Slide 1: 3Q/9M 2017 Results Presentation
3Q/9M 2017 Results Presentation Alessandro Profumo Chief Executive Officer Alessandra Genco Chief Financial Officer Rome, 9 November 2017
Slide 2: Agenda
1. 2017 UPDATE Alessandro Profumo - CEO 2. 2017 FINANCIAL REVIEW 3Q/9M RESULTS AND OUTLOOK Alessandra Genco - CFO 3. TAKING ACTION TO BUILD SUSTAINABLE LONG-TERM GROWTH Alessandro Profumo - CEO 4. Q&A 2
Slide 3: 2017 tougher than expected, fundamentals and medium-term opportunities confirmed
2017 tougher than expected, fundamentals and medium-term opportunities confirmed 9 months results broadly in line in Aeronautics and Defence Electronics but affected by Helicopters Year as a whole will be tougher than expected Helicopters expected to be impacted by continuous market and execution ch
Slide 4: 2017 Update: Providing clarity on Helicopters
2017 Update Providing clarity on Helicopters Progress Current headwinds Long-term confidence 9M2017A Market challenges Core strengths Lower volumes Great engineers Aeronautics Broadly in line Over supply vs demand World class product portfolio Defense & Broadly in line Eletronics Competitive pricing
Slide 5: Agenda
1. 2017 UPDATE Alessandro Profumo - CEO 2. 2017 FINANCIAL REVIEW 3Q/9M RESULTS AND OUTLOOK Alessandra Genco - CFO 3. TAKING ACTION TO BUILD SUSTAINABLE LONG-TERM GROWTH Alessandro Profumo - CEO 4. Q&A © 2016 Leonardo - Società per azioni 5
Slide 6: Financial Review: Group performance YTD broadly on track
Financial Review Group performance YTD broadly on track; FY 2017 tougher than expected 9 months results broadly in line in Aeronautics and Defence Electronics but affected by Helicopters Good commercial performance across the Group Stable revenues RoS at 8.8% reflects solid Aeronautics and Defence E
Slide 7: New Orders: Good momentum confirmed
New Orders Good momentum confirmed € Mln + 11.2% + 3.8% - 79.9% € 7.95 bln EFA Kuwait % Ch. vs. 9M2016, +5% excluding EFA Kuwait Ca. € 7.5 bln 9M 2017 © 2016 Leonardo - Società per azioni 7
Slide 8: Revenues: Stable despite forex headwinds
Revenues Stable despite forex headwinds € Mln - 8.2% + 2.6% + 6.2% - 2.5% % Ch. vs. 9M2016 Net of ca. € 110 mln of negative exchange rate 9M 2017 © 2016 Leonardo - Società per azioni 8
Slide 9: EBITA and Profitability: Robust performance
EBITA and Profitability Robust performance € Mln - 16.5% + 2.2% + 4.5% - 5.8% % Ch. vs. 9M2016 Net of ca. € 10 mln of negative exchange rate 9M 2017 © 2016 Leonardo - Società per azioni 9
Slide 10: Net Result Before Extraordinary Transactions
Net Result Before Extraordinary Transactions 9M2016 9M2017 - 5.8% - 9.5% - 20.7% € Mln € Mln 746 703 631 571 343 272 Lower taxes partially offsetting slightly higher restructuring and Net financial expenses (benefitting from positive fair value in 2016 for € 36 mln) © 2016 Leonardo - Società per azi
Slide 11: Improving balance sheet: Financial position and Rating
Improving balance sheet Financial position (as of end of September 2017) and Rating FINANCIAL POSITION Bond 4,816 Bank Debt including EIB Loan 283 Cash Available (1,574) Other financial assets/liabilities 479 4,004 (€mil) Average life: ≈ 6 years Debt maturity profile Dollar Bond Sterling Bond Euro B
Slide 12: Updated FY2017 Guidance
Updated FY2017 Guidance FY2017E FY2017E FY2016A Old New (*) Assuming New orders € bn 20.0 12.0 – 12.5 ca. 12.0 (*) finalization of C27J export contracts Revenues € bn 12.0 ca. 12.0 11.5 – 12.0 (**) Assuming cash- EBITA €mln 1,252 1,250 – 1,300 1,050 – 1,100 in of EFA Kuwait payments related to 2017
Slide 13: Agenda
1. 2017 UPDATE Alessandro Profumo - CEO 2. 2017 FINANCIAL REVIEW 3Q/9M RESULTS AND OUTLOOK Alessandra Genco - CFO 3. TAKING ACTION TO BUILD SUSTAINABLE LONG-TERM GROWTH Alessandro Profumo - CEO 4. Q&A © 2016 Leonardo - Società per azioni 13
Slide 14: Taking action to build sustainable long term growth
Taking action to build sustainable long term growth Continued confidence in our core strengths Clear and realistic on short – term issues Enduring benefits of industrial turnaround Confidence in 3 core pillars of growth Helicopters; Defence Electronics; Aeronautics © 2016 Leonardo - Società per azio
Slide 15: Clear priorities to build sustainable long-term growth
Clear priorities for to build sustanable long-term growth CUSTOMERS Commercial approach and Customer relationships intimacy Affordable Cash and focused conversion FINANCIAL product portfolio DISCIPLINE Values & PRODUCTS Culture Investment Customer Grade Support & Service Relentless Project focus on
Slide 16: Key Priorities – Taking actions
Key Priorities – Taking actions Organization & People New appointments to be more efficient, effective and customer focused, mainly leveraging on internal resources «One voice» approach with all stakeholders (External Relations, Communication, Italian Institutional Affairs, Investor Relations & Sust
Slide 17: Strengthening commercial effort and focusing on customer support
Strengthening commercial effort and focusing on customer support Plan Actions Taken New CCO and CCO Group Organisation Foreign Office review Rebuilding Commercial Network Unification of name and branding Clear mission agreed with each local Office Establish Integrated Campaign Teams Customer Support
Slide 18: Key messages
Key messages 2017 tougher than expected Continued confidence in medium-term opportunity Core strengths, fundamentals and 3 key pillars for the Group confirmed © 2016 Leonardo - Società per azioni 18
Slide 19: Q&A
Q&A 19
Slide 20: Sector Results
SECTOR RESULTS 20
Slide 21: 3Q/9M 2017 results: Helicopters
3Q/9M 2017 results Helicopters 3Q 9M FY % % 2016 2017 2016 2017 2016 € Mln Change Change Orders 580 568 (2.1%) 1,538 1,710 11.2% 3,737 Revenues 857 757 (11.7%) 2,565 2,355 (8.2%) 3,639 EBITA 83 64 (22.9%) 285 238 (16.5%) 430 ROS % 9.7% 8.5% (1.2) p.p. 11.1% 10.1% (1.0) p.p. 11.8% Higher orders YoY,
Slide 22: 3Q/9M 2017 results: Electronics, Defence & Security Systems
3Q/9M 2017 results Electronics, Defence & Security Systems* 3Q 9M FY % % 2016 2017 Change 2016 2017 Change 2016 Good commercial € Mln performance Orders 1,749 2,040 16.6% 4,239 4,400 3.8% 6,726 Revenues 1,130 1,204 6.5% 3,567 3,660 2.6% 5,468 Revenues in line YoY EBITA 92 75 (18.5%) 269 275 2.2% 558
Slide 23: 3Q/9M 2017 results: Aeronautics
3Q/9M 2017 results Aeronautics 3Q 9M FY % % 2016 2017 2016 2017 2016 € Mln Change Change Orders 305 183 (40.0%) 9,790 1,963 (79.9%) 10,158 Revenues 681 739 8.5% 2,060 2,187 6.2% 3,130 EBITA 83 75 (9.6%) 198 207 4.5% 347 ROS % 12.2% 10.1% (2.1 p.p.) 9.6% 9.5% (0.1 p.p.) 11.1% Good Order intake in bot
Slide 24: 3Q/9M 2017 results: Space
3Q/9M 2017 results Space 3Q 9M FY % % 2016 2017 2016 2017 2016 € Mln Change Change EBITA 14 10 (28.6%) 43 37 (14.0%) 77 Lower contribution due to lower profitability in Services, and higher taxes in Manufacturing 2017 Profitability in line with 2016 © 2016 Leonardo - Società per azioni 24
Slide 25: Appendix
APPENDIX 25
Slide 26: 3Q/9M 2017 results: Group Performance
3Q/9M 2017 results Group Performance 3Q 9M FY % % 2016 2017 2016 2017 2016 Change Change € Mln New Orders 2,637 2,884 9.4% 15,504 7,945 (48.8%) 19,951 Backlog 34,589 33,931 (1.9%) 34,798 Revenues 2,621 2,658 1.4% 8,034 7,984 (0.6%) 12,002 EBITA 274 221 (19.3%) 746 703 (5.8%) 1,252 ROS % 10.5% 8.3% (
Slide 27: Availability of adequate committed liquidity lines
LIQUIDITY POSITION (as of end of September 2017) In order to cope with possible swings in financing needs, Leonardo can leverage: – 30 September cash balance of approx. €1.6 Billion Availability of – Credit lines worth €2.7 Billion (confirmed and unconfirmed) adequate The Revolving Credit Facility
Slide 28: Safe Harbor Statement
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-looking statements are based on Co
Slide 29: Contacts
ir@leonardocompany.com Contacts www.leonardocompany.com/investors Raffaella Luglini EVP External Relations, Communication, Italian Institutiona Affairs, Investor Relations and Sustainability +39 06 32473.066 raffaella.luglini@leonardocompany.com Valeria Ricciotti Manuel Liotta Equity & Fixed Income