Slide 1: Full Year 2011 Results Presentation
Full Year 2011 Results Presentation Giuseppe Orsi Chairman and CEO Alessandro Pansa COO - CFO London 28 March 2012 London, 1
Slide 2: 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 3: Presentation Outline
Presentation Outline Giuseppe Orsi, Chairman & CEO Group 2011 Results and Exceptional Charges St t i Priorities Strategic P i iti Alessandro Pansa Pansa, COO & CFO Sector Results and Guidance 2012 Guidance and 2013 Trends Q&A Appendix 3
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Slide 5: 2011 Key Data
2011 Key Data * ** *Ebita: Adj EBITA as defined by Finmeccanica before exceptional non‐recurring charges above it **No dividend to be proposed by BoD for FY2011 5
Slide 6: Details of 2011 Exceptional Charges
DETAILS OF 2011 EXCEPTIONAL CHARGES As per Finmeccanica accounting policy: “above” includes all the cost items which, although included within the ordinary operations of the companies (i.e. within Adjusted EBITA), are “exceptional” in nature “below” below includes all the non recurring items - like
Slide 7: Cash Out Profile of Exceptional Charges
CASH OUT PROFILE OF EXCEPTIONAL CHARGES 3,180 € mil 7
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Slide 9: Back to Business, Keeping the Pace
BACK TO BUSINESS, KEEPING THE PACE 15 NOVEMBER 15° PRESENTATION 9
Slide 10: Building the New Finmeccanica
BUILDING THE NEW FINMECCANICA Strategic evolution of business portfolio to achieve sustainable shareholder value International Strategic Sectors Manage for Value Partnerships Defence Electronics and Space, Energy, Helicopters Aeronautics Security Defence Systems Transportation B i Business portfolio
Slide 11: Helicopters
HELICOPTERS Developing a new family of commercial Vision helicopters based on common platforms and “Leader” on the g global systems market leveraging on a Continuing to invest in advanced tilt rotor technologically advanced technology and extend it to UAVs and and diversified product commercial tran
Slide 12: Aeronautics
AERONAUTICS Trainers: recent market win has confirmed growing opportunity Vision Regional R i l Turboprop T b (ATR) shareholders (ATR): h h ld di discussion i tto leverage product success into next generation platform “Player of choice” at global Regional Jet (Superjet): review collaboration scheme
Slide 13: Defence Electronics and Security - Europe
DEFENCE ELECTRONICS AND SECURITY - EUROPE Vision On plan to merge SELEX companies by end of 2012 Transition team in place to deliver restructuring and operating “Player of choice” at global plan in the next few months level, with transnational Site consolidation has commenced industrial footprint (I
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Slide 15: Leveraging Our Technologies into New Applications
LEVERAGING OUR TECHNOLOGIES INTO NEW APPLICATIONS “Sustainable Smart Solutions” “Mili “Military” ” TECHNOLOGY “Security Solutions” “Civil” 15
Slide 16: Leveraging on Our Position to Gain New Markets
LEVERAGING ON OUR POSITION TO GAIN NEW MARKETS 16
Slide 17: DRS and Finmeccanica in the USA
DRS and FINMECCANICA IN THE USA January 2012 Spring 2012 2013 FNM North America (US) FNM OpCos (Italy) Meccanica Meccanica Holdings FNM Meccanica Holdings Holdings (US) OpCos (Italy) (US) (US) SSA Board SSA Board Proxy Board SELEX Systems Integration Finmeccanica DRS Technologies AgustaWestland Defe
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Slide 19: Presentation Outline
Presentation Outline Giuseppe Orsi, Chairman & CEO Group 2011 Results and Exceptional Charges St t i Priorities Strategic P i iti Alessandro Pansa Pansa, COO & CFO Sector Results and Guidance 2012 Guidance and 2013 Trends Q&A Appendix 19
Slide 20: Drivers of the Current Year Budget (2012-2013)
Dri ers of the c Drivers current rrent 2 year ear b budget dget (2012 – 2013) Strong focus on recovery of a sustainable long term profitability and cash flow generation, without leveraging on growth growth, through the execution of a portfolio restructuring plan Profitability recovery: based on - co
Slide 21: Our Market Environment
OUR MARKET ENVIRONMENT Growing pressure on domestic defence budgets (Italy, UK, and USA) from 2010 and cuts expected till 2015 Our addressable business in non domestic high spending markets steadily growing, although in a tighter competitive environment Stronger attention to “affordability”, perform
Slide 22: Competitiveness, Efficiency Improvement and Industrial Restructuring
Competitiveness, Competiti eness efficienc efficiency improvement impro ement and ind industrial strial restructuring plans for profitability recovery Net impact on EBITA 2012 Net impact on EBITA 2013 – Baseline FY2011A Examples of initiatives Production Sites rationalisation 20% Lean manufacturing
Slide 23: Restructuring: Status of Implementation
MIL-FAA091-05032012-50239/LR Competitiveness, efficiency improvement and industrial restructuring t t i – status t t off implementation i l t ti Net impact on EBITA 2013 Key ey results esu ts so far a Milli off E Million Euros, percentt Almost 200 projects (with ~440 more than 5,000 initiatives) ~90
Slide 24: Our Path to Structurally Improve Cash Flow Generation
OUR PATH TO STRUCTURALLY IMPROVE CASH FLOW GENERATION 2012 a transition yyear where a strong g improvement p in cash inflow at operating p g WC level, mainly concentrated in DE&S and Helicopters, is significantly offset by cash out for provisions taken in 2011 P&L, especially in Aeronautics and Vehi
Slide 25: Aeronautics Results
Orders up 15% mainly driven by civil (ATR (ATR, B787 B787, A380) A380). EFA accounts for caca. 39% of total backlog backlog, B787 ca18% Revenue decrease mainly due to EFA production slowdown, partially offset by ATR, M346 and JSF Lower profitability mainly due to lower industrial efficiency in certa
Slide 26: Aeronautics - Update on Restructuring Plan
AERONAUTICS – UPDATE ON RESTRUCTURING PLAN 3R Plan execution – Restructure, Reorganise and Relaunch – progressing in line with schedule Agreements with Unions signed in Nov2010 and in Nov2011 to reduce headcount for >1,800 in 2011-2014 , of which >800 already terminated Merger g effective on January
Slide 27: DRS Results
Good productivity and profitability maintained in 2011 while facing planned reduction in revenues Most of volume reduction in 2011 was expected due to winding down of equipment supplies for urgent battleground operational requirements in particular Driver Vision Enhancements, Movement Tracking Syste
Slide 28: DRS: Actions to Increase Competitiveness in US
DRS: ACTIONS TO INCREASE COMPETITIVENESS IN US Elimination of cost duplication, simplification and site rationalisation HQ optimisation Group actions, including elimination of redundant functions, consolidation of back office activities p y reductions, including Company g integration g and consolida
Slide 29: Defence Electronics and Security Results
Selex Galileo: Lower orders due to large EFA wins booked in FY2010. Key revenues include EFA DASS, avionic radars and equipment, equipment for helos/Space programmes and customer support. Profitability remains high single digit despite pressure on volumes Selex Sistemi Integrati: Key orders include
Slide 30: Defence Electronics and Security - Milestones of Unified Selex Project
DEFENCE ELECTRONICS AND SECURITY - MILESTONES OF UNIFIED SELEX PROJECT Starting from 2013 a Single European Entity in the Defence Electronics and Security sector, having: One single strategic plan (Marketing & Sales Plan, Integrated innovation and R&D l ) based plan) b d on activities ti iti andd ac
Slide 31: Transportation Results
Lower orders due to large win booked in FY2010 (50 high-speed trains for Italy). Key orders include driverless metro line for Honolulu, Milan metro Line 5 and Service Key revenues include trains for the Danish, Dutch and Belgian railways, double-decker train cars for Italy; trains for the Milan, Riy
Slide 32: Vehicles - Update on Restructuring Plan
VEHICLES – UPDATE ON RESTRUCTURING PLAN Restructuring R t t i plan l llaunched h dbby th the C Company new managementt ffor iimproving i Effi Efficiency i and Total Cost of Quality going ahead in line with schedule Agreement reached with all major Trade Unions for implementation of restructuring pla
Slide 33: Helicopters Results
Results confirming sustained growth, maintaining double digit profitability Revenues up 7% mainly driven by customer support (+19% YoY) New orders for almost 200 helicopters; backlog equal to ca. 3 years of production Investing in key programmes able to sustain future growth, while maximising effici
Slide 34: Space and Defence Systems Results
Decrease iin O D Orders d mainly i l d due tto llarge wins i b booked k d iin FY2010 (I (Iridium idi NEXT) Revenues up 8% driven by both Manufacturing and Satellite Services Improved profitability mainly due to higher volumes in both segments and higher profitability in Manufacturing 2012E/2013E:goo
Slide 35: Energy Results
All comments below referred to like for like variations Order increase mainly due to Plants and Components Service accounts for ca. 59% of total backlog, plants and components for ca. 37% Decrease in Revenues due to lower production activities in Service (Solution and Repair); increase in Renewables
Slide 36: Much Higher Return on Investments and Productivity
MUCH HIGHER RETURN ON INVESTMENTS AND PRODUCTIVITY Return on investments (Percent) Productivity (Thousands of Euros of EBITA per employee) ca. 50% ca. 50% 2011A 2012E 2013E 2011A 2012E 2013E Improvement rely upon: much more efficient business portfolio; more focussed and marketable product portfolio
Slide 37: 2012 Guidance and Trends for 2013
2012 GUIDANCE AND TRENDS FOR 2013 Finmeccanica Group FY2011A FY2012E Trends for 2013 €min Orders 17,434 ca. 17,500 Book to bill > 1 Revenues 17 318 17,318 16 900 – 17,300 16,900 17 300 Low single digit growth EBITA 878 ca. 1,100 EBITA margin >7% FOCF -358 >0 Materially growing YoY Net Financial debt
Slide 38: Disposal Strategy
Disposal p strategy gy As part of our strategy aimed at rationalising, focussing and maximizing value of our business portfolio, we reconfirm our commitment to dispose of less strategically placed assets Disposals will also support debt reduction and strengthen balance sheet, pending recovery in cas
Slide 39: Debt Balances
DEBT BALANCES Finmeccanica's current financial structure is built on €4,604 million equity and €3,443 million total debt ‒ The debt/total capitalisation ratio is therefore 43% The debt has an average life of ca.10 years, thanks to a strategy over the last two - three years of extending the duration
Slide 40: Stable Financial Outlook Underpinning Investment Grade
STABLE FINANCIAL OUTLOOK UNDERPINNING INVESTMENT GRADE In order to cope with possible volatilities in financial needs, Finmeccanica can leverage:Year end cash balance of €1.3Billion Solid liquidity – Credit lines worth €3.1 Billion, fully available at December 31th 2011 to profile finance cash absor
Slide 41: Reconfirming Management Priorities
RECONFIRMING MANAGEMENT PRIORITIES Strategic consolidation of Group businesses, accelerating focus on Aerospace, Defence Electronics and Security, improving operational performance by: Deconsolidation process and restructuring of Rolling Stock Industrial restructuring of Aeronautics (3R- Restructure
Slide 42: Presentation Outline
Presentation Outline Giuseppe Orsi, Chairman & CEO Group 2011 Results and Exceptional Charges St t i Priorities Strategic P i iti Alessandro Pansa Pansa, COO & CFO Sector Results and Guidance 2012 Guidance and 2013 Trends Q&A Appendix 42
Slide 43: Presentation Outline
Presentation Outline Giuseppe Orsi, Chairman & CEO Group 2011 Results and Exceptional Charges St t i Priorities Strategic P i iti Alessandro Pansa Pansa, COO & CFO Sector Results and Guidance 2012 Guidance and 2013 Trends Q&A Appendix 43
Slide 44: Italian MoD and MoI Disclosure
ITALIAN MOD AND MOI DISCLOSURE Additional funding of 6.000 €375mln approved for 2012 5.000 1 850 1.850 1400 1500 4.000 1.536 1.668 1.300 3.000 MoED MOD 2.000 3.580 3720 3540 3.264 3.172 2.521 1.000 ‐ 2007‐2009 2010 2011 2012 2013 2014 avg Italian government 3 year plan now approved as shown in Novem
Slide 45: FY2011 Results by Sector
, FINMECCANICA AZZ Aeronautics -3.9% (903) -33.8% (1,548) 121 263 326 2,919 8,656 11,993 6.8% 18 1.8% 14 36 30 7 919 2,465 4,139 Defence Systems 11.9% 117 9.6% 110 37 32 247 1,044 3,656 4,066 Energy Transport Other Activities Eliminations 9.3% 91 9.3% 46 20 23 23 1,258 1,939 1,872 (3.4%) (110) (5.9%
Slide 46: 4Q 2011 Results by Sector
Defence 4Q 2011 (EUR million) Helicopters Electronics Aeronautics Defence Energy Transport Other Activities Eliminations Total and Systems Security Revenues 505 5,066 EBITA(**) 130 204 (88) a“ 81 37 (53) (38) 313 EBITA margin 11.2% 11.7% -10.9%6 13.6% 19.7% 14.2% (10.5%) -35.2% 6.2% EBITA Adj (*) 13
Slide 47: Development Costs Capitalised as Intangible Assets
Development Costs Capitalised as Intangible Assets at 31 December 2011 47
Slide 48: Investor Relations Finmeccanica
Investor Relations Finmeccanica investor_relations@finmeccanica.com Website: http://www.finmeccanica.com/Investor Relations John D. Stewart Raffaella Luglini VP Investor Relations Investor Relations Officer +39 06 32473.290 +39 06 32473.066 john.stewart@finmeccanica.com raffaella.luglini@finmeccanic