Leonardo Spa · MIL:LDO
Leonardo Spa — Finmeccanica — FY2014 Earnings Presentation
32 slides from Leonardo Spa's earnings presentation, Mar 19, 2015
Slide 1: FY2014 Results Presentation
FY2014 Results Presentation Mauro Moretti Chief Executive Officer and General Manager Gian Piero Cutillo Chief Financial Officer London, 19 March 2015
Slide 2: Group Overview; Sector Results and Outlook
GROUP OVERVIEW (CEO and General Manager) SECTOR RESULTS AND OUTLOOK (CFO)
Slide 3: Key Messages
Key Messages Delivering on promises FY 2014 results in the top end of Guidance range EBITA >€1bn EBIT ca. €700mln New 5 year industrial plan launched Disposal of Transportation to Hitachi executed: a significant development in our focus on A,D&S Clear priorities set for 2015 and onwards 3
Slide 4: FY2014 Results Highlights
FY2014 Results Highlights Results ahead of expectations Robust commercial performance: orders at >€15bn with book to bill >1 Revenues close to €14.7bn EBITA improved bringing profitability at 7.4% (+100 b.p. YoY) Strong performance in Helicopters, Defence Electronics & Security and Aeronautics Step
Slide 5: New Industrial Plan launched in January 2015
New Industrial Plan launched in January 2015 10 things to take away 1. Serious turnaround plan ASSESS 2. Based on a rigorous review … and prudent assumptions 3. Major cost cutting to deliver a significant step up in profitability 4. New discipline on capex, R&D and working capital to drive a STRENGT
Slide 6: Disposal of the Transportation Division
Disposal of the Transportation Division Finmeccanica becomes a pure Aerospace, Defence & Security player Key step in the execution of the Industrial Plan shared in January Developing the business – focused on A,D&S Total exit from non core - residual portion <1% of total Revenues Binding agreements
Slide 7: 2015 Priorities
2015 Priorities 1. Execute Industrial Plan turnaround Complete transition to “One Single Operating Company” Focus on industrial processes in engineering, supply chain, manufacturing 2. Deliver as a focussed Aerospace, Defence & Security player Refine 'Go to market' model - market priorities (May); e
Slide 8: Group Overview; Sector Results and Outlook
GROUP OVERVIEW (CEO and General Manager) SECTOR RESULTS AND OUTLOOK (CFO)
Slide 9: 2014 Results: Key messages
2014 Results: Key messages Strong Commercial Performance, well above expectations, with Book to Bill >1 Revenues up 7% mainly driven by Aeronautics, Selex ES and Helicopters Strong profitability improvement EBITA at €1,080mln up 23% YoY as efficiencies and lower corporate costs more than offset impa
Slide 10: Focus on Group Orders
Focus on Group Orders Solid Commercial Performance, with Book to Bill >1 % Change vs. 2013 +3.9% +4.5% - 2.3% - 9.0% -64.2% +57.5% +3.7% € Mln 3,005 - 340 15,619 3,113 209 1,464 3,612 4,556 FY 2014 Good A,D&S performance driven by Helicopters (+4%YoY), thanks to UK MoD orders (AW101 and Apache Custo
Slide 11: Focus on Group Revenues
Focus on Group Revenues Strong performance in A,D&S % Change vs. 2013 +8.1% +11.3% - 15.2% +11.6% - 3.9% +14.7% +7.1% € Mln 2,025 - 367 14,663 495 3,144 1,413 3,577 4,376 FY 2014 Solid performance in A,D&S mainly driven by Helicopters: AW189, CH47 for the Italian Army, product support and AW101 prod
Slide 12: Focus on Group Profitability
Focus on Group Profitability Material step up YoY in EBITA and ROS € Mln 23 1,080 181 114 - 125 38 -3 - 22 878 -4 ROS 7.4% ROS 6.4% FY 2014 Strong underlying improvement in Helicopters, excluding one-off benefit of US Presidential Helicopter in 2013 DRS impact from losses more than made up at Group
Slide 13: Focus on Group FOCF
Focus on Group FOCF Positive, excluding extraordinary cash-out € Mln 255 725 ~100 mln extraordinary - 620 120 - 240 -256 -137 Cash from Dividends Investments Transportation FY2014 FOCF AW India cash- FY2014 FYFOCF operations from JVs excl. India out 2014 €256m of outflows on Indian Helicopters inclu
Slide 14: Focus on Net Result before extraordinary transactions
Focus on Net Result before extraordinary transactions “Back in the black” 2013 2014 € 388 mln € Mln 1,080 92 212 “below the line” more 84 € Mln € 892 mln than halved 692 443 878 423 386 179 70 83 -14 495 140 -649 +23% in EBITA driven by increasing revenues and improved efficiencies Financial expense
Slide 15: Helicopters
HELICOPTERS 4Q FY 2013 % 2013 % 2014 2014 € Mln Restated Change Restated Change Orders 1,473 2,137 (31.1%) 4,556 4,386 3.9% Revenues 1,340 1,051 27.5% 4,376 4,049 8.1% EBITA 164 145 13.1% 543 547 (0.7%) ROS % 12.2% 13.8% (1.6) p.p. 12.4% 13.5% (1.1) p.p. Strong performance in 2014 Activities on new
Slide 16: EU Defence Electronics and Security - Selex ES
EU DEFENCE ELECTRONICS AND SECURITY-Selex ES 4Q FY 2013 % 2013 % 2014 2014 € Mln Restated Change Restated Change Orders 1,661 1,634 1.7% 3,612 3,457 4.5% Revenues 1,310 970 35.1% 3,577 3,214 11.3% EBITA 122 51 n.a. 185 71 n.a. ROS % 9.3% 5.3% 4.1 p.p. 5.2% 2.2% 3.0 p.p. 2014 recorded a significant s
Slide 17: US Defence Electronics and Security - DRS
US DEFENCE ELECTRONICS AND SECURITY – DRS 4Q FY 2013 % 2013 % 2014 2014 $ Mln Restated Change Restated Change Orders 538 630 (14.6%) 1,945 1,991 (2.3%) Revenues 564 624 (9.6%) 1,877 2,213 (15.2%) EBITA 67 87 (23.0%) 31 194 (84.0%) ROS % 11.9% 13.9% (2.0) p.p. 1.7% 8.8% (7.1) p.p. Order intake in lin
Slide 18: Aeronautics
AERONAUTICS 4Q FY 2013 % 2013 % 2014 2014 € Mln Restated Change Restated Change Orders 1,584 1,787 (11.4%) 3,113 3,422 (9.0%) Revenues 1,009 983 2.6% 3,144 2,816 11.6% EBITA 89 38 n.a. 237 199 19.1% ROS % 8.8% 3.9% 4.9 p.p. 7.5% 7.1% 0.4 p.p. Good production performance, mainly B787, ATR as well as
Slide 19: Space and Defence Systems
SPACE 4Q FY 2013 % 2013 % 2014 2014 € Mln Restated Change Restated Change EBITA 26 19 36.8% 52 55 (5.5%) Revenues expected to grow, mainly thanks to manufacturing and launch operations services Business performance expected to improve, despite a decline in industrial profitability (unfavorable mix a
Slide 20: Transportation
TRANSPORTATION ANSALDO STS 4Q FY 2013 % 2013 % 2014 2014 € Mln Restated Change Restated Change Orders 586 470 24.7% 1,825 1,484 23.0% Revenues 434 381 13.9% 1,304 1,230 6.0% EBIT 44 39 12.8% 125 117 6.8% ROS 10.1% 10.2% (0.1) p.p. 9.6% 9.5% 0.1 p.p. (EBIT/Revenues) % ANSALDOBREDA 4Q FY 2013 % 2013 %
Slide 21: FY2015 Outlook Assumptions
FY2015 Outlook Assumptions Orders and Revenues: moderate growth, taking into account the changes in perimeter (B787 pass- through and DRS) Profitability: meaningful step up of 10% Below EBITA line: much lower volatility, with material improvement in the bottom line Restructuring costs: further decre
Slide 22: Focus on Group FOCF: 2015 expectations
Focus on Group FOCF 2015 expectations 2014A 2015E € Mln € Mln 255 ca. 130 ca. 900 725 ~100 mln extraordinary - 620 200 - 300 ca. - 750 120 ca. - 50 - 240 -256 -137 Cash from Dividends Investments Transportation FY2014 FOCF AW India cash- FY2014 Cash from operations Dividends Investments Transportati
Slide 23: FY2015 Guidance
FY2015 Guidance FY2014A FY2015E Old Guidance FY2015E New Guidance GROUP Reported Pro forma (incl. Transport.) A&D New orders € bn 15.6 12.6 14.0 – 14.5 12.0 – 12.5 12.0 – 12.5 Revenues € bn 14.7 12.7 14.0 – 14.5 12.0 – 12.5 12.0 – 12.5 EBITA €mln 1,080 980 1,150 – 1,200 1,080 – 1,130 1,080 – 1,130 F
Slide 24: Delivering on Industrial Plan: Medium Term Objectives
Delivering on Industrial Plan: Medium Term Objectives EBITA +20% and RoS +150b.p. from 2014 to 2016 SG&A reduction > 10% from 2013 to 2015 CAPEX and capitalized R&D rationalization > 20% from 2013 to 2017, rebalancing depreciation /investments ratio, significantly improving self-financing capacity O
Slide 25: Appendix
APPENDIX
Slide 26: Group Performance (1/2)
GROUP PERFORMANCE (1/2) 4Q FY 2013 % 2013 % 2014 2014 Restated Change Restated Change € Mln New Orders 6,266 6,950 (9.8%) 15,619 15,059 3.7% Backlog 38,234 36,831 3.8% Revenues 4,794 3,962 21.0% 14,663 13,690 7.1% EBITA 502 213 n.a. 1,080 878 23. 0% ROS % 10.5% 5.4 5.1 p.p. 7.4% 6.4% 1.0 p.p. EBIT 3
Slide 27: Transportation deal – Economics and financials
Transportation deal – Economics and financials As a result of the disposals, the € 600 mln net reduction on Group Net Debt at the end of 2015 will be as follows: Net cash of € 36 mln for the AnsaldoBreda and real estate assets disposal Cash of € 773 mln for ASTS disposal Deconsolidation of ASTS cash
Slide 28: Development costs capitalised as intangible assets
DEVELOPMENT COSTS CAPITALISED AS INTANGIBLE ASSETS AT 31 DECEMBER 2014 Self Funded Self Funded Total €mln National Security Other 01 Jan 2014 Opening Balance 1,167 430 1,597 Gross R&D capitalised 253 95 348 Depreciation and write offs -69 -66 -135 Disposals 0 0 0 Net R&D capitalised 184 29 213 Recla
Slide 29: Financial Position (as of end of December 2014)
FINANCIAL POSITION (as of end of December 2014) No refinancing needs before end 2017 Strong liquidity position Bonds have neither financial covenants nor rating pricing grids Average life ≈ 8 years (€mil) 46 46 Dollar Bond Sterling Bond 46 514 46 46 950 Euro Bond 600 600 EIB 500 500 358* 412 247 46
Slide 30: Liquidity Position (as of end of December 2014)
LIQUIDITY POSITION (as of end of December 2014) In order to cope with possible volatilities in financial needs, Finmeccanica can leverage: – 31 December cash balance of €1.5 Billion – Credit lines worth €2.8 Billion (confirmed and unconfirmed), undrawn at 31 Availability of December 2014 adequate
Slide 31: 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 32: Investor Relations & SRI Contacts
Investor Relations & Sustainable Responsible Investors (SRI) Contacts Raffaella Luglini Head of Investor Relations & SRI +39 06 32473.066 raffaella.luglini@finmeccanica.com Valeria Ricciotti Alessio Crosa Paolo Salomone Financial Communication Fixed Income ESG +39 06 32473.697 +39 06 32473.337 +39 0