Airbus parent EADS is poised later this month to unveil a dramatic rise in profitability, having netted more than €2.1 billion ($2.81 billion) for shareholders last year, up from €1.033 billion in 2011 and just €533 million in 2010.
The figures, when revealed on 27 February, look to be at the high end of EADS guidance. Results issued today by key shareholder Daimler show that its approximately 15% proportionate share of the 2012 net profit of EADS amounted to €307 million, more than twice the €143 million it received in 2011. EADS was unable to comment.
EADS revenue has risen steadily for several years to €49.13 billion in 2011, and Airbus in 2012 delivered a record 588 aircraft. But profitability has been considered low, and Louis Gallois, who retired last summer as chief executive, had made improvement a priority. Though the group's "Vision 2020" bid to reduce its proportional reliance on Airbus - historically accounting for some two-thirds of sales - has been thwarted by a booming civil aircraft market, analysts have praised cost reduction efforts. Astrium and Eurocopter divisions have been rising stars, too, though EADS has failed to match their global presence in its Cassidian defence unit.
In 2012, Daimler, the German car maker behind the Mercedes-Benz brand, realised €709 million from the sale of a 7.5% stake in Airbus parent EADS in 2012, half of its holding.
The shares sale - for €1.66 billion to various institutional investors and German banks, including state-owned KfW - valued EADS at €22.1 billion and left Daimler with a 7.5% stake, down from the 22.35% it once held as proxy owner of the German government's interest in EADS, an interest matched by the French government and its own proxy holder, the Lagardère media empire. Of Germany's remaining nearly 15%, half had previously been transferred to KfW and the so-called Daedalus consortium of German banks involved in the most recent stake sale.
The sale followed by hours the December 2012 agreement of a new governance structure for EADS that will see the French and German governments effectively cede control of the European aerospace champion formed a decade ago with the amalgamation of national companies. Daimler's role as Germany's proxy holder stemmed from placement of its aerospace interests into EADS.
The EADS governance deal, reached in December and set to be enacted by an extraordinary general meeting of shareholders expected to be called during the first half of this year, was forged to allow the company to move on from an era of real or perceived government interference in its management. Such interference has been manifest in often inefficient national workshare deals and duplication in Germany and France of assets such head offices and, until recently, key personnel. Management including chief executive Tom Enders and private investors have long called for EADS's governance to be reformed along normal commercial lines. Pressure for change became irresistible after a proposed merger between EADS and BAE Systems was called off owing largely to German government resistance. The merger would have created the world's biggest aerospace group and potentially given EADS the scale to compete with US defence industry majors. But Berlin - and in particular chancellor Angel Merkel - are thought to have feared that UK-French defence alignments would leave German interests in the shade.
Under the new regime, French, German and Spanish government stakes will be reduced to 12%, 12% and 4% - from nearly 50% combined today. And, critically, no shareholder will be allowed to hold more than 15% of the shares, or wield any veto rights over management decisions.
The deal also frees Lagardère and Daimler to sell, on the open market, the stakes they hold on behalf of the French and German governments. Lagardère and Daimler have long made clear that they wished to be free of this ownership. Another visible sign of the changes set to come will be Arnaud Lagardère's stepping down as EADS chairman, in order to concentrate on management of his eponymous business group.
Former Thales chairman and chief executive Denis Ranque was earlier this week named as one of several new candidates for the EADS board, and is thought to be Lagardère's most likely successor.