Leonardo Spa · MIL:LDO
Leonardo Spa — Leonardo Spa Ord — Q2 2024 Earnings Presentation
43 slides from Leonardo Spa's earnings presentation, Jul 30, 2024
Slide 1: 2Q/1H 2024 Results Presentation
2Q/1H 2024 Results Presentation Rome, 30 July 2024
Slide 2: Agenda
Agenda • Executing the Industrial Plan Roberto Cingolani, Chief Executive Officer and General Manager • 2Q/1H 2024 Results Alessandra Genco, Chief Financial Officer • Q&A • Appendix 2 © 2024 Leonardo - Società per azioni 2Q/1H 2024 Results
Slide 3: Solid first half results
Solid first half results with continued progress across all Group KPIs* 1H23 1H23 pro- 1H24 Change** forma* New Orders, €bn 8.7 8.9 10.3 15.6% Revenue, €bn 6.9 7.2 8.0 10.9% EBITA, €M 430 444 503 13.3% ROS, % 6.2% 6.2% 6.3% +0.1 p.p. FOCF, €M -517 -548 -502 8.4% Net debt, €bn 3.6 3.6 3.0 * -18.2% FY
Slide 4: Fully focussed on Industrial Plan: Executing on the arsenal of initiatives
Fully focussed on Industrial Plan: Executing on the “arsenal” of initiatives Action area Progress Organic Digitalisation • Developing strategies to leverage digital twin, AI, product digitalization empowering 1 • Multidomain Operation initiative with Italian MoD growth business • UAS – rationalising
Slide 5: Digitalisation empowering business: main results
Digitalisation empowering business: main results DIGITAL TWIN & BIG DATA FOR HELICOPTER AND AIRCRAFT SMART FACTORY LEONARDO MULTI DOMAIN INITIATIVE DEVELOPING STRATEGY TO LEVERAGE DIGITAL TWIN, AI ACROSS SOLUTIONS MAKE OUR CUSTOMERS READY TO SUCCESSFULLY FACE THE MULTIDIMENSIONAL CHALLENGES OF THE D
Slide 6: Portfolio streamlining
Portfolio streamlining • Agreement signed in May to sell Underwater business (formerly • Underwater Armament Systems – WASS) to Fincantieri rationalising portfolio, achieving • Valuation up to a maximum of €415M, with a €115M component more effective defence and global linked to 2024 performance com
Slide 7: Accelerating efficiency boost: exceeding 2024 targeted savings
Accelerating efficiency boost: exceeding 2024 targeted savings compensating for shortfall in Aerostructures and Space Telco Manufacturing (5 yrs avg) 2024 Efficiency Boost Update Saving Category 1H 2024 Procurement 70% Corporate 8% FY 2024E Travels 9% ca. €190 mln Business/Product Disposal 13% Total
Slide 8: Signed MoU with Rheinmetall for a strategic JV in land domain
Signed MoU with Rheinmetall for a strategic JV in land domain paving the way for EU defence • Leonardo + Rheinmetall 50:50 JV as lead system Integrator and prime- contractor for development and production of next-generation land vehicles Workshare analysis according to the requirements of the Italia
Slide 9: MoU with Airbus to support NH90 for the next decades
MoU with Airbus to support NH90 for the next decades Working together to • Strengthen in-service support Support NH90 over the the next decades • Manage obsolescence • Upgrade core system and mission system to ensure the platform continues to deliver its NH90 Helicopter value • First tactical and ta
Slide 10: Strenghtening international alliances
Strenghtening international alliances • New concept model of next generation combat aircraft unveiled at Farnborough 2024 • strong commitment and progress to test and evolve the GCAP - new-generation design, moving closer towards the next phase of the system of systems for programme multidomain oper
Slide 11: Key bolt on acquisitions below 15% of Divisional Revenues
Key bolt on acquisitions below 15% of Divisional Revenues Scouting opportunities • Continue to scout for opportunities in Cyber at European level to strengthen Cyber, • Final negotiations underway for acquisition of Italian company that will final negotiations strengthen LDO solutions for resilience
Slide 12: The new Space Division – pave the way to the future
The new Space Division – pave the way to the future • Telespazio Fully Consolidated • New LoB for Space Electronics fully integrated New Space Division • Full leveraging on Thales Alenia Space activities in earth observation and exploration • E-Geos for Geo Information and ISR • Satellite services (
Slide 13: Guidelines of Aerostructures Industrial Plan
Guidelines of Aerostructures Industrial Plan • B787 activities carried out in Grottaglie plant • The facility is designed for the production of B787 fuselage sections Focus on Grottaglie plant • One of the most innovative industrial sites in Italy • Total area of 364,720 m2 (110,200 m2 covered) • em
Slide 14: Selected enabling factors underpinning the strategic plan
Selected enabling factors underpinning the strategic plan 14 © 2024 Leonardo - Società per azioni
Slide 15: Strong position across ESG ratings and anti-corruption leadership
Strong position across ESG ratings and confirmed as a leading company in the fight against corruption o Anti-Corruption System Certification pursuant to the international standard ISO 37001:2016 renewed in July 2024 o Certification achieved for the first time in 2018 o The system is subject to surve
Slide 16: Agenda
Agenda • Executing the Industrial Plan Roberto Cingolani, Chief Executive Officer and General Manager • 2Q/1H 2024 Results Alessandra Genco, Chief Financial Officer • Q&A • Appendix 16 © 2024 Leonardo - Società per azioni 2Q/1H 2024 Results
Slide 17: Key messages
Key messages - Strong commercial Backlog > € 43 bn momentum +16% Orders 1 Top line Growth - Delivery of record Revenues +11% backlog - Good performance 2 Higher in Defence Operating profit EBITA +13% - Accelerated efficiency plan Cash flow 3 Strong cash in FOCF +8% strengthening Supporting Solid Inv
Slide 18: 1H 2024 Highlights: strong performance across Group KPIs
1H 2024 Highlights: strong performance across Group KPIs 1H23 1H23 pro- 1H24 Change** forma* New Orders, €bn 8.7 8.9 10.3 15.6% Revenue, €bn 6.9 7.2 8.0 10.9% EBITA, €M 430 444 503 13.3% ROS, % 6.2% 6.2% 6.3% +0.1 p.p FOCF, €M -517 -548 -502 8.4% Net debt, €bn 3.6 3.6 3.0 * -18.2% FY2024 Guidance co
Slide 19: Helicopters: positive momentum with strong demand across the business
Helicopters: positive momentum with strong demand across the business €mln 1H23 1H24 Change Orders 2,805 3,584 27.8% Revenues 2,160 2,425 12.3% EBITA 157 172 9.6% RoS (%) 7.3% 7.1% -0.2 p.p. Highlights Deliveries by programme • Strong Backlog of € 15.7 bn AW189 /149 • Strong Order growth driven by b
Slide 20: Defence Electronics: strong growth with increased profitability
Defence Electronics: strong growth with increased profitability Electronics Europe DRS €mln 1H23* 1H24** Change $mln 1H23 1H24 Change Orders 2,810 3,391 20.7% 1,447 1,756 21.4% Revenues 1,954 2,136 9.3% 1,197 1,441 20.4% EBITA *** 213 251 17.8% 91 121 33% RoS (%) 10.9% 11.8% 0.9 p.p. 7.6% 8.4% 0.8 p
Slide 21: Cyber & Security Solutions: solid performance with increasing demand
Cyber & Security Solutions: solid performance with increasing demand €mln 1H23 1H24 Change Orders 278 427 53.6% Revenues 267 301 12.7% EBITA 12 16 33.3% RoS (%) 4.5% 5.3% +0.8 p.p. Highlights • Order growth driven by domestic market (i.e Cyber & Security solutions for Governmental customers – JOC-CO
Slide 22: Aircraft: increased profitability driven by fighter programmes
Aircraft: increased profitability driven by fighter programmes €mln 1H23 1H24 Change Orders 1,497 1,026 -31.5% Revenues 1,348 1,272 -5.6% EBITA 160 167 +4.4% RoS (%) 11.9% 13.1% +1.2 p.p. Highlights • Wide array of international campaigns being pursued and progressing well • Reduced order volume ref
Slide 23: Aerostructures & ATR: further progress
Aerostructures & ATR: further progress €mln 1H23 1H24 Change Orders 225 364 61.8% Revenues 327 353 8% EBITA* (77) (76) 1.3% RoS (%) (23.5%) (21.5%) +2 p.p. Highlights • Order intake significantly up year-on-year; reflecting continued air traffic recovery • Revenue growth across all business lines •
Slide 24: Space: good commercial performance
Space: good commercial performance €mln 1H23* 1H24*** Change Orders 258 335 29.8% Revenues 309 399 29.1% EBITA ** 16 (1) -106.3% EBITA Space LoB and Telespazio - 29 - RoS (%) 5.2% (0.3%) -5.5 p.p. RoS Space LoB and Telespazio - 7.3% - Highlights • Strong increase in Orders (i.e. “MoonLight” contract
Slide 25: From EBITA to Net Result
From EBITA to Net Result 1H24 +13% +4% +160.6% YoY YoY YoY • EBITA up 13% driven by strong performance Fair value gain resulting from the full consolidation 555 503 70 of Telespazio Group • EBIT up 4% including € 70 mln of non-recurring 15 28 costs related to the favorable conclusion and 390 90 366
Slide 26: FY 2024 Guidance confirmed
FY 2024 Guidance confirmed FY 2023 (1) Guidance 2024 (2) Orders, €bn 18.7 ca.19.5 Revenue, €bn 16.0 ca. 16.8 EBITA, €M 1,326 ca. 1,440 FOCF, €M 652 ca. 770 Net debt, €bn 2.3 ca. 2.0 (3) 2024 exchange rate assumptions: € / USD = 1.15 and € / GBP = 0.89 (1) The values shown for the year 2023 enhance
Slide 27: Agenda
Agenda • Executing the Industrial Plan Roberto Cingolani, Chief Executive Officer and General Manager • 2Q/1H 2024 Results Alessandra Genco, Chief Financial Officer • Q&A • Appendix 27 © 2024 Leonardo - Società per azioni 2Q/1H 2024 Results
Slide 28: Agenda
Agenda • Executing the Industrial Plan Roberto Cingolani, Chief Executive Officer and General Manager • 2Q/1H 2024 Results Alessandra Genco, Chief Financial Officer • Q&A • Appendix 28 © 2024 Leonardo - Società per azioni 2Q/1H 2024 Results
Slide 29: 2Q/1H 2024 Results
2Q/1H 2024 Results * 2Q 2Q 2023 * 2Q 1H 1H 2023 1H % Change FY % Change proforma 2023 Proforma 2024 2023 2024 2023 €M New Orders 3,823 3,927 4,571 +16.4% 8,691 8,934 10,324 +15.6% 17,926 Backlog 39,119 40,382 43,346 +7.3% 39,529 Revenues 3,860 4,022 4,321 +7.4% 6,894 7,200 7,985 +10.9% 15,291 EBITA
Slide 30: Solid Group liquidity ensures adequate financial flexibility
Solid Group liquidity ensures adequate financial flexibility As at 30 June 2024 Leonardo had sources of liquidity available for a total of about € 6.0 bn to meet the financing needs of the Group’s, broken down as follows: €0.3bn ≈ €6.0bn €1.0bn €1.0bn €0.3bn €2.4bn €1.1bn Cash & ESG linked DRS RCF *
Slide 31: Balanced debt maturity profile
Balanced debt maturity profile TL DRS RADA Dollar Bond Euro in € mil EIB Term Loan CDP Debt maturity Average life: ≈ 2,3 years CREDIT RATING As of today Before last review Date of review S&P BBB- / Stable Outlook BB+ / Positive Outlook August 2023 Moody’s Baa3 / Stable Outlook Ba1 / Positive Outlook
Slide 32: Helicopters
Helicopters 2019-2023 Results 2Q/1H24 Results Orders (€ mln) Revenues (€ mln) EBITA (€ mln) and Profitability 4,725 2Q 2023 2Q 2024 % Change 4,547 6,060 4,157 € mln 5,513 4,025 3,972 10.7% 4,641 9.8% 9.1% 8.9% Orders 916 1,541 +68% 9.6% 4,494 4,370 Revenues 1,280 1,340 +5% 431 415 422 383 406 EBITA
Slide 33: Electronics
Electronics 2019-2023 Results ** 2Q/1H24 Results Orders Revenues EBITA and Profitability 6,521 4,907 ELECTRONICS - EU 5,628 4,712 5,392 4,519 4,289 12.2% 4,444 4,710 4,147 € mln 2Q 2023 2Q 2024 % Change 11.7% 10.7% Orders 1,350 1,341 -0.7% 3,516 10.0% 600 3,054 2,729 2,757 2,879 2,693 2,826 8.7% 553
Slide 34: Cyber & Security Solutions
Cyber & Security Solutions 2023 Results €bn Orders Revenues EBITA RoS 6.7% 0.7 0.6 0.04 2Q/1H24 Results 2Q 2023 2Q 2024 % Change 1H 2023 1H 2024 % Change € mln € mln Orders 112 223 +99% Orders 278 427 +54% Revenues 137 162 +18% Revenues 267 301 +13% EBITA 6 8 +33% EBITA 12 16 +33% RoS 4.4% 4.9% +0.5
Slide 35: Aircraft
Aircraft 2019-2023 Results 2Q/1H24 Results Orders (€ mln) Revenues (€ mln) EBITA (€ mln) and Profitability 2Q 2023 2Q 2024 % Change € mln 2,668 2,800 3,268 3,085 2,938 Orders 766 458 -40% 2,395 13.3% 2,634 13.6% 14.3% 2,031 2,329 Revenues 789 702 -11% 1,904 13.7% 13.5% 434 421 419 EBITA 106 112 +6%
Slide 36: Aerostructures and ATR
Aerostructures and ATR 2019-2023 Results 2Q/1H24 Results Aerostructures Orders (€ mln) Revenues (€ mln) EBITA (€ mln) and Profitability € mln 2Q 2023 2Q 2024 % Change 948 1,125 Orders 99 111 +12% 53 12 Revenues 176 178 +1% 644 819 581 EBITA (32) (35) -9% 636 -69 -6 420 -11 -24 RoS (18.2%) (19.7%) -1
Slide 37: Remuneration Policy aligned with shareholders interests, strategy and ESG criteria
Remuneration Policy aligned with shareholders interests, business strategy and ESG criteria CEO and General Manager remuneration components • Convergence of interests between management and shareholders Fixed Remuneration Short-Term Variable Remuneration Long-Term Variable Remuneration • Aligning th
Slide 38: CEO and General Manager short term variable remuneration (MBO)
CEO and General Manager short term variable remuneration (MBO) 38 © 2024 Leonardo - Società per azioni 2Q/1H 2024 Results
Slide 39: Long Term Incentive Plan (LTIP)
Long Term Incentive Plan (LTIP) Beneficiaries: Chief Executive Officer and General Manager, the Co-General Manager and key managers (executive directors, employees and/or associates of the Company and Group companies holding positions that have a decisive impact on the achievement of business result
Slide 40: Connecting ESG progress and remuneration
Connecting ESG progress and remuneration 10% of short-term variable CEO & General Manager •CEO & General Manager remuneration linked to ESG objectives • 5% →Inclusion of Leonardo in DJSI • 5% →Scope 1 & 2 GHG Emissions** • 5%→Average accident frequency rate* • 5% → Gender diversity, percentage of fe
Slide 41: Covenant FY2023
Covenant FY2023 FY2023A FY2023A Post IFRS 16 Post IFRS 16 EBITDA* € 1,790 M Group Net Debt € 2,323 M Net Interest € 95 M Leasing (IFRS 16) - € 610 M Financial Debt to MBDA - € 1,070 M Group Net Debt for Covenant € 643 M EBITDA* € 1,790 M EBITDA / Net Interest 18.8 Group Net Debt / EBITDA 0.40 THRESH
Slide 42: 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 43: Contacts
CONTACTS Valeria Ricciotti Head of Investor Relations and Credit Rating Agencies +39 06 32473.697 valeria.ricciotti@leonardo.com Investor Relations and Credit Rating Agencies +39 06 32473.512 ir@leonardo.com leonardo.com 43 © 2024 Leonardo - Società per azioni