Airbus owner signals change in strategy that may benefit shareholders
After years of large investments and difficult growth strategies, EADS has announced plans to consolidate its existing position and will likely begin paying out increased dividends to shareholders.
After a troubled few years, the parent company of Airbus is set to focus more on profits over the coming year, which will eventually provide shareholders with higher than expected dividends from around 2015. In 2012, the company paid a dividend of 60 cents a share, which represents 50 percent of its profit.
Speaking to German newspaper Boersen-Zeitung, EADS’s Chief Financial Officer Harald Wilhelm said: “Formerly, EADS was more cautious in its payout policy and at the time that was appropriate due to uncertainties, for instance those concerning the A380 programme. The risk profile of the group has improved in the meantime. Therefore, we can move more into the direction of an investor-friendly dividend policy.”
The company has faced a number of setbacks in recent years, with technical issues affecting its flagship Airbus A380 superjumbo resulting in delivery delays. It also saw a proposed merger with UK firm BAE Systems cancelled after political disagreements between the British, French and German governments.
The company is also looking at attracting new investors, with Willhelm telling reporters that Asia and the Middle East were particular focus, adding: “I have nothing against sovereign wealth funds (as investors), as long as they are normal investors.”
EADS is currently in the process of buying back shares from the likes of Daimler AG and the French government, although it insisted this would not affect the growth or dividend projections. The buyback programme, which will last 18 months, is expected to cost up to €3.75bn.
CEO Tom Enders told investors in February: “The Share Buyback Programme emphasises our commitment to create value for all shareholders. It also underlines our confidence in the equity story of EADS and our business plans. The Share Buyback Programme represents good use of company funds in the interest of EADS and its shareholders, and it preservers, at the same time, our strategic flexibility and a sound balance sheet.”
The company has recently appointed a series of executives who will oversee the new strategy, with Denis Ranque becoming Chairman, while new appointments to the Audit Committee and Remuneration & Nomination Committees have also been made. Enders became CEO in 2012, replacing Louis Gallois, who had seen his base salary more than double to $990,000 during his last two years.