Slide 1: 1H 2019 Results Presentation
1H 2019 Results Presentation Alessandro Profumo Chief Executive Officer Alessandra Genco Chief Financial Officer Investor Relations and Credit Rating Agencies Rome, 30 July 2019
Slide 2: Agenda
Agenda > Executing the Industrial Plan Chief Executive Officer > 1H 2019 Results & Outlook Chief Financial Officer > Appendix © 2019 Leonardo - Società per azioni 2
Slide 3: Solid 1H 2019 performance
1H 2019 Results Presentation Solid 1H 2019 performance • First half results in line with expectations • Strong commercial performance across all businesses o Orders up 34% YoY at € 6.1 bn • Further step forward in executing our Industrial Plan o Helicopters well on the way to achieving the plan o Ai
Slide 4: Benefits of sharper commercial strategy and management efforts
1H 2019 Results Presentation Benefits of sharper commercial strategy and management efforts Strong demand for our products • Across all businesses • € 300 mln M-345 contract with Italian Air Force • Domestic and international • € 380 mln AW101 contract with the Polish Ministry of National Defence •
Slide 5: Agenda
Agenda > Executing the Industrial Plan Chief Executive Officer > 1H 2019 Results & Outlook Chief Financial Officer > Appendix © 2019 Leonardo - Società per azioni 5
Slide 6: Solid 1H 2019 performance
1H 2019 Results Presentation Solid 1H 2019 performance • Good progress on top line growth o Orders up 34% YoY at € 6.1 bn o Revenues up 7% YoY at € 6.0 bn o EBITA up 4% YoY at € 487 mln with RoS at 8.2% o Net Result up 229% at € 349 mln o FOCF at € (1.1) bn • 2019 Guidance confirmed © 2019 Leonardo
Slide 7: Order Intake
1H 2019 Results Presentation Order Intake Strong performance across the Group Governmental Strong contracts (NH90 contribution from Spain and AW101 Leonardo DRS Mainly Aircraft Poland) (MFoCS II) (EFA and M345) ORDER BACKLOG +28.4% +44.2% +17.9% +33.5% 1H 2019 ca. € 36 bn YoY YoY YoY YoY € mln (289)
Slide 8: Revenues
1H 2019 Results Presentation Revenues Positive momentum in Defence Electronics in US and EU Governmental Driven by Airborne programmes offsetting Systems and lower civil deliveries Leonardo DRS In line with 1H18 +3.6% +13.4% -2.6% +6.7% YoY YoY YoY YoY € mln 1,389 (182) 5,962 5,589 ca. € 80 mln posi
Slide 9: EBITA and Profitability
1H 2019 Results Presentation EBITA and Profitability Solid performance across all businesses, with lower contribution from JVs Driven by military, Aircraft and Lower activities and Investments in corporate CS&T and benefit Aerostructures higher development costs as backbone for from UK pension Highe
Slide 10: Net Result
1H 2019 Results Presentation Net Result Below the line benefitting from lower restructuring and PPA 1H 2018 1H 2019 +3.6% +92.5% +229.2% YoY YoY YoY 470 (182) 487 (4) (7) (14) 462 (124) (48) 97 349 240 (86) € mln € mln (118) (16) 106 EBITA Restructuting costs PPA EBIT Net financial expenses Income t
Slide 11: FY 2019 Guidance confirmed
1H 2019 Results Presentation FY 2019 Guidance confirmed FY2018A FY2019 Guidance NEW ORDERS € bn 15.124 12.5 - 13.5 REVENUES € bn 12.240 12.5 - 13.0 EBITA € bn 1.120 1.175 - 1.225 FOCF € mln 336 ca. 200 GROUP NET DEBT € bn 2.351 ca. 2.3 ca. 2.8* 2018 exchange rate assumptions: €/USD 1.25 and €/GBP 0.
Slide 12: Q&A
Q&A © 2019 Leonardo - Società per azioni 12
Slide 13: Sector Results
SECTOR RESULTS © 2019 Leonardo - Società per azioni 13
Slide 14: Helicopters
1H 2019 Results Presentation Helicopters Well positioned to capture growth opportunities 2Q 2018 2Q 2019 % Change 1H 2018 1H 2019 % Change FY 2018 € mln Orders 718 1,019 +41.9% 1,329 1,707 +28.4% 6,208 Revenues 1,080 1,082 +0.2% 1,830 1,895 +3.6% 3,810 EBITA 100 144 +44.0% 153 200 +30.7% 359 RoS 9.3
Slide 15: Helicopters
1H 2019 Results Presentation Helicopters DELIVERIES BY PROGRAMME REVENUES BY CUSTOMER/SEGMENT 1H2019 = 61 new units 1H2019 AW109 / AW119 / SW4 / AW009 NH90 AW189 /149 AW101 8 4 4 2 AW159 / Lynx 2 72% 65% AW169 15 35% 28% 26 AW139 /W3 Civil Military/Governamental OE CS&T/Other AW 1H2018 = 77 new unit
Slide 16: Defence Electronics & Security
1H 2019 Results Presentation Defence Electronics & Security Remain strong ELECTRONICS - EU 2Q 2018 2Q 2019 % Change 1H 2018 1H 2019 % Change FY 2018 2019 OUTLOOK € mln Orders 708 1,185 +67.4% 1,330 2,008 +51.0% 4,409 • 2019 revenue growth Revenues 955 997 +4.4% 1,744 1,871 +7.3% 4,011 EBITA 113 96 -
Slide 17: Aeronautics
1H 2019 Results Presentation Aeronautics Aircrafts positive outlook offsetting lower ATR 2Q 2018 2Q 2019 % Change 1H 2018 1H 2019 % Change FY 2018 € mln Orders 406 877 +116.0% 1,129 1,331 +17.9% 2,569 Revenues 787 745 -5.3% 1,426 1,389 -2.6% 2,896 EBITA 76 84 +10.5% 123 121 -1.6% 328 RoS 9.7% 11.3%
Slide 18: Space
1H 2019 Results Presentation Space Pressure on Manufacturing 2Q 2018 2Q 2019 % Change 1H 2018 1H 2019 % Change FY 2018 € mln EBITA 14 12 -14.3% 21 13 -38.1% 58 2019 OUTLOOK • Continued downturn in telecommunication market expected to affect Manufacturing activities © 2019 Leonardo - Società per azio
Slide 19: Appendix
APPENDIX © 2019 Leonardo - Società per azioni 19
Slide 20: 1H 2019 Results: Group Performance
1H 2019 Results Presentation 1H 2019 Results Group Performance 2Q 2018 2Q 2019 % Change 1H 2018 1H 2019 % Change FY 2018 € mln New Orders 2,440 3,627 +48.6% 4,604 6,145 +33.5% 15,124 Backlog 32,611 36,321 +11.4% 36,118 Revenues 3.138 3.237 +3.2% 5,589 5,962 +6.7% 12,240 EBITA 317 324 +2.2% 470 487 +
Slide 21: Solid Financial Position as at end of June 2019
1H 2019 Results Presentation Solid Financial Position as at end of June 2019 Bond Dollar € mln Bond Sterling Bond Euro EIB DEBT MATURITY Term Loan Average life: ≈ 5,5 years (1) Repayment Conditions of The Term Loan Facility is characterized by a 5 years bullet repayment; the EIB New Debt Instruments
Slide 22: Availability of adequate committed liquidity lines as at end of June 2019
1H 2019 Results Presentation Availability of adequate committed liquidity lines as at end of June 2019 • In order to cope with possible € mln Undrawn at 30 June 2019 As of 30 June 2019 swings in financing needs, Leonardo can leverage: o 30 June cash balance of €1.2 bn o Credit lines worth €2.5 bn (c
Slide 23: IFRS 16
1H 2019 Results Presentation IFRS 16 • IFRS 16 redefines recording methods of operating leases in the financial statements imposing a single recognition method for all types of leasing, with the consequent recognition in the balance sheet of the tangible assets and liabilities for future payments •
Slide 24: CEO Remuneration
CEO REMUNERATION © 2019 Leonardo - Società per azioni 24
Slide 25: Balanced Remuneration Policy
1H 2019 Results Presentation Balanced Remuneration Policy Aligned with shareholders interests • Convergence of interests between management and shareholders • Clear link between pay and degree of achievement of targets CEO REMUNERATION • Aligning the remuneration package with international market be
Slide 26: CEO performance: Management by Objectives
1H 2019 Results Presentation CEO performance: Management by Objectives MBO remuneration is paid in cash on a yearly basis GATES GROUP EBITA 85% of budget GROUP FOCF 100% of budget TARGETS GROUP EBITA GROUP FOCF INDUSTRIAL SUSTAINABILITY PLAN OBJECTIVES 30% of REM 30% of REM 30% of REM 10% of REM - O
Slide 27: Remuneration scheme: methodology
1H 2019 Results Presentation Remuneration scheme: methodology • CLAW-BACK CLAUSE o Leonardo is entitled to request repayment of the variable remuneration paid in the event of erroneous or falsified calculation • SEVERANCE o No severance payment for early termination and non renewal of mandate o CEO
Slide 28: Long Term Incentive Plan (LTIP)
1H 2019 Results Presentation Long Term Incentive Plan (LTIP) • BENEFICIARIES o Chief Executive Officer o Executive directors, employees and/or associates with a greatest impact on the achievement of business results (210 people) • FREQUENCY o 3 year cycles assigned yearly on a rolling basis • AWARD
Slide 29: LTIP Performance conditions
1H 2019 Results Presentation LTIP Performance conditions TSR Relative RETURN ON SALES OF THE Group 50% 25% Return on Sales measured as average of the Median final values of each year during the vesting Position period of the Plan 25% TOTAL 50% BONUS Positioning Bonus 25% 1-4 100% 5-6 50% NET FINANCI
Slide 30: Safe Harbor Statement
1H 2019 Results Presentation 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-looki
Slide 31: Contacts
Contacts Raffaella Luglini Chief Stakeholder Officer raffaella.luglini@leonardocompany.com Valeria Ricciotti Manuel Liotta Head of Investor Relations and Credit Rating Agencies Head of Sustainability +39 06 32473.697 +39 06 32473.666 valeria.ricciotti@leonardocompany.com manuel.liotta@leonardocompan
Slide 32: Thank you for your attention
THANK YOU FOR YOUR ATTENTION leonardocompany.com