Israel Aerospace Industries sets record profit margin for 3rd year straight.
Highest annual sales since Company inception of approx. USD 4.5 billion
Record annual income of USD 148 million
Highest growth in Company history in EBITDA of 10% to approx. USD 436 million
Leap in order backlog to approx. USD 13.4 billion
- Growth in sales to approx. USD 4,477 million compared with approx. USD 4,184 million in 2020
- 11% increase in net income to approx. USD 148 million compared with net income of approx. USD 133 million in 2020
- 10% growth in annual EBITDA to approx. USD 436 million compared with approx. USD 397 million in 2020
- Gross profit in 2021 increased by USD 31 million, to approx. USD 696 million in 2021 compared with approx. USD 665 million in 2020
- 11% growth in annual operating profit to approx. USD 217 million compared with approx. USD 195 million in 2020
- 5% increase in R&D activity (in-house and contracted) in 2021 to approx. USD 1,083 million compared with approx. USD 1,036 million in 2020
- Leap in order backlog to approx. USD 13.4 billion, representing 3 years of operation, compared with approx. USD 12.6 billion at the end of 2020
- Free cash flow of approx. USD 905 million
Amir Peretz, Chairman of the IAI Board of Directors: "I would like to congratulate IAI on the great results, and thank the outgoing Chairman, CEO, and management, and emphasize the contribution of all the company employees. When we say 'the people behind the numbers' - it's not just a phrase. It is very much the hands and the minds that create the numbers. And the hands and minds, here at IAI, are exceptional. Despite the positive results, we have a long way to go, and we will strive to achieve results that will place us in line with the profits of other defense companies in Israel and around the world. An additional task ahead of us is the IPO - which is currently waiting for government approval. But until that happens, we will prepare so that as soon as we have the green light, we can set out and carry out the task as quickly as possible, while continuing to grow IAI, promote long-term company stability, and increase the scope of research and development."
Boaz Levy, IAI President and CEO: "This is the third consecutive year of record profit at IAI. This past year, the company has deepened its business activities in new markets and strengthened its position as a global leader in providing advanced technological solutions. This is a challenging period across the world. Despite the business challenges that emerged from the COVID-19 pandemic, we maintained close relations with our partners worldwide and built new global collaborations. Yet the world is currently facing challenges that will have a long-term impact. At this time, the importance and necessity for advanced and operational air defense systems is rising, and we are working closely with our customers to deliver our products as quickly as possible. IAI is a security and economic anchor for the State of Israel, and a source of innovation and technological know-how for our customers across the world. During this period, the responsibility imposed on the company management and employees is doubled, changing according to global needs and the pandemic, and we will lead the company to more growth. Together, we have achieved IAI's most profitable year since its inception.”
Israel Aerospace Industries Ltd., a leader in the Israeli military and commercial defense and aerospace markets, issues its consolidated financial statements for the year which ended December 31, 2021:
The Company's revenues in 2021 amounted to approx. USD 4,477 million compared with approx. USD 4,184 million in 2020, an increase of approx. USD 293 million (approx. 7%), mainly deriving from the increased sales in the Systems Missiles & Space Group and in the Military Aircraft Group.
The sales of the Military Groups (*) in 2021 increased by about 10% to approx. USD 3,867 million compared with approx. USD 3,508 million in 2020, an increase of approx. USD 359 million. The sales of the Aviation Group in 2021 increased by about 1% to approx. USD 1,196 million compared with approx. USD 1,187 million in 2020, an increase of approx. USD 9 million.
Sales for export in 2021 totaled approx. USD 3,219 million (about 72%) and sales to the local market totaled approx. USD 1,258 million (about 28%), compared with approx. USD 2,991 million (about 71%) and approx. USD 1,193 million (about 29%) in 2020, respectively.
Net income in 2021 increased by 11% to approx. USD 148 million (about 3.3% of sales), compared with net income of approx. USD 133 million in 2020 – the highest net income in IAI history. The net income of the Military Groups (*) in 2021 increased by about 8% to approx. USD 268 million compared with approx. USD 248 million in 2020, an increase of approx. USD 20 million. The net loss of the Aviation Group (*) in 2021 amounted to approx. USD 27 million compared with a net loss of approx. USD 32 million in 2020.
EBITDA in 2021 amounted to approx. USD 436 million, compared with approx. USD 397 million in 2020, an increase of 10% since 2020.
Gross profit in 2021 amounted to approx. USD 696 million (about 16% of sales), compared with approx. USD 665 million in 2020 (about 16% of sales), an increase of approx. USD 31 million, mostly deriving from the increased sales and profit of the Systems Missiles & Space Group, partly offset by the decrease in the profits of the Aviation Group. The gross profit of the Military Groups (*) in 2021 increased by about 10% to approx. USD 659 million compared with approx. USD 598 million in 2020 – an increase of approx. USD 61 million. The gross profit of the Aviation Group (*) in 2021 decreased to approx. USD 59 million compared with approx. USD 78 million in 2020.
Operating profit in 2021 increased by about 11% to approx. USD 217 million (about 4.8% of sales), compared with operating profit of approx. USD 195 million in 2020 (about 4.7% of sales), an increase of approx. USD 22 million, mostly deriving from the increase in gross profit and in other income and the decrease in employee retirement expenses. The operating profit of the Military Groups (*) in 2021 increased by 7% to approx. USD 306 million compared with approx. USD 285 million in 2020, an increase of approx. USD 21 million. The operating loss of the Aviation Group (*) in 2021 amounted to approx. USD 15 million compared with a loss of approx. USD 10 million in 2020.
Net financial expenses amounted to approx. USD 29 million in 2021, compared with net financial expenses of approx. USD 21 million in 2020, an increase of approx. USD 8 million. The increase in expenses mainly stems from recording exchange rate valuation losses in 2021 compared with exchange rate valuation gains in 2020 and from a decrease on the return on marketable financial assets and deposits. This increase was partly offset by a decrease in bank commissions and a decrease in interest expenses on bonds, as well as by income recorded on an investee investment component measured at fair value.
Research and Development activity (in-house and contracted) in 2021 grew to approx. USD 1,083 million, compared with approx. USD 1,036 million in 2020, an increase of about 5% since 2020.
In-house R&D expenses in 2021 grew to approx. USD 204 million, compared with approx. USD 196 million in 2020 (accounting for about 4.6% and 4.7% of sales, respectively), an increase of approx. USD 8 million.
Net tax expenses in 2021 amounted to approx. USD 46 million, similarly to 2020. It should be noted that the Company’s income is subject to ordinary corporate tax rate of 23% in Israel and the Company is not entitled to any tax benefits pursuant to the Israeli Law for the Encouragement of Capital Investments, 1959, as it is a wholly government-owned company. The divestiture of any interests in the Company, even at a miniscule rate, to a non-government party will render the Company eligible for a reduced corporate income tax rate as per said Law.
The order backlog at the end of 2021 amounted to approx. USD 13.4 billion, compared to approx. USD 12.6 billion at the end of 2020. 78% of the order backlog is held for sale to foreign customers that are widely geographically dispersed, based on a large variety of projects, and secures 3 years of operations given the current sales volumes.
Cash flows: in 2021, the Company recorded positive cash flows from operating activities of approx. USD 146 million compared with positive cash flows from operating activities of approx. USD 40 million in 2020.
Main data for Q4 2021
The Company's sales in Q4 2021 amounted to USD 1,272 million, compared with USD 1,100 million in Q4 2020, an increase of approx. 16%.
Gross profit in Q4 2021 amounted to USD 196 million (15.4% of sales), compared with USD 200 million (18.2% of sales) in Q4 2020.
Operating profit in Q4 2021 amounted to USD 27 million (2.1% of sales), compared with operating profit of about USD 32 million (2.9% of sales) in Q4 2020.
R&D expenses in Q4 2021 amounted to approx. USD 77 million, compared with USD 79 million in Q4 2020.
Net finance expenses in Q4 2021 amounted to USD 7 million, similarly to Q4 2020.
Net income in Q4 2021 amounted to USD 17 million (1.3% of sales), compared with net income of USD 21 million (1.9% of sales) in Q4 2020.
