Slide 1: FY 2020 Results Presentation
FY 2020 Results Presentation Rome, 10 March 2021
Slide 2: Agenda
Agenda > Key messages Alessandro Profumo, Chief Executive Officer > Industrial review Lucio Valerio Cioffi, General Manager > Financial review Alessandra Genco, Chief Financial Officer > Q&A > Appendix © 2019 Leonardo - Società per azioni 2
Slide 3: Key Messages
4Q/FY2020 Results Presentation Key Messages • We have successfully navigated the Group through 2020, resilient performance • Taking actions on optimising the portfolio for growth in our core businesses • Addressing challenges in businesses exposed to civil aeronautics • Strong foundations and core f
Slide 4: We successfully navigated 2020 with a strong, solid & resilient business performance
4Q/FY2020 Results Presentation 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% COMM
Slide 5: Strong reaction to crisis
4Q/FY2020 Results Presentation Strong reaction to crisis • Actions to get back to adequate levels of productivity delivered results • More than € 500 m of cost savings, exceeding our targets • Net investment savings of € 425 mln, ahead of plan PRODUCTIVITY SAVING MEASURES BEARING FRUIT BUDGET 2020 F
Slide 6: We see a clear path to improve efficiency, address issues in medium-longer term
4Q/FY2020 Results Presentation We see a clear path to improve efficiency, address issues in medium- longer term and mitigate effects in short term Focus on structural issues, mainly in civil businesses, to improve profitability and cash flow • Review of strategic options to accelerate transformation
Slide 7: Results achieved are showing we are on the right path
4Q/FY2020 Results Presentation Results achieved are showing we are on the right path Continuing to execute our strategic plan “Be Tomorrow-2030” based on strengthening the core, transforming to grow and mastering the new KOPTER DRS IPO of a Innovation Acquisition minority stake • Strengthening world
Slide 8: Strong confidence in our core business fundamentals
4Q/FY2020 Results Presentation Strong confidence in our core business fundamentals … well positioned for medium-long term • Core businesses delivering well, with resilient military/governmental • Addressing short-term challenges in a complex scenario • Robust 2021 guidance on orders & revenues, with
Slide 9: Agenda
Agenda > Key messages Alessandro Profumo, Chief Executive Officer > Industrial review Lucio Valerio Cioffi, General Manager > Financial review Alessandra Genco, Chief Financial Officer > Q&A > Appendix © 2019 Leonardo - Società per azioni 9
Slide 10: Focussed on shaping for the future
4Q/FY2020 Results Presentation Focussed on shaping for the future Mission and key priorities Focus on Streamline Civil processes Aeronautics Make Leonardo Addressing post Puzzling Covid issues in more flexible and competitive Commercial Aerostructures and existing strategic ATR business view towards
Slide 11: Positioning for the future: addressing post Covid challenges in civil Aeronautics
4Q/FY2020 Results Presentation Positioning for the future: addressing post Covid challenges in civil Aeronautics Two different paths for Aerostructures and ATR AEROSTRUCTURES ATR Taking action to address issues: clear roadmap Reinforcing leadership in regional market • Rationalise industrial sites t
Slide 12: New opportunities post COVID
4Q/FY2020 Results Presentation 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 & Intelligence
Slide 13: New opportunities post COVID: key role in Italy's recovery
4Q/FY2020 Results Presentation 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 GLOBA
Slide 14: Agenda
Agenda > Key messages Alessandro Profumo, Chief Executive Officer > Industrial review Lucio Valerio Cioffi, General Manager > Financial review Alessandra Genco, Chief Financial Officer > Q&A > Appendix © 2019 Leonardo - Società per azioni 14
Slide 15: Key financial highlights
4Q/FY2020 Results Presentation Key financial highlights • Strong commercial performance (book to bill 1x) and resilient top line • Solid EBITA in main businesses, offsetting worsening civil market and JVs • Record Q4 cash generation, as expected • Strong liquidity & financial flexibility • 2021 Guid
Slide 16: FY 2020 results
4Q/FY2020 Results Presentation 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 17: Order Intake
4Q/FY2020 Results Presentation Order Intake Continued strong commercial performance also supported by domestic customers € mln ∆ % YoY FY 2019A 14,105 Military/Governmental business (i.e. IMOS UK, NEES, 32 TH-73A for the US Navy and 31 NH90 helicopters for HELICOPTERS 4,494 -3.2% Germany) offsetting
Slide 18: Revenues
4Q/FY2020 Results Presentation Revenues Resilient top line performance € mln ∆ % YoY FY 2019A 13,784 NH90 Qatar and TH-73A US offsetting expected reduction on certain programmes and civil HELICOPTERS 3,972 -1.3% deliveries ELECTRONICS EUROPE* 4,147 -3.3% Slight decrease due to slowdown in bookings r
Slide 19: EBITA and Profitability
4Q/FY2020 Results Presentation EBITA and Profitability Solid EBITA performance, notwithstanding COVID-19 impacts € mln (RoS) RoS ∆ % YoY FY 2019A 1,250 9.1% Lower efficiency due to COVID-19 and less favourable mix mitigated by actions aimed at recovering HELICOPTERS 383 9.6% -11.1% productivity and
Slide 20: From EBITA to Net Result
4Q/FY2020 Results Presentation From EBITA to Net Result Non-cash one time write-off of the asset base of civil aeronautics programmes to reflect revised production schedule 2019A 2020A -25.0% -55.2% -70.4% YoY YoY YoY 1,251 43 28 1,153 27 263 938 333 21 147 100 822 € mln € mln 61 27 517 225 39 12 2
Slide 21: Impressive FOCF in Q4 to deliver on targets
4Q/FY2020 Results Presentation Impressive FOCF in Q4 to deliver on targets • Resilient performance at FOCF level as expected and promised • Working capital under control in non-civil activities • Lower investments also benefitting from extraordinary goverment grants cash-ins • Cost savings measures
Slide 22: Strong creditworthiness
4Q/FY2020 Results Presentation Strong creditworthiness • Anticipated refinancing of bonds maturing in 2021 taking advantage of favourable market conditions • Cost of funding reduced to 3% in advance of targets May 2020 July 2020 December 2020 € 2.0 bn new credit facilities(1) € 500 mln bond maturing
Slide 23: Strong liquidity position at € 5.6bn
4Q/FY2020 Results Presentation Strong liquidity position at € 5.6bn • Cash availability(1) and credit facilities ensure a Group’s liquidity above € 5.5 bn • Existing credit lines (confirmed and unconfirmed) equal to € 2.7 bn • New Credit Line signed in May 2020 equal to € 1.25 bn(2) €1.25bn €5.6bn €
Slide 24: True believers: ESG enhancing our future performance
4Q/FY2020 Results Presentation 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 in
Slide 25: Leonardo contributes to the SDGs through investments and innovation
4Q/FY2020 Results Presentation 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 impac
Slide 26: 2021 Guidance
4Q/FY2020 Results Presentation 2021 Guidance 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) 13.8 ca.
Slide 27: Q&A
Q&A © 2019 Leonardo - Società per azioni 27
Slide 28: Sector Results
SECTOR RESULTS © 2019 Leonardo - Società per azioni 28
Slide 29: Helicopters
4Q/FY2020 Results Presentation Helicopters Military-governmental supporting growth 4Q 2019 4Q 2020 % Change FY 2019 FY 2020 % Change € mln Orders 2,407 1,340 -44.3% 4,641 4,494 -3.2% Revenues 1,289 1,330 +3.2% 4,025 3,972 -1.3% EBITA 161 164 +1.9% 431 383 -11.1% RoS 12.5% 12.3% -0.2 p.p. 10.7% 9.6%
Slide 30: Helicopters
4Q/FY2020 Results Presentation Helicopters DELIVERIES BY PROGRAMME REVENUES BY CUSTOMER/SEGMENT FY2020 = 111 new units FY2020 AW169 AW189 /149 14 10 67% 63% 37% 25 AW109 / AW119 / 33% SW4 / AW009 48 AW139 /W3 9 5 NH90 AW101 Civil Military/Governamental OE CS&T/Other AW FY2019 = 156 new units FY2019
Slide 31: Defence Electronics & Security
4Q/FY2020 Results Presentation Defence Electronics & Security Growing Revenues and Profitability ELECTRONICS - EU 4Q 2019 4Q 2020 % Change FY 2019 FY 2020 % Change € mln Orders 1,780 2,464 38.4% 4,444 4,710 +6.0% Revenues 1,551 1,416 -8.7% 4,289 4,147 -3.3% 2021 OUTLOOK* EBITA 190 144 -24.2% 427 360
Slide 32: Aeronautics
4Q/FY2020 Results Presentation Aeronautics Solid Aircraft performance, Aerostructures still impacted by COVID-19 AIRCRAFT 4Q 2019 4Q 2020 % Change FY 2019 FY 2020 % Change € mln Orders 383 1,259 +221.9% 1,904 2,031 6.7% Revenues 827 930 +15.6% 2,329 2,634 +13.1% 2021 OUTLOOK* EBITA 132 151 +14.4% 32
Slide 33: Space
4Q/FY2020 Results Presentation Space Recovery of manufacturing and confirmed solid performance of satellite services 4Q 2019 4Q 2020 % Change FY 2019 FY 2020 % Change € mln EBITA 16 24 +50.0% 39 23 -41.0% 2021 OUTLOOK* • Volumes an profitability expected to increase supported by gradual recovery of
Slide 34: Appendix
APPENDIX © 2019 Leonardo - Società per azioni 34
Slide 35: 4Q/FY 2020 Results
4Q/FY2020 Results Presentation 4Q/FY 2020 Results Group Performance 4Q 2019 4Q 2020 % Change FY 2019 FY 2020 % Change € mln New Orders 5,526 5.244 -5.1% 14,105 13.754 -2.5% Backlog 36,513 35.516 -2.7% Revenues 4,650 4.385 -5.7% 13,784 13.410 -2.7% EBITA 565 441 -21.9% 1,251 938 -25.0% RoS 12.2% 10.1
Slide 36: Balanced debt maturity profile
4Q/FY2020 Results Presentation Balanced debt maturity profile Bond Dollar In € mil Bond Euro EIB Term Loan CDP DEBT MATURITY Average life: ≈ 4,9 years (1) …. Repayment Conditions of • €500mln bond issued in July 2020 is characterized by a 5 year bullet repayment New Debt Instruments • EIB financing
Slide 37: Development costs capitalised as intangible assets
4Q/FY2020 Results Presentation 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) Disposal
Slide 38: Covenant FY2020
4Q/FY2020 Results Presentation Covenant FY2020 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 Int
Slide 39: Defence Budget perspectives
4Q/FY2020 Results Presentation 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 growth
Slide 40: Current estimations on Helicopter market
4Q/FY2020 Results Presentation 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 >1
Slide 41: Safe Harbor Statement
4Q/FY2020 Results Presentation 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-loo
Slide 42: 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 42