Views on EADS Strategy andViews on EADS Strategy and Value Creation

Marwan LahoudChief Strategy and Marketing Officer

Global Investor Forum15 & 16 December 2011

2Safe Harbour Statement

Disclaimer

This presentation includes forward-looking statements. Words such as “anticipates”, “believes”, “estimates”, “expects”, “intends”, “plans”, “projects”, “may” and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include p ojects , ay a d s a e p ess o s a e used to de t y t ese o a d oo g state e ts a p es o o a d oo g state e ts c udestatements made about strategy, ramp-up and delivery schedules, introduction of new products and services and market expectations, as well as statements regarding future performance and outlook. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

These factors include but are not limited to:These factors include but are not limited to:

Changes in general economic, political or market conditions, including the cyclical nature of some of EADS’ businesses;

Significant disruptions in air travel (including as a result of terrorist attacks);

Currency exchange rate fluctuations, in particular between the Euro and the U.S. dollar;

The successful execution of internal performance plans, including cost reduction and productivity efforts;

Product performance risks, as well as programme development and management risks;

Customer, supplier and subcontractor performance or contract negotiations, including financing issues;

Competition and consolidation in the aerospace and defence industry;

Significant collective bargaining labour disputes;

The outcome of political and legal processes, including the availability of government financing for certain programmes and the size of defence and space procurement budgets;

Research and development costs in connection with new products;

Legal, financial and governmental risks related to international transactions;

Legal and investigatory proceedings and other economic, political and technological risks and uncertainties.

As a result, EADS’ actual results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see EADS’ “Registration Document” dated 19 April 2011April 2011.

Any forward-looking statement contained in this presentation speaks as of the date of this presentation. EADS undertakes no obligation to publicly revise or update any forward-looking statements in light of new information, future events or otherwise.

Growing revenues, but lagging share price… 3

EADS share price relative stagnant over 10 years while revenues grew strongly…

…however being an A&D leader in revenues does not make us into leader in valuey g g y does not make us into leader in value

40 50

Revenue (€k)Share price (€)

48

Revenue 2010 (€bn)*

Boeing 34Boeing

Mkt Cap (€bn)*

30

35

35

40

45

26

34

46

LMT

N th G

EADS

16

17

19

Gen Dynamics

EADS

LMT

20

25

20

25

30

24

25

26

BAE

Northr. Grumman

Gen Dynamics 10

11

16

BAE

Northr. Grumman

Gen Dynamics

IPO = €19

10

15

10

15

20

4

16

19FINM

D l

Bombardier

3

5

7Dassault

Bombardier

E b

O € 9

0

5

'02

'03

'04

'05

'06

'07

'08

'09 10 11

0

54

4Dassault

Embraer 3

3Embraer

FINM

* GD: Samel ith h lf

Boeing: 2x l ith value with half

the revenuesvalue withsame revenues

4…as we are not yet champions in Return on Capital Employed

FY10 ROCE %

High values

Medium values

19%

10%11%

18%19%

9%

13%13%14%

Lower values

5%*

9%

EADSFinmeccanicaDassaultEmbraer

North.GrummanBAEBoeingBombardierGen.DynamicsLMT

* made comparable to peers. Excludes launch aid.

5Successfully securing growing cash position…

16 2

Reasons to limit external investments for growth in the past

13.7

15.1

16.2

Gross CashNet Cash 11%

CAGR 03-10

for growth in the past

Internal investments has been priority ~5bn€/year for Capex and R&D

10.6

11.8 11.9

9.29.810.0

2002-06 - BoD misalignment on investing in the US

7.9

7.0

5.521%

2001 - 2005 - keep cash to "afford Thales“

2006 A380 crisis3.5

3.1

4.2 2006 - A380 crisis

2008-09 - A400M renegotiation

-1.7

2008-11 Financial Crisis

“Overcautious” cash-flow forecasts 2003 2004 2006 2008 2010200920072005

O e caut ous cas o o ecastsevery year

6…while

US Treasury prices (mixed maturity):

Safety is becoming expensive…

FTSE 350 Aerospace & Defence

…and Risk is becoming cheaper

US Treasury prices (mixed maturity): Oct 2010 -Oct 2011

3 700

FTSE 350 Aerospace & Defence

Fallen 17% since

3 300

3 500

Fallen 9% in th t

since January

German Bond prices (10yr): Oct 2010 -Oct 2011 3 100

3 300 the past year

Fallen 16%

2 900from Oct10 to August

2 700

oct-1

0N

ov

Dec Jan

Feb

Mar

Apr

May

June

July

Augu

Sept

e

oct-1

1

“You should be fearful when others are greedy and greedy when others are fearful" - Warren Buffet

7Can our cash cushion make us too comfortable?

40

16

1740%

35% e (%

)A-A high credit rating still applies to companies with a

30

35

12

13

14

15

29%

of R

even

ue

(€bn

)

applies to companies with a much lower proportion of cash than EADS

20

25

8

9

10

11

16%16%

23%

16,216% ro

port

ion

o

h po

sitio

n (

A

7,8 10

15

4

5

6

7

11%

16%16%16%

9%

6% ash

as a

pr

Gro

ss c

ash

BBB

BB+BBB+

BBBBBB+

A-

A

1,6 1,23,6

,8

3,92,9 2,8 2,1 2,1

0

5

0

1

2

3 6%

FY10

CaG BBB-

N/A

BBB+

FIN

M

BA

E

Bo

ein

g

Bo

mb

ard

ier

Dassault

EA

DS

Em

bra

er

LM

T

N. G

rum

man

Gen

Dyn

am

ics

easier to balance risk with cash G- easier to balance risk with cash than with improved business performance?

8Balancing 50/50 with Boeing Commercial is the most important balance for EADS - and it is not for free…

… costing ~8% of sales before financingManaged for success past 15 years

Airbus Investment (€bn) : Excludes financing

144.0

Portion of Group Revenue %

100

Commercial Aircraft deliveriesAirbus and Boeing in %

11

12

13

3.0

3.5

10.4%

12.3%11.9%

80

90

8

9

102.5

2.03 8

8.3%8.5%

7.6%8.0%

9.3%

3.950

60

70

Airbus

B i

52%

5

6

71.5

1.0

3.83.63.33.1

3.5 3.73.43.9

30

40Boeing

12%48%

5.8% 4.7% 5.2%5.7%5.2%Boeing

2

3

40.5

0.00

10

20

201020092008200720052004 20062003200119911981 2011E1971

9Balance - difficult organically due to strong Airbus growth -Acquisitions and Export Success key

80OP11 OP11 + YTD M&A

38,7 38,740

60 CAGR

8.3%

CAGR

8.3%

26 5

25,9 25,9

20

40

5 5% 6 9%19,0 24,9 19,026,5

02010 2015 2010 2015

5.5% 6.9%

* Based on SP11 trendline

Large Commercial Aircraft Non Large Commercial Aircraft

10Balance - Airbus managed the past 2 cycles successfully - do we need internal balance as much as we thought?

Learned from "near death" experience early 1990s

A Cycle without a Cycle? - first time in history: Peak to Trough production down 38 69% in past cycles experience early 1990s

Backlog flexibility -constant negotiation with customers on delivery160

Annual growth relative to a recession - LCA world production

Peak-to-Trough production down 38-69% in past cycles

customers on delivery slots pays off

Overbooking keeps factories full130

140

150

160

2008 - Financial

Government guarantees stabilizes export so far

Customer base more90

100

110

120

1980s Downturn

1990s Downturn

Crisis

Customer base more global - less impact of regional cycles

Careful ramp-up50

60

70

80 1970s Downturn

2000s Downturn

Y f p p

…while commercial services too small to deliver impact and Airbus Military not bringing the 20

30

40

50 Year of recession

y g gfinancial counterbalance10

R-2 RR-1 R+1 R+2 R+3 R+4

Boeing’s growth trend has followed a more volatile path than that of Airbus 11

Commercial deliveries 1971 – 2011E

606620

550

600

650

Airbus

362400

450

500 Boeing/ MDC deliveries

- 58% - 55%

362

257281

325

303

250

300

350

- 45%- 7%

200

257

163

123

100

150

200

250

- 25%

D l

0

50

100

19811971 2011E20011991

Duopoly commences around 2003

19811971 2011E20011991

12Services - Implementing the Vision 2020 through M&A has started

M&A according to priority segments…

A/C + H/C ISS

Cyber Sec

Satellite

Vizada

g p y g

Hig

hA

DS

Defence Training(non-flight)

Flight Training

Satellite ServicesDefence

Electronics

UASVector

Fit w

ith E

A

Security Equip

ATM + Flight Ops

Material Mngt

Mobile Radio

Space Systems

Satair Cabin Upgrades

Satair

Metron

w

Market Attractiveness HighLow

Lo

w

Financial metrics new culture and cost structure different Post MergerFinancial metrics new - culture and cost structure different - Post Merger Integration to be done

13Global - Portfolio management increasing in current market -an opportunity to enter in particular the US?

2 2 4 0622 0 00

24 0 00

26 0 00

1 8

2 0

2 2

V alue of Divestm ents $m# of D ives tm ents

estimation of all A&D deals* above 100m$

14 0 00

16 0 00

18 0 00

20 0 00

1 2

1 4

1 6

1 0 48 4

7 8 377 2 408 0 00

10 0 00

12 0 00

14 0 00

8

1 0

1 2

8 9057 2 40

5 6 6 14 8 67

2 0 00

4 0 00

6 0 00

8 0 00

2

4

64 885

0 02011201020092 00820072 00620 052004

Caveat: protectionism in the USCaveat: protectionism in the US

* including sell off from private equity

14Global - In overall sales we are a global success, while…

Customer base global, but mainly commercial

Employee Footprint Outside Europe Increasing

Country strategies being developedbut mainly commercial Europe Increasing

% Employees Outside EuropeBacklog end 2010

Revenues 2002

Backlog end 2010

Revenues 2002

being developed

USEurope

US

48% 27% Europe

US

48% 27%4%2007

USIndiaChinaSouth-Korea

4% 7% 20%Incl. recent acquisitions

US

Middle East4%

20%

23%

40%*US

Middle East4%

20%

23%

40%*

2011e 7%BrazilRussia…East

AsiaPacific7% 28%

East

AsiaPacific7% 28%

2020Objective 20%

PacificPacific

… Industrial footprints, Services growth and focus on non i l i i l i t t t d i t l b li ti

*Including leasing companies

commercial increasingly important to drive next wave globalization

15

EADS finance community is at the core of our Vision 2020 implementation

Key driver of growth - creating ways to finance group and division ambitions

Manage risk to allow opportunities to come alive

Measuring Services business performance - adapt the metrics

Integrating an increasingly global footprint

Balance the need to be cautious with the need to embrace opportunities in current market