraft into
than 6,100employees worldwide, STELIA supports the major freighter configuration, maintenance and repair of Airbus aircraft
aeronautical players, such as Airbus, ATR, Boeing, Bombardier, as well as engineering services in the context of certification
Embraer or Dassault, Etihad and Tha. STELIA Group is present and approval.
on 3 continents, in France in Maulte, Mrignac, Rochefort,
Saint-Nazaire, Salaunes, and Toulouse, and also in Canada, In the business field of composite structures and interiors, EFW
Morocco and Tunisia. develops, designs and manufactures flat sandwich components
for structure and cabin interior of the entire Airbus family. The
STELIA designs and produces large equipped fuselage product range includes floor and ceiling panels, cargo linings
sections and wings for civil and military aircraft manufacturers. and bullet-proof cockpit doors (in total, 50,000 different shapes
STELIA has a significant Tubes & Pipes production activity that and layups). The passenger-to-freighter conversion business
is designing and building solutions covering all ATA systems, comprises a standard extensive modification, carried out by
ranging from fuel to hydraulics and fire suppression. order of the civil aircraft owner. The freighter conversion market

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comprises cargo airlines, aerospace companies with small any medium widebody freighter available today as well as
aircraft fleets as well as finance groups. As of today, more than commonality with the already existing Airbus A330-200F.
190 freighter aircraft have been converted for 39 customers
On 17 June 2015, Airbus signed an agreement with Singapore-
throughout the world.
based ST Aerospace Ltd. (STA) to offer passenger-to-freighter
Airbus, ST Aerospace and EFW launched the A330 passenger- (P2F) conversion solutions for its A320 and A321 aircraft. STA
to-freighter (P2F) conversion programme on 19 May 2012 and will acquire an additional 20% of the shares of EFW, Dresden
ST Aerospace took 35% equity interest in EFW. First conversion (Germany) by way of a contribution in kind and a capital increase
is planned in 2016 (prototype). The A330P2F programme will to EFW. Consequently, 45% of the shares of EFW will be retained
offer customers two versions the A330-200P2F and the larger and the Group will effectively lose its control over EFW (reported
A330-300P2F. Both will provide new levels of reliability and in Airbus division). The transaction has been closed on 4 January
efficiency to P2F operators, offering better economics than 2016.

1.1.3 Airbus Helicopters

Airbus Helicopters is a global leader in the civil and military Focusing on Customers
rotorcraft market, offering one of the most complete and Airbus Helicopters also marked significant progress with its
modern ranges of helicopters and related services. This product transformation plan in 2015 by further enhancing customer
range currently includes light single-engine, light twin-engine, support and services, with safety as the top priority. This was
medium and medium-heavy rotorcraft, which are adaptable underscored by indicators of increasing fleet availability for
to all kinds of mission types based on customer needs. See customers and operators, and time delivery of planned spare
1.1.1Overview for an introduction to Airbus Helicopters. parts ordered.

Airbus Helicopters also established an extended warranty


Strategy
offer to include three years or 2,000 flight hours, with the first
Airbus Helicopters strategy is to continue driving improvement year of labor included. Taking effect on 1January 2015, this
initiatives via its company-wide transformation plan, which initiative is aligned with the company-wide transformation and
places customer satisfaction and quality at the core of its demonstrates the priority placed on customer satisfaction.
operations, along with increasing industrial competitiveness
all while ensuring the highest levels of aircraft safety. Delivering Safety
Safety continues to be a top-level priority for Airbus Helicopters,
A Commitment to Innovation
which advanced this company-wide effort in several ways during
After an unprecedented achievement in 2014 with the 2014 encompassing industry-leading efforts to propose
certification and the service introduction of the H145, H175 and promote changes to enhance airworthiness, increase
and H135, Airbus Helicopters pursued preparing the future survivability and promote standardisation of operator fleet
the H Generation embodied by the launch of the flight-test safety-related capabilities.
phase of the new H160 medium-weight helicopter as planned
for an entry-into-service planned in 2018 and the launch of the Major achievements in 2015, with the leading-edge H225 at
two-years concept phase of the next generation heavy-lift X6 the forefront of the developments, are the full implementation
helicopter tailored for the civil market. of the Flight Crew Operating Manual (FCOM) a document
outlining best practices and recommendations for oil and gas
Development also continue with the delivery of the first H145M missions by North Sea operators in 2015 and the certification
to the German armed forces, only two years after the contract of Rig N Fly, an advanced avionics solution for one-touch
was awarded for the development of this new, militarised version approaches to oil rigs.
of the leading H145 helicopter and at the Helitech exhibition in
London, the company also announced an upgrade of the H135
Market Drivers
equipped with the Helionix digital avionics suite developed by
Airbus Helicopters and providing increased safety and reduced According to market forecasts produced by Airbus Helicopters,
pilot workload. the Teal Group and Honeywell, between 9,500 to 10,500civil
helicopters and 6,000 (Teal Group excluding China and Russia)
Airbus Helicopters also unveiled a redefined, comprehensive to 9,000military helicopters are expected to be built globally
services offering. The new HCare offering is a product of the over 10years (all turbine helicopters). This forecast, particularly
company-wide transformation initiative, focusing on continuous with respect to the military sector, relies to a large extent on
improvement and customer satisfaction. large US development programmes.

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Helicopters sold in the civil and parapublic sector, where Airbus Competition

1.
Helicopters is a leader, provide transport for private owners Airbus Helicopters primary competitors in the civil and
and corporate executives, offshore oil operations, diverse parapublic sector are Agusta-Westland, Sikorsky and Bell
commercial applications and state agencies, including coast Helicopter. The civil and parapublic sector has grown more
guard, police, medical and fire-fighting services. Thanks to its competitive in recent years, with Sikorsky and Agusta-Westland
existing mission segment diversity, the helicopter market is having increased their market share in the heavy and medium
expected to prove resilient through the coming decade, even helicopter classes, while Bell has increased its market share in
though one of the key Segment, Oil & Gas (in value), is currently the light helicopter classes.
experiencing troubled times. Airbus Helicopters believes that
the demand over the next 10 years will be driven by large The military sector is highly competitive and is characterised
replacement needs from advanced economies and by growth by competitive restrictions on foreign manufacturers access
from emerging economies. Airbus Helicopters market data to the domestic defence bidding process, sometimes to the
indicates that in 2015, worldwide deliveries of civil and parapublic virtual exclusion of imports. Airbus Helicopters decreased its
turbine helicopters over a 1.3t MAUW stood at ~625units. share of the global market for military helicopters in unit and
value (from 11% in unit in 2014 to 9% in 2015), and will focus
Demand for military helicopters is mainly driven by budgetary on campaigns in 2015.
and strategic considerations, and the need to replace ageing
fleets. Airbus Helicopters believes that the advanced age of Airbus Helicopters main competitors in the military sector are
current fleets, the emergence of a new generation of helicopters Agusta-Westland in Europe, and Sikorsky, Boeing and Bell
equipped with integrated systems and the on-going introduction Helicopter in the US Military sales accounted for 50% of Airbus
of combat helicopters into many national armed forces will Helicopters revenues in 2015.
contribute to increased military helicopter procurement over
the next few years. Recent large-scale military programmes, Customers
such as those conducted by the US, Russia, China, India, More than 3,000operators currently fly Airbus Helicopters
South Korea, Saudi Arabia, Brazil and most western European rotorcraft in over 150countries. Airbus Helicopters principal
countries have confirmed this trend. Nevertheless, demand from military clients are Ministries of Defence (MoDs) in Europe,
the military sector has historically been subject to large year- Asia, the US and Latin America. In the civil and parapublic
to-year variations due to evolving strategic considerations, and sector, Airbus Helicopters has a leading market share in Europe,
short-term growth potential may be limited due to increasing the US and Canada.
budgetary constraints on public spending in some regions like
With 45% of the worldwide market share-based on deliveries,
Western Europe, while other regions like Asia, Eastern Europe
the versatility and reliability of Airbus Helicopters products have
or Latin America are expected to continue growing. In fact, the
made them the preferred choice of the most prominent civil and
political and military crisis in Ukraine and the emergence of the
parapublic customers (turbine helicopters over a 1.3t MAUW).
Islamic State has recently led to a major reassessment of threats
The worlds largest offshore operators (such as Bristow, CHC,
perceptions and military strategies in much of Europe which
Era and PHI) use Airbus Helicopters rotorcraft for passenger
could lead to some extent to new acquisitions. According to
transport and offshore oil industry support. In the emergency
Airbus Helicopters market data, worldwide deliveries of military
medical services market segment, Airbus Helicopters rotorcraft
turbine helicopters stood at ~885units in 2015.
dominate the fleets of large operators such as Air Methods in
the US and ADAC in Germany. Agencies with high serviceability
requirements, including police and armed forces, also rely on
Airbus Helicopters products.

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Products and Services


Airbus Helicopters offers a complete range of helicopters that covers nearly the entire civil and military market spectrum, which it
updates continuously with leading-edge technologies. This product range includes light single-engine, light twin-engine, medium
and medium-heavy helicopters, and is based on a series of new-generation platforms designed to be adaptable to both military
and civil applications. In addition, products share multiple technical features as part of a family concept approach.

The following table sets forth Airbus Helicopters existing product line, consisting of optimised products for different mission types:

Helicopter Type Primary Missions


Light Single Engine
H120 (previously EC120) Colibri Corporate/ Private, Commercial Pax Transport & Multipurpose, Civil & Military Training
Single Engine (Ecureuil family)
H125 Ecureuil (previously AS350)/ Public Services(1), Military Utility(2) & Armed Reconnaissance,
H125M Fennec (previously AS550) Corporate/ Private, Commercial Pax Transport & Aerial Work
H130 (previously EC130) Commercial Pax Transport & Multipurpose, Emergency Medical, Tourism, Corporate/ Private
Light Twin Engine
H135/ H135M (previously EC135/ EC635/ VIP, Military Utility & Armed Reconnaissance, Emergency Medical, Public Services(1)
EC135 T3/P3)
H145/ LUH (UH-72)/ H145M (previously VIP, Military Utility(2), Emergency Medical, Public Services(1)
EC145/ LUH / EC645/ EC145 T2
Medium (Dauphin family)
AS365 Dauphin/ AS565 Panther Military Naval Warfare Mission & Maritime Security, Public Services(1)
(in particular Coast Guard & SAR), Oil & Gas, Commercial Pax Transport & Multipurpose
H155 (previously EC155) Corporate/ Private, VIP, Oil & Gas, Public Services(1)
H175 (previously EC175) Corporate/ Private, VIP, SAR, Emergency Medical, Public Services(1), Oil & Gas
Medium-Heavy
H215 (previusly AS332) Super Puma/ Civil Utility, Military Transport/ SAR, Oil & Gas
H215M (previously AS532) Cougar
H225/ H225M (previously EC225/ EC725) SAR, Combat-SAR, Military Transport, Oil & Gas, VIP, Public Services(1)
NH90 (TTH/ NFH) SAR, Military Transport, Naval
Attack
Tiger Combat, Armed Reconnaissance/ Escort
(1) Public Services includes homeland security, law enforcement, fire-fighting, border patrol, coast guard and public agency emergency medical services.
(2) Civil Utility includes different kinds of commercial activities such as aerial works, electrical new gathering (ENG), passenger and cargo transport.

Civil Range Military Range


Airbus Helicopters civil range includes light single-engine, light Airbus Helicopters military range comprises platforms derived
twin-engine, medium and medium-heavy helicopters, which from its commercial range (such as the EC725 derived from the
are adaptable to all mission types based on customer needs. EC225) as well as purely military platforms developed for armed
To maintain and strengthen its competitive edge in the civil forces (the NH90 and the Tiger).
sector, Airbus Helicopters is pursuing a fast-paced product
Designed for modern multi-mission capabilities and cost
range renewal. This entails upgrades of existing platforms as
effectiveness throughout its lifecycle, the NH90 has been
well as development for the next generation of helicopters.
developed as a multi-role helicopter for both tactical transport
The newest products in this range are the H175, H145and (TTH) and naval (NFH) applications. The programme, mainly
H135, which received their certification and have been delivered financed by the governments of France, Germany, Italy and the
in 2014. Netherlands, has been jointly developed by Airbus Helicopters,
Agusta-Westland of Italy and Fokker Services of the Netherlands
In the civil market, Airbus Helicopters is preparing the future the
as joint partners in NATO Helicopter Industries (NHI) in
H Generation embodied by the all-new, medium-weight H160
direct proportion to their countries expressed procurement
civil helicopter which was unveiled and started flight testing, with
commitments. Airbus Helicopters share of NHI is 62.5%.
a planned entry-into-service in 2018 and launched the two-year
There were 35NH90deliveries in 2015, for a cumulative total
concept phase of the next-generation heavy-lift X6 helicopter,
of 267deliveries as of the end of 2015. The NH90 fleet has
tailored for the civil market.
accumulated ~90,000flight hours.

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The Tiger combat attack helicopter programme includes four Airbus Helicopters customer service activities consist primarily

1.
variants based on the same airframe: the HAP (turreted gun, of maintenance, repairs, spare parts supply, training and
rockets and air-to-air missile), 40 of which have been ordered technical support. In order to provide efficient worldwide service,
by France and 6 by Spain; the UHT (antitank missile, air-to-air Airbus Helicopters has established an international network of
missile, axial gun and rockets), 80 of which have been ordered subsidiaries, authorised distributors and service centres.
by Germany; the ARH (antitank missile, turreted gun and
rockets), 22 of which have been ordered by Australia; and the Production
HAD (antitank missile, air-to-air missile, turreted gun, rockets
Airbus Helicopters industrial activities in Europe are conducted
and upgraded avionics and engines), 24 and 40 of which have
in four primary locations, two in France, one in Germany and one
been ordered by Spain and France, respectively. During 2015,
in Spain. The French sites are Marignane, in southern France,
in the frame of French loi de programmation militaire (law
and La Courneuve, near Paris. The German site is located in
of military programmes management), Airbus Helicopters
Donauwrth, and the Spanish site is located in Albacete.
has been notified a decrease by 16 Tiger HAP and asked to
perform the retrofit of 19 Tiger HAP already delivered in HAD In the US, Airbus Helicopters, Inc. has two industrial sites: Grand
variant. 7 additional Tiger HAD have been ordered by France Prairie, Texas and Columbus, Mississippi. Grand Prairie serves
in December. France finally ordered 66 Tiger HAD. On UHT, as the companys headquarters and main facility and also serves
Germany, decreased its number of Tiger UHT by 12 H/C to 68 as the Airbus Helicopters Training facility for North America. The
H/C in the frame of the German deal. Columbus facility is dedicated to the assembly and delivery of
the UH-72A Lakota and AS350.
Overall in 2015, 16 Tigers were delivered, for a cumulative total
of 135deliveries by year-end. The Tiger fleet has accumulated In Australia, Australian Aerospace assembles, upgrades and
more than 70,200flight hours. maintains NH90 and Tiger for the countrys armed forces;
while a rotary-wing centre of excellence in Helibras Itajuba,
Customer Services Brazil produces, assembles and maintains EC725helicopters
With more than 3,000operators in over 150countries, Airbus acquired by the Brazilian armed forces.
Helicopters has a large fleet of some 12,000 in-service rotorcraft In November 2015, the heavyweight H215 was introduced
to support. As a result, customer service activities to support along with a new industrial model and an expanded strategic
this large fleet generated 42% of Airbus Helicopters revenues partnership with Romania aiming at providing a modern and
for 2015. cost-effective solution for markets such as utility, peacekeeping
operations and logistic support missions.

1.1.4 Airbus Defence andSpace

Airbus Defence andSpace develops and engineers cutting- centre in Europe and one of the market leaders for combat,
edge products in the field of defence and space, enabling mission, transport and tanker aircraft worldwide. Key products
governments, institutions and commercial customers alike include the Eurofighter, the A400M, the A330 MRTT and the
to protect resources and people while staying connected to C295/CN235 as well as Unmanned Aerial Systems.
the world. Airbus Defence and Space solutions guarantee
Space Systems covers the full range of civil and defence space
sovereignty in foreign affairs and defence matters. See systems. Its satellite system solutions for telecommunications,
1.1.1 Overview for an introduction to Airbus Defence earth observation, navigation and science include spacecraft,
andSpace. ground segments and payloads. As the European prime
contractor for launchers, orbital systems and space
Airbus Defence andSpace in 2015 comprised the four Business
exploration, its key systems include Ariane launchers, the
Lines Military Aircraft, Space Systems, Communications,
French deterrence force and the European participation to the
Intelligence & Security (CIS) and Electronics, the broad scope
International Space Station ISS. Beginning of the year, a 50/50
of which is detailed below. Further to a strategic portfolio review
joint venture was launched with Safran named Airbus Safran
conducted in 2014, some activities from the business lines CIS
Launchers, bringing together space launchers expertise from
and Electronics have been carved out with the target of a sale.
both companies.
These changes did not affect the majority of the year2015,

Communications, Intelligence & Security (CIS) brings
therefore activities subject to these changes are reported in
together satellite and terrestrial communications, intelligence
this document and only remarks added.
and security services and solutions. The customer base

Military Aircraft designs, develops, delivers and supports


encompasses both the government sector notably defence
military aircraft, and is the leading fixed-wing military aircraft

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and security forces and the commercial sector, including which will be responsible for developing, producing and
transportation (maritime, airport, metro), energy (oil, gas and marketing the next-generation European launcher, Ariane6.
electricity), mining and agriculture. Key services and solutions As a leading manufacturer of telecommunications and Earth
include: military and commercial satellite communication observation, navigation and science (ENS) satellites, as well
services, Professional Mobile Radio communications, as orbital and space exploration systems, Airbus Defence
emergency response centres (such as 9-1-1/112), border andSpace is continuously investing in innovation to ensure its
surveillance systems, command & control (C4I) systems, future positioning in these core segments. In addition, the ability
cyber security solutions and services and observation- to provide space-related services through its Communications,
satellite-based geo-information services. Commercial satellite Intelligence & Security (CIS) business line, as well as space
communication services and Professional Mobile Radio have electronics equipment, enables Airbus Defence andSpace to
been carved out for future sale. offer fully integrated space solutions to its customers.

Electronics provides high-performance equipment for system


Missiles are a growing and profitable business, in which Airbus
integrators that serve both Airbus Defence andSpace within
Defence andSpace already has a strong presence through its
the AirbusGroup as well as external customers worldwide.
participation in the leading European missile maker, MBDA, as
Products are mainly for the civil, defence and security markets
well as its military launcher business.
and cover ground, maritime, airborne and space applications.
Key products include radars and IFF systems, electronic
warfare equipment, avionics, space platform electronics, Market
space payload electronics as well as optronic sensors. All Airbus Defence andSpace is mainly active in public and para-
but space electronics have been carved out for future sale. public markets. As a general trend, defence budgets are flat or
slightly increasing in Europe. Market access outside the home
Strategy countries may be subject to restrictions or preconditions such
as national content. Nevertheless Airbus Defence andSpace,
The strategic ambition of Airbus Defence andSpace is to be
in conjunction with AirbusGroup, has already a strong export
a global leader in Space, Military Aircraft, Missiles and related
orientation as well as international presence and partnerships
systems and services. The Division aims to preserve a leading
and will continue to develop them.
position in Europe and build an international footprint in selected
countries, delivering benchmark financial performance and
Military Aircraft
sustainable growth. Following a full portfolio review, Airbus
Defence andSpace is taking steps to both divest non-core Customers
activities and invest in future growth. Significant progress has The Military Aircraft Business Line with its products Combat
been made for carving out non-core businesses (defence Aircraft, Military Transport Aircraft, Mission Aircraft and
electronics and border security, Secure Land Communications, Unmanned Aerial Systems supplies the public sector, mainly
commercial satellite communications services, and a number of armed forces.
participations and subsidiaries) while strategic growth options
Customer relationships in this segment are characterised by their
are being defined for the remaining core business.
long-term, strategic nature and long decision-making cycles.
Military Aircraft. Airbus Defence andSpace is capitalising on Once a contract is signed, contract life including considerable
its strong market position in transport, mission and combat services business often carries on for decades.
aircraft and related services. In heavy transport, the focus will be
Customers in the home countries of Airbus Defence andSpace
on completing the development and delivery the A400M airlifter
face budget pressures, leading the Group to focus on the export
to its launch customers while ramping up sales campaigns in
market. However, ageing material leads to the need for some
order to address the significant demand expected for this aircraft
ongoing or upcoming procurement decisions even in Europe,
worldwide. For light & medium transport, Airbus derivatives
such as Frances announcement for 12A330MRTT in 2014.
including the highly successful A330 MRTT (multi-role tanker
transport) and the Eurofighter combat aircraft, further export Unmanned Aerial Systems could lead to diversification into
opportunities will be pursued while investing in future capability commercial markets. It is also a sector in which Europe has a
growth and innovation. Airbus Defence and Space is also strong need for investment, which could set the stage for new
aiming at establishing a substantive presence in the market for cooperation programmes. France, Germany, Italy and Spain
Unmanned Aerial Systems (UAS). have signalled their intention to cooperate on a medium altitude,
long endurance Unmanned Aerial System and Airbus Defence
Space. Airbus Defence andSpace has taken a major step
andSpace is designated to participate in the two-year definition
towards future competitiveness in space transportation with
study of the system.
the creation of the Airbus Safran Launchers (ASL) joint venture,

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Competitors Space Systems


The market for military aircraft is dominated by large- and
medium-sized American and European companies capable
Public Sector: Satellites, Space Infrastructure,
Launchers, Deterrence
1.
of complex system integration. Among the competitive factors
In the public market for Earth observation, scientific/ exploration
are affordability, technical and management capability, the
and navigation satellites, competition in Europe is organised on
ability to develop and implement complex, integrated system
a national and multinational level, primarily through the European
architectures and the ability to provide timely solutions to
Space Agency (ESA), the European Commission (EC) and
customers. In particular special mission aircraft, such as heavy
national space agencies.
tankers, are derived from existing aircraft platforms. Adapting
them requires thorough knowledge of the basic airframe, which Decisions at the latest ESA Ministerial Conferences and
generally only the aircraft manufacturer possesses. The skills under EC Horizon 2020 paved the way for future European
necessary for the overall systems integration into the aircraft are programmes in which Airbus Defence andSpace does or may
extensive and the number of participants in the world market seek to participate. There is also important export demand for
is very limited. Earth observation systems, for which the company is a leading
provider. The export market is expected to continue growing
The main competitors in military transport and mission aircraft
over the medium-term.
include Boeing, Lockheed Martin, UAC, Kawasaki, Ilyushin and
AVIC. For military customers, demand for telecommunication and
observation satellites has increased in recent years.
Heavy military transport (> 14t payload) has been driven
historically by US policy and budget decisions, and therefore has The equipment segment can rely on a stable European market,
been dominated by US manufacturers. The A400M represents with potential growth to come from developing space countries
the Groups entry into this market, at a time when nations as well as the US.
worldwide are expected to begin upgrading and replacing their
The orbital infrastructure segment comprises manned and
existing fleets.
unmanned space systems mainly used for space exploration,
Competitors in the segment of combat aircraft include Boeing, i.e. scientific missions. Demand for orbital infrastructure systems
Dassault, Lockheed Martin, Saab and Sukhoi. originates solely from publicly funded space agencies, in
particular from ESA, NASA, Roscosmos (Russia) and NASDA
In the Unmanned Aerial Systems market segment, Israeli and
(Japan). Such systems are usually built in cooperation with
US firms are well established and other European companies
international partners. The International Space Station (ISS),
such as BAE Systems, Dassault and Thales compete for new
together with related vehicle and equipment development
European projects. The market itself features strong growth with
programmes and services, constitutes the predominant field of
significant opportunities in Europe and Asia Pacific.
activity in this segment and Airbus Defence andSpace leads as
Market Trends prime contractor on industrial level the European contribution to
the international Space Station ISS. Airbus Defence andSpace
The sale of aircraft is expected to remain sound in the
is involved in NASAs Orion project as the prime contractor for
transport and special mission aircraft segments and even grow
the European contribution: the mission-critical service module
considerably for the heavy transport segment, where the A400M
of the MPCV (Multi-purpose Crew Vehicle) Orion spacecraft,
occupies a unique position leading to a market forecast of 300
which will allow astronauts to fly beyond low Earth orbit for the
within the next 30years.
first time since the American Apollo programme.
The Eurofighter has received a declaration of intent for 28units
Airbus Defence andSpace is the sole prime contractor for the
from Kuwait in 2015, finalisation of the contract is pending. A
Ariane5 launcher system, with responsibility for the delivery
number of further sales are expected, prolonging its production
to Arianespace of a complete and fully tested vehicle. It also
life.
supplies all Ariane 5 stages, the equipment bay, the flight
Unmanned Aerial Systems, on the other hand, have a very software as well as numerous sub-assemblies. With the joint
promising growth potential. Market structures in this segment venture Airbus Safran Launchers, Airbus Defence andSpace
are not clearly set out yet and will see some movement, including is well positioned for the development and subsequent delivery
a new European collaborative programme. of the future Ariane6 launcher, planned for first launch in 2020.
After-Sales Services are an important business for Military Airbus Defence andSpace is the prime contractor for ballistic
Aircraft. Whereas the practice is well established in the area of missile systems to the French State. It is responsible for the
combat aircraft, the services business is only just ramping up development, manufacturing and maintenance of submarine-
in the area of transport and mission aircraft. launched missiles and related operating systems.

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Commercial Sector: Telecommunications Satellites, CIS also dominates the satellite imagery (optical and radar) market
Launch Services for Geo-Intelligence. This sector remains mainly government
The commercial telecommunication satellite market is very orientated. However, the demand for satellite imagery is growing
competitive, with customer decisions primarily based on price, in commercial markets as many companies see geospatial data
technical expertise and track record. The main competitors for as key information for their business development.
telecommunications satellites are Boeing, Lockheed Martin, The business line CIS is also a leader in commercial and
MDA and Orbital in the US, Thales Alenia Space in France and governmental satellite communications. This segment offers
Italy, and Information Satellite Systems Reshetnev in Russia. The a full portfolio of mobile and fixed satellite communication
market for telecommunications satellites is expected to remain solutions for application at sea, on land and in flight. Customers
largely stable over the coming years at a level of approximately are Ministries of Defence, the commercial maritime sector as
20orders per year on average. well as energy and mining businesses, humanitarian NGOs
The market for commercial launch services continues to evolve. and the media. Commercial satellite communication services
Competitive pressure is increasing in light of other competitors are subject to carve out.
entering or coming back into the market. Airbus Defence The Secure Land Communications segment is a major actor
andSpace is active in providing launch services through its worldwide for Professional Mobile Radio (PMR) networks and
shareholding in Airbus Safran Launchers, providing a complete terminals solutions as well as call taking solutions for public
range of launch services with the Ariane, Soyuz, Vega and safety answering and control room. Main customers are
Rockot launchers. Competitors for launch services include Ministries of the Interior and critical infrastructures, i.e. police,
ILS, SpaceX, ULA, Sea Launch and CGWIC. The accessible fire brigades, ambulances, airports, and metro lines. The Secure
market to Arianespace for commercial launch services for Land Communications segment is subject to carve out.
geostationary satellites is expected to remain stable at around
20 payloads per year. However, due to various factors (such The border security segment develops land and maritime border
as technology advances and consolidation of customers), this surveillance and protection systems, with a multi-level portfolio
figure remains volatile. This market does not include institutional of solutions ranging from sub-systems equipment to complete
launch services for the US, Russian or Chinese military and nationwide systems integrating all the mobile and fixed assets
governmental agencies. contributing to a customer countrys border security. In the area
of large-scale border security systems, it can be considered
In 2015 Airbus Defence andSpace announced the creation of as the world leader.
Airbus OneWeb Satellites (AOS) JV, an equally owned company
with OneWeb that will design and build 900+ satellites for Airbus Defence andSpace is also a leading provider of consulting
the OneWeb constellation programme. This participation is services for products of cyber security. The market growth is
entrepreneurial in nature and is meant to drive innovation in a driven by an exponential increase of cyber-attacks and this
new space market. trend is foreseen to continue in the next years. Customers are
governments and private companies.
Communications, Intelligence & Security (CIS) Airbus Defence and Space has good market position in all
The business line Communications, Intelligence and Security businesses covered in CIS. However, maintaining or improving
(CIS) brings together the growing but increasingly competitive its position would require important investments in some areas
market for satellite and terrestrial communication, intelligence and such as Secure Land Communications or Commercial Satellite
security services and solutions. CIS serves a common customer Communications Services. Airbus Defence andSpace is seeking
base which includes governments, defence institutions, security owners more suitable to develop these business areas further.
and public safety agencies, as well as commercial sectors such
Due to the carve out, CIS focuses on public customers such as
as transportation (maritime, airport, metro), energy (oil, gas,
armed forces for government satellite communications, where
electricity), mining and agriculture.
we have long-term relationships with our customers. Whereas
This business line is divided into five segments: Integrated budget pressures on public expenditure, above all military
Systems, Geo-Intelligence, Satellite Communications, Secure expenditure, are high in Europe, investment into the services
Land Communications and Cyber Security. and solutions offered by CIS is likely to continue in the face of
new global security threats.
Through Integrated Systems, Airbus Defence and Space
develops Command and Control solutions for Ministries of
Electronics
Defence and border security and emergency response systems
for Ministries of the Interior in Europe and Middle East. The For integrated civil, defence and security systems, the Business
market is very fragmented, with competitors coming from Line Electronics designs, develops and delivers electronic
defence, telecom, infrastructure and IT businesses. components and products. It is composed of two main business
clusters: On the one hand defence and security applications

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including optronics, radars, electronic warfare and avionics. A total of 174aircraft have been ordered so far by the seven

1.
The defence applications business cluster is subject to carve launch customer nations Belgium, France, Germany, Luxemburg,
out. On the other hand space equipment comprising space Spain, Turkey, the UK and one export customer, Malaysia. Type
platform electronics such as solar arrays, power electronics, Certificate and Initial Operating Clearance have been achieved in
data handling devices and gyros as well as space payload 2013. Since then, 21units have been delivered to five nations by
electronics through its subsidiary TESAT-Spacecom, e.g. the end of 2015. The A400M is already deployed operationally
amplifiers, multiplexer, switches and modulators. since 2014.

The integration of expertise from various defence and space Multi-role tanker transport A330MRTT. The A330MRTT,
competencies creates a broad basis of high-end technologies. a derivative of the Airbus A330 family, offers military strategic air
The Business Line provides mission-critical premium electronics transport as well as air-to-air refuelling capabilities. Its large tank
to all AirbusGroup platforms and is a longstanding partner of capacity is sufficient to supply the required fuel quantities without
system integrators worldwide. the need for any auxiliary tanks. This allows the entire cargo bay
to be available for freight, with the possibility of incorporating
In addition to supplying armed forces and security forces
standard LD3 or LD6 containers, military pallets and/or any
directly, Electronics often acts as a subcontractor for system
other type of load device in use today. The A330 MRTT is
integrator companies of land, sea, air or space vehicles, including
equipped with state of the art refuelling systems, including an
but not limited to Airbus Defence and Space. Affordability,
Aerial Refuelling Boom System (ARBS) and under-wing refuelling
innovativeness and top quality are key competitive factors,
pods. At the end of 2015, the A330MRTT programme has a
towards external customers as well as within the Group.
total of 49aircraft firm orders by seven nations, of which 26
In the defence business cluster, customers are military and already delivered and in service in four nations.
security forces worldwide in a market headed by big US players.
Eurofighter Combat Aircraft. The Eurofighter multi-role
It is the world leader in missile warning systems and the German
combat aircraft (referred to as Typhoon for export outside of
sensor house with a major position in the radar, optronics and
Europe) has been designed to enhance fleet efficiency through
electronic warfare markets.
a single flying weapon system capable of fulfilling both air-to-air
Concerning the space business cluster, customers are satellite and air-to-ground missions.
prime contractors worldwide in a highly fragmented market
The Eurofighter GmbH shareholders are Airbus Defence
with over 50 different companies operating in it. Electronics
and Space (46% share), BAE Systems (33% share) and
customers are primarily system integrators, but direct sales to
Finmeccanica (21% share). With regard to series production,
end-customers are not uncommon.
the respective production work shares of the participating
The sale of the Border Security business is currently not being partners within the Eurofighter consortium stand at 43% for
pursued. A separate organisational unit will focus on delivering Airbus Defence andSpace, 37.5% for BAE Systems and 19.5%
the border security projects with regard to technical solutions for Finmeccanica. Airbus Defence andSpace develops and
and building up a sustainable relationship with our customers. manufactures the centre fuselage, flight control systems,
identification and communication sub-systems, and the right
For the defence electronics business AirbusGroupSE reached
wing and leading edge slats for all aircraft, and is in charge of
an agreement with KKR, a leading global investment firm, to
final assembly of aircraft ordered by the German and Spanish
sell this business with an expected closing of the transaction
air forces.
in the first quarter of 2017.
At the end of 2015, a total of 571Eurofighter aircraft had been
Products and Services ordered by seven customers (UK, Germany, Italy, Spain, Austria,
Saudi Arabia and Oman), with a total of 468aircraft delivered.
Military Aircraft Production of aircraft within the core programme is scheduled
A400M Heavy military transport. The A400M is the most to last at least until 2018, while further export opportunities are
capable all-new airlifter ever conceived and unique in its kind. believed to exist worldwide.
It is designed to meet the needs of the worlds Armed Forces
CN235, C295 Light and Medium military transport.
and other potential operators for military, humanitarian and
The Light and Medium military aircraft are the work horses of
peacekeeping missions in the 21stcentury. The A400M does
military transport, conducting logistical and tactical missions
the job of three different types of military transport and tanker
for the transport and delivery of personnel and cargo as well as
aircraft conceived for different types of missions: Tactical (short
medical evacuations. The aircraft are deployed in demanding
to medium range airlifter capability with short, soft and austere
environments (meteorological conditions, operational
field operating performance), strategic (longer range missions
complexity) such as the search for the AirAsia flight QZ8501,
for outsized loads), as well as tanker.
Operation Atalanta (European counter-piracy mission off the Horn
of Africa) and peacekeeping on the Sinai Peninsula. Payloads

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range from 6t for the CN235 to 9t for the C295. The aircraft are on the International Space Station (ISS) with an independent
offered in the most varied versions and configurations beyond life-support system successfully in orbit since 2007. It provides
the traditional airlifter version, for example maritime patrol and a full-scale research environment under microgravity conditions
anti-submarine warfare, airborne early warning and control, (material science, medicine, human physiology, biology, Earth
firefighting, etc. In more than 30years in service, this family observation, fluid physics and astronomy) and serves as a test-
of aircraft has proven to be robust, reliable, high-performing, bed for new technologies.
efficient, flexible, easy to operate in any environment, and all
In 2015, ESA awarded Airbus Defence andSpace a contract to
this at very low operating costs.
handle the engineering support of the European components
More than 440 orders have been recorded for both types of the ISS, which represents a key part of the ISS operational
together at the end of 2015. activities. Airbus Defence and Space was also the prime
contractor for the development and construction of the
Unmanned Aerial Systems. In the field of unmanned aerial
Automated Transfer Vehicle (ATV) cargo carrier, designed to
systems (UAS), Airbus Defence andSpace is active at both
carry fuel and supplies to the ISS and to provide re-boost
product- and service- level. Airbus Defence andSpace is the
capability and a waste disposal solution. The fifth and last
leading UAS Service provider for the German air forces meeting
ATV was launched in July2014. The expertise gained on the
their medium-altitude long-endurance (MALE) Intelligence,
ATV served to become the prime contractor for the European
Surveillance and Reconnaissance needs in the operational
service module of NASAs next generation manned capsule
theatre. The Harfang system, delivered to the French Air Force
MPCV Orion.
and operational worldwide since 2009, is the only MALE product
in Europe certified to fly over populated areas, thanks to Airbus Launch services. Airbus Defence andSpace is active in the
UAS mission & communication system. These interim solutions, field of launch services through its shareholding in Airbus Safran
based on non-proprietary MALE systems, will be replaced Launchers.
by a new generation European MALE system where Airbus
In January2015, AirbusGroup and Safran created a 50/50 joint
Defence andSpace will be working on the Definition Study with
venture named Airbus Safran Launchers, a company responsible
its European partners. Airbus Defence andSpace also provides
for the coordination and programme management of civil
mini-UAS to the French- and selected export customers and
activities of the launcher business and relevant participations
the KZO UAS to the German Armed Forces. It is developing
that have been transferred. Airbus Safran Launchers currently
the EuroHawk system for high-altitude long-endurance (HALE)
owns a total 39% stake in Arianespace (which will increase to
Signal Intelligence missions based on an US platform for the
74% after the acquisition of the 35% stake currently held by
German Air Force as well as the solar powered Zephyr for the
the French space agency CNES), 41% of Starsem (46% after
UK MoD.
step-up in Arianespace shareholding) and 51% of Eurockot,
Customer Services. For all the aforementioned products, providing a complete range of launch services with the Ariane,
Airbus Defence andSpace offers and provides various services Soyuz, Vega and Rockot launchers.
throughout the lifetime of the aircraft including integrated logistics
Commercial launchers. Airbus Defence and Space
support, in-service support, maintenance, upgrades, training or
manufactures launchers and per forms research and
flight hour service. For example, the A330 MRTT contract with
development for the Ariane programmes. Member States,
the UK Ministry of Defence through the AirTanker consortium
through ESA, fund the development cost for Ariane launchers
includes alongside 14aircraft the provision for all necessary
and associated technology. Airbus Defence andSpace has
infrastructure, training, maintenance, flight management, fleet
been the sole prime contractor for the Ariane5 system since
management and ground services to enable the Royal Air Force
2004. In December2014, the Ariane6 programme was decided
to fly air-to-air refuelling and transport missions worldwide.
by ESA ministerial conference with an approval of the joint Airbus
Customer services go beyond the fleet of aircraft currently in
Defence andSpace and Safran concept. In addition a new
production at Airbus Defence andSpace, conducting upgrade
industrial set-up was announced with the creation of a joint
programmes for aircraft such as the Tornado and C-160 Transall.
venture (Airbus Safran Launchers) between the two main Ariane
The support centres for military aircraft are strategically located
manufacturers. This vertical integration secures the future by
throughout the world, for example in Seville or Manching in
cutting costs and being more competitive. Ariane6 is targeted
Europe, in Mobile, Alabama (US) or in subsidiaries in Saudi
to be launched in 2020.
Arabia or Oman.
Telecommunication satellites. Airbus Defence andSpace
Space Systems produces telecommunication satellites used for both civil
Manned Space Flight. Airbus Defence andSpace has been and military applications, such as television and radio
the prime contractor for the European part of the International broadcasting, fixed and mobile communication services and
Space Station ISS. This includes the development and Internet broadband access. Current Airbus Defence andSpace
integration of Columbus, the pressurised laboratory module geostationary telecommunication satellites are based on the

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Eurostar family of platform, thelatest version of which is the control segment and providing the payloads for the first 22 FOC

1.
Eurostar E3000, including an all-electric variant. In 2015, satellites through its subsidiary SSTL.
Airbus Defence andSpace also started the development of
Satellite products. Airbus Defence and Space offers an
the Quantum telecommunication satellite, which will be the first
extensive portfolio of embedded subsystems and equipment
satellite that can be fully reconfigured in orbit through its flexible
for all types of space applications: telecommunications, Earth
antennae and repeater. Through its contract with OneWeb in
observation, navigation, scientific missions, manned spaceflight
2015 to design and produce 900 small telecommunication
and launchers.
satellites for a constellation in Low Earth Orbit, Airbus Defence
and Space is spearheading the industrial and commercial Ballistic missiles. Following its contracts with the French
development of very large satellite constellations. State for the submarine-launched ballistic missiles family of
M1, M2, M20, M4 and M45, Airbus Defence andSpace is now
Observation and scientific/ exploration satellites. Airbus
under contract to develop and produce the M51 with increased
Defence andSpace supplies Earth observation satellite systems
technical and operational capabilities. In 2010, the French
including ground infrastructures for both civil and military
Defence Procurement Agency and Airbus Defence andSpace
applications. Customers can derive significant benefits from
signed a contract covering the development and production of
the common elements of Airbus Defence and Spaces civil
the second version of the M51 strategic missile (M51.2), which
and military observation solutions, which allow the collection
secures Airbus Defence andSpaces capabilities in this field. In
of information for various applications, such as cartography,
addition, Airbus Defence andSpace manages the operational
weather forecasting, climate monitoring, agricultural and forestry
maintenance of the M51 missile system on behalf of the French
management, mineral, energy and water resource management,
armed forces. At the end of 2011, Airbus Defence andSpace
as well as military reconnaissance and surveillance.
received a first design study contract in order to prepare the
Airbus Defence andSpace also produces scientific satellites and intended M51.3 new upper stage development.
space infrastructure, which are tailor-made products adapted
to the specific requirements of the mostly high-end mission Communications, Intelligence & Security
assigned to them. Applications include astronomical observation Integrated Systems. Airbus Defence andSpace is a provider of
of radiation sources within the Universe, planetary exploration full systems architecture and integration for military and security
and Earth sciences. Airbus Defence andSpace designs and land-, sea-, air- and space-based systems. Airbus Defence
manufactures a wide range of highly versatile platforms, optical andSpace designs, integrates and implements secure fixed,
and radar instruments and equipment. For example, Airbus tactical, theatre and mobile information infrastructure solutions,
Defence andSpace was highly involved in ESAs Rosetta including all of the services needed to support integrated
mission, which descended a lander on a comet a first in space mission systems and solutions. Airbus Defence andSpace is
flight. Airbus Defence andSpace was prime contractor for the also a designer and supplier of C4I systems (Command, Control,
orbiter. Additionally, Airbus Defence andSpace contributed to Communications, Computers and Intelligence). Airbus Defence
the scientific community with the launches of the Sentinel-1B andSpace offers a full range of mission avionics systems.
radar, Sentinel-2A and LISA pathfinder in 2015. It also signed
a major contract to develop and build the JUICE spacecraft, Airbus Defence andSpaces lead systems integration offering
ESAs next life-tracker inside the Solar System. JUICE will study includes the ability to design, develop and integrate the widest
Jupiter and its icy moons. possible range of individual platforms and subsystems into a
single effective network. Large systems integration has become
Navigation satellites. Airbus Defence andSpace plays a major increasingly important for customers engaged in border control
industrial role in the Galileo European navigation satellite and coastal surveillance, as well as for non-military customers
system, which delivers signals enabling users to determine in areas such as homeland security.
their geographic position with high accuracy and is expected to
become increasingly significant in many sectors of commercial Border security systems include sensor networks ranging
activity. Airbus Defence andSpace was responsible for the from IR and video cameras through radars to airborne and
Galileo in-orbit validation phase (IOV) to test the new satellite space surveillance systems, all connected to command and
navigation system under real mission conditions. The IOV control centres. Apart from Intelligence, Surveillance and
phase covered the construction of the first four satellites of the Reconnaissance (ISR) systems for gathering, aggregation
constellation and part of the ground infrastructure for Galileo. and evaluation of incident data, highly reliable and encrypted
After the successful launch of the first four Airbus Defence digital data and voice networks are provided. Sophisticated
andSpace Galileo IOV satellites in 2011 and 2012, this early decision-making tools support security forces to prioritise
constellation was successfully tested in orbit and handed over incidents, allocate required resources and control events in
to the customer in 2013. Airbus Defence andSpace is playing real-time. Services for long-term sustainable operation and life-
an active role in the Galileo full operation capability phase cost optimisation such as simulation and training, maintenance,
(FOC) with a nearly 50% work share, including the FOC ground support to operation, local partnerships are also proposed.

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Geo-Intelligence. Airbus Defence andSpace is a provider Secure Land Communications. Airbus Defence andSpace is
of both optical and radar-based geo-information services to a provider of digital Professional Mobile Radio (PMR) and secure
customers including international corporations, governments networks with more than 280networks delivered in 74countries.
and authorities around the world. Its solutions for PMR enable professional organisations in
various areas such as public safety, civil defence, transport
With the very-high-resolution twin satellites Pleiades 1A and 1B,
and industry to communicate effectively, reliably and securely.
SPOT 6 and SPOT 7, Airbus Defence andSpaces optical satellite
Airbus Defence andSpace offers its customers specialised
constellation offers customers a high level of detail across wide
PMR solutions based on TetraPOL, Tetra and P25 technologies.
areas, a highly reactive image programming service and unique
Airbus Defence andSpaces PMR solutions were in use during
surveillance and monitoring capabilities. Spot 6 and 7 provide
events like the Beijing Olympic Games, the Brazil FIFA World
a wide picture over an area with its 60-km swath, Pleiades1A
Cup and the Tour de France.
and 1B offer, for the same zone, products with a narrower field
of view but with an increased level of detail (50cm). Cyber Security. Airbus Defence andSpace has established a
cyber-security subsidiary to meet the growing cyber security
The successful launch of TerraSAR-X in 2007 a radar-based
needs of users of critical IT infrastructure, including governments
Earth observation satellite that provides high-quality topographic
and global companies. Airbus Defence andSpace provides
information enabled Airbus Defence andSpace to significantly
expertise and solutions to help such organisations to protect
expand its capabilities by proposing new kinds of images based
themselves against, detect, analyse, prevent and respond to
on radar. TanDEM-X, its almost identical twin, was successfully
cyber threats. Airbus Defence andSpace has a long track record
launched in 2010 and achieved in 2014 WorldDEM, the first high
in providing the most sensitive secure IT and data handling and
precision 3-D elevation model of the entire surface of the Earth.
training solutions to defence and security customers throughout
Satellite Communications. Airbus Defence and Space France, Germany, the UK and other NATO countries.
offers commercial, government and military satellite-based
communications. Electronics
Airbus Defence and Space provides armed forces and Airbus Defence andSpaces business line Electronics is focusing
governments in the UK, Germany, France and Abu Dhabi on surveillance and reconnaissance, air traffic control, signal
with secure satellite communications. For example in the UK, intelligence, mission electronics and protection. It is a partner
Airbus Defence andSpace delivers in the frame of the Skynet5 in the development of airborne multi-mode radars and provides
programme tailored end-to-end in-theatre and back-to-base integrated logistics support, maintenance and upgrades. It
communication solutions for voice, data and video services, is also involved in the development and application of next-
ranging from a single voice channel to a complete turnkey generation active electronically scanned (AESA) radars for air,
system incorporating terminals and network management. naval and ground applications. In the area of air defence, Airbus
This contract, pursuant to which Airbus Defence andSpace Defence andSpace produces mid-range radars for ship (TRS-
owns and operates the UK military satellite communication 3D/-4D) and land (TRML-3D) applications. Synthetic aperture
infrastructure, allows the UK MoD to place orders and to pay radars (SAR) for reconnaissance and surveillance operations
for services as required. The service is fully operational since and airport surveillance radars (ASR-S) are also part of the
2009 and extends to 2022. portfolio, along with the Spexer security radar family. A range
of optronics solutions completes Airbus Defence andSpaces
In Abu Dhabi, Airbus Defence andSpace together with Thales offering in this field.
Alenia Space built a secure satellite communication system.
Airbus Defence andSpace Services is managing the programme In the field of electronic warfare, Airbus Defence andSpace
and supplies the space segment except for the payload, as well supplies electronic protection systems for military vehicles,
as 50% of the ground segment. aircraft and civil installations, such as laser warning, missile
warning and electronic countermeasure units. Furthermore, the
In the commercial realm, subject to carve out, Airbus Defence portfolio also comprises avionics equipment, such as avionics
andSpaces more than 200,000 end-users benefit from access computers, digital map units, flight data recording units and
to satellite telecommunications services wherever they are in the situational awareness systems for helicopters. Transversally,
world. These include all maritime sectors (merchant shipping multi-sensor integration and data fusion technology is
vessels, fishing, yachting, etc.), oil, gas and mining companies, particularly useful creating added value by combining radars
emergency response organisations, global media companies, with optronic sensors and thermal imagers from Airbus Defence
telecommunication and internet service providers, and civil andSpaces extensive Optronics portfolio. Therein, cameras,
aviation. Airbus Defence andSpace works with the broadest telescopes, thermal imaging devices and periscopes constitute
range of network providers in the industry, including Inmarsat, indispensable elements of situational awareness for naval,
Iridium, Thuraya, Eutelsat, Intelsat,SES, Arabsat, Loral Skynet airborne and ground-based platforms.
and Satmex.

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Among the most prominent platforms equipped by the MBDA

1.
Electronics Business Lines products are Eurofighter (radar, self- The Companys missile business in addition to French nuclear
protection, avionics), the Ariane space launchers, the A400M deterrence derives from its 37.5% stake in MBDA (a joint venture
transport aircraft (self-protection, avionics) as well as helicopters between the Company, BAE Systems and Finmeccanica).
of various types. MBDA offers missile systems capabilities that cover the whole
In the area of Space technology the Electronics Business range of solutions for air dominance, ground-based air defence,
Line offers components and sub-systems deployed in space maritime superiority and battlefield engagement. Beyond its
platforms such as on-board computers, GNSS Receivers, role in European markets, MBDA has an established presence
Launcher Electronics and Power Electronics. Actuators and in export markets like Asia, the Gulf region and Latin America.
particularly reliable solar arrays rank extraordinarily high on The broad product portfolio covers all six principal missile
the companys technology skills. Space payload electronics system categories: air-to-air, air-to-surface, surface-to-air, anti-
comprise highly sophisticated components of communication ship, anti-submarine and surface-to-surface. MBDAs product
and earth observation satellites. range also includes a portfolio of airborne countermeasures
such as missile warning and decoy systems, airborne combat
Production training and counter-IED and counter-mine solutions. The most
Airbus Defence andSpace is headquartered in Munich. The significant programmes currently under development are the
main engineering and production facilities of the Division ground based air defense system TLVS/MEADS for Germany,
are located in France (Paris-region and South-West France), the Aster Block 1 NT extended air defence missile family of
Germany (Bavaria, Baden-Wrttemberg and Bremen), Spain systems for France and Italy, the Sea Venom/ANL anti-ship
(Madrid-region and Andalusia) and the UK (Southern England missile for the UK and French navies helicopters, the portable
and Wales). In addition, Airbus Defence andSpace operates medium range battlefield Missile Moyenne Porte (MMP)
a global network of engineering centres and offices in more and the Common Anti-Air Modular Missile (CAMM), which
than 80countries. is an anti-air missile family with land, naval and air launched
applications.

1.1.5 Other: AirbusGroup,Inc.

Airbus Group, Inc. is the American operating company As of May2014, 300aircraft had been delivered to the US
of Airbus Group. Headquartered in Herndon, Virginia, Defense Department for operation by Army and Army National
Airbus Group, Inc. (together with its Airbus Group parent) Guard units, as well as the Navy.
contributes more than US$14billion to the US economy annually,
In commercial aviation, AirbusGroup,Inc. has a significant
supporting over 225,000American jobs. Its US Business Units,
US presence including two engineering centers in Mobile and
operating companies and divisions are found in 29 locations
Witchita, and Airbus Helicopters is one of the US leaders in civil
across 15 states, offering a broad array of advanced solutions
helicopters. More than 3,090 Airbus aircraft have been ordered
to customers in the commercial, homeland security, aerospace
by North American customers, with over 2,150delivered; while
and defense markets.
some 1,300 Airbus Helicopters rotary-wing aircraft are used
Since its creation in 2003, AirbusGroup,Inc. (formerly EADS by operators that include the US Coast Guard, US Customs
North America) has been selected in key competitions for and Border Protection, Los Angeles County Sheriffs Office
military aircraft and systems. AirbusGroup,Inc.s presence in and the FBI. In addition, Airbus commenced aircraft assembly
the US defence and homeland security sectors is growing as in July2015 at its Final Assembly Line in Mobile, Alabama,
well. The company has supplied more than 90HH-65 rotorcraft with first deliveries scheduled to begin in 2016. The Airbus US
to the Coast Guard for its vital homeland security missions. Manufacturing Facility is expected to produce between 40 and
AirbusGroup,Inc. is prime contractor for the supply of up to 50aircraft per year by 2018 building the A319, A320 and A321
36HC-144A Ocean Sentry aircraft for Coast Guard maritime versions from Airbus best-selling single-aisle family of jetliners.
patrol and support missions. The vast majority of A320 Family jetliners produce in Mobile,
Alabama will be delivered to North American customers.
The company is also a major contractor to the US Army, having
been chosen to supply the services UH-72A Lakota helicopter.

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1.1.6 Investments

Dassault Aviation
As of 31December 2015, AirbusGroup held 23.60% of Dassault In 2012, Rafale was selected by the Indian MoD to enter into
Aviations share capital (and 24.71% of associated voting rights), exclusive negotiations for the sale of 126aircraft. Negotiations
with Groupe Industriel Marcel Dassault holding a 56.11% stake, are still in progress. From 2013 and onwards, the new Rafale
Dassault Aviation holding a 4.49% stake, and a free float of Omnirole will be delivered, with improvements such as the
15.8%. In 2015, the Company sold 1.73million shares or 18.75% RBE2-AESA radar, missile launch detector and optronics.
in Dassault Aviation through a book-built offering to institutional
Mirage 2000. The Mirage 2000 family reached the end
investors for a total of approximately 1.76billion and bringing
of its production phase in 2006. Approximately 470 Mirage
AirbusGroups holding in Dassault Aviation from 42.11% as of
2000aircraft are in service with nine air forces worldwide.
31December 2014 to around 23.36% then. Dassault Aviation
itself held a 24.90% stake in Thales as of 31December 2015, nEUROn. Dassault Aviation is the prime contractor for the
which makes it the second largest shareholder of Thales behind development of the unmanned combat air vehicle demonstrator,
the French state. nEUROn. The programme was open to European cooperation
and five countries have decided to participate and share
Dassault Aviation is active in the market for military jet aircraft
the skills of their aerospace industries: EADSCASA (Spain),
and business jets. Founded in 1936, Dassault Aviation has
SAAB (Sweden), HAI (Greece), RUAG (Switzerland) and Alenia
delivered more than 8,000military and civil aircraft to purchasers
Aermacchi (Italy). The nEUROn demonstrator made its first flight
in more than 80countries. On the basis of its experience as
in 2012 and has been performing several test flights in France
designer and industrial architect of complex systems, Dassault
since then.
Aviation designs, develops and produces a wide range of
military aircraft and business jets. In order to avoid any potential FCAS (Future Combat Air System). In 2014, Dassault Aviation,
conflict between the military products of Dassault Aviation and BAE Systems and their industrial partners have been awarded
the Group (Rafale and Eurofighter) and to facilitate a Chinese a 150m contract by the French and UK governments for a
wall approach, the Companys Dassault Aviation shareholding two year co-operative FACS feasibility phase study. The joint
is managed by AirbusGroup Corporate, whereas the Eurofighter study is to be supplemented with additional French and UK
programme is managed by Airbus Defence andSpace. national funding to the combined value of 100m in the same
period. Following the completion of the study at the end of
In 2015, Dassault Aviation recorded orders totalling 9.88billion
2016, work could then commence on a UCAS demonstration
(compared to 4.64billion in 2014), including 45 net orders
development programme that addresses both nations future
for Falcon business jets (compared to 90 net orders in 2014).
military requirements.
Consolidated revenues amounted to 4,176 billion in 2015
(compared to 3.68billion in 2014), with adjusted net income
Business Jets
of 482million (compared to 398million in 2014). Dassault
has approximately 12,000employees, of which more than 75% Dassault Aviation offers a wide range of products at the top end
are based in France. of the business jet sector. The family of Falcon business jets
currently includes the Falcon7X, the 900LX and the 2000LX
Military Jet Aircraft & S. In-service Falcons currently operate in over 65countries
worldwide, filling corporate, VIP and government transportation
Dassault Aviation offers wide expertise in the design and
roles. At the end of December2014, Dassault revealed the
manufacturing of the latest generation military jet aircraft.
Falcon 8X which made its maiden flight on February6, 2015.
Rafale. The Rafale is a twin-engine, omni-role combat aircraft Since the rollout of the first Falcon 20 in 1963, over 2,250 Falcon
developed for both airforce and navy applications. To date, jets have been delivered.
286 Rafale aircraft have been ordered by the French MoD.

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1.1.7 Insurance
1.
The Companys Corporate Insurance Risk Management (IRM) occurrence, with an annual aggregate cap of US$2.5billion for
is part of AirbusGroups Global Financial Service Unit. IRM product liability claims. Certain sub-limits are applicable for the
is an integrated corporate finance function established to insurance policies outlined above.
proactively and efficiently respond to risks that can be treated
Group employee-related insurance policies cover risks such as:
by insurance techniques. IRM is responsible for all corporate

personal accidents;
insurance activities and related protection for the Group and is

medical and assistance support during business trips and
empowered to deal directly with the insurance and re-insurance
assignments;
markets. A continuous task of IRM in 2015 was to further

company automobiles; and
improve efficient and appropriate corporate and project-related

personal and property exposure during business trips.
insurance solutions.
Amounts insured for such Group employee-related policies
IRMs mission includes the definition and implementation of
adequately cover the respective exposure.
the Companys strategy for insurance risk management to help
ensure that harmonised insurance policies and standards are in The Company follows a policy of seeking to transfer the insurable
place for all insurable risks worldwide for the Group. A systematic risk of the Company to external insurance markets at reasonable
review, monitoring and reporting procedure applicable to all rates, on customised and sufficient terms and limits as provided
Divisions is in place to assess the exposure and protection by the international insurance markets. All insurance policies
systems applicable to all the Groups sites, aiming at the: are required to satisfy the Companys mandatory standards of

continuous and consistent identification, evaluation and insurance protection.


assessment of insurable risks;
However, to be more independent from the volatilities of the

initiation and monitoring of appropriate mitigation and risk


insurance markets, the Company uses the capabilities of a
avoidance measures for identified and evaluated insurable
corporate-owned re-insurance captive as a strategic tool with
risks; and
respect to the property damage and business interruption

efficient, professional management and transfer of these


programme and the aerospace insurance programme. The
insurable risks to protect the Group adequately against the
captive is capitalised and protected according to European
financial consequences of unexpected events.
legal requirements so as to ensure its ability to reimburse claims
The Companys insurance programmes cover high risk without limiting the scope of coverage of the original insurance
exposures related to the Groups assets and liabilities, as well policies and without additionally exposing the financial assets
as risk exposures related to employees. of the Company.

Asset and liability insurance policies underwritten by IRM for The insurance industry remains unpredictable in terms of its
the Group cover risks such as: commitment to provide protection for large industrial entities.

property damage and business interruption; There may be future demands to increase insurance premiums,

aerospace third party liabilities including product liabilities; raise deductible amounts and limit the scope of coverage.

manufacturers aviation hull insurance; In addition, the number of insurers that have the capabilities

commercial general liabilities including non-aviation and non- and financial strength to underwrite large industrial risks is
space product liabilities and risks related to environmental currently limited, and may shrink further in light of new solvency
accidents; and requirements. No assurance can be given that the Company

Director and officers liability. will be able to maintain its current levels of coverage nor that
Claims related to property damage and business interruption the coverages in place are sufficient to cover the maximum
are covered up to a limit of 2.5billion per occurrence. Aviation exposure of the Group.
liability coverage is provided up to a limit of US$2.5billion per

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1.1.8 Legal and Arbitration Proceedings

Airbus Group is involved from time to time in various legal On 23March 2012, the WTO adopted the Appellate Bodys
and arbitration proceedings in the ordinary course of its final report in the case brought by the EU assessing funding to
business, the most significant of which are described below. Boeing from the US. The EU has cited the failure by the US to
Other than asdescribed below, AirbusGroup is not aware of implement the findings prior to the due date of 23September
any significant governmental, legal or arbitration proceedings 2012 in commencing a new proceeding on the adequacy of
(including any such proceedings which are pending or US compliance.
threatened), during a period covering at least the previous
Exact timing of further steps in the WTO litigation process is
twelve months which may have, or have had in the recent past
subject to further rulings and to negotiations between the US
significant effects on the Companys or the Groups financial
and the EU. Unless a settlement, which is currently not under
position or profitability.
discussion, is reached between the parties, the litigation is
Regarding Airbus Groups provisions policy, Airbus Group expected to continue for several years.
recognises provisions for litigation and claims when (i) it
has a present obligation from legal actions, governmental GPT
investigations, proceedings and otherclaims resulting from
Prompted by a whistleblowers allegations, Airbus Group
past events that are pending or may be instituted or asserted
conducted internal audits and retained PricewaterhouseCoopers
in the future against the Group, (ii)it isprobable that an outflow
(PwC) to conduct an independent review relating to GPT
of resources embodying economic benefits will be required to
Special Project Management Ltd. (GPT), a subsidiary that
settle such obligation and (iii)a reliable estimate of the amount of
Airbus Group acquired in 2007. The allegations called into
such obligation can be made. Although AirbusGroup believes
question a service contract entered into by GPT prior to its
that adequate provisions have been made to covercurrent or
acquisition by AirbusGroup, relating to activities conducted
contemplated general and specific litigation and regulatory
by GPT in Saudi Arabia. PwCs report was provided by
risks, no assurance can be provided that such provisions will
AirbusGroup to the UK Serious Fraud Office (the SFO) in
be sufficient.Forthe amount of provisions for litigation and
March 2012. In the period under review and based on the
claims, please refer to the Notes to the IFRS Consolidated
work it undertook, nothing came to PwCs attention to suggest
Financial Statements Note22: Provisions, contingent assets
that improper payments were made by GPT. In August2012,
and contingent liabilities.
the SFO announced that it had opened a formal criminal
investigation into the matter. AirbusGroup is cooperating fully
WTO with the authorities.
Although Airbus Group is not a party, Airbus Group is
supporting the European Commission in litigation before the Eurofighter Austria
WTO. Following its unilateral withdrawal from the 1992 EU-US
In March 2012, the German public prosecutor, following a
Agreement on Trade in Large Civil Aircraft, the US lodged
request for assistance by the Austrian public prosecutor,
a request on 6October 2004 to initiate proceedings before
launched a criminal investigation into alleged bribery, tax evasion
the WTO. On the same day, the EU launched a parallel WTO
and breach of trust by current and former employees of EADS
case against the US in relation to its subsidies to Boeing.
DeutschlandGmbH (renamed on 1July 2014 Airbus Defence
On 19 December 2014, the European Union requested
andSpaceGmbH) and Eurofighter JagdflugzeugGmbH as well
WTO consultations on the extension until the end of 2040
as by third parties relating to the sale of Eurofighter aircraft to
of subsidies originally granted by the State of Washington to
Austria in 2003. After having been informed of the investigation
Boeing and other US aerospace firms until 2024.
in 2012, AirbusGroup retained the lawfirm Clifford Chance to
On 1June 2011, the WTO adopted the Appellate Bodys final conduct a fact finding independent review. Upon concluding
report in the case brought by the US assessing funding to its review, Clifford Chance presented its fact finding reportto
Airbus from European governments. On 1December 2011, AirbusGroup in December2013. AirbusGroup provided the
the EU informed the WTO that it had taken appropriate reportto the public prosecutors in Germany.AirbusGroup is
steps to bring its measures fully into conformity with its WTO cooperating fully with the authorities.
obligations, and to comply with the WTOs recommendations
and rulings. Because the US did not agree, the matter is now
under WTO panel review pursuant to WTO rules.

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Other investigations Commercial disputes


Following the announcement of investigations by the Romanian
authorities relating to the border surveillance project in Romania
In May 2013, the Group has been notified of a commercial
dispute following the decision taken by the Group to cease a
1.
in mid-October 2014, Airbus Group confirms that Airbus partnership for sales support activities in some local markets
Defence andSpaceGmbH has been informed that the German abroad. The Group believes it has solid grounds to legally
prosecution office is also investigating potential irregularities in object to the alleged breach of a commercial agreement.
relation to this project, a project in Saudi Arabia and a project However, the consequences of this dispute and the outcome
of Tesat-SpacecomGmbH & Co. KG. The public prosecutor of the proceedings cannot be fully assessed at this stage. The
in Germany has launched administrative proceedings in arbitration is not expected to be completed before the end of
the context of those investigations against Airbus Defence 2016.
and Space GmbH and Tesat-Spacecom GmbH & Co. KG.
In the course of another commercial dispute, the Group
AirbusGroup is cooperating fully with the authorities.
received a statement of claim alleging liability for refunding part
Public prosecutors in Greece and Germany launched of the purchase price of a large contract which the customer
investigations into a current employee and former managing claims it was not obliged to pay. The Group believes that this
directors and employees of Atlas ElektronikGmbH, a joint claim, which goes back many years, should be dismissed in
company of ThyssenKrupp and AirbusGroup, on suspicion of principle. The dispute is currently the subject of arbitration.
bribing foreign officials and tax evasion. The public prosecutor
In light of regulatory investigations and commercial disputes,
in Germany has launched an administrative proceeding
including those discussed above, the Group has determined
for alleged organisational and supervisory shortfalls. The
to enhance certain of its policies, procedures and practices,
authorities in Greece have launched civil claims against
including ethics and compliance. The Group is accordingly in
Atlas Elektronik GmbH. In 2015 the public prosecutors
the process of revising and implementing improved procedures,
office in Bremen launched another investigation into current
including those with respect to its engagement of consultants
and former employees and managing directors of Atlas
and other third parties, in particular in respect of sales support
Elektronik GmbH on suspicion of bribery and tax evasion
activities, and is conducting enhanced due diligence as a pre-
in connection with projects in Turkey. With the support of
condition for future or continued engagement and corresponding
its shareholders, the company is cooperating fully with the
payment. The Group believes that these enhancements to its
authorities and in consultation with the public prosecutor is
controls and practices best position it for the future, particularly
assisting the further clarification of the matter through its
in light of advancements in regulatory standards. The Group
own internal investigation.
cannot exclude that these changes lead to additional commercial
disputes or other consequences in the future.

1.1.9 Research and Technology, Intellectual Property

Positioning AirbusGroup for the future Leading a Group-wide Strategy


AirbusGroups technological expertise is essential for ensuring Corporate-level research and technology efforts are centered
the Companys long-term market leadership and opening around nine key strategic technology roadmaps that provide the
business opportunities in new markets. The Groups research framework on which to build AirbusGroups competitiveness and
and technology efforts are focused on profitability, value creation, capabilities. Elaborated by the Divisions under the leadership of
market position and delivering competitive, integrated solutions the CTO, these shared roadmaps were created for faster delivery
for its customers, along with exploring emerging concepts that of new technologies by optimizing group-wide research and
will shape its future. technology efforts.

The AirbusGroup Corporate Technical Office (CTO) is the focal A key part of the technology roadmaps is the CTOs global reach.
point for this activity, ensuring that business and technology Its international presence facilitates relationships, partnerships
strategies are closely linked. The CTO addresses technology and collaborations that help AirbusGroup develop new products,
trends that impact the Groups business, and identifies key services, business models, methods, tools and manufacturing
areas for research and technology. It is responsible for the processes for maintaining the Companys competitiveness and
AirbusGroup Innovations research and technology network and leadership into the future.
also oversees information technology, cyber security, quality,
new business ventures and intellectual property activities across
the Group.

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A Lean, Agile Network for Global Innovation in operations and ensuring robust practical problem solving is
AirbusGroup Innovations the Companys global research and applied. The initiative has been rolled out to all Divisions and
technology network is managed by the CTO and driven by the corporate functions, with a significant training, up-skilling and
Groups overall strategy. It leverages a close relationship with quality-awareness programme in full implementation, on top
AirbusGroups three Divisions to identify new technologies and of the normal quality training schedule.
breakthrough concepts for eventual transfer to the Groups
commercial divisions. AirbusGroup Innovations is undergoing Staying Ahead of Cyber Threats
a transformation to become more agile, innovative and aligned The CTOs Cyber Security Programme Directorate is responsible
with the needs of the Companys Divisions. Its teams have for safeguarding the Companys products, manufacturing
been reorganised into five transnational Innovation Centres systems and IT infrastructure from cyber threats. This operation
focused around core Group competencies, along with a policy combines all of the group-wide competences behind common
and development function that includes all support activities. objectives and establishes priorities for protecting the Group
This structure ensures that AirbusGroup Innovations creates from the increasing threat of cyber attacks in the short- and
long-term value for the Group. long-terms.
AirbusGroup Innovations employs over 1,000 people across
sites in France, Germany, the UK, Spain, Singapore, India and Intellectual Property and Open Innovation
Russia, along with its operations in China, Japan, South Korea, AirbusGroups policy is to establish, protect, maintain and
Thailand, Malaysia, Canada and the US. This international defend its Intellectual property rights in all commercially
presence increases AirbusGroups access to diverse talent, significant countries and to use those rights in responsible
knowledge, disruptive technologies and new markets, which ways. The Group makes select patents and expertise available
improves the Companys flexibility, robustness and ability through technology transfer and licensing agreements as
to innovate. It also fosters the development of partnerships part of its Open Innovation processes. Open Innovation and
with leading universities and high-tech engineering schools technology transfer create a win-win situation for sharing
through joint research projects, as well as employment of the risks of research and technology with external partners,
thesis students, post-graduate interns and doctorates. while creating new market opportunities for the Group.
Under the CTOs responsibility, AirbusGroups technology
Major Milestones for Electric Aviation transfer initiative generates revenues by licensing approved
technologies and offering engineering services, along with
Development of electric and hybrid-propulsion aircraft is one of
forming strategic technology partnerships such as its
the Groups key priorities for the future, and the CTO is leading
long-term agreement that provides automotive manufacturer
this E-aircraft Roadmap with the long-term goal of applying
Maserati with access to a wide range of Airbus Group
electric and hybrid-propulsion technologies to helicopters and
expertise and know-how.
regional airliners. In 2015, the AirbusGroup Innovations-led
E-Fan programme captured worldwide attention when the
E-Fan technology demonstrator became the first all-electric Successful Ramp-ups and Growth for Spin-offs
aircraft to cross the English Channel completely on its own The CTO fosters an entrepreneurial spirit with the Corporate
power from takeoff to landing. This was a significant milestone Innovation Nursery. This operation helps accelerate emerging
as AirbusGroup progresses on its E-aircraft Roadmap, and will business applications that will bring added value to the Group
help pave the way for development of the E-Fan 2.0 and E-Fan by focusing on new ideas that will affect its business in coming
4.0 serial production versions for pilot training and general years, industrialising advanced manufacturing and service
aviation. A number of advanced technologies and ideas are solutions, and managing spin-off companies. In 2015, the
supporting this drive for more electric aviation, including the Nurserys strategy was evolved to further complement the
Airbus Group Innovations-developed Connected Cockpit divisional and Silicon Valley innovation initiatives, and to help
concept, which was revealed during the year at major public bring products to market faster.
exhibitions and received significant attention.
AirbusGroup spin-off companies managed by the Nursery
include TESTIA the Groups non-destructive testing and
Delivering even Higher Quality Products training subsidiary and APWORKS, which is a globally-
andServices recognised leader in 3D-printing that offers consulting and
The CTO manages the Company-wide Quest quality engineering services for state-of-the-art production processes.
improvement initiative that supports the Companys aim of Both of these companies continued their successful growth
delivering even better products and services for customers, with new products, services and lines of business launched
and reducing the cost of non-quality. Quest emphasises during 2015.
increased focus on customer needs, improving feedback loops

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Key Priorities for 2016


With guidance from the CTO, AirbusGroups overall research
and technology efforts will play a significant role in all of
Innovations, the CTO will continue to advance the Groups
technological roadmaps, while taking advantage of its
1.
the Companys 2016 objectives. Leveraging close working worldwide resources to open new opportunities for the Group.
relationships between the Divisions and Airbus Group

1.1.10 Corporate Social Responsibility

AirbusGroup CSR Approach Materiality


At AirbusGroup, corporate social responsibility (CSR) refers The Airbus Group focuses on material issues that have
to how we are aligning the Company with the needs and significant operational and strategic impacts, potentially
expectations of society. Airbus Group aims to balance its affecting the Groups risks and performance. AirbusGroup is
strategy for growth with fulfilling duties to all stakeholders and taking into account stakeholders and analysts questions about
addressing material sustainability issues. Underlying this is the materiality of CSR issues.
a drive to deliver the best technology to serve mobility and
security. Data and Performance
A signatory to the United Nations Global Compact since 2003,
Stakeholders AirbusGroup is committed to the UN Global Compact principles
Airbus Groups businesses are characterised by long and has reached the Advanced Level(1).
product lifecycles and corresponding returns on investments,
Environmental, Social and Governance (ESG) reporting is
considerable costs and risks in programme development,
embedded across the Group, measuring performance and
and cyclical civilian markets. The principal stakeholders are
progress. Environmental and social data have been externally
shareholders, customers, regulators, policymakers, employees,
audited since 2010. Below is a selection(2) of externally reviewed
suppliers, NGOs, as well as society at large.
environmental indicators. For a selection of social performance
indicators, see 1.1.11Employees.

(1) Through the GC Advanced level, the Global Compact Office recognises companies that strive to be top reporters and declare that they have adopted and report
on a broad range of best practices in sustainability governance and management.

(2) For details on Scope and Methodology, please refer to the AirbusGroup website at http://www.airbusgroup.com (Investors & Shareholders > Publications> Annual
Reports and Registration Documents).

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Environmental
performance KPI Unit 2015 2014
Total energy consumption (excluded electricity generated by CHP
on site for own use) MWh 3,864,574 3,903,080
Energy consumption from stationary sources MWh 1,396,967 1,318,144
of which
natural gas consumption MWh 1,309,824 1,232,690
distillate fuel oil consumption (Gas oil, Diesel, FOD) MWh 16,058 16,877
liquefied petroleum gas consumption MWh 133 322
propane consumption MWh 7,237 10,303
biomass consumption MWh 63,715 57,952
Energy consumption from mobile sources MWh 934,032 1,057,312
of which
gasoline consumption MWh 2,860 2,329
distillate fuel oil consumption (Gas oil, Diesel, FOD) MWh 26,473 23,281
Energy
liquefied petroleum gas consumption MWh 6 1
propane consumption MWh 615 1,046
jet fuel aircraft/ kerosene consumption MWh 519,453 675,342
flight tests MWh 139,091 323,375
Beluga MWh 380,363 351,967
aviation gasoline consumption MWh 4,263 3,346
Total electricity consumption MWh 1,533,576 1,527,624
of which
purchased electricity consumption MWh 1,435,615 1,421,794
purchased heat/ steam MWh 97,494 105,501
generated electricity from photovoltaic on-site for own use MWh 220 187
generated electricity from other renewable source on-site for own use MWh 246 143
Generated electricity from CHP on-site for own use MWh 177,359 260,541
Total CO 2 emissions tonnes CO2 925,216 950,690
Total direct CO2 emissions (Scope 1) tonnes CO2 527,573 545,613
of which
CO2 emissions from stationary sources tonnes CO2 271,950 256,872
CO2 emissions from mobile sources tonnes CO2 240,488 272,235
Air emissions CO2 emissions from fugitive sources tonnes CO2 15,051 16,422
CO2 emissions from processes on site tonnes CO2 84 84
Total indirect CO2 emissions (Scope 2) tonnes CO2 397,855 405,077
Total VOC emissions tonnes 1,437 1,500
Total SOx emissions tonnes 14 14
Total NOx emissions tonnes 242 235
Total water consumption m3 5,467,958 5,365,669
of which
purchased water % 52.3% 54.3%
abstracted ground water % 45.3% 43.2%
Water
withdrawn surface water % 2.3% 2.4%
rainwater collected used % 0.1% 0.1%
Total water discharge m3 4,200,490 4,222,619
of which water discharged via an internal pre-treatment plant m3 1,196,339 1,179,762
Total waste production, excluding exceptional waste tonnes 104,327 111,063
of which
non-hazardous waste tonnes 78,570 81,907
hazardous waste tonnes 25,757 29,156
Waste
waste going to material recovery tonnes 62,706 63,909
waste going to energy recovery tonnes 21,356 21,236
Material recovery rate % 60.1% 57.5%
Energy recovery rate % 20.5% 19.1%
Number of sites with ISO14001/ EMAS certification* unit 80 79
EMS certification
Percentage of workforce covered by ISO14001 & environmental reporting % 84% 83%
Data audited by Ernst & Young.
* Number of sites covered by the environmental reporting which are certified ISO14001.
Only 100% consolidated entities are taken into account.

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1.1.11 Employees
1.
As of 31December 2015, the Group workforce amounted to The remaining 8.5% are employees coming from a total of 130
136,574employees (compared to 138,622employees in 2014), other countries. In total, 92.4% of the Groups active workforce
96.1% of which consisted of full time employees. These statistics is located in Europe on more than 100 sites.
take into account consolidation effects and perimeter changes
throughout 2014. Depending on country and hierarchy level, the Workforce by Division and Geographic Area
average working time is between 35 and 40hours per week.
The tables below provide a breakdown of Group employees by
In 2015, 5,266employees worldwide were welcomed into the Division and geographic area, as well as by age and gender,
Group (compared to 5,211 in 2014 and 8,823 in 2013). At the including the percentage of part-time employees. Employees
same time, 4,870employees left the Group including partial of companies accounted for by the proportionate method
retirements (compared to4,478 in 2014 and 4,160 in 2013). (such as ATR, MBDA) in 2013 are included in the tables on the
same proportionate basis and have not been adjusted for the
In terms of nationalities, 37.8% of the Groups employees are
application of IFRS10 and 11.
from France, 33.9% from Germany, 9.2% from the UK and 8.9%
are from Spain. US nationals account for 1.8% of employees.

Employees by Division 31December 2015 31December 2014 31December 2013


Airbus 72,816 73,958 78,862
Airbus Helicopters 22,520 22,939 23,374
Airbus Defence andSpace(2) 38,206 38,637 -
Astrium(2) - - 17,255
Cassidian(2) - - 21,229
Airbus Corporate Functions(1) 3,032 2,989 2,951
Other Businesses - 99 390
Group Total 136,574 138,622 144,061
(1) Airbus Corporate Functions includes Headquarters, Shared Services and Innovation Works.
(2) The former reportable segments Cassidian, Astrium and Airbus Military form the new reportable segment Airbus Defence andSpace as of 1January 2014.

Employees by geographic area 31December 2015 31December 2014 31December 2013


France 50,810 51,740 54,510
Germany 47,796 48,374 50,080
Spain 12,521 12,449 11,217
UK 12,157 12,783 14,626
US 2,821 2,991 3,254
Other Countries 10,469 10,285 9,771
Group Total 136,574 138,662 144,061

% Part time employees 31December 2015 31December 2014 31December 2013


France 4.2% 4.1% 4.0%
Germany 5.1% 4.5% 4.3%
Spain 1.2% 1.0% 0.7%
UK 2.4% 1.8% 2.1%
US 1.1% 1.6% 0.6%
Other Countries 1.4% 0.8% 2.2%
Group Total 3.9% 3.4% 3.5%

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Active Workforce by contract type 31December 2015 31December 2014 31December 2013
Unlimited contract 133,650 135,688 140,327
Limited contract > 3months 2,924 2,934 3,733

% Active Workforce by Age 31December 2015 31December 2014 31December 2013


<20 0.2% 0.2% 0.1%
20-29 10.6% 11.4% 12.7%
30-39 29.7% 30.0% 27.8%
40-49 27.9% 27.8% 27.8%
50-59 27.1% 26.3% 25.4%
60+ 4.6% 4.3% 3.9%

31December 2015 31December 2014 31December 2013


Women in Active Workforce 17.2% 17.1% 17.2%
Women in Management Positions 10.9% 10.2% 9.6%
Employee Turnover Rate 3.6% 3.3% 3.0%
Total number of Training Hours 2,264,145 2,906,356 3,167,116
Total number of Training Participants 226,692 238,386 238,773

Reporting Scope
AirbusGroups headcount reporting includes all consolidated quota. This includes employees working for AirbusGroup or
companies worldwide. The internationally comparative figures its subsidiaries in France, Germany, Spain, Great Britain and
are based on the Active Workforce, i.e. the number of permanent internationally. In total, about 2% of the companies belonging to
and short-term employees, irrespective of their individual the AirbusGroup usually recently acquired are not included
working times. The headcount is calculated according to the in the scope, as no detailed employee data is available at Group
consolidation quota of the respective companies. level. For more details on Scope and Methodology, please refer
to the AirbusGroup website at http://www.airbusgroup.com
The scope for HR structure reporting covers about 98% of the
(Investors & Shareholders > Publications> Annual Reports and
Groups consolidated companies, including all employees of
Registration Documents).
these companies, irrespective of their individual consolidation

1.2 Recent Developments


In January2016, the Silicon Valley-based Ventures fund and mission is to identify and invest in the most visionary
the A 3 outpost of Airbus Group became fully operational. entrepreneurs in the global aerospace ecosystem.
In late May 2015, Airbus Group had announced a plan to
On 26 February 2016, the European Commission decided
establish its Silicon Valley operations with a fully independent
to open an in-depth investigation (Phase 2) regarding the
venture capital fund and an innovation center, which has
acquisition by Airbus Safran Launchers (ASL) of CNES shares
been branded A3 by AirbusGroup. The Group had appointed
in Arianespace (approximately 35%), in order to investigate more
Tim Dombrowski as CEO of Airbus Venture Capital and Paul
thoroughly impact on competition. Closing of the transaction
Eremenko as CEO of A 3. Airbus Ventures has completed
is subject to the European Commissions approval. ASL would
its core leadership team set-up and is operating with a
become a 74% shareholder of Arianespace after closing of the
US$150million commitment from AirbusGroup. Thefunds
acquisition.

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1.2 Recent Developments

Airbus Group SE has informed relevant UK authorities of its temporarily unavailable, the affected customers will be able

1.
findings concerning certain inaccuracies relating to applications to resume obtaining such financing or refinancing in the near
for export credit financing for Airbus customers. The Group future. The Group is cooperating with the relevant export credit
believes that although some export credit financing will be agencies to resolve this issue as soon as possible.

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Chapter

2.
X
FACTORS
RISK

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2.
ManagementsDiscussion
andAnalysisofFinancial Condition
andResultsofOperations

2.1 Operating and Financial Review 60


2.1.1 Overview 61
2.1.2 Significant Accounting Considerations, PoliciesandEstimates 63
2.1.3 Performance Measures 64
2.1.4 Results of Operations 68
2.1.5 Changes in Consolidated Total Equity
(IncludingNonControllingInterests)71
2.1.6 Liquidity and Capital Resources 73
2.1.7 Hedging Activities 76

2.2 Financial Statements 76

2.3 Statutory Auditors Fees 77

2.4 Information Regarding the Statutory Auditors 77

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2.1 Operating and Financial Review

The following discussion and analysis is derived from and should be


read together with the audited IFRS Consolidated Financial Statements
oftheGroup asof and for the years ended 31December 2015,
2014and2013 incorporated by reference herein. These financial statements
have been prepared in accordance with International Financial Reporting
Standards (IFRS) issued bythe International Accounting Standards
Board as endorsed by the European Union, and with Part9 of Book2
oftheDutchCivil Code. When reference is made to IFRS, this intends
tobe EU-IFRS.
The following discussion and analysis also contains certain non-GAAP
financial measures, i.e., financial measures that either exclude or include
amounts that are not excluded or included in the most directly comparable
measure calculated and presented in accordance with IFRS. Specifically,
the Group makes use of the non-GAAP measures EBIT*, net cash
andfreecash flow.
The Group uses these non-GAAP financial measures to assess its
consolidated financial and operating performance and believes they are
helpful in identifying trends in its performance. These measures enhance
managements ability to make decisions with respect to resource allocation
andwhether the Group is meeting established financial goals.
Non-GAAP financial measures have certain limitations as analytical tools,
and should not be considered in isolation or as substitutes for analysis
oftheGroups results as reported under IFRS. Because of these limitations,
they should not be considered substitutes for the relevant IFRS measures.

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2.1.1 Overview

With consolidated revenues of 64.5billion in 2015, the Group supplier of military aircraft, satellites and defence electronics.
is Europes premier aerospace and defence company and In 2015, it generated 82% of its total revenues in the civil sector

2.
one of the largest aerospace and defence companies in the (compared to 82% in 2014) and 18% in the defence sector
world. In terms of market share, the Group is among the top (compared to 18% in 2014). As of 31 December 2015, the
two manufacturers of commercial aircraft, civil helicopters, Groups active headcount was 136,574employees.
commercial space launch vehicles and missiles, and a leading

2.1.1.1 Exchange Rate Information


The financial information presented in this document is expressed ineuros,USdollars or pounds sterling. The following table sets
out, for the periods indicated, certain information concerning the exchange rate between the euro and the USdollar and pound
sterling, calculated using the official European Central Bank fixing rate:

Average Year End


Year ended -US$ - -US$ -
31December 2013 1.3281 0.8493 1.3791 0.8337
31December 2014 1.3285 0.8061 1.2141 0.7789
31December 2015 1.1095 0.7259 1.0887 0.7340

2.1.1.2 Reportable Business Segments 2.1.1.3 Significant Programme Developments,


Since 1January 2014, the Group has organised its businesses Restructuring and Related Financial
into the following three reportable segments: Consequences in2013, 2014 and 2015

Airbus: development, manufacturing, marketing and sale A380 programme. Based on an updated technical solution
of commercial jet aircraft of more than 100seats; aircraft concept to fix permanently the retrofit of the A380 wing rib issue,
conversion and related services; development, manufacturing, an additional amount of 85million was recognised in 2013. In
marketing and sale of regional turboprop aircraft and aircraft 2014, Airbus provided for costs related to in service technical
components; issues identified and with solutions defined, which reflected the

Airbus Helicopters: development, manufacturing, marketing latest facts and circumstances at the time.
and sale of civil and military helicopters; provision of helicopter-
In 2015, Airbus continued to improve gross margin per aircraft.
related services; and
Despite lower A380 deliveries (27aircraft in 2015 compared to

Airbus Defence andSpace: Military combat aircraft and


30aircraft in 2014), the programme achieved breakeven for the
training aircraft; provision of defence electronics and of
first time in 2015.
global security market solutions such as integrated systems
for global border security and secure communications A350XWB programme. On 14June 2013, the first A350XWB
solutions and logistics; training, testing, engineering and other MSN1 took to the skies on its first flight. In 2013, a net charge of
related services; development, manufacturing, marketing 434million reflected a re-assessment of actual and estimated
and sale of missiles systems; development, manufacturing, unit cost. Improvement actions were launched to converge on
marketing and sale of satellites, orbital infrastructures and cost targets.
launchers; provision of space related services; development, In 2014, A350XWB received Type Certification and entry-into-
manufacturing, marketing and sale of military transport aircraft service occurred at the end of 2014, with the first A350XWB
and special mission aircraft and related services. being delivered to Qatar Airways on 22December in line with
Other/ HQ/ Consolidation comprises the Groups activities commitments. In 2014, Airbus applied prospectively construction
managed in the US, the holding function of the Groups contract accounting for launch customer contracts in the civil
Headquarters, the AirbusGroup bank and other activities not aircraft business where customers significantly influenced
allocable to the reportable segments, combined together with the structural design and technology of the aircraft under the
consolidation effects. contract. Considering certain airline customers involvement
in the development and production process of the A350XWB
programme, Airbus applied IAS 11 construction contract
accounting to a fixed number of launch customer contracts
of the A350XWB programme. For all other contracts IAS18
is applied.

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In 2015, Airbus has delivered fourteen additional aircraft. The The A400M SOC1 and 1.5 milestones remain to be achieved.
industrial ramp-up preparation is underway and associated SOC1 fell due end October2013 and SOC1.5 fell due end
risks will continue to be closely monitored in line with the December2014. The associated termination rights became
schedule, aircraft performance and overall cost envelope, as per exercisable by OCCAR/ Nations on 1November 2014 and
customers commitment. Despite the progress made, significant 1January 2016, respectively. SOC2 fell due end December2015
challenges remain with the ramp-up acceleration. and is still in the 12-month grace period. Management judges
that it is highly unlikely that any of these termination rights will
A400M programme. Technical progress on the A400M
be exercised.
programme resulted in the recognition of A400M-related
revenues of 0.5 billion in 2012, 1.0 billion in 2013 and The A400M programme remains in a critical phase and
1.6billion in 2014 and 1.6billion in 2015. associated risks will continue to be closely monitored.

In 2013, the A400M programme achieved civil and military A320 programme. Joint European and US certification for the
certification. The initial two A400Ms were delivered to the A320neo was received in the fourth quarter of 2015 with the
French Air Force while the third aircraft, for Turkey, was awaiting first delivery following in January2016. Despite some schedule
acceptance in the delivery centre at the end of 2013. set-backs, the A320neo ramp-up preparation is underway with
the focus on maturity and service-readiness for early operations
There were eight aircraft deliveries in 2014 four to France,
in line with customer expectations.
two to Turkey and one each to Germany and to the UK. In the
last quarter of 2014, management reviewed the programme The Group makes estimates and provides, across the
evolution mostly driven by military functionality challenges programmes, for costs related to in service technical issues
and industrial ramp-up together with associated mitigation which have been identified and for which solutions have been
actions and recorded based on management best estimate defined, which reflects the latest facts and circumstances. The
an additional net charge of 551million for the period ended Group is contractually liable for the repair or replacement of
31December 2014. the defective parts but not for any other damages whether
direct, indirect, incidental or consequential (including loss of
An additional eleven A400M aircraft were delivered in 2015,
revenue, profit or use). However, in view of overall commercial
resulting in twenty-one cumulative deliveries up to 31December
relationships, contract adjustments may occur, and be
2015.
considered on a case by case basis.
Industrial efficiency and military capability remain a challenge
Restructuring provisions. In 2013, a provision of 292million
during the ramp-up phase. Management is working with
was booked relating to the restructuring of the Airbus Defence
the customers to agree a schedule of military capability
andSpace Division and Headquarters. In 2014 the restructuring
enhancement and deliveries as well as reviewing the escalation
programme remained on track with a reduction of 1,900
formulae. Industrial recovery measures have been identified
positions at the end of the year. After reassessing and adjusting
and management is focused on delivery, but risk remains.
the provision in 2015, 41million has been released. At the
The mission capability roadmap (including the achievement
end of 2015 a reduction of around 3,700 positions has been
of the respective milestones) and the delivery plan remain
achieved (active workforce and temporary staff).
under negotiation with OCCAR/Nations and are expected to
be finalised in 2016.
2.1.1.4 Current Trends
Management reviewed the programme evolution and estimated
contract result driven to a large extent from the implications of AirbusGroup expects the world economy and air traffic to grow
the accident, as well as the impact of low inflation on the price in line with prevailing independent forecasts and assumes no
revision formulae, delays in military functionality and deliveries, major disruptions.
commercial negotiations, cost reduction targets and challenges In 2016, Airbus expects to deliver more than 650aircraft, and
in the industrial ramp-up, together with associated mitigation the commercial order book is expected to grow.
actions. As a result of this review, Airbus Defence andSpace
recorded an additional net charge of 290million in the second
quarter of 2015. The detailed review continued in the second
half of 2015 however no further net charges were deemed
necessary.

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2.1.2 Significant Accounting Considerations, PoliciesandEstimates

The Groups significant accounting considerations, policies currencies, please refer to the Notes to the IFRS Consolidated
and estimates are described in the Notes to the Consolidated Financial Statements Note2: Significant accounting policies
Financial Statements. Transactions in foreign currency.
2.
Currency Translation Mismatch
2.1.2.1 Scope of and Changes inConsolidation
Customer advances (and the corresponding revenues recorded
For further information on the scope of and changes in
when sales recognition occurs) are translated at the exchange
consolidation as well as acquisitions and disposals of interests
rate prevailing on the date they are received. US dollar-
in business, please refer to the Notes to the IFRS Consolidated
denominated costs are converted at the exchange rate prevailing
Financial Statements Note2: Significant accounting policies
on the date they are incurred. To the extent that USdollar-
and Note6: Acquisitions and disposals.
denominated customer advances differ, in terms of timing of
receipt or amount, from corresponding USdollar-denominated
2.1.2.2 Capitalised Development Costs costs, there is a foreign currency exchange impact (mismatch)
Pursuant to the application of IAS38 Intangible Assets, the on EBIT*. Additionally, the magnitude of any such difference,
Group assesses whether product-related development costs and the corresponding impact on EBIT*, is sensitive to variations
qualify for capitalisation as internally generated intangible in the number of deliveries.
assets. Criteria for capitalisation are strictly applied. All research
and development costs not meeting the IAS38 criteria are 2.1.2.5 Accounting for Sales Financing
expensed as incurred in the consolidated income statement. Transactions in the Financial
Please refer to the Notes to the IFRS Consolidated Financial Statements
Statements Note 2: Significant accounting policies
The accounting treatment of sales financing transactions varies
Research and development expenses and development costs
based on the nature of the financing transaction and the resulting
and Note17: Intangible assets.
exposure. Please refer to the Notes to the IFRS Consolidated
Financial Statements Note19: Other investments and other
2.1.2.3 Accounting for Hedged Foreign long-term financial assets, Note22: Provisions, contingent
Exchange Transactions in theFinancial assets and contingent liabilities and Note25: Sales financing
Statements transactions.
At least 70% of the Groups revenues are denominated For further information on the significance of sales financing
inUSdollars, whereas a major portion of its costs is incurred transactions for the Group, please refer to 2.1.6.4 Sales
ineuros and, to a smaller extent, in pounds sterling. The Group Financing.
uses hedging strategies to manage and minimise the impact
of exchange rate fluctuations on its profits, including foreign
currency derivative contracts, interest rate and equity swaps and 2.1.2.6 Provisions for Loss-Making Contracts
other non-derivative financial assets or liabilities denominated Loss-making contract provisions are reviewed and reassessed
in a foreign currency. For further information, please refer to regularly. However, future changes in the assumptions used by
2.1.7 Hedging Activities, Risk Factors 1. Financial Market the Group or a change in the underlying circumstances may
Risks Foreign Currency Exposure and to the Notes to the lead to a revaluation of past loss-making contract provisions and
IFRS Consolidated Financial Statements Note2: Significant have a corresponding positive or negative effect on the Groups
accounting policies and Note35: Information about financial future financial performance. Please refer to the Notes to the
instruments. IFRS Consolidated Financial Statements Note2: Significant
accounting policies Provision for loss making contracts
and Note22: Provisions, contingent assets and contingent
2.1.2.4 Foreign Currency Translation
liabilities.
For information on transactions in currencies other than the
functional currency of the Group and translation differences for
other assets and liabilities of the Group denominated in foreign

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2.1.3 Performance Measures

2.1.3.1 Divisions

Airbus
Set forth below is a summary of the measures for the activities of Airbus for the past three years.

Year ended Year ended Year ended


(in m) 31December 2015 31December 2014 31December 2013
Order Intake (net) 139,062 150,085 199,261
Order Book 952,450 803,633 625,595
Revenues 45,854 42,280 39,494
EBIT* 2,301 2,671 1,593
in% of revenues 5.0% 6.3% 4.0%

Airbus Helicopters
Set forth below is a summary of the measures for the activities of Airbus Helicopters for the past three years.

Year ended Year ended Year ended


(in m) 31December 2015 31December 2014 31December 2013
Order Intake (net) 6,168 5,469 5,775
Order Book 11,769 12,227 12,420
Revenues 6,786 6,524 6,297
EBIT* 427 413 397
in% of revenues 6.3% 6.3% 6.3%

Airbus Defence andSpace


Set forth below is a summary of the measures for the activities of Airbus Defence andSpace for the past three years.

Year ended Year ended Year ended


(in m) 31December 2015 31December 2014 31December 2013
Order Intake (net) 14,440 12,225 11,808
Order Book 42,861 43,075 43,208
Revenues 13,080 13,025 13,121
EBIT* 745 409 659
in% of revenues 5.7% 3.1% 5.0%

2.1.3.2 Order Backlog


Year-end order backlog consists of contracts signed up to For commercial aircraft contracts, amounts of order backlog
that date. Only firm orders are included in calculating order reflected in the table below are derived from catalogue prices,
backlog for commercial aircraft, a firm order is defined as one escalated to the expected delivery date and, to the extent
for which the Group receives a down payment on a definitive applicable, converted into euro (at the corresponding hedge
contract. Defence-related orders are included in the backlog rate for the hedged portion of expected cash flows, and at the
upon signature of the related procurement contract (and the period-end spot rate for the non-hedged portion of expected
receipt, in most cases, of an advance payment). Commitments cash flows). The amount of defence-related order backlog is
under defence umbrella or framework agreements by equal to the contract values of the corresponding programmes.
governmental customers are not included in backlog until
AirbusGroup is officially notified.

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CONSOLIDATED BACKLOG FOR THE YEARS ENDED 31DECEMBER 2015, 2014 AND 2013 (1)

Year ended 31December 2015 Year ended 31December 2014 Year ended 31December 2013
Amount in bn In percentage(2) Amount in bn In percentage(2) Amount in bn In percentage(2)
Airbus(3) 952.4 94.6% 803.6 93.6% 625.6 91.8%
Airbus Helicopters 11.8 1.2% 12.2 1.4% 12.4 1.8%
Airbus Defence andSpace
Total Divisional backlog
42.9
1,007.1
4.2%
100%
43.1
858.9
5.0%
100%
43.2
681.2
6.4%
100%
2.
Other/ HQ/ Consolidation (1.2) (1.4) (0.6)
Total 1,005.9 857.5 680.6
(1) Without options.
(2) Before Other/ HQ/ Consolidation.
(3) Based on catalogue prices for commercial aircraft activities.

2015 compared to 2014. The 148.4billion increase in the the Groups strong order intake in 2014 (166.4billion), which
order backlog from 2014, to 1,005.9billion, primarily reflects significantly exceeded the revenues accounted for in the same
the Groups strong order intake in 2015 (159billion), which year (60.7billion). Additionally, the stronger US dollar spot rate
significantly exceeded the revenues accounted for in the same used for conversion of the non-hedged portion of the backlog
year (64.5billion). Additionally, the stronger US dollar spot rate into euro at year end (-US$1.21 as compared to -US$1.38
used for conversion of the non-hedged portion of the backlog at the end of 2013) had a positive impact on order backlog of
into euro at year end (-US$1.09 as compared to -US$1.21 approximately +86billion.
at the end of 2014) had a positive impact on order backlog of
Airbus backlog increased by 178 billion from 2013, to
approximately +56billion.
803.6billion, primarily reflecting a book-to-bill ratio of more
Airbus backlog increased by 148.8 billion from 2014, to than two (calculated using units of new net orders). Order intake
952.4billion, primarily reflecting a book-to-bill ratio of more consisted of 1,456 net orders in 2014 (as compared to 1,503 in
than one (calculated using units of new net orders). Order intake 2013), driven mainly by the A320 Family, which received 1,321
consisted of 1,080 net orders in 2015 (as compared to 1,456 net firm orders (1,011 A320neo and 310 A320ceo). Total order
in 2014), driven mainly by the A320 Family, which received 945 backlog at Airbus amounted to 6,386aircraft at the end of 2014
net firm orders (887 A320neo and 58 A320ceo). Total order (ascompared to 5,559aircraft at the end of 2013).
backlog at Airbus amounted to 6,831aircraft at the end of 2015
Airbus Helicopters backlog decreased by -0.2billion from
(ascompared to 6,386aircraft at the end of 2014).
2013, to 12.2billion, reflecting a book-to-bill ratio of less than
Airbus Helicopters backlog decreased by -0.4billion from one with new net orders of 5.5billion. Order intake consisted
2014, to 11.8billion, reflecting a book-to-bill ratio of less than of 369 net orders in 2014 (as compared to 422 in 2013), driven
one with new net orders of 6.2billion. After 50 governmental by orders for commercial helicopters. Total order backlog
helicopter cancellations, Airbus Helicopters received 333 net amounted to 893helicopters at the end of 2014 (as compared
orders in 2015 (as compared to 369 in 2014). Total order backlog to 995helicopters at the end of 2013).
amounted to 831helicopters at the end of 2015 (as compared
Airbus Defence andSpaces backlog decreased by -0.1billion
to 893helicopters at the end of 2014).
from 2013, to 43.1billion, reflecting a book-to-bill ratio of less
Airbus Defence andSpaces backlog was broadly stable at than one with new net orders of 12.2billion. Space Systems
42.9billion in 2015 including a book-to-bill ratio of more than achieved a book-to-bill ratio above 1 with a major development
one with new net orders of 14.4billion. The order intake includes contract in Defence, key export orders in Earth Observation,
14 additional orders on A330 MRTT and 5 telecommunications Navigation and Science and 4 telecommunications satellites
satellites. During the year, an agreement was also signed with (as compared to 3 in 2013). Furthermore, 28 net orders were
OneWeb for 900 small telecommunications satellites. booked in the Light & Medium segment (as compared to 10
in 2013). One order was booked for the A330 MRTT for a new
2014 compared to 2013. The 176.9billion increase in the
customer, France (compared to 7aircraft in 2013).
order backlog from 2013, to 857.5billion, primarily reflects

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The table below illustrates the proportion of civil and defence backlog at the end of each of the past three years.

Year ended 31December 2015 Year ended 31December 2014 Year ended 31December 2013
Amount in bn(1) In percentage Amount in bn(1) In percentage Amount in bn(1) In percentage
Backlog:
Civil Sector 967.5 96% 815.3 95% 638.0 94%
Defence Sector 38.4 4% 42.2 5% 42.6 6%
Total 1,005.9 100% 857.5 100% 680.6 100%
(1) Including Other/ HQ/ Consolidation.

2.1.3.3 Use of EBIT*


The Group uses EBIT pre-goodwill impairment and exceptionals (EBIT*) as a key indicator of its economic performance. The term
exceptionals refers to such items as depreciation expenses of fair value adjustments relating to the former EADS merger and
the Airbus combination, as well as impairment charges thereon. It also comprises disposal impacts related to goodwill and fair
value adjustments from these transactions.

Set forth below is a table reconciling the Groups profit before finance costs and income taxes (as reflected in the Groups
consolidated income statement) with the Groups EBIT*.

Year ended Year ended Year ended


(in m) 31December 2015 31December 2014 31December 2013
Profit before finance costs and income taxes 4,062 3,991 2,570
Disposal and impairment of goodwill 0 6 15
Exceptional depreciation 24 43 39
EBIT* 4,086 4,040 2,624

2.1.3.4 EBIT* Performance by Division


Set forth below is a breakdown of the Groups consolidated EBIT* by Division for the past three years.

Year ended Year ended Year ended


(in m) 31December 2015 31December 2014 31December 2013
Airbus 2,301 2,671 1,593
Airbus Helicopters 427 413 397
Airbus Defence andSpace 745 409 659
Total Divisional EBIT* 3,473 3,493 2,649
Other/ HQ/ Consolidation(1) 613 547 (25)
Total 4,086 4,040 2,624
(1) Other/ HQ/ Consolidation comprises results from headquarters, which mainly consist of the share of profit from investments in associates from the Groups investment in
Dassault Aviation.

2015 compared to 2014. The Groups consolidated EBIT* Significant Programme Developments, Restructuring and
increased by 1.1%, from 4.0billion for 2014 to 4.1billion Related Financial Consequences in 2013, 2014 and 2015).
for 2015.
Airbus Helicopters EBIT* increased by 3.4%, from 413million
Airbus EBIT* decreased by 13.9%, from 2.7billion for 2014 for 2014 to 427 million for 2015 as lower deliveries were
to 2.3 billion for 2015. A solid operational performance compensated by higher services activities, a favourable mix
including the A380 breakeven was weighed down by a negative and progress on the Divisions transformation plan.
revaluation impact from foreign exchange linked to the dollar
Airbus Defence andSpaces EBIT* increased by 82.2% from
pre-delivery mismatch in the amount of 551million, partially
409million for 2014 to 745million for 2015 driven by strong
compensated by a capital gain linked to the divestment of a
programme execution across the business lines and progress
subsidiary (CIMPASAS) (72million). (Please refer to 2.1.1.3
with its transformation plan. In addition, a net charge of
290million was recorded related to the A400M programme

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for the period ended 31December 2015 (551million for the Foreign currency impact on EBIT*. At least 70% of the
period ended 31 December 2014). (Please refer to 2.1.1.3 Groups revenues are denominated inUSdollars, whereas a
Significant Programme Developments, Restructuring and substantial portion of its costs is incurred ineuros and, to a
Related Financial Consequences in 2013, 2014 and 2015). lesser extent, pounds sterling. Given the long-term nature of
Airbus Defence andSpaces EBIT* also included an adjustment its business cycles (evidenced by its multi-year backlog), the
of the provision for restructuring generating a positive impact of Group hedges a significant portion of its net foreign exchange
41million and a net gain from the Airbus Safran Launchers first
phase deconsolidation and some further small disposal impacts.
exposure to mitigate the impact of exchange rate fluctuations
on its EBIT*. Please refer to the Notes to the IFRS Consolidated
2.
Financial Statements Note35: Information about financial
The EBIT* of Other/ Headquarters/ Consolidation increased by
instruments and Risk Factors 1.Financial Market Risks
12.1% from 547million for 2014 to 613million for 2015. This is
Foreign Currency Exposure. In addition to the impact that
due to the increase in the Dassault Aviation result driven mainly
Hedging Activities have on the Groups EBIT*, the latter is also
by the higher capital gain from ongoing divestment compared
affected by the impact of revaluation of certain assets and
to 2014. 2014 also included the gain from the sale of the Paris
liabilities at the closing rate and the impact of natural hedging.
Headquarters building.
During 2015, cash flow hedges covering approximately
2014 compared to 2013. The Groups consolidated EBIT*
US$25.5billion of the Groups USdollar-denominated revenues
increased by 54.0%, from 2.6billion for 2013 to 4.0billion
matured. In 2015, the compounded exchange rate at which
for 2014, primarily reflecting the increased EBIT* at Airbus in
hedged US dollar-denominated revenues were accounted
2014, which increased by 67.7%, from 1.6billion for 2013 to
for was -US$1.34, as compared to -US$1.35 in 2014. This
2.7billion for 2014, mainly due to higher aircraft deliveries
difference resulted in an approximate +0.05billion increase in
(629 deliveries in 2014, as compared to 626 deliveries in 2013),
EBIT* from 2014 to 2015. In addition, other currency translation
continued operational improvements including A380 progress
adjustments, including those related to the mismatch between
towards breakeven and a favourable evolution of maturing
USdollar-denominated customer advances and corresponding
hedges, partially offset by increased A350XWB support costs.
USdollar-denominated costs as well as the revaluation of loss-
In Q42013 a negative charge of 434million was recorded on
making contract provisions, had an approximate negative effect
the A350XWB programme contributing to the improvement
of -0.78billion on EBIT* compared to 2014. Please refer to
seen in 2014.
2.1.2.4 Foreign Currency Translation.
Airbus Helicopters EBIT* increased by 4.0%, from 397million
During 2014, cash flow hedges covering approximately
for 2013 to 413million for 2014, despite higher research and
US$24.3billion of the Groups USdollar-denominated revenues
development expenses and a less favourable revenue mix.
matured. In 2014, the compounded exchange rate at which
Airbus Defence andSpaces EBIT* decreased by 37.9% from hedged US dollar-denominated revenues were accounted
659 million for 2013 to 409 million for 2014. In the last for was -US$1.35, as compared to -US$1.37 in 2013. This
quarter of 2014, Management reviewed the A400M programme difference resulted in an approximate +0.2billion increase in
evolution mostly driven by military functionality challenges and EBIT* from 2013 to 2014. In addition, other currency translation
industrial ramp-up together with associated mitigation actions. adjustments, including those related to the mismatch between
As a result of this review, Airbus Defence andSpace recorded USdollar-denominated customer advances and corresponding
based on Management best estimate an additional net charge USdollar-denominated costs as well as the revaluation of loss-
of 551million for the period ended 31December 2014. making contract provisions, had an approximate positive effect
of +0.24billion on EBIT* compared to 2013.
The EBIT* of Other/ Headquarters/ Consolidation increased
from -25 million for 2013 to +547 million for 2014. This
includes a capital gain of 343million linked to the divestment of
eight percent of the Companys Dassault Aviation participation.

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2.1.4 Results of Operations

Set forth below is a summary of the Groups Consolidated Income Statements (IFRS) for the past three years.

Year ended Year ended Year ended


(in m, except for earnings per share) 31December 2015 31December 2014 31December 2013
Revenues 64,450 60,713 57,567
Cost of sales (55,599) (51,776) (49,613)
Gross margin 8,851 8,937 7,954
Selling and administrative expenses (2,651) (2,601) (2,762)
Research and development expenses (3,460) (3,391) (3,118)
Other income 474 330 272
Other expenses (222) (179) (259)
Share of profit from investments accounted for under
the equity method and other income from investments 1,070 895 483
Profit before finance costs and income taxes 4,062 3,991 2,570
Interest result (368) (320) (332)
Other financial result (319) (458) (278)
Income taxes (677) (863) (477)
Profit for the period 2,698 2,350 1,483
Attributable to:
Equity owners of the parent (Net Income) 2,696 2,343 1,473
Noncontrolling interests 2 7 10
Earnings per share (basic) (in ) 3.43 2.99 1.86
Earnings per share (diluted) (in ) 3.42 2.99 1.85

Set forth below are year-to-year comparisons of results of operations, based upon the Groups Consolidated Income Statements.

2.1.4.1 Consolidated Revenues


Set forth below is a breakdown of Groups consolidated revenues by Division for the past three years.

Year ended Year ended Year ended


(in m) 31December 2015 31December 2014 31December 2013
Airbus 45,854 42,280 39,494
Airbus Helicopters 6,786 6,524 6,297
Airbus Defence andSpace 13,080 13,025 13,121
Total Divisional revenues 65,720 61,829 58,912
Other/ HQ/ Consolidation (1,270) (1,116) (1,345)
Total 64,450 60,713 57,567

For 2015, consolidated revenues increased by 6.2%, from 60.7billion for 2014 to 64.5billion for 2015. The increase was
primarily due to higher revenues at Airbus. For 2014, consolidated revenues increased by 5.5%, from 57.6billion for 2013 to
60.7billion for 2014.

Airbus
Set forth below is a breakdown of deliveries of commercial aircraft by product type for the past three years.

Year ended Year ended Year ended


Number of aircraft 31December 2015 31December 2014 31December 2013
Single-aisle 491 490 493
Long-range 103 108 108
A350XWB 14 1 0
Very large 27 30 25
Total 635 629 626

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Airbus consolidated revenues increased by 8.5%, from Airbus consolidated revenues increased by 7.1%, from
42.3billion for 2014 to 45.9billion for 2015. This was due 39.5billion for 2013 to 42.3billion for 2014, driven by the
to higher deliveries of 635aircraft (compared to 629 deliveries overall increase in deliveries to a record 629 aircraft (626
in 2014) including 14 A350 XWBs and the strengthening deliveries in 2013) and a more favourable delivery mix including
USdollar. 30 A380s compared to 25 in 2013.

Airbus Helicopters
Set forth below is a breakdown of deliveries of helicopters by product type for the past three years.
2.
Year ended Year ended Year ended
Number of aircraft 31December 2015 31December 2014 31December 2013
Tiger 16 12 11
Light 178 226 269
Medium 124 132 136
Heavy 77 101 81
of which NH90 35 53 44
Total 395 471 497

Consolidated revenues of Airbus Helicopters increased by driven by government programmes including the ramp-up in
4.0%, from 6.5billion for 2014 to 6.8billion in 2015 mainly NH90 activity. Helicopter deliveries totalled 471units (FY 2013:
reflecting a higher level of services activities, despite lower 497units), including the successful entry-into-service (EIS) of
overall deliveries of 395units (2014: 471units). the H175 in the fourth quarter following the EIS of the H145 and
H135 earlier in the year.
Consolidated revenues at Airbus Helicopters increased by
3.6%, from 6.3billion for 2013 to 6.5billion for 2014 mainly

Airbus Defence andSpace


Set forth below is a breakdown of deliveries of Airbus Defence andSpace by product type for the past three years.

Year ended Year ended Year ended


Number of aircraft 31December 2015 31December 2014 31December 2013
A400M 11 8 2
A330 MRTT (Tanker) 4 5 7
Light & Medium aircraft 19 19 22
Telecom satellites 5 5 3
Total 39 37 34

Airbus Defence and Spaces consolidated revenues were 2.1.4.2 Consolidated Cost of Sales
broadly stable at 13.1billion (13.0billion for 2014), despite Consolidated cost of sales increased by 7.4% from 51.8billion
the de-consolidation of launcher revenues with the creation of for 2014 to 55.6billion for 2015. The increase was primarily
the Airbus Safran Launchers Joint Ventures first phase. A total due to business growth at Airbus and negative foreign exchange
of 11 A400M military transport aircraft were delivered in 2015. revaluation impacts from pre-delivery payments. This was partly
Airbus Defence and Spaces consolidated revenues were offset by a lower net charge related to A400M programme of
broadly stable with a slight decrease by -0.7%, from 290million (in 2014: 551million). Consolidated cost of sales
13.1billion for 2013 to 13.0billion for 2014. Revenues were also includes the amortisation of capitalised development costs
driven by military aircraft with eight A400M deliveries in total to pursuant to IAS38, which amounted to -202million in 2015
four nations and by space systems with six Ariane5 launches compared to -137million in 2014. The gross margin decreased
during the year. from 14.7% in 2014 to 13.7% in 2015.

Consolidated cost of sales increased by 4.4%, from 49.6billion


for 2013 to 51.8billion for 2014. The increase was primarily due
to strong delivery patterns, costs related to business growth
at Airbus, increased A350XWB support costs and to a net

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charge of 551million related to the A400M programme as a 2.1.4.6 Consolidated Share of Profit
result of Managements review. In Q42013, a negative charge of fromInvestments Accounted for under
434million was recorded on the A350XWB programme which theEquity Method and Other Income
is partly compensating the increase in 2014. Consolidated cost of fromInvestments
sales also includes the amortisation of capitalised development Consolidated share of profit from investments accounted for
costs pursuant to IAS38, which amounted to -137million in under the equity method and other income from investments
2014 compared to -106million in 2013. Notwithstanding the principally includes results from companies accounted for
above stated items, the gross margin increased from 13.8% in under the equity method and the results attributable to non-
2013 to 14.7% in 2014. consolidated investments.

For 2015, the Group recorded 1,070million in consolidated


2.1.4.3 Consolidated Selling andAdministrative share of profit from investments accounted for under the equity
Expenses method and other income from investments as compared to
Consolidated selling and administrative expenses increased by 895million for 2014. The 175million increase is mainly due
1.9%, from 2.6billion for 2014 to 2.7billion for 2015. to higher results from joint ventures. The consolidated share of
Consolidated selling and administrative expenses decreased profit from investments accounted for under the equity method
by 5.8%, from 2.8billion for 2013 to 2.6billion for 2014. includes a 748million net gain from the sale of 18.75% stake
in Dassault Aviation in the first half of 2015. Please refer to
the Notes to the IFRS Consolidated Financial Statements
2.1.4.4 Consolidated Research Note7: Investments accounted for under the equity method
andDevelopment Expenses and Note 12: Share of profit from investment accounted for
Consolidated research and development expenses increased under the equity method and other income from investment.
by 2.0%, from 3.4billion for 2014 to 3.5billion for 2015.
For 2014, the Group recorded 895million in consolidated
The main contribution to the expenses comes from the
share of profit from investments accounted for under the equity
A350XWB programme. In addition, an amount of 154million
method and other income from investments as compared to
of development costs has been capitalised, mainly related to
483million for 2013. The 412million increase is mainly due
the H160 and Single Aisle NEO programmes. Please refer to
to a gain of 343 million from the partial sale of shares of
2.1.2.2 Capitalised development costs.
Dassault Aviation and to a gain of 47million from the disposal
Consolidated research and development expenses increased by of shares of Patria.
8.8%, from 3.1billion for 2013 to 3.4billion for 2014, primarily
reflecting R&D activities at Airbus. The main contribution to
2.1.4.7 Consolidated Interest Result
the expenses comes from the A350 XWB programme. In
addition, an amount of 58million of development costs for Consolidated interest result reflects the net of interest income
the A350XWB programme has been capitalised. and expense arising from financial assets and liabilities,
including interest expense on refundable advances provided
by European governments to finance R&D activities.
2.1.4.5 Consolidated Other Income
andOtherExpenses For 2015, the Group recorded a consolidated net interest
expense of -368million, as compared to -320million for
Consolidated other income and other expenses include gains
2014. The deterioration in interest result is primarily due to
and losses on disposals of investments, of fixed assets and
higher interest expense recorded on European government
income from rental properties.
refundable advances.
For 2015, other income and other expenses was +252million
For 2014, the Group recorded a consolidated net interest
net as compared to +151million net for 2014. The net increase
expense of -320million, as compared to -332million for
was due to the capital gain of 72million related to the disposal
2013. The small improvement in interest result is due to lower
of Cimpa SAS, the net gain of 51million from the partial sale
interest expense recorded on European government refundable
of Dassault Aviation held for sale shares that occurred in the
advances.
second quarter and the capital gain of 49million following the
completion of the first phase of the creation of ASL. This was
partly offset due to costs associated with disposals in Airbus 2.1.4.8 Consolidated Other Financial Result
Defence andSpace. This line item includes, among others, the impact from the
For 2014, other income and other expenses was +151million revaluation of financial instruments, the effect of foreign
net as compared to +13million net for 2013. The net increase exchange valuation of monetary items and the unwinding
was partly due to the sale of the Paris Headquarters building. of discounted provisions. Please refer to the Notes to the
IFRS Consolidated Financial Statements Note2: Significant
accounting policies and Note14: Total finance costs.

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Consolidated other financial result improved from -458million 2.1.4.11 Consolidated Profit for thePeriod
for 2014 to -319 million for 2015 reflecting a 139 million Attributable to Equity Owners
positive change mainly from a decrease in the negative impact oftheParent (Net Income)
of revaluation of financial instruments. As a result of the factors discussed above, the Group recorded
Consolidated other financial result reduced from -278million consolidated net income of 2,696million for 2015, as compared
to 2,343million for 2014.
2.
for 2013 to -458million for 2014. This negative -180million
change mainly results from an increase in the negative impact
of revaluation of financial instruments, related to the weakening 2.1.4.12 Earnings per Share
of the euroversus the USdollar in the fourth quarter 2014.
Basic earnings were 3.43 per share in 2015, as compared to
2.99 per share in 2014. The number of issued shares as of
2.1.4.9 Consolidated Income Taxes 31December 2015 was 785,344,784. The denominator used
For 2015, income tax expense was -677million as compared to calculate earnings per share was 785,621,099shares (in
to -863million for 2014. The decrease was primarily due to 2014: 782,962,385), reflecting the weighted average number of
the sale of shares of Dassault Aviation which has been taxed shares outstanding during the year. In 2013, the Group reported
at a reduced rate. The effective tax rate was 20% in 2015. basic earnings of 1.86 per share, based on a denominator of
Please refer to the Notes to the IFRS Consolidated Financial 792,466,862shares.
Statements Note15: Income tax. Diluted earnings were 3.42 per share in 2015, as compared
For 2014, income tax expense was -863million as compared to 2.99 per share in 2014. The denominator used to
to -477million for 2013. The increase was primarily due to calculate diluted earnings per share was 788,491,929 (in
the higher income before tax recorded in 2014 (3,213million) 2014: 784,155,749), reflecting the weighted average number
as compared to 2013 (1,960million). The effective tax rate of shares outstanding during the year, adjusted to assume
was 27% in 2014. the conversion of all potential ordinary shares. In 2013, the
Group reported diluted earnings of 1.85 per share, based
on a denominator of 794,127,812 shares. For further details,
2.1.4.10 Consolidated Non-Controlling Interests please refer to the Notes to the IFRS Consolidated Financial
For 2015, consolidated profit for the period attributable to non- Statements Note32: Total equity and Note16: Earnings
controlling interests was 2million, as compared to 7million per share.
for 2014.

2.1.5 Changes in Consolidated Total Equity (IncludingNonControllingInterests)

The following table sets forth a summary of the changes in consolidated total equity for the period 1January 2015 through
31December 2015.

(in m)
Balance as at 31December 2014 7,079
Profit for the period 2,698
Other comprehensive income (2,649)
Thereof foreign currency translation adjustments 277
Cash distribution to shareholders/ dividends paid to non-controlling interests (948)
Capital increase 142
Equity transactions (IAS27) 56
Share buy-back (487)
Share-based payment (IFRS2) 29
Convertible bond 53
Balance as at 31December 2015 5,973

Please refer to the AirbusGroupSE IFRS Consolidated Financial Set forth below is a discussion on the calculation of accumulated
Statements IFRS Consolidated Statements of Changes in other comprehensive income (AOCI) and the related impact
Equity for the years ended 31December 2015 and 2014 and on consolidated total equity.
to the Notes to the IFRS Consolidated Financial Statements
Note32: Total equity.

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2.1.5.1 Cash Flow Hedge Related Impact onAOCI


As of 31December 2015, the notional amount of the Groups Positive pre-tax mark to market values of cash flow hedges are
portfolio of outstanding cash flow hedges amounted to included in other financial assets, while negative pre-tax mark to
US$101.9billion, hedged against the euro and the pound sterling. market values of cash flow hedges are included in other financial
The year-end mark to market valuation of this portfolio required liabilities. Year-to-year changes in the mark to market value of
under IAS39 resulted in a negative pre-tax AOCI valuation effective cash flow hedges are recognised as adjustments to
change of -4.7billion from 31December 2014, based on a AOCI. These adjustments to AOCI are net of corresponding
closing rate of -US$1.09 as compared to a negative pre-tax changes to deferred tax assets (for cash flow hedges with
AOCI valuation change of -6.4billion as of 31December 2014 negative mark to market valuations) and deferred tax liabilities
from 31December 2013, based on a closing rate of -US$1.21. (for cash flow hedges with positive mark to market valuations).
For further information on the measurement of the fair values Set out below is a graphic presentation of cash flow hedge
of financial instruments, please refer to the Notes to the IFRS related movements in AOCI over the past three years (in m).
Consolidated Financial Statements Note35: Information
Note: The mark to market of the backlog is not reflected in the
about financial instruments.
accounts whereas the mark to market of the hedge book is
reflected in AOCI.

CASH FLOW HEDGE RELATED MOVEMENTS IN AOCI IN M (BASED ON YEAR-END EXCHANGE RATES)

1,625
OCI Net Liability -4,797
-9,525

-526
Net Deferred Taxes 1,465
2,612

1,099
Net Equity OCI -3,332
-6,913

31 December 2013: US$ 1.38 31 December 2014: US$ 1.21 31 December 2015: US$ 1.09

As a result of the negative change in the fair market valuation of the cash flow hedge portfolio in 2015, AOCI amounted to a net
liability of -9.5billion for 2015, as compared to a net liability of -4.8billion for 2014. The corresponding 1.1billion tax effect
led to a net deferred tax asset of 2.6billion as of 31December 2015 as compared to a net deferred tax asset of 1.5billion as
of 31December 2014.

For further information, please refer to the Notes to the IFRS Consolidated Financial Statements Note35.5: Derivative financial
instruments and hedge accounting disclosure.

2.1.5.2 Currency Translation Adjustment Impact on AOCI


The 277million currency translation adjustment related impact on AOCI in 2015 mainly reflects the effect of the variation of the
USdollar.

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2.1.6 Liquidity and Capital Resources

The Groups objective is to generate sufficient operating cash cash Financing liabilities. The factors affecting the Groups
flow in order to invest in its growth and future expansion, honour cash position, and consequently its liquidity risk, are discussed

2.
the Groups dividend policy and maintain financial flexibility while below.
retaining its credit rating and competitive access to capital
For information on AirbusGroupSEs credit ratings, please refer
markets.
to the Notes to the IFRS Consolidated Financial Statements
The Group defines its consolidated net cash position as the Note33: Capital management and to 2.1.6.1: Cash Flows.
sum of (i)cash and cash equivalents and (ii)securities, minus
(iii) financing liabilities (all as recorded in the consolidated
2.1.6.1 Cash Flows
statement of financial position). The net cash position as
of 31 December 2015 was 10.0 billion (9.1 billion as of The Group generally finances its manufacturing activities
31December 2014). and product development programmes, and in particular the
development of new commercial aircraft, through a combination
The liquidity is further supported by a 3.0billion syndicated of flows generated by operating activities, customer advances,
back-up facility, undrawn as of 31December 2015 with no risk-sharing partnerships with sub-contractors and European
financial covenants, as well as a Euro medium term note government refundable advances. In addition, the Groups
programme and commercial paper programme. Please refer military activities benefit from government-financed research
to 2.1.6.3 Consolidated Financing Liabilities and Notes to and development contracts. If necessary, the Group may raise
the IFRS Consolidated Financial Statements Note34.3: Net funds in the capital markets.

The following table sets forth the variation of the Groups consolidated net cash position over the periods indicated.

(in m) 2015 2014 2013


Consolidated net cash position at 1January 9,092 8,454 11,724
Gross cash flow from operations(1) 4,614 5,595 4,143
Changes in other operating assets and liabilities (723) (2,386) (2,091)
Thereof customer financing (150) 108 (319)
Cash used for investing activities(2) (1,066) (1,207) (2,879)
Thereof industrial capital expenditures (2,924) (2,548) (2,918)
Free Cash Flow(3) 2,825 2,002 (827)
Thereof M&A transactions 1,650 893 (16)
Free Cash Flow before acquisitions 1,175 1,109 (811)
Cash flow from customer financing (net) (150) 108 (319)
Free Cash Flow before customer financing 2,975 1,894 (508)
Cash distribution to shareholders/ noncontrolling interests (948) (589) (469)
Contribution to plan assets of pension schemes (217) (462) (223)
Changes in capital and noncontrolling interests 195 52 171
Share buyback/ Change in treasury shares (264) 102 (1,915)
Others (680) (467) (7)
Consolidated net cash position as of 31December 10,003 9,092 8,454
(1) Represents cash provided by operating activities, excluding (i)changes in other operating assets and liabilities (working capital), (ii)contribution to plan assets of pension
schemes and (iii)realised foreign exchange results on Treasury swaps (0 in 2013; -187million in 2014, -74million in 2015).
(2) Does not reflect change of securities (net disposal of 1,267million for 2013; net investment of -2,016million for 2014, net investment of -2,361million for 2015), which are
classified as cash and not as investments solely for the purposes of this net cash presentation. Excluding bank activities.
(3) Does not reflect change of securities, contribution to plan assets of pension schemes and realised foreign exchange results on Treasury swaps. Excluding bank activities.

The net cash position as of 31 December 2015 was Gross Cash Flow from Operations
10.0billion, a 10.0% increase from 31December 2014. The Gross cash flow from operations decreased by 17.5% to
increase primarily reflects the gross cash flow from operations 4.6billion for 2015, due to a higher level of cash consumption
(4.6billion), partially offset by the cash used for investing under utilisation of loss-making contract provisions and higher
activities (-1.1billion), the cash distribution to shareholders/ income tax payments.
non-controlling interests (-0.9billion), the build-up of other
operating assets and liabilities (-0.7billion) and the contribution
to plan assets of pension schemes (-0.2billion).

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Changes in Other Operating Assets andLiabilities M&A transactions. In 2015, the 1.7billion figure principally
Changes in other operating assets and liabilities is comprised reflects the sale of Dassault Aviation shares in the first half
of inventories, trade receivables, other assets and prepaid of 2015. Please refer to the Notes to the IFRS Consolidated
expenses netted against trade liabilities, other liabilities Financial Statements Note6: Acquisitions and disposals.
(including customer advances), deferred income and customer In 2014, the 893million figure principally reflects the partial sale
financing. They resulted in a -0.7billion negative impact on the of shares of Dassault Aviation (792million) and the disposal of
net cash position for 2015, as compared to a negative impact shares of Patria (133million). Cash was used for the Groups
of -2.4billion for 2014. acquisitions of Alestis Aerospace S.L. (-22 million) and of
In 2015, the main net contributor to the negative working capital Salzburg Mnchen Bank AG (-21million).
variation was the change in inventory (-4.1billion) reflecting
increased work in progress mainly associated with the A350XWB Free Cash Flow
at Airbus and increased activity on A400M at Airbus Defence The Group defines Free Cash Flow as the sum of (i) cash
andSpace. Additionally, trade receivables (-1.4billion) and provided by operating activities and (ii)cash used for investing
other assets and liabilities (-0.4billion) contributed negatively. activities, minus (iii)change of securities, (iv)contribution to plan
This was partly offset by pre-delivery payment from customers assets of pension schemes and (v)realised foreign exchange
(3.8billion) and an increase in trade liabilities (1.6billion). In results on treasury swaps. As a result of the factors discussed
2014, the main net contributor to the negative working capital above, Free Cash Flow amounted to 2.8billion for 2015 as
variation wasthe change in inventory (-3.3billion) reflecting compared to 2.0billion for 2014 and -0.8billion for 2013. Free
inventory growth at Airbus especially due to investment in Cash Flow before customer financing was 3.0billion for 2015
programmes to support both production and development, as compared to 1.9billion for 2014 and -0.5billion for 2013.
particularly for the A350XWB and Single Aisle programmes,
as well as at Airbus Defence andSpace. Additionally, trade Change in Treasury Shares
receivables contributed negatively (-0.7billion). These negative Change in treasury shares for 2015 amounted to -0.3billion
variations within the year were partially offset by pre-delivery which is related to the share buyback. Airbus Group has
payments from customers (1.7 billion), which increased appointed an investment services provider to undertake a share
compared to 2013. buyback on behalf of the Company for a maximum amount of
1billion. The buyback will take place between 2November
European government refundable advances. As of
2015 and 30June 2016. As of 31December 2015, the Group
31December 2015, total European government refundable
bought back 264million of shares.
advances received, recorded on the statement of financial
position in the line items non-current other financial liabilities Change in treasury shares for 2014 amounted to +0.1billion.
and current other financial liabilities due to their specific nature,
amounted to 7.3billion, including accrued interest. Contribution to Plan Assets of Pension Schemes
European government refundable advances (net of The cash outflows of -0.3billion, -0.5billion and -0.2billion
reimbursements) increased in 2015, due primarily to refundable in 2015, 2014 and 2013, respectively, primarily relate to a
advances received for the A350XWB. Please refer to the Notes contribution to the Contractual Trust Arrangement (CTA) for
to the IFRS Consolidated Financial Statements Note23: Other allocating and generating pension plan assets in accordance
financial assets and other financial liabilities. with IAS19, as well as to plan assets in the UK and to German
benefit funds. Please refer to the Notes to the IFRS Consolidated
Cash Used for Investing Activities Financial Statements Note29.1: Post-employment benefits
Provisions for retirement plans. In 2016, the Group intends
Management categorises cash used for investing activities into
to make additional 400million contributions to plan assets
three components: (i)industrial capital expenditures, (ii)M&A
in order to reduce the provision for retirement plans on its
transactions and (iii)others.
statement of financial position.
Industrial capital expenditures. Industrial capital expenditures
(investments in property, plant and equipment and intangible Others
assets) amounted to -2.9 billion for 2015 as compared In 2015, the negative change of -680million mainly resulted
to -2.5 billion for 2014 and -2.9 billion for 2013. Capital from finance lease liabilities and from a financing liability of
expenditures in 2015 related to programmes at Airbus of -223million recognised for Airbus irrevocable share buyback
-2.0billion (mainly for the ramp-up phase of A350XWB and commitment as at 31 December 2015; recognition of the
Single Aisle) and additional projects in the other Divisions of financial liability led to a corresponding reduction of equity.
-0.9 billion. Capital expenditures include product-related
development costs that are capitalised in accordance with In 2014, the negative change of -467million reflects among
IAS38. Please refer to 2.1.2.2 Capitalised development costs. others the change in consolidated financing liabilities (mainly
due to the first consolidation of AirbusGroup bank).

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2.1.6.2 Consolidated cash and cash in 2015. For further information, please refer to the Notes to
equivalents and securities the IFRS Consolidated Financial Statements Note34.3: Net
The cash and cash equivalents and securities portfolio of the cash Financing liabilities.
Group is invested mainly in non-speculative financial instruments,
mostly highly liquid, such as certificates of deposit, overnight 2.1.6.4 Sales Financing
deposits, commercial paper, other money market instruments
2.
The Group favours cash sales and encourages independent
and bonds. Please refer to the Notes to the IFRS Consolidated financing by customers, in order to avoid retaining credit or asset
Financial Statements Note35.1: Information about financial risk in relation to delivered products. However, in order to support
instruments Financial risk management. product sales, primarily at Airbus and Airbus Helicopters, the
The Group has a partially automated cross-border and Group may agree to participate in the financing of customers, on
domestic cash pooling system (including France, Germany, a case-by-case basis, directly or through guarantees provided
Spain, the Netherlands, the UK and the US). The cash pooling to third parties.
system enhances Managements ability to assess reliably The financial markets remain unpredictable, which may cause
and instantaneously the cash position of each subsidiary the Group to increase its future outlays in connection with
within the Group and enables Management to allocate cash customer financing of commercial aircraft and helicopters,
optimally within the Group depending upon shifting short- mostly through finance leases and secured loans and if deemed
term needs. necessary through operating lease structures. Nevertheless, it
intends to keep the amount as low as possible.
2.1.6.3 Consolidated Financing Liabilities Dedicated and experienced teams structure such financing
The outstanding balance of the Groups consolidated financing transactions and closely monitor total Group finance and asset
liabilities increased from 7.4billion as of 31December 2014 value exposure and its evolution in terms of quality, volume and
to 9.1billion as of 31December 2015. This increase is mainly intensity of cash requirements. The Group aims to structure all
due to a 0.5 billion convertible bond, the US$ 0.3 billion financing it provides to customers in line with market-standard
loan from EIB and liabilities under the US Commercial paper contractual terms so as to facilitate any subsequent sale or
programme in the amount of US$0.55billion, all entered into reduction of such exposure.

EVOLUTION OF AIRBUS GROSS EXPOSURE DURING 2015 IN US$ MILLIONS

31 December 2014 1,339

Additions 849

Disposals -581

Amortisation -120

31 December 2015 1,487

Airbus Gross Customer Financing Exposure as of 31December deliveries over the same period, i.e. 9aircraft financed per year
2015 is distributed over 74aircraft, operated at any time by out of 630deliveries per year on average.
approximately 19 airlines. In addition, the level of exposure
Airbus Helicopters Gross Customer Financing Exposure
may include other aircraft-related assets, such as spare parts.
amounted to 69million as of 31December 2015. This exposure
More than 90% of Airbus Gross Customer Financing Exposure
is distributed over 49 helicopters, operated by approximately
is distributed over 10 countries (this excludes backstop
4 companies.
commitments).
For further information, please refer to the Notes to the IFRS
Over the last three years (2013 to 2015), the average number of
Consolidated Financial Statements Note25: Sales financing
aircraft delivered in respect of which financing support has been
transactions.
provided by Airbus amounted to 1% of the average number of

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2.1.7 Hedging Activities

At least 70% of the Groups revenues are denominated by market changes in the exchange rate of the USdollar against
in US dollars, with approximately 60% of such currency these currencies, and to a lesser extent, by market changes in
exposure naturally hedged by USdollar-denominated costs. the exchange rate of pound sterling against the euro.
The remainder of costs is incurred primarily ineuros, and to a
As the Group intends to generate profits only from its operations
lesser extent, in pounds sterling. Consequently, to the extent
and not through speculation on foreign currency exchange
that the Group does not use financial instruments to hedge its
rate movements, the Group uses hedging strategies solely to
net current and future exchange rate exposure from the time of a
mitigate the impact of exchange rate fluctuations on its EBIT*.
customer order to the time of delivery, its profits will be affected

The table below sets forth the notional amount of foreign exchange hedges in place as of 31December 2015, and the average
USdollar rates applicable to corresponding EBIT*.

2016 2017 2018 2019 2020+ Total


Total Hedges (in US$bn) 23.2 23.8 23.5 20.9 10.5 101.9
Forward Rates (in US$)
-US$ 1.32 1.30 1.25 1.26 1.25
-US$ 1.58 1.59 1.58 1.58 1.55

For further information on the Groups hedging strategies in response to its particular exposures as well as a description of its
current hedge portfolio, please refer to the Notes to the IFRS Consolidated Financial Statements Note35.1: Information about
financial instruments Financial risk management.

2.2 Financial Statements


The IFRS Consolidated Financial Statements and the Company and approved by, the AFM on 16April 2015 and filed in English
Financial Statements of AirbusGroupSE for the year ended with the Chamber of Commerce of The Hague.
31December 2015, together with the related notes, appendices
Copies of the above-mentioned documents are available free
and Auditors reports, shall be deemed to be incorporated in
of charge upon request in English at the registered office of
and form part of this Registration Document.
the Company and on www.airbusgroup.com (Investors &
In addition, the English versions of the following documents Shareholders > Publications> Annual Reports and Registration
shall be deemed to be incorporated in and form part of this Documents).
Registration Document:
Copies of the above-mentioned Registration Documents are also

the IFRS Consolidated Financial Statements and the


available in English on the website of the AFM on www.afm.nl
Company Financial Statements of EADSN.V. for the year
(Professionals > Registers > Approved prospectuses). The
ended 31December 2013, together with the related notes,
above-mentioned financial statements are also available in
appendices and Auditors reports, as incorporated by English for inspection at the Chamber of Commerce of The
reference in the Registration Document filed in English with, Hague.
and approved by, the AFM on 4April 2014 and filed in English
with the Chamber of Commerce of The Hague; and The Company confirms that the reports of the auditors

the IFRS Consolidated Financial Statements and the incorporated by reference herein have been accurately
Company Financial Statements of AirbusGroupN.V. for the reproduced and that as far as the Company is aware and is
year ended 31December 2014, together with the related able to ascertain from the information provided by the auditors,
notes, appendices and Auditors reports, as incorporated by no facts have been omitted which would render such reports
reference in the Registration Document filed in English with, inaccurate or misleading.

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2.4 Information Regarding the Statutory Auditors

2.3 Statutory Auditors Fees


With reference to Section2:382a(1) and (2) of the Netherlands Civil Code, the following fees for the financial years 2015 and 2014
have been charged by KPMG to the Company, its subsidiaries and other consolidated entities:

2015 2014
2.
Amount in K % Amount in K %
Audit
Audit process, certification and examination of individual
andconsolidated accounts 6,008 47.0% 5,812 66.5%
Additional tasks(1) 6,160 48.2% 2,344 26.9%
Sub-total 12,168 95.2% 8,156 93.4%
Other services as relevant
Legal, tax, employment 608 4.8% 573 6.6%
Sub-total 608 4.8% 573 6.6%
Total 12,776 100% 8,729 100%
(1) Mainly transaction related work.

In 2015 and 2014, the AirbusGroup was audited by KPMG only. Other audit firms, including EY, have audit fees related to audit
process, certification and examination of individual and consolidated accounts of 6million in 2015 (2014: 6million).

2.4 Information Regarding the Statutory Auditors

Date of first Expiration of current


appointment term of office(1)
KPMG AccountantsN.V.
Laan van Langerhuize 1 1186 DS Amstelveen The Netherlands On the day of the Annual General
Represented by R.J. Aalberts 10May 2000 Meeting of AirbusGroupSE in 2016
(1) A resolution will be submitted to the Annual General Meeting of Shareholders to be held on 28April 2016, in order to appoint Ernst & Young AccountantsLLP as the
Companys auditor for the 2016 financial year.

KPMG AccountantsN.V. and its representative are registered with the NBA (Nederlandse Beroepsorganisatie van Accountants).

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Chapter

3.
X
FACTORS
RISK

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CompanyanditsShareCapital

3.1 General Description of the Company 80


3.1.1 Commercial and Corporate Names, SeatandRegisteredOffice 80
3.1.2 Legal Form 80
3.1.3 Governing Laws and Disclosures 80
3.1.4 Date of Incorporation and Duration oftheCompany 82 3.
3.1.5 Objects of the Company 82
3.1.6 Commercial and Companies Registry 82
3.1.7 Inspection of Corporate Documents 82
3.1.8 Financial Year 82
3.1.9 Allocation and Distribution of Income 83
3.1.10 General Meetings 83
3.1.11 Disclosure of Holdings 84
3.1.12 Mandatory Disposal 86
3.1.13 Mandatory Offers 87

3.2 General Description of the Share Capital 87


3.2.1 Issued Share Capital 87
3.2.2 Authorised Share Capital 87
3.2.3 Modification of Share Capital orRightsAttachedtotheShares 88
3.2.4 Securities Granting Access totheCompanysShareCapital 89
3.2.5 Changes in the Issued Share Capital 89

3.3 Shareholdings and Voting Rights 90


3.3.1 Shareholding Structure at the end of 2015 90
3.3.2 Relationships with Principal Shareholders 91
3.3.3 Form of Shares 94
3.3.4 Changes in the Shareholding of the Company 95
3.3.5 Persons Exercising Control over the Company 95
3.3.6 Simplified Group Structure Chart 95
3.3.7 Purchase by the Company of its Own Shares 97

3.4 Dividends 99
3.4.1 Dividends and Cash Distributions Paid 99
3.4.2 Dividend Policy of the Company 99
3.4.3 Unclaimed Dividends 99
3.4.4 Taxation 100

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3.1 General Description of the Company


3.1.1 Commercial and Corporate Names, SeatandRegisteredOffice

Commercial Name: AirbusGroup Seat (statutaire zetel): Amsterdam

Statutory Name: AirbusGroupSE Tel: +31(0)71,5245,600

Registered Office: Mendelweg 30, 2333 CS Leiden, Fax: +31(0)71,5232,807


TheNetherlands

3.1.2 Legal Form

The Company is a European public company (Societas Europaea), with its seat in Amsterdam, The Netherlands and registered
with the Dutch Commercial Register (Handelsregister) under number24288945. As a company operating worldwide, the Company
is subject to, and operates under, the laws of each country in which it conducts business.

3.1.3 Governing Laws and Disclosures

The Company is governed by the laws of the Netherlands with the relevant competent market authority. The Company
(inparticular Book2 of the Dutch Civil Code) and by its Articles must then ensure that Regulated Information remains publicly
of Association (the Articles of Association). available for at least ten years.

The Company is subject to various legal provisions of the Dutch Finally, Regulated Information must be made available for central
Financial Supervision Act (Wet op het financieel toezicht) (the storage by a mechanism that is officially designated by the
WFT). In addition, given the fact that its shares are admitted Companys home Member State.
for trading on a regulated market in France, Germany and Spain,
the Company is subject to certain laws and regulations in these Dutch Regulations
three jurisdictions. A summary of the main regulations applicable For the purpose of the Transparency Directive, supervision of the
to the Company in relation to information to be made public Company is effected by the Member State in which it maintains
in these three jurisdictions, as well as the Netherlands, is set its corporate seat, which is the Netherlands. The competent
out below. market authority that assumes final responsibility for supervising
compliance by the Company in this respect is the AFM.
3.1.3.1 Periodic Disclosure Obligations Under the Transparency Directive as implemented under Dutch
Pursuant to Directive2004/ 109/ EC on the harmonisation law, the Company is subject to a number of periodic disclosure
of transparency requirements in relation to information about requirements, such as:
issuers whose securities are admitted to trading on a regulated
publishing an Annual Financial Report, together with an audit
market (as amended, the Transparency Directive), the report drawn up by the Statutory Auditors, within four months
Company is required to disclose certain periodic and on-going after the end of each financial year; and
information (the Regulated Information).
publishing a semi-Annual Financial Report, within three
months after the end of the first six months of the financial year.
Pursuant to the Transparency Directive, the Company must
disseminate such Regulated Information throughout the In addition, the Company must file with the AFM, within five days
European Community in a manner ensuring fast access to such following their adoption by the Companys shareholders, its
information on a non-discriminatory basis. For this purpose, audited annual financial statements (including the consolidated
the Company may use a professional service provider (wire). In ones), themanagement report, the Auditors report and other
addition, Regulated Information must be filed at the same time information related to the financial statements.

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French Regulations would not be likely to mislead the public and provided that the
In accordance with the requirement set forth in the Transparency issuer is able to ensure the confidentiality of that information.
Directive to disseminate Regulated Information throughout the
European Community, the Company is required to provide Dutch Regulations
simultaneously in France the same information as that provided Following the implementation of the Transparency Directive
abroad. into Dutch law, the Company must publicly disclose Regulated
Information and also file Regulated Information with the AFM,
German Regulations which will keep all relevant Regulated Information in a publicly
Due to the listing of the Companys shares in the Prime Standard available register. The Company will, whenever it discloses
sub-segment of the Regulated Market (regulierter Markt) of the inside information pursuant to applicable mandatory law as

3.
Frankfurt Stock Exchange, the Company is subject to certain part of the Regulated Information, disclose and disseminate
post-listing obligations as described below. The Company is throughout the European Community any such information.
included inter alia in the selection index MDAX, the MidCap Under Dutch law, the Company must also publish any change
index of Deutsche BrseAG. in the rights attached to its shares, as well as any changes in
Pursuant to the Exchange Rules (Brsenordnung) of the the rights attached to any rights issued by the Company to
Frankfurt Stock Exchange, the Company is required to publish acquire AirbusGroup shares.
consolidated annual and semi-annual financial statements as
well as quarterly reports which may be prepared in English French Regulations
only. In addition, pursuant to the Exchange Rules, the Company Any inside information as defined above will be disclosed in
is required to publish a financial calendar at the beginning of France by means of dissemination throughout the European
each financial year in German and English. The Company is Community, as it is organised under Dutch law implementing
also required to hold an analysts meeting at least once per the Transparency Directive so as to provide simultaneously in
year in addition to the press conference regarding the annual France equivalent information to that provided abroad.
financial statements.
German Regulations
Spanish Regulations Any inside information as defined above will be disclosed in
In accordance with the requirement set forth in the Transparency Germany by means of dissemination throughout the European
Directive to disseminate Regulated Information throughout the Community, as it is organised under Dutch law implementing
European Community, the Company is required to provide the Transparency Directive so as to provide simultaneously
simultaneously in Spain the same information as that provided in Germany equivalent information to that provided abroad.
abroad.
Spanish Regulations

3.1.3.2 Ongoing Disclosure Obligations Pursuant to the Spanish restated securities market law dated
23October 2015 (the Spanish Securities Market Act), the
Pursuant to the Transparency Directive, Regulated Information
Company is required to make public, as soon as possible, any
includes in particular inside information as defined pursuant
fact or decision that may substantially affect the quotation of
to Article6 of Directive 2003/ 6/ EC on insider dealing and
its shares (Relevant Event). Any Relevant Event must be
market manipulation (the Market Abuse Directive). Such
notified to the CNMV simultaneously with its diffusion by any
information must be disseminated throughout the European
other means, as soon as the relevant fact is known, the relevant
Community (see introduction to section 3.1.3.1 Periodic
decision has been made or, the relevant agreement has been
Disclosure Obligations).
executed, as the case may be. The Company may, under its
Inside information consists of information of a precise nature own responsibility, delay the publication of any Relevant Event
which has not been made public that relates, directly or if it considers that such publication damages its legitimate
indirectly, to one or more issuers of financial instruments or interests, provided that such lack of publication does not mislead
to one or more financial instruments and which, if it were the public and that the Company is in a position to guarantee
made public, would be likely to have a significant effect on the the confidentiality of the relevant information. Nonetheless, the
prices of those financial instruments or on the price of related Company will immediately inform the CNMV should it decide
derivative financial instruments. to delay the publication of any Relevant Event. Furthermore,
pursuant to the Spanish Securities Act, the Company must
Inside information must be disclosed to the markets as soon as
post details of any Relevant Event on its website. The Company
possible. However, an issuer may under its own responsibility
must try to ensure that the relevant information is disclosed
delay the public disclosure of inside information so as not to
simultaneously to all types of investors in the Member States
prejudice its legitimate interests provided that such omission
of the European Union where it is listed.

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Pursuant to the Spanish securities rules and regulations, the Spanish language or in a language customary in the sphere of
Company is also required to make available to shareholders international finance on an annual basis.
and file a Corporate Governance Report with the CNMV in the

3.1.4 Date of Incorporation and Duration oftheCompany

The Company was incorporated on 29December 1998 for an unlimited duration.

3.1.5 Objects of the Company

Pursuant to its Articles of Association, the objects of the partnerships, business associations and undertakings that
Company are to hold, co-ordinate and manage participations are involved in:
or other interests and to finance and assume liabilities,
the aeronautic, defence, space and/or communication
provide for security and/or guarantee debts of legal entities,
industry; or

activities that are complementary, supportive or ancillary
thereto.

3.1.6 Commercial and Companies Registry

The Company is registered with the Dutch Commercial Register (Handelsregister) under number24288945.

3.1.7 Inspection of Corporate Documents

The Articles of Association are available for inspection in Dutch In Germany, the Articles of Association are available at the
at the Chamber of Commerce. Munich office of AirbusGroup (Willy-Messerschmitt-Strasse
1, 82024 Taufkirchen, Germany, Tel.: +49896070).
In France, the Articles of Association are available at the
operational headquarters of AirbusGroup (2, rond-point Emile In Spain, the Articles of Association are available at the CNMV
Dewoitine, 31700 Blagnac, France, Tel.: +335 81 31 75 00). and at the Madrid office of AirbusGroup (Avenida de Aragn
404, 28022 Madrid, Spain, Tel.: +3491,5857000).

3.1.8 Financial Year

The financial year of the Company starts on 1January and ends on 31December of each year.

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3.1.9 Allocation and Distribution of Income

3.1.9.1 Dividends Dividends, interim dividends and other distributions on shares


The Board of Directors shall determine which part of the profits shall be paid by bank transfer to the bank or giro accounts
of the Company shall be attributed to reserves. The remaining designated in writing to the Company by, or on behalf of,
distributable profit shall be at the disposal of the Shareholders shareholders at the latest 14days after their announcement.
Meeting. The persons entitled to a dividend, interim dividend or other
The Shareholders Meeting may resolve (if so proposed by the distribution shall be the shareholders as at a record date to be
determined by the Board of Directors for that purpose, which
Board of Directors) that all or part of a distribution on shares
shall be paid in AirbusGroup shares or in the form of assets date may not be a date prior to the date on which such dividend,
interim dividend or other distribution is declared.
3.
as opposed to cash.

The declaration of a dividend, an interim dividend or another


distribution to the shareholders shall be made known to them
3.1.9.2 Liquidation
within seven days after such declaration. Declared dividends, In the event of the dissolution and liquidation of the Company,
interim dividends or other distributions shall be payable on such the assets remaining after payment of all debts and liquidation
date(s) as determined by the Board of Directors. expenses shall be distributed amongst the holders of the shares
in proportion to their shareholdings.

3.1.10 General Meetings

3.1.10.1 Calling of Meetings statutory threshold (which is currently 3% of the issued share
Shareholders Meetings are held as often as the Board of capital) have requested in writing to be put on the agenda for
Directors deems necessary, when required under the Dutch a General Meeting of Shareholders shall be included in the
Civil Code (as a result of a decrease of the Companys equity convening notice or shall be announced in the same fashion,
to or below half of the Companys paid up and called up capital) if the substantiated request or a proposal for a resolution is
or upon the request of shareholders holding, individually or received by the Company no later than the 60thday before the
together, at least 10% of the total issued share capital of the general meeting. When exercising the right to put a matter on the
Company. The Annual General Meeting of Shareholders of the agenda for a General Meeting of Shareholders, the respective
Company is held within six months of the end of the financial shareholder or shareholders are obliged to disclose their full
year. economic interest to the Company. The Company must publish
such disclosure on its website.
The Board of Directors must give notice of Shareholders
Meetings through publication of a notice on the Companys A request as referred to in the preceding paragraph may only
website (www.airbusgroup.com), which will be directly and be made in writing. The Board of Directors can decide that in
permanently accessible until the Shareholders Meeting. The writing is understood to include a request that is recorded
Company must comply with the statutory rules providing for electronically.
a minimum convening period, which currently require at least
42days of notice. The convening notice must state the items 3.1.10.2 Right to Attend Shareholders Meetings
required under Dutch law. Each holder of one or more shares may attend Shareholders
Shareholders Meetings are held in Amsterdam, The Hague, Meetings, either in person or by written proxy, speak and
Rotterdam or Haarlemmermeer (Schiphol Airport). The Board vote according to the Articles of Association. See 3.1.10.4
of Directors may decide that Shareholders Meetings may Conditions of Exercise of Right to Vote. However, under (and
be attended by means of electronic or video communication subject to the terms of) the Articles of Association these rights
devices from the locations mentioned in the convening notice. may be suspended under circumstances.

The Board of Directors must announce the date of the Annual The persons who have the right to attend and vote at
General Meeting of Shareholders at least ten weeks before the Shareholders Meetings are those who are so on record in a
Meeting. A matter which one or more shareholders or other register designated for that purpose by the Board of Directors
parties with meeting rights collectively representing at least the on the registration date referred to in the Dutch Civil Code which

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is currently the 28thday prior to the day of the Shareholders resolutions of an extraordinary nature. Dutch law requires a
Meeting (the Registration Date), irrespective of who may be special majority for the passing of certain resolutions: inter alia,
entitled to the shares at the time of that meeting. capital reduction, exclusion of pre-emption rights in connection
with share issues, statutory mergers or statutory de-mergers;
As a prerequisite to attending the Shareholders Meeting and to
the passing of such resolutions requires a majority of two-thirds
casting votes, the Company, or alternatively an entity or person
of the votes cast if 50% of the share capital with voting rights
so designated by the Company, should be notified in writing
is not present at the Shareholders Meeting (or otherwise a
by each holder of one or more shares and those who derive
simple majority). In addition, resolutions to amend the Articles
the aforementioned rights from these shares, not earlier than
of Association or to dissolve the Company may only be adopted
the Registration Date, of the intention to attend the meeting in
with a majority of at least two-thirds of the valid votes cast at a
accordance with the relevant convening notice.
Shareholders Meeting, whatever the quorum present at such
Shareholders holding their Airbus Group shares through meeting, and resolutions to amend certain provisions of the
Euroclear FranceSA who wish to attend general meetings will Articles of Association may only be adopted with a majority of
have to request from their financial intermediary or accountholder at least 75% of the valid votes cast at a Shareholders Meeting,
an admission card and be given a proxy to this effect from whatever the quorum present at such meeting.
Euroclear FranceSA in accordance with the relevant convening
notice. For this purpose, a shareholder will also be able to
3.1.10.4 Conditions of Exercise of Right toVote
request that its shares be registered directly (and not through
Euroclear FranceSA) in the register of the Company. However, In all Shareholders Meetings, each shareholder has one vote
only shares registered in the name of Euroclear FranceSA may in respect of each share it holds. The major shareholders of the
be traded on stock exchanges. Company as set forth in 3.3.2 Relationships with Principal
Shareholders do not enjoy different voting rights from those
In order to exercise their voting rights, the shareholders will of the other shareholders.
also be able, by contacting their financial intermediary or
accountholder, to give their voting instructions to Euroclear A shareholder whose shares are subject to a pledge or usufruct
FranceSA or to any other person designated for this purpose, shall have the voting rights attaching to such shares unless
as specified in the relevant convening notice. otherwise provided by law or by the Articles of Association or
if, in the case of a usufruct, the shareholder has granted voting
Pursuant to its Articles of Association, the Company may provide rights to the usufructuary. Pursuant to the Articles of Association
for electronic means of attendance, speaking and voting at the and subject to the prior consent of the Board of Directors, a
Shareholders Meetings. The use of such electronic means will pledgee of shares in the Company may be granted the right to
depend on the availability of the necessary technical means vote in respect of such pledged shares.
and market practice.
According to the Articles of Association, no vote may be cast
at the General Meeting on a share that is held by the Company
3.1.10.3 Majority and Quorum or a subsidiary, nor for a share in respect of which one of them
All resolutions are adopted by means of a simple majority of holds the depository receipts. Usufructuaries and pledgees of
the votes cast except when a qualified majority is prescribed shares that are held by the Company or its subsidiaries are,
by the Articles of Association or by Dutch law. No quorum however, not excluded from their voting rights, in case the right
is required for any Shareholders Meeting to be held except of usufruct or pledge was vested before the share was held by
as required under applicable law for a very limited number of the Company or its subsidiary.

3.1.11 Disclosure of Holdings

Pursuant to the WFT, any person who, directly or indirectly, or several of the above-mentioned thresholds due to a change in
acquires or disposes of an interest in the capital or voting rights AirbusGroups outstanding capital, or in voting rights attached
of the Company must immediately give written notice to the AFM to the shares as notified to the AFM by the Company, should
by means of a standard form, if, as a result of such acquisition notify the AFM no later than the fourth trading day after the AFM
or disposal, the percentage of capital interest or voting rights has published the notification by the Company. Among other
held by such person meets, exceeds or falls below the following things, the Company is required to notify the AFM immediately
thresholds: 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, if its outstanding share capital or voting rights have changed by
60%, 75% and 95%. Any person whose interest in the capital or 1% or more since the Companys previous notification.
voting rights of the Company meets, exceeds or falls below one

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If at the end of a calendar year the composition of a shareholders Disclosure of Transactions Carried Out
holding differs from its previous disclosure as a result of the onAnySecurities Issued by the Company
conversion of certain types of securities or following the exercise Based on the WFT, certain persons discharging managerial or
of rights to acquire voting rights, this shareholder must then supervisory responsibilities within the Company and, where
provide an update of its previous disclosure within four weeks applicable, persons closely associated with them (together
of the end of each calendar year by giving written notice thereof Insiders, as defined below), are required to notify the AFM
to the AFM. The disclosures are published by the AFM on its within five trading days of all transactions conducted for their
website (www.afm.nl). own account involving shares of the Company, or derivatives
Pursuant to the Articles of Association, shareholders must notify or other financial instruments related to such shares, unless the
the Company when meeting or crossing the thresholds above. aggregate amount of such transactions does not exceed 5,000

3.
The Articles of Association also contain disclosure obligations in respect of all transactions in a calendar year.
for shareholders that apply when their interests in the Company Insiders for the Company include (i)Members of the Board of
reach or cross certain thresholds. Directors and the Group Executive Committee of the Company,
Under the Articles of Association, the disclosure obligations (ii)persons closely associated with any person mentioned under
of shareholders are enhanced in several ways beyond what is category (i)(including their spouses, life partners or any partner
required under the WFT, including by requiring the disclosure considered by national law as equivalent to the spouse, blood
of additional information, tying the disclosure obligations to relatives, dependent children and other relatives who have
a broader range of interests in the capital or voting rights of shared the same household), and (iii)legal entities, trusts or
the Company and by requiring a shareholder to notify the partnerships whose managerial responsibilities are discharged
Company if his or her interest reaches, exceeds or falls below by any person referred to in categories (i)or (ii)or which are
the Mandatory Disposal Threshold (as defined below) or if the directly or indirectly controlled by such a person, or that have
interest of a shareholder (alone or a member of a concert) which been set up for the benefit of such a person, or whose economic
is above such Mandatory Disposal Threshold changes in its interests are substantially equivalent to those of such a person.
composition, nature and/or size. According to the German Securities Trading Act, persons with
Failure to comply with the legal obligation to notify a change in significant managerial responsibility within the Company (i.e. for
shareholding under the WFT is a criminal offence punishable the Company, the Members of the Board of Directors and of the
by criminal and administrative penalties as well as civil law Group Executive Committee), or the persons closely associated
penalties, including the suspension of voting rights. Failure to with them, must disclose transactions conducted for their own
comply with a notification under the Articles of Association can account involving shares of the Company or financial instruments
lead to a suspension of meeting and voting rights. that relate to those shares, especially derivatives. These persons
have to notify the Company and the German Federal Financial
Disclosure Requirements for Members Supervisory Authority of the transactions within five trading
oftheBoard of Directors and the Executive days unless the aggregate amount of such transactions does
Committee not exceed 5,000 in respect of all transactions in a calendar
year. Since implementation of the Transparency Directive into
Disclosure of Holdings German law on 20January 2007, the Company is no longer
In addition to the requirements under the WFT regarding the required to publish such notifications on its website or in a
disclosure of holdings in case the specified thresholds are met German supra-regional mandatory stock exchange newspaper.
or exceeded or if holdings fall below these thresholds, Members The Company has adopted specific internal insider trading rules
of the Board of Directors must report to the AFM the number (the Insider Trading Rules) in order to ensure compliance with
of shares in the Company and attached voting rights(1) held by the above requirements and with other share trading regulations
him or an entity controlled by him, within two weeks following applicable in the Netherlands, France, Germany and Spain. The
his appointment as Director, whether or not such shareholdings Insider Trading Rules are available on the Companys website,
meet or exceed any of the specified thresholds. Subsequently, and provide in particular that: (i)all employees and Directors
any Member of the Board of Directors is required to notify the are prohibited from conducting transactions in the Companys
AFM of any changes in such number of shares in the Company shares or stock options if they have inside information, and
and attached voting rights. (ii)certain persons are only allowed to trade in the Companys
shares or stock options within very limited periods and have
specific information obligations to the ITR Compliance Officer

(1) In this context, the term shares also includes for example depositary receipts for shares and rights resulting from an agreement to acquire shares or depositary
receipts for shares, specifically call options, warrants, and convertible bonds. Equally, the term voting rights also includes actual or contingent rights to voting
rights (e.g., embedded in call options, warrants or convertible bonds).

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of the Company and the competent financial market authorities Pursuant to the WFT, the Company must maintain a list of
with respect to certain transactions. The ITR Compliance Officer all persons working for it by virtue of a labour relationship
is responsible for the implementation of the Insider Trading Rules or otherwise, who may have access to inside information.
and for reporting to the AFM. Equivalent requirements exist under French, German and
Spanish law.

3.1.12 Mandatory Disposal

3.1.12.1 Mandatory Disposal Threshold a mechanical manner vote to reflect the outcome of the votes
Restricting Ownership to 15% cast (or not cast) by the other shareholders, and the foundation
The Articles of Association prohibit any shareholder from holding will distribute any dividends or other distributions it receives
an interest of more than 15% of the share capital or voting rights from the Company to the holders of depositary receipts; and
of the Company, acting alone or in concert with others (the

no transfer of a depositary receipt can be made without the
Mandatory Disposal Threshold). An interest (Interest) prior written approval of the foundations board.
includes not only shares and voting rights, but also other For any shareholder or concert, the term Excess Shares,
instruments that cause shares or voting rights to be deemed as used above, refers to such number of shares comprised
to be at someones disposal pursuant to theWFT, and must be in the interest of such shareholder or concert exceeding the
notified to the Dutch regulator, the AFM, if certain thresholds Mandatory Disposal Threshold which is the lesser of: (a)the
are reached or crossed. Any shareholder having an interest of shares held by such shareholder or concert which represent a
more than the Mandatory Disposal Threshold must reduce its percentage of the Companys issued share capital that is equal
interest below the Mandatory Disposal Threshold, for instance to the percentage with which the foregoing interest exceeds
by disposing of its Excess Shares, within two weeks. The same the Mandatory Disposal Threshold; and (b)all shares held by
applies to concerts of shareholders and other persons who such person or concert.
together hold an interest exceeding the Mandatory Disposal
This restriction is included in the Articles of Association to reflect
Threshold. Should such shareholder or concert not comply with
the Companys further normalised governance going forward
not exceeding the 15% Mandatory Disposal Threshold by the
aiming at a substantial increase of the free float and to safeguard
end of such two-week period, their Excess Shares would be
the interests of the Company and its stakeholders (including all
transferred to a Dutch law foundation (Stichting), which can,
its shareholders), by limiting the possibilities of influence above
and eventually must, dispose of them.
the level of the Mandatory Disposal Threshold or takeovers other
The Dutch law foundation would issue depositary receipts to the than a public takeover offer resulting in a minimum acceptance
relevant shareholder in return for the Excess Shares transferred of 80% of the share capital referred to below.
to the foundation, which would entitle the relevant shareholder to
the economic rights, but not the voting rights, attached to such
3.1.12.2 Exemptions from Mandatory Disposal
AirbusGroup shares. The foundations Articles of Association
Threshold
and the terms of administration governing the relationship
between the foundation and the depositary receipt holders The restrictions pursuant to the Mandatory Disposal Threshold
provide, inter alia, that: under the Articles of Association do not apply to a person who

the Board Members of the foundation must be independent has made a public offer with at least an 80% acceptance
from the Company, any grandfathered persons and their (including any Airbus Group shares already held by such
affiliates (see 3.1.12.2 Exemptions from Mandatory Disposal person). These restrictions also have certain grandfathering
Threshold) and any holder of depositary receipts and their exemptions for the benefit of shareholders and concerts holding
affiliates (there is an agreement under which the Company interests exceeding the Mandatory Disposal Threshold on the
will, inter alia, cover the foundations expenses and indemnify date that the current Articles of Association entered into force
the Board Members against liability); (the Exemption Date).

the Board Members are appointed (except for the initial Board Different grandfathering regimes apply to such shareholders and
Members who were appointed at incorporation) and dismissed concerts depending on the interests and the nature thereof held
by the Management Board of the foundation (the Company by each such shareholder or concert on the Exemption Date.
may however appoint one Board Member in a situation where
The Company has confirmed that (i)the specific exemption in
there are no foundation Board Members);
Article16.1.b of the Articles of Association applies to Sogepa,

the foundation has no discretion as to the exercise of voting


as it held more than 15% of the outstanding Company voting
rights attached to any AirbusGroup shares held by it and will in

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rights and shares including the legal and economic ownership and SEPI, as they held more than 15% of the outstanding
thereof on the Exemption Date and (ii)the specific exemption Company voting rights and shares including the legal and
in Article16.1.c applies to the concert among Sogepa, GZBV economic ownership thereof on the Exemption Date.

3.1.13 Mandatory Offers

3.1.13.1 Takeover Directive bid, the conditions under which the Board of Directors of the
The Directive 2004/ 25/ EC on takeover bids (the Takeover Company may undertake any action which might result in the
Directive) sets forth the principles governing the allocation of
laws applicable to the Company in the context of a takeover bid
frustration of the bid, the applicable rules and the competent
authority will be governed by Dutch law (see 3.1.13.2 Dutch 3.
for the shares of the Company. The Takeover Directive refers to Law).
the rules of the Netherlands and the rules of the European Union
Member State of the competent authority that must be chosen 3.1.13.2 Dutch Law
by the Company from among the various market authorities In accordance with the Dutch act implementing the Takeover
supervising the markets where its shares are listed. Directive (the Takeover Act), shareholders are required to
For the Company, matters relating to, inter alia, the consideration make an unconditional public offer for all issued and outstanding
offered in the case of a bid, in particular the price, and matters shares in the Companys share capital if they individually or
relating to the bid procedure, in particular the information on acting in concert (as such term is defined in the Takeover Act),
the offerors decision to make a bid, the contents of the offer directly or indirectly have 30% or more of the voting rights
document and the disclosure of the bid, shall be determined (significant control) in the Company. In addition to the other
by the laws of the European Union Member State having the available exemptions that are provided under Dutch law, the
competent authority, which will be selected by the Company requirement to make a public offer does not apply to persons,
at a future date. who at the time the Takeover Act came into force, already held
individually or acting in concert 30% or more of the voting
Matters relating to the information to be provided to the
rights in the Company. In the case of such a concert, a new
employees of the Company and matters relating to company
Member of the concert can be exempted if it satisfies certain
law, in particular the percentage of voting rights which confers
conditions.
control and any derogation from the obligation to launch a

3.2 General Description of the Share Capital


3.2.1 Issued Share Capital

As of 31December 2015, the Companys issued share capital amounted to 785,344,784, consisting of 785,344,784 fully paid-up
shares of a nominal value of 1 each.

3.2.2 Authorised Share Capital

As of 31December 2015, the Companys authorised share capital amounted to 3billion, consisting of 3,000,000,000shares
of1each.

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3.2.3 Modification of Share Capital orRightsAttachedtotheShares

The Shareholders Meeting has the power to authorise the subscription right (by virtue of Dutch law, or because it has
issuance of shares. The Shareholders Meeting may also been excluded by means of a resolution of the competent
authorise the Board of Directors for a period of no more than corporate body) and (ii)for an aggregate issue price in excess
five years, to issue shares and to determine the terms and of 500million per share issuance.
conditions of share issuances.
At the AGM held on 27May 2015, the Board of Directors was
Holders of shares have a pre-emptive right to subscribe for any authorised, for a period of 18months from the date of such AGM,
newly issued shares in proportion to the aggregate nominal to repurchase shares of the Company, by any means, including
value of shares held by them, except for shares issued for derivative products, on any stock exchange or otherwise, as
consideration other than cash and shares issued to employees long as, upon such repurchase, the Company would not hold
of the Company or of a Group company. For the contractual more than 10% of the Companys issued share capital, and at
position as to pre-emption rights, see 3.3.2 Relationships a price per share not less than the nominal value and not more
with Principal Shareholders. than the higher of the price of the last independent trade and
the highest current independent bid on the trading venues of the
The Shareholders Meeting also has the power to limit or to
regulated market of the country in which the purchase is carried
exclude pre-emption rights in connection with new issues of
out. In addition, and without prejudice to this authorisation, the
shares, and may authorise the Board of Directors for a period
Board of Directors was also authorised to repurchase up to 10%
of no more than five years, to limit or to exclude pre-emption
of the Companys issued share capital for a period of 18months
rights. All resolutions in this context must be approved by a
as of the date of the AGM held on 27May 2015, at a price not
two-thirds majority of the votes cast during the Shareholders
less than the nominal value and at most 85euros per share.
Meeting in the case where less than half of the capital issued is
present or represented at said meeting. However, the Articles The Shareholders Meeting may reduce the issued share capital
of Association provide that a 75% voting majority is required by cancellation of shares, or by reducing the nominal value
for any shareholders resolution to issue shares or to grant of the shares by means of an amendment to the Articles of
rights to subscribe for shares if the aggregate issue price is in Association. The cancellation of shares requires the approval of
excess of 500,000,000 per share issuance, and no preferential a two-thirds majority of the votes cast during the Shareholders
subscription rights exist in respect thereof. The same voting Meeting in the case where less than half of the capital issued is
majority requirement applies if the Shareholders Meeting present or represented at said meeting; the reduction of nominal
wishes to designate the Board of Directors to have the authority value by means of an amendment to the Articles of Association
to resolve on such share issuance or granting of rights. requires the approval of a two-thirds majority of the votes cast
during the Shareholders Meeting (unless the amendment to
Pursuant to the shareholders resolutions adopted at the
the Articles of Association also concerns an amendment which
AGM held on 27May 2015, the powers to issue shares and
under the Articles of Association requires a 75% voting majority).
to grant rights to subscribe for shares which are part of the
Companys authorised share capital and to limit or exclude At the AGM held on 27May 2015, the Board of Directors and
preferential subscription rights for existing shareholders have the Chief Executive Officer were authorised, with powers of
been delegated to the Board of Directors for the purpose of: substitution, to implement a cancellation of shares held or
repurchased by the Company, including the authorisation
1. employee share ownership plans, provided that such
to establish the exact number of the relevant shares thus
powers shall be limited to 0.1% of the Companys authorised
repurchased to be cancelled.
share capital; and
The Company launched on 30October 2015 1billion share
2. funding the Company and its Group companies, provided buyback for completion by 30June 2016 (please refer to the
that such powers shall be limited to 0.3% of the Companys Notes to the IFRS consolidated financial statements Note32:
authorised share capital. Total equity for further information).

Such powers have been granted for a period expiring at the


AGM to be held in 2016, and shall not extent to issuing shares or
granting rights to subscribe for shares (i)if there is no preferential

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3.2.4 Securities Granting Access totheCompanysShareCapital

Except for stock options granted for the subscription of the Companys shares (See Corporate Governance 4.3.3 Long-Term
Incentive Plans and Notes to the IFRS Consolidated Financial Statements Note30: Share-based payment) and convertible
bonds (See Notes to the IFRS Consolidated Financial Statements Note34.3 Financial liabilities), there are no securities that
give access, immediately or over time, to the share capital of the Company.

The table below shows the total potential dilution that would occur if all the stock options issued as of 31December 2015 were
exercised:

Number of
shares
Percentage of
diluted capital
Number of
votingrights
Percentage of
diluted voting 3.
rights(1)
Total number of Company shares issued as of 31December 2015 785,344,784 99.331% 785,344,784 99.331%
Total number of Company shares which may be issued
followingexercise of stock options 264,500 0.034% 264,500 0.034%
Total number of bonds convertible into Company shares
which may be issued 5,022,990 0.635% 5,022,990 0.635%
Total potential Company share capital 790,632,274 100% 790,632,274 100%
(1) The potential dilutive effect on capital and voting rights of the exercise of these stock options may be limited as a result of the Companys share purchase programmes
andinthecase of subsequent cancellation of repurchased shares. See 3.3.7.1 Dutch law and information on share repurchase programmes.

3.2.5 Changes in the Issued Share Capital

Total
Nominal Number number
value of shares of issued Total issued
per issued/ shares after capital after
Date Nature of Transaction share cancelled Premium(1) transaction transaction
Cancellation of shares upon authorisation granted
bytheExtraordinary General Meeting held on
20June 2013 27March 2013 1 47,648,691 - 779,719,254 779,719,254
29July 2013 Issue of shares for the purpose of an employee offering 1 2,113,245 57,580,650 781,832,499 781,832,499
Cancellation of shares upon authorisation granted
bytheExtraordinary General Meeting held on
27September 2013 27March 2013 1 3,099,657 - 778,732,842 778,732,842
Cancellation of shares upon authorisation granted
bytheAnnual Shareholders Meeting held on
27September 2013 29May2013 1 2,448,884 - 776,283,958 776,283,958
Issue of shares following exercise of options granted
In 2013 toemployees(2) 1 6,873,677 176,017,918 783,157,635 783,157,635
Issue of shares following exercise of options granted
In 2014 toemployees(2) 1 1,871,419 50,619,684 784,780,585 784,780,585
Cancellation of shares upon authorisation granted
bytheAnnual Shareholders Meeting held on
In 2015 27May2015 1 2,885,243 - 785,333,784 785,333,784
Issue of shares following exercise of options granted
In 2015 toemployees(2) 1 1,910,428 - 785,344,784 785,344,784
(1) The costs (net of taxes) related to the initial public offering of the shares of the Company in July2000 have been offset against share premium for an amount of 55,849,772.
(2) For information on stock option plans under which these options were granted to the Companys employees, see Corporate Governance 4.3.3 Long-Term Incentive Plans.

In 2015, the Groups employees exercised 1,910,428stock options granted to them through the Stock Option Plans launched by
the Company. As a result, 1,910,428 new shares were issued in the course of 2015.

During 2015, (i)the Company repurchased in aggregate 4,078,346shares and (ii)2,885,243 treasury shares were cancelled.

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3.3 Shareholdings and Voting Rights


3.3.1 Shareholding Structure at the end of 2015

As of 31December 2015, the French State held 10.93% of the (SEPI). The public (including the Groups employees) and
outstanding Company shares through Socit de Gestion de the Company held, respectively, 73.85% and 0.19% of the
Participations Aronautiques (Sogepa), the German State Companys share capital.
held 10.91% through Gesellschaft zur Beteiligungsverwaltung
The diagram below shows the ownership structure of the
GZBV mbH & Co. KG (GZBV), asubsidiary of Kreditanstalt fr
Company as of 31December 2015 (% of capital and of voting
Wiederaufbau (KfW), a public law institution serving domestic
rights (in parentheses) before exercise of outstanding stock
and international policy objectives of the Government of the
options granted for the subscription of AirbusGroup shares).
Federal Republic of Germany, and the Spanish State held
See Corporate Governance 4.3.3 Long-Term Incentive
4.12% through Sociedad Estatal de Participaciones Industriales
Plans.

OWNERSHIP STRUCTURE OF AIRBUSGROUPSE AS OF 31DECEMBER 2015

FRENCH SPANISH GERMAN


STATE STATE STATE
PUBLIC

OTHER GERMAN KfW


PUBLIC ENTITIES

15.69% 84.31%

SOGEPA SEPI GZBV

10.93% 4.12% 10.91% 74.04%(1)


(10.95%) (4.12%) (10.93%) (73.99%)

Share subject to Shareholders Agreement

AIRBUS GROUP SE

(1) Including shares held by the Company itself (0.19%)

(1)Including shares held by the Company itself (0.19%).

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In addition, the below listed entities have notified the AFM of or indirectly more than 50% of the share capital, 1,474,057 of its
their substantial interest in the Company as of 31December own shares, equal to 0.19% of issued share capital. The treasury
2015. For further details, please refer to the website of the AFM shares owned by the Company do not carry voting rights.
at: www.afm.nl:
For the number of shares and voting rights held by Members

BlackRock, Inc. (4.20% of the capital interest and 4.99% of


of the Board of Directors and Group Executive Committee,
the voting rights); and
see Corporate Governance 4.2.1 Remuneration Policy.

Capital Group International Inc. together with Capital Research


and Management Company (5.02% of the voting rights). Approximately 2.01% of the share capital (and voting rights) was
held by the Companys employees as of 31December 2015.
As of 31December 2015, the Company held, directly or indirectly
through another company in which the Company holds directly

3.
3.3.2 Relationships with Principal Shareholders

On 5December 2012, the Company, its then-core shareholders below, and certain further undertakings of the Company with
Daimler AG (Daimler), Daimler Aerospace AG (DASA), respect to selected matters that affect the interests of the
Socit de Gestion de lAronautique, de la Dfense et de Current Consortium Members.
lEspace (Sogeade), Lagardre SCA (Lagardre), Socit
de Gestion de Participations Aronautiques (Sogepa) and
3.3.2.1 Corporate Governance Arrangements
Sociedad Estatal de Participaciones Industriales (SEPI)
and Kreditanstalt fr Wiederaufbau (KfW), a public law Af ter the Consummation, the corporate governance
institution serving domestic and international policy objectives arrangements of the Company were substantially changed.
of the Government of the Federal Republic of Germany, These changes are intended to further normalise and simplify
reached an agreement (the Multiparty Agreement) on far- the Companys corporate governance, reflecting an emphasis
reaching changes to the Companys shareholding structure and on best corporate governance practices and the absence of a
governance. The Multiparty Agreement was aimed at further controlling shareholder group. Certain changes to the Companys
normalising and simplifying the governance of the Company corporate governance arrangements were provided for in the
while securing a shareholding structure that allowed France, Articles of Association, including (i)disclosure obligations for
Germany and Spain to protect their legitimate strategic interests. shareholders that apply when their interests in the Company
This represented a major step forward in the evolution of the reach or cross certain thresholds and (ii)ownership restrictions
governance of the Company. prohibiting any shareholder from holding an interest of more than
15% of the share capital or voting rights of the Company, acting
The Multiparty Agreement provided for significant changes alone or in concert with others. See sections3.1.11 and 3.1.12
to the Companys shareholding structure. In addition, a above. In addition, there were changes in the composition of the
series of related transactions (collectively referred to as the Board of Directors and its internal rules. See section4 below.
Consummation) occurred shortly after the Extraordinary
General Meeting of the shareholders held on 27March 2013.
This resulted in several changes in the governance of the
3.3.2.2 Core Shareholder Arrangements
Company, including changes in the composition of the Board Grandfathering Agreement
of Directors and its internal rules, as well as amendments to
At the Consummation, the French State, Sogepa, the German
the Articles of Association of the Company. The participation
State, KfW and GZBV (all parties together the Parties and
agreement among the Companys former core shareholders,
each, individually, as a Party) entered into an agreement with
as at 31December 2012 including KfW, was terminated and
respect to certain grandfathering rights under the Articles of
replaced in part by a more limited shareholders agreement
Association. Below is a summary of such agreement.
(the Shareholders Agreement) among only Gesellschaft
zur Beteiligungsverwaltung GZBVmbH&Co.KG (GZBV), a Individual Grandfathering Rights
subsidiary of KfW, Sogepa andSEPI.
A Party that is individually grandfathered pursuant to
The Shareholders Agreement does not give the parties to it Article16.1.b of the Articles of Association (such Party holding
any rights to designate Members of the Board of Directors or Individual Grandfathering Rights) shall remain individually
management team or to participate in the governance of the grandfathered in accordance with the Articles of Association if
Company. Finally, the Multiparty Agreement provided for the the new concert with respect to the Company (the Concert)
entry into state security agreements with each of the French is subsequently terminated (for instance by terminating the
State and German State, which will be described in more detail Shareholders Agreement) or if it exits the Concert.

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Loss of Individual Grandfathering Rights Governing law. Laws of the Netherlands.


A Party holding Individual Grandfathering Rights as well as any of Jurisdiction. Binding advice for any dispute, controversy or
its affiliates who are grandfathered pursuant to Article16.1.b in claim arising out of or in connection with the post-concert
conjunction with Article16.3 of the Articles of Association (such Grandfathering Agreement in accordance with the procedure
affiliates holding Derived Grandfathering Rights, and the set forth in the post-concert Grandfathering Agreement;
Individual Grandfathering Rights and the Derived Grandfathering provided, however, that to the extent application to the courts
Rights, together, the Grandfathering Rights) shall all no is permitted to resolve any such dispute controversy or claim,
longer be entitled to exercise their Grandfathering Rights in the courts of the Netherlands shall have exclusive jurisdiction.
the event:

the Concert is terminated as a result of it or any of its affiliates Shareholders Agreement


having actually or constructively terminated such Concert; or Below is a further description of the Shareholders Agreement,

it or its relevant affiliate(s) exit(s) the Concert; based solely on a written summary of the main provisions of
and such termination or exit is not for good cause and is not the Shareholders Agreement that has been provided to the
based on material and on-going violations of the Concert Company by Sogepa, GZBV andSEPI (all parties together the
arrangements, including, without limitation, of the Shareholders Shareholders).
Agreement, by the other principal Member of the Concert.
Governance of the Company
In the event that in the future the voting rights in the Company Appointment of the Directors. The shareholders shall vote
of the other principal Member of the Concert together with in favour of any draft resolution relating to the appointment
those of its affiliates would for an uninterrupted period of three of Directors submitted to the Shareholders Meeting of the
months represent less than 3% of the outstanding aggregate Company in accordance with the terms and conditions of
voting rights of the Company, the Grandfathering Rights of the the German State Security Agreement and the French State
Party including its affiliates which were no longer entitled to Security Agreement (as described below). If, for whatever
use their Grandfathering Rights shall from then on revive and reason, any person to be appointed as a Director pursuant
Sogepa and GZBV shall jointly notify the Company to that effect. to the German State Security Agreement or the French State
Security Agreement is not nominated, the shareholders shall
Notification to the Company
exercise their best endeavours so that such person is appointed
The Company will not be required to take any of the actions as a Director.
provided for in Article15 of the Articles of Association pursuant
to the post-concert Grandfathering Agreement unless and until Sogepa and GZBV shall support the appointment of one
it receives (i)a joint written instruction from Sogepa and GZBV Spanish national thatSEPI may present to them as Member of
with respect to the taking of any of the actions provided for in the Board of Directors of the Company, provided such person
Article15 of the Articles of Association pursuant to the post- qualifies as an Independent Director pursuant to the conditions
concert Grandfathering Agreement, or (ii)a copy of a binding set forth in the Board Rules, and shall vote as shareholders in
advice rendered by three independent, impartial and neutral any Shareholders Meeting in favour of such appointment and
Expert Adjudicators in order to settle any dispute between the against the appointment of any other person for such position.
Parties arising out of or in connection with the post-concert If, for whatever reason, the French State Security Agreement
Grandfathering Agreement. and/or the German State Security Agreement has/ have been
The Company will not incur any liability to any of the Parties by terminated, KfW or Sogepa, as the case might be, shall propose
taking such actions following receipt of any such joint instruction two persons, and the shareholders shall exercise their best
or binding advice, and the Company will not be required to endeavours so that these persons are appointed as Directors.
interpret the post-concert Grandfathering Agreement or any Modification of the Articles of Association. Sogepa and
such joint instruction or binding advice. GZBV shall consult each other on any draft resolution intending
Notwithstanding the description under Various provisions to modify the Board Rules and/or the Articles of Association.
Jurisdiction below, the courts of the Netherlands will have Unless Sogepa and GZBV agree to vote in favour together on
exclusive jurisdiction to resolve any dispute, controversy or such draft resolution, the shareholders shall vote against such
claim affecting the rights or obligations of the Company under draft resolution. If Sogepa and GZBV reach a mutual agreement
the post-concert Grandfathering Agreement. on such draft resolution, the shareholders shall vote in favour
of such draft resolution.
Various provisions
Reserved Matters. With respect to the matters requiring the
Termination. The post-concert Grandfathering Agreement approval of a Qualified Majority at the Board level (Reserved
terminates only if either the French State and its affiliates or Matters), all the Directors shall be free to express their own
the German State and its affiliates no longer hold shares in views. If the implementation of a Reserved Matter would require
the Company.

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a decision of the Shareholders Meeting of the Company, Tag-along right. Tag-along right for the benefit ofSEPI in the
Sogepa and GZBV shall consult each other with a view to event that Sogepa, the French State or any of their affiliates and
reaching a common position. Should Sogepa and GZBV fail to any French public entity and GZBV, the German State or any of
reach a common position, Sogepa and GZBV shall remain free their affiliates and any public entity propose together to transfer
to exercise on a discretionary basis their votes. all of their entire voting rights interests.

Prior consultation. Sogepa and GZBV shall consult each other Various provisions
on any draft resolution submitted to the Shareholders Meeting
Termination. The Shareholders Agreement may cease to
other than related to Reserved Matters and the Board Rules.
apply in respect of one or more Shareholders and/or their
Balance of Interests affiliates, subject to the occurrence of certain changes in its
or their shareholding interest in the Company or in its or their
The shareholders agree their common objective to seek a
balance between themselves of their respective interest in the
shareholders.
3.
Company as follows: Governing law. Laws of the Netherlands.

to hold as closely as reasonably possible to 12% of the voting


Jurisdiction. Arbitration in accordance with the Rules of
rights for Sogepa, together with any voting rights attributable
Arbitration of the International Chamber of Commerce, with
to Sogepa and/or to the French State, pursuant to Dutch
the seat of arbitration in The Hague (The Netherlands).
takeover rules except for voting rights attributable due to
acting in concert with the other Parties;

to hold as closely as reasonably possible to 12% of the voting 3.3.2.3 Undertakings with Respect to Certain
rights for GZBV, together with any voting rights attributable to Interests of Certain Stakeholders
GZBV and/or to the German State, pursuant to Dutch takeover The Company has made certain undertakings and entered into
rules except for voting rights attributable due to acting in certain agreements in connection with certain interests of its
concert with the other Parties; former core shareholders and the German State.

to hold as closely as reasonably possible to 4% of the voting


rights forSEPI, together with any voting rights attributable State Security Agreements and Related
to SEPI and/or to the Spanish State, pursuant to Dutch Undertakings and Negotiations
takeover rules except for voting rights attributable due to The Company and the French State have entered into an
acting in concert with the other Parties. amendment to the current convention between the French State
and the Company relating to the ballistic missiles business of
Mandatory Takeover Threshold
the Company (as so amended, the French State Security
The total aggregate voting rights of the shareholders shall always Agreement). Under the French State Security Agreement,
represent less than 30% of the voting rights of the Company, certain sensitive French military assets will be held by a Company
or less than any other threshold the crossing of which would subsidiary (the French Defence Holding Company). At the
trigger for any shareholder a mandatory takeover obligation Consummation, the Company contributed certain sensitive
(the MTO Threshold). In the event that the total aggregate French military assets to the French Defence Holding Company.
voting rights of the shareholders exceed the MTO Threshold, The French State has the right to approve or disapprove of
the shareholders shall take all appropriate actions as soon as but not to propose or appoint three outside Directors to the
reasonably practicable, but in any event within 30days, to fall Board of Directors of the French Defence Holding Company
below the MTO Threshold. (the French Defence Outside Directors), at least two of
whom must qualify as Independent Directors under the Board
Transfer of Securities
Rules if they were Members of the Board of Directors. Two of
Permitted transfer. Transfer of securities by any shareholder the French Defence Outside Directors are required to also be
to one of its affiliates. Members of the Board of Directors. French Defence Outside
Pre-emption right. Pro rata pre-emption rights of the Directors may neither (i)be employees, managers or corporate
shareholders in the event any shareholder intends to transfer officers of a company belonging to the Group (although they
any of its securities to a third party directly or on the market. may be Members of the Board of Directors) nor (ii)have material
on-going professional relationships with the Group.
Call-option right. Call-option right for the benefit of the
shareholders in the event that the share capital or the voting The Company and the German State have entered into an
rights of any shareholders cease to be majority owned directly or agreement relating to the protection of essential interests to
indirectly by the French State, the German State or the Spanish the German States security (the German State Security
State as applicable. Agreement). Under the German State Security Agreement,
certain sensitive German military assets are held by a Company
subsidiary (the German Defence Holding Company). The

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German State has the right to approve or disapprove of but total number of Dassault Aviation shares sold by the Company in
not to propose or appoint three outside Directors to the the placement reached nearly 1.73million shares, representing
Supervisory Board of the German Defence Holding Company 18.75% of the share capital of Dassault Aviation.
(the German Defence Outside Directors), at least two of
whom must qualify as Independent Directors under the Board Stock Exchange Listings
Rules if they were Members of the Board of Directors. Two of The Company has undertaken to the parties to the Shareholders
the German Defence Outside Directors are required to also Agreement that for the duration of the Shareholders Agreement
be Members of the Board of Directors. The qualifications to AirbusGroupSE shares will remain listed exclusively in France,
serve as a German Defence Outside Director are comparable Germany and Spain.
to those to serve as a French Defence Outside Director, with the
additional requirement that a German Defence Outside Director Specific Rights oftheFrench State
may not be a civil servant.
Pursuant to an agreement entered into between the Company
and the French State (the Ballistic Missiles Agreement),
Dassault Aviation
the Company has granted to the French State (a) a veto right
The Company entered into an agreement with the French State and subsequently a call option on the ballistic missiles activity
pursuant to which the Company would: exercisable under certain circumstances, including if (i)a third

grant the French State a right of first offer in case of the sale party acquires, directly or indirectly, either alone or in concert,
of all or part of its shareholding in Dassault Aviation; and more than 15% or any multiple thereof of the share capital or

commit to consult with the French State prior to making any voting rights of the Company or (ii)the sale of the ballistic missiles
decision at any Shareholders Meeting of Dassault Aviation. assets or of the shares of such companies carrying out such
activity is considered and (b) a right to oppose the transfer of
In November 2014, the Company in an off-market block
any such assets or shares.
trade sold to Dassault Aviation approximately 8% of Dassault
Aviations share capital. As was disclosed in a press release The Company, the French State and MBDA are parties to a
dated 25March 2015, the Company sold 1.61million shares in similar convention regarding the assets comprising the French
Dassault Aviation through a book-built offering to institutional nuclear airborne systems under which the French State has
investors. Following the exercise of the over-allotment option, the similar rights.

3.3.3 Form of Shares

The shares of the Company are in registered form. The Board so decide, with respect to all or certain shares, with the issue of
of Directors may decide with respect to all or certain shares, a certificate. Share certificates shall be issued in such form as
on shares in bearer form. the Board of Directors may determine. Registered shares shall
be numbered in the manner to be determined by the Board of
Shares shall be registered in the shareholders register without
Directors.
the issue of a share certificate or, should the Board of Directors

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3.3 Shareholdings and Voting Rights

3.3.4 Changes in the Shareholding of the Company

The evolution in ownership of the share capital and voting rights of the Company over the past three years is set forth in the table
below:

Position as of Position as of Position as of


31December 2015 31December 2014 31December 2013
% of % of % of
% of voting Number of % of voting Number of % of voting Number of
Shareholders capital rights shares capital rights shares capital rights shares
SOGEPA
GZBV (1)
10.93%
10.91%
10.95%
10.93%
85,835,477
85,709,822
10.94%
10.92%
10.94%
10.93%
85,835,477
85,709,822
11.99%
10.94%
12.03%
10.98%
93,864,165
85,709,822 3.
SEPI 4.12% 4.12% 32,330,381 4.12% 4.12% 32,330,381 4.13% 4.14% 32,330,381
- - - - - - - - - -
Sub-total New
Shareholder Agt. 25.96% 26.01% 203,875,680 25.98% 25.99% 203,875,680 27.06% 27.16% 211,904,368
Foundation SOGEPA 0.00% 0.00% 0 0.00% 0.00% 0 0.07% 0.07% 575,606
Public(2) 73.85% 73.99% 579,995,047 73.97% 74.01% 580,473,073 72.51% 72.84% 568,418,146
Own share buy-back(3) 0.19% - 1,474,057 0.06% - 431,832 0.36% - 2,835,121
Total 100% 100% 785,344,784 100% 100% 784,780,585 100% 100% 783,157,635
(1) KfW & other German public entities.
(2) Including Company employees. As of 31December 2015, the Companys employees held approximately 2.01% of the share capital (and voting rights).
(3) The shares owned by the Company do not carry voting rights.

To the knowledge of the Company, there are no pledges over of 570,184,806 Company shares (including 3,796,187shares
the shares of the Company. held by Iberclear on behalf of the Spanish markets and
31,228,628shares held by Clearstream on behalf of the German
The Company requested disclosure of the identity of the
market).
beneficial holders of its shares held by identifiable holders
(Titres au porteur identifiables) holding more than 2,000shares The shareholding structure of the Company as of 31December
each. The study, which was completed on 31December 2015, 2015 is as shown in the diagram in 3.3.1 Shareholding
resulted in the identification of 2,505shareholders holding a total Structure at the end of 2015.

3.3.5 Persons Exercising Control over the Company

See 3.3.1 Shareholding Structure at the end of 2015 and 3.3.2 Relationships with Principal Shareholders.

3.3.6 Simplified Group Structure Chart

The following chart illustrates the simplified organisational structure of the Group as of 31December 2015, comprising three
Divisions and the main Business Units. See Information on Group Activities 1.1.1 Overview Organisation of the Groups
Businesses. For ease of presentation, certain intermediate holding companies have been omitted.

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SIMPLIFIED GROUP STRUCTURE CHART

AIRBUS GROUP SE
Q

(The Netherlands)

97.57%
3.3 Shareholdings and Voting Rights

Airbus Group DADC Luft-und Airbus Defence Airbus DS Airbus Helicopters


Airbus Group SAS Raumfahrt Airbus Group, Inc. 2.43%
Limited and Space, S.A. Holdings B.V. Holding
(UK) (France) Beteiligungs GmbH (USA) (Spain) (The Netherlands) (France)
(Germany)
96.31% 18.12%
GeneralDescription ofthe CompanyanditsShareCapital

3.69% Airbus Defence EADS CASA Airbus DS Holding Airbus DS Holding


Airbus DS SAS and Space GmbH 66.08% HOLDING SAS France SAS
(France) (Germany) (France) (France) (France)

15.80% 65% 5% 95%

Elbe
Flugzeugwerke 94.42% EADS CASA Airbus Defence
Stelia Aerospace FRANCE Airbus DS GmbH and Space SAS Airbus Helicopters
(France) GmbH (Germany) (France)
(France) (France)
Annual Report 2015

(Germany)

Airbus Helicopters
Premium Aerotec 5.58% Astrium EADS Casa Deutschland
50%* ATR GIE Airbus Espaa, S.L. Espacio, S.L.
(France) GmbH GmbH
(Germany) (France) (Spain) (Spain) (Germany)
1
2

Airbus Operations Astrium Services Airbus Helicopters


37.5%* MBDA Group SAS GmbH CRI, S.A.
(Spain) UK Limited
(France) (Germany) (UK)

AIRBUS GROUP REGISTRATION DOCUMENT 2015 l 96 l


3

Airbus Operations Airbus Defence


and Space Airbus Helicopters
GmbH Espaa, S.A.
4

(Germany) Limited
(UK) (Spain)
Registration Document 2015
5

Airbus Operations Astrium Services Vector Aerospace


UK Limited Infoterra Limited
Limited (UK) Holding SAS
(UK) (UK) (France)
Airbus
1

Airbus Defence and Space


Airbus Paradigm Secure
2

Airbus Helicopters Operations, S.L. Communications


Limited
Financial

(Spain)
Airbus Group North America (UK)
3

MBDA Group
*Airbus Group owns indirectly 50% of ATR GIE and 37.50% of MBDA Group. Paradigm
Services Limited
4

Subsidiaries held with no indication of ownership percentage are 100% owned. (UK)
Financial Statements

Legal forms are indicated for information purposes and are not always part of the legal name.
Statements 2015
2015
5
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2015
1 2 3 4 5 1 2 3 4 5
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3.3 Shareholdings and Voting Rights

3.3.7 Purchase by the Company of its Own Shares

3.3.7.1 Dutch Law and Information on Share 3.3.7.3 German Regulations


Repurchase Programmes As a foreign issuer, the Company is subject to German rules
Under Dutch Civil law, the Company may acquire its on repurchasing its own shares only to a limited extent, since
own shares, subject to certain provisions of the law of German rules refer to the law of the Member State in which the
the Netherlands and the Articles of Association, if (i) the Company is domiciled.
shareholders equity less the payment required to make
In addition, general principles of German law of insider trading,
the acquisition does not fall below the sum of paid-up and
called portion of the share capital and any reserves required
by the law of the Netherlands and (ii)the Company and its
market manipulation and equal treatment of shareholders are
applicable. 3.
subsidiaries would not thereafter hold or hold in pledge shares
with an aggregate nominal value exceeding one-half (50%) of 3.3.7.4 Spanish Regulations
the Companys issued share capital. Share acquisitions may As a foreign issuer, the Company is not subject to Spanish rules
be effected by the Board of Directors only if the Shareholders on trading in its own shares, which only apply to Spanish issuers.
Meeting has authorised the Board of Directors to effect such
However, according to the Conduct Rules under the Spanish
repurchases. Such authorisation may apply for a maximum
Securities Market Act, insider trading is prohibited and the
period of 18months.
Company may not trade in its own shares for the purpose of
Pursuant to EC Regulation No.2273/ 2003, the Company is manipulating the market.
subject to conditions for share repurchase programmes and
disclosure relating thereto, as described below.
3.3.7.5 Description of the Share Repurchase
For the authorisations granted to the Board of Directors at the Programme to be Authorised by
Annual General Meeting of Shareholders held on 27May 2015, the Annual General Meeting of
see 3.2.3 Modification of Share Capital or Rights Attached Shareholders to be held on 28April
to the Shares. 2016
Pursuant to Articles 241-2-I and 241-3 of the AMF General
3.3.7.2 French Regulations Regulations, below is a description of the share repurchase
As a result of its listing on a regulated market in France, the programme (descriptif du programme) to be implemented
Company is subject to the regulations summarised below. by the Company:

date of the Shareholders Meeting to authorise the share
Pursuant to the AMF General Regulations, the purchase repurchase programme: 28April 2016;
by a company of its own shares requires the publication of
intended use of the AirbusGroupSE shares held by the
the description of the share repurchase programme. Such Company as of the date of this document: the owning of
description must be published prior to the implementation of shares for the performance of obligations related to employee
the share repurchase programme. share option programmes or other allocations of shares
Under the AMF General Regulations, a company may not trade to employees of the Group and the Groups Companies:
in its own shares for the purpose of manipulating the market. 910,705shares;
The AMF General Regulations also define the conditions for a
purposes of the share repurchase programme to be
companys trading in its own shares to be valid. implemented by the Company (by order of decreasing
priority, without any effect on the actual order of use of
After purchasing its own shares, the Company is required to the repurchase authorisation, which will be determined
disclose on its website specified information regarding such on a case-by-case basis by the Board of Directors based
purchases within at least seven trading days. on need):
In addition, the Company must report to the AMF, on at least
the reduction of share capital by cancellation of all or part
a monthly basis, all the specified information regarding such of the repurchased shares, it being understood that the
purchases previously published on its website and information repurchased shares shall not carry any voting or dividend
concerning the cancellation of such repurchased shares. rights,

the owning of shares for the performance of obligations
related to (i) debt financial instruments convertible into
Airbus Group SE shares, or (ii) employee share option
programmes or other allocations of shares to employees
of the Group and the Groups companies,

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the purchase of shares for retention and subsequent use for
term of the share repurchase programme and other
exchange or payment in the framework of potential external characteristics: this share repurchase programme shall be
growth transactions, and valid until 27October 2017 inclusive, i.e. the date of expiry of

the liquidity or dynamism of the secondary market of the authorisation requested from the Annual General Meeting
the Airbus Group SE shares carried out pursuant to a of Shareholders to be held on 28April 2016.
liquidity agreement to be entered into with an independent
As of the date of this document, the Company has not entered
investment services provider in compliance with the decision
into any liquidity agreement with an independent investment
of the AMF dated 1October 2008 (as amended) related
services provider in the context of the share repurchase
to approval of liquidity agreements recognised as market
programme.
practices by the AMF;

procedure:

maximum portion of the issued share capital that may be 3.3.7.6 Description of the Exceptional Share
repurchased by the Company: 10%, Repurchase Programme Authorised

maximum number of shares that may be repurchased by bythe Annual General Meeting of
the Company: 77,819,882 shares, based on an issued Shareholders Held on 27May 2015
share capital of 778,198,822shares as of 31March 2016. Pursuant to Articles 241-2-I and 241-3 of the AMF General
Assuming the exercise of all stock options outstanding as Regulations, below is a description of the exceptional
of 31March 2016, the threshold of 10% would represent share repurchase programme (descriptif du programme)
77,836,032shares based on the 778,360,322shares which implemented by the Company:
would make up the entire fully-diluted share capital of the
date of the Shareholders Meeting authorising the share
Company, repurchase programme: 27May 2015;

the amounts to be paid in consideration for the purchase
intended use of the AirbusGroupSE shares held by the
of the treasury shares must not, in accordance with Company as of the date of this document: For details
applicable Dutch law, exceed the equity components which on use of the AirbusGroupSE shares already held by the
are repayable or distributable to the shareholders. Equity Company, please refer to 3.3.7.5 Description of the Share
components repayable or distributable to the shareholders Repurchase Programme to be authorised by the Annual
means the contribution premiums (in relation to contributions General Meeting of Shareholders to be held on 28April 2016;
in kind), the issue premiums (in relation to cash contributions)
sole purpose of the share repurchase programme to be
and the other reserves as set out in the financial statements implemented by the Company: the reduction of share capital
of the Company, from which the repurchase price for the by cancellation of all of the repurchased shares;
treasury shares must be deducted.
procedure:
The Company undertakes to maintain at any time a sufficient
maximum portion of the issued share capital that may be
number of shares in public hands to meet the thresholds repurchased by the Company: 10%,
of Euronext,
maximum number of shares that may be repurchased

shares may be bought or sold at any time (including by the Company: 78,751,182shares, based on an issued
during a public offering) to the extent authorised by the share capital of 787,511,829shares as of 27May 2015.
stock exchange regulations and by any means, including, Assuming the exercise of all stock options outstanding
without limitation, by means of block trades and including as of 27May 2015, the threshold of 10% would represent
the use of options, combinations of derivative financial 78,845,837shares based on the 788,458,377shares which
instruments or the issue of securities giving rights in any would make up the entire fully-diluted share capital of the
way to AirbusGroupSE shares within the limits set out in Company,
this document.
the amounts to be paid in consideration for the purchase
The portion of shares repurchased through the use of block of the treasury shares must not, in accordance with
trades may amount to all the shares to be repurchased in the applicable Dutch law, exceed the equity components which
context of this programme, are repayable or distributable to the shareholders. Equity

in addition, in the event that derivative financial instruments components repayable or distributable to the shareholders
are used, the Company will ensure that it does not use means the contribution premiums (in relation to contributions
mechanisms which would significantly increase the volatility in kind), the issue premiums (in relation to cash contributions)
of the shares in particular in the context of call options, and the other reserves as set out in the financial statements

characteristics of the shares to be repurchased by the of the Company, from which the repurchase price for the
Company: shares of AirbusGroupSE, a company listed treasury shares must be deducted.
on Euronext Paris, on the regulierter Markt of the Frankfurt The Company undertakes to maintain at any time a sufficient
Stock Exchange and on the Madrid, Bilbao, Barcelona and number of shares in public hands to meet the thresholds
Valencia Stock Exchanges, of NYSE Euronext,

maximum purchase price per share: 100;

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shares may be bought or sold at any time (including volatility of the shares in particular in the context of call
during a public offering) to the extent authorised by the options,
stock exchange regulations and by any means, including,
characteristics of the shares to be repurchased by the
without limitation, by means of block trades and including Company: shares of AirbusGroupSE, a company listed
the use of options, combinations of derivative financial on Euronext Paris, on the regulierter Markt of the Frankfurt
instruments or the issue of securities giving rights in any Stock Exchange and on the Madrid, Bilbao, Barcelona and
way to AirbusGroupSE shares within the limits set out in Valencia Stock Exchanges,
this document.
maximum purchase price per share: 85;
The portion of shares repurchased through the use of block
term of the share repurchase programme and other
trades may amount to all the shares to be repurchased in
characteristics: this share repurchase programme shall be
the context of this programme,

in addition, in the event that derivative financial instruments
are used, the Company will ensure that it does not use
valid until 27November 2016 inclusive, i.e. the date of expiry of
the authorisation requested from the Annual General Meeting 3.
of Shareholders held on 27May 2015.
mechanisms which would significantly increase the

3.4 Dividends
3.4.1 Dividends and Cash Distributions Paid

Cash distributions paid to the shareholders are set forth in the table below:

Financial year Date of the cash distribution payment Gross amount per share(1)
2013 3June 2014 0.75
2014 3June 2015 1.20
(1) Note: figures have not been adjusted to take into account changes in the number of shares outstanding.

3.4.2 Dividend Policy of the Company

In December2013, the Group formalised a dividend policy demonstrating a strong commitment to shareholders returns. This
policy targets sustainable growth in the dividend within a payout ratio of 30%-40%.

Therefore, based on earnings per share (EPS) of 3.43, the Board of Directors will propose to the Annual General Meeting the
payment to shareholders of a dividend of 1.30 per share on 4May 2016 (FY 2014: 1.20).

The record date should be 3May 2016. This proposed dividend represents a pay-out ratio of 38% and a year-on-year dividend
per share increase of 8%.

3.4.3 Unclaimed Dividends

Pursuant to the Articles of Association, the claim for payment of dividends shall lapse five years after the day on which the claim
a dividend or other distribution approved by the Shareholders for payment of the dividend against which the interim dividend
Meeting shall lapse five years after the day on which such claim could be distributed becomes due and payable.
becomes due and payable. The claim for payment of interim

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3.4.4 Taxation

The statements below represent a broad analysis of the current Taxes on Income and Capital Gains
Netherlands tax laws. The description is limited to the material tax A Non-Resident Holder who receives dividends distributed by
implications for a holder of the Companys shares (the Shares) the Company on Shares or who realises a gain from the sale or
who is not, or is not treated as, a resident of the Netherlands disposition of Shares, will not be subject to Netherlands taxation
for any Netherlands tax purposes (a Non-Resident Holder). on income or capital gains unless:
Certain categories of holders of the Companys shares may
such income or gain is attributable to an enterprise or
be subject to special rules which are not addressed below
part thereof which is either effectively managed in the
and which may be substantially different from the general rules
Netherlands or carried on through a permanent establishment
described below. Investors who are in doubt as to their tax
(vaste inrichting) or permanent representative (vaste
position in the Netherlands and in their state of residence should
vertegenwoordiger) in the Netherlands;
consult their professional Advisors. Where the summary refers to
the Non-Resident Holder is not an individual and the Non-
the Netherlands or Netherlands, it refers only to the European
Resident Holder has or is deemed to have, directly or indirectly,
part of the Kingdom of the Netherlands.
a substantial interest (aanmerkelijk belang) or a deemed
substantial interest in the Company and such interest (i)does
Withholding Tax on Dividends not form part of the assets of an enterprise and (ii)is held by
In general, a dividend distributed by the Company in respect the Non-Resident Holder with the main objective, or one of
of Shares will be subject to a withholding tax imposed by the the main objectives, to avoid Netherlands withholding tax on
Netherlands at a statutory rate of 15%. Dividends include dividends or Netherlands individual income tax at the level of
dividends in cash or in kind, deemed and constructive another person or entity; or
dividends, repayment of paid-in capital not recognised as
the Non-Resident Holder is an individual and (i)the Non-
capital for Netherlands dividend withholding tax purposes, and Resident Holder has, directly or indirectly, a substantial interest
liquidation proceeds in excess of the average paid-in capital (aanmerkelijk belang) or a deemed substantial interest in the
recognised as capital for Netherlands dividend withholding tax Company and such interest does not form part of the assets
purposes. Stock dividends paid out of the Companys paid-in- of an enterprise, or (ii)such income or gain qualifies as income
share premium, recognised as capital for Netherlands dividend from miscellaneous activities (belastbaar resultaat uit overige
withholding tax purposes, will not be subject to this withholding werkzaamheden) in the Netherlands as defined in the Dutch
tax. Income Tax Act 2001 (Wet inkomstenbelasting 2001).

A Non-Resident Holder of Shares can be eligible for a partial or Generally, a Non-Resident Holder of Shares will not have a
complete exemption or refund of all or a portion of the above substantial interest in the Companys share capital, unless the
withholding tax pursuant to domestic rules or under a tax Non-Resident Holder, alone or together with certain related
convention that is in effect between the Netherlands and the persons holds, jointly or severally and directly or indirectly,
Non-Resident Holders country of residence. The Netherlands Shares in the Company, or a right to acquire Shares in the
has concluded such conventions with the US, Canada, Company representing 5% or more of the Companys total
Switzerland, Japan, almost all European Union Member States issued and outstanding share capital or any class thereof.
and other countries. Generally, a deemed substantial interest exists if all or part
of a substantial interest has been or is deemed to have been
Withholding Tax on Sale or OtherDispositions of disposed of with application of a roll-over relief.
Shares
Payments on the sale or other dispositions of Shares will not Gift or Inheritance Taxes
be subject to Netherlands withholding tax, unless the sale or Netherlands gift or inheritance taxes will not be levied on
other disposition is, or is deemed to be, made to the Company the transfer of Shares by way of gift, or upon the death of a
or a direct or indirect subsidiary of the Company. In principle, Non-Resident Holder, unless the transfer is construed as an
a redemption or sale to the Company or a direct or indirect inheritance or gift made by or on behalf of a person who, at
subsidiary of the Company will be treated as a dividend and the time of the gift or death, is or is deemed to be resident in
will be subject to the rules set forth in Withholding Tax on the Netherlands.
Dividends above.

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Value Added Tax Residence


No Netherlands value added tax is imposed on dividends on A Non-Resident Holder will not become resident, or be deemed
the Shares or on the transfer of the Shares. to be resident, in the Netherlands solely as a result of holding
a Share or of the execution, performance, delivery and/or
Other Taxes and Duties enforcement of rights in respect of the Shares.

There is no Dutch registration tax, transfer tax, capital tax,


stamp duty or any other similar tax or duty other than court fees
payable in the Netherlands in respect of or in connection with
the execution, delivery and/or enforcement by legal proceedings
(including any foreign judgment in the courts of the Netherlands)
with respect to the dividends relating to the Shares or on the
transfer of the Shares.
3.

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Chapter

4.
X
FACTORS
RISK

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Corporate Governance

4.1 Management and Control 104


4.
4.1.1 Corporate Governance Arrangements 104
4.1.2 Dutch Corporate Governance Code, ComplyorExplain 123
4.1.3 Enterprise Risk Management System 124
4.1.4 Ethics and Compliance Organisation 129

4.2 Interests of Directors and Principal


ExecutiveOfficers130
4.2.1 Remuneration Policy130
4.2.2 Long-Term Incentives Granted totheChief Executive Officer 140
4.2.3 Related Party Transactions 141

4.3 Employee Profit Sharing andIncentivePlans 141


4.3.1 Employee Profit Sharing and Incentive Agreements 141
4.3.2 Employee Share Ownership Plans 141
4.3.3 Long-Term Incentive Plans 142

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Corporate Governance
4.1 Management and Control

4.1 Management and Control

The corporate governance arrangements of the Company were the Companys corporate governance, reflecting an emphasis
substantially changed pursuant to the Multiparty Agreement, on best corporate governance practices and the absence of a
including changes in the composition of the Board of Directors controlling shareholder group. Below is a summary description
and the rules governing its internal affairs (the Board Rules). of such changes.
These changes are intended to further normalise and simplify

4.1.1 Corporate Governance Arrangements

4.1.1.1 Board of Directors

a) CompositionRules and Principles Meeting. No shareholder or group of shareholders, or any


Under the Articles of Association, the Board of Directors consists other entity, has the right to propose, nominate or appoint any
of at most twelve (12) Directors, who each retire at the close Directors other than the rights available to all shareholders under
of the Annual General Meeting held three years following their Dutch law.
appointment. Under the Board Rules, at least a majority of the In addition to the membership and composition rules described
Members of the Board of Directors (i.e., 7/12) must be European above, the RNGC, in recommending candidates for the Board of
Union nationals (including the Chairman of the Board of Directors) Directors, and the Board of Directors, in its resolutions proposed
and a majority of such majority (i.e., 4/7) must be both European to the Shareholders Meeting regarding proposals to appoint or
Union nationals and residents. No Director may be an active civil replace a resigning or incapacitated Director, are both required
servant. The Board of Directors has one (1) Executive Director to apply the following principles:
and eleven (11) Non-Executive Directors. While the Board of
the preference for the best candidate for the position; and
Directors appoints the Chief Executive Officer of the Company
the maintenance, in respect of the number of Members of
(the CEO), the CEO is required to be an Executive Director and the Board of Directors, of the observed balance among the
must be an EU national and resident; therefore it is anticipated nationalities of the candidates in respect of the location of the
that the Board of Directors will appoint as CEO the person main industrial centres of the Company (in particular among
appointed by the shareholders as an Executive Director. At least the nationals of the four (4) Member States of the European
nine (9) of the Non-Executive Directors must be Independent Union where these main industrial centres are located).
Directors (including the Chairman of the Board of Directors).
The Board of Directors is required to take into account, in the
Under the Board Rules, an Independent Director is a Non- resolutions proposed in respect of the nomination of Directors
Executive Director who is independent within the meaning of presented to the Shareholders Meeting, the undertakings of
the Dutch Corporate Governance Code and meets additional the Company to the French State pursuant to the amendment
independence standards. Specifically, where the Dutch to the French State Security Agreement and to the German
Corporate Governance Code would determine independence, in State pursuant to the German State Security Agreement, in
part, by reference to a Directors relationships with shareholders each case as described more fully in 3.3.2.3 - Undertakings
who own at least 10% of the Company, the Board Rules with Respect to Certain Interests of Certain Stakeholders. In
determine such Directors independence, in relevant part, by practice, this means that (A) two (2) of the Directors submitted
reference to such Directors relationships with shareholders to the shareholders for appointment should also be French
who own at least 5% of the Company. Defence Outside Directors (as defined above) of the French
The Remuneration, Nomination and Governance Committee Defence Holding Company (as defined above) who have been
of the Board of Directors (the RNGC) is charged with proposed by the Company and consented to by the French State
recommending to the Board of Directors the names of candidates and (B) two (2) of the Directors submitted to the shareholders for
to succeed active Board Members after consultation with the appointment should also be German Defence Outside Directors
Chairman of the Board of Directors and the CEO. (as defined above) of the German Defence Holding Company
(as defined above) who have been proposed by the Company
The Board of Directors, deciding by simple majority vote,
and consented to by the German State.
proposes individuals to the Shareholders Meeting of the
Company for appointment as Directors by the Shareholders

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The RNGC endeavours to avoid a complete replacement


nominating, suspending or revoking the Chairman of the
of outgoing Directors by new candidates and draws up an Board of Directors and the CEO (Qualified Majority);
appointment and reappointment schedule for the Directors
approving of all of the Members of the Group Executive
after consultation with the Chairman and the CEO. In drawing up Committee as proposed by the CEO and their service
such schedule, the RNGC considers the continuity of company- contracts and other contractual matters in relation to the Group
specific knowledge and experience within the Board of Directors Executive Committee and deciding upon the appointment and
while it takes into account that a Director may at the time of his removal of the Secretary to the Board of Directors on the basis
appointment or re-appointment not be older than 75years and of the recommendation of the RNGC;
ensuring that at least one third of Directors positions are either
approving the relocation of the headquarters of the principal
renewed or replaced every year, provided that exceptions to companies of the Group and of the operational headquarters
these rules may be agreed by the Board of Directors if specific of the Company (Qualified Majority);
circumstances provide an appropriate justification for such
approving decisions in connection with the location of new
exceptions. industrial sites material to the Group as a whole or the change
of the location of existing activities that are material to the
b) Role of the Board of Directors Group;
Most Board of Directors decisions can be made by a simple approving decisions to invest and initiate programmes financed
4.

majority of the votes of the Directors (a Simple Majority), but by the Group, acquisition, divestment or sale decisions, in
certain decisions must be made by a 2/3 majority (i.e. eight each case for an amount in excess of 300million;
(8) favourable votes) of the Directors regardless of whether
approving decisions to invest and initiate programmes financed
present or represented in respect of the decision (a Qualified by the Group, acquisition, divestment or sale decisions, in
Majority). In addition, amendments to certain provisions of each case for an amount in excess of 800million (Qualified
the Board Rules require the unanimous approval of the Board Majority);
of Directors, with no more than one Director not present or
approving decisions to enter into and terminate strategic
represented (including provisions relating to nationality and alliances at the level of the Company or at the level of one of
residence requirements with respect to Members of the Board its principal subsidiaries (Qualified Majority);
of Directors and the Group Executive Committee). However,
approving matters of shareholder policy, major actions or
no individual Director or class of Directors has a veto right with major announcements to the capital markets; and
respect to any Board of Directors decisions.
approving decisions in respect of other measures and
business of fundamental significance for the Group or which
The Board Rules specify that in addition to the Board of involves an abnormal level of risk.
Directors responsibilities under applicable law and the
Articles of Association, the Board of Directors is responsible The Board of Directors must have a certain number of Directors
for certain enumerated categories of decisions. Under the present or represented at a meeting to take action. This quorum
Articles of Association, the Board of Directors is responsible requirement depends on the action to be taken. For the Board
for the management of the Company. Under the Board Rules, of Directors to make a decision on a Simple Majority matter, a
the Board of Directors delegates the execution of the strategy majority of the Directors must be present or represented. For
as approved by the Board of Directors and the day-to-day the Board of Directors to make a decision on a Qualified Majority
management of the Company to the CEO, who, supported by matter, at least ten (10) of the Directors must be present or
the Group Executive Committee, makes decisions with respect represented. If the Board of Directors cannot act on a Qualified
to the management of the Company. However, the CEO may not Majority Matter because this quorum is not satisfied, the quorum
enter into transactions that form part of the key responsibilities would decrease to eight (8) of the Directors at a new duly called
of the Board of Directors unless these transactions have been meeting.
approved by the Board of Directors. In addition, the Board Rules detail the rights and duties of
Matters that require Board of Directors approval include among the Members of the Board of Directors and sets out the core
others, the following items (by Simple Majority unless otherwise principles with which each and every Member of the Board of
noted): Directors shall comply and shall be bound by, such as acting in

approving any change in the nature and scope of the business the best interest of the Company and its stakeholders, devoting
of the Company and the Group; necessary time and attention to the carrying out of their duties

debating and approving the overall strategy and the strategic and avoiding any and all conflicts of interest.
plan of the Group;

approving the operational business plan of the Group and the


yearly budget of the Group, including the plans for Investment,
R&D, Employment, Finance and, as far as applicable, major
programmes;

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c) The Board of Directors in 2015


(i)Composition of the Board of Directors in 2015

Airbus Group Board Of Directors

Committee
Memberships
Primary Remuneration
occupation Attendance Nomination
Term & Other Public to the Board and
Name Age Since expires Director expertise Status Company Board meetings Audit Governance

Chairman of
Denis the Board ofDirectors
RANQUE 64 2013 2016 Independent of Airbus Group SE 9/9

2012, Chief Executive


Thomas reelected Officer ofAirbus
ENDERS 57 in2013 2016 Executive Group SE 9/9

Chairman of
Manfred the Supervisory Board
BISCHOFF 73 2013 2016 Independent of Daimler AG 7/9
Former Member
oftheManagement
Boards of Airbus
Ralph D. Non- Group SE and of
CROSBY, JR. 68 2013 2016 Independent Northrop Grumman 9/9

 ice President
V
Hans-Peter of the Federation of
KEITEL 68 2013 2016 Independent German Industries (BDI) 9/9

2007, Former Member of


Hermann-Josef reelected theManagement Board
LAMBERTI 60 in2013 2016 Independent ofDeutsche Bank AG 8/9

Anne Founder andCEO


LAUVERGEON 56 2013 2016 Independent ofALP 8/9

2007, Chairman and Chief


Lakshmi N. reelected Executive Officer
MITTAL 65 in2013 2016 Independent ofArcelorMittal 9/9

Mara Amparo Former General 5/5


MORALEDA Manager of IBM (from AGM
MARTNEZ 51 2015 2018 Independent Spain and Portugal 2015)

2007, Chairman
Sir John reelected of AngloAmerican
PARKER 73 in2013 2016 Independent PLC 8/9

2007,
Michel reelected Honorary President
PEBEREAU 74 in2013 2016 Independent of BNPParibas S.A. 7/9
Honorary Governor
of Banque de France
2012, andformer President
Jean-Claude reelected of theEuropean
TRICHET 73 in2013 2016 Independent Central Bank 9/9
5 meetings 6 meetings
80% 96%
average average
Attendance Attendance
rate rate
Status as of 23 February 2016.
The professional address of all members of the Board of Directors for any matter relating to Airbus Group is Mendelweg 30, 2333 CS Leiden, The Netherlands.

Chairman Member

Global Industrial Business / Engineering & Technology / Manufacturing & Production / Aerospace Industry / Finance & Audit /

Geopolitical Economics / Defence Industry / Information & Data Management / Asia

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The Company has not appointed observers to the Board of Directors. Pursuant to applicable Dutch law, the employees are not
entitled to elect a Director. There is no minimum number of shares that must be held by a Director.

(ii)Curriculum Vitae and other Mandates andDuties Performed in any Company bytheMembers of the Board of
Directors in2015

Denis RANQUE

Curriculum Vitae
Denis Ranque began his career at the French Ministry for Industry, where he held various positions in
the energy sector, before joining the Thomson group in 1983 as Planning Director. The following year,
he moved to the electron tubes division, first as Director of space business, then, from 1986, as Director
of the divisions microwave tubes department. Two years later, the electron tubes division became the
affiliate Thomson Tubes lectroniques, and Denis Ranque took over as Chief Executive of this subsidiary
in 1989. In April1992, he was appointed Chairman and CEO of Thomson Sintra Activits Sous-marines.
64 years old

4.
Four years later, he became CEO of Thomson Marconi Sonar, the sonar systems joint venture set up
Director since 2013 by Thomson-CSF and GEC-Marconi. In January1998, Denis Ranque was appointed Chairman and
Chief Executive Officer of the Thomson-CSF group, now called Thales. He resigned from this position in
Independent May2009, as a consequence of a change in shareholding. From February2010 to June2012 he has been
Non-Executive Chairman of Technicolor. Since October2001, he has also been Chairman of the Board
of the cole des Mines ParisTech, and since September2002, Chairman of the Cercle de lIndustrie, an
association which unites Frances biggest industrial companies; both mandates ended in June2012. He
is Member of the Boards of directors of Saint-Gobain and CMA-CGM. Since October2013, he chairs The
Haut Comit de Gouvernement dEntreprise, the newly created independent body put in place by the
French Code of corporate governance for monitoring and encouraging progress in this field. Since 2014
he is also co-Chairman of La Fabrique de lindustrie, a think tank dedicated to industry and a member
of the French Academy for Technologies (Acadmie des Technologies). Denis Ranque, born 1952, is a
graduate of Frances cole Polytechnique and the Corps des Mines.

Current Mandates:
-- Chairman of the Board of Directors of AirbusGroupSE;
-- Member of the Board of Directors of Saint Gobain;
-- Member of the Board of Directors of CMA-CGM;
-- Member of the Board of Directors of Scilab Enterprise SAS;
-- President of the French Haut Comit de Gouvernement dEntreprise;
-- President of the Board of Foundation de lcole Polytechnique.
Former mandates for the last five years:
-- Director of CGG VERITAS (2010 to 2012);
-- Director of CMA CGM (2009 to 2012);
-- Director of Fonds Stratgique dInvestissement (2011 to 2012);
-- Chairman of Technicolor (2010 to 2012).

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Manfred BISCHOFF

Curriculum Vitae
Manfred Bischoff was born 22April 1942. He holds a diploma and PhD in Economics from the University
of Heidelberg. Having joined Daimler-Benz AG in 1976, Mr.Bischoff became Chief Financial Officer of
Mercedes-Benz do Brasil in 1988. In 1989, he was appointed to the Board of Management of Deutsche
Aerospace (later DaimlerChrysler Aerospace AG) as CFO and in 1995 became Chairman of the Board
of Management of Daimler-Benz Aerospace (later Daimler Chrysler Aerospace AG) and a Member of the
Board of Management of Daimler-Benz AG. At the foundation of EADS in 2000, Mr.Bischoff became its
73 years old Chairman, a position he held until April2007, when he was elected Chairman of the Supervisory Board
Director since 2013 of DaimlerChrysler AG. Currently, Manfred Bischoff is also Member of the Board of Unicredit S.p.A., and
Member of the Supervisory Board of SMSGmbH.
Independent

Current Mandates:
-- Member of the Board of Directors of AirbusGroupSE;
-- Chairman of the Supervisory Board Daimler AG;
-- Member of the Supervisory Board SMSGmbH;
-- Member of the Board of Directors Unicredit S.p.A.;
-- Multiple memberships in non-profit Boards.
Former mandates for the last five years:
-- Member of the Supervisory Board Fraport AG (until May2012);
-- Member of the Supervisory Board KPNN.V. (until April2013);
-- Chairman of the Supervisory Board and Chairman of the Shareholder Committee VoithGmbH
(untilSeptember2014).

Ralph DozierCROSBY

Curriculum Vitae
Ralph Crosby was Member of the Executive Committee of EADS from 2009-2012 and served as Chairman
and CEO of EADS North America from 2002-2009. He presently serves as an Independent Director of
American Electric Power headquartered in Columbus, Ohio, where he chairs the Human Resources
Committee; and Serco, headquartered in London, United Kingdom. Furthermore, Mr.Crosby serves on
the Board of Directors, and Executive Committee of the Atlantic Council of the United States. Prior to
joining EADS, Mr.Crosby was an Executive with Northrop Grumman Corporation, where he had served
68 years old as a Member of the Corporate Policy Council with positions including President of the Integrated Systems
Director since 2013 Sector, Corporate Vice President and General Manager of the Companys Commercial Aircraft Division and
Corporate Vice President and General Manager of the B-2 Division. Prior to his industry career, Mr.Crosby
Non-Independent served as an officer in the US Army, where his last military assignment was as military staff assistant to
the Vice President of the United States. Mr.Crosby is a graduate of the US Military Academy at West
Point, and holds Masters degrees from Harvard University, and the University of Geneva, Switzerland.
He is the recipient of the James Forrestal Award from the National Defense Industrial Association, and
has been awarded Chevalier of the Legion dHonneur of France.

Current Mandates:
-- Member of the Board of Directors of AirbusGroupSE;
-- Member of the Board of Directors (Supervisory Board) of American Electric Power Corporation;
-- Member of the Board of Directors (Supervisory Board) of Serco, PLC.;
-- Member of the Board of Directors and Member of the Executive Committee of the Atlantic Council
of the United States.
Former mandates for the last five years:
-- Executive Chairman of EADS North America (retired 31December 2011);
-- Member of the Board of Directors (Supervisory Board) of Ducommun Corporation (resignedJune2013).

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Thomas ENDERS

Curriculum Vitae
Thomas (Tom) Enders was appointed Chief Executive Officer (CEO) of AirbusGroup, effective 1June
2012, after having been CEO of Airbus since 2007. Before that he served as Co-CEO of EADS between
2005 and 2007. He was Head of the Groups Defence division 2000-2005. Tom Enders has been a member
of the Executive Committee of AirbusGroup since its creation in 2000. Prior to joining the aerospace
industry in 1991, Mr.Enders worked, inter alia, in the German Ministry of Defence and in various Foreign
Policy think tanks. He studied Economics, Political Science and History at the University of Bonn and at
57 years old the University of California in Los Angeles.
Director since 2012, Mr.Enders was President of the BDLI (German Aerospace Industry Association) from 2005 to 2012.
re-elected in 2013 He is member of the BDI Presidential Board (German Industry Association) since 2009. From 2005 to
2009 he was Chairman of the Atlantik-Brcke e.V. In 2014, Mr.Enders joined the Advisory Council of the
Executive Munich Security Conference as well as the Senate of the Max-Planck-Gesellschaft. From 2011 to 2015,
Tom Enders was member of the Business Advisory Group of UK Prime Minister David Cameron. He sits
on the Joint Advisory Council of AllianzSE since 2013.

Current Mandates:
-- Chief Executive Officer of AirbusGroupSE;
4.
-- Member of the Executive Committee of AirbusGroupSE;
-- Chairman of the Shareholder Committee of Airbus SAS;
-- Chairman of the Supervisory Board of Airbus Helicopters SAS;
-- Chairman of the Supervisory Airbus DS Holding B.V.;
-- Chairman of the Supervisory Board of Airbus Defence andSpace DeutschlandGmbH;
-- Member of the Board of Directors of the BDI (Federation of German Industry);
-- Member of the Governing Board of HSBC Trinkhaus;
-- Member of the International Advisory Board of Atlantic Council of the US;
-- Member of the Joint Advisory Council of AllianzSE;
-- Member of the Board of Directors of WORLDVU Satellites, Ltd. (OneWeb).
Former mandates for the last five years:
-- President and Chief Executive Officer of Airbus SAS (from 2007-2012);
-- President of the BDLI (Bundesverband der deutschen Luft- und Raumfahrtindustrie e.V.)
from2005-2012;
-- Chairman of the Advisory Council for Aeronautics Research and Innovation in Europe (ACARE)
from 2011-2013.

Hans-Peter KEITEL

Curriculum Vitae
Hans-Peter Keitel served as President of the Federation of German Industries (BDI) from 2009 to 2012 and
now (since 2013) serves as one of its Vice Presidents. Prior to this he served nearly 20years at Hochtief
first as Director for International Business and subsequently from 1992 to 2007 as Chief Executive Officer.
He started his career in 1975 at Lahmeyer International as a technical Advisor and project manager being
involved in large scale global infrastructure projects in over 20countries. He also advised the arranging
banks of the Channel Tunnel Consortium. Mr.Keitel has graduated from the Universities of Stuttgart and
68 years old Munich in Construction Engineering and Economics and has received a PhD in Engineering from the
Director since 2013 University of Munich.

Independent
Current Mandates:
-- Member of the Board of Directors of AirbusGroupSE;
-- Member of the Supervisory Board of RWE AG;
-- Chairman of the Supervisory Board of VoithGmbH;
-- Member of the Supervisory Board of ThyssenKrupp AG;
-- Deputy Chairman of the Supervisory Board of National-Bank AG.
Former mandates for the last five years:
-- Member of the Supervisory Board of Commerzbank AG (until 20May 2014);
-- Member of the Supervisory Board of Deutsche Messe AG.

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Hermann-Josef LAMBERTI

Hermann-Josef Lamberti was Member of the Management Board of Deutsche Bank AG from 1999 until 2012
and operated as the banks Chief Operating Officer. As COO he had global responsibility for Human Resources,
Information Technology, Operations and Process Management, Building and Facilities Management as well as
Purchasing. He joined Deutsche Bank in Frankfurt in 1998 as Executive Vice President. From 1985, he held
various management positions within IBM, working in Europe and the United States, in the fields of controlling,
internal application development, sales, personal software, marketing and brand management. In 1997, he
was appointed Chairman of the Management of IBM Germany. Mr.Lamberti started his career in 1982 with
60 years old Touche Ross in Toronto, before joining the Chemical Bank in Frankfurt. He studied Business Administration at
Director since 2007, the Universities of Cologne and Dublin, and graduated with a Masters degree.
re-elected in 2013
Independent
Current Mandates:
-- Member of the Board of Directors of AirbusGroupSE;
-- Chairman of the Society of Freunde der Bachwoche Ansbach e.V.;
-- Member of the Board of Trustees of Institute for Law and Finance Frankfurt;
-- Chairman of the Advisory Board: Wirtschaftsinitiative FrankfurtRheinMain e.V.;
-- Member of the Board of Trustees of Johann Wolfgang Goethe-Universitt Fachbereich
Wirtschaftswissenschaften and Member of the Board of Trustees of Frankfurt Institute forAdvanced Studies
(FIAS) of Goethe-Universitt;
-- Member of the Supervisory Board ING GroupN.V.;
-- Senior Business Advisor Advent InternationalGmbH;
-- Member of the Supervisory Board Open-Xchange AG;
-- Owner/ Managing Director Frankfurt Technology ManagementGmbH.
Former mandates for the last five years:
-- Executive Customer of the Advisory Council of Symantec Corporation (resigned 12May 2010);
-- Member of the Board of Trustees of Baden-Badener Unternehmergesprche - Gesellschaft zur Frderung des
Unternehmensnachwuchses e.V. (resigned 13May 2010);
-- Member of the Board of Trustees of Wallraf-Richartz-Museum und Museum Ludwig e.V. (resigned31January 2011);
-- Member of the Founder Council of Wallraf-Richartz-Museum (resigned 31January 2011); and
-- Member of theSenate of Fraunhofer Gesellschaft. (resigned 31December 2011); and
-- Member of the Management Board of Deutsche Bank AG (resigned 31May 2012);
-- Member of the Supervisory Board of BVV Versicherungsverein des Bankgewerbes A.G. undBVV
Versorgungskasse des Bankgewerbes e.V. (resigned 21June 2012);
-- Member of the Supervisory Board of Deutsche Brse AG (resigned 16May 2012);
-- Member of the Supervisory Board of Deutsche Bank Privat-und Geschftskunden AG (resigned24May2012);
-- Member of the Board of Management of Arbeitgeberverband des privaten Bankgewerbes e.V.
(resigned21June 2012);
-- Deputy member of the Deposit Insurance Committee of Bundesverband deutscher Banken e.V.
(resigned21June 2012);
-- Delegate of the Delegates Assembly of the Deposit Insurance Committee of Bundesverband deutscher
Banken e.V. (resigned 21June 2012);
-- Member of the Financial Community Germany Committee of Bundesverband deutscher Banken e.V.
(resigned21June 2012);
-- Member of the Board of Management of Deutsches Aktieninstitut e.V. (resigned 21June 2012);
-- Member of the Board of Trustees of e-Finance Lab Frankfurt am Main (resigned 31May 2012);
-- Member of the Stock Exchange Council of Eurex Deutschland (resigned 31May 2012);
-- Member of the Stock Exchange Council of Frankfurter Wertpapierbrse AG (resigned 31May 2012);
-- Member of the Advisory Board of Institut fr Unternehmensplanung - IUP (resigned 31May 2012);
-- Member of the Board of Trustees of Junge Deutsche Philharmonie (resigned 8October 2012);
-- Deputy Chairman of the Board of Trustees of the Society of Promotion of Klner Kammerorchester e.V.
(resigned 31May 2012);
-- Member of the Programme Advisory Board of LOEWE Landes-Offensive zur Entwicklung Wissenschaftlich-
konomischer Exzellenz des Hessischen Ministeriums fr Wissenschaft und Kunst (resigned 14June 2012);
-- Member of the Advisory Circle of Mnchner Kreis (resigned 31May 2012);
-- Deputy member of the Advisory Board of Prfungsverband deutscher Banken e.V. (resigned 31May 2012);
-- Member of the Administrative Council of Universittsgesellschaft Bonn-Freunde, Frderer, Alumni
(resigned31May 2012);
-- Member of the Advisory Board in the centre for market-orientated corporate management of WHU
(resigned31May 2012);
-- Member of the Commission of Brsensachverstndigenkommission (Bundesfinanzministerium)
(resigned31May 2012);
-- Member of the Management Board and Member of the Executive Committee of Frankfurt Main Finance e.V.
(resigned 31May 2012);
-- Member of the Advisory Board of Fraunhofer-IUK-Verbund (resigned 31May 2012);
-- Member of the Executive Committee and of the Steering Committee of Frankfurt RheinMain e.V.
(resigned31May 2012);
-- Member of the Senate of acatech Deutsche Akademie der Technikwissenschaften e.V. (resigned31May 2012);
-- Member of the Board of Directors of American Chamber of Commerce in Germany (resigned 11May 2012);
-- Member of the Board of Trustees of Hanns Martin Schleyer-Stiftung (resigned 21June 2012).

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Anne LAUVERGEON

Curriculum Vitae
Anne Lauvergeon is founder and CEO of A.L.P S.A., a French advisory and investments company.
Mrs.Lauvergeon is a graduate of the cole Normale Suprieure and the French National School of Mining
Engineer. She holds an advanced degree in Physics & Chemistry. From 2011 to 2014, Mrs.Lauvergeon
was Partner of Efficiency Capital, a fund dedicated to technology and natural resources. She was CEO
of Areva from July2001 to June2011, and Chairman and CEO of Areva NC from June1999 to July2011.
In 1997, she worked at Alcatel as Senior Executive Vice President, member of the Executive Committee,
56 years old in charge of international business and industrial holdings. From 1995 to 1997 she was Partner of Lazard
Director since 2013 Frres & Cie. Before that, from 1990 to 1995, she worked for the French Presidents office, in charge of
international economy and foreign trade missions in 1990, then as Deputy Chief of Staff and personal
Independent representative to the French President, in charge of the G7/G8 Summits from 1991. Anne Lauvergeon
began her career in 1983 in the steel industry, at Usinor, before working on nuclear & chemical safety
issues in Europe at the French Atomic Energy Commission. Mrs.Lauvergeon is Doctor Honoris Causa of
the Imperial College, London (2008), Fellow of the Royal Academy of Engineering (UK 2011) and Fellow
of the Royal Academy of Belgium (2012).

Current Mandates:
4.
-- Member of the Board of Directors of AirbusGroupSE;
-- Member of the Board of Directors of AMERICAN EXPRESS;
-- Member of the Board of Directors of RIO TINTO;
-- Member of the Board of Directors of SUEZ ENVIRONNEMENT;
-- Member of the Board of Directors of AVRIL;
-- Chairman of the Board of Directors of cole Nationale Suprieure des Mines de Nancy;
-- Member of the Board of Directors of PSL University (Paris Sciences et Lettres);
-- Chairman of A2i fund Agir pour lInsertion dans lIndustrie (Union des Industries Mtallurgiques
etMinires).
Former mandates for the last five years:
-- CEO of AREVA (resigned