EADS Launches A400M Program; Contract Signed: Order Worth EUR20 Billion.

Business Editors

AMSTERDAM, Netherlands--(BUSINESS WIRE)--May 28, 2003

EADS will now register the largest defence order in its history worth EUR 20 billion for the A400M military transport aircraft.

The A400M contract was signed on Tuesday in Bonn, Germany, by Airbus Military and the European procurement agency OCCAR representing France, Germany, Spain, Turkey, Belgium, Luxemburg and the United Kingdom. The contract will come into effect on 31 May 2003.

First revenues are expected to be generated as soon as this year and to ramp up very quickly, with a total amount of about EUR 2 billion already generated between 2003 and 2005. This will contribute to the EADS overall target to grow defence revenues from EUR 6 billion in 2002 to nearly EUR 10 billion by 2005. With the A400M, the company's defence order book will double to around EUR 40 billion, placing EADS among the top three defence companies in the world.

For the EADS CEOs Philippe Camus and Rainer Hertrich "the launch of the A400M programme is a major milestone in EADS' strategy to grow the defence business and further balance civil and military activities."

"We will immediately start the A400M industrial programme. For all A400M project teams, on-time delivery and full technical compliance are now first priorities," said Camus and Hertrich. "We know that the armed forces in Europe have an urgent need for the most modern and capable military transport aircraft available, and EADS is ready to meet their need," the CEOs said.

"The A400M is a breakthrough for the military aircraft industry. We are convinced that the A400M will set new standards in military transport and forces interoperability," added Francisco Fernandez Sainz, President of Airbus Military and Head of the EADS Military Transport Aircraft Division. "We are proud to harness our expertise in Airbus commercial aircraft to create a high-quality, efficient and technologically advanced military transport aircraft. This will provide the best value for money to all our customers," Fernandez said.

In addition to this initial domestic order, EADS is convinced that the A400M has an outstanding export potential of more than 200 aircraft in the next two decades. "The A400M is well positioned to replace a major part of the current world-wide fleet of tactical transport aircraft," Camus and Hertrich said. "There is simply no other new generation aircraft with 21st century technologies on the market."

The CEOs stressed that the A400M programme will create and secure a total of 40,000 jobs at manufacturers and their suppliers over a period of 20 years. "The financial strength of EADS and our experience in the management of large-scale, multi-national projects have been important prerequisites for the decision in favour of the A400M," Camus and Hertrich said.

The launch contract provides for a total of 180 A400M transport aircraft for seven NATO nations with the Airbus partners Germany (60), France (50), Spain (27) and the UK (25) placing the largest orders. The other national partners' and customers' orders are Turkey (10), Belgium (7) and Luxemburg (1).

Together with Airbus, EADS has a 90 percent share in the programme. EADS leads the consortium of participating companies with responsibilities for managing the overall programme as well as for final assembly in Seville (Spain). The EADS group work-share is equivalent to the percentage of its shareholding in Airbus Military (20.56 percent held directly by EADS and 69.44 percent held by Airbus). Revenues and profit from A400M programme will be recorded at the EADS Military Transport Aircraft Division. EADS will consolidate 100 percent of the A400M programme reflecting its control and major work-share of 90 percent. The order intake value is thus EUR 20 bn representing 100% of the programme.

About EADS:

EADS is a global aerospace and defense company and is the world's second largest in terms of revenues with EUR 29.9 billion in 2002. EADS has a workforce of more than 100,000 and is a market leader in defence technology, commercial aircraft, helicopters, space, military transport and combat aircraft, as well as related services. It's family of leading brands includes the commercial aircraft manufacturer Airbus, the world's largest helicopter manufacturer Eurocopter, the space company Astrium and MBDA, the world's second largest missile company. EADS is the biggest partner in the Eurofighter consortium and heads the A400M military transport aircraft programme. The company has over 70 sites in Germany, France, Great Britain and Spain. It is active in many regions worldwide, including the U.S., Russia and Asia.

www.eads.net