Slide 1: 3Q/9M 2018 Results Presentation
3Q/9M 2018 Results Presentation Alessandro Profumo Chief Executive Officer Alessandra Genco Chief Financial Officer Rome, 8 November 2018 Investor Relations & Credit Rating Agencies
Slide 2: Executing the Industrial Plan
Executing the Industrial Plan Chief Executive Officer 3Q/9M 2018 Results & Outlook Chief Financial Officer
Slide 3: Steps forward in the execution of the Industrial Plan
Steps forward in the execution of the Industrial Plan 2018 Good 3Q/9M 2018 performance Leonardo 2.0 Enhanced Business FY2018 guidance confirmed Approach Transformation Core divisions in line with our expectations Portfolio Reshaping Value and Creation Strengthening Lower contribution from JVs Ex
Slide 4: Strong backlog supporting revenue growth
Strong backlog supporting revenue growth ORDER BACKLOG as at 30 September 2018 = ca. € 35 bn HELICOPTERS ELECTRONICS, DEFENCE AERONAUTICS AND SECURITY SYSTEMS ORDER BACKLOG € 11.8 bn ORDER BACKLOG € 11.5 bn ORDER BACKLOG € 12.0 bn 33% of total 33% of total 34% of total Current Backlog covering almos
Slide 5: Outstanding achievements in military and civil helicopters
Outstanding achievements in military and civil helicopters Continued commercial momentum >€ 3 bn NH90 Qatar contract booked in August (Q3) 28 NH90 (16 for land operations and 12 for naval missions), Customer Support & Training and Infrastructure Leonardo prime contractor Deliveries from 2022 to 2025
Slide 6: Helicopters momentum confirmed
Helicopters momentum confirmed Well positioned for long term growth of the business CIVIL MARKET SHARE Medium/ Heavy >10t and <16t 100% - RANKING Increasing order intake supported by Super Medium >7t and <10t 1st AW FAMILY military export campaigns Intermediate >5t and < 7t 1st Light Intermediate >3
Slide 7: Leonardo DRS strong progress supported by US market
Leonardo DRS strong progress supported by US market 9M 2018 KEY DATA 1,950 $ mln 1,541 1,541 1,318 90 102 6.8% 6.6% 9M17A* 9M18A 9M17A* 9M18A 9M17A* 9M18A NEW ORDERS REVENUES EBITA (RoS) *9M 2017 IFRS15 restated Excluding TX costs US Defence spending supporting long term Revenue growth reflects abil
Slide 8: Delivering results on cost control initiatives
Delivering results on cost control initiatives Over 60% of annualised savings identified delivered in the 9M Potential upside from further actions, mainly cost savings in staff functions Addressed areas: € mln Efficiency increase in Manufacturing and ~ 200 Engineering 200 Off-load optimisation
Slide 9: Doing the right things for the long term
Doing the right things for the long term Sustainability as a base of the Industrial Plan Membership of the United Nations Global Compact For the 9th year in a row in the Dow Jones Sustainability Indices The 1st company among the top 10 global players in the AD&S to obtain certification (Anti Bribery
Slide 10: Fully focused on execution of the Industrial Plan
Fully focused on execution of the Industrial Plan Sharper commercial focus (+20% YoY Order Intake) Increasing commercial momentum Strong backlog to support sustainable top-line growth (€ 35 bn as at end of September) Solid financial strategy …aimed at long term sustainable growth 10 © Leonardo - Soc
Slide 11: Executing the Industrial Plan: 3Q/9M 2018 Results & Outlook
Executing the Industrial Plan Chief Executive Officer 3Q/9M 2018 Results & Outlook Chief Financial Officer 11 © Leonardo - Società per azioni
Slide 12: 3Q/9M 2018 Highlights
3Q/9M 2018 Highlights Good 9M 2018 performance Orders at € 9.4 bn, up 20% in constant currency, driven by NH90 Qatar Revenues at € 8.2 bn, up 4% in constant currency EBITA at € 632 mln, RoS at 7.7% Net Result at € 263 mln FOCF at € (800) mln, including NH90 Qatar downpayment Net Debt at
Slide 13: Order intake
Order intake Strong performance, up 20%, mainly driven by NH90 Qatar NH90 Qatar contract Qatar Navy contract EFA Customer Support booked in 3Q18 booked in 3Q17 booked in 3Q17 € mln +174% -18.8% -27.7% +20% YoY 1,420 284 ca. 9,535 ca. € 145 mln of 3,569 negative forex 7,945 +18.2% 9,390 YoY 4,685 9M
Slide 14: Revenues
Revenues Growth and positive momentum in Helicopters & DRS Deliveries up to 113 new units Lower revenues in compared to 99 of 9M17 Aerostructures and C27-J +10.1% +4.8% -6.9% +4% € mln YoY 2,025 296 8,048 ca. 8,370 ca. € 130 mln of negative forex +2.4% 3,855 8,240 YoY 2,656 9M 2017* Helicopters Elec
Slide 15: EBITA and Profitability
EBITA and Profitability Solid performance across all businesses; lower contribution from ATR Tough comparator due to Lower contribution 2Q17 performance from ATR -6.1% +2.1% -14.4% € mln 694 -8% 167 YoY 31 71 (RoS 8.6%) (RoS 8.2%) ca. 642 ca. € 10 mln of negative forex 288 -8.9% (RoS 7.5%) 632 YoY (
Slide 16: Net Result impacted by early retirement agreement
Net Result impacted by early retirement agreement 9M2017* 9M2018 -8.9% -33.8% -0.8% 694 60 72 632 17 562 237 73 542 170 177 € mln € mln 60 372 265 263 31 99 EBITA Restruct. PPA EBIT Net fin. Income Net EBITA Restruct. PPA Underlying ART. 4 EBIT Net fin. Income Release of Net costs expenses taxes cos
Slide 17: 2018 Guidance confirmed
2018 Guidance confirmed FY2017A FY2018E FY2018E Restated at January ‘18 at July ‘18 New orders € bn 11.6 12.5 – 13.0 14.0 – 14.5 Revenues € bn 11.7 11.5 – 12.0 11.5 – 12.0 EBITA € bn 1.08 1.075 – 1.125 1.075 – 1.125 FOCF € mln 537 ca.100 300 – 350 Group Net Debt € bn 2.6 ca. 2.6 ca. 2.4 2018 exchang
Slide 18: Q&A Thank you for your attention
Q&A THANK YOU FOR YOUR ATTENTION
Slide 19: Sector Results
SECTOR RESULTS THANK YOU FOR YOUR ATTENTION
Slide 20: Helicopters: Well positioned to capture growth opportunities
Helicopters Well positioned to capture growth opportunities DELIVERIES BY PROGRAMME 9M2017 = 99 new units AW189 /149 10 AW169 19 36 AW109 / AW119 / SW4 / AW009 27 AW139 1123 NH90 /W3 AW FAMILY CH47 AW159 / AW101 Lynx 9M2018 = 113 new units AW169 AW189 /149 2018 OUTLOOK 18 11 Healthier market outlook
Slide 21: Electronics, Defence & Security Systems
Electronics, Defence & Security Systems Remains strong 2018 OUTLOOK Revenues and profitability almost flat YoY Upward trends in some business areas Efficiency Of which DRS: improvement Higher contribution from development programmes DRS benefitting from positive market trend Avg. exchange rate
Slide 22: Aeronautics
Aeronautics Aircrafts positive outlook offsetting lower ATR and Aerostructures 2018 OUTLOOK Revenues expected almost flat YoY Aircraft benefitting from EFA Kuwait Aerostructures volumes expected to decline Profitability in line with 2017 Efficiency improvement ATR contribution lower than Off
Slide 23: Space
Space Stable outlook 2018 OUTLOOK Revenues expected almost in line with 2017 Profitability slightly lower compared to 2017 23 © Leonardo - Società per azioni
Slide 24: Appendix
APPENDIX THANK YOU FOR YOUR ATTENTION
Slide 25: 3Q/9M 2018 Results: Group Performance
3Q/9M 2018 Results Group Performance Free Operating Cash-Flow (FOCF): this is the sum of the cash flows generated by (used in) operating activities (which includes interests and income taxes paid) and the cash flows generated by (used in) ordinary investment activity (property, plant and equipment a
Slide 26: No material impact from IFRS15
No material impact from IFRS15 Leonardo applies retrospectively IFRS15 in 2018 FY2017 and 2017 quarters fully restated in accordance with IFRS15 Not material impacts on FY2017 KPI’s (higher revenues by ca. 2% and higher EBITA by ca. 1%) Cumulative catch-up adjustment to be recognised in equity; ca.
Slide 27: Solid Financial Position as end of September 2018
Solid Financial Position as end of September 2018 € mln Dollar Bond Sterling Bond Euro Bond EIB DEBT MATURITY Average life: ≈ 5 years REVOLVING RCF renegotiated lowering margin (from 100 bps to 75 bps) and CREDIT FACILITY Lower margin amount (from € 2.0 bn to € 1.8 bn). The facility will expire in 2
Slide 28: Availability of adequate committed liquidity lines
Availability of adequate committed liquidity lines as end of September 2018 In order to cope with possible swings in € mln Undrawn at 30 September 2018 As of 30 September 2018 financing needs, Leonardo can leverage: 30 September cash balance of € 1.0 bn Credit lines worth € 2.5 bn (confirmed and
Slide 29: Prime contractor business supporting long term visibility and growth
Prime contractor business supporting long term visibility and growth Lower margin pass-through but without capital invested Large prime contractor business wins supporting long term visibility and better positioning in reference markets Higher margin activities under our responsibility Lower mar
Slide 30: Balanced Remuneration Policy
Balanced Remuneration Policy Aligned with stakeholders interests Clear link between pay and degree of CEO REMUNERATION achievement of targets Aligning the remuneration package with international market best practices Reducing risk-oriented behaviour Attracting / retaining resources regarded by the C
Slide 31: CEO performance: Management by Objectives
CEO performance: Management by Objectives TARGETS GROUP EBITA GROUP FOCF SUSTAINABILITY INDUSTRIAL PLAN OBJECTIVES 30% of REM. 30% of REM. 10% of REM. - ON/OFF 30% of REM. Target linked to the Structured into 3 specific inclusion of KPIs Leonardo in Dow 1. 2018 business performance Jones Sustainabil
Slide 32: Remuneration scheme: Methodology
Remuneration scheme: Methodology CLAW-BACK CLAUSE Provided for all the variable incentives assigned starting from 2014 Leonardo is entitled to request repayment of the variable remuneration paid in the event of incorrect or misstated data SEVERANCE If CEO appointment is: • revoked • terminated
Slide 33: Long Term Incentive Plan (LTIP)
Long Term Incentive Plan (LTIP) BENEFICIARIES LOCK UP Chief Executive Officer 1 year Executive directors, employees and/or associates with a decisive impact on the VESTING PERIOD achievement of business results (210 3 year people) FREQUENCY PAYOUT 3 year cycles assigned yearly on a Share
Slide 34: LTIP Performance conditions
LTIP Performance conditions TSR Relative RETURN ON SALES OF THE GROUP 50% 25% Award max 100% of bonus Return on Sales measured as average of the ≥ TSR of final values of each year during the vesting company at the period of the Plan Top 4 position 25% TOTAL 50% BONUS 25% Award target NET FINANCIAL P
Slide 35: 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 36: Contacts
Contacts Raffaella Luglini Chief Stakeholder Officer raffaella.luglini@leonardocompany.com Valeria Ricciotti Manuel Liotta Head of Investor Relations & Credit Rating Agencies Head of Sustainability +39 06 32473.697 +39 06 32473.666 valeria.ricciotti@leonardocompany.com manuel.liotta@leonardocompany.