Good morning, ladies and gentlemen, and welcome to the Airbus Delivery Center. It's great to see you again, and welcome to our connected guests over the internet. It's great to have you on board as well. Okay, today, we are very conscious of your time, and we have built what we hope to be an agenda of interest for you. Before going into more detail, let me go through some practicalities. I told you yesterday, safety comes first at Airbus. It's the same this morning. There are no emergency lighting on the floor, no life jackets under your seats. In the unlikely event of an emergency, the exit rooms are there and there. Like last night, I would ask you to follow the team, and we will meet outside at the meeting point. Now to our timetable. No worries, there will be breaks today. We will start with a group overview with Guillaume and Dominik, as well as financial perspectives and an update on Airbus commercial. It will be followed by a Q&A session. We'll then have a short break, and after the break, we will discuss sustainability and decarbonization roadmap with Julie and Sabine. There will be as well a Q&A session just after. Lunch break should start around 11:15 A.M. Lunch will be served on this side of the room. During the break, you will have the opportunity to meet Airbus leaders at the marketplaces on this side, as well as to visit our display, which is hidden behind the curtain behind me. We'll be back at 1:00 P.M. sharp, and this afternoon we will discuss defence at large with Antoine, as well as Airbus Helicopters with Bruno and Airbus Defence and Space with Mike Schoellhorn. It's gonna be a busy day, I think. You are familiar with our safe harbor statement. Today, over the day, we will be making forward-looking statements, so you can always refer to it on our homepage. With all this in mind, now, Guillaume. Good morning, everyone. I hope you had a good evening yesterday. It was really great to have some time. It's indeed a great pleasure to have everyone again in a room. We were discussing with Julie last time we had a sort of real Capital Market Day together, and I think it was in 2018. It's four years ago, but there's so much that has happened in the meantime. Yes, that's the first Capital Market Day since we went through COVID. I think it's worth looking a bit backwards because so much has changed and has transformed the sector during those years of COVID. First, I'd like to say the working together with the financial community has been quite amazing. We would not have managed to go through this existential crisis without all the work that was done with the different parts and dimensions of the financial community. It's been a crisis that was multidimensional, but obviously the ability for Airbus, for our supply chain, for our customers, and many others to go through was enabled by the work of the financial community. It's an industry that is going by far beyond the boundaries of the sky and of flying. It's an industry that is really rooted into its ability to move forward with the financial community. During this crisis, it's been. I mean, it's been an adventure. We had Bertrand Piccard not far ago visiting us, and he said, "A crisis that you accept is an adventure. An adventure that you don't accept becomes a crisis." I don't know if we've been wise enough to accept the crisis at the very beginning, but indeed, it's really been an adventure. At Airbus, I have been particularly impressed by what our employees and management did in the face of the high level of uncertainty we had at the very beginning of the crisis. A week after people were sent home by governments, stay home, save lives, the lockdowns, the confinements, we asked people, managers to come back and start to prepare the reopening of the plants because we thought, and I think we were right, that we would stop for months this very complex, deep industrial system, it would be extremely difficult to restart it later. We wanted to maintain life in the body to maintain the industrial system working. That's what our employees did, reopening workstation one by one with the new constraints of COVID, of something that was quite unknown. We sent planes to the other side of the world to collect masks because we were deeply convinced that that was something essential for us and the supply chain followed and we moved forward. We've worked as well very closely with governments. It's been quite reassuring to see how systemic they believe this industry is, not only commercial aviation, but obviously security, defence. It's been a period of very, very close cooperation, maintaining the defence and the security alive, I mean, in all the regions and the parts of the world where we are working, but as well, the connectivity. Even if the number of flights were very significantly reduced, maintaining connectivity and the ability to continue to operate, in particular for freighters. You know that the use of freighters has been by far significantly higher than it was before, has really shown the importance of this industry. We've been very well supported, and it's been really a proof of the level of cooperation that we need, but that we have as well, to go through crisis. COVID has been probably a unique crisis. You will see some charts on our backlog, on the deliveries that show the uniqueness of COVID. In the meantime, we have so many other crises. We are in a period of time where things are accelerating, where we have multiple crises to manage. You know them extremely well, but it's Ukraine, it's inflation and interest rates, it's the energy crisis that comes with it. The human crisis that is multidimensional, but let's say just the availability of workforce and the talent, the Great Resignation, 2021, the logistical issues and the raw material availability and prices, on and on and on. We are in an environment that is changing very, very fast, and it's not about being wiser than others in determining what the world will look like in 10 years. This is, in my view, extremely difficult to do. It's about trying to understand what are the different scenarios, what could happen, where are the risks, and define a path that is quite robust to these changes and to the uncertainties. Also, I think that's super important, the ability to go fast, to be agile, to be adaptive, and to face reality. Among those many, many changes that are more hurdles on the way than things that can help, even if sometimes we can ride some of those shock waves, I think it's really important to understand what are the mega trends, the ones that will not change or even that can be accelerated by what's happening around us. There are a couple of them. One is obviously environment, decarbonization. We had a very, very special summer of 2022 with heat waves in the US, in Europe and in China, exactly the same year. I hear everywhere now, those last weeks, this is really growing the awareness, the common understanding that climate change is something that is gonna be front and center to what societies, to what governments and to what private companies have to do, and have to manage in the next years and decades, and that's obviously something that has a lot of implication for us. For Airbus, it's really about trying to be fast, to be agile, to prepare ourselves for different kind of scenarios and be super committed on those mega trends to make sure we are fast, we do the right things, and change is an opportunity more than a risk. Of course, there are always risks in changes. You can't be planning for everything, but that's what we are trying to do very humbly, but in a very, very committed way. Again, with a management and a workforce that is really amazing at Airbus. We were discussing this yesterday night. The level of commitment to the company, to the brand is quite unique in my perspective, and this has played a big role for what we have accomplished since the last Capital Market Day. We keep moving. A lot of things have happened in terms of decisions. Yes, we were in COVID, but we have decided to maintain the speed on the XLR, the development of the XLR. We've not been as fast as we would have liked, but still, given all what we've been going through, I'm quite proud of where we are on the XLR and coming close to the entry into service. We have launched in 2021 the A350 Freighter because we are super ambitious on the wide body. We think we want to do on the wide body something similar to what we've done on the single aisle. We are not overambitious. We know it takes time and, but still, we want to have the portfolio of products that will enable us in that direction, and that's why we launched the A350 Freighter last year, 2021. We've done other changes. I will come to some of them when it comes to our industrial system, but we have also restructured the way we do cyber and security, gathering, bundling the different organizations we have at Airbus into one new company that is called Airbus Protect, and that has now sort of a critical size. It's much easier to have a branding to attract people. You know that in all this digital and cybersecurity and safety of systems, those kind of topics, it's difficult to find the skills and talents, and we need to be attractive, and that's one of the reasons why we've done it. To fuel and to organize our speed of execution, going in the right direction and being faster than the rest of the world around us, first we decided in 2018, and we did it in 2019 actually, to redefine the purpose of Airbus. We thought it was super important to have a clear guiding light, a lighthouse of what Airbus stands for, and we involved a lot of people, including a lot of employees. I think you are aware of that purpose. It's we pioneer sustainable aerospace for a safe and united world. Each and every word is really important. We pioneer, so we remain pioneers. Even if we are now in the leading seats in this industry, we don't want to slow down. We pioneer, that's the very DNA of Airbus. Sustainable aerospace. Sustainable is something we really put at the heart of what we do, and I believe that's very meaningful today. Aerospace, that defines the company, okay? No clear boundaries, but still it says what we do, who we are, for a safe and united world. Safe has many dimensions, safety of people. That's why we're serious about the briefings, and we really want our people to understand that this is very core to what we do. I think today the value of life is probably much higher than it has ever been, and for us, it means that there is not a single accident that is acceptable. Actually, the less accident we have, the less acceptable they are. We are now into a race to zero accidents. That's very clear. Safe and united world, and that's what we do. We unite people. We connect, but we also unite in different ways. What we do on security is obviously of that dimension, connecting people around the world. We've seen the effects of COVID. We went so far from each other. I mean, the geopolitical issues, the conflict, Russia, rest of the world, in my perspective, has also some reasons to be found in the fact that during two years, we've been so far from each other, physically and emotionally. Connecting people has a big role for society. We defined our purpose in 2019. This has been extremely useful to keep moving during the pandemic. There was a very clear direction that everybody had in mind we wanted to pursue. It's been super helpful to get the support of governments on accelerating funding of research for decarbonization, not only, but mainly for decarbonization of aviation. It's been quite amazing to see that in COVID, governments also, many governments around the world, especially the ones of Europe, have worked together with us, with industry to define the battle plan to transform this industry. Because we are an industry that is today representing 2% of the carbon emissions of the world. If the plans prove to be right, this percentage would increase if we don't do anything, and it would increase very significantly. We believe there is a risk that at a point in time, we would have to go backwards in terms of growth, because of the lack of acceptability of carbon emissions from aviation. Aviation is a hard-to-abate sector. It's hard, so we have to be very serious about it. We are very happy to have you here because we will show you some examples of what we do, not only PowerPoints, but as well, later today and during the afternoon or this morning, on specific workshops where you will see on some topics we can't show everything, interesting ones, I hope, what we are doing. We started to organize ourselves in 2019. Then early 2020, we had COVID. We put a bit on ice the way we run our transformation in the direction of the purpose. We wanted to see as well what would happen with COVID and what would change. Last year, we have relaunched the transformation. We call it internally a next chapter, Rewired. Rewired because we refueled it after COVID-19. Basically, I want to share with you some of the ideas which are behind. We're focusing on four pillars for managing that transformation. One is our product. Quite obvious. The second one is the industrial systems because we believe that's a very large enabler of the transformation. It's not an objective per se, but there is so much going into production systems, industrial systems that can transform the company and the product. That's one of our big pillars. The third one is ecosystems. Well, basically, before I turn to a bit of details, this transformation is not something that will just be managed inside the walls of Airbus. There is a dimension that is linked to energy. There is a dimension that is linked to regulation, cost of carbon. We have the ICAO Assembly very soon, CORSIA, the long-term aspiration goals. If we want to go to hydrogen, it's a completely different new infrastructure. It has to be green hydrogen, and so on and so on. If we go to e-fuels, the e-fuels, the SAF, which are absolutely essential, they rely as well on new forms of sustainable energy, going to green hydrogen as well to do the e-fuels, moving forward, and so on and so on. We have to look at the ecosystem working with airports, and we have a lot of partnership with airports to make this happen. Ecosystem. I spend a lot of my time, and my team as well, looking outside aerospace. Last but not least, employees. A few words about each of them. On the products, basically, we will keep improving our current range of products, and that's the short term and mid-term. We have a very strong product line with four platforms, which are modern platforms, if not brand-new platforms. There's a lot of potential to improve those products, and there are a lot of opportunities with technologies to make it happen. I mentioned the new products. It's part of improving those platforms, the A321XLR, the A350 freighter, and we are already looking a bit beyond. You will probably hear about the A220-500 that it makes a lot of sense for us at a certain point in time. We don't want to be right too early on that one. We still have a lot of work to do on the A220 before we get there. There's a very strong demand for freighter versions of some of our existing aircraft, the A321, the A330. Again, we won't do everything. We want to be very focused, but it will make sense, and these are things we will keep doing on the existing platforms. We're also working very hard on the technologies for the platforms of tomorrow, the one that will be based on sustainable aviation fuel. We need to continue to reduce very significantly the fuel burn, not only to go further and to have better performances, but because the fuels of the future, be them fossil fuels or SAF, will probably be by far more expensive than they are today. To have an economical equation that keeps working, we need to continue to reduce the fuel burn, and there are many opportunities to do it. We strongly believe in hydrogen. It's not SAF or hydrogen at Airbus, it's SAF and hydrogen. SAF will play the much bigger role in the short term, that's very clear. For the long haul, SAF will play the unique role for the next decades to come. We don't see around the corner how to fly a long-haul plane, a wide body with hydrogen. On the short haul, hydrogen has a lot of potential. It makes a lot of sense for the world where a kilogram of carbon in the air will become less and less acceptable. I'm sure we're gonna come to it. I guess Glenn will be with us, I suppose, for the ZEROe workshop, and so he's our expert on hydrogen. Don't hesitate to ask question, to challenge, to disagree. That's the moment where we really need to be able to do these kind of things. A lot on products. Moving forward, industrial systems. There's a lot of technologies that have enabled in other sectors a deep change in the competitiveness of the product. Of course, everybody thinks of microelectronics. The vast majority of the progress made in microelectronics come from the production system. The car industry has made incredible progress as well, and we see now that there's a lot of opportunities for us in the aerospace industry to change significantly the equation by the transformation of production systems. We are building some of the most complex and large products in the world, and the technologies, the tools that will help us do the automation and the robotization, they're not existing today. We have to invent at the same time we prepare the product of tomorrow, the production system of tomorrow, and we have reorganized ourselves. That's something you might have not noticed, but it's something very important that took place in the last two years. We have reorganized ourselves to be prepared for that. We have changed the perimeter of our industrial organizations. We had Airbus in France that was doing part of the production of subcomponents, and we had Premium AEROTEC in Germany. We have changed the way we are structured. We've took some of the Airbus plants that were merged with some of those assets to have consistent organizations that can be more competitive on the short term, but even more important, prepared for the digitalization, automation, and robotization of the next generation of products. It's already starting now. Since the first of January, we have Airbus Atlantic for our French production sites. We have since the first of July done something very similar on our German site, and we just call now Airbus Aerostructures. We are in the development of what we call DDMS. I think that's something you know very well already. I don't want to be too long, but it's absolutely essential to have that digital backbone completely transforming the way we operate, having digital twins of our product and production systems, and optimizing product and production systems even before they do exist, which is something we've not done so far. The potential for improvement is very significant. I had a question yesterday, how much time, how much money are you gonna save? Well, we have some ideas of what we would like to save for a similar development of what we've done so far. There is another factor that needs to be kept in mind is the fact that the products we're gonna enter into service for the next generation, they have a level of complexity and innovation that is significantly higher than what we've done before. There's a huge transformation. We are in a new generation of aviation going to the next product. Industrial systems, there is a bit more to it, but I need to be consistent with the time and not derail everything with my first speech. Ecosystem, so I tried to explain already a bit what it means. It's not a change that is just impacting Airbus. We're working with a lot of stakeholders to make sure that the coexistence of the system need to be correct in this new aviation world, so in... including for SAF. SAF is not a big change for aircraft. It's very consistent with what we do. But the air sector is today not structured to deliver the amount of SAF that we need, and the pace of change is too slow, is too small. We're working on the ecosystem. For instance, with airlines, the airlines committing to 10% SAF by 2031 by one, and some airlines have started to disclose the contracts they have placed with energy providers to get there. If we are at 10% of use of SAF by 2030 in this industry, we think it's likely to be at around 40% by the 2040s and around 80%- by the 2050s, which is what we need for reaching the long-term aspiration goal and the net zero for this industry by 2050, which is possible. Being carbon neutral in 2050 is possible. We We have the trajectory. It's been agreed. We were in Toulouse last year for the Declaration of Toulouse with governments because they believe in our trajectory, and they want to help us reach that trajectory. Moving to the last point, people, employees. Everybody has in mind the race, the competition for talent, we are in that race as well, so that's something we need to take very seriously. There's a lot of change in the skills that we need to run the Airbus of tomorrow, of course, in the field of digital, of cyber, of sustainable aviation fuels, of hydrogen, and all what goes with cryogenics and those kind of things. That's something we are doing. Maybe even more important than the skills themselves is to make sure we continue to have a very engaged workforce. That's probably the most powerful thing that I have discovered at Airbus. I knew it in my helicopter time. There's a passion for helicopters at Airbus Helicopters, but actually it's broader than helicopters. Here in Toulouse, in Hamburg, in commercial, you have a passion for those products. Mike, I'm sure will share with you tomorrow the passion for space in the space part of the company, for defence, for fighters. That's really something that is very special at Airbus. People love what they are doing. They are very committed to what our customers are doing with our products, and that's something we want to keep. From that perspective, COVID and teleworking is a big challenge. We don't produce planes from home. We are trying to say, "Oh, how can we turn this challenge into an opportunity?" The way we are answering to it is by defining a better workplace for employees, and we are working in that direction. Bruno, you did very recently family days at Helicopters. The results, or maybe you will share, has been really amazing and impressive. Probably people were so happy to gather again after a couple of years of COVID, but it shows as well the pride of people. We've decided to go for the better workplace to be one of the companies where people will want to come and work together, because we are defining products by working together, we are producing products by working together. The technologies we are working on are complex and large ones. They are interconnected, and we don't believe we can be a competitive company by having people staying four days a week at home, even working very engaged from home. That's not us, and therefore we are turning this in a different way, and the response of employees has been incredibly positive. They told us, "Wow, that's what we wanted," the vast majority of them. There are exceptions, to be fair. When we compete with digital companies, the tech, for jobs where the vast majority of people like to work from home, we need to define exceptions and we're working on this. We're also engaging by far more on education of people, on training. Catherine Jestin, that was at one table yesterday, has put together a university, so a school here in Toulouse. We have the first class of people coming to being trained and educated in cyber, and there was an overwhelming demand to come to the Airbus Cyber University. We're gonna do more of this to not only find the best people in the market, but as we train people for what we need, we believe that's a good way to have a very well prepared employees for what we have to do. If I'd like to summarize this introduction before we enter into more specific presentations, it's a complex world. It's a fast-changing environment. You know this VUCA thing, volatility, uncertainty, complexity, ambiguity. I think it defines very well the world we're in. This is not something we can change. We can just do the best out of it, and that's the way we try to face that situation. We won't be perfect, and we won't be winning each and every battle, but we try to win as many as we can. We have sort of, I like the expression never waste a crisis, and we try to turn really, I mean, not only in words but in actions, what has happened in the last years into opportunities to accelerate, to do better, to challenge ourselves, to transform ourselves, and that's really what I would like to keep doing with the management team, and we're working in that spirit. Last but not least, it's a team, and I'm very happy to have the team speaking today. I'm very happy to have you meeting with them. It's very important for me to make sure that it's a team working together and, my team knows it, and we really try to spread that way of thinking and working inside the company because that's the only way to be able to move fast with the right level of delegation and knowing that you are supported by others in the challenges you have to accomplish. Team Airbus is here today for you. I'm sure you've seen our tweets and communication, Team Airbus many times. We really try to put things, real things behind these two words. I stop here. Dominik, I think it's time to invite you on stage and for a presentation that we're all impatient to hear. I'll go through the presentation of the Airbus commercial, and we'll take your questions together. Thank you. Dominik, the floor is yours. Thank you, Guillaume, and good morning from my side to all of you. It's great to have you on site, back on site here. I'll start my comments with our fiscal year 2022 guidance. Recall that we maintained our financial targets while having updated delivery targets at the kind of first half year disclosure, and the company now targets to achieve in 2022 around 700 commercial aircraft deliveries, EUR 5.5 billion of EBIT adjusted, and EUR 3.5 billion of free cash flow before M&A and customer financing. What progress have we made so far? We have delivered 382 aircraft through August, leaving around 320. A similar back-end loaded remaining to do as compared to this point in time during pre-COVID years. How will we get to around 700 aircraft? We will continue to focus on delivering the aircraft we have in stock and that are almost ready for delivery, including the gliders for which the recovery plan is on track. On the A220, we are currently producing at around rate six, and we plan to deliver more aircraft in 2022 than in 2021. On the A320 family, we'd expect to close the year at a monthly production rate of around 50, and our current level of inventory will support the end of year deliveries. On the wide-bodies, we are very pleased with the good progress made on remarketing and de-storing of some aircraft. Yes, against the backdrop of disruptions in global supply chains, delivering around 700 aircraft in 2022 is anything but a walk in the park. Our Airbus teams are fully engaged with our suppliers and industry partners to deliver on our commitments towards our customers. How does this translate into EBIT adjusted? In H1, we generated EUR 2.6 billion in EBIT adjusted, which includes a non-recurring positive element of EUR 4 billion, partially offset by EUR 0.1 billion negative impacts from international sanctions. Our performance in H1 was also supported by our continued effort on competitiveness, while the progress on ramping up and on preparing the future was not really visible yet, especially in the first quarter of the year. It leaves us with an EBIT adjusted remain to do of around EUR 2.9 billion. That reflects our back-end loaded delivery profile, including in Airbus Helicopters and Airbus Defence and Space. In the second half of the year, we expect to expense around EUR half billion more than in the first half to prepare the future. This includes, but is not limited to research and development expenses. In parallel, we continue to progress on our rehiring plan with profiles mainly to support the ramp up, pursue our digitalization efforts and to decarbonize our industry. How about free cash flow? In the first half of the year, our free cash flow before M&A and customer financing stood at EUR 2 billion, also reflecting a strong positive impact from customers' advance payments and trade liabilities, partially offset by the A320 inventory build. In the second half, we still need to generate around EUR 1.5 billion to reach our target. There are phasing elements explaining the lower cash conversion in the second half of the year, and let me draw your attention to the main ones. Obviously, the gross cash from operations should reflect the higher EBIT adjusted. On the other hand, we expect our capital expenditures to be almost EUR 1 billion higher in the second half of the year as compared to the first. In addition, tax payments will also be back-loaded this year as we saw limited payments in the first half of the year. To conclude, we still have a lot to do by year end. We continue to operate in a period of uncertainty and volatility, but we are fully focused on execution and have well socialized and synchronized commitments from our suppliers, which form a good base to deliver our results. Now let's look longer term. We are on our trajectory to first snap back to the pre-COVID levels of delivery. Given we had to push the increase to rate 65 out into early 2024, it will not be possible to reach the 2019 delivery levels already in 2023. On a rolling twelve months basis, that snap back should occur sometime in 2024. On the other hand, we are now targeting rate 75 in 2025, a level significantly above the levels we indicated for the coming years back in 2019. On the other hand, please do keep in mind the adverse mix effect we have. Once back to pre-COVID levels, i.e., around 860 commercial aircraft deliveries, we'll have a higher portion of A220 and a lower portion of wide-bodies. Of course this will have a negative impact on our revenues, unless the U.S. dollar-euro exchange rate remains at current levels. The mix will also affect our profitability, and that's to a certain degree independently of the strengthening of the U.S. dollar due to hedges already in place. Let's now look at our profitability trajectory in more detail. That is looking beyond 2022. Some more color about where we expect to be once we are back to the 2019 levels of delivery. On the A320, our backlog now consists almost exclusively of neos. The share of the A321 variant within the A320 family backlog is today at 60%, significantly higher than in August 2019, with only 45%. Also, the overall share of the A320 family in our total deliveries should be slightly higher for next couple of years versus the 2019 level. On the A220, the volume is increasing as well. As compared to 2019, this actually represents a headwind to our bottom line because the program has not yet reached its break even, and we benefit less and less from the utilization of less loss-making contract provisions booked in the context of the purchase price allocation. We continue to progress towards break even as we advance through the learning curve and get closer to our ambition of rate 14 by the middle of the decade. For the widebody segment, we have adopted our production capabilities and lowered our fixed costs as we will remain at lower rates for longer. We are not so far off the overall break even on the segment, and we expect to turn the corner by 2023. Let me remind you that in 2019, the widebody deliveries were much higher, and as a consequence, the A350 program broke even while the A330 family contributed to our company profitability in a meaningful way. For our divisions, Airbus Helicopters and Defence and Space, Bruno and Mike will provide further details later on today. We are very pleased with the resilience the division demonstrated during the crisis, and we expect their combined EBIT adjusted to grow by low triple-digit EUR million in the next couple of years versus 2019. With regards to the potential impact from foreign exchange rates, it is impossible to accurately predict how it will evolve going forward. Should the U.S. dollar stay strong for a protracted period of time, an opportunity may arise. We still have some open exposure in 2023 and 2024, while the room for maneuver is much higher from 2025 onwards. I will come back to our hedging policy in more detail in a couple of minutes. On research and development and digitalization, we expect the volume of investments to converge to pre-COVID levels at the time we snap back to a similar number of deliveries. In addition, we still foresee some uncertainties on the business environment, notably related to inflation and supply, which could weigh on our profitability. Guillaume will come back to that more specifically. Now let's look towards the middle of the decade. Here I'm thinking 2025, 2026, and of course, beyond the ramp of the A320 family, our margins tend to further benefit from the improvement on the A220 and widebody programs, as well as the growth and margin expansion potential on our helicopters and defence and space businesses. Even more importantly, the combined effect of the dip in deliveries caused by COVID during the years 2020 through 2023, the expected full recovery of air traffic, as well as the strengthening of our competitive products, have by now created significant pent-up demand, which we will not be able to fully satisfy for the A320 family before 2028, despite the planned rate 75 from 2025. The A321, including its LR and XLR variants, is in the eyes of our customers, the most versatile model to relaunch the less densely populated point-to-point routes. We plan to go up to a capability of 70% share of the A321 within the A320 family in our ramp to rate 75. In the context of lasting inflation, we may have a triple-digit million EUR impact on our profitability that we expect to be at least partially offset by favorable foreign exchange rates should the current market conditions prevail. In short, while we anticipate that it will take us more than four years to recover back to 2019 levels of deliveries and profitability due to the disastrous impact of COVID on our industry, we actually see a significantly steeper earnings growth potential from the snapback point onwards for all these reasons. Longer term, additional catalysts could come from the higher production rate of widebodies, including the freighter, as we start to see potential for higher demand in the second half of the decade. Besides, the stable production at high volume on the A320 family should also provide opportunities to offset higher research and development expenses to support the launch of next-generation products. Overall, there is a significant potential for improved margins beyond 2019 levels as we deliver on our trajectory and outperform our pre-COVID peak delivery numbers. I dare say, compared to where we jumped off before COVID, our earnings growth trajectory is steeper and even more tangible, with remaining uncertainties predominantly from exogenous factors such as Forex and inflation. Now, what does it mean in terms of cash? As a reminder, we define a cash conversion as net income to free cash flow before M&A and customer financing. Cash conversion of one remains the target. In the near term, we still expect the A220 and A400M to weigh on our free cash flow. However, once these two headwinds are behind us and we come back and then exceed 2019 delivery levels, there's no reason why we should not converge towards this target. Furthermore, the singular ramp will have a mechanical impact on inventory in the short term that we expect to partially offset by reduction of the stored aircraft, also driven by our success in remarketing unplaced aircraft. Our capital expenditures are expected to be broadly stable or to only slightly increase as compared to the 2019 level. From a cash conversion perspective, our CapEx level should, over time, largely converge towards the level of depreciation amortization. To summarize, over a five-year planning horizon starting in 2022, we aim to fully convert net income into free cash flow. We consider our ability to achieve a cash conversion of one, despite significant growth in revenues and earnings as a key value driver, rarely observed in other capital goods companies, and will therefore make every effort to secure this target. Guillaume, is there anything you want to add on that? No. I confirm, Dominik. That's the management view, including the one of the CFO, but it's one of the full management view, and we're all committed to it, including our friends from the divisions. Thanks. On to hedging. In July, we decided to provide you with additional details regarding the way we manage our U.S. dollar exposure. Let me remind you where we stand. In 2021, more than 70% of the company's revenues were denominated in U.S. dollars, with approximately 60% of such currency exposure naturally hedged by U.S. dollar-denominated costs. We have implemented dollarization measures over the last years to address and increase the natural hedge. Going forward, as we are ramping up on our commercial aircraft business, we expect the U.S. dollar revenues to continue to represent the vast majority of our total revenues. At the end of June 2022, we had mainly two instruments to reduce currency exposure. First, our hedging portfolio stood at $82.2 billion at an average rate of 1.25. This portfolio is comprised of forwards, and let me remind you that hedges are implemented for each aircraft family independently. We do not pay any option premium for these instruments. The hedging costs related to the interest rate differential between dollar and euro are embedded in the rates displayed on the graph, which represents the associated EBIT impact. With forward instruments, we do not bear any risk of losing coverage, as it may be the case with certain types of options, such as knockout options, for instance. The second instrument is the euro conversion with a portfolio of $18 billion at the end of June. Couple of color on the euro conversions. It is a disintermediated instrument, meaning we directly agree with our customers on the future conversion rate based on the forward curve observed at the time of the agreement. Upon customer request, we could enter into a side agreement that defines the euro-dollar conversion rate applicable to the transaction. To be clear, the commercial transaction remains denominated in U.S. dollar, but the payments are made in euro. Airlines with revenues in euros may particularly be interested in this euro conversion agreement, as a significant portion of their costs is in U.S. dollar. Overall, in H1 2022, we've increased our exposures coverage by $12.3 billion, as we have implemented both new forwards and euro conversion agreements, while $10 billion matured over that period. While we have a quite high coverage in the short term, the increase in the net exposure induced by our commercial aircraft ramp up and the potential further rate increase on the wide-body segment leaves us room to further benefit from the strong U.S. dollar should current market conditions persist. That's for the basics. Now let's take a look at where do we go from this with rallying U.S. dollar rates. Let us use 2025 as an example, as we still have significant headroom to implement new hedges. We have already hedged roughly $18 billion at 1.24, and of course, that's only a fraction of the exposure. If you take a random figure, let's say we add another $5 billion at the current forward rate of 1.06. In this example, actually, the real rate today is 1.04. That would result in a total hedged exposure increase to $23 billion with an average hedge rate of 1.20. Now we apply our FX rule of thumb, which defines how much EBIT impact you get from a $0.01 increment at a specific hedge book volume. At $23 billion exposure and with an average hedge rate of 1.20, the $0.01 improvement would yield around 160 million incremental EBIT impact. If you do the math here, adding these 2.5 billion of new hedges would provide an EBIT tailwind of more than a mid triple-digit million EUR in 2025, as compared to a situation where this additional $5 billion would have been taken at the current average portfolio rate of 1.24. That's the overall idea. We will continue to monitor the situation and actively manage our hedge book and optimize our currency risk. That being said, we will continue to progressively hedge our exposure as we cannot take the current market conditions as granted forever. All along, we have adopted a prudent and conservative approach in terms of hedging. Speculation is not compatible with our responsibility to foster trust, stability, visibility through the entire ecosystem, and our hedging strategy has been framed in that regard. Now let's move on to another factor which, we recently have seen evolving very strongly. I mean inflation and particularly its impact on our commercial aircraft portfolio. As you know, on our customer side, we have so-called escalation clauses in place which are based on several indices, including labor costs and raw material prices. The escalation clauses which apply to the contractual prices are based on compound escalation rates over the contract lifetime. There are caps negotiated on a case-by-case basis with our customers. Please keep in mind that it's only one of many elements of the negotiation. Let's take an illustrative example to figure out what this exactly means. Please understand that we cannot give concrete numbers about average and ranges for escalation caps as due to the long-term nature of order intake, these are as sensitive in negotiations with customers as the price itself. Assuming the contract is signed in year zero, if we deliver in the first scenario, so that's the one you see on the chart, the compound escalation rate would not have reached the cap as per the example displayed on the slide, so the full escalation formula would apply. Actually, in such a scenario, Airbus would have done better if inflation had been slightly higher. If we deliver in the second scenario, the compound escalation rate would be higher than the cap and consequently, the compound cap would apply. Third scenario, at year +6, the compound escalation rate would not have reached the cap and the escalation would be fully passed on to the customer. In that example, it is important to note that we would benefit from the excess inflation in year three and year four, as it will compensate the relatively low inflation at year one and two. This is why in 2022, for instance, we still have a little bit of a shock absorber against the astronomically high levels of inflation that we currently observe. What matters in the end is the signature date of the contract and the delivery date to compute the compound escalation formula versus cap. Finally, in case of prolonged inflation, which is not illustrated on the page here, we are able to pass some additional costs on to our customers. To wrap up, we are pretty well covered by our commercial contracts in case of inflation in our cost base, but only to the degree inflation is not way in excess of, for instance, the ECB inflation targets, as it recently has been the case, and that for multiple years in a row. Should the wisdom of crowds in financial markets, as evidenced by inflation swaps pointing to a mean reversion of inflation to around 2-2.5% turn out to be right, inflation would certainly not be a significant issue to be discussed here. Now, coming back to our investment perspective, let's talk about how much and where we invest. As you know, the level of CapEx and R&D spending, you know already the level of R&D and CapEx spending in the recent years. As you remember, we moderately reduced our expenses during the crisis to preserve cash. and I insist on that point, we protected strategic projects such as the A321 XLR, the A350 Freighter, DDMS, and some investments for future development programs to preserve our future competitiveness. Looking at the multi-year horizon, let's say five years from now, as compared to the previous five years, the overall investment should be broadly stable. The R&D expenses and CapEx are expected to increase as we are preparing for the future. There is, of course, the required investment for the A350 Freighter and the A320 family ramp up, but there's also the investment to continue to mature the techno bricks to pursue our digitalization path for more flexibility and to progress on our ambition to decarbonize aviation, as evidenced by the ZEROe project. Sabine and Julie will later on provide details on our journey to deliver on these ambitions. Some additional elements on the R&D. We expect the volume of investments to converge to pre-COVID levels at the time we reach the pre-COVID numbers of deliveries. From that point to middle of the decade, we expect the R&D number to remain roughly stable as% of revenues, assuming constant foreign exchange rates. The overall investment in R&D is actually even higher if we consider the customer-funded share, which represents roughly one-third of our yearly self-funded research and development, and that's not reflected in our financial results. A couple of words on working capital. As I said, we have the capacity to grow without deteriorating the cash conversion, mainly with the pre-delivery payment schemes, which are structured in a way to finance our inventory needs. Back on CapEx, we expect to largely converge to the level of depreciation amortization and therefore not to weigh on the cash conversion in the future. In other words, as compared to today, we have some room to further invest without weighing on our cash conversion. Now, the balance sheet. Having a strong liquidity is key for our business, whether it's the pandemic or the war in Ukraine. The past two years have unfortunately not been short of unexpected negative developments at the macro level. A robust balance sheet has proven to be of utmost importance to support the confidence of our entire ecosystem in our ability to withstand these crises. It also enabled us to access liquidity either through banks or debt markets at favorable conditions, and to enter into hedging transactions without our bank partners, and that without the need to post collateral. The latter is of significant importance to avoid cash flow volatility from margin calls. We entered 2020 with a strong cash position which helped us navigate the COVID-19 crisis. After reaching a low point with a slight net debt position during the course of 2020, we progressively strengthened our net cash position, which has improved to EUR 7.2 billion as of the end of June 2022. Our liquidity position remains strong at EUR 77.6 billion. In July, we upsized our credit facility from EUR 6 billion to EUR 8 billion to further improve our liquidity, so we now have close to EUR 30 billion liquidity available when combining our gross cash and undrawn committed credit facilities. As a reminder, in Q1 2022, S&P and Moody's both updated Airbus credit ratings to A and A2 respectively, and removed the negative outlook, reflecting our strong financial and operational performance. As we have stated before, we're working hard towards rebuilding a net cash position of around EUR 10 billion. This aims at allowing us to weather potential crises while still maintaining our flexibility to invest in new programs or to consider acquisitions where it makes sense. Our cash generation potential for the next few years will contribute to this ambition. Now, what will we do with our free cash flow when we get there? First, we want to preserve some cash to largely close the remaining pension deficit gap over time. This would come on top of the normal contributions. The net debt pension deficit, which stood at EUR 2.9 billion as of June 2022, has clearly benefited from the increase in interest rates. However, risks from inflation and falling interest rates persist. We also anticipate some usage of cash in the coming years for customer financing. While the aircraft financing environment remains solid, with sufficient liquidity in financial markets for our products, a low level of customer financing may not be sustainable. Obviously, with the earnings growing, we also want to see the dividend evolving accordingly. On dividends, the company targets a sustainable dividend growth within a payout ratio of 30%-40%. Pre-COVID, we were at the higher end of this policy. In the first quarter of 2020, as one of the measures taken in the early stages of the pandemic, we decided to withdraw our 2019 dividend proposal to protect our financial liquidity. After two years of cash containment efforts, we took the decision to reintroduce dividend payments for the year 2021, underpinned by our financial performance and strengthening balance sheet. Due to the high level in 2021, which was inflated by non-recurring elements in net income, our 2021 payout ratio was below our policy levels in relative terms. In absolute value, it was actually in the high, at the high end of the range of our historical dividends per share. Going forward, the dividend will remain our preferred way of shareholder returns, and our aim is to return to the higher end of the range of the company's policy. Yes, once we will have reached the EUR 10 billion net cash ambition, and absent any imminent M&A plans, we will discuss additional measures to return cash to our shareholders with our board of directors. In summary, we will have recovered from the crisis. We see ourselves significantly better positioned to deliver even stronger earnings and cash flow growth than what we had targeted pre-pandemic. The further we move out in time, the more uncertainties such as inflation, Forex, and unforeseen crisis we have to be aware of. Think about the VUCA comments. We have to remain humble when making firm financial commitments as to where exactly the journey will lead us in terms of earnings by middle of the decade and beyond. We know that capital markets have no mercy for over-promising and under-delivering. We do commit to a cash conversion of one-for-one for a five-year planning horizon through 2026. We have a degree of confidence that in case of mean-reverting inflation and exchange rates, and absent any foreseen crisis a la COVID and acts of war, we have plenty of mighty levers to be among the fastest growers in terms of earnings and cash flows in the universe of capital goods companies. We commit to prepare the ground to lead the decarbonization of aerospace, not only technically, but also from a financial point of view. This is it for the financial elements. Guillaume, anything you wanna add? Just wanted to thank you. Just wanted to thank you for this presentation, in particular, the one on the escalation and inflation. I think you managed to share things which are important for our shareholders and financial community without disclosing the contracts themselves. It was really good. I wanted to insist on your last point. We are committed to growing shareholder returns. Dominik will be looking at it with a different perspective, but Sure. We will do our very best, Dominik, to make sure that what you said today will be proven right. And indeed, we really believe in the potential of that company to grow. Aviation is just at its beginning. Yes, we had a bit of a hiccup with COVID. It's been quite a shock, but we've seen, and I will share with you some data points that the world keeps needing and believing in aviation, and we want to be at the forefront of this growth. We want to grow the shareholder return. Maybe I should preempt a question, and I'm sure you will raise on share buyback. We are not yet there, but we are very much looking forward to having that discussion with the board as soon as we hit the EUR 10 billion mark, and that might be coming quite soon. We are looking forward to this discussion with the board, and share buyback is one tool in the toolbox, I like to say. We'll see how we do it. This is a board of directors decision, so nothing to be commented beyond here. But we really want to have that problem very, very fast, and you've seen that we've been very committed. I think one element that I might add to what you said, Dominik, maybe taking a bit of a step back. We are very committed on the short term and the mid-term, and we know that that's a horizon where we have to be very serious to the financial community. We don't want this to be at the expenses of the mid and long term, because we really believe in that long term. We think we have a unique opportunity to ride the wave of change and benefit from the growth of aviation that is front of us, and this is where Airbus wants to be positioned. We strongly believe as well on our other businesses that will come a bit later. It's not just that there are other parts of the company, they are fully at the center of the company because we have synergies on the skills of people, the ability to run large programs, the technologies, the tools and systems we're using, the know-how of the company. There's a lot of innovation that comes from defence as well, and it's just gonna accelerate moving forward. We really believe in that ecosystem inside Airbus to be a better company, and that's the equity story or part of the equity story for the group. It's not just Airbus commercial, even if it is the lion's share you're looking at. Also it's a business that is easier to understand probably than the others. We would like to take benefit from those presentations today to increase the understanding and the awareness of the other businesses because they really contribute to what we are and to our success. Shall we stop here? Okay. I think we are. Commercial On time or almost on time. I will transition to commercial. Dominik will stay with me, and then we'll take your question. I hope you're still with us after these different speeches. Yes, everybody is energized. We can go directly to commercial. Okay. My challenge will be to try to share with you some slides and perspectives that make sense, that bring value. You know this business very well, so I will try to contribute to this by going on to specific topics, and if there are others you want to hear about, we will be very happy to take your questions as I said before. Let's go. I think I'll start with a slide that is quite simple actually. There's nothing on the slide except a wonderful A350 to share with you the fact that Airbus Commercial is all about matching demand and supply. Demand used to be something quite slow in the change, quite predictable, and that was okay because the supply is a deep supply chain. The products are with a lot of long lead time items. When you look at a landing gear, a leg, the main part of the landing gear or the main axle of an engine, actually, if you take into account the need to have the production system to produce those long lead time items, it's more than five years of lead time before it goes into a plane that flies. In a slow, changing world, that's something that is not so difficult to manage, even if we have 3,200 suppliers that supply parts to us, that's just Airbus commercial. We have roughly 3 million parts per plane. We have also maybe roughly 3 million parts that come every day through the door, so there's a lot of complexity. In this new world, it becomes by far more challenging to balance demand and supply, to match demand and supply, because the demand is shaken by a lot of crises. We really need to work hard on having the best possible understanding of the demand and anticipation. We need to change the way we supply, by far more reactivity and anticipation and ability to change and to adapt to what's really happening. This was really a challenge during COVID, but matching demand and supply is really the core of what we're trying to achieve. On the demand side, we're working in different ways to not rely on only one way of looking at things. That's something I explained, I guess, to some of you, so I won't be too long. We test ourselves with what we call a top-down approach, where we come from macro factors, and it's something that is in the hands of Antoine Bouvier in marketing. We have macro models relying on all the megatrends, the data on GDP, on how people fly, I mean, all what we can get from the external world. We have what we call a bottom-up view, which is what we do with each and every airline, almost going plane by plane on what they want to do, when they want to replace their plane, what are the new airlines that could be coming, the ones that are in difficulties, and trying to create that very granular understanding. Then we compare the two. Obviously, on the very short term, the bottom-up is by far more precise. The top-down is a more general one. When you look at the long term, the top-down is probably more likely to happen. We crosscheck the two. For the horizon, that is the one we need to be flexible to, which is three to five to seven years, it's very strong to have those two methodologies. We keep improving the methods and we have enriched a lot with COVID-19 itself. COVID-19 was really a deep stress test, and that was very useful to adapt and change a bit the way we were looking at the top-down view. For the bottom-up, we have never worked as closely as we've done in the last years with our customers just to find solutions for each and every plane. We have much better understood the dynamics on the bottom-up. Understanding the demand is absolutely critical. On the supply side, we've done a lot as well. I will be more detailed when I go product by product. We have changed the production system, as I was saying before, for components. We have also adapted our product lines quite very significantly. I will explain one by one. We're also using digital data, Skywise, to be much faster in changing our supply chain, in changing the production planning and the way we cascade data and the demands, the supply plan to our suppliers to make sure we keep suppliers always with us at the pace and the speed and with the level of anticipation that they need. That's what led us to communicate as early as May 2021 on the start of ramp-up from rate 40 to higher rates on the single aisle, because we saw that we had to do this adaptation and start to inform the supply chain and demand to the supply chain that it was time for them to start accelerating at a time where it was everything but obvious that it was time to accelerate. It's difficult. You know that, and I will share a bit of data on this, that managing supply chain today is the biggest challenge for the industry, not only for us, by the way, for many other industries. I think it just highlights the need to anticipate. It shows as well that we have many other factors that are making the supply chain management and industrial activities at the moment quite challenging. Management of the demand and the supply, or matching demand and supply, is really at the very core of what we do at Airbus Commercial, but also in the other businesses. There is another mechanism in helicopters that is very close to that one, and that is also being managed very, very carefully. Going to the next chart, please. Sharing with you the following. I hope it's visible, yeah. I'm trying to find a synthetic way to share with you the recovery from COVID-19. That's actually the traffic and the way it's plunged in 2020 to very low level in Q2 2020, almost close to zero. We have updated our demand plan, the demand forecast, twice in 2020 and in 2021. These are the two corridors that I hope you can see on the slide. You have the gray one, that was the corridor we defined in Q4 2020, and then the light blue one, that is the one we defined in 2021. I think it was Q2 2021. Well, we navigate in this corridor, so that we have a recovery which is more or less fitting with what we had, we had forecasted, and it was very difficult to forecast at that time, so it was a prudent forecasting. But we needed someone to be able to do this demand supply management and to communicate to the supply chain. Therefore, we continue to believe that we will recover fully the traffic of 2019 between 2023 and 2025, okay? That remains valid. You might remember that that's something we started to say in 2020. Of course, we had to change and to adapt. Omicron has slowed us down on the, on the recovery. But basically, we see that we are still consistent. Region by region, we've been wrong. Segment by segment, we've been wrong. Not too wrong, but overall, the trajectory is that one. This business is recovering. We will have lost sort of five years, just to be clear, in the growth trajectory we had before COVID-19 hit the industry. When we will be looking at the global market forecast, we are back to where we were in 2019 in terms of growth. Very few changes, and they're probably not directly linked to aviation itself, but more to the change in the environment, especially all what is related to decarbonization. The nature of the demand has changed as well. When we will be looking at planes, these are not exactly the same planes than the one we had in 2019. We have stopped the production of the A380. We have now the two twenty ramping up. When we take a bit of a distance, that's basically the recovery we're in and we keep moving forward, consistently with the order of magnitude of estimation we did at that time. The next one is the slide that shows the number of passenger aircraft, commercial aircraft in service. So that one is quite important. We were in a trajectory of doubling the traffic every 15 years, and therefore, not far from doubling the number of passenger aircraft in service, every 15 years. It's not so easy today to really characterize what is an aircraft in service, given the way airlines are managing their fleet in COVID and the number of planes which are grounded. Still, we see that we have started to grow again the number of passenger aircraft in service, that we have roughly 39,000 planes. The exact figure is 38,600 new passenger planes that we estimate will have to be delivered in the next 20 years. That's not far from what we were saying in 2018, 2019 before we were hit by COVID. We are back on this trajectory. What is interesting on that slide is also the pace of replacement of previous generation planes. The dark blue are the planes of the so-called older generation, and the light blue are the planes we are commercializing now. You know that the big change or the big improvements from one generation to the other one is the fuel burn and therefore the energy efficiency, the CO2 emissions, and also the economical efficiency of the plane in a world where fuel is expensive. We see that by the 2040s, beginning of the 2040s, we'll be roughly at all the products being of the new generation. When I see this, it tells us that in the 2040s, maybe in the second half of the 2030s, that will be time for a new generation of products to come because the pressure to gain competitiveness will be in the market at that time. It's another way to look at the time for entering into service of the next generation of platforms, starting in the second half of the thirties, maybe beginning of the forties. That gives an indication of why we're looking at that horizon from a technology standpoint, but also from a market standpoint. In a world where, again, carbon fuel burn will be very much under pressure. I think that's basically what I wanted to say. I said already we are improving our products as well by upgrades in the meantime, so taking the best out of the potential of the platforms we have today. The next slide is, I guess in my view, a very interesting one. You have on the right side the bars, which is the backlog. The dark blue line is the deliveries. It's quite amazing. You have in light blue vertical the different crises. You have 9/11, you have the SARS. That was a very interesting crisis in the perspective of COVID-19. We looked a lot at what happened during SARS, regional in Asia to try to figure out what was going to happen with COVID-19. We had a lot of conversation with strategy on how to look again at the learnings from SARS. We had the financial crisis and the, on the right side, you have COVID-19. What is amazing here is to see how the backlog has been stable during crisis, including during COVID-19. There was a slight reduction of the backlog 2020, 2021. You see at the very bottom, the red bars below the waterline, that's basically the cancellations. We had very small number of cancellations. That's something we discussed yesterday during the dinner at our table. Why have we managed to stay at rate 40 and rate five on the 350? Well, that's basically because the airlines really believed in the recovery of beyond the COVID-19, the recovery of the traffic. They need to be there with competitive products and therefore the value of adding slots into our backlog, and there was a very small number of cancellation. That was a bit of a surprise for me, but it was very reassuring and has been a stabilizer into COVID, and actually it's been the same in the previous crisis. Including on the deliveries where we see that COVID-19 has been really of a very different nature compared to other crises. In other crises, the deliveries were maintained rather stable. Here, we had to reduce very significantly, roughly 30%, cutting by half on the wide-bodies. Still, the backlog going out of COVID-19 is stronger than it has ever been. We have roughly 6,700 planes on the single aisle and 640 aircraft on the wide-bodies. You know very well that we have started to book again single aisles in very large numbers, including with the recent orders from China after a few years without orders. It's starting slowly but surely on the wide-bodies as well. I think we will see some interesting slides on the wide-bodies. That is probably telling us, or it's not necessarily on the slide, but I will comment, that is telling us that there will be a moment where wide-body orders will probably come big time, and that's maybe probably not very far out. I think that's basically what I wanted to share with you on that slide. Moving to the next one. It's an interesting one. I guess that's the first time, Dominik, we present that slide with residual values. This is the evolution of the residual values of the planes we are commercializing now, or planes that we sell now. In the last two years or two years and a half, it starts just before COVID-19. There was a way for us to share with you something that we've been looking at, which is how the assets have stayed, I mean, trended. These are assets which are a lot of value for our customers, therefore, they are good financial assets to own. They remain attractive. One choice we've made on that slide is just Airbus planes. So you have the A220, the A320, and the A321 on the left side, and you have the A330neo and the A350 on the right side. Basically, their value is the same as what it was beginning of COVID-19, pre-COVID-19. Actually, if we would have put the products we are no longer commercializing or the planes of the competition, there's a different behavior. Older planes on the single-aisle, the value has been reduced. Residual value has been under. The asset value has been reduced. Not too much, for the A320ceo, for instance, but different behavior than what we see here for the A320neo. On the wide-bodies, the value of planes which are not on that slide, be they Airbus or mainly from other manufacturers, have plunged very significantly, which basically is consistent with the idea that we have changed very significantly the structure of the wide-body market compared to pre-COVID-19 situation. The older planes in the wide-body business, they are of a much lower value seen by the market, which basically is consistent with the idea that there will be a need for modern planes in the wide-body business, and there's only a small share of modern planes in the wide-body business. When this segment of the market is going up again, there is probably a strong demand coming forward for those new products, and in particular, the Airbus products, which have been trusted over the last two years and a half and remain very clearly in demand, and in particular, the very strong A350 that is positioning itself now more and more as the market leader in this segment. That's why we are so happy to have launched the three-fifty freighter last year. That's a very important piece of the puzzle to have a strong product range. Maybe there will be more to be shared with you and more discussions moving forward, but I think that slide is the start of an interesting discussion. Moving forward, a few slides on the products themselves. Of course, starting by the A320 family. On the A320 family, we have almost 10,000 planes in service. We have more than 6,000 planes in the backlog, including a lot of A321s. You see, I don't know if you see it's roughly 60% of A321s in the backlog now. The speed of moving from a good mix of A320, A321 to a very strong demand really centered onto the A321 is just a reality today. That's something we have identified already, I mean, years ago that we were quite impressed to see that was very consistent, if not increasing during COVID. We've made a couple of important decisions, on that front. The one is, we maintain all our lines open, the final assembly lines open during COVID. We had, and we still have eight final assembly lines for the A320 family around the world, one in the US, two in Toulouse, four in Hamburg, and one in Tianjin. We could have decided to shut down, to close some of those FALs. That's not what we decided. We decided to keep them open at a lower rate of production, which is less efficient, but with the idea that, it was the best way to be able to start and ramp up again. If we would have closed final assembly lines, it would have taken a lot of time to reopen and accelerate. Unfortunately, that's what we see with some of our suppliers, but that's not what we've done at Airbus, and I think it was the right thing to do for the A320. The second important driver is the fact that to do this, sales production matching I mentioned before, and have the ability to move fast and be agile and respond to the demands, we decided to transform the production system and enable A321 on all sites. That's what we are doing in Tianjin. We are enabling A321. That has been done already, in Mobile, Alabama. That's what we are doing in Toulouse as well. We are building, as we speak, an A321 assembly line to replace an old A320 assembly line here in Toulouse to be able to produce A321s here to assemble A321s. We're gonna transform completely the production system. By the way, in Toulouse, we go one step further in automation. We will have AGVs in the A321 assembly line. That's something we start to play with because we believe there is a lot of potential, and do what the car industry is doing on smaller lines, on smaller production sites. We want to do it as well for the A321. As you know, to cope with the increase of rates overall and the stronger demand of the A321, we've decided to add one final assembly line in Mobile. We will have very soon nine final assembly lines, A321, and also more geographical flexibility to respond to the demand. A lot of work on the single aisle because it's a supply constraint program. We are today in a situation where the demand for the A320 family is very likely to remain stronger than our ability to supply for the many years to come. We have announced to the supply chain after having assessed their ability and willingness to get there, to go to 75. That's for 2025. We have a first very important mark that is rate 65 now for beginning of 2024. We wanted to target mid of 2023. We have announced at our H1 results that we had to push it to the right by roughly six months because of the state of the supply chain. The demand remains very, very strong for our single aisle. So I think that's basically what I wanted to share with you. I will be happy to take questions. We increased the size of the family with the XLR, and we keep improving our products. ACF is working very well on the A321. Two-twenty. Well, two-twenty, it's a product where we are on trajectory with what we had said in 2020. We had to review our assumptions because of COVID. Basically, rate 14 is targeted for mid of the decade, for 2025, and we think we get there. We want to be breakeven by mid of the decade, same timing, and we think we're on trajectory to get there. To do this, we have to reduce our costs. We're on trajectory as well on the cost reduction side of the program. We need to ramp up, and there's a big ramp up on the A220. There's a higher percentage of ramp up on the A220 than what we do on the A320. We will have gone from rate four to rate 14 within five years. That's quite amazing. That's the equivalent of going from rate 14 to 120-ish on the A320, which fortunately we don't do because it would be of a magnitude that is probably difficult to manage. On the A220, on a smaller program, that's what we do. The pace of ramp up is very high. We have decided to put in place a final assembly line in the U.S., in Mobile, close to the A320. We have started delivering last year from Mobile. It works very well, and we have some synergies, some more synergies to do between A220 and A320, in Mobile. We have decided to put in place a pre-FAL, which was not the way Bombardier had organized the production system of the A220, to create a pre-FAL to do exactly what we do on the other Airbus products, because that's the best way to serve different assembly lines, the one in Mobile and the one in Mirabel. That program moves forwards. We have now a backlog of 550. We keep taking orders at the pace we need, and that works quite well. It's an Airbus product, completely embedded in the Airbus product line. The next one is probably the wide-body slide. Yes, thank you. On the widebody, we have not seen yet big orders coming back. Well, we had Malaysia, we had a couple of them. We have the orders for the A350 freighter, but there's a lot of campaigns ongoing, and we see that there is life in the body, if I can say it like this. The body will be up and strong and running fast, in my perspective, quite soon. Still, we have a good backlog. By reducing the production rates by half, that gives a much deeper backlog, and therefore, we have a lot of visibility on our widebodies. There was a very important financial aspect to the crisis that we reached breakeven on the A350 in 2019. That was a commitment from the program that we achieved, and then we were hit by COVID. The commitment of the new team was, in the new condition, to say, "We're gonna be breakeven at rate 5." I don't want to be ahead of myself, but we are very close to reaching the breakeven on the A350 at lower rates. That's the priority we gave to ourselves. We share more probably after the end of the year. We have added the A350 Freighter. The planes behave very, very well in service. You've seen the value, the asset value, in the previous chart. We are really making progress on widebody business, and we are gaining very much with the 350. We add the A380 to position Airbus in the widebody space, gaining a lot of credibility by the product itself. It was not a good business case for us and for our customers. We decided to stop production, and now we put all our focus on the A330neo and on the A350, and that's, I think, basically what I wanted to share to remain not too long. I'm behind schedule. This slide is a complex one, probably too complex, but I'll try to share a couple of ideas. You see the four bullet points vertically, the blue ones. I tell you to manage this supply chain in a very complex environment at a time where ability to move forward, adapt, anticipate change is totally key. We need to anticipate as much as we can, and it means a lot for the supply chain, ahead of the decisions we make. We engage the partner a lot by far more than what we did before, and I think Jürgen, that was with us yesterday, Jürgen Westermeier, our focal point, that comes from the industry because he brings a lot of know-how on how to partner with suppliers. We try to secure as much as we can, and we come into different kind of partnership or agreement with our suppliers to partner with them, to secure their commitments, and we monitor. We've put in place during COVID what we've called the watchtowers. That was to anticipate disruptions and many financial disruptions at the supplier end. We have kept those watchtowers, and now they focus very much on the ability of suppliers to deliver. Do they have the resources? Do they have the production planning to their own supply chain in place? How is it moving forward? Because we can face disruptions with suppliers if we know early enough. Our objective is not to have no disruption in the supply chain. It's just impossible. It's to have those disruptions so early that this can be managed without impact on the final assembly line, where we've not been completely successful, as you've seen, as we had to postpone by six months, but still we are ramping up, and we have maintained the supply chain alive during this war period of time and including during these very specific moments where the world is really disrupted when it comes to supplying and operating. I would have liked to spend a bit more time, but I need to accelerate. Two more slides. The next one is on what we do on environment, what we do on ESG, what we do on preparing our products for the world that will be a very different world. Maybe I'm too quick to say, but a post-fossil fuel world. We had coal. We had oil. We have to be prepared for the post-coal era, and we better be ahead of time than late. On top, this is an opportunity. The new fuels will be expensive, so being very excellent and efficient in the energy efficiency is an asset, and it goes all in the direction of economical efficiency, fuel efficiency, low carbon. There is no contradiction. Execution speed. It's all about speed. We're trying to be as fast as we reasonably can. We don't want to launch products with immature technologies that would be going too fast, and we are in a period of time where we're really focusing on technologies. We take our time, if I may call it like this, on the technologies to make sure we have the right set of technologies for tomorrow, to develop and enter into service our products. Very happy to see that, Mike and Sabine have joined us, so we will have everyone later for the presentation. Julie and Sabine will come on that part, so I think I can be quick. I think that's part of the resilience and of the growth story. As I said before, we are just at the beginning of aviation. That's the perfect mode of transport. The infrastructure you need is the air. It's existing. It's clean. You don't need an investment. It's by far less impact on the population on the ground, on the ecosystems, be it the fauna or the flora, everything. It's well documented. The only big thing is carbon. The only point where aviation is worse than other modes of transport in terms of impact on environment is carbon. That's why it's the top priority, and we are focused on that priority. Last slide, it's maybe my sort of wrap-up of what I try to share with us. We are in a growing market. It's a world full of opportunities when it comes to offering product and services in security and connectivity. We really believe the purpose we have given to ourselves makes a lot of sense, has a lot of meaning for society, and that Airbus is probably the best company placed to serve that purpose. We are very committed to it. It's a growth trajectory. It's all about finding the right balance between the short term, the mid term, and the long term. That's the beauty of what we do. So far, we have managed to be putting priority in the, in my view, in a rather well-balanced way, both on the short, mid-term and delivering on our growing numbers, but also preparing the technologies and the skills for this post fossil fuel era, if I may call it like this, and on defence and space, in the world we're in, we're probably not in a better world, a more dangerous and more complex world, but where security, defence, space, cyber have a very, very large role to play and where we believe we can serve in a profitable way, in a growing way the demand from the market. I stop here. I've been slightly too long. It's not unusual, I have to confess. Looking very much for- A bit of respect, please. That's Julie, always Julie. Very happy to take your question with Dominik. I don't know how much time we have. We have roughly 15-20 minutes for Q&A questions. Voilà. If you have still a bit of energy and attention, and thank you for your attention, we're happy to take your questions. Please state your name. As usual, in the disclosure calls, limit yourself to two questions at a time so that we can have as many as possible. Thank you. Good morning. It's David Perry from JP Morgan. So my two questions. First of all, just on your slide, Dominik, I think it's slide four. You say delivery's about 1,000 in mid-decade. I just wondered why. I'm sure you agonized over it, but why about 1,000 as opposed to just telling us over 1,000? So just curious as to your thinking on that, 'cause I'm just struggling to reconcile that with the production rates. Then I think your comment on margin, I think it does seem conservative compared to what the consensus expects. Consensus could be wrong, but are you literally saying 2024 civil margins, we should think about 10%? Is that literally how we interpret it? I think on the 1,000, we say around, but it can be more. I agree with that. If you look at the production rates, there's potential to go beyond. So we should have potentially highlighted that more clearly, but I agree with your assessment. On the margin question, don't forget we say that we snap back to the 2019 margins once we are on a twelve-month rolling basis back to the delivery level. Of course, we'll try our very best for the full year 2024 to be above that. So that's why I think it. We're not confined to that type of limit for 2024. Yeah. Other questions? Thank you. Guillaume, it's Harry Breach here from Stifel. Maybe two questions, maybe one for you, one for Dominik. For you, in terms of wide body demand, earlier on you said that you thought there would be some life coming back into the body. There are some that say that this depends on lockdowns ending or becoming more minimal in China and some liberalization or relaxation of that. In terms of the campaign activity you see, how dependent is that revival of wide body order intake dependent upon China? Maybe for Dominik, in a cash conversion figure you gave us of around one over the five-year period, can you help us to understand what your PDP assumptions are in there? Both in terms of PDP flows relating to the production rate increases you see, and separately relating to the pacing of new order intake that you expect this year and coming years. I start with the first one, and it's actually a very good one. The resilience of the demands on the wide body and on the single aisle to different scenarios of the world are very different. That's something we discovered and we discussed a lot at Airbus in the last 36 months. Actually, under a very large set of scenarios, the demand for the single aisle remains very strong. Of course, there are exceptions. COVID was one. But still, you can change a lot of things in the world and come to the conclusion that it will remain a supply-constrained market. Very different from wide bodies. That's why we think it might, there will be potentially life into the body coming. Because if the international scene remains or becomes even more challenged than it is today, things can turn different into the wide body. We have to wait to see it to be sure it's coming. We want to be prepared. We think it's more likely to come than not, but it's not certain at all. It's very depending on some of the parameters and the factors you mentioned and others. The wide body recovery, the pace and the when is still unclear and very much depending on a number of KPIs. Is it fair to say it, Antoine? Is it the way you would have phrased it? Okay. I look at my Should I? Yeah, my lawyer or my source of truth and knowledge. Okay. I see. On the PDPs, really nothing exotic embarked in that, kind of, north star of cash conversion on one. We will come to the rate 75. 26, it should be, plateauing, so there's no magic growth beyond. If your question is do you need like a super boost in the second half of decade to pull in PDPs to finance that's not the case. It's quite prudent assumption, I would say, towards the end of that, planning horizon. It's the normal PDP assumptions we have with customers, and we just need to, follow that rate curve. Sorry, that ramp curve. Deposits on new orders, is there no assumption in that ramp? No, of course. I mean, there are in some programs, you need new orders to fulfill that ramp. I mean, think about the wide bodies. We need some, think about the A220. To get to the rate 14, new orders will be required. But again, nothing exotic, but very much consistent with the ramp we have sketched out here. We have a question from Tristan. Merci. Good morning. Tristan Sanson, Exane BNP Paribas. I wanted to focus quickly on the supply environment that you quickly addressed earlier. You talked about the ability through the watchtower to monitor the activity of your supplier. Can you explain to us quickly first, what is it that you could not absorb fast enough when you rescheduled the deliveries this year? And second, what makes you comfortable that you won't have to do it again this time that you can properly anticipate the issues in forging, casting, labor, et cetera? Well, I'm not sure comfortable is the situation we're in today. We had difficulties a bit across the board. We managed to protect the FAL from most of the crisis, the Final Assembly Line from most of the crisis. We had a lot on the electronic components, microchips, very low in the supply chain going up and sometimes coming close to us. But we managed with the coordination with the tier one and sometimes the tier two or tier three to avoid disruptions. We had many other goods, equipment, systems that were in a similar situation because basically one of the big drivers is the inability of suppliers to find people when they want to ramp up again, and that's something that is not unique to aviation, but we are also hit by this situation. I mean, we've had a lot of issues with engines, you know that. We had sort of 26 or 29 gliders by end of H1. We have reduced to single digits as we speak now, 'cause we've had a lot of engines coming over the summer, and the engine makers have fulfilled their commitments in the last weeks. We see very quickly a change. Overall, with what we have to deliver in the last four months, which is around 320 planes, something we have not done since end of 2019, and we started from a higher base for the first eight months of the year, we think that's what we can do. Again, it's a very granular analysis of what we think we can deliver. Based on the visibility we have now from the supply chain, we think it's manageable. I will not tell you that it's easy. It will be like each and every year-end race at Airbus at the end of the year. It's challenging. We are on trajectory to get there as we speak, but still there's a hell of a lot of work to be done. I'm not aware of any new crisis that would jeopardize what we have given as a guidance. It doesn't mean that there will not be one in a month from now. Now, the closer we come to the end of the year, the less likely to hit the fan. Would we have another crisis, it's not unlikely that we will manage as previously to avoid impacting the fan. It's a complex environment. It's not easy. I'm not comfortable. I believe in what we have given a month ago, a month and a half ago, and there's nothing new to be shared today that is of a nature to jeopardize what we have, what we have indicated. It's not just an end of the year battle, it's something we need to manage as well in 2023, and it's gonna be a difficult year again. We don't know exactly when the situation of the supply chain will have normalized. We tend to believe, I mean, we try to guess mid of 2022 and some said, I said, probably mid of 2023. Others were a bit more conservative, saying it's something to be managed over the whole year of 2023. We have indication telling us here and there and supplier by supplier or commodity by commodity that things start to go better. We are in a ramp up, so it's not just fulfilling the needs of today. It becomes more and more difficult every day. It's gonna be probably a topic we're gonna be discussing over 2023 again. I have a question from Rob Stallard in the middle. Again, the 700 that we gave for revised guidance was assuming a certain environment, and we still operate in this environment. Hi, Guillaume. Couple of questions. First of all, on rate 75 on the 320, it still sounds like some of the supply chain are a little bit skeptical of this target. Is there a risk you may have to push this one out like you did on the 65 rate? Then secondly, can you give us an update on titanium and the Russian source situation? Thank you. Okay. I think you're referring to the comments of Greg that were really unhelpful. I was on the phone yesterday on that very topic, expecting questions today. I can share what I heard from the other side because I was really not satisfied. It's not consistent with what we have discussed recently. One, they are not challenging the need for 75, and that's not clear in the way this was expressed. They fully agree with us on Pratt & Whitney that rate 75 is gonna come and the market is there and they have agreed to get there. They don't push back on the willingness to get there. What they are telling is it's gonna be hard. And we know it's gonna be hard, and we know it's gonna be hard this year and next year. We have agreed on volumes with both engine makers for the single aisle for 2023 and 2024. We start to discuss the volumes for 2025. We'll see when we plan to hit rate 75 in 2025, hopefully. I am committed to 2025. That's probably something we will be communicating more precisely on, I guess, at our full year results when we give a guidance for 2023. We keep targeting and they keep targeting rate 75 with us. They believe in 75. I can be quoted because I checked before that this is something they would live with. On the other side, a bit of the same thing. I mean, ramping up quickly to rate 75 from where we are today for engine makers is difficult. They have a very heavy supply chain. Their long lead time items are of a very heavy nature. Their own suppliers, the PCC, Arconic on some parts and others, it's no longer Arconic, by the way, need lead time visibility investment. We know it's a supply chain that is difficult to move. Still, again, with CFM, we have an agreement on the rate 75 as a target, and we have agreements in place for 2023 and 2024. That's where we are today. It's a difficult journey for them as well, okay? We have a question at the back. Say again? Did I miss something? Titanium. Yes. So titanium, no change. We continue to procure from, and we is the aerospace industry, including Airbus, from VSMPO-AVISMA. VSMPO-AVISMA is not sanctioned, and there's no counter-sanction on titanium. But we have launched now six months ago, we have activated our second sources that were prepared but not triggered before. And we are moving forward to be able to be immune from anything that could happen moving forward. A world without the Russian titanium is not a world as good as it is today in aerospace. That's why everybody's very reluctant to have this big situation of sanctions, and I mean, we exactly know what's happening with the war going that far, because this will have. It's a pure lose-lose situation for everyone. Still, we're preparing for that scenario. That's a very simple situation. We're trying to move away from that dependency. It's not the case today, but it's not sanctions. We'll see. If it's a long conflict, I think everybody knows what will be the final outcome. We have a question at the back. Right there. In the corner over here. Charles Armitage. Oh, Charles. Hello. How are you doing? Hi. Very well, thank you. The two twenty. First of all, thank you. Interesting comments about the five hundred at some stage. But also, what's the end game? You know, break even is an awful lot better than where we are at the moment, but it's not really a good investment perspective. It's just break even. What's the end game on that? Depends on the horizon. We think that the product range, when it's a product range, and I think it needs the 500 to be a powerful product range, that's what we hear from the airline as well. The potential of the 300 is a very good plane. The potential of the 500 is probably even stronger. We see, I mean, opportunities going quite high in terms of potential. Are we in the position to say today what it deserves and what we could expect from the product? I think it's honestly too early. We have a lot of expectation and hopes and we're working for that product to deliver strong returns because we think it has the potential to be in that place. On top, it's something that we like to believe is gonna take a significant share of the market for us to be less depending on the A320 family and more balanced and with a very strong A321 that will be the center of the range for the A320 family. If we look at it from the broader perspective, it has a very important role to play. Just in terms of its own profitability, it has the potential to be a strong contributor to our profits. I don't want to be specific today. We have different scenarios. Again, it's too much in the second half of the decade. End of the decade is probably a good target for significant returns. What significant means is something we will highlight moving forward. We would like to know better at what pace we will cross the breakeven line in 2025. The pace meaning at what speed we see the improvement and the margins kicking in. That would be a good timing for us to start to be really specific on the profit potential of the 220. I value the fact that you might want more earlier, but that's what we think is fair for us. Thank you. We have time for a last question. No. Daniela. Good morning. It's Daniela Costa from Goldman Sachs. Thanks for taking my question. On the supply chain, maybe a little bit more longer term, given the current supply chain seems to be struggling to just ramping up for the existing models, when we think about the supply chain for the post-2025 decarbonization efforts that you've mentioned, do you think a different shape of the supply chain will emerge? How can we sort of do the two in parallel to be ready for the next five years? Yeah. The jury is out. We would love strong, stable companies with a high degree of maturity in supply chain management, in operations, delivering on time, on quality, on cost to be with us and to be able to supply what we will need for the next generation of products. We see a lot of innovation coming from smaller players. You don't want to lose the opportunity to work with very innovative companies when you're going to new technologies. This is something that will move as well. We will see the smaller companies being very innovative, maybe being acquired or partnering with bigger companies. We will encourage this to happen because we don't want to be in a situation to launch new products relying on weak and fragile and risky suppliers. On the other hand, if you don't take benefit of the ones that bring strong innovation, you lose an opportunity to be more competitive. That's in the making. It's a lot about partnering at the moment when it comes to hydrogen, SAF, decarbonization. I didn't mention electrification of the plane. We are going for hybridization of our current platform as well, and these are new players. It's unfortunately quite likely that we will remain with a supply chain where we have very strong big players, sometimes not the easiest one to manage, to be honest, but they deliver performance, deliver stability, and smaller ones in quite large numbers because there is innovation with those players. I don't see a structural change in the supply chain, and we will have to continue to be managing a diversity of suppliers. That is not what we like, but that is obviously what we need in the very moment and probably moving forward. Even the car industry that has tried to significantly change the robustness of its supply chain and supply chain management in this phase of going to electric cars is facing as well again this situation. I think it's a bit unavoidable for structural reasons. We try to minimize impact of this, but it's gonna be a similar situation from my perspective. Maybe handing the question to Jürgen Westermeier, Alberto, and Sabine. Maybe Sabine could say a few words later on the supply chain or the companies, the partners you see for the next generation of products. Time for a coffee? Time for a coffee. Thank you, Hélène. We'll be back in 15 minutes. Take the time for a coffee, and to our connected guests, see you in 15 minutes. Thank you for your attention. Thank you. Welcome back, everybody, and welcome back to our guests online. For the next 45 minutes, we'll be focusing on sustainability at Airbus and how we plan to decarbonize aviation. To give you more insights on our decarbonization roadmap, please welcome on stage our EVP Communication and Corporate Affairs, Julie Kitcher. Our CCO, Sabine Klauke. Hello, everybody. To those of you on the screen, it's good to see you too. Thanks for taking the time. Sabine and I have the great privilege to talk to you about our sustainability strategy and action plan today. Actually, you're already quite familiar with a lot of the elements. What we're going to try to do for you today is really bring everything together, join the dots, if you will, so that you can connect our sustainability strategy and our technology roadmap. Obviously, you'll have the opportunity as well with the marketplace to see a lot more later on. First, what does sustainability really mean for us here at Airbus? Hold on. Let's see if the slide moves. Thank you. What Guillaume said, it starts with our purpose. Actually, we started a long time before we adopted and embraced that purpose. We've always been known at Airbus as a company driven by innovation, known for pioneering new technologies that have redefined the aerospace industry. What we do as a company, and I think we can be really proud of that, is connect people and cultures, bring those closer together physically, and that really helps to create value and drive social and economic growth. It's really our purpose, if you like, our North Star, which sits above our company strategy. Our sustainability strategy is really embedded in that corporate strategy at the heart of what we're doing. To make it easier for people to understand, starting with employees, but our wider stakeholder groups too. We break it down into three key themes. It's about valuing people, it's about respecting the planet, and it's about enabling prosperity. They're all interconnected, they're all equally important. Actually, we can't achieve one without the other, and we need all three to be able to deliver on our sustainability commitments. Of course, we're not starting from scratch. I already said it. Let's talk a little bit about the reflections we had together around those three clusters and what it means. On the people side, valuing people, it's about respecting human rights, reflecting on the right to life and liberty, and acting on that. We're driving a safety and business integrity culture. We're creating an inclusive workplace where everybody can bring their best to work, and that goes through our value chain too. We're taking global action to support communities, in particular on the most vulnerable. We're also taking care of environmental activities and working with young people, in particular on STEM. When it comes to respecting the planet, a lot is driven around our decarbonization ambition. That starts by delivering and continuously improving our products and services. The products coming off the production line today, they're actually already significantly meeting that ambition to decarbonize and reducing our CO2 emissions by 20%-25% with each new generation of aircraft. On top, we've committed this year to science-based target initiatives, and we're waiting for some feedback, I hope, hopefully quite soon now. We're really setting ourselves on a clear path to reach those intermediate and long-term targets, standing behind our commitments. We're also committed to bringing a zero-emission aircraft into activity in 2035, and Sabine will talk to you more about that, and we've got the marketplace with Glenn. We're improving the environmental performance of our own operations, holding ourselves accountable for our footprint too. Working on a circular model, so lifecycle analysis of the aircraft and really the overall circular model across the value chain, so we're looking at the optimization of resources. We're helping to manage global threats too, such as deforestation, biodiversity loss, wildfires, rising sea levels, and our satellite technology is really at the fore in enabling that visibility. When we look at prosperity, enabling prosperity, I know you agree with me, you can't have sustainability without prosperity. As Dominik and Guillaume said, we're committed to being a profitable, competitive company that meets customer expectations and has the financial strength to invest in our future. Of course, we have strong governance. It prizes safety, quality, integrity and compliance at the foundation. Then finally, to be sustainable, you need security. There's no security without defence, and Mike and Antoine will talk about that later today. How is sustainability embedded in the company? We've got it really, an integrated approach. You can see the commitments up there. Lead the journey towards clean airspace, respect human rights and foster inclusion, build our business on the foundation of safety and quality, and exemplify business integrity. We really selected those ESG commitments as the ones most important to Airbus and all of our stakeholder groups, and the ones that are really the focus, I would say, of the principal regulatory and market trends of the aviation sector. How do we oversee them? How are we holding ourselves accountable to them? Well, every quarter we have an ethics, compliance, and sustainability committee at board level. We govern all of the various roadmaps via executive committee level steerings within the company. It really is embedded in our corporate governance. Today we're gonna focus with Sabine on the decarbonization commitment, so leading the journey to clean aerospace. Before we look at the ambition, let's look at a few facts with numbers. In 2021, global CO2 equivalent emissions were around 35 billion tons. The aviation industry represented 2%-3% of that. We're recognizing that aviation emits CO2, but it's not aviation or the aerospace sector that's the issue, it's the CO2. We're on it. That's the biggest impact, I would say, on our products and services in the environment because of its cumulative effect, and that's why we're seeing the long-term trends and the long-term commitments from industry, from companies and governments to get there, to the net zero level. Scope 1 and Scope 2, these are related to our direct and indirect emissions in our facilities and our activities. You can see on the chart, it's a very small proportion of the total emissions, a bit less than 1 million tons in 2021. The 475 million tons is our Scope 3. Now, we've stood behind that figure. We're reporting that figure. Of course, that's a collective responsibility. It's not one that Airbus can solve alone. We need the whole industry to rally behind that. Of that 475 million ton number, around 10, 11 million of that comes from our upstream. Really the lion's share, the 800-pound gorilla, if you like, is the use of our sold products in service. That's why it really is going to need unprecedented collaboration, coordination to really reduce that number. This year we disclosed our Scope 3. Sorry, last year we disclosed our Scope 3 for the first time, really creating transparency around that number. We want to be transparent, hold ourselves accountable, and create a movement around that climate target. We're also aligning our approach to all the recognized standards. For example, we've been a supporter of the TCFD, the Task Force on Climate-related Financial Disclosures, since December 2019. That's also reflected in our CDP rating, which was A- again in 2021, despite the more stringent standards. That also recognized our first sustainability-linked credit facility, which is also linked to the environmental targets in the CDP as well as our safety standards. I said it earlier, we've also formally committed to SBTi. That's on our Scope 1, Scope 2, and Scope 3, and we're waiting for some feedback, hopefully in the coming weeks. Really holding ourselves accountable, addressing our Scope 1 and Scope 2. Basically, we've upgraded our target to now, We target the reduction of our Scope 1, Scope 2 emissions by 63% by 2030. That's basically compared to the 2015 level, and it's aligned with our ambition of a 1.5-degree scenario. We've set a target as well to remove all the residual emissions through the use of carbon removal technology solutions. That's via offsets, but also via direct air carbon capture and sequestration. We offset around 40,000 tons of CO2 equivalent in 2021. We offset all our business travel, for example. As you can see here, we've also embedded those targets in our remuneration policy and our, what we call our top company objectives. All senior managers and above are actually remunerated on delivery of those CO2 reduction targets, as well as our health and safety targets, what we call our FR1 targets. How are we going to meet that? Well, we're pursuing a range of projects and investments covered in the CapEx and OpEx outlooks. You saw the charts on it. 60% of our industrial footprint is from our stationary facilities and 40% from the mobile. On the stationary side, we're looking at, for example, all of our sites across Europe by 2024 to have 100% either low carbon or renewable energy. 100% in Europe by 2024, and we're also looking at opportunities to do the same in Western China. We've also implemented to try and prioritize or help the prioritization of those, CapEx and investment. We've implemented a CO₂ shadow price. We're using a price of EUR 150 a ton, and that really helps us focus the investment where we believe the priority lies in terms of meeting those CO₂ reduction targets. We're also, of course, implementing LED lighting, which has significant energy saving, as well as using biomass instead of steam for heating. On the flight test and Beluga and oversized transportation, that's, I said it, around 40% of those Scope 1 and Scope 2 emissions. Of course, we're increasing the use of sustainable aviation fuel in operations. Sabine's gonna talk to us a lot more about that, but our target would be to reach around 5% this year in share of our fuel mix for those activities. The reality is when we look globally, the percentage is far below that. It's really a demonstration of our commitment to being able to mobilize around the SAF, the SAF market. Let's talk about scope three. As I said, it's really a collective ambition, and we need all of our partners, the suppliers, our customers and the entire ecosystem actually to move together to reduce this scope three number. We've committed to a 46% reduction in CO2 efficiency target by 2035. CO2 efficiency is the CO2 equivalent per RPK. It's a tough ambition. I said it, we're waiting for the feedback, and this really covers all the emissions from our aircraft and products in use in the 2035 year. Of course, our current product line is already delivering significant CO2 reductions, 20%-25% with every new generation of aircraft that we deliver. The reality is only 20% of the fleet flying today are flying with those latest technology aircraft. It's obviously gonna need a lot of investment. At Airbus, we invest on the commercial aircraft side around EUR 2 billion of R&D per annum. The lion's share of that goes towards the sustainable objectives that we have. But we also need the development of new propulsion systems. We need advances in systems, aerostructures, and materials. We also need all our supply chain on board, and we've launched a Supplier Sustainability Council to help our suppliers in the supply chain meet those targets too. Before I pass over to Sabine to talk about the technological roadmap in a bit more detail, I wanted to share the industry target as a whole because we've talked about our targets. In 2021, the whole industry rallied together for an industry target to reach net zero by 2050. Previously, the industry commitment was to reduce emissions by 50% in the same timeline. Now, we know that aviation has a credible path to meet those targets. We've been working on CO2 emission reduction for decades. I think, you know, we can all agree there's a credible path to get there. What it's going to mean is that a vast, you know, significant investment in technology and innovation. You see that as the primary lever and an equivalent actually in the development of sustainable aviation fuels and energy pathways. The message is clear, technology, innovation, and energy transition. We also need improvement in air traffic management, and I've seen Fabrice. We've got NAVBLUE here as well on the stand in the marketplace. You can see and learn a lot about the opportunities there too. We need a global regulatory framework for a global industry to support offsetting and carbon removal. For that, we really need a global policy. The ICAO Assembly, which is taking place in Montreal next week, is really pivotal in that, where we're hoping that more than 190 states will come together to commit and rally behind a global policy framework. With that, Sabine, I'm gonna pass over to you for some more color on the technology. Thanks. Thank you, Julie. Yes, I need this one here. Yes. Julie has shown it, the overview. The big portion in terms of decarbonization for us is on the Scope 3, and if you talk about Scope 3, it's about our products and it's about how we use them. Let me give you an overview of the different pillars in line with the chart which we just shared on how we can act and what we are doing. First of all, Julie said it, if you're taking our aircraft, we're continuously improving it, and over the last decades we've done that significantly, and this is exactly that. The first pillar is using the latest generation aircraft. There's only 20% of them flying today in the overall fleet. By each aircraft that we would add from the newer generation, we are actually gaining in terms of efficiency and CO2 emissions by 20%-30%. That's one lever, and we will continue to improve our aircraft continuously. If you look at all the technologies, let me give you a little bit an outlook. We are looking at all the different components, of course, and if we are looking into a little bit the more disruptive bits, then first of all, it is about materials and how we structurally develop our aircraft. What can we do on modern industrial means, which would help us as well to reduce weight in the aircraft. That will be ongoing over and over again. The wing is one of the components which is having a lot of potential because in the aerodynamics, we can really push to the limits in order to be more efficient. We have important projects here pushing basically the span of the wing wider and wider. We are looking at hinges in order to be able to fold the wing and go wider. We also look at the nature in order to go forward. If you think about falcon soaring, then they really change the shape of the wings in flight. That's what we are doing with the project, which we call eXtra Performance Wing, where we would even in flight be able to adapt during the mission. Of course, engine efficiency is one of the big drivers, and here we are, you've seen it over the different neos that we've brought up. Engine is an important lever and we are continuously working with all engine makers in order to improve. You probably have seen as well, we launched one demonstrator on the RISE concept, so we are looking as well into more disruptive concepts in order to go further into the future. Then Guillaume mentioned it, what can we do in terms of electrification, hybridization? For the aerospace industry and for the big commercial aircraft, there is no way to electrify fully. We can work on hybridized concepts where we would take the peaks during start, for instance, when the engine is really going to the limit by introducing electric energy here. This is, you can compare it with hybrid cars and the way forward here. These are development paths that we are following and that we will continue to follow and that we will need in order to go into decarbonization. A second big pillar is of course the operation and what we can do to optimize operations. Here, if you optimize the flight trajectories and we've done first test flight with a single-aisle, we can gain up to 10%. That means by having continuous descent and ascent, but also improving on the waiting missions of the aircraft. Of course, here we need to be well integrated into the air traffic management systems. We need to have a combined system and a more digitalized system, and we are working together in projects like SESAR, but as well with all the different air traffic management authorities. Another one which I would really like to get your attention on is what we call the fello'fly. This is again looking to nature, looking how geese migrate. Here it's about coupling aircraft during their flight, and this is more about long-haul flights. The test that we have done was about coupling two A350s over the Atlantic from Toulouse to Montreal. The second aircraft would then actually take the positive wake of the first one, and you can gain up to 5% again here. In the test we have flown, it was about 6 tons of CO2 that we saved, and this is something which is of course needing the ecosystem to participate, but we are looking to be able to have these kind of solutions by 2028 for the Atlantic routes and then going further worldwide. If you put all the different dots together, then of course we are coming as well to sustainable aviation fuels because here we are in a situation that every aircraft can fly it up to 50% blend today. As Julie said, today the overall use of SAF is lower than 1%. The potential of the aircraft is today already going up to 50%, and we are actually starting to certify the whole fleet up to 100% by the end of the decade. We have flown first flights to 100% with all the different engine makers and the different models, and it's actually feasible. We just need to really push it. The even more important topic here is we know how to do biofuels, we know how to do SAFs. We need the industrial uptake, and this is what it's really about today because that's available, and that's one big lever which would bring us up to 80-85% of reducing the CO2 emissions. This is why as well we are very active in different alliances in order to help catalyzing the uptake of the use of sustainable aviation fuels. Let me come to, again, a technical topic on the aircraft, because if we really want to go to 100% zero emissions, then it's all about hydrogen. Our big ambition, and you know that, is to bring a commercial aircraft into the market based on hydrogen by 2035. If we think about hydrogen, then it is really about the propulsion energy that we are looking at. In order to realize then, it's first of all about the propulsion, so engines. Would we combust hydrogen or would we use it in fuel cells? Secondly, of course, it's all the different technical elements we need, like the tanks, which are cryogenic tanks because it's liquid hydrogen that we would need to bring on the aircraft. It is the distribution system which is cryogenic again. If we talked about supply chains earlier, then it's of course looking into the existing one, but these boundaries are bringing us as well to partner with everybody who is firm in the topic around the world. Sometimes it's really bringing us to, of course, link with the hydrogen makers, the Air Liquide and Linde of the world. As well, if you look about pumps, valves, all this is a bit of different environment and we have to cope for it. What happened? We launched this project two years ago, and since then, we have actually worked on the partnerships. We have really looked across the sectors to have the right people together with us, and also all the engine makers are with us. We have development centers that we launched, zero emission development centers in Bremen, in Nantes, in Filton, in Madrid, where we are actually focusing, for instance, on the tanks. We are looking at metallic tanks, to CFRP tanks. These are starting to emerge, and we see them physically. That's really good to see as well the first demonstrators, system demonstrators on the ground, taking shape. That's really good to see because with every single basic test that we are doing, we are also gaining in confidence. Then we launched a flying demonstrator with the A380, where we will fly a combustion engine on top of the normal engine that the aircraft has in order to test for the first time a liquid hydrogen tank, the distribution system and an engine, and also to be able to measure the atmospheric impact and how it's done. We also do that with a small aircraft already end of this year. We call the project Blue Condor, where actually on the glider we put a very small hydrogen engine in order to be able to measure and in order to see exactly what is the impact on the atmosphere, how do we cope with contrails and what is actually the result of combusting hydrogen in the atmosphere. These are important topics in order to understand the technical bricks and to mature them. Then by 2027-2028, we will actually choose the right bricks, put the configuration together and launch a program, which will bring us then to the entry into market by 2035. This is important, but equally important, of course, is that we get prepared in the ecosystem. We need the airports to be ready. We need the authorities to go with us into the certification path of these new technologies. This is making us very active in the ecosystem in order to get ready for 2035. You can see that all these different pillars are actually needed to decarbonize the aviation sector. There is a last one, which is actually a short-term action that we need as well, the market-based measures, and that's Julie taking back on that. Thank you. Thank you, Sabine. That's the technology piece, hopefully a bit or a lot clearer now. Of course, we're working whether it be on our own emissions or in the overall value chain. Our own, remember, Scope 1, Scope 2, direct, indirect, and Scope 3 is the total emissions of the products in use in a given year. Avoid, reduce, remove. What we need is a global system for our global industry. I said it already, but I can't insist on it enough, in particular, when we have high technological barriers to entry, so it means the development cycles are long. Although we're committed to a net zero 2050 timeline to help us get there, particularly shorter term, we need the right mechanisms in place to enable that to happen. That enables us to be able to remove or compensate the so-called residual emissions once we've reduced. The mechanism to remove these measures needs to be effective and really consistent, so it doesn't distort competition across the globe. Today, there are two main types of market-based measures. There's an emissions trading scheme, such as, for example, the European Union's ETS scheme, and that works on a cap and trade system. There's CORSIA. That's an offsetting scheme which we're really strongly advocating for, and that's about a global carbon offsetting and reduction scheme for international aviation. That's really key. It will be one of the key things to watch next week at the ICAO Assembly. We're advocating for both. Both systems are complementary, and actually it works on an international basis. On top, we're looking at carbon removal technology, and hopefully you followed in Farnborough in the summer, our direct air carbon capture and storage partnership agreement with 1PointFive. This is really to test the technology. DACCS, as we call it, is really a very promising way of removing on a permanent basis CO2 from the atmosphere. On top of compensation, this is really a removal mechanism. It's yet still not recognized, however, in regulatory markets other than California. We're also really working hard to get that as a formal recognition to certify those removal credits. Our partnership with 1PointFive is actually we've purchased 400,000 tons of removal credits, and we're working with airlines and actually seven so far have signed up to that. It's really about this innovative approach to technologies. It's testing, it's working together, it's learning. There's no one single solution to get us there. We need a number of solutions, a wide number of solutions, and a wide number of partners to get us there. We really believe that DACCS is a very positive step forward, and it also can contribute to the overall energy pathway too, with low carbon power to liquid synthetic fuel creation. Sabine said it, and I'm going quickly 'cause I'm looking at the clock. We're really working now with a global ecosystem for SAF and hydrogen deployment, that's airports, airlines, producers across the globe. We need everyone. Of course, it depends on the scale-up and energy transition. Today fossil fuel represents around 80% of the world's energy requirements. That needs a step change if we're going to meet those Scope 3 ambitions and the net zero sectoral target in 2050. When we look at SAF, basically we'd like to see SAF supply at 10% of the aviation fuel mix by 2030. Today reality is it's less than 1%. We've already said it. We need to move fast, and there needs to be significant impact and acceleration to get us there. There are, however, a number of airlines coming to the table to make pledges, so demand pledges. We've seen demands of up to 20 million tons so far, and to meet that 10% number, it would require 30 million tons. On the demand side, in particular in the United States, the airlines are being very much supported by the incentivization schemes. We see more of a mandate scheme in Europe, and there are a number of other countries moving towards incentivization schemes. We see that really as our role now to enable the mobilization with states, with policy makers, and you can see all of the different partnerships that we're working with. We're testing. Hopefully you'll have learned about the commitment we made with Qantas. That's about the investment, a match funding investment into a SAF fund. We launched that a little while ago. We also have another SAF fund with... We're sorry, that's for investments in local ecosystem. On top we have a SAF fund that we're working on with ALC and our lessors. We're testing, we're trying different initiatives to really mobilize around the target, making it credible. That's it. It's a really exciting time for aerospace. We're excited by it. The company's excited by it. You can feel the engagement now, really coming through in the sector. There's never been such a time of innovation and cooperation. We're coming together behind a clear goal, and I think if we've got enough time for a couple of questions, Helen, we'll move to some questions. Thanks very much. Absolutely. In light of the time, I suggest we take two questions, and then Julie and Sabine will be there over lunch, and you will have the opportunity to continue the conversation with them. We have a question here. Yeah. Thank you. It's Ben from Bank of America. Can you talk about how you're pacing your investments into hydrogen versus what the OEMs, other OEMs in the supply chain are doing? I'm thinking, what is the risk that you accelerate your investments and the ecosystem just doesn't come with you? Thank you. I think I'll take it from the technology side, because this is of course our utmost interest at the moment. As Julie said, our overall R&D budget is in the EUR 2 billion this year, and at the upper part of it. We are investing actually several hundred million in the hydrogen technologies and all the different technologies going along with it. Then, of course, we are as well investing a lot of effort into the ecosystem work. As you've seen on the slide, we have kind of alliances and working on hydrogen with the airports, for instance, with the authorities. You've seen it in Singapore, but also in Korea, in Japan, in the U.S. and also in European airports, in order to bring them into testing it, getting acquainted to it and learning. I don't know if you want to add anything. Yeah, no. I mean, thanks, Sabine. We got the question as well yesterday about why do we believe at Airbus our role is to work in the ecosystem. It's precisely for that reason, Ben. It's to ensure that we all coincide in terms of the readiness, because if we go and we don't have the ecosystem with us, we don't have the infrastructure, we don't have the distribution capability, we don't have the certification for these new technologies, then we've invested and there'll be a big pause. It's really vital that the whole ecosystem is ready, mobilized, and learning together, because that's the point about pioneering innovation. It really is about learning, testing, recognizing when it doesn't work, stopping, moving on to something else or evolving as necessary. The ecosystem's key. We have a question from Charles Armitage. Hi, Sabine. As far as I know, Boeing doesn't see or at least doesn't see hydrogen as the solution. You see it as a solution. What are they missing? I think it's a question of opportunities and timing. We do, of course, talk and as well work industry-wide on the topics. We've just seen that NASA has launched a demonstrator aircraft on hydrogen. Actually we are all agreeing on the different pathways and the different technologies we will need. I think it's a question of when do we see we will have to have it? We see our responsibility as a leader and a leading company in the aerospace really into pushing it forward because we think this is one of the options which we really need in when we want to go zero emissions. Thank you very much, ladies. Time for a break now. To our guests connected online, we see you at 1:00 P.M. For the guests in the room, lunch will be served on this side. Take the opportunity to meet Airbus leaders at the marketplace and also take your chance to visit the static display behind me. On your badge, you have a sticker with a number. This is your group for the A350 visit. I see you at 1:00 P.M. sharp. Thank you. Welcome back, everybody, and welcome back to our participants participating remotely. Before we start, just a couple of practicalities. The event will formally close at 3:00 P.M., and at 4:00 P.M. there will be buses waiting for you outside to drive you back to the airport. This afternoon, we are turning our focus into defence. To give you insights on the European defence in a complex geopolitical environment, please welcome on stage the Head of Strategy, Mergers & Acquisitions and Public Affairs, Antoine Bouvier. Thank you. Thank you, Elaine. In this room, you are all experts on defence. There is no need for me to further explain to you what are the benefits of duality, why it is important for Airbus to grow in defence. This is not my point today. My point today is to share with you and also to get your views on sensitivity with various stakeholders or shareholders of this defence activities that we may call ESG defence, but is larger than that. We know that you are yourselves challenged internally, externally by the different stakeholders, by shareholders doing assemblies, and we are also challenged. I think there is really an interest to share views, to be more aligned. Maybe there is also an interest on our side to be more offensive or I would say less defensive on this topic, and to check what are the arguments, Dominik told me, the ammunition, but I'm not sure I can use this term without raising too many smiles on the audience. Not the ammunition, but the arguments that we could use. I am also very conscious that this discussion could be very different whether we are in Europe or whether we are in the US. There are very different perspectives. What is our DNA? EADS, 20 years ago, European cooperation, but certainly not Fortress Europe. As you are well aware, we have invested for decades in our presence, cooperation in the U.S., in China, in many other regions, but a very, very competitive environment. We, Airbus, secure the critical mass in terms of investment, in terms of technology, in terms of product, in terms of expertise to be able to successfully compete in this extremely competitive environment. Part of this, Airbus DNA, you have just the fact that we are an aerospace and defence company. Aerospace and defence, this is part of our DNA. We were formed with the support of our four nations. France, Germany, Spain, the U.K. I'm sure you value the fact that over this more than two decades, we have become a normal company and we are a normal company able to compete and to be successful in this extremely competitive market. Ukraine. If I can use my, sorry, limited German, leider. This is a term that has been used by Olaf Scholz to describe this new situation. It's not just an evolution, it's something which is deeply changing our environment in Europe, worldwide, and our relation between Europe and the US. The transatlantic link, which is for defence, NATO, which is the core of the collective defence of Europe. This link is much larger and much deeper than just defence. We see on a number of topics for which we are under pressure currently, this link is extremely important. NATO as a nuclear alliance. If you allow me, I will take one or two minutes to explain what it means because this is also something which is important to understand when it comes to the question about controversial banned weapons and nuclear deterrence. What do we mean by NATO as a nuclear alliance? It is not just us, it's NATO is describing itself as a nuclear alliance. NATO has been over the last 70 years, a nuclear alliance. This nuclear alliance has been reconfirmed very clearly during the last NATO summit in Madrid last June. It means first that three NATO countries, the U.S., U.K. and France are nuclear powers. It means also that five NATO countries, Germany, Belgium, Italy and Turkey are part of what is called the NATO nuclear sharing scheme. This is why Germany has procured this batch of F-35 to replace the Tornado, which was the aircraft carrying the B-61 atomic bomb. Through this NATO nuclear sharing, Germany is under the control and under the full mastering of the U.S. in terms of use, is also part of this nuclear alliance which is NATO. The 29 NATO countries, except, sorry, France for historical reasons, are part of what is called a nuclear planning group, which is a very formal group within NATO to harmonize, to decide not the strikes, but what is doctrine and what are the different contributions of the allies to the NATO acting as a nuclear alliance. I think it's important to prepare further discussion about the concept of banned or controversial weapons to understand this is not just one or two countries. This is NATO as an alliance which is positioning and describing itself as a nuclear alliance. The paradox, which is a very happy paradox of the situation today, is not only the transatlantic link is reinforced but Europe as Europe is reinforced. This is a very positive evolution in an extremely negative context. This is a positive evolution because over the past years there was some opposition, some potential contradiction between the transatlantic link and Europe, the EU. When I say Europe is the EU plus the UK, Europe reinforcing itself. With more budget and confirmation that defence is at the core of EIC. This is what Julie has mentioned this morning. There is no sustainability without security. I would say to reuse a term which has been used, the EU, and I mean Europe, should act as a security provider. We provide security. We provide security to our own citizens and we provide security to our allies. A security provider. This is the best words I have found to describe this link between sustainability and security. Duality, you know it very well. Duality brings resilience. The only aircraft, commercial aircraft manufacturer which was not involved in a defence was Bombardier. We all know what has been from our perspective a very happy evolution for the two-twenty. For the company itself, this was from our perspective a further confirmation that, if you are just a commercial aircraft and if you don't have a solid and robust, defence and space activity, it's a weakness. The case in China with COMAC and AVIC, a case in Russia. Embraer also is both commercial and defence, but Bombardier was the only one and we see what has been its fate. Resilience, synergies. Guillaume, this morning, has mentioned a number of synergies in terms of technology, in terms of program management, in terms of position on the market. This is something that we value, and we think that there is still, for Airbus, a very significant potential to further grow this, these synergies. I think from your perspective, it should be a bit reassuring that the management of the company is confessing that we can do much more, and this is a source of value for the company. Export is probably a bit more controversial. Export of defence. Export of defence is a business, and our objective, this will be explained by Mike and Bruno, is to grow this business and to have this business as robust and profitable as it can be. But it's not just a business. When I mentioned the challenge that we all have to face, that we could call ESG defence, to say it's a profitable and growing business doesn't address the point. It's necessary. It is not sufficient. Today, what we need is to build or to rebuild what I could call a legitimacy of defence, a legitimacy of export of defence. Whatever the importance we give to a profitable sound and growing business, the legitimacy of defence export doesn't just go through this good business. Why are we considering that this activity is legitimate? I think, Julie, you would agree that legitimacy and ESG are two concepts which are very, very close. First point, which is specific to Europe, second point, that Europe is what is sharing with the U.S. First point, in Europe, we don't have the volume of budget in defence, which would allow the European defence industry, for the long term, to invest in innovation, to invest in technology, to invest in new products, to be at the right level of performance, the right level of innovation, and also in a position to deliver affordable equipment to our European armed forces. We don't have the critical mass, and this critical mass can only come with some significant export activities. This critical mass is not just a good business. This critical mass is a condition for our armed forces in Europe to access high-performance, affordable equipment with the same level of performance and affordability that could be provided by large budgets like the US one. This is what is specific to Europe and is extremely important for our business model. Second, something that Europe and the US and China, Russia, all the countries, Israel, are sharing, is we, the defence industry, yes, we do a good business, but we have a role to play, which is our legitimacy, and so not just towards our countries, but towards our shareholders, investors, and the general public, that we are, I like to use that term, the industrial arm of the defence and foreign policies of our different countries. When the U.S. have decided to have an influence to enter into a cooperation, to be more present in a country or in a region, very often, defence cooperation with a substance in it which is export of defence equipment, is a main or one of the main vehicles for this cooperation. It's exactly the same in Europe, and this is a tradition that we have more in some European countries, less in other European countries, probably the tradition which is more in France and the U.K., probably less in Germany, but this is something which will be more and more important, that we as industry, we are the vehicle, we are the arm, we are the industrial arm of our foreign and defence policies of our different countries. In an environment which is extremely restricted, I think we are the only activity, defence, where there is a general interdiction to develop, produce, deliver. Everything is forbidden, and everything can be done only with a formal a priori authorization from our different countries. What is true for development, production, and delivery of equipment is even more true for export. I know that this is something that you are perfectly aware of, but this is not necessarily something which is widely understood, that the principle is interdiction. What we do, produce, export, is an exception. An exception means a formal a priori decision which is taken by our different countries. Needless to say, in this extremely formal and restrictive environment, we fully comply with all international, national rules and regulations. We are absolutely impeccable and will not take a single risk to be in breach of national or international regulations. This is absolutely clear, and I think this is something which is shared by the overall defence industry. When we get export license to export our product, I think it's important also to highlight that when our countries, which I remind are countries with democratically elected governments, so there is a legitimacy which is coming from the democracy of our countries for any decision which is taken by the administration and by the government, it is legitimate. When we are in these countries, these countries, they don't just take a decision based on their own interests or their own view. You will see Mr. Bouillon at SGDSN. He will use the term values, morality. Morality in France, but I would translate by ethics more than morality. What it means is that any decision which is taken by any of our governments has to comply with a number of international regulations and principles, and specifically the code of conduct with eight criteria, one of them being human rights and the more recent ATT, Arms Trade Treaty, which is specifically referring, giving a clear description of the different situation on human rights, and the Geneva Conventions of 1949. When they take decisions, they take informed decisions with a very clear framework. We will see with Mike. We are not active in any banned weapon, which I think is an absolute minimum you could expect from us. Even if we pay the highest respect, even if we confirm the importance of these decisions taken by our different governments, it is not necessarily enough. We have our own view, we make our own judgment, very upstream in the product policy. When we have a bid, no bid, when we have a decision to launch or not to launch a campaign, when we have a decision to propose or not to propose a given equipment to a given customer, we have our own view. We make our own view, but this does not mean that we disregard or we disrespect the decisions which are taken by our respective governments. We pioneer sustainable aerospace for a safe and united world. With your permission, Guillaume and Julie, I would try to even more summarize this sentence. I think. No. Guillaume doesn't agree, but since I am on the stage, I will dare anyway. If I had to summarize in two words the strategy of Airbus, I would say mobility, security. It is more than mobility, but half mobility. defence, safety, security. What we have to do, what is our purpose is mobility and security. We are security provider. We are aligned with our own business objectives, but we are also here to be consistent with the defence policies of our different countries. If we come back one second, I still have one minute, I will use it, I'm afraid. If we come back one second to what is the very mission of ESG. ESG is something which has been developed by a number of governmental, non-governmental players to support public policies which are going in the right direction. Public policy about diversity, about inclusion, public policy about energy transition, public policy about environment. All ESG criteria are supporting a public policy. Maybe except one, defence. If ESG is how we do defence, this is absolutely legitimate. We need and we do defence the right way. If the ESG criteria is understood, as it has been the case in several occasions in Brussels, for example, as a challenge on defence itself, then we totally disagree because a challenge on defence itself is not consistent with the defence policies which have been defined, voted, and implemented by our democratic governments. ESG defence is legitimate when it is a way we do defence. ESG defence is not legitimate when it is a challenge on the notion of defence itself. This is my last word, Hélène. Thank you very much, Antoine, and see you later for the panel discussion. When you and I speak about defence, when we meet at inward shows, when we talk on calls, when we prepare AGMs with your stewardship teams or your ESG departments, very often, I know that there are three recurring questions. There is a question on the what, on the scope. What is it that you do at Airbus? There is a question on the future of European collaboration, and there is a question on export control. On export control, we talked with the General Secretariat for Defence and National Security. For our panel discussion, ladies and gentlemen, please welcome the CEO of Airbus Defence and Space, Michael Schoellhorn. The CEO of Airbus Helicopters, Bruno Even. And Antoine Bouvier. Gentlemen, we have heard from the SGDSN how France is dealing with export control. Other countries have similar procedures, but in practice, how important is export control at Airbus? Bruno, perhaps. I don't know if I speak with this mic. It's okay? Yeah. Yeah. It's a clear priority for our military activities which are not limited to defence and space. It's also part of Airbus Helicopters. It applies to our product, to our services, but also, and it's a specificity of the helicopter business also to all our dual product. Top priority, and I think the way to illustrate this priority is, I don't know if you have in mind, but the way we manage our priority within the year, we define the top company objective, in order to align all the team on the key priorities of the year. For Airbus Helicopters, we have a company objective, one of them being focused on export control in order to develop the whole business of our process and develop the culture around the export control. More precisely and concretely, 70 headcounts, additional resources have been recruited. It means that we have more than doubled our resources focusing on export control. Training of all the employees, again, to develop the culture and strong investments with our innovation, IT to be more robust. It's clear priorities and concrete actions. Some addition from me. Obviously, I could repeat what Bruno says, but we have group policies. We have one group for dealing with export control questions. I think what resonates with me every time is what was mentioned several times in the talk so far was, the default export of weapons, defence goods is forbidden unless it's specifically allowed for the reasons that a country cites these advantages. Typically, I think all have examples of that, and we all probably have use of that, exports and export controls come to a discussion or become controversial when they interface with human rights. Everybody can probably think of some examples on the planet where that might be the case. I think that's the point I wanna add and build on what Bruno says. When it comes to human rights, I think it was like 2003 when Airbus was one of the first companies to subscribe to the UN Global Compact and has built since then very much internally in terms of our values, in terms of our policies, and have developed a human rights policy until very recently and updated it. That obviously is very close to how we want to operate, what is our own standard, how do we take decisions. This is not taken lightly. This is taken in terms of understanding as good as possible what's the problem at hand and what can we afford, if you will, or not afford is not the right word, but what can we justify in terms of that stance on human rights, in the framework of export control. That has built to a policy which is being assessed from the outside. We do not only just write down a policy and say, "Well, it looks pretty good," but we work with it, we improve on it, we are audited and assessed. We have, in 2019, I think, done a gap, an impact analysis by a third party. To tell us and feedback to us, are we doing okay? Where are we living up to our own standards? Where do we have gaps that we need to close? Obviously, one gap that you always need to work on in terms of closing it is supply base. Driving it through the supply policy to the supply base and also live up to the same standards there. I think this is how we put this in perspective with how we want to be a company that claims we are a force for good, and in that sense, we also do defence and export. Thank you very much, gentlemen. Now I would like to come to the second theme I was mentioning earlier. The question of the scope. What is it that we do at Airbus? There is a notion that is getting a lot of attention that is the notion of controversial weapons, and we've heard from Antoine that this is subjective. However, there are categories of weapons that are widely recognized as controversial. Mike, is Airbus involved in the production of biological and chemical weapons? Nope. Of cluster bombs and submunitions? Also, no. Of anti-personnel mines? No. Of non-detectable fragments? Not either. Of incendiary weapons and white phosphorus? No. Depleted uranium? Also not. Thank you, Mike. I think this couldn't be clearer. Now, Antoine, I have a question for you as well. Could you tell us about Airbus activities in support of nuclear deterrence? Yes. My point a couple of minutes ago on NATO as a nuclear alliance was meant to prepare the ground for this question. When it comes to deterrence, I think there are two perspectives. The first is legal, legality, and the second is legitimacy. Let's start with legality. Meaning the five countries which are nuclear powers, we signed a new United Nations international treaty, which is called Non-Proliferation Treaty. This treaty is making legal for the five countries which are the nuclear powers to continue to retain this nuclear power, and it is illegal for all of the other countries. This is a point of legality. Now, you could tell me, "Yes, but two years ago, there was this new treaty. TPNW, Treaty on the Prohibition of Nuclear Weapons, which have been signed by a number of countries, 50 countries. This treaty, from a legal standpoint, is not changing the rights and the obligations of the countries which have signed the Non-Proliferation Treaty. This is for the first part of my answer, legality. Second part of my answer, legitimacy. First, we have seen what is important for NATO as a nuclear alliance, but there is a point of legitimacy I think we should also mention. The obligations of the countries which are part of the NPT. There is an obligation to very proactively promote disarmament, which is not necessarily what has been done by China or Russia, which are part of this treaty. This is what has been the constant policy of France over the past decade, with the concept of strict sufficiency in terms of a number of nuclear warheads, and also the decision made by France to stop any activity in terms of testing and production of nuclear material in an irreversible way. From a legitimacy standpoint, obviously, everybody has his own or her own judgment. I think the combination of NATO nuclear alliance and what has been proactively decided by France is giving the right framework in terms of legitimacy. To come back to your point about banned weapons. When it is not legal, it is banned. This is something which is extremely precise. It's a legal term. Controversial is not a legal term. If I think that such an equipment is controversial, I am right. I call it controversial. It is controversial. So it is subjective. I think it's very important in our discussions about so-called banned and controversial weapons that we make this very clear difference between banned, illegal, and controversial, subjective. Thank you, Antoine. The last topic I would like to ask you about is one we get many questions on when we are on roadshows with Dominik and Guillaume. International collaboration programs. On the one hand side, in particular, since last February, we have heard the governments of Europe calling for more collaboration. On the other side, it seems to be still challenging. Gentlemen, is there a future for these collaboration programs? I hear sometimes this negative comment around the European program in cooperation. I have to recognize that based on my experience, it's something I don't share. When I look at specifically the helicopter business, we have two major program in the cooperation. In the past year, the Tiger program attack helicopter between Germany and France and Spain joining the NH90. Tiger, in term of development from a technical performance perspective, strong success. There are many example of situation where the different forces, in particular the French, are using the Tiger, but it's more than that. Let's keep in mind that the launch of the Tiger program 30 years ago was a trigger for the merger between MBB and Aérospatiale becoming Eurocopter and being now Airbus Helicopters. I will come back on that during my presentation. Airbus Helicopters being today the leader on the worldwide market. We cannot imagine that, we would be in this position without this merger, which means without this, program launched 30 years ago. NH90, again, yes, there have been some challenges at the beginning, but we have been able to qualify all the different configurations. Success in terms of performance, but from a commercial perspective, 580 helicopters sold to more than 18 different customers, last one being Qatar. So strong commercial success again, and also an opportunity to reinforce the cooperation with Leonardo in Europe. The two examples I have in mind are more positive than negative. Well, I'm gonna speak to the portfolio that I'm in charge of in a minute, but I maybe single out some, in my view, two very successful European aircraft programs have been Tornado and Eurofighter. If you ask the question, who's doing air policing now in Romania and the Baltics, it's the Eurofighter or Typhoon, as it's called in the UK. That's been a very successful, actually the most successful European aircraft program. As we know, there are some other ones that are taking root or gaining ground in Europe that are not necessarily European, like the F-35. Yes, probably sometimes it took pretty long until the platforms delivered what they were supposed to deliver, which is always also a problem of history, but also a bit of a problem of how we define what these platforms should do. Probably a very good example would be the A400M that some of you have maybe heard of in terms of low availability. I think we're coming out of the hole now, late in the game, admittedly. I think there's a lot of lessons that can be learned, what went wrong in an A400M that we're applying now. For the Eurodrone or for the FCAS that we will speak about in a minute as well. If you don't have a solid technology demonstrator or technology development phase at the beginning, and you want to aim high with your technology standard, chances are, if you want to develop that on the fly in the program, it's gonna get very difficult. You throw then in too many requirements from too many countries. That is sometimes the fallacy of a European collaboration, too many. Which- Too many different sets of requirements that are stacked on top of each other, and then it gets very difficult. I think that's another lesson to be learned. By and large, I would say, we are convinced that European sovereignty also in defence is not possible without European programs. Thank you very much, Mike. Thank you, gentlemen. Big thank you to our panelists. If I may keep you on stage, Mike. Antoine and Bruno, see you for the Q&A session. Ladies and gentlemen, you see Mike is staying on stage because the focus is now on Airbus Defence and Space. Mike. Hello to all of you. You heard me talk to some points already. I'm very happy to be with you because I think this is a very important topic, not only because I have the privilege to run Airbus Defence and Space since July of last year, but also because I think not only due to Ukraine, from a societal point of view, it is immensely important that this course takes place. Now, prior to me taking over Defence and Space, I was on the commercial side, I was COO, and at the beginning, before my industrial career, I was a military aviator, so maybe you will forgive me for combining and sometimes getting too passionate about defence and aviation as a combination, but I will try to be neutral as much as I can. If I had to summarize my first 14 months in the job, somehow this is from July of last year until now, I would say, if I said it's been interesting, I guess that would be a British understatement, from what I perceived as the peak of the ESG discussion that sort of almost stigmatized defence as being non-sustainable last summer, I would say, to the Kabul refugee rescue operations with the complete floundering of the Western approach in Afghanistan leading to that, to everything under COVID conditions, taking over new business, 33,000 people, to then Ukraine and everything that's happened since then, not only as a tragedy and a war, but also in terms of the supply chain disruptions and everything that came from it. It's been interesting. I will try to present to you what is it that we do at Airbus Defence and Space, and why do we do the things, and how do we do the things. With that, I think we can turn over and give a quick glance. I'm not gonna read all these numbers. You can read them faster than I can read them to you, but we are about a EUR 10 billion revenues business with some 33,000 people, as I said. We are, in my view, Europe's only credible pan-European defence and space company. Our home bases are in our four home countries, so all four of them, that's, that includes the UK. We do almost everything that you would expect in a space and defence business, and I will get to that in a minute. There are companies that are bigger than us that also do defence, but if you focus on defence and space as your search field, then I think we politely and solemnly or with all humility consider ourselves the European number one. That's actually why we were founded. Antoine showed that before. That was the mission that EADS was given to be the consolidator in Europe. I think we've come a long way, but we still have a very fragmented defence landscape in Europe. Let's talk quickly about the portfolio. Maybe the most known products are the ones from military air systems. I talked about the Eurofighter already with almost 700 orders, the most successful European combat aircraft program ever, and we still have a long way to go. The air forces of Germany, the UK, and Italy and Spain have said that they will use and continue to use the Eurofighter at least until 2040 for most nations. Germany has actually said beyond 2055. Now you think of that aircraft having been developed in the 1980s with the technologies of the 1980s, then it gives you a taste of what the technological challenge and ambition is to keep that updated and to always update and innovate such a legacy platform. A400M, I talked about already. It is the most versatile, the most capable transport aircraft on the planet. Nothing like it. When it flies, it does miraculous things and the pilots love it. In the meantime, the gents love it too because it delivers much better availability than a couple of years ago. The MRTT is the leading tanker and transport platform in the world in that it works. There is another big one that's not really working so well. I'm not gonna call it out, but the Americans in the room will probably know what it is. It is leading in terms of automatic air-to-air refueling, so you have a lot of automation in the process up, and we're working on a process of potentially completely omitting the operator that does the boom piloting into to fill the aircraft. The Eurodrone, which is after many failures, the first successful program to build a European drone. Ironically, almost or tragically, after a long, long debate with a lot of discussions between countries and companies, we were able to sign the contract for the Eurodrone on the twenty-fourth of February this year, which was a date that is in most people's heads for other reasons, but maybe that was a bit symbolic. A very complete program. I could talk to the other four platforms that we have, from high altitude pseudo satellites to other transport aircraft to the Tornado that was mentioned. A very complete program that probably no other company in Europe has. There is all these benefits and synergies that we have with commercial aircraft, with helicopters partly, in many technologies where we play a spearheading role in the company when it comes to autonomy, when it comes to connectivity, I'll speak to that. Next page would talk about the very known, I guess, program of FCAS, some call it the Future Combat Air System. We start in 2017, first between France and Germany to develop that system. Spain has joined a little bit later, and now it's these three core European countries that want to not only build a sixth-generation fighter plane for the future, but also and not least confirmed by what we see in Ukraine, not only the aircraft, but the set of what we call remote carriers of drones of different sizes that fly alongside this command fighter that can take over tasks that are all connected also with legacy assets by a cyber resilience low latency connectivity network, what we call the Combat Cloud. That is not only technologically hugely ambitious, it's also what every advanced air force in the world says is the future. That will not happen with a big bang, that will have to be developed over decades. Since it's so determining for the future of many companies that have come together to build the FCAS system, it is so important for these companies that they all invest a lot of time and energy into making sure they're all part of this future success. That's the more complicated way of saying we still have discussions, notably, between Dassault and Airbus Defence and Space. I think we have a good dynamics. If you heard the French and the German defence minister make a joint statement yesterday, we have a renewed dynamics, and I'm very optimistic we will close, and I hope it will happen this year. It's important, and Europe needs it, and it's something that our people are ready to go for. Next page. Coming to space, something that you all experts, I would assume, but many people don't even know how important space has become for all of our everyday life, from navigation to ubiquitous connectivity, to more and more applications that people see in terms of Earth observation. You probably all saw the pictures of Russian tanks lining up when they tried to drive towards Kyiv. That was all photographed, if you will, taken as imagery from satellites from space. This is also the same technology that's being used for climate research. More than 50% of the input variables of a modern climate model can only be taken from space through various sensors, optical, IR, and other technologies. There's a lot of dual use in what we do at space. We have four product lines, not to go too deeply into the details, but it essentially covers almost the whole value chain, from designing and building satellites through our JV that we have a 50% stake in at ArianeGroup. We also are involved in the launchers. We do the downstream part. What do we do with the data that satellites then send down to Earth? That's the third business that I represent, which is Connected Intelligence. Come to that in a minute. I will touch on Artemis, the mission to go back to the moon 50 years after the last human had set foot on the moon. You probably also heard about the two unsuccessful attempts to launch Artemis. The next attempt is now at the end of the month. I really keep my fingers crossed. What we deliver as Airbus in the lead, leading a bunch of European companies is the European Service Module. It is what you see on top of that right-hand picture. The Orion spaceship has two parts. One is the crew module, which is built by Lockheed Martin, and we do everything in the basement, if you will. All the technology that keeps the astronauts alive, temperature control, humidity control, oxygen control, attitude control for the spaceship. The really important part that hosts the technology, it's the first time that NASA gives this to Europeans. You might have heard that this is not only a once in a lifetime thing, but NASA wants to fly to the moon to stay there, to start to build a permanent establishment, if you will, of humanity on the moon. We have been asked to provide one of these European Service Modules every year from now on. There's a cadence that's been built up to really start what people call the moon economy. Really exciting and super fascinating business that attracts some of the most talented people that we have in Europe and in the world. Then lastly, Connected Intelligence. It's a bit more difficult to describe because you can't show many pictures. It's what do we do with the data, whether they come from aircraft, whether they come from satellites. We do AI, we do, we sell data, if you will. We also sell process data. We create intelligence, and we provide governmental, institutional, but also private customers with that intelligence to do their job as quick as possible. That, by the way, is also the nucleus that will have to build what I called before the multi-domain combat cloud. This is where we spearhead a big part of connectivity, of cyber resilient connectivity for the group. Fascinating and big job. Needless to say, it's not gonna be easy against the hyperscalers from the US and others that are involved in defence business on the US side, but that's the European answer to it. A bit of data, as many of you are analysts. The market outlook has been quite okay until recently. Growth of about 3% every year. Sort of a steady business, but not exuberant growth. We're seeing now a significant uptick since Ukraine. If you count it together, it's somewhere between EUR 200-300 billion over the next or until 2026 in additional turnover or in additional budget, I should say, that's been pledged. Now, will that come on time? Partly depends on the countries and how fast they can process the things, but it is a significant uptick, and you all heard about the EUR 100 billion of those 200-300 coming from Germany, which constitute die Zeitenwende, as Olaf Scholz called it. We consider this an attractive market. Next page, please. That's a bit the financials. We haven't seen really growth in the last couple of years. Actually, it's been sort of even shallow decline, but that was due to a bit of portfolio cleanup and streamlining what we wanna focus on, especially in the CI area. We're still a bit too dispersed. We need to focus a bit more. We're seeing now also this year a significant growth also on the order intake side. You see about this factor of 3.5 to 3.6 years as an order book, as a pipeline that we have. Profitability is not where we want it to be. Benchmark values in the US are 10%. We have a clear plan to go up to an individual target to 8%. We're currently in the 6% range, 6%-7%. I would add EBIT or EBIT adjusted, the return on sales is not the only metric that's meaningful in defence and space business, because another one is return on capital employed. Because many of the developments that we do get pre-funded by the customers. You don't have to invest yourself. You get money from the government or from ESA, for that matter, and you develop your technology. That's another way to look at it, which is why we think defence can also be an attractive business. I spare you the breakdown of the turnover portions of my three businesses, and would probably come to the last point that's near and dear to my heart. That's this ESG discussion, which, again, probably repeating it, but was very one-sided in my view some time ago, where not only financial institutions but some politicians, notably in Brussels, I think took too simplistic of a stance of saying defence in its entirety is unsustainable. Well, as you would imagine, after Ukraine, that's a bit of a different discussion now because obviously it's a much more nuanced now in terms of why do you have a defence business and what is it used for and what do you do with the weapons and with the systems that you build. I do want to quote from the UN Sustainable Development Goal number 16, which calls for peace, justice, and strong institutions. That's exactly the line of sight that we have with what we want to contribute to. Obviously, the good thing of this criticism was also that we were forced to be a bit more self-critical and go out a bit more in terms of and also talk to our people. Why do we do what we do? We have a good purpose that Antoine summarized in two words, but actually, when you have all these questions, they're not always easy to answer. What do you export? To what countries do you export? How does that fit with your values? You need some star that helps you. We found an ambition. We are a force for good. We do not believe that it's either defence or sustainability, either security or sustainability. We think the two force each other. As a group, we wanna do our share in terms of sustainability. You heard a lot about that today from green aviation, from decarbonization. We do at Defence and Space for climate research, for many things from satellites to other assets that can be used to fight illegal fishing, to do sustainable forestry and agriculture. We think that we can help prevent, we can help protect, and we can help restore in the directions of people and planet. In that sense, if you're able to defend a way of living, your values, your democracy, you are more resilient. You also have the means and the stability to take care of sustainability and climate change. The other way around is if we don't manage a more sustainable world, we will have more insecurity in the world. We will have more refugees in the world. We will have more conflict in the world for scarce resources. Then that becomes a vicious circle. I would like to see it as a virtuous circle, and this is what we prefer, and this is pretty much what I wanted to get across. Thank you very much. Thank you very much, Mike. Mike will be back with us for the Q&A session afterwards. For now, the focus is on Airbus Helicopters. Good afternoon, everyone. It's a privilege for me to run the helicopter business now since four years. Quite a challenge to run it after Guillaume. But I'm really pleased to be on stage today, and to tell you more about the helicopter business. I'm not used to speak in front of you. You are probably not so much familiar to the helicopter business, so I will try to be as simple and as clear as possible. I will articulate my presentation around four topics: market overview, Airbus Helicopters positioning on the market, our strategy to develop the activity and contribute to the growth and the financial performance of Airbus, and I will conclude with a focus on urban air mobility. Starting with the market overview, you see on this slide the evolution of the market in terms of bookings in the past years. You see that the helicopter market is a dual market, well-balanced between civil and military activities. Mainly driven in the past years by the development in Europe, in North America, and mainly driven by the renewal of the fleet. In the past years, we have seen a continuous decrease of the activity of the bookings on the helicopter market. The market has been divided by two in terms of bookings, both on civil and military between 2013 and 2020. 2020 being a low point. 2021 being a turning point in terms of recovery of the market, both on civil and military. We have seen a growth in terms of bookings on the worldwide market between 30% and 50%, depending on the segment. In this market context, our Airbus Helicopters is positioning. In terms of market share, we have not only resist in this challenging market, but we have grown our market share from 25%-40% on the worldwide market. We have confirmed our leadership on the market, and in particular on the civil market, where last year we have reached 55% in terms of market share. It clearly confirm the resilience of the business model and the validity of strategy focused on both competitiveness and innovation, preparation of the future. Our two competitors on the civil market, it's mainly Leonardo Helicopters and Bell. On the military market, it's mainly the US OEM. I have in mind, of course, Lockheed Martin and Boeing. The military market, it's a much more scattered market compared to the civil market. What does it mean for the future? You see on this slide, it's an interesting one. I will not comment it in detail. You see the evolution of the helicopter market in terms of deliveries in the past year. You see the versatility and how cyclic this market is. I think it's more interesting to look at the future, how we see the evolution in the coming year, in the coming years. 2021 was a turning point in terms of recovery, and we confirm this trend in 2022. First part of 2022, we see a growth in terms of bookings around 30%. It's not only through the bookings that we confirm this positive trend. When I look at the evolution of the activity, when I look at the evolution of the fleet hours for Airbus Helicopters, 12,000 helicopters in service. In terms of flight hours, we are already back first part of 2022 to the level of 2019. It's also interesting to look at the second-hand market, helicopter market, and we see since two years a strong decrease of the number of helicopters, second-hand helicopters available on the market for sale. Strong decrease means 30%-40%. All this makes us positive about the perspective in terms of market evolution for the coming years. We anticipate in the next five, six years, a growth between 20%-30%, depending on the segment, civil and military market. What's our ambition for the coming years for Airbus Helicopters? On the civil market, we want to confirm our leadership position, not necessary growing the market share beyond the 50%-60% we see, but developing the product mix and in particular reinforcing our market share on the medium and super medium segment of helicopter. On the military market, our ambition is to grow our market share. We have resisted. We have grown our market share in the past years. It clearly confirm for me the validity and the resilience of our business model. Our strategy, our business model is based on four pillars. First one being focus both on civil and military market. You see here the split between civil and military. Quite a well-balanced level of revenues. It's an element of resilience to be able to address these two different markets, with the objective, with the product strategy to address as much as possible these two markets with dual platform, which gives the volume and the competitiveness. The second pillar of our business model is the focus both on the sale of new helicopters, but also on services. Services is an element of resilience, and we have seen this in the past years, 12,000 helicopters in service. It's not only an element of resilience, it's an element of growth, and it's at the core of our strategy to grow our revenues in support and services, in particular, growing the value chain of our customers. The third pillar of our business model is our international footprint. Think global, act local. It's clearly what is the core of the strategy in a sense where it's a very local market. 3,000 operators worldwide. A helicopter, when you want to support it, cannot cross the Atlantic, as it can be for an A350. It's really essential to be local, to be close to our customers, not only to develop our sales, but also to be in position to develop our support and services activity. The fourth pillar is our product strategy. A large range of product for portfolio from light helicopter to heavy helicopter. We really want, with the exception of some niche like the heavy transport helicopter, we really want to be in position to address any need on the civil and military market through our different product range. It's again, an element of volume and an element of competitiveness. On the next two slides, I will present to you our product range on civil and military. I will not go into the detail. The first comment you see on the bottom, the type of mission we are delivering with our helicopters. Diversity of the mission, they all are mission critical. So referring to the comment of Mike, sustainability, it's yes, to contribute to the reduction of the CO2, but the mission we are delivering contribute also to a more sustainable world. It's an element which is key to have in mind. We address this different segment for our different helicopters. One element which is important for us is the polyvalence of our helicopter. With our different helicopters, the H125, the Écureuil, the H145, the H160, we have the objective to be able to address different type of segment with one helicopter. The H145 is addressing medical services, is addressing VIP mission, is addressing also oil and gas mission. Our strategy is to continuously invest in our product. In the past years, you have probably seen the certification of the new H215 power bringing 150 kg payload more. You have seen the qualification of a new version of the H145. Incremental innovation, but also development of new product and the certification of the H160 in 2020. It's clearly an element of growth for the future. We want to grow our market share on the medium segment, and the H160 is clearly an element to achieve this strategy. Again, on the military market, very diversified type of mission. We want to be in position to address all of them as much as possible for dual helicopters. The H145 addressing the civil market, but also the military market. Very successful on the military market. The H225, the Caracal, focusing on the oil and gas market, search and rescue, but also successful on the military market. You have seen the different contract we have signed in the past years, and more recently, the H160 addressing first the civil market, but we have signed a major contract in 2021 with the French forces with the objective to develop a specific configuration for the army, the navy, and the air force. Clearly, the decision also to launch a military version of the H175M will give us the possibility to address most of the requirement of the military customer through our dual platform. We have also helicopter addressing a specific mission like the Tiger, and you have seen the contract we have signed at the beginning of the year with Spain and France, giving us the opportunity to upgrade this helicopter and to keep it in service till 2050. What's our strategy to continue to develop the company and to contribute to the resilience and the growth of the company? Three strategic priorities. The first one, customer loyalty. So it's about customer satisfaction, which is an element which is key to develop the sales, but it's also the ambition to grow in the value chain of our customers in order to develop the support and services activity. We have been quite successful in the past years. Again, since the beginning of the year, two major contracts signed, one in the US, global contract, five-year contract to support the 500 Lakota helicopters in the US, and the NH90 support contract that we have signed with France and Germany. Innovation and sustainability. Innovation to continuously invest in our product, in particular the civil helicopter, to keep our leadership on the market, and sustainability to be in line also with the purpose at Airbus. We are convinced, and we want at helicopter level also to be carbon neutral by 2050. It means to invest in the technology in order to progressively reach this ambition. The third priority is to grow our business in the defence, on the defence market. We are around 15% market share. We consider that we can grow in terms of market share, investing in our different products. Three strategic priorities. To create the condition to implement this strategy, we have defined a transformation roadmap that we articulate around. Quality and safety, reliability, we want to be a benchmark in terms of performance, in terms of quality and safety on the market. Around competitiveness, continue to focus on our cost, on our competitiveness to create the condition, whatever is the situation of the market, to continue to invest for the future. Competitiveness, obviously, is not only cost, it's also about agility. Leadership, sustainability. Sustainability, I insisted about the ambition for our product to be carbon- Implicitly or explicitly, like a situation where there is a sort of political priority to establish a link in defence with a country. We manage not to find ourselves in this situation, and my answer is not a theoretical answer. I have been CEO of MBDA for 12 years, when we think that this is not the right way to go, not the right thing to do, we go to the authorities and we have a discussion. We say we don't think it is the right thing to do. We have the highest consideration, and so we respect the authority to grant us an export license, but we keep our right to exercise our own judgment, which could be supported by either the interest of the company, risk of reputation, which is not necessarily what is part of the export license process. The legal risk, which is not necessarily what is part of the license process. Risk in terms of geopolitics, because there are several countries. We may have a discussion with one country, and so we think it is not necessarily the right way to go. I have not in mind any situation where we have been forced to do something. I'm sorry. Just in terms of process, is that internal thinking run by an ethics committee or by the management of the defence business group management? In terms of process, I think we have been in this situation actually last year. Obviously, I cannot be more specific about which country, which product. This is a decision of the company, because the consequences of such a decision are so significant and the necessity to manage in a very careful and cautious way the implication of such a decision is so that it is immediately escalating. In the situation I have in mind, this was discussed extensively at the Airbus Executive Committee. I think I did a good job delegating to you. To your second question, we have a relatively good view over the next couple of years. So we want to be at about EUR 12+ billion in 2025. Thereafter, it will depend on what of the current pledges will become reality. I think we need to understand a bit better of how serious that is, how sustainable that is. Is that a bit driven by the current situation? Then all of a sudden, there come second thoughts. But we do expect growth, especially in the mid-term also, because I think there is in fact a different mindset towards defence now. But in some countries more than others, it takes time until the system that was partly made dysfunctional over many years now learns to process again. Some of the effects of the additional budgets will probably come only after 2025. When FCAS kicks in, that's then where we see a lot of growth coming in the next decade. One there. We had one question at the back, then Rob. Matthew Chisa from Agency Partners. Military helicopters, if I heard right, you said you have about a 15% market share at the moment. I can understand that you have a bit of a tailwind with the H160 as you militarize that, possibly a bit of a tailwind as you do the same thing with H175. But the big trend in military vertical lift is very complex, compound, advanced rotorcraft systems being produced for the US FLRAA and FARA programs. To me, I mean, how can Airbus catch up with programs like that within a reasonable period of time? Or, is the European market just going to surrender to spinoffs from the US programs, as arguably part of the military aircraft market has done, to the F-35? Ambition to grow on the military helicopter market, as you rightly mentioned, short, mid-term, is to continue to invest in our different type of helicopters. Duality is clearly an asset, and that the reason why, and we see this with the H145, H225, and that's the reason why we developed the H160M and the H175M, and contribute to the development of our market share on the military market, short, mid-term. Long-term, we have the question of the next generation of military helicopter. We see that the U.S. are already investing in a new development program, Future Vertical Lift, FARA, FLRAA. We want to be prepared in Europe. We want to have the European industry being ready the day a European program would be launched. We think that the volume on the European market should be there the day our nation would decide to launch such a program. That's the reason why we have launched this project initiative with Leonardo as per the European Defence Fund, ENGRT, in order to develop the technology breakthroughs to be ready to launch such a program if the need is confirmed. From our perspective, it's more mid- to long-term to be ready to launch a program if There is a need by the end of the decade, and there is no reason to think that the need for European nation would be the same than the one in the US today confirm. We want to be ready. It's more for mid to long term and the meantime to be able to continue to invest in our product range, dual helicopter that you see with the Tiger Mark Three and the NH90. At the same time, we work with our customers to continue to invest in our pure military helicopters. We have a question from Rob Stallard in the middle, and then Ken Herbert. Thanks so much. Rob Stallard from Vertical Research. Michael, quick question for you. How much of a risk is cost inflation on fixed price contracts over the next sort of year or two, particularly on things like the recent 2020 Eurofighter order? Bruno, your forecast for civil helicopter growth, what have you factored in for the global economy? There are some challenges out there at the moment. Thank you. I think it's an excellent question. In fixed and firm price contracts, or in contracts with firm escalation formulas, it is obviously a problem. We're seeing the impact of that. We are taking mitigating actions. We will have to start to renegotiate some of these contracts, in light of what the inflation will become in the next couple of years. From our side, in terms of market forecast, helicopter market is not directly correlated with the macroeconomy. I was insisting during my presentation on the fact that mission delivered by helicopters are mission critical. When we look at the geopolitical context, we are convinced that the military market will continue to grow. When we look at the civil market, I will just take the example of the oil and gas market, which is contrary to the evolution of the price of energy, which can benefit from this situation. Again, we are not factoring in this market evolution crisis like we have faced in the past two years, like the COVID situation. Of course, it could impact this perspective, but we consider that this view is relatively robust, based on the macro trend, but also based on what we see in terms of evolution of the second-hand market flight hour. We are quite confident about this perspective. David had a question, and you got the mic. Ken, promise it's you afterwards. Michael, it's David Perry at JP Morgan. I'm just trying to reconcile some of the numbers you've given us. You had a slide on potential European defence spending, and it looks like close to 40% growth between 2021 and 2025, but I think you just said EUR 12 billion is your revenue target for 2025, which is 18% growth. If you could help me understand that. You have to give me a margin target. Is that 25%? Why is it so modest? I mean, you've been higher than that in the past, and there's all this money should be coming your way. Then a third one, if I can. Can you just help me as a Brit understand what's actually happening in Germany? Because they throw out these numbers, it was 2% of GDP, but then it seems to be the EUR 100 billion fund, which gets you nowhere close to 2% of GDP. Just what's your take from, you know, speaking to your counterparties? All in one short answer? Okay. Why was I a bit more, let's say, conservative on what I see as our turnover development for the next couple of years, given that overall development? First of all, it's currently all statements. It's not yet something that we see in budgets that we see you know tied down into something that you can really plan for. Secondly, if you look at, take the EUR 100 billion, and maybe that's part of the third answer, not very much to our joy. If you look at where a lot of the money was spent by Germany, it was on U.S. and there's some discussion on Israeli spending. We have, or we're suffering a bit, the consequences of a pretty long period where capabilities were not developed or kept up. We need to build them up. That takes time. This is why, at least in the short run, we're gonna have a, what I perceive, maybe a bit of an under proportional development compared to those pledged spendings. I think the truth is somewhere in the middle. Now to the German question, I could probably speak a bit longer to that, but, try to keep it short. The logic which, quite frankly erupted the day after the speech, what does that mean, in, as it relates to 2% of GDP and everything else, and led to... I mean, the opposition party was needed to put that EUR 100 billion debt, if you will, in as a law, and it was very hotly debated. The compromise that came out is the EUR 100 billion will be counted against the 2% of GDP for the next four or five years. That fills the gap, so to speak. Then you need to, for the next mechanism, or you need to just beef up your annual budget if you want to be at the 2%. Otherwise you buy that, and you can't maintain them in a couple of years. I don't know if that answers your question, but that's the official logic. Now, if you ask me how good is Germany prepared to process all that money, I can't give you a short answer. The margin. Actually, we were never really at that level that we wanted to be. We had a dip in 2019 as part of some special effects, high investment into space that we did ourselves that will pay off over the next couple of years. The restriction that we see as opposed to the U.S. is that in our fixed and firm contracts with the European countries, there's a lot of price scrutiny, and the margins that we are allowed are relatively slim. You add to that the mechanism on space that especially NASA has, and you somewhat have the same slimmer margin, certainly not double-digit for your part of the overall program, but you can't charge any margin on, depending on what program you have, 60%-80% of the value added that's done by your suppliers. Because these suppliers are other European countries and other European space companies in that scheme that ESA runs. From an EBIT, from a return on sales point of view, you're somewhat limited. We need to find ways to tap into different businesses which we're doing, for instance, now more in the U.S. to systematically bring up our profitability. Ken? Yeah. Hey, Ken Herbert with RBC. A question again for you, Mike. As we look to disaggregate maybe that incremental EUR 2 billion in revenues between aircraft and space, can you parse that out a bit? Specifically within space, where are you investing now? Where do you see the real sort of incremental opportunities in the next three to five years in terms of. Obviously, there's a lot happening in that marketplace. Where do you see yourself positioned best, and where are you spending to capitalize on that? I didn't quite get the first question. What do you want me to describe? The growth, the 10%-12%, is that how much of that is space versus aircraft? It's mostly coming from aircraft and Connected Intelligence. We don't see space grow so much, at least in the current portfolio that we have. We see some good growth rates in our US business, but it's very small. We're tapping into SDA, into things that look very promising, but they're very small. Space will probably grow something like 2%. CI should be growing faster, and depending on how new programs, how quickly we find our way into FCAS, what the Tornado replacement discussion will be in Germany, there's a good potential for steeper growth in military air systems. We have a question over there. Is there a microphone? Thank you. Hi. Thanks. Kristine Liwag from Morgan Stanley. The geopolitical environment seems to be very dynamic, right? I mean, we thought the Ukraine-Russia thing could be temporary, and here we are seven months later. If we see additional urgency, and we see the situation worsen, and we start seeing funding for European defense accelerate, how quickly could the industry respond and capitalize on that growth? Because we're already seeing some tightness in the supply chain and aerospace, and, you know, you have a shared industrial base. If you could provide more color on how quickly you could ramp and how steep you could address that demand, should they materialize, would be great. That's actually a question that countries have started to ask us too. France, for instance, has started to talk about what would a war economy look like. The answer is not so easy to give. I mean, the short version of it would, it depends. If you have an existing program that has free capacity, manufacturing capacity, then we can crank it up relatively quickly. Now, there would be obstacles in terms of struggling supply chain, access to people and all that, but that should work pretty well. If it's something that needs a certain level of development, then it takes long. In terms of existing assets, I think we would be in a position to make a difference in terms of providing more means to the armed forces in a relatively short amount of time. one-two years would be really meaningful. For the helicopter market, we can clearly benefit from our dual product. The one H145 as an example, so we can be relatively short in terms of deliveries. It could be in the range of 18 months, 12-18 months. By the way, not to belabor the point, but we've already been asked this year to pull some things ahead that were spread over the next two years. To a smaller degree, that's already happening. Thank you. We have a last question from Zafar. Thank you for that. Zafar Khan from Société Générale. A question on Defence and Space and then supplementary one on helicopters, please. On the Defence and Space side, are you able to give us a little bit of an idea on the profitability of the two segments, relative profitability? And then follow-up to that is on the border controls contracts, you had some problems. Is that still loss-making? Where are you on that? I tiptoe around your first question because I don't want to give too high granularity of the profitability. We are in military air systems, in aircraft. We're not quite where we want to be in space, and we see more potential on the connectivity digital business. I'm not gonna be much more precise than that. In terms of the border security business, that's been a painful exercise over many years. We have now found a way how to, let's say, reduce the scope of that business and also put more into the local hands. There is a way that we can sort of finalize the project. We're not gonna turn it profitable, but it's gonna be an okay end of that project. Just on the helicopters, are the NH90 and the Tiger contracts profitable? Yes. They directly contribute to the performance of the company. In particular, in the phase we are in the program, which is mainly driven by services activity, and for the NH90 by export contract. We are clearly in the phase where this program are contributing to the profitability of the company. Again, we were mentioning this during the round table, but we learn from the past, so each time we renegotiate a contract or we launch a new contract, Tiger MkIII is an example, we create the condition to improve and to learn from the past. The answer is yes. Thank you. Thank you very much, gentlemen, for playing the game of the grilling session. You are fit to go on roadshow with us next time. Good. Way we go. Thank you. We are nearing the end of our day together. It's been a long day. Before we say goodbye to our guests connected over on stage, Guillaume, for a few closing remarks. It's been a warm session. We try to oscillate between a bit of fresh air and silence. Anyway, I'd like to thank you, Hélène, and thank the IR team for having put this together. Really, I mean, it's very interesting and energizing to have you here and to see you so engaged and having all the questions outside and inside the room. We've tried to put together something that was fitting to our understanding of your expectations, and in particular, to have more time to open the kimono and share what we do on businesses that you have probably less time and opportunity to be exposed to, defence, space, helicopters, and also spend quite a bit of time on what we do on the sustainability roadmap, what we do in the direction of ESG and, I think, Julie and Sabine put together a lot of pieces of the puzzle that you know already, but I hope it helped clarify the picture, the overall picture of what we do. We are in a very. Let me just summarize a few things maybe before I close. It's been a long day, so just a few ideas I'd like to share with you just to finish. We navigate in a fast-changing environment, and that's basically the beauty and what makes the job interesting and Airbus is trying to navigate this, not losing focus on the long-term trends and what will the priorities be that will remain. You've seen that we put sustainability at the very core of what we do. We try to show how deeply committed we are to environment on the one hand, and security on the one hand. Antoine summarized with mobility and security, I think you said, and the purpose that is fueling the way we make decision, the way we hire people, we prioritize projects, we decide on programs, we allocate money to make sure that we are performing on the short term. We know you have a lot of expectations on Airbus to be successful on the growth trajectory we were in before COVID, and we're trying to be back again as good as we can. That's very much what Airbus is about, and we want, and we stay committed to it. That's very clear. But also, keeping our eyes on the long term and allocating the right time, energy, priority on building that future Airbus around the priorities we have shared with you. That's what we're basically doing. Thank you again for the time you devoted to Airbus. There's an expression I like about a customer. A customer is someone who wants a good deal from someone he likes. I hope we have contributed a bit to having shareholders and people in the financial community looking at us as a company that gives good return, but also a company that you like. Thank you very much for your attention. Thank you. It's yours again. Yes, for a couple of minutes only. Thank you very much, Guillaume. It's now time to say goodbye to our guests connected on the webcast. We are looking forward to catch up with you and to see you soon.