Profiles of Industry, Boeing and Airbus

Graphical analysis of financial performance

Discussion of business performance

Conclusion with Recommendations

THEME OF PRESENTATION
 Trade war between China and US

Industry US political decision affecting industry

European industry affecting due to Brexit

Apart from all challenges, there is projection of growth

US based aircraft maker

Boeing Donald Trump pulls out from deal with Iran

New production plant in China

Imposed the duty on steel from China to US

Acquired KLX

European manufacturer of aircraft

Airbus Lag of deliveries is major issue

Product an aircraft which can travel up to 20 hours

C series partnership

Dealing with many airlines

PROFILES
FINANCIAL PERFORMANCE
 Sales Analysis
120,000

100,000
96,114 94,571
90,762
80,000

66,581
60,000 64,450
60,713

40,000

20,000

-
2014 2015 2016

Boeing Airbus

(Source: Boeing, 2014:2016; Airbus, 2014:2016)

SALES ANALYSIS
 GPM NPM
7.0%
18.0%
6.0%
6.0%
5.0% 5.4% 5.2%
16.0%
15.4% 4.0% 4.2%
3.9%
14.7% 14.6% 14.6% 3.0%
14.0%
13.7% 2.0%

12.0% 1.0% 1.5%

0.0%
2014 2015 2016
10.0%

Boeing Airbus

8.0%
7.9% (Source: Boeing, 2014:2016; Airbus, 2014:2016)

6.0%
ROCE
4.0% 18.0%
16.0% 16.7% 16.9%
14.0% 14.7%
2.0% 12.0%
10.0%
8.0%
8.3% 7.7%
0.0% 6.0%
2014 2015 2016
4.0%
4.1%
2.0%
0.0%
2014 2015 2016
Boeing Airbus
Boeing Airbus
(Source: Boeing, 2014:2016; Airbus, 2014:2016)
(Source: Boeing, 2014:2016; Airbus, 2014:2016)

PROFITABILITY ANALYSIS
 Current Ratio Quick Ratio
1.60 0.50

0.45 0.46 0.47

1.40
1.40 0.44 0.44
1.35 0.42
0.40
1.20 1.25 0.38
0.35

1.00
0.99 0.99 0.99 0.30

0.80 0.25

0.20
0.60

0.15
0.40
0.10

0.20
0.05

- -
2014 2015 2016 2014 2015 2016

Boeing Airbus
Boeing Airbus

(Source: Boeing, 2014:2016; Airbus, 2014:2016) (Source: Boeing, 2014:2016; Airbus, 2014:2016)

LIQUIDITY ANALYSIS
 Gearing Ratio Interest Cover
12.00 30.00

10.91 27.02
10.00 25.00

22.43
8.00 20.00
19.20
6.00 15.00

4.00 10.00

2.00 2.41 5.00 5.91

5.13
1.36 1.06
0.93 0.89 2.34
- -
2014 2015 2016 2014 2015 2016

Boeing Airbus Boeing Airbus

(Source: Boeing, 2014:2016; Airbus, 2014:2016)

(Source: Boeing, 2014:2016; Airbus, 2014:2016)

SOLVENCY ANALYSIS
 Inventory Days
Debtor Days
250
50

45 222
45 44 200 210
40 191 195
41
179 177
35 150
33 34
30 31
25 100
20

15 50
10

5 -
2014 2015 2016
-
2014 2015 2016
Boeing Airbus

Boeing Airbus (Source: Boeing, 2014:2016; Airbus, 2014:2016)

(Source: Boeing, 2014:2016; Airbus, 2014:2016)
Creditor Days
80
70 75
72 71
60
50
51 48 51
40
30
20
10
-
2014 2015 2016

EFFICIENCY ANALYSIS Boeing Airbus

(Source: Boeing, 2014:2016; Airbus, 2014:2016)
 EPS DPS
$1.60
$9.00
$1.40
€ 1.35
$8.00 $1.20 € 1.30
€ 1.20
$7.70
$7.47 $7.52 $1.00
$7.00
$0.80 $0.91

$6.00 $0.73
$0.60

$0.40 $0.49
$5.00
$0.20
$4.00
$0.00
2014 2015 2016
€ 3.43
$3.00
€ 2.99
Boeing Airbus
$2.00
(Source: Boeing, 2014:2016; Airbus, 2014:2016)

$1.00 € 1.29
DPR
$0.00
2014 2015 2016 120%

100% 105%
Boeing Airbus 80%

60%
(Source: Boeing, 2014:2016; Airbus, 2014:2016)
40%
40% 38%
20%

10% 12%
0% 6%

INVESTOR ANALYSIS
2014 2015 2016

Boeing Airbus

(Source: Boeing, 2014:2016; Airbus, 2014:2016)

Strengths Acquired KLX which is largest supplier of aerospace
Open a new plant in China for production
Different airlines approaching Boeing

Weaknesses Faced the loss on each model of 787

Heavily rely on US government contracts
Unsuccessful nuclear deal between Iran and US

Opportunities Government incentives and programs

Partnership between different players of industry
China providing opportunities for aerospace industries

Threats Trade war between US and China

Unsuccessful deal between Iran and US for nuclear
China vision Made in China 2025
SWOT
 Low
Threat of
Substitutes Railway and shipments are available

But there is great need of aerospace industry all over the world

Very Low
Threat of New
Governments supporting their players
Entrant Purely capital intensive industry
Many countries have no capacity to develop aerospace industry
Moderate threat of rivalry
Rivalry
Dominance of two major players

Other players don’t have great influence

High
Customers
Paid on completion
Bargaining Power Lag of deliveries faced financial charges
Switching cost is low
High
Suppliers
Blockchain technology
Bargaining Power Acquired KLX
Trade war affecting relations of US

PORTER FIVE
Conclusion
Business performance seems good

Utilized its strengths

Need to overcome weaknesses and threats

Recommendations
Need to reply on more number of customers

Need to calculate profit per product because one product affected

profit badly
Need to do more partnerships in industry to capture more market
share

CONCLUSION AND RECOMMENDATIONS

 IF ANY QUESTION FOR RESEARCH PROJECT
 THANK YOU TO ALL AUDIENCE