Leonardo Spa · MIL:LDO
Leonardo Spa — Leonardo Spa Ord — Q3 2024 Earnings Presentation
42 slides from Leonardo Spa's earnings presentation, Nov 7, 2024
Slide 1: 3Q/9M 2024 Results Presentation
3Q/9M 2024 Results Presentation Rome, 7 November 2024
Slide 2: Agenda
Agenda • Executing the Industrial Plan Roberto Cingolani, Chief Executive Officer and General Manager • 3Q/9M 2024 Results Alessandra Genco, Chief Financial Officer • Q&A • Appendix 2 © 2024 Leonardo - Società per azioni 3Q/9M 2024 Results
Slide 3: Executing the Industrial Plan
Executing the Industrial Plan Q3 2024 coincides with the mid term report • During the first 18 months we have o Developed a technology roadmap, a vision and an ambitious Industrial Plan which are timely and appreciated by defense institutions, market and peers Industrial Plan delivery o Set up a str
Slide 4: Solid nine months results
Solid nine months results with continued progress across all Group KPIs* 9M23 9M23 9M24 Change** pro-forma* New Orders, €bn 13.3 13.7 14.8 7.8% Revenue, €bn 10.3 10.7 12.1 12.4% EBITA, €M 644 666 766 15% ROS, % 6.3% 6.2% 6.3% +0.1 p.p. FOCF, €M -604 -637 -550 +13.7% Net debt, €bn 3.8 3.9 3.1 -19% Fi
Slide 5: Pillars of the Industrial Plan
Pillars of the Industrial Plan Organic growth Strengthen the core business Efficiency boost Inorganic growth Pave the way to address the global security challenge 5 © 2024 Leonardo - Società per azioni 3Q/9M 2024 Results
Slide 6: Execution of the Plan and Main Deliveries
Execution of the Plan and Main Deliveries Action area Progress • Increasing digital, data fusion and data analytics Organic growth Digitalisation • Launched Leonardo Multidomain Innovation Hub with Italian MoD • UAS – rationalising portfolio Efficiency boost Portfolio streamlining • Exited non-core
Slide 7: Leonardo and Rheinmetall JV
Leonardo and Rheinmetall JV 3) NEW PLAYER IN EU TANK PRODUCTION 1) Leonardo Rheinmetall Military New Main Battle Tank Vehicles (LRMV) ultra light JV 2) JV Headquarter in Rome based on Panther KF51 established October 15th Production sites: La Spezia, Rome, platform (>150 units) Dusseldorf New Armore
Slide 8: GCAP: new JV constitution expected by year end
GCAP: new JV constitution expected by year end • Development contract from 2025 to 2035 o €8.8bn investments from Italian MoD o Governance defined, including CEO and management appointment rules • Workshare allocation and key terms agreed • The JV will have 4 sites, with HQ in the UK • Equal rights
Slide 9: M&A Activity
M&A Activity 9 © 2024 Leonardo - Società per azioni 3Q/9M 2024 Results
Slide 10: Costs and efficiencies
Costs and efficiencies Efficiency examples • Savings of ca. € 13 million coming from • Travel rationalization (5 yrs avg) o avg. Hotel cost p.d. -8.8%* o avg. Intl. flight cost -4.1%* o avg. National flight -3.4%* o avg. Train cost -16.5%* • Mobile phones - roaming extra UE down ca. 34.5% • Real Est
Slide 11: The new Space Division – pave the way to the future
The new Space Division – pave the way to the future Space is crucial for multi-domain solutions and for fully integrated, data and information driven approach • Full financial consolidation of Telespazio • Space Business Unit carved-out from Electronics Division and fully integrated The new Space Di
Slide 12: Aerostructures business context and Boeing-related events
Business Context | Overall challenging business context to prolonged gap between workload and industrial capacity, compounded by high inflationary pressure Focus on Boeing-related events in 2024 Aerostructures’s industrial challenges June 24 First 787 volumes Max ~ 4.5 reduction Industrial Sept 24 -
Slide 13: Updated Industrial Plan | March 2025
Updated Industrial Plan | March 2025 | A comprehensive set of material improvement actions has been defined and is being implemented, with additional transformative interventions under evaluation Baseline (Scenario 1) Scenario 2 Scenario 3 Inertial Scenario Improvement Scenario Transformation Scenar
Slide 14: Sector leader in the main ESG Ratings
Sector leader in the main ESG Ratings Major ESG rating Latest Update Leonardo score Scale (low|high) Positioning in the reference sector Q4 2024 81 0 | 100 Achieved the highest CSA score out of 103 companies in the A&D Industry in the S&P Global The most comprehensive ESG assessment Corporate Sustai
Slide 15: Agenda
Agenda • Executing the Industrial Plan Roberto Cingolani, Chief Executive Officer and General Manager • 3Q/9M 2024 Results Alessandra Genco, Chief Financial Officer • Q&A • Appendix 15 © 2024 Leonardo - Società per azioni 3Q/9M 2024 Results
Slide 16: 9M Key messages
9M Key messages - Continued commercial Backlog > € 43 bn momentum +7.8% Orders 1 Top line Growth - Delivery of strong Revenues +12.4% backlog - Good performance 2 Higher in Defence Operating profit EBITA +15% - Accelerated efficiency plan Cash flow 3 Solid cash in FOCF +13.7% strengthening Supportin
Slide 17: 9M 2024 Highlights: solid performance across Group KPIs
9M 2024 Highlights: solid performance across Group KPIs with continued progress across all Group KPIs* 9M23 pro- 9M23 9M24 Change** forma* New Orders, €bn 13.3 13.7 14.8 7.8% Revenue, €bn 10.3 10.7 12.1 12.4% EBITA, €M 644 666 766 15% ROS, % 6.3% 6.2% 6.3% 0.1 p.p. FOCF, €M -604 -637 -550 13.7% Net
Slide 18: Helicopters: positive momentum with continued demand
Helicopters: positive momentum with continued demand across the business €mln 9M23 9M24 Change Orders 4,177 4,805 +15% Revenues 3,202 3,622 +13.1% EBITA 250 271 +8.4% RoS (%) 7.8% 7.5% -0.3 p.p. Highlights Deliveries by programme • Backlog of € 15.7 bn AW189 /149 • Order growth driven by both milita
Slide 19: Defence Electronics: solid growth with increased profitability
Defence Electronics: solid growth with increased profitability Electronics Europe DRS €mln 9M23* 9M24** Change $mln 9M23 9M24 Change Orders 4,418 4,865 +10.1% 2,502 2,807 +12.2% Revenues 2,925 3.229 +10.4% 1,900 2,253 +18.6% EBITA *** 309 381 +23.3% 158 204 +29.1% RoS (%) 10.6% 11.8% +1.2 p.p. 8.3%
Slide 20: Cyber & Security Solutions: solid performance with increasing demand
Cyber & Security Solutions: solid performance with increasing demand €mln 9M23 9M24 Change Orders 485 586 +20.8% Revenues 403 447 +10.9% EBITA 18 22 +22.2% RoS (%) 4.5% 4.9% +0.4 p.p. Highlights • Order growth driven by domestic market (i.e Cyber & Security solutions for Governmental customers – JOC
Slide 21: Aircraft: increased profitability driven by fighter programmes
Aircraft: increased profitability driven by fighter programmes €mln 9M23 9M24 Change Orders 1,824 1,228 -32.7% Revenues 1,938 1,910 -1.4% EBITA 242 246 +1.7% RoS (%) 12.5% 12.9% +0.4 p.p. Highlights • Wide array of international campaigns being pursued and progressing well • Reduced order volume ref
Slide 22: Aerostructures & ATR: further progress
Aerostructures & ATR: further progress but not reflecting headwinds from B787 slowdown €mln 9M23 9M24 Change Orders 528 571 +8.1% Revenues 462 508 +10% EBITA* (129) (129) - RoS (%) (27.9%) (25.4%) +2.5 p.p. Highlights • Order intake up year-on-year; reflecting continued air traffic recovery • Revenu
Slide 23: Space: good performance in Telespazio
Space: good performance in Telespazio €mln Telespazio 9M23 9M24 Change Orders 435 383 -12.0% Revenues 478 527 +10.3% EBITA 36 41 +13.9% RoS 7.5% 7.8% +0.3 p.p. €mln Space Division 9M23* 9M24*** Change Orders 435 476 +9.4% Revenues 478 616 +28.9% EBITA** 28 1 -96.4% RoS 5.9% 0.2% -5.7 p.p. Highlights
Slide 24: From EBITA to Net Result
From EBITA to Net Result 9M24 +15% +15.2% +136.2% YoY YoY • EBITA up 15% driven by good operating YoY performance Fair value gain resulting from the full consolidation 766 72 of Telespazio Group 730 • EBIT up 15.2% including € 72 mln of non- 17 41 636 144 recurring costs related to the favorable 366
Slide 25: FY 2024 Guidance confirmed
FY 2024 Guidance confirmed FY 2023 (1) Guidance 2024 (2) Orders, €bn 18.7 ca.19.5 Revenue, €bn 16.0 ca. 16.8 EBITA, €M 1,326 ca. 1,440 FOCF, €M 652 ca. 770 Net debt, €bn 2.3 ca. 2.0 (3) 2024 exchange rate assumptions: € / USD = 1.15 and € / GBP = 0.89 (1) The values shown for the year 2023 enhance
Slide 26: Agenda
Agenda • Executing the Industrial Plan Roberto Cingolani, Chief Executive Officer and General Manager • 3Q/9M 2024 Results Alessandra Genco, Chief Financial Officer • Q&A • Appendix 26 © 2024 Leonardo - Società per azioni 3Q/9M 2024 Results
Slide 27: Agenda
Agenda • Executing the Industrial Plan Roberto Cingolani, Chief Executive Officer and General Manager • 3Q/9M 2024 Results Alessandra Genco, Chief Financial Officer • Q&A • Appendix 27 © 2024 Leonardo - Società per azioni 3Q/9M 2024 Results
Slide 28: 3Q/9M 2024 Results
3Q/9M 2024 Results * 3Q 3Q 2023 * 3Q ** 9M 9M 2023 9M % Change ** FY % Change proforma 2023 Proforma 2024 2023 2024 2023 €M New Orders 4,584 4,756 4,429 (6.9%) 13,275 13,690 14,753 +7.8% 17,926 Backlog 40,186 41,473 43,618 +5.2% 39,529 Revenues 3,375 3,540 4,091 +15.6% 10,269 10,740 12,076 +12.4% 15
Slide 29: Solid Group liquidity ensures adequate financial flexibility
Solid Group liquidity ensures adequate financial flexibility As at 30 September 2024 Leonardo had sources of liquidity available for a total of about € 5.2 bn to meet the financing needs of the Group’s, broken down as follows: • Cash in-hands equal to € 0.9 bn • ESG Revolving Credit Facility (RCF) e
Slide 30: Balanced debt maturity profile
Balanced debt maturity profile TL DRS RADA Dollar Bond Euro in € mil EIB Term Loan CDP Debt maturity Average life: ≈ 2,4 years(1) CREDIT RATING As of today Before last review Date of review S&P BBB- / Positive Outlook BBB- / Stable Outlook August 2024 Moody’s Baa3 / Stable Outlook Ba1 / Positive Out
Slide 31: Helicopters
Helicopters 2019-2023 Results 3Q/9M24 Results Orders (€ mln) Revenues (€ mln) EBITA (€ mln) and Profitability 4,725 3Q 2023 3Q 2024 % Change 4,547 6,060 4,157 € mln 5,513 4,025 3,972 10.7% 4,641 9.8% 9.1% 8.9% Orders 1,372 1,221 -11% 9.6% 4,494 4,370 Revenues 1,042 1,197 +14.9% 431 415 422 383 406 E
Slide 32: Electronics
Electronics 2019-2023 Results ** 3Q/9M24 Results Orders Revenues EBITA and Profitability 6,521 4,907 ELECTRONICS - EU 5,628 4,712 5,392 4,519 4,289 12.2% 4,444 4,710 4,147 € mln 3Q 2023 3Q 2024 % Change 11.7% 10.7% Orders 1,608 1,474 -8.3% 3,516 10.0% 600 3,054 2,729 2,757 2,879 2,693 2,826 8.7% 553
Slide 33: Cyber & Security Solutions
Cyber & Security Solutions 2023 Results €bn Orders Revenues EBITA RoS 6.7% 0.7 0.6 0.04 3Q/9M24 Results 3Q 2023 3Q 2024 % Change 9M 2023 9M 2024 % Change € mln € mln Orders 207 159 -23.2% Orders 485 586 +20.8% Revenues 136 146 +7.4% Revenues 403 447 +10.9% EBITA 6 6 +0% EBITA 18 22 +22.2% RoS 4.4% 4
Slide 34: Aircraft
Aircraft 2019-2023 Results 3Q/9M24 Results Orders (€ mln) Revenues (€ mln) EBITA (€ mln) and Profitability 3Q 2023 3Q 2024 % Change € mln 2,668 2,800 3,268 3,085 2,938 Orders 327 202 -38.2% 2,395 13.3% 2,634 13.6% 14.3% 2,031 2,329 Revenues 590 638 +8.1% 1,904 13.7% 13.5% 434 421 419 EBITA 82 79 -3.
Slide 35: Aerostructures and ATR
Aerostructures and ATR 2019-2023 Results 3Q/9M24 Results Aerostructures Orders (€ mln) Revenues (€ mln) EBITA (€ mln) and Profitability € mln 3Q 2023 3Q 2024 % Change 948 1,125 Orders 303 207 -31.7% 53 12 Revenues 135 155 +14.8% 644 819 581 EBITA (55) (58) -5.5% 636 -69 -6 420 -11 -24 RoS (40.7%) (3
Slide 36: Remuneration Policy aligned with shareholders interests
Remuneration Policy aligned with shareholders interests, business strategy and ESG criteria CEO and General Manager remuneration components • Convergence of interests between management and shareholders Fixed Remuneration Short-Term Variable Remuneration Long-Term Variable Remuneration • Aligning th
Slide 37: CEO and General Manager short term variable remuneration (MBO)
CEO and General Manager short term variable remuneration (MBO) 37 © 2024 Leonardo - Società per azioni 3Q/9M 2024 Results
Slide 38: Long Term Incentive Plan (LTIP)
Long Term Incentive Plan (LTIP) Beneficiaries: Chief Executive Officer and General Manager, the Co-General Manager and key managers (executive directors, employees and/or associates of the Company and Group companies holding positions that have a decisive impact on the achievement of business result
Slide 39: Connecting ESG progress and remuneration
Connecting ESG progress and remuneration 10% of short-term variable CEO & General Manager •CEO & General Manager remuneration linked to ESG objectives • 5% →Inclusion of Leonardo in DJSI • 5% →Scope 1 & 2 GHG Emissions** • 5%→Average accident frequency rate* • 5% → Gender diversity, percentage of fe
Slide 40: Covenant FY2023
Covenant FY2023 FY2023A FY2023A Post IFRS 16 Post IFRS 16 EBITDA* € 1,790 M Group Net Debt € 2,323 M Net Interest € 95 M Leasing (IFRS 16) - € 610 M Financial Debt to MBDA - € 1,070 M Group Net Debt for Covenant € 643 M EBITDA* € 1,790 M EBITDA / Net Interest 18.8 Group Net Debt / EBITDA 0.40 THRESH
Slide 41: 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 42: Contacts
CONTACTS Valeria Ricciotti Head of Investor Relations and Credit Rating Agencies +39 06 32473.697 valeria.ricciotti@leonardo.com Investor Relations and Credit Rating Agencies +39 06 32473.512 ir@leonardo.com leonardo.com 42 © 2024 Leonardo - Società per azioni