Ladies and gentlemen, thank you for standing by. Welcome to the Airbus Full Year 2019 Results Release Conference Call. I am Aurelia, the operator for this conference. Please note that for the duration of the presentation, all participants will be in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to your hosts, Guillaume Faury, Dominik Asam, and Thorsten Fischer.
Thank you, Aurelia. Good morning, ladies and gentlemen. This is the Airbus Full Year 2019 Results Release Conference Call. Guillaume Faury, our CEO, and Dominik Asam, our CFO, will be presenting our results and answering your questions. This call is planned to last around 90 minutes. This includes Q&A, which we will conduct after the initial presentation. This call is also webcast. It can be accessed via our homepage, where we have set a special banner. Playback of this call will be accessible on the website, but there is no dedicated phone replay service. The supporting information package was emailed to you earlier this morning. It includes the slides, which we will now take you through, as well as the financial statements. Throughout this call, we will be making forward-looking statements. The package you received contains the safe harbor statement, which applies to this call as well. Please read it carefully.
Now, over to Guillaume.
Thank you, Thorsten. Good morning, ladies and gentlemen, and welcome to our full year 2019 results call. You've seen our press release earlier on the increase in our holdings in the A220 program. We will come back to that later on. Our call today is about our full year release. I'm happy to be here with Dominik to run you through our 2019 results and provide our 2020 outlook. In 2019, we made good progress despite industrial challenges and a complex geopolitical environment. In commercial aircraft, we delivered a record 863 deliveries, ramping up our production by approximately 8%. Although we adjusted the deliveries guidance during the year, we demonstrated a strong underlying financial performance. In 2019, we delivered on EBIT adjusted at EUR 6.9 billion, up 19% year-on-year, and free cash flow before M&A and customer financing at EUR 3.5 billion, up 21% year-on-year. We also addressed some key files.
First, compliance. Airbus has reached final agreements with the French PNF, Parquet National Financier, the U.K. SFO, Serious Fraud Office, the U.S. Department of Justice and United States Department of State, resolving the investigations into Airbus, and agreed to pay penalties of EUR 3.6 billion plus interest and costs. The corresponding charge has been recorded in our 2019 accounts. These agreements represent a very important milestone for us. Second, on the A400M, while we re-baselined the program and made significant progress on technical capabilities, the outlook is increasingly challenging on exports during the launch contract phase, also in light of the repeatedly prolonged German export ban on Saudi Arabia. We have reassessed our export assumptions on future export deliveries for the launch contract phase, and we have booked a charge of EUR 1.2 billion in Q4.
Whilst the agreement with the authorities and the charge for the A400M have pushed our 2019 results into a net loss and will heavily weigh on our 2020 free cash flow, we remain confident about sustaining our operational improvements in EBIT and cash generation in the coming years. Taking this into account together with good prospects in 2020, we propose a dividend of EUR 1.8 per share, which is plus 9% versus 2018. In 2019, we had again a strong finish to the year, thanks to a tremendous team effort, but we cannot be satisfied again with the back-loaded delivery profile. For 2020, we remain fully committed to take the necessary steps to position Airbus for growth, which is more sustainable. At the same time, we are facing a heavy burden on free cash flow in 2020 from the penalty payments and the consumption of compliance-related provisions.
Before we come to our 2020 guidance, let's take a closer look at 2019. First, I'd like to kick off on commercial with a short update on the WTO situation. Let me remind you that in October 2019, the USTR levied tariffs on Airbus aircraft imported from the EU into the U.S., which impacts our U.S. customers. We continue working to manage the consequences of these tariffs. This year, the WTO is expected to authorize the EU to impose tariffs on U.S. products. The financial decision, whether, and in what amount to impose tariffs, would be made by the EU and its member states. I'm hopeful that the U.S. and the EU will find a negotiated settlement to avoid further damage. Let's take a look at our commercial positioning, starting with Airbus. We continue to see a robust demand for our products.
Despite geopolitical and trade tensions, the global economy grew by about 2.5%, passenger traffic grew by more than 4%, passenger load factors were above 82%, and airline profitability remained strong at about EUR 29 billion. Of course, we are closely watching how the coronavirus situation is evolving to anticipate its potential impact on our customers, employees, and stakeholders, as well as on our aircraft production and deliveries, and to define appropriate contingency measures to be applied if and when necessary. In 2019, we booked 1,131 gross orders, underlying customer endorsements in all market segments. The installation of 363 units reflects specific airline situations in 2019, as well as the A380 production stock. Net orders reached 768 compared to 747 in 2018, taking others of our historical cumulative net orders over the 20,000 mark.
While the book-to-bill was one, the value of the backlog has increased year- on- year by around EUR 12 billion. In units, our backlog reached 7,482 aircraft. On the A220, we booked 63 net orders, including new customers, confirming the A220 as the leader in its category. Our backlog stands at 495 aircraft. The A320 family continued its success with 664 net orders. The A321XLR received an outstanding market response with a backlog of more than 400 aircraft at the end of 2019. Our total single-aisle backlog of 6,068 aircraft supports our ramp up plan. Now on the A330, where we booked 89 net orders, including orders from existing operators and the new Neo lessor, our backlog stands at 331 aircraft. On the A350, we've recorded 113 gross orders, including some major campaigns. Net orders stand at 32 aircraft with a backlog of 579 aircraft.
In helicopters, the team achieved a book-to-bill of more than one in value for the third consecutive year, a very good performance in a rather difficult market environment. Order intake amounts to EUR 7.2 billion, of which about EUR 3 billion from services. Despite the current soft civil and parapublic market environments, we maintained our leading position in the civil and parapublic sector. We booked 310 net orders in 2019, including 25 Super Puma, 23 NH90s, and 10 H160s. Key services contract wins include a support contract extension for Australia, ARH Tiger, and support contracts for the French Forces. In 2020, we expect the civil and parapublic market to remain soft, particularly in the oil and gas, and we continue to see good prospects in military. Finally, in Defence and Space, while we see significant opportunities in the long term, the book-to-bill was a disappointing 4.8 in 2019.
Our 2019 order intake of EUR 8.5 billion was supported by 800 service contracts and key contract wins in space. In defense, we've seen some acceleration on major campaigns, but as communicated before, exact timing of contract award is and remains difficult to predict. The FCAS Future Combat Air System first demonstrator contract, the so-called Phase 1A, was finalized and approved by the German parliament yesterday. We've also submitted the order proposal together with our partners in 2019. The contract negotiations are underway. In space, we focus on strengthening our position in a competitive environment. We've seen some positive signs in terms of budget commitments at the latest ESA conference. Now, Dominik will take you through our financial performance for the year. Dominik?
Thank you, Guillaume, good morning, everybody. Our 2019 revenues grew to EUR 70.5 billion, up 11% year-on-year, mainly driven by higher deliveries and a favorable product mix at Airbus, and to a lesser extent, a favorable exchange rate development. As a reminder, throughout the year, we guided an approximately 15% increase year-on-year on EBIT adjusted. We actually exceeded that with EUR 6.9 billion, up 19% year-on-year, despite the revised delivery target we gave you in October, showing approximately 20 aircraft less than we initially targeted. The strong conversion of deliveries into profit was largely driven by the A320 ramp-up and neo premium, good progress on the A350, partially offset by Defense and Space performance, and additional ramp-up costs. We also continued to increase our investment in innovation and digitalization. Our earnings per share adjusted stands at EUR 6.07 per share, using an average 777.0 million shares.
We generated free cash flow before M&A and customer financing of about EUR 3.5 billion, up 21% year-over-year, despite higher A220 dilution and some initial progress on linearization, in particular on trade receive and trade liabilities. This mainly reflects our record deliveries and our earnings performance. Turning to page seven on our profitability. Our EBIT reported was around EUR 1.3 billion. The level of adjustment was a net negative of EUR 5.6 billion, of which EUR 0.7 billion were already booked in the nine months. It includes the following negative adjustments. About EUR 3.6 billion related to the penalties. About EUR 1.2 billion related to the A400M charge. EUR 221 million related to the suspension of defense export licenses to Saudi Arabia, now prolonged to March 2020. EUR 202 million related to the A380 program costs. EUR 170 million related to foreign exchange and balance sheet revaluation.
EUR 103 million related to Premium AEROTEC restructuring plan launched to improve company competitiveness. EUR 101 million negative of other costs, including compliance costs, partially offset by positive capital gains from the sale of Alestis and PSW. We are clearly not satisfied with this exceptionally high level of adjustment and will put a very strong focus on managing this down. While we believe we have put a lot behind us, we still have work to do in 2020 in terms of Defence and Space restructuring, A380 ramp down, and the consequences of the compliance settlement. Obviously, FX and balance sheet revaluation may continue to introduce some volatility in our adjustments. EPS reported includes a negative impact from financial results, mainly driven by revaluation of financial instruments. The tax expense of minus EUR 2.4 billion is mainly due to the fact that adjustments were largely non-tax deductible.
For 2020, you should assume a tax rate of around 28% on the core business results. The resulting net loss is about minus EUR 1.4 billion, with loss per share of about EUR 1.75. Our hedging strategy provides good visibility for the coming years. Our annual hedge rates have significantly improved versus the prior year. In fiscal year 2019, we implemented $40.6 billion of forwards at an average rate of $120 per euro, mainly for 2022 and 2023, while $24 billion of hedges matured at a rate of 124. We also adjusted the phasing of our hedges to better reflect our delivery profile. We rolled $4.1 billion of hedges into 2020 and about EUR 7.1 billion out of 2020. In addition, we continued to restructure our collars by converting them into forwards.
In 2019, we restructured the total amount of 2019 collars and a significant portion of 2020 collars, resulting in a positive impact on the 2020 average hedge rate. We also started hedging British pounds versus euro, which will progressively replace our British pounds versus US dollar portfolio. Our total hedging portfolio in US dollar stands at $97.1 billion, with an average exchange rate of 123. We will implement new hedges based on the overall foreign exchange environment in line with our policy. Let's look at our cash evolution in 2019. Our strong gross cash from operations of about EUR 7.0 billion, up from EUR 5.5 billion in 2018, reflects our EBIT adjusted and record deliveries. In 2019, the significant cash out from our linearization efforts, both on single inventory and payment terms with suppliers, has been partially compensated by healthy PDP inflows and disciplined inventory management on wide-bodies.
As cash neutral in 2019, the impact from recognizing the penalties has been netted in our cash bridge from both gross cash flow from operations and change in working capital. A220 impact on free cash flow was around minus EUR 0.5 billion as expected. The net cash impact was largely covered by the ACLP funding agreement by Bombardier. This funding was recognized as a financing cash flow and therefore outside free cash flow. A400M continued to weigh on our free cash flow before M&A and customer financing, but less than in 2018. At around minus EUR 2.3 billion, CapEx was stable versus 2018. We expect our 2020 CapEx to be around EUR 2.6 billion. Free cash flow reported was EUR 3.5 billion. Customer financing contributed EUR 0.1 billion, whilst M&A activities accounted for minus EUR 4.1 billion. The 2018 dividend paid in 2019 amounted to EUR 1.3 billion.
We contributed a total of EUR 1.8 billion to our pensions in 2019, thereof, EUR 1 billion of top-up funding to reduce the deficit. The net pension deficit stands at EUR 8.4 billion at the end of 2019, and we are committed to further fund this deficit in the future to secure a funding ratio at benchmark levels. As a reminder, on January 1st, 2019, we adopted the IFRS leases standard, which increased financing liabilities by EUR 1.4 billion and reduced the opening net cash balance to EUR 11.9 billion. On a comparable basis, our net cash position has slightly increased by about EUR 500 million - EUR 12.5 billion. Before we move to Airbus business, I would like to give you a little heads-up. Beginning this year, we will adapt our segment structure to reflect our internal reporting.
As a result, you should consider that the bulk of our transversal activities will be included in the Airbus segment. Eliminations will be reported separately. We'll start reporting on that basis from Q1 2020. Back to Guillaume for a closer look at our businesses.
Thanks, Dominik. Starting with Airbus, we delivered a strong set of results based on record deliveries and solid operational performance. Despite the challenging and steep ramp-up we have faced on the ACF, we delivered an industry record of 863 aircraft, which is 63 more than in 2018, as I said, an 8% increase. Let's take a closer look at where we stand on each of our programs, starting with the A220. In 2019, we delivered 48 aircraft. Our focus continues to be on cost reduction as well as growing the backlog to support the ramp-up plan to a max target rate of 10 in Mirabel and four in Mobile by the middle of the decade. At that rate, we should be in a position to reach operational profitability. In 2020, we target to deliver around 55 aircraft.
A220 will continue to weigh on free cash flow in 2020 at a higher level than last year. Coming back to our announcement from earlier today, Airbus and Investissement Québec have agreed to acquire Bombardier's remaining stake in the Airbus Canada Limited Partnership leading the A220 program. Following the agreement, Airbus becomes a 75% shareholder of ACLP, with IQ holding the remaining 25%. This agreement also includes the transfer of the remaining A220 and A330 work packages production capabilities to Airbus. Airbus will pay a total consideration of EUR 591 million net of adjustments, of which EUR 531 million on closing. With this transaction, Bombardier is released of its future funding capital requirements to Airbus Canada. Onto the A320. We delivered 642 A320 family aircraft, of which 551 neo.
Within that overall A320 delivery number, we ramped up the ACF, Airbus Cabin Flex, by nearly 100 aircraft versus last year, of which almost half were delivered in Q4. In 2020, we target to more than double our ACF deliveries, with ACF add-on versions increasing in 2020. Our teams are focused on securing the ongoing ACF ramp-up and improving the industrial flow on a sustainable basis to alleviate the burden in Hamburg. Locally, in Hamburg, we dedicated 2 lines, 2 out of the 4 lines, for the ACF. We also inaugurated the new A320 structural assembly line in October to help build additional efficiency in our production system. In the U.S., we delivered our first ACF in 2019.
We will expand our industrial footprint by increasing the A320 family rates to seven per month in Mobile by the beginning of this year, as part of our plan to reach rate 63 in 2021. In Toulouse, we recently announced the launch of a new digitalized A321 FAL to rebalance the A320/A321 mix and further secure the global single-aisle outputs. First aircraft delivery is targeted in 2022. Our single-aisle backlog of 6,068 aircraft represents more than eight years of production at current rate. We are in discussions for further ramp-up beyond rate 63 with our supply chain, and we already see a clear path to further increase the monthly production rate by one or two for each of the two years after 2021. Switching to the A330, we delivered 53 aircraft, including 41neos.
Given the current overall demand in wide-body, we have reviewed our production planning and will adjust the A330 deliveries beginning in 2020 to approximately 40 aircraft per year. We will work to adjust over time the cost base of the program in line with this new production plan. On the type certification for the A330-800, we expect some news very soon. Moving on to the A350, we delivered 112 aircraft and now have 33 A350 operators. We achieved our break-even target in 2019, and we've continued to progress on recurring cost convergence as we improve the performance of the program. Rates, given the current market environment, we plan to stay between rate 7 and 10. On the financials, revenues reflect higher deliveries, including 551 A320neo and 112 A350.
Our 32% increase in EBIT adjusted reflects on A320, the strong performance driven by higher deliveries and neo premiums as the neo mix has increased to 86% for the full year 2019. The improvement was partly offset by additional ramp-up costs for the A350. On A350, we delivered 19 more aircraft in total versus 2018. The R&D was higher at EUR 2.4 billion, as expected. The year-on-year increase reflects mainly the DDMS ramp-up. We will continue to focus on execution as well as competitiveness, and deliver on the commitments to our customers. Let's move on to our helicopter business. Stable revenues were supported by growth in services offsetting lower deliveries. 4.6% margin expansion in EBIT adjusted mainly reflect an increased contribution from services and lower R&D, reduced by less favorable delivery mix.
Our 2019 performance confirms the resilience of our business in what remains the soft market. We continue to manage performance, and the building blocks are in place in anticipation of a market recovery. Finally, in Defence and Space, revenues were broadly stable with last year. Our EBIT adjusted came in at EUR 565 million, a decline of 40% versus last year. This mainly reflects lower performance in space and our efforts to support sales. As a reminder, 2019 EBIT reported includes an adjustment of minus EUR 221 million due to the prolonged suspension of defense export licenses from Germany to Saudi Arabia, and 2018 included the net capital gain from the disposal of Airbus DS Communications, Inc. business in the U.S. What's the status on the A400M? In 2019, we delivered 14 aircraft in line with the latest delivery schedule, bringing the in-service fleet to 88 aircraft.
In 2019, we achieved several key milestones towards full capability. This includes simultaneous deployment of paratroopers, certification of combat offload operations, and helicopter air-to-air refueling dry contacts. In 2020, we will continue with development activities toward achieving the revised capability roadmap. Retrofit activities are progressing in line with the customer agreed plan. As I mentioned earlier, we reassessed the export assumptions of the A400M in Q4, resulting in a charge of EUR 1.2 billion. The A400M is now expected to weigh on cash by a total amount of approximately EUR 2 billion until mid-decade. Over the past three years, Airbus Defence and Space order intake and financial performance have been impacted and have fallen short of our ambitions. As a result, we are targeting a restructuring program to address cost structure and restore profitability to high single-digit margin.
We started engaging with our social partners in December and expect a restructuring charge this year. Guidance. As the basis for its 2020 guidance, Airbus assumes the world economy and air traffic to grow in line with prevailing independent forecasts, which assume no major disruptions, including from the coronavirus. The current tariff regime to remain unchanged. Airbus 2020 earnings and free cash flow guidance is before M&A. Airbus targets around 880 commercial aircraft deliveries in 2020. On that basis, Airbus expects to deliver an EBIT adjusted of approximately EUR 7.5 billion, and free cash flow before M&A and customer financing of approximately EUR 4 billion. Before the minus EUR 3.6 billion for the penalty payment and a negative mid-to-high triple-digit million EUR amount for the consumption of compliance-related provisions for tax and legal disputes. The board of directors will propose a dividend of EUR 1.8 per share, up 9% versus last year.
This dividend reflects the positive evolution of the 2019 underlying performance and our 2019 cash generation. It also highlights our confidence in our future financial performance, as well as ongoing commitments towards sustained dividend growth and increasing shareholder returns. In 2019, we've put a lot behind us. Compliance investigations, A400M baselining, A380 end of program and Emirates A350 order, A220 ramp-up and now buyout of Bombardier stake, formation of the Future Combat Air System, which is a major achievement for the future, management transition, and the launch of the transformation platform to prepare the next chapter of Airbus. We also progress towards a more linear financial profile. The cash we generate in 2020 from our underlying business will help satisfy the estimated compliance-related obligations for the year. We'll continue to fund our pensions to benchmark levels, as Dominik said, and we need to explore opportunities for non-organic growth.
We will do all this while protecting our investment-grade credit rating. While A400M, A220, and compliance will continue to weigh on our free cash flow, the business supports our cash conversion target of one. Now a few words to wrap up. 2019 was a year where we progressed on a number of topics in an environment that has become more complex with Brexit, tariffs, and trade bans, which should carry into 2020. We laid out the foundation of our next chapter for a stronger and more sustainable Airbus, and we'll continue to build on it. In 2020, we'll further enhance the efficiency of the single-aisle delivery flow, including the ACF ramp-up, to leverage the full potential of the program in the future. Linearizing of production is a key priority. We know the coronavirus could make it a bit more difficult.
We will also continue to improve the A350 profitability, while at the same time, we're going to address the A330 cost base given the rate adaptation in line with wide-body customer demand. The A220 focus will remain on commercial momentum and securing additional cost reductions. In helicopters, we'll continue to leverage our military and services business while positioning the company for future civil and parapublic market recovery. In Airbus Defence and Space and Premium AEROTEC, we take the necessary measures to restore profitability. We'll continue our investment in digitalization and innovation to prepare the future. Our focus is and will remain on program execution and delivering on our commitments to our customers, paving the way for stronger financial performance and free cash flow growth, always with quality, safety, integrity, and compliance in the forefront. Now, let's turn to your questions. Thank you.
Thank you, Guillaume. We now start our Q&A time. Please introduce yourself and your company when asking a question. Please limit yourself to two questions at a time. This includes sub-questions. As usual, please remember to speak clearly and slowly in order to help all participants, particularly ourselves, to understand your questions. Aurelia, please go ahead and explain the procedure for the participants.
We will now begin the question and answer session. Anyone who wishes to ask a question may press zero and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press zero and two. Participants are requested to use only handsets while asking the question. Anyone who has a question may press zero and one at this time. We've received the first question from Benjamin Heelan, Bank of America. Your line is now open. Please go ahead.
Yes, good morning, everyone. Thank you for taking my question. My first one was on A320 rate rises. Can you help us understand where these aircraft are going to be produced? How should we be thinking about the mix of A320 versus A321 within those rate rises? Secondly, on Defence and Space. I think in the statement, you flesh out that it's space which is where you're seeing primarily the weakness. How should we be thinking about this going forward? Thank you.
Hi, Ben. Thank you for the questions. I'll start with the first one. Well, A320 family will continue to be produced in our main sites where they are produced today. We have four final assembly lines in Hamburg, capable of A320 and A321s. We have two assembly lines in Toulouse. They are A320 only. As we have announced earlier, we set up a new final assembly line that will be a A320, A321 assembly line. We gain flexibility on our ability to grow the mix of A321 moving forward in the single aisle, and we have the two assembly lines in Tianjin and Mobile, and we continue to raise the rates as well on those assembly lines.
That supports the plan to go to rate 63 per month overall for the A320 family by 2021, and as well to increase the rate, as I said, by one or two points of rate in 2022 and again in 2023. I hope it answers your question. Now, on the mix between A320 and A321, Dominik, under your control, we were around 30% A321 deliveries in 2019, and we have in the backlog a much higher percentage of A321. We keep growing the percentage of A321s moving forward.
You want to take the one on Defence and Space?
Sure. You've seen that the profitability in Defense and Space has significantly declined. You've also seen that the order intake was, again, significantly below the revenue line. The plan is currently to say, let's assume that many white elephants we have in the pipeline would not materialize, just as a stress test, and assume that the kind of EUR 8.59 billion level would be rock bottom where we could end up. How do we need to adjust the cost base to bring the return on sales back to a high single-digit margin? That will take a couple of years. This year, you will not see a lot of improvement on that because the restructuring is just starting. Next year, gradual improvement.
Thereafter, in the year three, so to speak, we want to be back to that kind of high single-digit margin we've seen in the past because of the restructuring.
The next question is from Tristan Sanson, Exane BNP Paribas. Your line is now open. Please go ahead.
Yes. Good morning, Guillaume, Dominik. It's Tristan from Exane. I will limit myself to two questions. The first one would be on your ability to provide midterm visibility to the market. Remember that at the Paris Air Show last year, you commented that you needed a few conditions behind, like Brexit, the settlement of the SFO case, and the completion of operating planning exercise before you can provide midterm visibility to The Street. I suspect the environment has evolved quite a lot since then. Can you tell us what would be the new conditions required for you to be able to use this kind of commitment? That the first question. The second is can you provide to us an update on the cash flow pattern of the A400M program going forward? Thank you.
On the capital allocation question, I think it's worthwhile first looking at the cash flow development. I should start with the kind of target capital structure. We really like the rating position we are in. We think it's a little bit of a slippery slope to go back or down to a triple B type rating in such a business as ours with a lot of PDPs from the customer. We really have to be a safe haven for our customers. Also in case ever capital markets would dry up a little bit on the vendor financing, we really would like to be able to also support that if needed. For that reason, we really like the rating category we are currently in.
In terms of the cash flow you've seen last year, bringing in EUR 3.5 billion, and we had also mentioned there is a EUR 1.8 billion funding of pension liability to be deducted, and then we're going to pay a dividend for last year. If you take that together, you see that basically that is already kind of washing it out. For next year, we are extremely burdened. Sorry. The current year, 2020 now, I'm talking. We are extremely burdened by the fine and the consequences of the fine and the EUR 4 billion guidance on the operating side is already kind of eaten up by that. Of course, we want to also continue the dividend policy, which is very much geared around the net income and 30%-40% cut of the net income.
As we have now all the fine related topics in our balance sheet already, it means that, of course, we would like to sustain the dividend policy. There's a clear commitment to sustain the dividend policy increase in dividend. It's also clear from the kind of cash bridge I gave you that we have no room for 2020 to think about shareholder returns in terms of share repurchases.
The second question was on A400M cash profile.
The A400M cash profile. For last year, 2019, we had previously guided that we want to go to about EUR 500 billion, and that kind of EUR 500 million is now slipping into next year. Last year we did more than that. Well, it was less than the EUR 1 billion in 2018, but kind of in between the two numbers. I think it will be EUR 500 billion for a couple more years, maybe three years, and then tapering off. This gives you the roundabout EUR 2 billion we've mentioned.
Okay. Thank you so much. If I may, the first answer was very helpful, actually not exactly my question. I was rather wondering when you would be able to hold a capital market day that would enable us to get a bit more visibility on the earnings trajectory of each of your programs and the midterm ambition that you have for the group. I'm not looking for timing, but for the conditions that need to be gathered for you to be able to hold such an event if you want to.
I'm not sure I can answer your question precisely. As you have seen, we've put a lot behind us in 2019. Brexit remains a risk, unfortunately. We thought the no-deal Brexit was off the table with the new negotiation situation. It's not completely sure. We have the WTO situation as well, quite dynamic. SFO, PNF, all of this is behind us. I think it was a very important objective we had in the team to come to an end and move to the next phase and that this is done. I think we owe you a more precise answer on that question. As we move forward in this year, we think we have a lot of things again to put behind us, but we see a clear trajectory on operations, on linearization, on the ramp-up of the single aisle and profitability of our program.
We take the question maybe to be answered a bit later. It's understood, Tristan. Thank you.
Thanks for your answer.
The next question is from Céline Fornaro, UBS. Your line is now open. Please go ahead.
Yes. Good morning, gentlemen. Thanks for taking my questions. I would start with the first one, which is coming back to one comment that Guillaume made at the end where you said that you can still see that the business supports a cash conversion target of one time and I guess you were talking at group level. Should we infer from that Airbus Commercial?
Yeah, it's Dominik here. Hi, Céline. The cash conversion of one is clearly the target for the group. There are two caveats we have highlighted. One is the A400M. We gave you now the sizing of the cash that's weighing still going forward. It's clear in 2020 we have the compliance topics ahead of us, which is also depressing cash conversion in 2020. There is the J-curve of the A220. The program is ramping. You've seen that we have delivered, I think, 48 aircraft last year. If you think about the rate potential, you see that it should go up, kind of mid of the decade to 160, 170-ish. That's a very steep ramp, and that ramp is cash. There is also a significant cash requirement, which will actually for 2020 be in the high triple-digit million dollar.
These two are the ones we have to still bring behind us. We should have the group on a cash conversion of one.
Céline, sorry, the line was disconnected. Operator, maybe you can go to the next question.
Sure. The next question is from Christophe Menard, Kepler Cheuvreux. Your line is now open. Please go ahead.
Yes. Good morning. Two questions. The first one on the A330 production rate decrease. Can you explain the reason? I guess it's probably the demand, the reason why you moved from 50 to 40, how sustainable is this beyond this? Second question is on the timing of pension funding and the amount that you intend to actually pay or fund in the coming years, also kind of the timing you envision.
Yes. I take the first one, and Dominik, you take the second one. On the A330, behind the delivery figures, it's important to have in mind that a lot of the planes that were delivered in 2019 were actually produced in 2018. You remember that we had delays on the entering to service of the Neo linked to engine issues. The underlying production is more linear, is more stable than what we see in the deliveries. Now back specifically on your question for 2020 and moving forward to 2021. Yes, that's basically driven by the demand. We won't, and we said it already a couple of times in the past, to have a level of production that is reflecting the demand moving forward, not to be in a situation of over capacity on our side.
What we have said on the A350 and on the A330 reflects our understanding of the capacity of the market and mainly is reflecting the backlog, capacity of the backlog and the market, to take our planes in good conditions. That's basically what we think is the right level of deliveries to fit with the current market environment and the success of our product, because we had a very good booking record last year on those products. We remain very confident that we want to be according to market expectations. Dominik, on the pension.
Yes. On the pension, we now have a pension liability, DBO, defined benefit obligation, of about EUR 21 billion as of end of the year, and a deficit of about EUR 8 billion. We said we want to bring that to benchmark level. You should take the kind of benchmark levels in a blend of our countries. It should be maybe around 80% funded. If you do the math, given the funding ratio we currently have, you will require another EUR 4 billion or so at current interest rates. Of course, interest rates can move, and in case they ever moved up again, the deficit would close quickly. If they don't, we need to fund. The idea is now to basically gradually over several years do that. I mean, the kind of rate at which we do that, you've seen last year was EUR 1 billion.
In case interest rates stay where they are, it could be a similar rate going forward until we have that gap closed to the 80% funding ratio.
Thank you very much.
We have Céline Fornaro back on the line. Your line is now open again. Please go ahead.
Céline, we don't hear you. I don't know if you can hear us.
Hello, can you hear me?
Yes, we can hear you loud and clear.
Okay. Hello. Hi. Well, I could hear you nice and clear. Here we are. I heard the answer on the free cash flow conversion, so thank you for that. I suppose on that one, Dominik, you were assuming a neutral defense contribution if you exclude A400M, which probably is already a progress from the situation that we've generally had.
I mean, if you think about the cash we mentioned, it should be better than neutral over time. I mean, we do the restructuring to also bring Defence and Space gradually. It will take time to a much better cash conversion.
Okay. My second question would be regarding an update on the A320 delays that were mentioned by some airlines in the U.S. last week, and also the progress on the A321 ACF and in terms of head of versions, how much is that increasing in 2020 compared to 2019? On the A320 delays, maybe you want to comment on some GTF issues that have been flagged as well. Thank you.
A lot of questions in one. Céline, I'll do my best to answer. On the A320, A321 ACF. You remember that this was considered by us as a major risk or challenge in 2019. Well, basically, we have managed to do the ramp up of ACF in the second half of 2019 according to the revised plan, I have to say. We delivered sort of 100 ACF more in 2019 compared to 2018. That's a very, very significant ramp up, and with a lot of head of series. I feel by far more comfortable on that challenge for 2020. Still, it's another wave of ramp up as we intend to sort of double the number of ACF planes we deliver in 2020 compared to 2019.
In terms of mix, in terms of complexity, in terms of standout of the planes we deliver, actually, this is much higher. We increase as well the rate, I'm sorry, the share of the A321 in the family. This is quite well compared to where we were a year ago, obviously. We have gained a lot of comfort, but we want to further ramp up the A320 family at a pace that enables fulfilling our plans and delivering as we expect. We run actually around six months late on the production of the neo compared to a large number of contractual commitments to customers, and we expect to recover this over the next year or year and a half. This is not something that will be over in 2020, but will progressively get better.
We are victim of our success on the product and the complexity of the ramp-up. We think this is something we're really focusing on efficiently. I have to say, I'm satisfied with what the team has delivered, especially in the second half of 2019. We continue to have difficulties with engines in service. The GTF situation is known and transparent. This is weighing on our capacity to deliver more planes in H1, as there is a lot of the production that goes to MRO to support our customers and make sure we give priority to planes which have been already delivered to customers and our customers that need to fly. This is something that has also been normalized over time. We're making progress on that front, too.
Thank you very much.
Thank you, Céline.
The next question is from Jeremy Bragg, Redburn. Your line is now open. Please go ahead.
Morning, guys. Two questions, please. Firstly, on A350, where the rates are 9 - 10 per month versus 10 previously, you kind of made the comment, Guillaume, about the market conditions. I just wanted to ask the question, how do you feel about the long-term margin that you can achieve on that program vis-à-vis lower rates and the market conditions, please? The second question was a bit of a geeky one on A220. I mean, previously the losses were backstopped, you've bought the rest of the program or bought a high stake in the program at a phenomenal price. I'm guessing that the backstop arrangement no longer continues, and that that program, as you hinted, will be loss-making on a cash basis until the middle of the next decade because of the J-curve that you talked to.
Just wondered if you could help with those two things, please. Thank you.
Thank you, Jeremy. I take the first one. Dominik, you take the second one on the A220. Well, on the A350, I would like to say we keep moving forward and maintaining our trajectory on the cost reduction. It's not really a rate increase. We touched the rate 10 last year. We want to maintain between nine and 10, that's in the same ballpark. We continue to see a strong demand for the A350 as a plane in this market environment, which is more difficult. You've seen the several announcements from our main competitor bringing their rates down significantly on their own wide body. We think it shows that a strong resilience and performance of the A350, as I said, it doesn't change significantly or it doesn't change our trajectory on cost. We keep going at the same pace.
On the A220 funding, yes, you mentioned that Bombardier has backstopped some of the cash consumption in the joint venture. There were two type of shares, the very interesting one for us was the so-called B shares. The funding commitment still outstanding was now EUR 250 million, it was quite limited given what is still ahead of us. Of course, the purchase price you referred to, one of the components embarked on that was the fact that we let Bombardier off the hook for that funding. Going forward, the joint venture will fund everything. We have agreed with the other shareholder, IQ, and the joint venture that they will first try to raise funding on a joint venture basis. Of course, we then have also the option to fund out of our own treasury.
For anything that Airbus would support in terms of guarantee of a joint venture, there would be a fee associated with that. Basically, this will be on our balance sheet right now. Don't forget, the whole joint venture has already been consolidated before the transaction we announced overnight.
Great. Thank you very much, guys. Very clear. Thanks.
Thank you, Jeremy.
The next question is from Olivier Brochet, Credit Suisse. Your line is now open. Please go ahead.
Yes, thank you very much. Good morning, gentlemen. I'm Olivier from Credit Suisse. I have two questions. The first one on the coronavirus, to understand if there are any impacts on airlines or lessors' behavior, as you can see today, like deferrals or things like that already. The second one is, you mentioned at the end of your presentation, non-organic growth opportunities. Can you maybe put a bit of color around how you think about these in terms of financial discipline? What sort of things you could be looking at? Thank you.
Okay. Coronavirus. It's a very dynamic situation. We are very much looking at it. We have organized a couple of crisis cell to try to better understand the situation and the likely scenario moving forward. The traffic in China Inside China or from or to China has been very significantly reduced in the last weeks. Seems to pick up a bit now. There was the Chinese New Year holidays, where we had most of our plants that were closed, and you know that this has been extended by a week by the authorities, so we have respected the guidance of the authorities and the recommendation from the World Health Organization. These plants have restarted to work beginning of this week, and we are monitoring that the restart is efficient and this is the case.
We do this for our own plants and for the one of our suppliers, so that's on the supply side. Obviously, we are very much focusing on the safety, on the health, on the protective measures against the coronavirus in the plants for our employees and our partners. That's super important for us. We are as well in contact with our customers. On the customer side, well, on the very short term, they've had to defer the deliveries. That's very short term, so it's very difficult for us to give an indication and just to know whether this will last a bit or not. We are all monitoring that very dynamic situation that seems to be going better from an industrial perspective.
Still, this is work in progress, I shall say, and obviously, we are very much looking at it and carefully monitoring and anticipating to define the appropriate mitigation measures. This is where we are at this very moment. The second point?
I mean, organic growth.
I'm not sure I got the question exactly.
The question was on the non-organic growth opportunities that you mentioned. If you could put a bit of color on how you think of them in terms of financial discipline and the areas that you could be interested in.
Well, we have clear priorities when it comes to developing our business. We have a lot on our plate. The main priorities for Airbus, at least on the Airbus commercial side, are on the digitalization, on the transition to more automated and robotized production systems, and on the preparation of the technologies for the future which are around environment decarbonization of the flight. We are very disciplined on focusing on those priorities. Would we have needs or opportunities to go faster on our strategy? This is something we would consider, but we are mainly focused on those priorities, which are mainly internal priorities. When it comes to Defence and Space, well, we've been rather clear on our trajectory of restructuring and turning around the business to make sure it delivers the profitability we expect from that business moving forward.
Basically, that's the situation, and we will look at all opportunities to be performing in that direction. There was no specific intent in my comments in a way or the other. What remains important for us is the strategy of the existing pillars of business of Airbus.
Okay. Thank you very much.
The next question is from Andrew Humphrey, Morgan Stanley. Your line is now open. Please go ahead.
Hello, and thank you. A couple of questions from me. The first is a clarification, just looking at 2020 guidance. Can you confirm your EUR 4 billion of free cash flow includes both some additional cash costs from the A220? I think you highlighted that that could be high triple-digit million longer term. Some A400M costs in the region of maybe EUR 500 million, but obviously excludes the unwind of the additional provisions you've taken today in relation to regulatory issues. I'm sure I've misunderstood parts of that, but I'd be grateful for clarification. The second one is around the rate increases that you've highlighted. Would it be fair to assume that those are really coming from optimization in the supply chain, that the level of kind of new hard investment will be pretty limited and maybe will include some reallocation from other programs?
Dominik, you want the first one?
Yeah, the answer to your first question is shortly, yes, you're absolutely right how we defined it. When we guide the EUR 4 billion, we of course fully include the consolidated business and both A220 and A400M are part of that. We just wanted to kind of separate the impact of the compliance issues, and this is why we kind of put it into pieces in the guidance.
As far as the rate increases concerns, you understood my statement beyond the rate 63 for 2022, 2023. This is coming from the existing supply chain and at a level of increase that is sustainable by the supply chain. It is very important for us. We've seen the challenges on that front. It's a rate that supports regularity and predictability in deliveries. That's very important. We had our challenges in the last two years. We want to put this behind us. There is a new final assembly line that we are putting together, and that we're creating in Toulouse for the A320, A321 to be able to produce more A320, 21 and debottleneck Hamburg, so that's part of our plans to be able to manage that ramp-up and what we call the linearization of the production on the A320. Don't underestimate the change of mix.
I mean, we have close to 50% of A321s in the backlog, so we are ramping up the A321 overall. We intend to increase the CapEx in 2020 compared to 2019, sort of EUR 300 million more in 2020 compared to 2019. We continue to prepare, including with investments, the ramp-up of the single aisle in numbers, in mix, and in efficiency.
That's very helpful. Thank you very much.
The next question is from Robert Stallard, Vertical Research Partners. Your line is now open. Please go ahead.
Thanks very much. Good morning. Just a couple from me. First of all, on the Asian market, before the coronavirus outbreak, we had already seen a slowdown in RPM growth versus what we've seen in recent years, and I was wondering if you had seen any pickup in airline deferral discussions or airlines adjusting their airline capacity plans going forward in terms of new aircraft requirements. Also, following on on the last question, there had been conversation in the supply chain about the A320 family going to 70 a month. Is that still a possibility, or is that rate too high? Thank you.
On the 70, I answer later. I start with the Asian market. You've seen our booking record in January, which is a very strong one, and we continue to see a lot of demand for Airbus products, including from all regions. To the coronavirus, and if it has an impact, it's really premature. The only effect that is visible is the one or two weeks of the Chinese airline just telling us that they would like to postpone the deliveries, but it was more for logistical reasons and the situation we had in the first two weeks of the outbreak. I'm not able to answer on that answer more specifically. You remember that all what we say today is before coronavirus, because coronavirus is really too new, too recent, to be able to fully understand the magnitude of and the consequences of that situation.
We're very active on managing that situation with suppliers, with partners, and with customers. This is obviously something we'll continue to discuss and monitor as the situation develops. On the A320, you remember that in 2018, we assessed the capacity of the supply chain to move to different rates, and we assessed the capacity up to the rate 70. At that time, end of 2018, we had a very strong pushback from the supply chain on that rate, and that's why we decided to reach the rate 60 in 2019, then go to rate 63 in 2021. We have reassessed the capacity of the supply chain last year, and that's why we guide on one or two points of additional rate for each of the years after 2021, and this is supported by the result of the supply chain assessment.
We keep looking at the ramping of the product, balancing between demand and supply on demand and supply chain capacity. On the symbolic 70 per month, I don't want to answer your question in a very specific way, but basically, if you take 63 plus 1 or 2 for two years, it brings between 65 to 67 by 2023. We are not far, and this is what we have in our plans now. I would like to remain on those figures, which are moving progressively upwards at a pace which we think is sustainable, and we put sustainability of what we do very high on our agenda.
That's great. Thank you.
The next question is from Doug Harned, Bernstein. Your line is now open. Please go ahead.
Good morning. Thank you. Going back to single aisle, when we look at Hamburg, you've got a complex variant mix there, which seems to add to the ACF challenges. How are you thinking about addressing that complexity, and when we get out into 2021, when presumably a lot of the issues around the ACF are resolved, should we expect to see a margin benefit come then? That would be the first question. Second, you talked about guidance, assuming that the tariff regime stays in place. What are you seeing as the cost of those tariffs now, and what are the prospects you see for getting that resolved?
You want to take the first one, Dominik?
The margin benefit question?
Margin benefit, yeah.
I first would like to point out that you already see the kind of margin potential of the ACF to a certain degree in what we delivered in 2019. You see that in the guidance also now is for A80, and one or two, EUR 2.7 billion of EBIT adjusted on that number, which is significantly higher than what was previously discussed on a similar level. You see that while it's a kind of slow ramp in units for 2020, there is margin expansion from a single aisle, and we think it's not the end of it because, as Guillaume has already highlighted, the mix shift is just starting. Yes, we think there is potential there.
Yes. On Hamburg, well, they are heavily loaded with the 321s, and the opportunity to share a bit better the 321s between Hamburg and other sites, namely Toulouse. Later, when the new file will be in place, we will obviously simplify, help ease the situation, and should have a better flow and more efficiency. Now the margin itself, we're developing with the product, and the mix that Dominik mentioned before. On the tariffs, well, that's a very dynamic situation. We could expect, by the way, changes in the situation from the U.S. in the next days, potentially. What is very important for us is the May-June ruling from the WTO, where the EU is expected to be granted the right to put tariffs on U.S. goods coming to Europe, and this will finally rebalance the situation.
I think you have the history of these long-lasting claims across the Atlantic, and this will be the moment where we will be able to, in our perspective, come to the table of negotiation and put this behind us, because honestly, in our view, it's nonsense, and it's a lose-lose situation that is just slowing down the industry. We manage that situation for the moment. We keep managing it. The burden is on our side for the moment. It might be on the other side moving forward. We think 2020 is the year to put this behind us and move forward as an industry with good competition and no tariffs.
Is it possible to give us a sense of what that cost is for Airbus with this current tariff regime?
The cost is mainly in managing the situation, in the relationship with the airlines, and the complexity and how we deal with the situation. This is for planes going from Europe to the U.S. It's customer by customer, and it's not nil, but it's something we have managed to keep at a quite reasonable level for the moment, so that for 2019 and 2020, we'll see. It's still dynamic as well.
Okay. Thank you very much.
Thank you.
The next question is from Carter Copeland, Melius Research. Your line is now open. Please go ahead.
Thank you and good morning. Dominik, I wondered if you might give us a little bit more color on the year-over-year cash bridge. I think you gave us most of the pieces on A400M and pension and A220, but some weren't there, the D&S restructuring cash costs. What I'm really just trying to get to is, what sort of growth do you expect in the core cash flow year-over-year? I think with those pieces, it looks like it's still pretty strong, high triple digits or EUR 1 billion. How should we think about the pieces there, A320 family versus A350 versus working capital or something else we can't see? Thanks.
Okay. I want to make the caveat first that we put the more compliance-related cash flows out of the equation. We only talk about the EUR 4 billion here, and it's a half billion increase relative to what we have done in the last year. There are some headwinds. For instance, I mentioned the A220. I think we mentioned about a half billion cash in 2019, which will increase further. I think that's the kind of drop of the J-curve in the ramp of the A220. Then there is continued effort on linearization. If you look at our balance sheet, you'll see that there was some strong improvement already in accounts payable, meaning that in 2019, we've actually had some adverse impact on the free cash flow from accounts payable.
I think that piece of the equation is now behind us, and now it's all about the inventory linearization and making sure that we end 2020 in a way that we can start with higher rates in the first quarter of 2021. That will also require some cash. I think these are the major changes, which are weighing a little bit on the cash and kind of dampen the increase, but I don't want to comment exactly now on your EUR 1 billion more, but I gave you some hints so you can calibrate it.
Well, maybe just another way. Can you give us a sense of what the cash costs of the D&S restructuring are and if you expect any material year-over-year change in PDPs?
First of all, the cash out, the PAT restructuring is a little bit ahead of Defence and Space, and we have booked EUR 103 million. You see that in the adjustments for PAG. The Defence and Space restructuring is likely to be higher than that, yeah? Significantly higher, and from a cash-out point of view, that will affect 2020 and 2021.
PDPs? Thank you.
Sorry. PDPs, you know that we have been blessed by a very strong year-end rally, and also, as Guillaume said, there was an extremely strong January, where we had a very high order intake, which compares very favorably to our competitor. That, of course, drove also PDPs to some degree. We have a healthy ramp ahead of us. The kind of PDP delta, which has been a tailwind now for many years, will most likely not be sustainable as a tailwind going forward. It will be a little bit of a kind of turning and not be such a tailwind as in the past, but it's more of a headwind, I'd say. It's also something that's already fully embarked in all these numbers we gave.
Great. Thank you for the color.
The next question is from Harry Breach, MainFirst. Your line is now open. Please go ahead, sir.
Hello. Good morning, Guillaume. Good morning, Dominik, and everyone. Thank you for taking my questions. Can I just ask my two on, firstly, A321 ACF? Guillaume, I think when we spoke in October, you mentioned that the first 30, 40, or 50 head of series were going to be the most challenging. Are you able to share with us how many head of series were achieved last year, 2019, and the sort of pacing of how you're going to get through those this year in 2020? Secondly, can I ask just on the A400M, today you've spoken about the adjustment in the estimate completion due to changes in the export assumptions. Can I just ask, are there any export deliveries left in the plan that drives your estimate of completion on A400M, or are they now completely out of that plan?
I answer for the ACF. We have achieved in 2019 what we wanted to achieve, and this is true that it was very challenging. It's a couple of dozens of head of series that we have achieved, order of magnitude, and we'll keep doing more head of series in 2020. I said we'll double the number of ACF planes that we deliver in 2020 compared to 2019. Maybe giving a bit more color on, not the figures, but the situation. The main challenge was this big increase in the second half of 2019, and that was something I was a bit stressed about. We had a plan, but it was full of challenges. This has been achieved, and we feel much better moving forward on the ACF. I would say we will probably less speak about ACF in 2020 as such. We'll speak about A320, A321 deliveries.
This is the industrialization of the ACF was the challenge. You remember in 2018, we were very focused on managing our engine situation. We started 2019 being behind the curve on the ACF. I think we are back on track. This is what matters in my perspective.
On the A400M estimate at completion, first of all, we have to underline that this is really during the contract period of the OCCAR nations and nothing beyond that. We have taken down the number now very significantly, and I don't want to give precise data, but what I can say is that we've taken them down by a much larger amount than what is still left in our calculations. It has been significantly de-risked.
Okay. Thank you. Thank you very much.
The last question is from Zafar Khan from Societe Generale. Your line is now open. Please go ahead.
Thank you very much. Good morning, everyone. Two questions from me, please. First one is on A380. Could you tell us what the contribution was from the program at the operating level in 2019? I imagine probably a negative contribution. What this year, next year, contributions are going to be? Should we be looking for losses from the program in 2020 and 2021 through the operating profit line? Second question, just on the cash fluctuations, working capital fluctuations during the year. Obviously, with linearization, hopefully the working capital swings through the quarters should become much less. Can you give us some idea of what you're targeting when you achieve linearization in terms of working capital swings through the quarters?
Okay. On the A380, you might have seen that we adjust the A380 impact in our adjustment. You'll find it in the bridge there, and I would hope to drive that down going forward because it's kind of protected by some loss-making contract provisions, but there are still some open pieces, but it should be kind of a diminishing topic in the adjustment over the next couple of years. As the program ends, it will be out of the equation. On the working capital, I think the way I want to stick to is to say for the group, if you look at 2021, we want to achieve a cash conversion of one before the A400M bleed consumption here and the A220 J-curve funding.
Then you can basically say on the working capital, there should not be any huge impact anymore in such a more linearized topic. There will be a gradual increase. As the customers are also funding PDPs, and I mentioned it will become more difficult going forward, but it should not be such a big factor anymore. If you look at the prior years and you look at the changes in the working capital, they have been very huge. I mean, really mid-single-digit billion swings over the year, and that swinging should be maybe halved or linearized to a degree like that in a much more stringent way.
Just on this one cash conversion that you're looking at, is that the adjusted net income that you're hoping to see a conversion of one on?
Well, there we talk about basically EBIT adjusted multiplied with a certain tax rate, deducting financial items, and that's the way we look at it. Again, we mentioned we really, over time, want to drive out these adjustments. They have been very material and a great source of frustration for us. There are some topics which will be never really entirely out, like the volatility from the Forex and the balance sheet revaluation topics. Of course, it's our ambition to make sure that the delta between EBIT and EBIT adjusted is kind of converging.
Okay. It's adjusted net income is what we should be looking at?
Yes. You can say that more or less, yes.
Yeah. Thank you. Thanks very much.
Ladies and gentlemen, this closes our conference call for this time. I would like to add a personal note. Nicolas, who has been working with us for almost five years, is leaving the team for a new challenge within Airbus. I thank Nicolas for his exceptional dedication and professionalism over the past years, and at the same time, I'm happy to welcome Philippe Gossard, who will take over from now on. If you have any further questions, please send an email to Mohamed, Philippe, or myself, and we will get back to you as soon as possible. Thank you, and I look forward to speaking to you again soon.
Thank you, Nicolas, and thank you, everyone. Have a good day. Thank you.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.