Slide 1: FY 2021 Results Presentation
FY 2021 Results Presentation Rome 11 March 2022
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 • Sector results • Appendix 2 © 2022 Leonardo - Società per azioni FY 2021 Results
Slide 3: We provide essential Security and Protection for people and nations
We provide essential Security and Protection, security for people and nations.… This means preserving peace and stability, safety and democracy, without which social and economic prosperity does not exist … 3 © 2022 Leonardo - Società per azioni FY 2021 Results
Slide 4: FY2021: an important year of delivery
FY2021: an important year of delivery • Well positioned in key markets committed to grow defence spending CLOSER • 25,1% Hensoldt acquisition enhancing cooperation in EU Defence Electronics Industry COLLABORATION IN • EuroMale promoting EU collaboration in Security and Defence EUROPE • Playing a key
Slide 5: We have delivered results in line or exceeding expectations
We have delivered results in line or exceeding expectations All businesses ahead of 2019 levels, excluding Aerostructures (€ mil) Orders and Backlog Revenues EBITA FOCF 36,118 36,513 35,516 35,534 13,784 14,135 13,410 12,240 1,326 619 1,262 548 1,157 369 398 15,124 1,251 1,024 14,105 13,754 14,307 1
Slide 6: Strong confidence in medium/long term prospects of our main businesses
Strong confidence in medium/long term prospects of our main businesses Helicopters and Aircraft • Leading product portfolio and solid backlog Helicopters • Strong defence/governmental and resilient civil business 2021 Backlog € 12.4 bn • Continue to invest to build the future (i.e. AW09, AW609, Hero
Slide 7: Strong confidence in medium/long term potential of our main businesses
Strong confidence in medium/long term potential of our main businesses Electronics and Leonardo DRS • Strong order book Electronics • Established trusted relationships with customers globally and recognized heritage 2021 Backlog € 12.0 bn • Well balanced presence and positioned in highest growing ma
Slide 8: Customer Support on installed fleet accounting for € 5.3 bn of cash present value
Customer Support on installed fleet accounting for € 5.3 bn of cash present value • Inertial intrinsic value embedded in customer support: a cornerstone of future cash generation • Impressive installed base of ca. 4,000 helicopters and more than 1,000 aircraft • Tangible value and inertial visible i
Slide 9: Results achieved are showing we are on the right path
Results achieved are showing we are on the right path Continuing to execute our strategic plan “Be Tomorrow-2030” Strengthen Transform Master our Core to Grow the New • Acquisition of 25.1% stake in • Clear Plan for Aerostructures • Transformed R&D focus to capture Hensoldt recovery and relaunch mor
Slide 10: Strong confidence in the medium-term
Strong confidence in the medium-term Based on strong fundamentals of our businesses 2022-2026 TARGETS(*) Confirming cumulated > € 80 bn ORDERS Book to bill >1 TOP LINE Confirming Mid Single Digit CAGR EBITA Confirming High Single Digit CAGR RoS growing, at double digit at Plan end STEP UP in 2022 FO
Slide 11: 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 • Sector results • Appendix 11 © 2022 Leonardo - Società per azioni FY 2021 Results
Slide 12: Key messages
Key messages • Progress and update on the recovery plan for Aerostructures • Growing commercial opportunities across our core Defence and Governmental business • New business opportunities across the Group driven by technology and post pandemic recovery 12 © 2022 Leonardo - Società per azioni FY 202
Slide 13: Aerostructures business: positive progress on the recovery plan outlined last November
Aerostructures business: positive progress on the recovery plan outlined last November • Clear plan for Aerostructures recovery based on: • Business repositioning • Profitability improvement • Lower cash absorption • Short medium haul ramping up in production • Positive signs on ATR • Long haul stil
Slide 14: Aerostructures recovery plan is on the right way
Aerostructures recovery plan is on the right way 2021 the bottom year, gradual improvement from 2022 PROGRESS SO FAR • Furlough scheme agreed with trade unions • Workforce reduction by ca.800 mainly through new pension scheme ACTION • Collaboration with Vertical Aerospace on fuselage development for
Slide 15: Growing commercial opportunities driven by positive defence market trends
Growing commercial opportunities driven by positive defence market trends as well as our domestic and international strengths A,D&S MARKET DEFENCE BUDGET TREND CAGR 2021-2026 ▪ A,D&S annual average market value: €780 bln -0.3% +1.5% ▪ A,D&S market CAGR over the next 5 years: ca. 6% +4% +1.2% + 5% ▪
Slide 16: Order intake increasing trend continues
Order intake increasing trend continues POSITIVE OUTLOOK SUPPORTED BY COMMERCIAL MODEL STRONG TRACK RECORD ORDER INTAKE ▪ Strong positioning in key domestic markets 2018-2021 ▪ Competitive position in key strategic countries Cumulative value: 2022-2026 Ca. €57 bln ▪ International footprint enhanceme
Slide 17: Well positioned with a transformed R&D focus to capture more growth opportunities
Well positioned with a transformed R&D focus to capture more growth opportunities driven by technology LEONARDO LABS 10 Leonardo Labs (in 6 regions in Italy and 1 in the USA) 30 research units 4 joint external laboratories 130 research fellows in 2022 DAVINCI-1 HPC 7th in the aerospace sector behind
Slide 18: Focused approach across selected domain areas creating value for our customers
Focused approach across selected domain areas creating value for our customers COMPUTING AND STORAGE DAVINCI-1 HPC CAPABILITIES HIGH PERFORMANCE CLOUD COMPUTING ENABLERS ARTIFICIAL BIG DATA INTELLIGENCE APPLIED DIGITAL TWIN UNMANNED TECHNOLOGIES AND ADVANCED QUANTUM ELECTRIFICATION MATERIALS ROBOTIC
Slide 19: New growth opportunities as a partner in the Italian National Recovery Plan
New growth opportunities as a partner in the Italian National Recovery Plan: playing with core assets and distinctive capabilities PROJECT STREAMS IDENTIFIED BY LEONARDO Global Monitoring Logistics Space Digital PA Smart City Health systems Research Continuously monitoring and Contributing to a conn
Slide 20: Key takeaways
Key takeaways • Clear plan and progress on the path of gradual recovery in Aerostructures • Positive commercial outlook in domestic and international markets based on key products and strengths • Strong capabilities to seize future growth opportunities driven by R&D tech-focus and post pandemic Nati
Slide 21: 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 • Sector results • Appendix 21 © 2022 Leonardo - Società per azioni FY 2021 Results
Slide 22: FY 2021 Highlights
FY 2021 Highlights • Met or exceeded 2021 guidance, with FOCF doubling initial guidance • Back or above 2019 level without Aerostructures IMPORTANT • Strong performance across core defence/governmental businesses YEAR OF DELIVERING ON • Civil slightly ahead of target PROMISES • Structurally Improvin
Slide 23: Order Intake
Order Intake Continued strong commercial momentum € mln ∆ % YoY FY2020A 13,754 Growing civil orders. Key orders: 72 TH-73A for the US Navy, follow-on tranche of NEES for Italian Army, 18 AW139 for Saudi, 8 AW139 for Italian Guardia di Finanza. 18 HELICOPTERS 4,370 -2.8% AW169M LUH for Austrian MoD E
Slide 24: Revenues
Revenues Growing top line and continued strong programme delivery € mln ∆ % YoY FY2020A 13,410 Ramp-up in defence/governmental (NH90 Qatar and TH-73A US Navy); HELICOPTERS 4,157 4.7% AW189/AW149; slight decrease in civil ELECTRONICS EUROPE 4,519 9.0% Delivery on backlog and capturing new opportuniti
Slide 25: EBITA and Profitability
EBITA and Profitability Improving Profitability € mln RoS ∆ % YoY FY2020A 938 7.0% HELICOPTERS 406 9.8% 6.0% Higher volumes, profitability in line with 2020 ELECTRONICS EUROPE 485 10.7% 34.7% Higher volumes and profitability, impacted by COVID 19 restrictions n 2020 Confirmed margin expansion primar
Slide 26: From EBITA to Net Result
From EBITA to Net Result Stronger bottom line thanks to EBITA increase FY 2020A FY 2021A +19.7% +76.2% +141.6% YoY YoY YoY 938 -333 1,123 -101 -89 -22 911 -167 9 € mln € mln -61 -166 -27 517 -225 587 -39 -12 -2 243 EBITA Non recurring Restructuring PPA EBIT Net financial Exchange rate Income taxes D
Slide 27: Leonardo investments and innovation contributes to the alignment with SDG goals
Leonardo investments and innovation contributes to the alignment with SDG goals 50% capex in line with SDG • Investments in 2021-2023 on yearly average around € 600-700 mln(1) • Leonardo commits to around 50% of SDGs-aligned investments • The initiatives mainly impact SDG 9 “Industry, Innovation & I
Slide 28: Step up in FOCF in 2021 and 2022
Step up in FOCF in 2021 and 2022 cash flow conversion excl Aerostructures at ca. 70% in 2022 2021 FOCF 2022 FOCF(*) 2021-2025 FOCF(*) ca. €3bn €209mln ca. €500mln cumulated • ca.20% EBITA growth • Revenue growth • Mid single digit Revenue growth • Highest focus on cash ins • EBITA growth • High sing
Slide 29: 50% of Leonardo funding sources now are ESG linked
50% of Leonardo funding sources now are “ESG linked" Financing sources Two ESG linked financial transactions subscribed in 2021 €6,0bn € 2.4 bn ESG linked Revolving Credit 50% Facility (“RCF”) ESG linked € 600 mln ESG linked Term Loan (to refinance January 2022 debt maturing) 2021(1) KPI selected in
Slide 30: Reduced debt by ca. 20% and decreased cost of funding by ca. 60%
Reduced debt by ca. 20% and decreased cost of funding by ca. 60% Gross debt(1) Cost of funding(1) € 4.6 bn -20% 5.4% € 3.6 bn 6% -60% 4.7% 4.0% 3.5% 3.0% 2.3% TARGET 2016 2021(3) 2016 2017 2018 2019 2020(2) 2021(3) 2022-23E ≤ 3.0% • Important deleveraging achieved in 2021 vs 2016 • Average cost of f
Slide 31: 2022 Guidance
2022 Guidance FY2022 FY2021A Guidance(1) New Orders (€ bn) 14.3 ca. 15.0 Revenues (€ bn) 14.1 14.5-15.0 EBITA (€ mln) 1,123 1,180-1,220(2) FOCF (€ mln) 209 ca. 500 Group Net Debt (€ bn) 3.1 ca.3.1(3) 2022 exchange rate assumptions: € / USD = 1.18 and € / GBP = 0.9 (1) Based on the current assessment
Slide 32: Closing remarks
Closing remarks • Back on the growth path • Continued strong commercial activity globally building our backlog • Top line growth across all defence/governmental sectors • Robust profitability benefitting from increasing volumes and solid industrial performance • Structurally more solid and increasin
Slide 33: 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 • Sector results • Appendix 33 © 2022 Leonardo - Società per azioni FY 2021 Results
Slide 34: Q&A
Q&A 34 © 2022 Leonardo - Società per azioni FY 2021 Results
Slide 35: 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 • Sector Results • Appendix 35 © 2022 Leonardo - Società per azioni FY 2021 Results
Slide 36: Helicopters
Helicopters Solid business with civil recovering 2018-2021 Results 4Q21 Results Orders (€ mln) Revenues (€ mln) EBITA (€ mln) and Profitability 6,208 4,025 3,972 4,157 3,810 10.7% 4Q 2020 4Q 2021 % Change 9.8% 4,641 4,494 9.6% € mln 4,370 9.4% 431 406 359 Orders 1,340 1,979 +47.7% 383 Revenues 1,330
Slide 37: Helicopters
Helicopters DELIVERIES BY PROGRAMME REVENUES BY CUSTOMER/SEGMENT FY2021 = 128 new units FY2021 AW169 AW189 /149 24 16 74% 64% AW109/AW119 27 36% 46 26% AW139 13 2 NH90 AW101 Civil Defence/Governamental OE CS&T/Other AW FAMILY FY2020 = 111 new units AW169 FY2020 AW189 /149 14 10 69% 63% 25 AW109 / AW
Slide 38: Defence Electronics & Security
Defence Electronics & Security Growing Revenues and Profitability 2018-2021 Results 4Q21 Results ELECTRONICS - EU Orders Revenues EBITA and Profitability 5,392 4,519 4Q 2020 4Q 2021 % Change 4,289 4,147 € mln 4,710 4,011 4,409 4,444 Orders 2,464 1,529 -38.0% 10.7% 10.0% Revenues 1,416 1,496 5.6% 2,8
Slide 39: Aircraft
Aircraft Solid performance 2018-2021 Results 4Q21 Results Orders (€bn) Revenues (€bn) EBITA (€m) and Profitability 2,668 3,268 2,634 4Q 2020 4Q 2021 % Change 13.2% 2,031 2,329 € mln 1,904 13.5% 1,700 13.7% 432 1,932 13.8% Orders 1,259 1,025 -18.6% 355 266 320 Revenues 930 1,147 23.4% EBITA 151 191 2
Slide 40: Aerostructures and ATR
Aerostructures and ATR Gradual recovery 2018-2021 Results 4Q21 Results Aerostructures € mln 4Q 2020 4Q 2021 % Change Orders (€bn) Revenues (€bn) EBITA (€m) and Profitability Orders 132 66 -49.9% 925 948 1,125 Revenues 189 37 -80.6% 1,020 97 EBITA -39 -78 98.9% 53 RoS -20.7% -212.4% -191.7 p.p. 819 A
Slide 41: Space
Space Recovery of Manufacturing and confirmed solid performance of Satellite services 2018-2021 Results 4Q21 Results EBITA (€m) 4Q 2020 4Q 2021 % Change 58 62 € mln EBITA 24 25 4,2% 39 23 2018 2019 2020 2021 2022 Outlook(*) • Growing volumes driven by increased backlog and profitability improvement
Slide 42: 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 • Sector results • Appendix 42 © 2022 Leonardo - Società per azioni FY 2021 Results
Slide 43: 2021 results exceeding expectations
2021 results exceeding expectations Steady path of growth, with FOCF doubling the original Guidance BACKLOG* € 35.5 bn ORDERS € 14.3 bn +4.0% YOY • Strong and resilient 14% 20% 29% 23% CONTINUED STRONG defence/governmental 29% 21% 13% 51% COMMERCIAL (88% revenues in FY21) MOMENTUM • Book to Bill ca.
Slide 44: 4Q/FY 2021 Results
4Q/FY 2021 Results Group Performance 4Q 2020 4Q 2021 % Change FY 2020 FY 2021 % Change € mln New Orders 5.244 5.039 -3.9% 13.754 14.307 4.0% Backlog 35.516 35.534 0.1% Revenues 4.385 4,571 4.2% 13.410 14.135 5.4% EBITA 441 516 17% 938 1.123 19.7% RoS 10.1% 11.3% 1.2 p.p. 7.0% 7.9% +0.9 p.p. EBIT 122
Slide 45: Main initiatives enabling 50% contribution to SDG
Main initiatives enabling 50% contribution to SDG New initiatives increasing industrial New products included in our SDG process efficiency aligned portfolio M-346 and M-345 Our trainers through a greater use of Energy efficiency simulation systems allow a reduction of the Transition to LED technolo
Slide 46: Solid Group liquidity ensures adequate financial flexibility
Solid Group liquidity ensures adequate financial flexibility • Available credit lines • New ESG Credit Line signed in October 2021 equal to € 2.4 bn • Existing credit lines unconfirmed equal to € 1.0 bn together with cash in-hands(1) ensure a Group’s liquidity of approx. € 5.4 bn €5.4bn €1.0bn €2.4b
Slide 47: Balanced debt maturity profile
Balanced debt maturity profile Bond Dollar Bond Euro In € mil EIB Term Loan CDP DEBT MATURITY Average life: ≈ 4,8 years (1) …. Repayment Conditions of • €600mln ESG linked Term Loan subscribed in December 2021 has a bullet repayment in 2027 New Debt Instruments CREDIT RATING As of today Before last
Slide 48: Development costs capitalised as intangible assets as at 31 December 2021
Development costs capitalised as intangible assets as at 31 December 2021 Self Funded National Self Funded Other Total Security € mln 01 January 2021 Opening Balance 1,710 713 2,423 Gross R&D capitalised 118 160 278 Depreciation and write offs (75) (44) (119) Disposals - (2) (2) Subtotal 43 114 157
Slide 49: Covenant FY2021
Covenant FY2021 FY2021A FY2021A Post IFRS 16 Post IFRS 16 EBITDA* € 1,538 mln Group Net Debt € 3,122 mln Net Interest € 138 mln Leasing (IFRS 16) - € 568 mln Financial Debt to MBDA - € 664 mln Group Net Debt for Covenant € 1,890 mln EBITDA* € 1,538 mln EBITDA / Net Interest 11.1 Group Net Debt / EBI
Slide 50: 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 51: Contacts
CONTACTS Valeria Ricciotti Head of Investor Relations and Credit Rating Agencies +39 06 32473.697 valeria.ricciotti@leonardo.com Leonardo Investor Relations and Credit Rating Agencies +39 06 32473.512 ir@leonardo.com leonardo.com 51 © 2022 Leonardo - Società per azioni