Slide 1: ODDO BHF Forum - Leonardo Presentation
ODDO BHF FORUM Leonardo Presentation Valeria Ricciotti, Head of Investor Relations & Credit Rating Agencies Rome, 11th January 2022
Slide 2: Agenda
Agenda > Key messages Alessandro Profumo, Chief Executive Officer > 3Q/9M2021 Results Alessandra Genco, Chief Financial Officer > Update on Aerostructures Lucio Valerio Cioffi, General Manager > Sector Results > Appendix © 2019 Leonardo - Società per azioni 2
Slide 3: Key messages
3Q/9M2021 Results Presentation Key messages • Solid nine-month results with strong and resilient military-governmental business, 87% of Group revenues o Solid Top Line growth (Orders +9%, Revenues + 6%) • Results above 2019 levels on military-governmental • Some positive signs in challenging civil a
Slide 4: Solid 9M results and on track, above 2019 in military-governmental
3Q/9M2021 Results Presentation Solid 9M results and on track, above 2019 in military-governmental Progressing well with our Plan: 2021 Guidance confirmed BACKLOG* € 35.2 bn ORDERS € 9.3 bn +8.9% YOY CONTINUED STRONG COMMERCIAL 26% 13% 29% 20% 24% • Strong and resilient PERFORMANCE AND 20% 12% milita
Slide 5: Signed the first ESG-linked financial instrument
3Q/9M2021 Results Presentation Signed the first ESG-linked financial instrument NEW REVOLVING CREDIT FACILITY • € 2.4 bn credit line, composed of two tranches SIGNED IN OCTOBER 2021, THE FIRST • Maturity until 2026 TO BE ESG-LINKED • Oversubscribed for € 4.4 bn • Including o Reduction of CO2 emissio
Slide 6: Strong confidence in medium/long term potential of our main businesses
3Q/9M2021 Results Presentation Strong confidence in medium/long term potential of our main businesses Electronics Helicopters • Strong military/governmental and resilient • Attractive long term opportunities across civil business avionics, land and naval programmes • Attractive Customer Support & Tr
Slide 7: Aerostructures update
3Q/9M2021 Results Presentation Aerostructures update • Before COVID outbreak we were ahead of schedule in restructuring the business o EBITA breakeven expected in 2021/2022 and FOCF in 2022/2023 • Pandemic materially affected air traffic, airlines and aircraft manufacturers • Positive signs of early
Slide 8: Agenda
Agenda > Key messages Alessandro Profumo, Chief Executive Officer > 3Q/9M2021 Results Alessandra Genco, Chief Financial Officer > Update on Aerostructures Lucio Valerio Cioffi, General Manager > Sector Results > Appendix © 2020 Leonardo - Società per azioni 8
Slide 9: 9M 2021 Highlights
3Q/9M2021 Results Presentation 9M 2021 Highlights Solid first nine months on track to achieve FY 2021 guidance • Continued strong demand for our products supports growing top line • Backlog at € 35.2 bn, book to bill ca. 1 • Order intake of € 9.3 bn, up 8.9% YoY • Revenues at € 9.6 bn, up 6.0% YoY •
Slide 10: Order Intake
3Q/9M2021 Results Presentation Order Intake Continued strong commercial activity € mln ∆ % YoY 9M2020A 8,510 Large IMOS contract booked in 9M20. Postponement of some orders to 4Q21. In 9M2021 Orders for 36 TH-73A (AW119) for the US Navy, follow-on tranche of NEES for HELICOPTERS 2,391 -24.2% Italian
Slide 11: Revenues
3Q/9M2021 Results Presentation Revenues Strong top line performance across the Group € mln ∆ % YoY 9M2020A 9,025 Ramp-up in military/governmental (NH90 Qatar and TH-73A US Navy); HELICOPTERS 2,719 2.9% AW189/AW149 ELECTRONICS EUROPE 3,023 10.7% Growth across businesses impacted in 2020 by COVID 19 r
Slide 12: EBITA and Profitability
3Q/9M2021 Results Presentation EBITA and Profitability Strengthening performance as we increase volumes and reduce COVID impact € mln RoS ∆ % YoY 9M2020A 497 5.5% HELICOPTERS 223 8.2% 1.8% Stable performance ELECTRONICS EUROPE 281 9.3% 30.1% Higher volumes and profitability, impacted in 2020 by COVI
Slide 13: From EBITA to Net Result
3Q/9M2021 Results Presentation From EBITA to Net Result Net Result benefitting from EBITA increase 9M 2020A 9M 2021A -27.6% -39.0% -70.5% +22.1% +12.7% +67.2% YoY YoY YoY YoY YoY YoY 497 607 -45 -60 -101 -21 -21 395 -157 -16 445 -123 € mln € mln -9 -50 -84 -53 229 2 137 EBITA Non recurring Restructu
Slide 14: Strong liquidity position at € 3.6bn
3Q/9M2021 Results Presentation Strong liquidity position at € 3.6bn • Cash availability and credit facilities pro forma post signing new RCF ensure Group’s liquidity of € 3.6 bn • Cash & equivalents equal to € 0.4 bn • Confirmed credit lines equal to € 2.4 bn • Unconfirmed credit lines equal to € 0.
Slide 15: First Leonardo ESG-linked Revolving Credit Facility
3Q/9M2021 Results Presentation First Leonardo ESG-linked Revolving Credit Facility Extending maturity to 2026 - Size fitting business needs - Lowering financial cost • Further step in integrating economic and financial data and ESG targets • Margins reduced compared to previous credit lines • Margin
Slide 16: 2021 Guidance confirmed
3Q/9M2021 Results Presentation 2021 Guidance confirmed 2021E FY2020A FY2021 • Military/governmental business robust and resilient Guidance* driving top-line growth, improving profitability and New Orders (€ bn) 13.8 ca. 14 FOCF generation Revenues (€ bn) 13.4 13.8-14.3 • Civil Aeronautics expected t
Slide 17: Closing remarks
3Q/9M2021 Results Presentation Closing remarks • Back on the growth path • Continued strong commercial activity globally building our backlog • Top line growth across all sectors • Robust profitability benefitting from increasing volumes and solid industrial performance • Cash flow on track supporte
Slide 18: Agenda
Agenda > Key messages Alessandro Profumo, Chief Executive Officer > 3Q/9M2021 Results Alessandra Genco, Chief Financial Officer > Update on Aerostructures Lucio Valerio Cioffi, General Manager > Sector Results > Appendix © 2020 Leonardo - Società per azioni 18
Slide 19: Positioning for the future: addressing post Covid challenges in civil Aeronautics
3Q/9M2021 Results Presentation Positioning for the future: addressing post Covid challenges in civil Aeronautics • Progress and improving outlook in a number of areas • Clear action plan to address issues and improve industrial efficiency and flexibility • ATR recovering faster than expected • Airbu
Slide 20: ATR: Reinforcing leadership in regional market
3Q/9M2021 Results Presentation ATR: Reinforcing leadership in regional market • Leader in regional market • Environmentally friendly platform • Investing in SAF • Turboprop market to recover earlier vs entire civil aeronautics • 2020 bottom year (10 deliveries) • Good market opportunities (i.e. a/c
Slide 21: Aerostructures: Key strengths
3Q/9M2021 Results Presentation Aerostructures: Key strengths • Leadership in Aerostructures sustained by strong engineering skills and innovation Labs across the Group • Well positioned on some of the most important aircraft platforms • Customer base diversification • Technology strengths with stron
Slide 22: COVID has changed the revenue profile and production rate in Aerostructures
3Q/9M2021 Results Presentation COVID has changed the revenue profile and production rate in Aerostructures REVENUES PRODUCTION RATES 2019 2021E 2019 2020 2021E B787 B787 50% 37% B787 FUSELAGE SECTIONS (44 and 46) B767 16% 14/avg. p.m. 9/ avg. p.m. exp.4/ avg. p.m. Military 5% B767 7% Military 14% Ai
Slide 23: Our path towards breakeven: key assumptions
3Q/9M2021 Results Presentation Our path towards breakeven: key assumptions The recovery path has already started and is based on the following Production rate expected to increase starting from 2022, with material ATR ramp up from 2023, expanding product family (Cargo and 42 STOL) AEROSTRUCTURES A22
Slide 24: Aerostructures: Taking action to address issues
3Q/9M2021 Results Presentation Aerostructures: Taking action to address issues Industrial efficiency and flexibility plan launched to counteract COVID impacts and ensure future sustainability FOCUS ACTIONS RESULTS • Headcount reduction involving 1,000 out of 4,500 people • ca 500 early retirement •
Slide 25: Specialised production resulting in more robust and sustainable performance
3Q/9M2021 Results Presentation Specialised production resulting in more robust and sustainable performance SITE LOCATION MISSIONibvre STATUS/EVOLUTION • Center of excellence for • assembly of fuselages in light alloy for regional • Top ranked Aerostructures site, with extended use of and narrowbody
Slide 26: Summary
3Q/9M2021 Results Presentation Summary • We have taken actions to address challenges: clear action plan in place with results already visible in 2021 • The outlook is improving in ATR, Airbus and military activities • ATR: leading platform in its segment, expanding product family to capture new mark
Slide 27: Q&A
Q&A © 2019 Leonardo - Società per azioni 27
Slide 28: Sector Results
SECTOR RESULTS © 2019 Leonardo - Società per azioni 28
Slide 29: Helicopters
3Q/9M2021 Results Presentation Helicopters DELIVERIES BY PROGRAMME 3Q 2020 3Q 2021 % Change 9M2020 9M2021 % Change FY 2020 9M2021 = 73 new units € mln AW101 NH90 Orders 628 382 -39.2% 3,154 2,391 -24.2% 4,494 71 AW109 / AW119 AW189 /149 18 Revenues 949 829 -12.6% 2,642 2,719 +2.9% 3,972 11 AW169 EBI
Slide 30: Defence Electronics & Security
3Q/9M2021 Results Presentation Defence Electronics & Security ELECTRONICS - EU 2021 OUTLOOK* 3Q 2020 3Q 2021 % Change 9M2020 9M2021 % Change FY 2020 € mln • Growth in revenues recovering from 2020 Orders 827 1,428 +72.7% 2,246 3,861 +71.9% 4,710 pandemic slow down Revenues 919 931 +1.3% 2,731 3,023
Slide 31: Aeronautics
3Q/9M2021 Results Presentation Aeronautics AIRCRAFT 2021 OUTLOOK* 3Q 2020 3Q 2021 % Change 9M2020 9M2021 % Change FY 2020 € mln • Aircraft production increase driven by Orders 103 408 +296.1% 772 1,643 112.8% 2,031 EFA Kuwait, F35 and proprietary products (M-345, M-346) Revenues 630 887 +40.8% 1,704
Slide 32: Space
3Q/9M2021 Results Presentation Space 3Q 2020 3Q 2021 % Change 9M2020 9M2021 % Change FY 2020 € mln EBITA 9 14 +55.6% -1 37 n.a. 23 2021 OUTLOOK* • Volumes and profitability expected to increase supported by gradual recovery of Manufacturing • Confirmed solid performance of Satellite services *In abs
Slide 33: Appendix
APPENDIX © 2019 Leonardo - Società per azioni 33
Slide 34: 3Q/9M2021 Results - Group Performance
3Q/9M2021 Results Presentation 3Q/9M2021 Results Group Performance 3Q 2020 3Q2021 % Change 9M2020 9M2021 % Change FY 2020 € mln New Orders 2,406 2,584 +7.4% 8,510 9,266 +8.9% 13.754 Backlog 34,980 35,235 +0.7% 35.516 Revenues 3,147 3.219 +2.3% 9,025 9,564 +6.0% 13.410 EBITA 205 207 +1.0% 497 607 +22
Slide 35: Balanced debt maturity profile
3Q/9M2021 Results Presentation Balanced debt maturity profile No refinancing needs until 2022 In € mil Bond Dollar Bond Euro EIB Term Loan DEBT MATURITY CDP Average life: ≈ 4,2 years CREDIT RATING As of today Before last review Date of review Moody’s Ba1 / Stable Outlook Ba1 / Positive Outlook Octob
Slide 36: Covenant
3Q/9M2021 Results Presentation Covenant FY2020A FY2020A Post IFRS 16 Post IFRS 16 EBITDA* € 1,378 mln Group Net Debt € 3,318 mln Net Interest € 168 mln Leasing (IFRS 16) - € 555 mln Financial Debt to MBDA - € 663 mln Group Net Debt for Covenant € 2,100 mln EBITDA* € 1,378 mln EBITDA / Net Interest 8
Slide 37: Remuneration Policy aligned with shareholders interests, business strategy and ESG criteria
3Q/9M2021 Results Presentation Remuneration Policy aligned with shareholders interests, business strategy and ESG criteria • Convergence of interests between management and shareholders CEO Remuneration components • Aligning the remuneration package with international market best practices Fixed Rem
Slide 38: Performance Gate
3Q/9M2021 Results Presentation CEO short term variable remuneration (MBO) Type of objective KPIs Weight Functioning mechanism Target / Guidance Performance Gate 1,075 € mil. – If one or both of the following thresholds are not Group EBITA 30% On / off 1,125 € mil. achieved: Economic and • Group EBIT
Slide 39: Long Term Incentive Plan (LTIP)
3Q/9M2021 Results Presentation Long Term Incentive Plan (LTIP) KPIs Weight Reference Performance range Payout range financial period (Target / Guidance) 1-4 100% Relative Total Shareholder 5- 6 50% 35% 2021-2023 Return 7 25% 8-13 0% Target (< 3 € bil.) 100% Group Net Debt 25% 2021-2023 Minimum 50% T
Slide 40: 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 41: Contacts
Contacts Valeria Ricciotti Head of Investor Relations and Credit Rating Agencies +39 06 32473.697 valeria.ricciotti@leonardocompany.com Leonardo Investor Relations and Credit Rating Agencies +39 06 32473.512 ir@leonardocompany.com leonardocompany.com © 2019 Leonardo - Società per azioni 41