Ladies and gentlemen, thank you for standing by. Welcome to the Airbus nine month 2025 earnings release conference call. I am Sharon, the operator for this conference. Please note that for the duration of the presentation, all participants will be in a listen only mode and the conference is being recorded. After the presentation there'll be an opportunity to ask questions. At this time I would like to turn the conference over to your hosts, Guillaume Faury, Thomas Toepfer and Hélène Le Gorgeu. Please go ahead.
Thank you, Sharon and good evening ladies and gentlemen. This is the Airbus nine months 2025 earnings release conference call. Guillaume Faury, our CEO, and Thomas Toepfer, our CFO, will be presenting our results and answering your questions. This call is planned to last around an hour. This includes Q & A which we will conduct after the presentation. This call is also webcast.
It can be accessed via our homepage by clicking on the dedicated banner. Playback of this call will be accessible on our website, but there is no dedicated phone replay service. The supporting information package was published on our website earlier today. It includes the slides which we will now take you through as well as the financial statement. Throughout this call we will be making forward looking statements. I invite you to refer to our safe harbor statement that appears in the presentation slide which applies to this call as well. Please read it carefully. Now over to Guillaume.
Thank you, Hélène, and hello ladies and gentlemen. Thank you for joining us today for our nine month 2025 results call. We're here in Amsterdam with Thomas to run you through our results. Our operating environment remains complex and dynamic. Navigating strong demands, combined with the specific supply chain tensions that have not changed, still requires continuous operational discipline and agility, in particular in the environment of changing trade policies. We welcome the U.S. EU Trade Agreement, which restores a stable and tariff-free environment for trade in aircraft and parts since the start of September. This is a crucial step that allows our global industry to move forward with the predictability it needs to invest and innovate. Yet the still unstable geopolitical situation remains an area of continuous vigilance.
In that context, we are rolling out our plan to reach the A320 family production target of rate 75 per month by establishing 10 A321 capable final assembly lines across four global sites. The recent addition of a second line in the United States and the second line in China marks a critical milestone in our global industrial growth strategy, but also enhances our overall business resilience. We are scaling up our operations and expanding capacity as we move forward with the commercial aircraft ramp up. We are also committed to contributing to European Defence and remain focused on delivering more competitive and innovative products and services with our two divisions, and we see a growing momentum when it comes to European strategic autonomy. We have made significant progress toward the consolidation of our space activities together with Leonardo and Thales, aiming at establishing a leading European company.
I will come to this in a minute. In Q3, we delivered 201 commercial aircraft, and as the engine situation is showing signs of recovery, the number of gliders is now at 32 as of the end of September. This brings our year to date deliveries to 507 aircraft as compared to 497 last year. Deliveries continue to be back end loaded as we navigate the engine situation. We have a strong year end rally ahead of us and our teams are in the sprint. Our EBIT Adjusted stood at EUR 4.1 billion as of nine months 2025. This reflects the commercial aircraft deliveries and the solid performance at both Airbus Defence and Space and Airbus Helicopters. Our free cash flow before customer financing was -EUR 0.9 billion. It notably reflects the inventory buildup that supports the Q4 deliveries and the ramp up on that basis.
We maintain our 2025 guidance which now includes the impact of currently applicable tariffs and we'll come back to this later. Moving to space, we've made a major strategic step forward. We are very pleased with the recent announcement of signing a Memorandum of Understanding, an MoU, with Leonardo and Thales to form a new European space player in 2027. If you recall, last year I was clear we needed to focus on fixing our foundations and restore profitability. The turnaround plan is in full motion and we are pleased with the first results. In parallel, we've been working on strategic options to create scale and increase competitiveness facing global players. The new company aims to unite, enhance capabilities in space by combining the three respective activities in satellite and space systems, manufacturing, and space services. The MoU is a collective industry commitment to strengthen the European space sector.
The next steps include launching the social consultation process with our social partners, preparing to carve out the space businesses, and addressing regulatory needs. We have a busy journey ahead and we are fully committed to this major and exciting project. Let's now look at our commercial environments, starting with commercial aircraft. Passenger traffic continued its growth momentum while air cargo demand remained resilient. During the nine months 2025 we booked 610 gross orders, including 116 in Q3. On the A220 we booked 40 gross orders and looking at the A320 family, we booked 371 gross orders. This brings our backlog to 7,105 out of which around 75% are for the A321 and the 7,105 is just for the A320 family, of course. Moving to the widebodies, on the A330 we booked 90 gross orders, confirming the high demand for these versatile products.
Finally, on the A350 we booked 109 gross orders, underpinning the continued commercial momentum of what has become the reference in the market. Net orders amounted to 514 aircraft, including 96 cancellations which were largely anticipated and already embedded in our backlog valuation. As of December 2024, our total backlog in units stood at 8,665 aircraft at the end of September. Looking at Helicopters, in the nine months 2025 we booked 306 net orders compared to 308 in the nine months 2024. Very similar and this is well spread across the portfolio. We continue to see positive momentum in particular on the military markets, and we remain focused on securing new business opportunities in both our home countries and export markets.
A new Airbus final assembly line will be established in India to build H125 helicopters in collaboration with Tata Advanced Systems, aiming at capturing the full potential of the civil, para, public, and military markets in South Asia. Let me conclude by highlighting that we have streamlined our small and medium tactical uncrewed aerial systems, UAS, the drones offering, into a single comprehensive portfolio managed by the Airbus Helicopters Division. This aims at delivering a focused market approach for defense and security customers and provides customers with cutting-edge capabilities for surveillance, intelligence, and operational flexibility. Finally, in Defence and Space, order intake stands at EUR 6.8 billion for the nine months on air power. This notably reflects an order from the Royal Thai Air Force for a next-generation Airbus A330 MRTT+.
This advanced aircraft is an evolution of the combat-proven A330 MRTT, introducing innovations from the A330neo as well as upgraded military capabilities, in particular the new engine of the NEO that is now on the MRTT +. While on air power, Let me highlight the recent contract with Germany for the acquisition of 20 Eurofighter aircraft to be produced at our final assembly line in Nanjing and to be delivered to the German Air Force starting from 2031. The order intake will be recorded once all contractual conditions are met, so the order intake is not yet recorded in Q3. The momentum for the Eurofighter is also strong on the export market outside of the home countries of the Eurofighter, and that was also demonstrated by this week's commitment from Turkey to acquire 20 units.
The Eurodrone program is making progress as we successfully completed the CDR, the so-called critical design review, earlier this month. This officially concludes the design phase and paves the way to prototype, production, and ground tests ahead of first flight on FCAS. We remain convinced that Europe needs to have its future combatant system in order to meet its security challenges and further develop its critical skills and know-how in this field. Given the level of effort and investment required, we are convinced, I am convinced, of the benefit of a collaborative approach, and we intend to play a leading role in making it happen in a way or the other. Overall, on what concerns the defense part of our Airbus Defence and Space and Helicopters businesses, we hope serving a growing momentum and we expect it will continue in the foreseeable future. Thomas, thank you very much.
Now Thomas will take you through our financial.
Guillaume and hello ladies and gentlemen. I'm now on page seven of the presentation and as Guillaume said, I will take you through our financial performance. As you can see on the chart, our nine months 2025 revenues increased to EUR 47.4 billion, which is up 7% year- on- year. It mainly reflects the higher contribution from our divisions, the stronger services volumes across our businesses, and a higher level of deliveries, partially offset by the U.S. dollar depreciation. As you can see on the right hand side, our R&D expenses stood at EUR 2.1 billion for the first nine months of the year, lower compared to the nine months of 2024. We continue to benefit from the prioritization of our activities. We now expect that the R&D expenses will be slightly lower in 2025 than in 2024 when we talk about the full year.
Now let's look at EBIT Adjusted on page 8. As you can see, our nine month 2025 EBIT Adjusted increased to EUR 4.1 billion from EUR 2.8 billion in the nine months of 2024. Let me remind you that in the nine months of last year we recorded EUR 989 million of charges in our space business, which obviously did not repeat themselves as of the nine months of this year. The higher commercial aircraft deliveries embed a less favorable mix, which is offset by a more favorable hedge rate and lower R&D expenses, and it also reflects a stronger performance in both divisions. Let me just clarify the impact of the currently applicable tariffs. At this point we expect this to represent anything between EUR 100 million and EUR 200 million for the full year, of which, however, the vast majority will be recorded in Q4.
As you can see on the right hand side of the page, the level of EBIT Adjustments totaled a net - EUR 0.8 billion. I'll just walk you through the items: it has in it - EUR 577 million impact from the dollar working capital mismatch and the balance sheet revaluation, mainly reflecting the mechanical impact coming from the difference between transaction date and delivery date, of which - EUR 186 million occurred in Q3. Secondly, it has - EUR 105 million related to the Airbus Defence and Space restructuring, which we recorded already in Q1, and it has - EUR 88 million related to the stabilization of certain Spirit AeroSystems work packages, of which EUR 31 million recorded in Q3, and finally - EUR 11 million other including compliance costs and also Moda. This takes our nine months 2025 EBIT reported to + EUR 3.4 billion and the financial result was + EUR 374 million.
It mainly reflects the revaluation of certain equity investments and the revaluation of financial instruments, partially offset by the evolution of the U.S. dollar. The tax rate on the core business continues to be at around 27%. However, the effective tax rate is 32.4% including the tax effect on the revaluation of certain equity investments as well as a net deferred tax assets impairment. We still expect the French surtax to result in an impact of around EUR 300 million in 2025 both for P&L and cash. In the nine months of this year, we recorded the part that is related to the year 2024 as well as the part corresponding to the first nine months of this year. The resulting net income is EUR 2.6 billion with earnings per share reported of EUR 3.34 as you can see on the chart.
The nine months 2025 EPS adjusted stood at 3 based on an average of 790 million shares. Now, with this, let's turn the page to page nine and look at our U.S. dollar exposure coverage. Consistent with what we said during our business update, we began to implement a limited number of zero cost collars, exactly $2.1 billion in the quarter into our hedge portfolio. The $2.1 billion is dollars, not euros obviously. This strategy aims at addressing the longer term horizon with an acceptable level of volatility and to potentially capture the favorable evolution of the U.S. dollar while at the same time being protected against a material weakening of the dollar.
Let me just be clear, we do not aim at replacing our forwards, but rather to complement our coverage with a limited amount of collars and as indicated the collars will at this stage remain at around a single digit percentage of the overall. With the integration of collars, the blended rate now includes the least favorable rate of our collars and so hence it provides you with a protected or conservative view. With all that being said, as you can see on the page, in the nine months of 2025, $14.8 billion of forwards matured with the associated EBIT impact and euro conversions realized at a blended rate of $1.18 versus $1.21 in the nine months of 2024. We also implemented $12.7 billion of new coverage at a blended rate of $1.18. As a result, our total U.S. dollar coverage portfolio in U.S.
dollar stands at $80.7 billion with an average blended weight of $1.21 as compared to $82.8 billion at $1.21 at the end of 2024. Now let's look at our free cash flow on page 10. Our free cash flow before customer financing was - $0.9 billion in the first nine months of the year. As you can see on the chart, this outflow was mainly driven by the change in working capital and it notably reflects the planned inventory build up to support our ramp up across our businesses. It also includes a favorable phasing effect of cash receipts and payments on the A400M. The aircraft slightly weighted negatively on our free cash flow in the nine months of 2025 as the deliveries of the aircraft are back end loaded.
However, we continue to expect it to be broadly neutral from a free cash flow perspective in the full year 2025. As you can also see on the chart, the nine month CapEx number was - EUR 2.3 billion and we continue to expect it to increase in 2025 to support our industrial ramp up so that the free cash flow was - EUR 0.8 billion including customer financing of a + EUR 0.1 billion. What we can say is that the aircraft financing environment remains strong and competitive and we expect sufficient liquidity to finance our 2025 deliveries. Our net cash position stood at EUR 7 billion as at the end of September, also reflecting the dividend payment as well as the weakening dollar environment. I should stress that our liquidity remains very strong at around EUR 30 billion.
In September, as you might have noticed, Moody's upgraded our credit rating to A1 with a stable outlook and we think this is underlining our consistent strong credit management and the strength of our balance sheet. With that, I would like to hand it back to Guillaume.
Thank you, Thomas. Very clear. Now let's start with commercial aircraft. In the nine months 2025, we delivered 507 aircraft to 79 customers. Looking at the situation by aircraft family, on narrowbodies, we delivered 62 A220s and 392 A320s. Out of the 392 A320 family aircraft, 250 were A321s, representing 64% of the deliveries for the A320 family. We are very pleased that Air New Guinea has taken delivery of its first A220, becoming the 25th global operator of the aircraft, which is now flying with carriers on five continents. The A320 family reached a major milestone, becoming the most delivered airliner in history. There's a bit of pride here, as you can see, and we continue to ramp up towards a rate of 75 A320 family aircraft per month in 2027. That's no change compared to previous assumptions.
On the A220, the current balance between supply and demand has led to an adjustment of the ramp-up trajectory and the ramp-up ahead of us. We are now targeting to reach rate 12 in 2026, allowing time for the integration of the Spirit AeroSystems work packages, mostly the wings, and the progressive introduction of engine durability improvements for our customers. This means more work to reach breakeven, and our team are actually on it. In the nine months, we delivered 53 widebodies, of which 20 A330s and 33 A350s. On the A330, we're currently stabilizing at a monthly production rate of 4 as previously introduced. We are now targeting to reach rate 5 in 2029 to meet the customer demand for the A330. On the A350, there's no change. We continue to target the rate 12 in 2028.
When it comes to the A350 freighter, I'm pleased to say that we started the assembly of the first flight test aircraft in Toulouse, with the first flight planned next year. In a nutshell, we continue to produce in line with the plan. The challenges for the year have not changed, notably with cabin and for the A320, the persisting tensions on engines, resulting in 32 gliders at the end of September. The engine situation is showing signs of recovery, and we continue to work closely with the engine manufacturers to deliver on our 2025 commitments. Now let's look at the financials for our commercial aircraft business. Revenues increased 3% year- on- year, mainly reflecting the higher number of deliveries and growth in services. EBIT Adjusted was at EUR 3.33 billion in the nine months, driven by favorable hedges rate and slightly lower R&D expenses.
While the increase of deliveries embeds an unfavorable mix. Looking at Helicopters, in the nine months we delivered 218 helicopters, 28 more than at nine months of 2024. Revenues increased around 16% to EUR 5.7 billion, reflecting a solid performance from programs and services growth. EBIT Adjusted increased to EUR 495 million, reflecting growth in services as well as higher deliveries. As I mentioned earlier, let's complete our review with Defence and Space. Revenues increased 17% year- on- year to EUR 8.9 billion, driven by higher volumes across all business lines. EBIT Adjusted stood at EUR 420 million, supported by higher volumes and improved profitability, in line with the divisional mid term trajectory. On the A400M program, we engage in positive and forward-looking discussions with the launch nations and OCCAR.
This was notably marked by the agreement reached in June with OCCAR to advance seven deliveries for France and Spain and to further increase the visibility we have on the production for the program. In light of uncertainties regarding the level of aircraft orders, Airbus continues to assess the potential impact on the program's manufacturing activities. Risks on the qualification of technical capabilities and associated costs remain stable. Now on to our guidance, which as you have seen, is maintained. On the basis of its 2025 guidance, the company assumes no additional disruptions to global trade or to the world economy, air traffic, the supply chain, the company's internal operations and its ability to deliver products and services. The guidance now includes the impact of currently applicable tariffs.
The guidance also includes the impact of the integration of certain Spirit AeroSystems work packages based on preliminary estimates and an assumed closing in the fourth quarter of 2025. On that basis, the company targets to achieve in 2025 around 820 commercial aircraft deliveries, an EBIT Adjusted of around EUR 7 billion. We're not yet there, and the free cash flow before customer financing of around EUR 4.5 billion. Just to clarify my statement on EBIT, we target an EBIT Adjusted of around EUR 7 billion. The anticipated impact of the integration of certain Spirit AeroSystems work packages on the company's guidance remains broadly in line with previous estimates. Maybe, Thomas, you want to be more precise on some of those elements?
Yes, let me just add a couple of precisions and details to what you said, Guillaume. First of all, on tariffs, as I said earlier, we expect this to represent anything between $102 million and $200 million for the full year. The vast majority of the total amount will be recorded in Q4. Secondly, on Spirit AeroSystems, when we say broadly in line, what we mean is that the closing date is now expected before the end of the year and all parties are putting all necessary efforts into the closing process. This is on track for the operational readiness for day one. Of course, it is later than what we had anticipated at the beginning of this year when we put out the guidance.
This shift of the closing into Q4 comes with a partial relief to free cash flow because we didn't own the business and therefore we did not record any negative operational result in our free cash flow. On the other hand, you have also seen in our financial statements that we provided credit lines to Spirit which are recorded below the free cash flow line. In total, this remains broadly neutral in terms of the net cash position for the company. Everything else being equal, you could take this slight free cash flow positive adjustment in the range of a low triple digit number into your models if you want, but obviously the order of magnitude is not such that it led us to change the guidance. With that, back to Guillaume.
Thank you, Thomas, for those precisions. I'll conclude with our key priorities, and they have not changed. We are and we remain fully committed to executing the next steps of our commercial aircraft production ramp up together with our suppliers. Our focus is twofold: addressing the remaining specific supply chain tensions, in particular on narrow body engines where durability remains a headwind as well as cabin, while also preparing the integration of the key Spirit AeroSystems work packages. As we focus on our production goals, we're also maturing the critical technologies that will define the successor of the A320 family, in line with our ambition to pioneer the next generation of commercial aircraft. When it comes to Airbus Defence and Space, we are progressing on our transformation and contributing to establishing a European space leader. On European Defence, the industry is clearly in motion.
We are embracing this challenge by leveraging the combined expertise of our Defence and Space and Helicopters divisions to drive scale and cooperation in Europe. Now let's turn to your questions in the Q&A.
Thank you, Guillaume. Thank you, Thomas. We will now start our Q & A session. Please introduce yourself and your company. When asking a question, please limit yourself to two questions at a time and this includes sub questions also. As usual, please remember to speak clearly and slowly in order to help all participants, particularly of self, to understand your question. Sharon, please go ahead and explain the procedure for the participants.
Thank you, Hélène. We will now begin the question- and- answer session. If you would like to ask a question, please press star one one on your telephone keypad. That is star one one to ask a question. We will now go to our first question. Our first question today comes from the line of Benjamin Heelan from Bank of America. Please go ahead.
Ben, we don't hear you.
Can you hear me now?
Yes.
Yes, sorry about that. First question was on the margin. Margin I think in Q3 looks pretty positive. Could you just talk through some of the drivers? It looks to me as though very positive mix in commercial. Any comments there would be helpful. Thank you.
Ben, I think we're repeating ourselves a little bit when we say that the margin of a single quarter should not be overestimated or overinterpreted. I would say the margin in commercial indeed was, let's say, positive. That does not necessarily come from the mix. The mix was actually not specifically helping us in Q3, but it was more driven by, let's say, cost discipline in terms of SG&A, R&D, where the lead program that we have started is now really showing its full effect. We're pretty pleased with, I would say, the efficiency that the company has shown over the course of the year and specifically in Q3. The things that we have done are not, let's say, of short-term nature, but we expect them, that we can actually keep them in our trajectory.
Secondly, I would say in Defence and Space, all divisions are showing a good performance. There are two drivers for it. One, that our improvement program for Space is actually showing good effects and we're very pleased with the results that we see, not only in terms of measures that they take, but first outcome, which is rather better than what we had expected. Secondly, as Guillaume pointed out, a good momentum in defense in general where we see not only good order intake but also, let's say, good margins for the first nine months of the year. I would not specifically point to the mix but rather some self-help measures and operational discipline that are helping.
Okay, thank you. And then a follow on. I know you won't give us a delivery number for 2026 today, but are there any building blocks that you can provide to point us broadly in the direction of where we should be headed for next year from a delivery perspective in commercial? Thank you.
I would say not more today than what you know already in terms of ramp up trajectory for the A320. The A330 and the A350 has changed, as you have seen on what we target for next year on the A220 where we target to reach rate 12 instead of rate 14. Nothing new on that horizon except this slight modification on the A220 and we'll be targeting rate 5 for the A330 a bit later.
That's basically a lot of stability in the ramp up trajectory compared to what we had shared earlier in the year .
Cool, thank you. Appreciate it.
Thank you. Your next question comes from the line of David Perry from JPMorgan. Please go ahead.
Yes. Hi, good evening, Guillaume and Thomas. Two quick ones from me just on this tariff impact, Thomas, if it all falls in Q4, do we annualize that impact going forward? On space, can you just clarify exactly what you're putting in? Unless I'm mistaken, I think you're putting a little bit more than just the manufacturing business. Maybe I've misunderstood on that and maybe any other comments you want to make in terms of like, is this going to have a meaningful impact on the ADS margin going forward, this transaction, are you making any equalization payments or receiving any? Thank you.
On the two questions, the tariff impact, let me repeat what I said. The total full year impact will be between EUR 100 million and EUR 200 million. Why is the majority of that occurring in Q4? The material that we have shipped, that is necessary, has already been shipped into the U.S. We hold it as work in progress so that we will only record the impact of the tariffs once the material is actually built into the aircraft and the aircraft is sold. Therefore, to your question, you should not annualize the Q4 effect. It's a specific impact of this year, where a lot of the pre-September 1 effects are currently captured in our WIP and will then only materialize when the aircraft is delivered. That is the mechanic behind it. On your second question, if I understood correctly, you're referring to Bromo. What are we bringing into that corporation?
Two businesses, essentially our space services business, which is currently mainly in CI, and our space systems business, which is also a subdivision of Defence and Space. Obviously, what has nothing to do with it is the launcher business, which is completely separate, but we're bringing in both services and space systems.
Okay, does the transaction have a big impact on the future margin of Airbus?
I mean, we do expect that there will be mid triple digit synergies five years after the closing of the transaction. I would say in the medium term it should be clearly accretive to the margin. We will then hold a 35% stake in something which is more efficient and more profitable than what we have today. Let's be honest, in the very short term, I would not put in a big impact in the models that you probably have.
Okay, thank you very much.
Thank you. Your next question comes from the line of Ross Law from Morgan Stanley. Please go ahead.
Hi, evening. Thanks for taking my questions. The first one on your full year delivery guidance, given that the engine suppliers have e ssentially said that they're getting you the e ngines that you need, what are the main challenges or bottlenecks outstanding from here into year end, and then looking ahead to 2026, obviously engines seemingly becoming less of an issue compared to 2024 and 2025, supply chain overall performing better. Is there any reason why you won't b e able to deliver a double- digit i ncrease in deliveries in 2026, which is a growth rate you previously referred to? Thanks.
Maybe I take the questions. When it comes to 2025 and the full year around 820 aircraft, the main challenge is the volume of aircraft that remains to be delivered in the fourth quarter. What we will have to deliver in the last month is indeed quite unprecedented. We are not yet at the point where we will have all what we need to secure all deliveries. We are still expecting engines in the weeks to come that will support some 2025 deliveries. The main challenge is indeed volume backloading of the year and making sure that there's no mishap or no challenge ahead of us that would postpone aircraft and cross the line of the end of 2025. A lot of work. The supply chain and the engine situation looks like we're going to make it. Again, still a lot on our plate about the engine tensions.
They will persist. There is indeed a bigger backdrop of airlines needing more engines for their in-service aircraft on the Pratt & Whitney side, but as well on the CFM side. The engine makers need to continue to ramp up the production of parts and engines to serve both the aircraft manufacturers and their airline and lessor customers. We are not out of the woods when it comes to tension on engine availability. We think we will have what we need for the trajectory we have sketched out for 2026. Again, we are not at the point of guiding for 2026.
I confirm and I maintain what I said earlier, we are consistent with the ramp-up trajectory that we have given previously this year and next year, namely reaching the rate 75 on the A320 in 2027, the rate 12 on the A350 in 2028, and the rate 5 on the A330 in 2029 as far as I remember. Only change, A220 slightly lower rate for next year. We are in the steep ramp-up on the A220 and we now target to reach the rate 12 for next year, which is still a very steep ramp-up. We believe this is the best balance between the different constraints we have next year and a lot of work actually on the A220 to get there by next year, including the integration of the wings and other work packages that will come from the integration of Spirit AeroSystems.
Okay, thanks Guillaume.
Thank you. Your next question comes from the line of Chloé Lemarié from Jefferies, please go ahead.
Yes, good evening, Guillaume, Thomas and Hélène. Thank you for taking my question. The first one would be on the maintain guide. It looks fairly conservative for Q4 given the expected delivery growth. I understand tariffs are a headwind, but any other moving part you'd like to share to help us understand the building blocks for the Q4 year- on- year? The second one, I think Guillaume, you commented on the press call about gliders being half of what they were. Could you just clarify whether this is at end Q3 or more recently and maybe compare and contrast the situation between the LEAP and GTF- powered aircraft, please? Thank you.
Maybe I start with the guidance and remain to do so starting from the $4.1 billion as of the nine months. Last year we did $2.6 billion in Q4 of last year. I would say there's clearly a positive effect from the volume. You can attach roughly half a billion to it if all the deliveries materialize. I would say there's at least two headwinds. One is the tariffs and secondly, R&D. We're expecting that R&D will be slightly lower than last year, but that still could mean that in Q4 R&D would be higher than last year. That is a headwind that you should have on your list. On the other hand, I do believe that the two divisions, Helicopters and ADS , could be performing positively and that would be then positive. If you take those together, that would bring me then to the around seven.
It all hinges on the deliveries. As Guillaume said, it's a very, very steep ramp up. The teams are on it and if we make the deliveries, obviously, then I think the financial numbers should clearly be in sync with it.
Thank you, Thomas. When it comes to the question on gliders, we stood at 60 gliders by end of Q2, and we stood at 50, 32 gliders by end of Q3, so by end of September, roughly a month ago. The situation obviously is dynamic as we are targeting to be with zero gliders by the end of the year. As I said earlier, we still need to receive engines in the weeks to come to be fully sure that we will have what we need. Engine manufacturers have confirmed that they will deliver what we need to reach that objective of zero glider and reaching our guidance. When it comes to the situation, LEAP versus GTF, actually it's both. As we speak, it's shared between the two engine manufacturers and can't be precise enough.
It's not far from balanced between the two, not far from 50: 50 between LEAP and GTF. Again, it's a dynamic situation almost by the day as we deliver a lot of aircraft those weeks. I can't be more precise than this at this very moment.
Very clear. Thank you.
Thank you. We will now take the next question. The question comes from the line of Sam Burgess from Goldman Sachs. Please go ahead.
Great. Thank you, Guillaume and Thomas, for taking the question. A couple from me. Thomas, can we just circle back on R&D? From memory, your initial expectation was R&D would be a bit above 2024 levels. I might have missed it, but what specifically is driving this trimming of R&D versus your initial expectations? Is that kind of sustainable going forward or do we get some catch up in FY 2026? The second question, I know you don't want to dwell too much on individual quarters, but in your press release you do explicitly mention a less favorable mix on deliveries year- to- date. Do you expect that mix to become more favorable in Q4? Thank you.
On R&D, we have roughly $200 million below the 2024 numbers for the first nine months of the year. If I'm not mistaken, that is mainly a function of our lead improvement program, where we're focusing on the things that really matter, but have the courage to also terminate some projects where we think they're simply not yielding the results that we feel they should. That means less external consultants, that means less spending on all kinds of things. It's not trimming R&D, as you said it, with a lawnmower approach, but it's really very specific and focused with the program where we think let's focus on the things that matter most to the company. That was pretty successful in our view.
Therefore, while admittedly we said at the beginning of the year that we would expect R&D to slightly increase, we're now of the view that with the successes that we have, which we think are sustainable, we should be slightly below previous year for the full year. That still means that in Q4, as I said in my previous answer, there might be a slight increase in R&D. Now going forward, what is unchanged is that we do expect R&D to increase in line with revenue. As a percentage of revenue, I think you should keep it constant in your model. Of course, starting from a somewhat lower base in 2025 and then on the mix, it's simply a function that we have delivered more A220s and you know that they have a lower margin than the best.
It's just a function of all the ramp- ups and the numbers that we have given you.
Great, that's very helpful. Thank you.
Thank you. Your next question today comes from the line of Ian Douglas-Pennant from UBS. Please go ahead.
Good evening. Thanks for taking my questions. The first is another on the supply chain. Aside from engines and the acquisition of Spirit AeroSystems being delayed, are there any other pain points that you'd like to call out in the supply chain that are causing the changes to the schedules that you've talked about today or elsewhere? Secondly, we've seen a number of A320neos being retired this year. I wonder, do you have any comments on why that might be happening, how sustainable you think, whether they are, you know, edge cases or how we should interpret some very young aircraft being retired. Thank you.
On the supply chain, of course, the main area of attention and concern are engines. As we mentioned earlier, the rest of the supply chain is actually doing much better than in 2024 and previous years. I mean, significantly better.
The number of missing parts and the depth of delays is significantly better than it was before. We continue to have issues and delays on cabin equipment, interiors, seats, and that's probably more of a midterm issue than a short term one given the fact that this part of the industry has been since COVID or since the recovery after COVID, sort of overwhelmed by the combination of demand for new aircraft and retrofit and extension of the life of products. When it comes to your question on the retirement of A320neo, I'm a bit surprised that's not what I have in mind maybe there's a confusion with aircraft being on the ground because of missing engines, in particular on the Pratt & Whitney side. That's not something that is consistent with what I have in mind. Not retirement of aircraft as much as I know.
We look at your question.
Thank you. We will now go to the next question. The next question comes from the line of Douglas Harned from Bernstein, please go ahead.
Good evening. Thank you. The first question is if you could update us on the A350. It looks like deliveries may be a little bit better in October, but this has been very slow. Maybe you could update us on progress with Spirit AeroSystems with interiors related to the A350 and getting those rates up. The second question is now we've heard some cautious comments from CFM on getting out to 75 a month, particularly most recently from Safran. Where do you stand now in working with the engine providers on ensuring that you can get to that 75 a month at some point, hopefully by the end of 2026.
On the A350, we continue to believe we will be consistent with what we have indicated so far, meaning that the ramp up has been sort of the start of the ramp up on the A350 has been sort of delayed by a year given the challenges and the difficulties we had with the section 15 of Spirit AeroSystems. We don't expect an increase compared to 2024 in 2025, but there is indeed a phasing and a quite significant level of backloading in deliveries in 2025. The ramp up then comes later and we think we'll catch up in the sense of maintaining reaching the rate 12 by 2028. We are mostly challenged by difficulties and delays on interiors, on lavatories, on seats. That's mainly what we're suffering from on the A350 and it's not different compared to previous quarters and even compared to 2024.
Unfortunately, when it comes to the ramp up of the A320, actually CFM is in line with us and has confirmed regularly that they are in line with us on the need for rate 75 on the ramp up trajectory. I'm slightly surprised with the remark because the level of alignment with CFM is very strong. They had significant issues this year that has led to a lot of gliders and delays in delivering their engines. They're catching up and again I'm comfortable that they will be back to where they have to be by end of this year to then deliver on the ramp up trajectory to support us in 2026, 2027 till we reach the rate 75. I'm not suggesting they don't have their challenges. I don't know what was the nature of the comment precisely.
They have their challenges, obviously, but we are moving hand in hand when it comes to ramping up the A320 with the CFM engine. At least that's my current perception and that's consistent with the last weeks and months, meetings and interactions with CFM.
Very good. Thank you.
Thank you. Your next question comes from the line of Ken Herbert from RBC. Please go ahead.
Yes, hi, good evening. Guillaume, Thomas and Hélène. I wanted to pivot and ask about the A220 if I could. The lower guidance for deliveries still seems relatively ambitious considering sort of where you are today on that program. Can you talk more about challenges with that ramp and what gives you incremental confidence? Still at the 12 a month in 2026. As a second part, there continues to be speculation about maybe a third variant of that program. How do you view the investments in that and the potential return on that program considering what seems to be a more challenging ramp and some incremental comments about some demand pressure. Thank you.
Yes, thank you for the question. Indeed, we are in a steep ramp up for the A220. The team has a lot on the plate, and now they have on top to integrate the wings and other work packages of the A220. That's indeed a lot of work to get to where we want to be. We think the rate 12 for next year is a good balance between the different challenges and the demand and supply situation and the quantity of work to be delivered. It's still a significant ramp up, but what we learned from this year is that a rate 12 for next year, reaching rate 12 next year, actually is something we believe is well in the cards. Basically, that's all about the quantity of work, all what needs to be achieved, the ramp up.
In both Mirabel and Mobile, we have two files, the number of variants, different configurations that we have to deliver, and industrial optimization to be able to accelerate the pace of production to that level. When it comes to the third variant, which is also nicknamed the Dash 500, the first two variants being the Dash 100 and the Dash 350, that's something we believe the program will need and benefit from. We have demand from airlines and from the airline customers for these variants that on paper looks really as a very competitive product. We have said that the Dash 500 is not a question of if, but is a question of when. We're still with the same type of statements.
Again, we're giving priority to the short term work and the short term challenges that we have to perform: the ramp up, to move forward, to break even with the program, to digest the Spirit AeroSystems work package that will be now under our responsibility. That's the way we're looking at the year and the years ahead of us.
Thank you.
Thank you. We will now take our final question for today. The final question comes from the line of Olivier Brochet from Redburn Atlantic. Please go ahead.
Yes, good evening, Guillaume and Thomas. Thanks for taking the question. The first one is very simple. On tariffs. You mentioned a number. Should we think of the impact on gas to be similar for 2025 and 2026, please? Second, on space, on accounting and the deconsolidation that you might be doing. Should we think of a deconsolidation? Will it lead to some separation costs, please?
The second question is too difficult and the first one as well, so I hand over to Thomas.
The first one obviously is easy for me, the answer is yes. I mean, roughly, the EBIT and the cash impact is the same. You can put that into your model on the space consolidation. What we have to do is go from a Memorandum of Understanding to signing and then from signing to closing. Closing means in order to be ready for that, we have to carve out the business. Currently the business is spread over many legal entities and countries. To your question, yes, we do have the task as Airbus to create an operationally and legally standalone separate business until 2027, which can then be put into the new legal entity that will come with, not insignificant, let's say, separation costs. We said, however, in the statement on Bromo that they would be in line with industry standards.
I think you can plug in a normal number into your models, but it's not insignificant, given the size of it for 2025. That will not have an impact on our financial results.
That's helpful. Thank you.
Thank you, Guillaume. Thank you, Thomas. This now closes our conference call for today. If you have any further questions, please send an email to Olivier, Victoria, or myself and we will get back to you as soon as possible.
Hélène, I'd like to announce to the audience that you will actually move to new challenges still in the Financial Directorate of Airbus under the leadership of Thomas in the Commercial Aircraft team. You will have Jean-Christophe Henoux as a successor. Jean-Christophe is joining from the Strategic team and will take over on December 1st. Very soon we will have J.C., nicknamed J.C., with us. Hélène, I would like to thank you very warmly for the pleasure working with you, for the quality and the precision of all you've been doing with us, for your constant voice on the calls, and for your very good availability with all our investors and analysts and all the financial community. I wish you, we wish you, with Thomas, all the best moving forward to your new job.
I'm sure there will be opportunities for you to answer questions on what it is and what you will be doing next. Again, thank you, Hélène, and welcome, J.C., and bye- bye, everyone. Thank you.
Thank you, ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant evening. Goodbye.