Slide 1: 1H/2Q 2016 Results Presentation
1H/2Q 2016 Results Presentation Mauro Moretti Chief Executive Officer and General Manager Gian Piero Cutillo Chief Financial Officer London 29 July 2016
Slide 2: Agenda
KEY ACHIEVEMENTS IN 1H 2016 (CEO and General Manager) RESULTS AND OUTLOOK (CFO) UPDATE ON STRATEGIC DEVELOPMENTS (CEO and General Manager) Q&A
Slide 3: Key achievements in 1H 2016
Key achievements in 1H 2016 Results confirm successful execution of the Industrial Plan Improved industrial performance: strong progress in Aeronautics and Defence Electronics Some softness in Helicopters due to civil markets Increased quality of results More solid and balanced, with all key busines
Slide 4: Outstanding 1H2016 Results
Outstanding 1H2016 Results New Orders at € 12,9mln (+132% YoY), with Book to Bill at 2.4x Backlog up to € 35bn (+ 19% YoY) Material improvement in operating profitability: - EBITDA at € 786mln up 6.5% YoY, margin at 14.5% (from 12.4%) - EBITA at € 472mln up 4.9%YoY , RoS at 8.7% (from 7.5%) - EBIT a
Slide 5: Results and Outlook (CFO)
KEY ACHIEVEMENTS IN 1H 2016 (CEO and General Manager) RESULTS AND OUTLOOK (CFO) UPDATE ON STRATEGIC DEVELOPMENTS (CEO and General Manager) Q&A 5
Slide 6: Key messages
Key messages Solid start to the year reflecting a better balanced business Continuous improvement in Electronics, Defence & Security and Aeronautics Offsetting increasingly challenging Helicopters market Material step up in Net Result FY expectations confirmed Very positive incremental impact from E
Slide 7: New Orders
New Orders benefitting from the €7.95bln EFA-Kuwait contract - 57.6% - 8.7% +1,272.6% +132.3% % Ch. vs. 1H2015 € Mln 9,485 (66) 12,867 5,539 2,490 958 1H2015 Helicopters Electronics, Defence Aeronautics Eliminations & Other 1H2016 1H and Security Systems 2016 7
Slide 8: Revenues
Revenues Lower YoY due to change in perimeter and shortfall in Helicopters - 19.2% - 4.7% - 2.5% - 9.4% % Ch. vs. 1H2015 € Mln 5,973 1,379 (111) 5,413 2,437 1,708 1H2015 Helicopters Electronics, Defence Aeronautics Eliminations & Other 1H2016 1H and Security Systems 2016 8
Slide 9: Profitability improvement
Profitability improvement EBITDA improving trend continues, margin 210bp higher YoY - 0.2 p.p. +2.1 p.p. +4.0 p.p. + 2.1 p.p. Ch. vs. 1H2015 € Mln 256 29 (24) 786 738 (Margin 18.6%) (Margin 14.5%) (Margin 12.4%) 281 (Margin 11.5%) 244 (Margin 14.3%) 1H2015 Helicopters Electronics, Aeronautics Space
Slide 10: Profitability improvement
Profitability improvement Higher EBITA despite lower revenues, ROS 120bp higher - 0.5 p.p. +1.5 p.p. + 2.2 p.p. + 1.2 p.p. Ch. vs. 1H2015 € Mln 115 29 (51) (RoS 8.3%) 472 450 (RoS 8.7%) (RoS 7.5%) 177 (RoS 7.3%) 202 (RoS 11.8%) 1H2015 Helicopters Electronics, Aeronautics Space Corporate & 1H2016 1H
Slide 11: Net Result
Net Result More than doubled on lower below the line and net financial expenses 1H2015 1H2016 € Mln € Mln 472 (+4.9%) 472 (25) 450 450 (51) (48) 399 (48) (+13.7%) 399 (121) 351 351 (197) (78) 200 (+119.8%) 200 (63) 91 91 EBITA Restr./Non-rec. PPA EBIT Net financial Income Taxes Net Result EBITA Rest
Slide 12: Eurofighter Kuwait contract
Eurofighter Kuwait contract Order booked in 2Q2016 Contract signed on April 5th 2016 for 28 Eurofighter in the most advanced configuration, including new E-Scan radar Leonardo as prime contractor will lead all activities on behalf of the Consortium. Our share is ca. 60% of total value (€ 7,95mln), r
Slide 13: FY2016 Guidance
FY2016 Guidance New Orders: challenging, due to the prolonged crisis of civil helicopters markets FY2015A FY2016E* Revenues: forecasted at the lowest end, driven by lower Helicopters New orders € bn 12.4 ca. 20 EBITA: expected at the top end, confirming continuous improvement in operating Revenues €
Slide 14: Update on Strategic Developments
KEY ACHIEVEMENTS IN 1H 2016 (CEO and General Manager) RESULTS AND OUTLOOK (CFO) UPDATE ON STRATEGIC DEVELOPMENTS (CEO and General Manager) Q&A 14
Slide 15: Better bottom line with growing cash conversion
Better bottom line with growing cash conversion € Mln Net Result before extraordinary transactions FOCF 15
Slide 16: Stronger capital structure for a more solid and flexible Company
Stronger capital structure for a more solid and flexible Company € Mln D/E% 1.06% 1.03% 4,302 3,902 3,854 3,962 3,679 3,278 0.76% ~2.8bn ~0.6% 2013 2014 2015 2016 E Equity Group Net Debt 16 Debt-to-Equity ratio
Slide 17: Investments in innovation for future growth leveraging on key technologies
Investments in innovation for future growth leveraging on key technologies working on a complete range UAVs (i.e. Falco family, IRIS) Also to address security needs € Mln Complete the Training value ~ 1bn chain with the M-345 HET ~ 750mln Extending the M-346 role to ~ 600mln 600 - 650 mln light figh
Slide 18: Stronger, more focused and better balanced today
Stronger, more focused and better balanced today Contribution to 2016 Guidance* 14% ROS% Helicopters LEONARDO GROUP FINMECCANICA GROUP 12% Aeronautics 10% Electronics, Defence and Security Systems 8% 6% EBITA 4% 2% 0% 18 0 200 400 600 800 1,000 1,200 1,400 EBITA *Space sector consolidated under the
Slide 19: Executing and delivering strongly in 2016
Executing and delivering strongly in 2016 We have deeply rationalized the business and product portfolio Extracting the benefits of being today a one integrated Company Facing some market challenges we are concentrating our efforts and doing an outstanding job in what we can control: - Cost - Invest
Slide 20: Sector Results
SECTOR RESULTS 20
Slide 21: Helicopters
HELICOPTERS 2Q 1H FY % % 2016 2015 2016 2015 2015 € Mln Change Change Orders 574 909 (36.9%) 958 2,257 (57.6%) 3,910 Revenues 898 1,190 (24.5%) 1,708 2,114 (19.2%) 4,479 EBITA 119 148 (19.6%) 202 260 (22.3%) 558 ROS % 13.3% 12.4% 0.9 p.p. 11.8% 12.3% (0.5) p.p. 12.5% Challenging market conditions in
Slide 22: Electronics, Defence & Security Systems
ELECTRONICS, DEFENCE & SECURITY SYSTEMS (Now includes Defence Systems as a Division , DRS and MBDA) Slight decline in Orders due to some postponements to H2 and change in 2Q 1H FY perimeter of DRS. Major orders booked in Land & Naval Defence Electronics and % % DRS 2016 2015 2016 2015 2015 € Mln Cha
Slide 23: Aeronautics
AERONAUTICS 2Q 1H FY % % 2016 2015 2016 2015 2015 € Mln Change Change Orders 8,492 362 n.a. 9,485 691 n.a. 1,741 Revenues 741 754 (1.7%) 1,379 1,414 (2.5%) 3,118 EBITA 74 52 42.3% 115 86 33.7% 312 ROS % 10.0% 6.9% 3.1 p.p. 8.3% 6.1% 2.2 p.p. 10.0% Significant level of new orders boosted by Eurofight
Slide 24: Space
SPACE 2Q 1H FY % % 2016 2015 2016 2015 2015 € Mln Change Change EBITA 25 21 19.0% 29 22 31.8% 37 Good performance in Manufacturing, with higher volumes and better profitability offsetting lower margins in Services EBITA and profitability expected to recover in 2016 24
Slide 25: Appendix
APPENDIX 25
Slide 26: Group Performance
GROUP PERFORMANCE 2Q 1H FY % % 2016 2015 2016 2015 2015 Change Change € Mln New Orders 10,303 2,898 n.a. 12,867 5,539 n.a. 12,371 Backlog - - - 34,996 29,303 19.4% 28,793 Revenues 2,877 3,319 (13.3%) 5,413 5,973 (9.4%) 12,995 EBITDA 460 451 20.0% 786 738 6.5% 1,866 EBITDA Margin 16.0% 13.6% 2.4 p.p.
Slide 27: Financial Position (as of end of June 2016)
FINANCIAL POSITION (as of end of June 2016) No refinancing needs before end 2017 Key Strong liquidity position Messages Bonds have neither financial covenants nor rating pricing grids Average life approx. 7 years (€mil) Dollar Bond Maturity 384 Sterling Bond Schedule 521 500 739 556 Euro Bond 391 50
Slide 28: Liquidity Position (as of end of June 2016)
LIQUIDITY POSITION (as of end of June 2016) In order to cope with possible swings in financing needs, Finmeccanica can leverage: – 30 June cash balance of approx. €0.8Billion Availability of – Credit lines worth €2.7 Billion (confirmed and unconfirmed) The Revolving Credit Facility was renegotiated
Slide 29: 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 30: Investor Relations Contacts
Investor Relations & Sustainable Responsible Investors (SRI) Contacts Raffaella Luglini Head of Investor Relations & SRI +39 06 32473.066 raffaella.luglini@leonardocompany.com Valeria Ricciotti Alessio Crosa Manuel Liotta Equity Analysts & Investors Fixed Income Analysts & Investors and Group Sustai