Slide 1: FY2015 Results Presentation
FY2015 Results Presentation Mauro Moretti Chief Executive Officer and General Manager Gian Piero Cutillo Chief Financial Officer Milan, 17 March 2016
Slide 2: Key Messages / Results and Outlook / Delivering Change / Q&A
KEY MESSAGES (CEO and General Manager) RESULTS AND OUTLOOK (CFO) DELIVERING CHANGE – A NEW COMPANY (CEO and General Manager) Q&A 2
Slide 3: Key Messages
KEY MESSAGES Executing and delivering strongly in 2015 Increasing strategic focus Delivering on promises Step up in profitability and cash flow Better balance and quality of results Continued momentum in 2016 3
Slide 4: Delivering on our promises
Delivering on our promises Strategic, industrial and financial Disposal of non-core business completed A PURE A,D&S Transportation sold to Hitachi PLAYER Disposal of two lines of business of DRS Fata completed last week MORE BALANCED All key businesses now contributing to profitability FOCUSED AND M
Slide 5: Delivering on our promises
Delivering on our promises Strategic, industrial and financial PROFITABILITY Improved industrial processes - Engineering, Supply Chain, Manufacturing IMPROVEMENT Meaningful step up in EBITA and RoS Lower and stabilised “below the line” EQUITY/NET Sustainable growth in net profit INCOME Increase in n
Slide 6: Key Messages / Results and Outlook / Delivering Change / Q&A
KEY MESSAGES (CEO and General Manager) RESULTS AND OUTLOOK (CFO) DELIVERING CHANGE – A NEW COMPANY (CEO and General Manager) Q&A 6
Slide 7: FY2015 Results Highlights
FY2015 Results Highlights 2015 another strong year of delivery Good commercial performance, despite tough market conditions Revenues in line with expectations, excluding FX impacts Resilient performance in Helicopters EBITDA at €1.9bn (+19% YoY), with EBITDA margin at 14% Material step up in EBITA (
Slide 8: Focused and stronger: Selecting orders to deliver a higher quality backlog
Focused and stronger Selecting orders to deliver a higher quality backlog - 14.2% + 35.1% + 24.5% - 44.1% +228.2% - 2.3% % Ch. vs. FY2014 € Mln 12,667 686 1,741 12,371 ( 667) 1,822 4,879 3,910 FY2014 Helicopters Selex ES DRS Aeronautics Defence Eliminations & FY FY2015 Restated Systems Other 2015 Go
Slide 9: Revenues: In line with expectations
Revenues In line with expectations + 2.4% +2.2% + 15.1% - 0.8% - 7.3% + 1.8% % Ch. vs. FY2014 € Mln 459 12,764 3,118 12,995 (343) 1,627 3,655 4,479 FY2014 Helicopters Selex ES DRS Aeronautics Defence Eliminations & 9M2015 Restated Systems Other FY 2015 DRS consolidating recovery in the top line Heli
Slide 10: Profitability improvement: EBITDA growing year on year
Profitability improvement EBITDA growing year on year € Mln 1,866 1,866 1,569 1,569 14.4% EBITDA margin 12.3% EBITDA margin FY2014 FY 9M2015 Restated 2015 19% increase compared to 2014 More than 200 bp improvement in EBITDA margin as a result of better operating performance More effective cost contr
Slide 11: Profitability improvement: Material step up in EBITA and ROS
Profitability improvement Material step up in EBITA and ROS + 0.1 p.p. +3.3 p.p. + 5.3 p.p. + 2.5 p.p. +1.2 p.p. + 1.6 p.p. % Ch. vs. FY2014 88 37 € Mln 312 (RoS 19.2%) (RoS 10.0%) 1,208 (RoS 9.3%) (211) 980 114 (RoS 7.7%) (RoS 7.0%) 310 (RoS 8.5%) 558 (RoS 12.5%) FY2014 Helicopters Selex ES DRS Aer
Slide 12: Net Result before capital gain
Net Result before capital gain Sustainable growth improving leverage ratios 2014 2015 € Mln € Mln 1,208 1,208 (112) (114) 980 980 (93) (98) (206) 884 884 (438) (84) 597 597 (448) (193) 253 253 (134) 15 15 +23% in EBITA driven by restructuring plans and improved efficiencies of industrial processes B
Slide 13: Disciplined financial strategy aimed at cash flow improvement and Net Debt reduction
Disciplined financial strategy aimed at cash flow improvement and Net Debt reduction € Mln FOCF 2015A € Mln FOCF 2016E ca. 150 183 800-850 747 300-400 (543)* 307 (600) - (650) (80) Cash from operations Dividends Investments Transportation & FYFOCF FY2015 Cash from operations Dividends Investments FY
Slide 14: Net Invested Capital streamlining
Net Invested Capital streamlining Working Capital net of Customer Advances >15 % reduction by 2017 ~ 6.0 bln Customer Advances expected to decrease YoY (approx - ~ 5.5 bln ~ 5.4 bln 6% per year) Net of Customer advances impact, initiatives put in place lead to an operating working capital reduction
Slide 15: FY2016 Guidance
FY2016 Guidance Another year of continued momentum Orders: increasingly selective with tighter FY2015A FY2016E* return criteria, to reduce execution risk and improve quality of results Revenues: change in perimeter New orders € bn 12.4 12.2-12.7 (ca.€400mln lower in 2016 vs 2015) Revenues € bn 13.0
Slide 16: Key Messages / Results and Outlook / Delivering Change / Q&A
KEY MESSAGES (CEO and General Manager) RESULTS AND OUTLOOK (CFO) DELIVERING CHANGE – A NEW COMPANY (CEO and General Manager) Q&A 16
Slide 17: Delivering on our promises
Delivering on our promises Strategic, industrial and financial Disposal of non-core business completed A PURE A,D&S Transportation sold to Hitachi PLAYER Disposal of two lines of business of DRS Fata completed last week MORE BALANCED All key businesses now contributing to profitability FOCUSED AND M
Slide 18: ROS%: Less balanced in the past
LESS BALANCED IN THE PAST 2013 EBITA-EBITA% Positioning* 25% ROS% 20% Defence Systems Helicopters 15% FINMECCANICA GROUP 10% DRS (€) Aeronautics 5% Selex ES 0% € Mln -400 -200 0 200 400 600 800 1,000 EBITA Transportation -5% -10% -15% -20% *Space sector consolidated under the Equity Method 18
Slide 19: ROS%: More balanced today
MORE BALANCED TODAY Current EBITA-EBITA% Positioning* 14% ROS% Helicopters FINMECCANICA GROUP 12% Aeronautics 10% Electronics, Defence and Security Systems 8% 6% EBITA 4% 2% 0% € Mln 0 200 400 600 800 1,000 1,200 1,400 EBITA *Space sector consolidated under the Equity Method Eur mln 19
Slide 20: More balanced today: Business outlook
MORE BALANCED TODAY Business outlook Helicopters: Diversified and flexible, in 2015 only 5% of Revenues coming from O&G Good results YoY outperforming peers Consistent double digit profitability, even in tough environment Electronics, Defence & Security Systems Divisional reorganisation driving incr
Slide 21: Focused and stronger: Improved industrial performance
FOCUSED AND STRONGER Improved industrial performance Delivering in line with expectations Engineering: 10% productivity increase YoY achieved Engineering reorganisation finalised (activities fully divisionalised) Processes and activities entirely reviewed Investments rationalisation accomplished in
Slide 22: One Company: Stronger Together
MORE INTEGRATED AND CUSTOMER ORIENTED One Company: Stronger Together Implemented from 1 January 2016 One industrial operating company CORPORATE CENTRE Sectors Electronics, Defence & Helicopters Aeronautics Space Security Systems Divisions Airborne & Space Helicopters Aircrafts Systems Land & Naval D
Slide 23: Key Priorities
KEY PRIORITIES Achieve 2016 Guidance New orders: €12.2-12.7bn Revenues: €12.2-12.7bn EBITA: €1,220-1,270mln FOCF: €300-400mln Group Net Debt: ca. €3bn Continued momentum in 2016 Full deployment of the One Company and exploitation of its benefits Continue to deliver efficiencies 23
Slide 24: The New Brand
The New Brand Why a new brand? Why now? because we are entering a new phase of our history we are now a one single operating company, focused on core Aerospace, Defence and Security the right moment for a new identity Why Leonardo? …represents the roots of our history…. and the sense of our future T
Slide 25: Sector Results
SECTOR RESULTS 25
Slide 26: Helicopters
HELICOPTERS 4Q FY % % 2015 2014 2015 2014 € Mln Change Change Orders 1,029 1,473 (30.1%) 3,910 4,556 (14.2%) Revenues 1,267 1,340 (5.4%) 4,479 4,376 2.4% EBITA 177 164 7.9% 558 543 2.8% ROS % 14.0% 12.2% 1.8 p.p. 12.5% 12.4% 0.1 p.p. Lower orders YoY mainly due to tough market conditions, especially
Slide 27: EU Defence Electronics and Security - Selex ES
EU DEFENCE ELECTRONICS AND SECURITY-Selex ES 4Q FY % % 2015 2014 2015 2014 € Mln Change Change Orders 2,620 1,661 57,7% 4,879 3,612 35.1% Revenues 1,271 1,310 (3,0%) 3,655 3,577 2.2% EBITA 183 123 48,8% 310 185 67.6% ROS % 14.4% 9.4% 5,0 p.p. 8.5% 5.2% 3.3 p.p. Very good commercial performance and s
Slide 28: US Defence Electronics and Security - DRS
US DEFENCE ELECTRONICS AND SECURITY – DRS 4Q FY % % 2015 2014 2015 2014 $ Mln Change Change Orders 483 538 (10.2%) 2,022 1,945 4.0% Revenues 508 564 (9.9%) 1,805 1,877 (3.8%) EBITA 33 67 (50.7%) 126 31 n.a. ROS % 6.5% 11.9% (5.4) p.p. 7.0% 1.7% 5.3 p.p. Good commercial performance at domestic and in
Slide 29: Aeronautics
AERONAUTICS 4Q FY % % 2015 2014 2015 2014 € Mln Change Change Orders 482 1,584 (69.6%) 1,741 3,113 (44.1%) Revenues 978 1,009 (3.1%) 3,118 3,144 (0.8%) EBITA 149 89 67.4% 312 237 31.6% ROS % 15.2% 8.8% 6.4 p.p. 10% 7.5% 2.5 p.p. Postponement of some key acquisition affecting 2015 Order intake Volume
Slide 30: Space and Defence Systems
SPACE 4Q FY % % 2015 2014 2015 2014 € Mln Change Change EBITA 10 26 (61.5%) 37 52 (28.8%) 2015 affected by some costs recognised on a specific programme EBITA and profitability expected to promptly recover in 2016 DEFENCE SYSTEMS 4Q FY % % 2015 2014 2015 2014 € Mln Change Change Orders 417 59 n.a. 6
Slide 31: Appendix
APPENDIX 31
Slide 32: Group Performance
GROUP PERFORMANCE 4Q FY % % 2015 2014 (*) 2015 2014 (*) Change Change € Mln New Orders 4,580 5,070 (9.7%) 12,371 12,667 (2.3%) Backlog 28,793 29,383 (2.0%) Revenues 3,994 4,160 (4.0%) 12,995 12,764 1.8% EBITDA 692 651 6.3% 1,866 1,569 18.9% EBITDA Margin 17.3% 15.6% 1.7 p.p 14.4% 12.3% 2.1 p.p. EBIT
Slide 33: Development costs capitalised as intangible assets at 31 December 2015
DEVELOPMENT COSTS CAPITALISED AS INTANGIBLE ASSETS AT 31 DECEMBER 2015 Self Funded Self Funded Total €mln National Security Other 01 Jan 2015 Opening Balance 1,346 514 1,860 Gross R&D capitalised 174 100 274 Depreciation and write offs -80 -90 -170 Disposals 0 0 0 Net R&D capitalised 94 10 104 Recla
Slide 34: Financial Position
FINANCIAL POSITION (as of end of December 2015) No refinancing needs before end 2017 Key Strong liquidity position Messages Bonds have neither financial covenants nor rating pricing grids Average life ≈ 7,5 years (€mil) 434 Dollar Bond Maturity 739 Sterling Bond Schedule 521 500 399 556 500 419 Euro
Slide 35: Liquidity Position
LIQUIDITY POSITION (as of end of December 2015) In order to cope with possible swings in financing needs, Finmeccanica can leverage: – 31 December cash balance of approx. €1.8 billion Availability of – Credit lines worth €2.7 billion (confirmed and unconfirmed) The Revolving Credit Facility was rene
Slide 36: Aerospace & Defence Market
Aerospace & Defence Market Different dynamics in our major markets ITALIAN MOD AND MOED BUDGET - € BLN UK DEFENCE BUDGET - € BLN US DEFENCE BUDGET - € BLN 4,7 4,5 4,0 184 16 173 35% 158 39% 14 13 36% 22% 39% 52% 23% 39% 22% 2 78% 1 65% % 77% 61% 78% 61% 61% 64% 7 48% 9 % 2011 2014 2017 2012 2015 202
Slide 37: 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 38: Investor Relations 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 Financial Communication Fixed Income +39 06 32473.697 +39 06 32473.337 valeria.ricciotti@finmec