For the sixth consecutive year, EADS surpassed its announced targets and consolidated its position as a driving force in global aerospace and defence. EADS confirmed its position as market leader for commercial aircraft with 100 seats or more in 2005 – a record year for the aviation industry – and has considerably increased its portfolio in the defence sector.

As planned from the foundation of EADS, the Board of Directors was renewed in 2005. At the same time, new CEOs and two COOs were appointed and a slight reshaping of EADS’ divisional structure and headquarters organisation took place. EADS’ Board closely supervised this process, guaranteeing continuity of strategy and reliability towards its stakeholders.

In 2005, the Board of Directors dedicated much time and attention to reviewing and ensuring successful strategy implementation with a focus on expanding into new markets and on widening the product range. Examples of this were the launch of the Global Industrial Development initiative as well as the regular review of the civil aircraft product portfolio, including the industrial launch of the A350.

EADS’ competitive position in the international aerospace industry was an important topic for the Board. The Board looked into different ways of developing and positioning your Group for the future. It reviewed the opportunities to develop EADS from within, building on its strong existing capabilities, and studied possible scenarios for external growth.

Throughout 2005, the Board closely monitored and reviewed the progress of major programmes such as the Airbus A380, the A400M transport aircraft, Paradigm and UAVs. Regarding personnel and human resources issues at EADS, the Board dealt with management qualification as well as with the need to attract, retain and develop our high-potential employees in order to ensure the future quality of EADS’ management and its multinational leadership structure. Finally, financial performance and structure, hedging strategy, funding policy and accounting principles were debated and decided among the Board members in a collaborative and trusting way.

EADS was well positioned to benefit fully from the market upturn and so 2005 results once again surpassed its targets. With an EBIT of €2.85 billion, an impressive increasing order book, and a significant net cash position, the Group has shown that EADS’ strategy and its implementation are on track, resulting in solid financial strength and profitability.

The year 2005 was also a very positive one for shareholders in many respects. Our share price clearly outperformed major indices, reaching an all-time peak on 22nd December 2005 at €33.45. This made us one of the strongest performers in the world aerospace and defence sector. In view of the Group’s financial strength and excellent prospects, the Board will be recommending payment of a dividend of €0.65 per share, an increase of 30% from the previous year.

We are also determined to become a market reference in the fields of corporate governance and corporate social responsibility through ensuring transparent management and reporting, complying with market expectations with regard to social, legal and statutory standards. Therefore, to give guidance to EADS employees, the Group’s Code of Ethics has been updated to reflect practices recommended by various codes and laws, and to align with best practice. It is based on EADS’ underlying values and is fully in line with recognised international standards. As such, EADS’ strategy envisions a sustainable balance between economic performance, consideration of all stakeholders’ interests and respect for the environment.

The Board of Directors appreciates that the management of EADS has succeeded in establishing your Company as a credible and reliable enterprise, not only for its customers, suppliers and employees, but in the eyes of the public as well. Our thanks and congratulations are due to everyone in the Group who has contributed to this result, which will be developed and further enhanced for the benefit of all EADS stakeholders, according to the highest standards of corporate governance.

For the future, the Board has taken action to guarantee continuity in its operations and its composition. We remain committed to the success of EADS and the implementation of its strategy of seeking profitable growth in civil aviation, space and defence by setting the standards in these markets. This will allow us to continue creating substantial value for our shareholders and, furthermore, contribute to the well-being of all our stakeholders.