PARIS --- Airbus Defence and Space has frozen capital spending and urged its 34,000 staff to take “drastic measures” to save cash as it faces the prospect of missing 2017 cash targets by hundreds of millions of euros, according to a memo seen by Reuters.
“With the risk of missing our full-year cash targets by hundreds of millions, we need to do something extraordinary together,” divisional finance chief Julian Whitehead told an internal forum, according to a summary distributed to staff.
Airbus has said it expects 2017 group-wide free cashflow to be similar to 2016, before mergers and acquisitions and customer financing. It does not publish cash targets for divisions. Due to the bumpy patterns of cashflows in aerospace, it often faces a dash to meet targets in the fourth quarter.
Airbus Defence & Space, which has warned of continued cash pressures from the troubled A400M military aircraft program, plans to set up a “Cash Crisis” team to improve the situation by end-year, with all its programs expected to participate.
Until those plans become clear, all capital expenditure is being frozen with immediate effect across all the division’s activities and across all its subsidiaries, the memo said.
Airbus shares stumbled from record highs and fell as much as 1.6 percent. They were down 1.3 percent by 0945 GMT, making the stock the worst performer on France's benchmark CAC-40 equity index.
Airbus’ stock price remains up around 30 percent since the start of 2017 on buoyant demand for passenger jets, although rival Boeing’s shares are up 64 percent. (end of excerpt)
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