Leonardo Spa · MIL:LDO
Leonardo Spa — 7th CEO Conference, Mediobanca 2021
37 slides from Leonardo Spa's conference presentation, Jun 23, 2021
Slide 1: 7th CEO Conference Mediobanca
7th CEO Conference Mediobanca 23rd June 2021
Slide 2: Agenda
Agenda > Key messages > 1Q 2021 Results > Sector Results > Appendix © 2019 Leonardo - Società per azioni 2
Slide 3: Key Messages
Leonardo presentation June 2021 Key Messages • We have successfully navigated the Group through 2020 and 1Q2021, resilient performance • Taking actions on optimising the portfolio for growth in our core businesses • Addressing challenges in businesses exposed to civil aeronautics • Strong foundation
Slide 4: We successfully navigated 2020 with a strong, solid & resilient business performance
Leonardo presentation June 2021 We successfully navigated 2020 with a strong, solid & resilient business performance We delivered on Q4 as we said we would BACKLOG* € 35.5 bn ORDERS € 13.8 bn • Continued momentum despite 29% 18% 31% civil slowdown 10% 28% • Strong support from military / 20% 12% COM
Slide 5: Solid start to the year: progressing well with our plans
Leonardo presentation June 2021 Solid start to the year: progressing well with our plans First step to achieve our FY2021 Guidance BACKLOG* € 36.4 bn ORDERS € 3.4 bn 17% 24% LEVERAGING OUR • Benefitting from the 30% 14% 26% BACKLOG resilience of 19% 12% 59% IN A COMPLEX GLOBAL military/governmental
Slide 6: Strategic progress update: taking actions on portfolio
Leonardo presentation June 2021 Strategic progress update Taking actions on portfolio AEROSTRUCTURES • Proactive review of options to accelerate transformation and address structural issues REVIEW • Including rationalising industrial sites; investing to increase efficiency/flexibility; headcount red
Slide 7: Strategic progress update: addressing post Covid challenges in civil Aeronautics
Leonardo presentation June 2021 Strategic progress update Addressing post Covid challenges in civil Aeronautics AEROSTRUCTURES ATR Taking action to address issues: clear roadmap Reinforcing leadership in regional market • Rationalise industrial sites towards programmes and • Turboprop market to reco
Slide 8: Leonardo and HENSOLDT Strategic partnership
Leonardo presentation June 2021 Strategic progress update Leonardo and HENSOLDT Strategic partnership Key transaction terms Access to a wider international customer base • Leonardo to acquire a 25.1% stake in German HENSOLDT from KKR • Total purchase consideration of €606 million • Establishment of
Slide 9: Key business strengths
Leonardo presentation June 2021 Key business strengths Confidence in the medium and long term potential in our main businesses Helicopters Defence Electronics Aircraft Electronics • Demonstrated strength in current conditions • Strong order book • Structurally strong business • Well balanced in mili
Slide 10: New opportunities post COVID
Leonardo presentation June 2021 New opportunities post COVID Leveraging existing assets, capabilities and technologies to support Italian and European Next Gen ASSETS CROSS BUSINESS CORE COMPETENCES Predictive Simulation Big Data Management High Performance Computing Artificial Command & Intelligenc
Slide 11: Agenda
Agenda > Key messages > 1Q 2021 Results > Sector Results > Appendix © 2019 Leonardo - Società per azioni 11
Slide 12: FY 2020 results
Leonardo presentation June 2021 FY 2020 results 2020 targets met and exceeded at Order intake and FOCF level • Successfully navigated 2020 with a strong, solid & resilient business performance OPERATING CASH GENERATION AND COMMERCIAL STRATEGY PERFORMANCE FINANCIAL STRATEGY • Orders € 13.8 bn • EBITA
Slide 13: 1Q 2021 highlights
Leonardo presentation June 2021 1Q 2021 highlights Confirming growing path • Continued strong demand for our products supports growing top line • Backlog at € 36.4 bn • Order intake of € 3.4 bn, flat YoY, with no jumbo orders included • Revenues at € 2.8 bn, up 7.7% YoY • Recovery in profitability •
Slide 14: Order Intake
Leonardo presentation June 2021 Order Intake Commercially strong, reflecting continued strength of domestic military / governmental business € mln ∆ % YoY 1Q2020A 3,421 YoY performance decrease due to IMOS contract booked in 1Q20. New orders HELICOPTERS 855 -42.6% in 1Q21 for the supply of 36 TH-73A
Slide 15: Revenues
Leonardo presentation June 2021 Revenues Solid performance confirming growing path € mln ∆ % YoY 1Q2020A 2,591 HELICOPTERS 792 +12.5% Ramp-up in military/governmental (NH90 Qatar and TH-73A US Navy) ELECTRONICS EUROPE* 931 +10.0% Strong increase across all business areas LEONARDO DRS* 565 +8.0% Cons
Slide 16: EBITA and Profitability
Leonardo presentation June 2021 EBITA and Profitability Improving profitability across the business; COVID-19 affecting Aerostructures € mln (RoS) RoS ∆ % YoY 1Q2020A 41 1.6% HELICOPTERS 31 3.9% +72.2% Higher volumes and improved industrial efficiency ELECTRONICS EUROPE 79 8.5% +71.7% Higher volumes
Slide 17: From EBITA to Net Result
Leonardo presentation June 2021 From EBITA to Net Result Net Result benefitting from EBITA increase 1Q 2020A 1Q 2021A -74.8% -80.8% -176.6% +131.7% +150.0% +96.6% YoY YoY YoY YoY YoY YoY 41 -4 30 95 -11 -7 -50 -4 -59 -5 75 -46 € mln € mln -31 -8 -31 -2 EBITA Restructuring PPA EBIT Net financial Exch
Slide 18: Strong liquidity position at ca. € 4.2 bn
Leonardo presentation June 2021 Strong liquidity position at ca. € 4.2 bn • Cash availability and credit facilities ensure a Group’s liquidity above € 4.2 bn • Existing credit lines (confirmed and unconfirmed) equal to € 2.6 bn • Credit Line signed in May 2020 equal to € 1.25 bn(1) €1.25bn €4.2bn €0
Slide 19: True believers ESG enhancing our future performance
Leonardo presentation June 2021 True believers ESG enhancing our future performance Key results achieved • ESG is forefront of our minds and its been part of our journey for 10 years now 5 CAPITALS 3 “P’s” FINANCIAL • Solid FY2020 Results CAPITAL GROWTH OPPORTUNITIES PEOPLE HUMAN • 9,000 employees i
Slide 20: Leonardo contributes to the SDGs through investments and innovation
Leonardo presentation June 2021 Leonardo contributes to the SDGs through investments and innovation First Integrated Reporting in 2020 • In 2021-2022, Leonardo invests on yearly average around € 600-700 mln(1) • Leonardo commits to around 50% of SDGs-aligned investments • The initiatives mainly impa
Slide 21: 2021 Guidance confirmed
Leonardo presentation June 2021 2021 Guidance confirmed Assuming progressive improvement in the global health situation through the year with consequent normalization of operating / market conditions 2021E FY2021 FY2020A • Military/governmental business robust and resilient Guidance New Orders (€ bn
Slide 22: Closing remarks
Leonardo presentation June 2021 Closing remarks • Continued good commercial progress with continuous order intake distributed across the Group • Confirmed growth path in revenues • Solid industrial performance • Robust profitability • Cash flow in line with plan • Progress towards ESG Goals: ESG tar
Slide 23: Agenda
Agenda > Key messages > 1Q 2021 Results > Sector Results > Appendix © 2020 Leonardo - Società per azioni 23
Slide 24: Helicopters
Leonardo presentation June 2021 Helicopters DELIVERIES BY PROGRAMME 1Q 2021 1Q 2020 % Change FY 2020 € mln 1Q2021 = 13 new units Orders 855 1,486 -42.5% 4,494 AW169 6 Revenues 792 704 +12.5% 3,972 1 AW189 /149 EBITA 31 18 +72.2% 383 2 AW109 / AW119 3 1 RoS 3.9% 2.6% +1.3 p.p. 9.6% AW139 NH90 REVENUE
Slide 25: Defence Electronics & Security
Leonardo presentation June 2021 Defence Electronics & Security ELECTRONICS – EU 1Q 2021 1Q 2020 % Change FY 2020 € mln Orders 1,544 862 +79.1% 4,710 Revenues 931 846 +10.0% 4,147 2021 OUTLOOK* EBITA 79 46 +71.8% 360 • Slight growth in revenues recovering 2020 RoS 8.5% 5.4% +2.6 p.p. 8.7% pandemic sl
Slide 26: Aeronautics
Leonardo presentation June 2021 Aeronautics AIRCRAFT 1Q 2021 1Q 2020 % Change FY 2020 € mln Orders 595 515 +15.5% 2,031 Revenues 510 431 +18.3% 2,634 2021 OUTLOOK* EBITA 47 26 +80.8% 355 • Aircraft production increase driven by RoS 9.2% 6.0% +3.2 p.p. +13.5% EFA Kuwait, F35 and proprietary AEROSTRUC
Slide 27: Space
Leonardo presentation June 2021 Space 1Q 2021 1Q 2020 % Change FY 2020 € mln EBITA 3 -2 +250.0% 23 2021 OUTLOOK* • Volumes an profitability expected to increase supported by gradual recovery of manufacturing • Confirmed solid performance of satellite services *In absence of further worsening of the
Slide 28: Appendix
APPENDIX © 2019 Leonardo - Società per azioni 28
Slide 29: 1Q 2021 Results: Group Performance
Leonardo presentation June 2021 1Q 2021 Results Group Performance 1Q 2021 1Q 2020 % Change FY 2020 € mln New Orders 3,421 3,421 - 13.754 Backlog 36,414 37,000 -1.6% 35.516 Revenues 2,790 2,591 +7.7% 13.410 EBITA 95 41 +131.7% 938 RoS 3.4% 1.6% +1.8 p.p. 7% EBIT 75 30 +150% 517 EBIT Margin 2.7% 1.2%
Slide 30: Balanced debt maturity profile
Leonardo presentation June 2021 Balanced debt maturity profile No refinancing needs until 2022 In € mil Bond Dollar Bond Euro EIB Term Loan DEBT MATURITY CDP Average life: ≈ 4,7 years CREDIT RATING As of today Before last review Date of review Moody’s Ba1 / Stable Outlook Ba1 / Positive Outlook Octo
Slide 31: Development costs capitalised as intangible assets
Leonardo presentation June 2021 Development costs capitalised as intangible assets as at 31 December 2020 Self Funded National Self Funded Other Total Security € mln 01 January 2020 Opening Balance 1,805 503 2,308 Gross R&D capitalised (18) 121 103 Depreciation and write offs (56) (88) (144) Disposa
Slide 32: Covenant
Leonardo presentation June 2021 Covenant FY2020A FY2020A Post IFRS 16 Post IFRS 16 EBITDA* € 1,378 mln Group Net Debt € 3,318 mln Net Interest € 168 mln Leasing (IFRS 16) - € 555 mln Financial Debt to MBDA - € 663 mln Group Net Debt for Covenant € 2,100 mln EBITDA* € 1,378 mln EBITDA / Net Interest
Slide 33: New opportunities post COVID: key role to play in Italy's recovery
Leonardo presentation June 2021 New opportunities post COVID …. key role to play in Italy’s recovery Leonardo Technological Enablers (Cloud computing – High Performance Computer – AI – Predictive Simulation – Decision Support – C2 – Cyber) Global Monitoring Smart City Health Digital PA Logistic GLOB
Slide 34: Defence Budget perspectives
Leonardo presentation June 2021 Defence Budget perspectives USA Asia Pacific • USA: the main defense spender • China the main spender CAGR 19-25 worldwide (> 700B $ in 2020) CAGR 19-25 • Significant Defense budgets in ~ +4.1% ~ -0.5% NA ~ +0.7% LA South Korea, India and Japan, with • Return to growt
Slide 35: Current estimations on Helicopter market
Leonardo presentation June 2021 Current estimations on Helicopter market CIVIL REFERENCE MARKET GLOBAL MILITARY MARKET GLOBAL CS&T MARKET Market value of new western-built* helicopters ($bn) Total market value ($bn) Total market value ($bn) $3,0bn ~$15bn ~$20bn $19,2bn $13,6bn Medium/Heavy ~$2,5bn >
Slide 36: Safe Harbor Statement
Leonardo presentation June 2021 SAFE HARBOR STATEMENT NOTE: Some of the statements included in this document are not historical facts but rather statements of future expectations, also related to future economic and financial performance, to be considered forward-looking statements. These forward-lo
Slide 37: Contacts
Contacts Valeria Ricciotti Head of Investor Relations and Credit Rating Agencies +39 06 32473.697 valeria.ricciotti@leonardocompany.com Leonardo Investor Relations and Credit Rating Agencies +39 06 32473.512 ir@leonardocompany.com leonardocompany.com © 2019 Leonardo - Società per azioni 37