Ladies and gentlemen, thank you for standing by. Welcome to the Airbus half year 2026 earnings release conference call. I am Laura, 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 Jean-Christophe Henoux, Head of Investor Relations. Please go ahead.
Thank you, Laura, a very warm welcome to everyone joining us today to dive into our half year 2026 results. I am in sunny Amsterdam with our CEO, Guillaume Faury, and our CFO, Thomas Toepfer, we are here to break down the numbers and take your questions. This call is planned to last one hour, including Q&A, and the replay plus transcript will be available on our website. On the Airbus website, you can already find today's presentation and the detailed financial statements. Before we start, let me remind you that we will be making some forward-looking statements. I encourage you to take a look at our safe harbor statements in our presentation slides. Please have a quick read. With that, let's get things started. Guillaume, the floor is yours.
Thank you, good evening, ladies and gentlemen. As said by J.C., we're here in Amsterdam with Thomas to run you through our H1 2026 results. Let me start by saying that we were very happy to see many of you at the occasion of the Farnborough Airshow, at our 2026 business update last week. Today, we return to our quarterly disclosure cycle with a presentation of the H1 results. Before that, I want to spend a moment to share my thoughts with all those affected by the devastating wildfires in Europe in Canada. From our side, we're focused on doing our share, keeping our helicopters, aircraft, and firefighting solutions working to ensure they can best assist, where they are most needed. The global landscape remains complex and fast-changing, we maintain a strong upward trajectory across our civil and defense businesses.
To meet the rising demands, our immediate focus is on steady execution and ramp-up. Our commercial aircraft deliveries that we achieved in Q2 are at a record number of 237 aircraft. This brings our H1 deliveries to 351 aircraft as compared to 306 last year. I'm pleased with the progress made by Team Airbus and by the entire ecosystem. We are actually where we wanted to be, that confirms our trajectory. This is directly reflected in our financial results with EBIT adjusted standing at EUR 2.7 billion and the free cash flow before customer financing at - EUR 0.1 billion following a strong inflow in the second quarter. Our 2026 guidance remains unchanged. Let's now look at our commercial environment. Starting with the commercial aircraft business. Recently, the passenger traffic declined slightly due to the Middle East conflict and higher oil prices.
The rate of contraction appears to be easing. We have not seen any order cancellations nor deferral requests, and the demand for our aircraft remains strong. Looking at our long-term trajectory, the commercial momentum we observed at Farnborough underscores the robust demand across the entire product and services portfolio. During H1, we booked 886 gross orders. On the A220, we booked 178 gross orders as we welcome the landmark order from AirAsia for 150 A220s. That's a very strong endorsement of the A220 by AirAsia. Looking at the A320 family, we booked 605 gross orders. This brings our backlog for the A320 family to 7,467 aircraft, of which approximately 75% are for the A321. Moving to the wide bodies. On the A330, we booked 37 gross orders, including the latest order from Scandinavian Airlines, SAS, for 18 A330s.
Finally, on the A350, we booked 66 gross orders. As the family continues to evolve, the -1000ULR, the ultra long range, the world's longest range aircraft, recently completed its first flight. You saw yesterday the record-breaking Airbus flight of over 24 hours. Actually, to be precise, 24 hours and 24 minutes. Meanwhile, the A350 freighter remains right on track for its first flight by the end of this year. Net orders amounted to 821 aircraft, including 65 cancellations, which were largely embedded in our backlog valuation at the full year. Our backlog in units stood at 9,222 aircraft at the end of June of this year. Moving to helicopters. In H1, we booked 215 net orders compared to 171 in the first half of 2025.
During the ILA Berlin Air Show, Airbus Helicopters signed a contract with the Ministry of Internal Affairs of Romania under the European Initiative, SAFE, Security Action for Europe. This acquisition for 12 military helicopters includes seven H160s and five H145s. Earlier this year, two subsidiaries of the Vietnam Helicopter Corporation placed an order for three Airbus H225 helicopters, and it's important because it supports the ongoing expansion of their oil and gas offshore operations with this helicopter. Overall, we continue to see good momentum on all our platforms in both the civil and military markets, and we remain fully focused on delivering on expectations. Finally, on defense and space. Here we continue to see a very strong commercial momentum across all business lines, with order intake reaching EUR 9.3 billion in the first half. On Air Power, the commercial performance is driven by several important contracts across the portfolio.
Notably, we observe good traction related to the C295, with six orders year to date, including four from Thailand. On A400M, seven NATO nations have launched a strategic initiative to establish a multinational A400M fleet. Meanwhile, Airbus is working closely with the French Air Force and the French Sécurité Civile, deploying the A400M firefighting kit to support during the ugly wildfires that we see currently in the southwest of France. Moving to space systems, Airbus was selected to develop and produce two advanced next-generation radar instruments for the Copernicus Sentinel-1 NG constellation, as well as the Aeolus-2 wind-sensing satellite. Importantly, we continue to foster partnerships and collaboration, notably with European startups, to benefit from their increased speed and agility in the defense sector. We are also advancing AI applications across the sector and beyond, notably through the recent partnership with Mistral AI. That's it for me.
Now, Thomas will take you through our financials.
Yes. Thank you very much, Guillaume. Hello, ladies and gentlemen. Welcome to the call. I'm now on page six of the presentation, and I'd like to take you through our financial performance. As you can see on the left-hand side, our H1 2026 revenues increased to EUR 33.2 billion. That's up 12% year-on-year, and it's mainly reflecting higher commercial aircraft deliveries, as well as a higher contribution from our Airbus Defence and Space division, partially offset by the weaker US dollar in 2026 as compared to the first half of last year. On R&D, you can see that on the right-hand side, our expenses slightly increased versus H1 of last year, and they stood at EUR 1.5 billion. Let me just remind you that our R&D expenses are expected to increase in 2026, including to support the defense portfolio acceleration.
If you turn the page, we can come to EBIT adjusted. Our H1 2026 EBIT adjusted increased to EUR 2.7 billion from EUR 2.2 billion in the first half of last year. That increase reflects the higher commercial aircraft deliveries, a strong performance in Airbus Defence and Space, partially offset by a less favorable hedge rate. Let me now come to the EBIT adjustments, which you have on the right-hand side of the page and which were broadly neutral overall in the first half of this year. As you can see, they included a positive EUR 124 million impact from the dollar working capital mismatch and balance sheet revaluation, mainly reflecting the mechanical impact coming from the difference between transaction date and delivery date, of which positive EUR 166 million in the second quarter.
Secondly, a -EUR 123 million related to the integration of the former Spirit AeroSystems work packages, of which negative EUR 91 million in Q2. Then again, a +EUR 60 million linked to the Airbus Defence and Space Workforce Adaptation plan, where we released a provision, but where the plan is proceeding as intended, and out of the provision release, EUR 46 million concerned Q2. Finally, a -EUR 43 million of other costs, including M&A, of which negative EUR 27 in the second quarter.
This takes our H1 2026 EBIT reported to EUR 2.7 billion, so almost the same number as the EBIT adjusted. The financial result was positive EUR 186 million and mainly reflects the revaluation of certain equity investments and of the participations held in the venture capital funds managed by Airbus Ventures, and these are partially offset by the revaluation of financial instruments and the evolution of the US dollar.
The tax rate on the core business continues to be around 27%. The effective tax rate for the half year is roughly 26%, including the tax effect on the revaluation of certain equity investments, partially offset by the effect of the French surtax. For 2026, we expect the French surtax to be broadly in line with 2025, which as you recall, was roughly EUR 0.2 billion. With all of that, the resulting net income is EUR 2.2 billion, with earnings per share of EUR 2.84, and our H1 2026 EPS adjusted stood at EUR 2.61, based on an average of 789 million shares. Let's go to page eight and onto our US dollar exposure. In H1 2026, $11 billion of forwards matured with the associated EBIT impact and euro conversions realized at a blended rate of $1.21 versus $1.18 in H1 2025.
In the first half of 2026, we implemented $9.5 billion US in new coverage over a five-year horizon, with a mix of instruments, including collars. The blended rate of $1.22 for this first half additions reflect, in particular, the least favorable rate of our collars, which are primarily weighted towards the outer years of our hedging horizon. As a result, our total US dollar coverage portfolio in US dollar stands at $74.3 billion, with an average blended rate of $1.22 as compared to $75.8 billion US at $1.22 at the end of 2025. Now on to a more detailed look at the free cash flow on page nine. Our free cash flow before customer financing was negative EUR 1.2 billion in the first half of this year, and this outflow was mainly driven by the change in working capital.
Notably, it of course reflects the planned inventory buildup to support our ramp-up across all businesses. As you can see in our CapEx in H1 of this year was - EUR 1.5 billion, and to support our ramp-up and the successful integration of the former Spirit AeroSystems work packages, we expect our CapEx to continue to increase in 2026. The free cash flow was - EUR 1 billion, including customer financing of +EUR 4.1 billion. Just as a general comment, we continue to see a diverse and competitive finance landscape in the first half of this year, and currently, we expect sufficient liquidity to support our 2026 deliveries.
With all of that, as you can see on the right-hand side of the chart, our net cash position stood at EUR 8.4 billion at the end of June, also reflecting the dividend payment as well as the acquisition of Unical, slightly offset by the strengthening dollar environment. Overall, our liquidity remains strong above EUR 30 billion. With that, I would like to hand it back to Guillaume.
Thank you. Coming to the divisional highlights and starting with commercial aircraft. In the first half, we delivered, as already said, 351 aircraft to 77 customers. I am pleased where we stand at the end of H1 with a good, if not a very good second quarter, that allow us to recover from the low deliveries we had in Q1. Looking at the situation by aircraft family. On the A220, we delivered 44 aircraft. The ramp-up is ongoing, and we continue to target a monthly production rate of 13 aircraft in 2028, that's no change compared to what you know. On the A320, we delivered 271 aircraft, of which 167 A321s, representing 62% of the deliveries for the A320 family.
The administrative delay that affected the delivery of nearly 20 aircraft to Chinese customers has been resolved, and aircraft have been delivered, and the panel quality issue is largely behind us, as anticipated. Our production rate trajectory remains unchanged. Again, no change for the A320. We expect to reach a rate of between 70 and 75 aircraft a month by the end of 2027, stabilizing at rate 75 thereafter. On wide bodies, we delivered 36 aircraft, of which 10 A330 and 26 A350s. That makes 36. On the A330, no change. We target to reach rate five in 2029 to meet customer demand, and on the A350, no change either. We continue to target rate 12 in 2028. Our target ramp-up rates for our wide bodies have not changed, even so the strong market demand could support even more.
Let's look at the financials for our commercial aircraft business. The revenues increased 15% year- on- year, mainly reflecting the higher deliveries, increased services, and partially offset by the U.S. dollar depreciation. EBIT adjusted increased to EUR 2 billion from EUR 1.7 billion in H1 2025, driven by the higher deliveries and partly offset, again, by a less favorable hedge rate. Looking at helicopters, next page. In H1 2026, we delivered 144 helicopters, which is six more than in the first half of 2025. Revenues were broadly stable at EUR 3.7 billion, reflecting a slightly less favorable delivery mix in the first six months. As a result, EBIT adjusted stood at EUR 240 million, reflecting a solid performance from programs offset by higher R&D expenses. Let's complete our review with defense and space.
Revenues increased 9% year- on- year to EUR 6.3 billion, driven by higher volumes across all business units. This includes deliveries of three A400Ms in the first half, which is +2 compared to the first half of 2025. This resulted in an EBIT adjusted of EUR 487 million, supported by favorable cost phasing, improved profitability, and higher volumes. Let me highlight that the yearly performance is somewhat front-loaded to manage expectations. On to our guidance, which remains unchanged. As the basis for its 2026 guidance, the company assumes no additional disruptions to global trade or the world economy, air traffic, the supply chain, its internal operations, and ability to deliver products and services. The company's 2026 guidance is before M&A and includes the impact of currently applicable tariffs.
On that basis, the company targets to achieve in 2026 around 870 commercial aircraft deliveries, an EBIT adjusted of around EUR 7.5 billion, and a free cash flow before customer financing of around EUR 4.5 billion. We will conclude with our key priorities, which have not changed since the last quarter. Since the Farnborough Airshow, we remain highly focused on ramping up across all programs, utilizing our strong portfolio to deliver to our commercial and military customers. We will continue to be guided by the core pillars of Airbus that underpin our company: safety, quality, integrity, compliance, and security. That is paramount to me. Against a complex geopolitical backdrop, we draw strength from our global footprint and our multi-year diverse backlog. I see strong momentum now and ahead of us as we embark on the phase highlighted at the business update.
With a clear focus on advancing our sustainability ambition, we will continue to deliver profitable growth while driving our key priorities forward. Now on this positive note, I hand over to you, J.C., to open the Q&A.
Thank you, Guillaume and Thomas. In order to allow an efficient Q&A session, let me set a couple of guidelines. First, please introduce yourself and your company before you dive in. Second, we ask you to limit yourself to two questions so that we can keep things fair for everyone in the queue. Finally, a small favor for the speakers, please try to keep a steady pace and speak clearly. It really helps us and everyone listening in to fully capture your questions. Now, Laura, could you please explain the Q&A procedure for our participants?
Thank you. We will now begin the question and answer session. If you want to ask a question, please press hashtag five on your telephone keypad. We have a first question from Ross Law from Morgan Stanley. Please go ahead.
Hi. Good evening. Thanks very much for taking my questions. The first one on the defense margin in Q2, very strong above 10%. Were there any one-offs in that number? You obviously mentioned profit is a bit front-loaded this year. If you could maybe just explain exactly what's driving that, and your expectations for margins through the second half. Moving to commercial, I know you don't tend to like speaking about monthly production rates, but can you maybe just give us a broad sense of where you are on the core A320 and A350 programs at the moment? It looks as though you're maybe around the 60 on the A320 and six on the A350. When should we expect the next rate break? Thank you.
I start by the second one, and as you have rightly noticed, I don't like to be commenting on monthly production rates. I more believe in, well, at least quarterly production rates, if not yearly ones. We are in ramped trajectories. That's what counts to me. We delivered a number of aircrafts in the first half of the year that is very consistent with the trajectory. We managed to recover in Q2 the missing deliveries of Q1 for a number of reasons I indicated in my introduction. That's really what matters from my perspective. Please consider we are on the trajectory we need for this year and with the midterm target. On different margins, Thomas, any one-off? What do you say about the Q2 margin?
Well, Ross, I was sure that you would spot that. The way I would characterize it, no, there is no specific one-off in H1 or in Q2. However, as I said many times also at other occasions, never over-interpret a single quarter in terms of margin trajectory. Indeed, I would say the first half for defense was a semester where many things just aligned very positively. We had the export of the A400M, for example. We are planning to increase R&D, but that has not fully materialized yet. Same is true for headcount. There will be an increase, but it has not materialized so much in the first half. I would say it's just many things coming together that produced a very good margin despite the absence of any, let's say, accounting one-off. I think we should not get ahead of ourselves.
It's not indicative for a continuation of that margin in the second half of the year. Of course, we feel it's a good sign that we're on track to the midterm target that we have communicated for defense last week.
Very helpful. Thank you.
We have a question from Benjamin Heelan from Bank of America. Please go ahead.
Yes. Good evening, guys. I hope you're both well. Thank you for the question. First question was on the A400M, and Guillaume, you mentioned the announcement around the multinational force. Could you give us a little bit of guidance and color about what that could mean, potentially from an order perspective? Secondly, on Spirit, you've owned the business now for a while. Can you just give us a bit of an update? What are you seeing? How is that business performing? Where are you on the trajectory to driving the improvements there for the A350? Thank you.
Thanks, Ben. I think, yes, I can say we are both well, and I hope you're well, too. A400M, yes, it's a good endorsement of the A400M when it comes to the European needs for airlift. Actually, we see a good momentum on A400M on different fronts, and that's really what matters to me. We feel confident with the short-term, mid-term trajectory for the A400M, and we also hear good feedbacks on the A400M, where it is used in operation, and I was really happy with the first feedback from operations of the test, the use of the A400M for firefighting operation. That's something we were targeting and we were considering now for a few years, but that's now something that has been tested in real conditions. Good momentum for A400M. The multinational force is indeed for us a good opportunity.
It follows the path of the MRTT, where we have the same pattern, the same frame, and that gives a lot of satisfaction to the European countries which are part of the multinational force. I see it as a real strong potential for use of A400M.
Spirit. Maybe on Spirit, I would say, we own the business since December 8th last year. No real major surprise, and that means that we also confirm the financial assessment for what it means for 2026 and 2027, namely a negative low triple-digit EBIT impact this year, but a high negative triple-digit impact in terms of cash flow. Why is cash flow so much more negative? Because we are front-loading the investments that we have to make. Secondly, working capital is an issue. We want to build some buffer stocks. We are paying our suppliers in time to stabilize the supply chain. Of course, the integration costs also flow into the cash flow. Quite frankly, no change with respect to what we have given you as financial indication earlier this year at the full year call.
The other thing that I would say, also no change in terms of integration. It progresses well, of course, challenging in both key locations, but I would say it is in line with our ramp-up ambitions that we have for the A350 and the A220, therefore, nothing to report that is off track with respect to the ramp-up.
Very clear. Thank you.
We have now a question from Milène Kerner from Barclays. Please go ahead.
Yes. Good evening, Guillaume, Thomas, and Jean-Christophe. I have also two question, please. The first one on the free cash flow. Your guidance implies around EUR 5.7 billion of free cash flow in the second part of this year. Last year, you generated EUR 6.2 billion on lower delivery volume, and your inventory are nearly at EUR 7 billion higher than that would be were at the end of December. Excluding the Spirit impact, can you help us reconcile what is preventing a higher level of cash flow this year? My second question is on FX and hedging. Last year, you mentioned that you were looking to optimize your hedging policy and potentially introducing more options. Yet the EUR 9.5 billion of new hedges you added in H1 were again stock around $1.22 euro.
Can you update us where you are in that process and whether we should expect any change in the hedging strategy going forward? Thank you.
Okay. I think those two questions go both to me.
They're too difficult for me, Thomas, and I'd like to hear the answer of the first one.
On the first one, I think what I said for the EBIT in the single quarter also applies for cash flow. Cash flow, of course, is not always fully linear. We were very pleased with the positive EUR 1.3 billion that we had in Q2. Again, things are not super steady. I think with what we have achieved in the first half of the year, we are on a good way for the full year in terms of the guidance. I would also say let's not get ahead of ourselves. Inventory buffer is an important thing because we have to cater for the ramp-up not only for 2026, but then also we want to have a much smoother transition into 2027. Secondly, as you indicated, Spirit, a lot of the things in terms of cash flow are still ahead of us.
I would say the numbers that we're seeing are consistent with the guidance for the full year cash performance of the company. On the second one, the hedging policy, indeed, we have said that we have also used options. That was what I was referring to when I said we have also implemented collars in our hedging strategy. These collars are reflected with the least favorable rate. Meaning, using collars does not necessarily LEAD! to a, let's say, optically better hedge rate in the portfolio that we have, because we give you the most conservative number. Of course, they provide the optionality that if the dollar is strengthening, that we can exercise those collars at a more favorable rate.
By the way, that's also what we have already been doing on a small scale in the first half of this year, which encourages us to increase or to go down that path even further and increase the share of options or collars, as you might call them, in our total portfolio. Again, I think the optics of what I've given you, the 122, maybe doesn't fully reflect the optionality and the opportunity that we have here. Currently, I would say we're pleased with what we're seeing, and we will continue that hedging policy gradually, but no fundamental change. I think that was also your question.
Thank you, Thomas.
Thank you so much.
The next question come from Chloé Lemarié from Jefferies. Please go ahead.
Good evening, Guillaume, Thomas, and Jean-Christophe. Thank you for taking my question. I have a first one on the number of gliders. Previously, you said you were no longer building any, so I'm just checking whether this is still the case and if you have any in your inventory at the end of the first. The second question is a follow-up on Ben's question on Spirit. I was wondering if you'd be able to maybe refine the range of the low three-digit million impact you mentioned for the full year, or at least share what it looked like so far in H1, please. Thank you.
Maybe on Spirit, no, I think I would leave it here with the guidance in terms of Spirit impact. Therefore, I think no further comment on this one. Maybe Guillaume, you take it on the gliders.
We have no gliders in the sense of aircraft not being delivered solely because of engines. We are in a normalized situation. We don't have buffers of engines. We don't have engines ahead of what we need from Pratt & Whitney. We don't have aircraft non-delivered because of missing engines. We have few other reasons why we don't deliver aircraft without engines, but I would not call them gliders in the sense of aircraft ready to deliver, but not delivered because of engines. That's an important information indeed.
If I can just maybe follow up. Should we assume maybe it's still to do with some remaining panel issue that you're still in the process of solving or maybe interiors?
Panels? No, panel is behind us. If that's the question.
Very clear. Thank you.
The panel issue is behind us. It's resolved. Okay?
Yes. Very clear.
The next question comes from Sam Burgess from Goldman Sachs. Please go ahead.
Thank you very much. Good evening, Guillaume, Thomas, and Jean-Christophe. Thanks very much for the question. Firstly, coming back to A400M, do you see any potential for additional countries to join that initiative? Is it mainly about shared service and support, or following on from what Ben was saying, do you see demand there for incremental orders? The second question is just whether there's any additional color you can offer in terms of the discussions with Pratt, and any update you can give us there in terms of 2027 and 2028 picture. Thanks.
The short answer to your second question is I don't have much more to say than we think we'll continue to get from Pratt & Whitney for 2026, 2027 and beyond the number of engines that have been finally agreed and which are the current basis for the 2026 delivery guidance and consistent with the midterm targets that we have given before. Nothing very significant to report with Pratt except that we continue to negotiate the dispute when it comes to the outcomes of the revised downwards number for 2026 and 2027. When it comes to the A400M, yes, indeed, there could be more countries joining the initiative for the multinational European force, the pooling and sharing. I'm not in the details of this. I know it's open for other countries, it's already very significant.
Yes, indeed, it's consistent with the market dynamics that we see on the A400M. It's slowly moving, it's moving in the right direction for more customers ordering A400M. That's something that we will be happy to report as things move forward. As you know, with military customer, we are not commenting on not with civil customers either, even less with military customers. We are not commenting before things become official from the customer perspective because it's defense matters. Good momentum. Good hope for more orders moving forward and a very concrete multinational force that is something that is actually public already.
Very helpful. Thank you very much.
Pleasure.
Next question comes from Olivier Brochet from Rothschild & Co. Please go ahead.
Yes. Good evening, Guillaume. Good evening, Thomas. Thanks for taking my questions. I have two small ones, actually. The first one is, in the press release, you call out Airbus Ventures and the revaluation there. Could you maybe give us a bit of color on what drove that revaluation? What assets are behind that? The second one, another detail is, you recently made the acquisition of a small component manufacturing company in Spain, MASA. Could you just share the rationale of why you did that, and if there is anything else to happen in Aerostructure for the company? Thanks.
Yes. Let me maybe start with MASA, I think what I would say is that it's not indicative of any change in our strategy with respect to vertical integration, to be very clear. We are happy with the way how we are integrated in our supply chain and how the split of work is. Therefore, the thing is not to be over-interpreted, but there's always sometimes situation, where such an acquisition from a more defensive perspective can make sense. Can be a succession problem or can be other things. Here we felt it would be good if we are in control of this business. Again, I would say no strategic change of direction to be interpreted into the acquisition. Secondly, yes, on Airbus Ventures, Airbus Ventures exists since a number of years.
They are investing into various startup companies in the field of aerospace, that has been a successful journey so far. Therefore, as part of the normal recurring revaluation of the portfolio, we're recognizing also the gains that they have in their portfolio. Of course, I should clearly say those gains have not been realized to the biggest extent. Those are gains in terms of valuation and not yet in terms of cash returns.
Thomas, is this related to the space industry, by any chance?
Yes. Aerospace in the broader sense, but also some specific space investments.
Okay. Very clear. Thank you very much.
The next question comes from Sebastian Growe from BNP Paribas. Please go ahead.
Yes, good evening. Sebastian Growe here from BNP Paribas. Hi, Guillaume Faury. Hi, Thomas Toepfer and Christophe. Two from me. The first one is on commercial. Guillaume Faury, on-
Can you speak a bit louder, please?
Yes, sure. Yep, I will. Guillaume Faury, on a prior call today, you seemingly pointed to deliveries in the range of 850- 890 aircraft in 2026. That was on the wires today. My question is if you can provide more color whether your engine supply has improved as of late. The second question goes to Thomas Toepfer. The guidance implies EBIT adjusted for the group in the second half that is about EUR 100 million lower compared to 2025. I heard your comments to not extrapolate the strong H1 trajectory at Defense and Space, are there any other building blocks that you might want to call out in order to explain why the decline in the guidance for EBIT adjusted?
Okay. I'll take the first question. I'm surprised it makes news. Actually, at Airbus for many years, when we give a guidance in number of deliveries for the year, we say around 870, for example, for this year, around means ±20. That was the case for the previous year, where we had a delivery guidance for 2025 of around 820 that we changed in the back end of the year for around 790. We finally delivered, as you remember, 793. The guidance for this year is unchanged. It's around 870 aircraft. If you apply the ±20 that we consider is consistent with around, that's going from 870 -2 0= 850 to the upper part of the range, which is 870 + 20, that makes 890. This is exactly no news.
It's just explaining with the numbers what around 870 means or repeating it, but apparently it was useful to repeat it because it is surprising to some. I look at you-
Yep
Thomas, for the answer on the second question on EBIT.
Yes. I think, Sebastian, essentially your question is on what is the remain to do for the year and how does it align. I think what the key building blocks that play a role here, of course, is the deliveries, first of all. If you want to bring it to the midpoint of the guidance, the 870, and Guillaume explained always it's ±20, but if you want to bring it to the midpoint
That would mean an additional 32 deliveries in the second half of the year. I would say, however, that not all of these aircraft will be A320, therefore, not all of them with margin. Please deduct a certain number, then you can multiply with, I would say, the contribution that most of you have in your models. Let's assume that brings you to 0.3 positive. You have a couple of things against that. One is the FX hedging. Let's say negative impact of roughly EUR 0.01 degradation. Secondly, you have the Spirit effect, where we only have digested half or even maybe less than half in the first half of the year.
Thirdly, remember at R&D, we pointed to an increase, but that has not materialized to the full extent in the first half of the year, you should expect some further increase in the second half. Three headwinds, I would say, against the positive volume development. Then, of course, you do have some positive contribution, I would say, from the divisions. Slight positive, but if you take all of these together, that should bring you to the midpoint of the guidance also in terms of EBIT.
Right. Thank you very much for this.
Next questions comes from Christophe Menard from Deutsche Bank. Please go ahead.
Yes. Good evening. Thank you for taking my question. I had two. First one, can I labor a little bit more into the Defense and Space performance, for H1? Obviously, I understood what you said, but is there any element related to space which is structural and that could explain also that solid margin performance? Another question more for detail, but the H1 or the Q2 performance in Airbus Commercial was actually slightly better than expected. Is it purely mix, or did you, for instance, manage to retrieve some of the tariff you had to pay last year and you could repatriate, so to say, in Q2? Thank you.
Thomas?
Is there anything specific in defense and space, and you ask for space? Nothing other than we're very pleased with the, I would say, turnaround that we're doing in space, and that is materializing. We are on plan, if not ahead of plan, with the improvement that we wanted to make. Therefore, I will not disclose now individual numbers for the subdivisions, but what we're doing in space is better than what we probably or slightly better than what we had in our internal plans. Therefore, I think it's a reconfirmation that the turnaround that the new management team has done in space is actually working. Then on commercial, no, in the second quarter, there was no positive effect on tariff.
We're claiming, of course, tariffs that we have paid, we have not booked anything positive in our results in the second quarter of the year. What I would point to, though, is that indeed, as you indicated, the mix, of course, was pretty positive. If you look at the 45 aircraft that we are ahead of last year, there's only three A220s, they all carry almost a margin. Therefore, that was, of course, helpful for the first half of the year, in terms of mix. I indicated that for the second half, that mix might be slightly less positive, and I think that goes back to the remain to do bridge that I tried to answer in the previous question.
Thank you very much. Very clear.
The next questions comes from Ian Douglas-Pennant from UBS. Please go ahead.
Thanks very much. I hope you can hear me. It's Ian Douglas-Pennant at UBS. First question is on the next generation of aircraft. Some of the engine players have been making comments on the potential business structure of the next generation aircraft after the comments that you made last week, emphasizing the significant upfront costs of developing an engine. Is there anything that you'd like to add to that conversation, especially around your willingness and ability to support them with the costs early in the next engine program? The second question is on cost control. We're now two years after LEAD!, roughly, with six months on roughly from Pratt & Whitney's communication to you on 2026 engines. Is the cost structure now in the right place going into the second half? Is there still an opportunity or work done, conversations to be had at this point?
Thanks very much.
I'll be short. No, there's nothing I'd like to add on the conversation when it comes to changing or adapting the business structure as we move to the future aircraft. Nothing else than we see opportunities to tap more into the life cycle revenues and margins of the airplanes and the equipment. I'm not specific to certain equipment. For the second question, Thomas?
Maybe in terms of cost, I would say yes. LEAD! was quite successful in 2024 and 2025. We are continuing, I would say, to monitor our costs very strictly, but I would rather see this as an exercise of cost containment and not so much cost reduction. Therefore, I would, if I was you, not plug in anything specific as a tailwind in your models. Of course, we're very focused that costs are increasing way slower than our revenue line, and that's how I would characterize it. Nothing specific on the horizon in terms of a cost tailwind that I would put on the models.
Thank you very much.
We have now a question from Douglas Harned from Bernstein. Please go ahead.
Good morning or good evening. Thank you. I want to first go back to the earlier question on production rates. In the business update, I asked Lars about getting to 12 per month on the A350, and he said that you were already at a production rate of eight to nine per month. That is higher than what we've seen in terms of deliveries. First, perhaps you could explain that difference, what creates that gap, and should we expect it to close? Then, second, you also talked a lot about building a services business and seeing a good growth opportunity there, both organic and through acquisitions. How do you envision the steps going forward to growth services, and when should we expect a material contribution to overall growth?
Okay. Thank you, Doug. On the A350, as far as I can recall, I think Lars said that the ecosystem, which using my words would have been the supply chain, was operating at rates around eight to nine a month at the moment of the comment. As you know, the supply chain is ahead of the farm. In a ramp-up phase, we are always in a situation where the supply chain and what Lars called the ecosystem, as far as I can remember, is of course at higher rates than the rates we have for assembly. You know that we measure the rates at the so-called Station 40 at Airbus, at the station where we put the wings on the fuselage, which also comes significantly ahead of the time of delivery of the aircraft.
In a ramp-up, you have the supply chain operating at higher rates than the Station 40, where we measure rates that is itself operating at higher rates than the deliveries. This is of course on average, because when you have a situation like what we had in the first quarter of this year, we had a production rate that was rather linear, but we had aircraft that could not be delivered either because of industrial challenges, namely the panels, or for administrative reasons, namely the issue we faced with the delivery of aircraft in China for certification items reasons. There's always a non-linearity on deliveries that is significantly higher, generally speaking, than production, especially when production runs reasonably well and the supply chain is operating at higher rates than the Airbus deliveries.
I think the reason why Lars made the comment is to highlight the fact that our production system in the external parts, in the supply parts, is on track to support the rate increase that we want to demonstrate at Airbus. It's our way to check that the supply chain is actually delivering on the expectations for higher rates moving forward. I hope it clarifies the answer or the comment made by Lars. Again, that's top of my head of what Lars said. I think it was at the business update.
Yes.
I think that's right. Yes.
Maybe let me clarify on the service topic. What we are targeting is EUR 10 billion in commercial aircraft services revenues by 2030. In terms of profitability, we're expecting to cross the line of double-digit profitability in the midterm. As we said in the business update last week, that is clearly an upgraded target because we're focused on the efficiency of that business and also cost reductions. How will we get there? It's a combination of both organic growth and efficiency improvement, but also some inorganic potential acquisitions. You've seen that we have closed the Unical acquisition in H1 of this year, that is definitely playing into that. It's very difficult to plan, of course, for M&A, but part of the growth path is also potential further bolt-ons in the next years to come.
Maybe just to remind everyone what is the commercial aircraft service businesses. In our case, it really consists of two parts. One is the highly profitable trading services, and that is things like spare parts, training, digital solutions, et cetera. The other one, the second one, covers the core support costs, which we have to ensure that the aircraft that we have delivered are operating as promised to their life cycle. It's really two very different businesses that are grouped in here, and the main growth, of course, should come through the highly profitable part where also all the acquisitions should play into.
We have five minutes left.
That's very good. Thank you.
This might be our last question depending on how complex it is to answer.
Thank you. Next question is from Ken Herbert from RBCCM. Please go ahead.
Yes, hi, good evening. I'll keep these two questions relatively simple. Thank you for the time. The first is, you typically see, at least last year, a significant step up in helicopter margins profitability from, or profitability, I should say, EBIT, from first to second half. Is there any reason we shouldn't see that this year again in 2026? My second question on the A350, on the freighter, you called out first flight this year. Can you just give a little more detail, Guillaume, as to your schedule for the freighter beyond first flight in terms of when you'd expect entry into service and how quickly you expect to ramp up production on that variant of the A350? Thank you.
I'll start with this one. Yes, I confirm we expect the first flight before the end of this year, which means start of flight test immediately and a very dense flight test program, targeting certification and first delivery, ideally by end of next year. The ramp up, so delivery of aircraft in rather significant numbers as soon as 2028.
Maybe on the helicopter topic. Yes, your observation is right. Margins are increasing in the second half of the year relative to the first. What is driving that is that helicopters last year had a very back-end loaded delivery profile. Without making any too precise of a prediction, I would say the profile will not materially change this year. Since the delivery profiles are similar, I think that could be a good indication that also the margin trajectory could be relatively similar to last year.
Maybe a very last question.
For the remaining two minutes. If not, we conclude.
We have a next question from Robert Stallard from Vertical Research. Please go ahead.
Thanks so much. Good evening.
Good evening. How are you, Robert?
Not too bad. You sneaked me in. Thank you very much. A couple of quick ones for you, Guillaume. First of all, these very serious forest fires you've seen in France and Spain, have they had any impact on the Airbus business? Secondly, Lars talked last week about potentially raising A350 production beyond 12 a month, which would require another FAL. Where would you put it? Thank you.
On the first one, no material impact so far on the business. We've had employees, well, no longer accessing their place and actually even some employees losing their house, their house has burned. It's really a very tragic situation when it comes to individual situations. We, in the period where most of the activities were about to pause for the summer break or had already paused on the Friday. That's the current situation, and it's very important for us that the Sécurité Civile forces, and the firemen managed to contain the fire in areas not impacting large industrial activities, not only ours, but one of others. Which is the case for the moment. Well, no comment on the second one. We are investigating what we could do potentially beyond rate 12.
We are not advanced enough to be able to give indications of what it will be specifically, how much, by when, and even less, where that would take place. This is for later.
Okay. Thanks very much.
Thank you. Thank you everyone. Thank you for taking the time to join us today. If you have any further question, please reach out to Victoria, Olivier Prébaux, or myself, and we'll get back to you as quickly as we can. As we close, a special thank you to Eduard for his last disclosure today.
Best of luck-
Excellent one, Eduard. Bravo.
In your new challenge. This bring our session to a close for today. Have a great evening, everyone.
Thank you, everyone.
Thank you. Bye.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant evening. Goodbye.