For your Company, 2007 was a year of reorientation and a year of renewal.

In July, a new corporate governance structure took shape – a step towards good practices in a field where EADS had been a subject of controversy. The core shareholders, in order to ensure long-term competitiveness and performance of EADS, addressed important control and sovereignty challenges.

The various technical and industrial difficulties encountered in key programmes over the past two years weighed heavily on the 2007 full year results. It is evident that shortcomings in programme management not only cause delays that risk alienating customers, they also put severe strains on profitability. Nobody can be satisfied by such performance – neither the Board of Directors nor the management. Furthermore, they are not content with the insufficient future economic performance suggested by the company’s mid-term plan, drawn up at a punitive euro versus U.S. dollar exchange rate at 1.45. I believe that EADS’ share price performance reflects a similar judgment by the market.

We are confident, however, that the clarification of roles between Board and management and the simplification of the chain of command are key factors to foster future success for the Company – and its shareholders.

In the early years of EADS, we drew our dynamism from European cooperation; today, market presence and value creation must tap a wider, more global world. Recognising this, the core shareholders have relinquished Board seats and increased the number of independent members. The newly appointed personalities contribute not only experience and expertise, but also reinforce the entrepreneurial spirit and broaden the global outlook of the EADS Board of Directors. Clearly, this new Board proves more stimulating and more demanding for top management, as Board discussions also added emphasis on enhancing the Group’s profitability and reducing risks.

In keeping with market practice, the Audit Committee and the Remuneration & Nomination Committee are now headed by independent directors. The newly created Strategic Committee, which operates under my chairmanship, has the objective to prepare Board decisions on strategic matters. Its main role is to evaluate the Company’s overall strategy and portfolio composition as well as to assess major investments, product proposals and acquisition cases.

After a full year of operation under the new rules, the recomposed Board will evaluate its internal functioning in order to optimise its processes and to ensure adequate practices.

Beyond all the necessary industrial decisions in support of sustainable and profitable growth, portfolio rebalancing and cost optimisation, the Group’s interests need to be secured for the long-term. The Group needs stability to best serve its role of providing governments and society with solutions that secure sovereignty and strategic autonomy.

EADS management itself has repeatedly stated that the change process which started in 2007 needs to continue. Vision 2020, launched by Louis Gallois in his new role, the execution of Power8 restructuring plans at Airbus and the call for further measures in response to the continued weakening of the dollar, as well as the improvement of the programme management – all of this underscores a determination to renew EADS. My task and that of my Board colleagues is to make sure that the momentum the Company currently shows in facing and tackling its many challenges is sustained.

The Board of Directors is proposing to the Annual General Meeting of shareholders a dividend of €0.12 per share. This proposal is a gesture of appreciation for shareholders’ loyalty and an expression of trust in our ability to set EADS back on track for sustained profitability despite the remaining challenges.

To succeed, we need to show confidence, congruence of words and actions, mutual respect and transparency. Both the work of the Board of Directors and its relations to the Group’s top management are characterised by these values. The excellent personal and professional relationship between Louis Gallois and myself may stand as an example for bringing these values to life when building the future of EADS. Success also requires the motivation of our employees and commitment of our management. I want to thank everyone for their performance in 2007 and I look forward to their contributions in the period to come.

Rüdiger Grube
Chairman of the Board