Slide 1: Leonardo Presentation UBS Conference
Leonardo Presentation UBS Conference Alessandro Profumo Chief Executive Officer Alessandra Genco Chief Financial Officer 25 June 2020
Slide 2: Agenda
Agenda > Leonardo Overview > 1Q 2020 Results > Sector Results > Appendix © 2019 Leonardo - Società per azioni 2
Slide 3: Delivering long term sustainable growth
Delivering long term sustainable growth • A lot was achieved in recent years: we have delivered on promises and executed our Industrial Plan › Well balanced business › Solid Backlog › Met or beated targets on all metrics CASH GENERATION AND COMMERCIAL STRATEGY OPERATING PERFORMANCE FINANCIAL STRATEG
Slide 4: Well balanced business
Well balanced business Military / Governmental business accounts ca. 82% of 2019 Revenues; Civil ca. 18% 2019 REVENUES € 13.8 bn 2019 BACKLOG* € 36.5 bn GLOBAL PLAYER IN THE AEROSPACE, DEFENCE AND SECURITY BY DIVISION HELICOPTERS DEFENCE ELECTRONICS & SECURITY 45% 35% 25% 31% 1% 29% 34% HELICOPTERS
Slide 5: Our global presence
Our global presence Stronger international footprint WORLDWIDE PRESENCE Outstanding achievements • i.e. NH90 in Qatar • CUMULATED 2018-2019 ORDERS ca. € 30 bn • i.e. MH-139, TH-119 and MFoCS in US 18% 36% HELICOPTERS • i.e. M345 in Italy • i.e. AESA radar in UK (hundreds DEFENCE ELECTRONICS ca.150 c
Slide 6: Delivering on long term sustainable growth
Delivering on long term sustainable growth Strong focus on cost control and efficiencies • LEAP 2020 and Leonardo Production System launched, with results so far > € 200 mln 80% above target annualised reinvested • Continuous improvement identifying more opportunities savings for growth ROS RoS soli
Slide 7: Clear targets in our priority sectors
Clear targets in our priority sectors GLOBAL • World leader in Helicopters and in Simulation solutions & Training • Leader in Europe in Defence Electronics and reference partner for DoD and US primes • Key player in international cooperation programmes (i.e. Eurofighter LTE, Tempest) • Partner of ch
Slide 8: Clear view of the strategic path
Clear view of the strategic path MASTER THE NEW STRENGTHEN TRANSFORM ACCELERATING OUR CORE TO GROW INNOVATION • Keep strong focus on our core to fuel growth • Identify, develop, leverage, scale new • Adding new capabilities • Delivering the significant Backlog technologies “transversal” across the •
Slide 9: Actively managing current challenges
Actively managing current challenges • Proud of how our organisation and our people have responded • Moved quickly to keep our people safe and ensure business continuity • Relatively resilient military and governmental; civil demand slowdown • COVID-19 impact on production efficiencies, programme ex
Slide 10: What we are seeing
What we are seeing Current dynamics MARKET DYNAMICS OUR EXPERIENCE • Travel restrictions affecting • No major disruption to campaigns to date – but potential to have commercial campaign finalisation an effect across the Group SALES / • Slowdown in civil demand – civil ca. • OEMs crisis expected to i
Slide 11: Our actions and responses
Our actions and responses Clear recovery plan and mitigation actions PROTECTING OUR PEOPLE PROTECTING OUR BUSINESS – ACTIVELY USING ALL AVAILABLE LEVERS 1. ACTIVELY WORKING WITH DOMESTIC CUSTOMERS • Leveraging institutional support • Leveraging technologies in emerging opportunities • Moved fast 2.
Slide 12: Agenda
Agenda > Leonardo Overview > 1Q 2020 Results > Sector Results > Appendix © 2019 Leonardo - Società per azioni 12
Slide 13: 1Q 2020 highlights
1Q 2020 highlights Solid Order growth with COVID-19 beginning to impact performance • Good start to the year both commercially and operationally • Commercial strategy achieving targets in line with our expectations • Strong Q1 Orders at € 3.4 bn up 36% YoY with Book to Bill at ≈ 1 • Solid Backlog at
Slide 14: Order Intake
Order Intake Continuous positive commercial momentum Driven by IMOS Solid Driven by Aicraft (F- programme for UK contribution from 35, C-27J and EFA) MoD and AW119 Electronics and and Aerostructures contract for US Navy Leonardo DRS (ATR) +116.0% -2.3% +41.9% +35.9% ORDER BACKLOG YoY YoY YoY YoY € m
Slide 15: Revenues
Revenues 5% down YoY driven by Civil Helicopter deliveries, due to COVID-19 EFA Kuwait production Leonardo DRS COVID-19 affecting ramp-up offsetting offsetting slowdown of deliveries in civil (i.e B787 and ATR activities due to AW139) slowdown due to COVID-19 effects COVID-19 -13.4% +2.2% unchanged
Slide 16: EBITA and Profitability
EBITA and Profitability Performance affected by COVID-19 leading to lower revenues and lower productivity across all businesses Drop in Revenues Lower productivity Lower productivity and delivery and lower due to COVID-19 postponement (ATR) due to COVID-19 productivity due to and revenue mix effects
Slide 17: From EBITA to Net Result
From EBITA to Net Result Net Result affected by EBITA performance and higher financial expenses FX related 1Q 2019A 1Q 2020A -74.8% -80.8% -176.6% 163 -7 156 YoY YoY YoY -51 Forex fair value and hedging of € -1 mln -28 41 -4 -7 30 -50 77 € mln € mln -59 -31 -8 EBITA PPA EBIT Net financial Income Net
Slide 18: Strong liquidity position
Strong liquidity position • On May 6, 2020 Leonardo signed € 2.0 bn credit facilities with a pool of leading international bank › The new facilities have a maturity up to 24 months and have no financial covenants • The credit lines will support the Group’s financial flexibility and bolster liquidity
Slide 19: Balanced debt maturity profile
Balanced debt maturity profile In € mil Bond Dollar Bond Euro EIB Term Loan CDP DEBT MATURITY Average life: ≈ 4,5 years CREDIT RATING As of today Before last review Date of review Moody’s Ba1 / Stable Outlook Ba1 / Positive Outlook October 2018* S&P BB+ / Stable Outlook BB+ / Positive Outlook April
Slide 20: COVID-19 Impact on Divisions in Q1
What we are seeing COVID-19 Impact on Divisions in Q1 • Measures implemented to contain virus spread, including travel bans and lockdowns, impacted Q1 › Inability to finalise deliveries › Programme execution slowdown › Lower productivity HELICOPTERS ELECTRONICS AERONAUTICS Revenue EBITA Revenue EBIT
Slide 21: What we are seeing
What we are seeing • Leonardo strategically relevant for our domestic markets • Q1 reflecting initial impact of COVID-19 - Q2 expected to be affected the most • FY2020 COVID-19 impact will be significant but not yet reliably quantifiable: 2020 Guidance suspended • Mitigating actions promptly in plac
Slide 22: Sector Results
SECTOR RESULTS © 2019 Leonardo - Società per azioni 22
Slide 23: Helicopters
Helicopters DELIVERIES BY PROGRAMME 1Q 2019 1Q 2020 % Change FY 2019 € mln 1Q2020 = 11 new units Orders 688 1,486 +116.0% 4,641 Revenues 813 704 -13.4% 4,025 AW169 1 EBITA 56 18 -67.9% 431 AW189 /149 1 AW139 /W3 RoS 6.9% 2.6% -4.3 p.p. 10.7% 1 AW109 / AW119 / 6 SW4 / AW009 1 NH90 REVENUES BY CUSTOME
Slide 24: Defence Electronics & Security
Defence Electronics & Security ELECTRONICS - EU 1Q 2019 1Q 2020 % Change FY 2019 € mln Orders 823 862 +4.7% 4,444 Revenues 874 846 -3.2% 4,289 EBITA 76 46 -39.5% 427 RoS 8.7% 5.4% -3.3 p.p. 10.0% LEONARDO DRS 1Q 2019 1Q 2020 % Change FY 2019 € mln Orders 687 615 -10.5% 2,611 Revenues 461 523 +13.4%
Slide 25: Aeronautics and Space
Aeronautics 1Q 2019 1Q 2020 % Change FY 2019 € mln Orders 454 644 +41.9% 2,788 Revenues 644 644 unchanged 3,390 EBITA 37 -17 -145.9% 362 RoS 5.7% -2.6% -8.3 p.p. 10.7% Space 1Q 2019 1Q 2020 % Change FY 2019 € mln EBITA 1 -2 -300% 39 © 2020 Leonardo - Società per azioni 25
Slide 26: Appendix
APPENDIX © 2019 Leonardo - Società per azioni 26
Slide 27: 1Q2020 Results: Group Performance
1Q2020 Results Group Performance 1Q 2019 1Q 2020 % Change FY 2019 € mln New Orders 2,518 3,421 +35.9% 14,105 Backlog 36,575 37,000 +1.2% 36,513 Revenues 2,725 2,591 -4.9% 13,784 EBITA 163 41 -74.8% 1,251 RoS 6.0% 1.6% -4.4 p.p. 9.1% EBIT 156 30 -80.8% 1,153 EBIT Margin 5.7% 1.2% -4.5 p.p. 8.4% Net r
Slide 28: Covenant FY2019
Covenant FY2019 FY2019A FY2019A Post IFRS 16 Post IFRS 16 EBITDA(1) € 1,743 mln Group Net Debt € 2,847 mln Net Interest € -182 mln Leasing (IFRS 16) € -451 mln Financial Debt to MBDA € -651 mln Group Net Debt for Covenant € 1,745 mln EBITDA € 1,743 mln EBITDA / Net Interest 9.6 Group Net Debt / EBIT
Slide 29: Development costs capitalised as intangible assets
Development costs capitalised as intangible assets as at 31 December 2019 Self Funded Self Funded Total € mln National Security Other 01 January 2019 Opening Balance 1,760 476 2,236 Gross R&D capitalised 204 66 270 Depreciation and write offs -102 -32 -134 Disposals 0 -2 -2 Other Changes (*) -57 -5
Slide 30: 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 30