Leonardo Spa · MIL:LDO
Leonardo Spa — Shareholder Meeting (May 2021)
45 slides from Leonardo Spa's shareholder meeting presentation, May 19, 2021
Slide 1: Annual General Meeting 2021
Annual General Meeting 2021 Alessandro Profumo Chief Executive Officer Rome, 19 May 2021
Slide 2: Agenda
Agenda > 2020 Results > Business Performance & Outlook > Industrial review > Shareholding and share price update > Integrated report > Appendix © 2019 Leonardo - Società per azioni 2
Slide 3: Key Messages
AGM 2021 Key Messages • We have successfully navigated the Group through 2020, resilient performance • Taking actions on optimising the portfolio for growth in our core businesses • Addressing challenges in businesses exposed to civil aeronautics • Strong foundations and core fundamentals give us co
Slide 4: FY 2020 results
AGM 2021 FY 2020 results 2020 targets met and exceeded at Order intake and FOCF level • Successfully navigated 2020 with a strong, solid & resilient business performance OPERATING CASH GENERATION AND COMMERCIAL STRATEGY PERFORMANCE FINANCIAL STRATEGY • Orders € 13.8 bn • EBITA € 938 mln • FOCF € 40
Slide 5: We successfully navigated 2020 with a strong, solid & resilient business performance
AGM 2021 We successfully navigated 2020 with a strong, solid & resilient business performance We delivered on Q4 as we said we would BACKLOG* € 35.5 bn ORDERS € 13.8 bn • Continued momentum despite 29% 18% 31% civil slowdown 10% 28% • Strong support from military / 20% 12% COMMERCIALLY 51% governmen
Slide 6: Strong reaction to crisis
AGM 2021 Strong reaction to crisis • Actions to get back to adequate levels of productivity delivered results • More than € 500 m of cost savings, exceeding our targets • Net investment savings of € 425 mln, ahead of plan PRODUCTIVITY SAVING MEASURES BEARING FRUIT BUDGET 2020 FY2020 FY2020 BASELINE
Slide 7: FY 2020 Group Results
AGM 2021 FY 2020 Group Results GROUP PERFORMANCE • Backlog covers more than 2.5 years of production Guidance FY 2019 FY 2020 % change 2020 • New Orders reflecting strong commercial performance € mln (book to bill 1x) New Orders 14,105 13,754 -2.5% Ca. 14,000 Backlog 36,513 35,516 -2.7% • Revenues in
Slide 8: FY 2020 Leonardo Spa Results
AGM 2021 FY 2020 Leonardo Spa Results LEONARDO SPA PERFORMANCE FY 2019 FY 2020 % change € mln New Orders 9,163 8,362 -8.7% Backlog 27,987 27,160 -3.0% Revenues 9,010 8,654 -4.0% EBITA 568 404 -28.9% RoS 6.3% 4.7% -1.6 p.p. EBIT 538 50 -90.7% EBIT Margin 6.0% 0.6% -.5.4 p.p. Net result before extraor
Slide 9: True believers sustainability enhancing our future performance
AGM 2021 True believers sustainability enhancing our future performance Contributing to People, Planet and Prosperity CAPITALS BUSINESS MODEL RESULTS AND IMPACTS People and skills Financials • 13.4 €bil revenues • 49,882 employees R&D • 13.8 € bil. orders • ~8,800 people in R&D and engineering • 35.
Slide 10: 2020 ESG results achieved
AGM 2021 2020 ESG results achieved Performance indicators and recognitions GOVERNANCE PEOPLE • 42% of women sitting on the Board of Directors • 3,222 new hires, of which 43% hold a STEM degree, 41% under 30 and 23% women • Embedding CFO Principles on Integrated SDG Investments and Finance • ~800,000
Slide 11: Proposal to the Shareholders' Meeting
AGM 2021 Proposal to the Shareholders' Meeting • The Company's Board of Directors resolved to submit the financial statements of Leonardo - Società per azioni at 31 December 2020 for approval to the Shareholders' Meeting, which closed with a net loss of € 93,152,464.65 • In this regard, the Company'
Slide 12: Strategic updates in Defence Electronics & Security
AGM 2021 Strategic updates in Defence Electronics & Security Europe US • Acquisition of 25.1% of Hensoldt • DRS IPO of a minority stake • Agreement to purchase a 25.1% stake in HENSOLDT, • Transaction to allow the financial market to better leading European player in the field of sensor solutions as
Slide 13: Strong confidence in our core business fundamentals
AGM 2021 Strong confidence in our core business fundamentals … well positioned for medium-long term • Core businesses delivering well, with resilient military/governmental • Addressing short-term challenges in a complex scenario • Robust 2021 guidance on orders & revenues, with a solid underpinning
Slide 14: Agenda
Agenda > 2020 Results > Business Performance & Outlook > Industrial review > Shareholding and share price update > Integrated report > Appendix © 2019 Leonardo - Società per azioni 14
Slide 15: Helicopters: military-governmental supporting growth
AGM 2021 Helicopters: military-governmental supporting growth 4Q 2019 4Q 2020 % Change FY 2019 FY 2020 % Change € mln Orders 2,407 1,340 -44.3% 4,641 4,494 -3.2% Revenues 1,289 1,330 +3.2% 4,025 3,972 -1.3% EBITA 161 164 +1.9% 431 383 -11.1% RoS 12.5% 12.3% -0.2 p.p. 10.7% 9.6% -1.1 p.p. 2020 RESULT
Slide 16: Electronics: Solid sales and industrial performance
AGM 2021 Electronics: Solid sales and industrial performance 4Q 2019 4Q 2020 % Change FY 2019 FY 2020 % Change € mln Orders 1,780 2,464 38.4% 4,444 4,710 +6.0% Revenues 1,551 1,416 -8.7% 4,289 4,147 -3.3% EBITA 190 144 -24.2% 427 360 -15.7% RoS 12.4% 10.2% -2.4 p.p. 10.0% 8.7% -1.3 p.p. 2020 RESULTS
Slide 17: Leonardo DRS: development programmes key for future
AGM 2021 Leonardo DRS: development programmes key for future 4Q 2019 4Q 2020 % Change FY 2019 FY 2020 % Change $ mln Orders 670 511 -23.7% 2,923 3,054 +4.5% Revenues 913 825 -9.6% 2,729 2,757 +1.0% EBITA 92 88 -4.3% 208 202 -2.9% RoS 10.1% 10.7% +0.6 p.p. 7.6% 7.3% -0. 3.p. Avg. exchange rate €/$ @
Slide 18: Aircraft: solid performance
AGM 2021 Aircraft: solid performance 4Q 2019 4Q 2020 % Change FY 2019 FY 2020 % Change € mln Orders 383 1,259 +221.9% 1,904 2,031 6.7% Revenues 827 930 +15.6% 2,329 2,634 +13.1% EBITA 132 151 +14.4% 320 355 +10.9% RoS 15.9% 16.2% -0.01 p.p. +13.7% +13.5% -0.2 p.p. 2020 RESULTS • Strong performance d
Slide 19: Aerostructures: heavily impacted by the civil market downturn
AGM 2021 Aerostructures: heavily impacted by the civil market downturn + 4Q 2019 4Q 2020 % Change FY 2019 FY 2020 % Change € mln Orders 413 132 -62.9% 948 581 -38.7% Revenues 279 189 -24.0% 1,125 819 -27.2% EBITA 16 -39 -337.5% -11 -86 -681.8% RoS 5.73% -20.7% -23.6 p.p. -1.0% -10.5% -9.5 p.p. 2020
Slide 20: Space: solid performance of satellite services
AGM 2021 Space: solid performance of satellite services 4Q 2019 4Q 2020 % Change FY 2019 FY 2020 % Change € mln EBITA 16 24 +50.0% 39 23 -41.0% 2020 RESULTS • Solid performance from Services • Space Manufacturing lower activities • COVID effects on productivity and higher costs on telecommunication
Slide 21: Agenda
Agenda > 2020 Results > Business Performance & Outlook > Industrial review > Shareholding and share price update > Integrated report > Appendix © 2019 Leonardo - Società per azioni 21
Slide 22: A clear path to improve efficiency and address issues
AGM 2021 We see a clear path to improve efficiency, address issues in medium- longer term and mitigate effects in short term Focus on structural issues, mainly in civil businesses, to improve profitability and cash flow • Review of strategic options to accelerate transformation and address structura
Slide 23: Results achieved are showing we are on the right path
AGM 2021 Results achieved are showing we are on the right path Continuing to execute our strategic plan “Be Tomorrow-2030” based on strengthening the core, transforming to grow and mastering the new KOPTER Acquisition Innovation • Strengthening worldwide leadership in core • At the forefront of inno
Slide 24: Positioning for the future: addressing post Covid challenges in civil Aeronautics
AGM 2021 Positioning for the future: addressing post Covid challenges in civil Aeronautics Two different paths for Aerostructures and ATR AEROSTRUCTURES ATR Taking action to address issues: clear roadmap Reinforcing leadership in regional market • Rationalise industrial sites towards programmes and
Slide 25: New opportunities post COVID
AGM 2021 New opportunities post COVID Leveraging existing assets, capabilities and technologies to support Italian and European Next Gen ASSETS CROSS BUSINESS CORE COMPETENCES Predictive Simulation Big Data Management High Performance Computing Artificial Command & Intelligence Control Algorithm Adv
Slide 26: New opportunities post COVID: key role in Italy's recovery
AGM 2021 New opportunities post COVID …. key role to play in Italy’s recovery Leonardo Technological Enablers (Cloud computing – High Performance Computer – AI – Predictive Simulation – Decision Support – C2 – Cyber) Global Monitoring Smart City Health Digital PA Logistic GLOBAL MONITORING SMART CIT
Slide 27: Agenda
Agenda > 2020 Results > Business Performance & Outlook > Industrial review > Shareholding and share price update > Integrated report > Appendix © 2019 Leonardo - Società per azioni 27
Slide 28: Most of Leonardo's shareholding is held by Institutional Investors
AGM 2021 Most of Leonardo's shareholding is held by Institutional Investors DISTRIBUTION OF SHAREHOLDERS 48.8% Instiutional Investors 30.2% Ministry of Economic and Finance 17.5% Retail Investors 13.0% Institutional Unidentified 10.5% Treasyry Shares GEOGRAPHICAL DISTRIBUTION OF SIGNATORIES OF THE P
Slide 29: 2020 share price materially affected by COVID
AGM 2021 In 2020 Financial markets and Leonardo share price materially affected by COVID 19 2 January 2020 – 31 December 2020 Leonardo -43.6% FTSEMIB -6.7% STOXX 600 -4.9% A&D EU -20 .6% S&P 500 15.3% 140 120 100 80 60 40 20 Ja n-20 Feb-2 0 Mar-2 0 Apr-20 May-20 Ju n-20 Ju l-20 Aug-20 Sep-20 Oct-20
Slide 30: A&D sector share price performance affected by COVID-19
AGM 2021 A&D sector share price performance materially affected by COVID-19 with a recovery starting from November 2020 2 January 2020 – 30 December 2020 Leonardo -43.6% Airbus -31.2% BAE Systems -13.5% Thales -19.0% Rolls-Royce -52.5% Meggitt -29.0% MTU Aero Engines -16.2% 140 120 100 80 60 40 20 0
Slide 31: Positive market trend in 2021, strong Leonardo share price performance
AGM 2021 Positive market trend in 2021, strong Leonardo share price performance 1 January 2021 – 30 April 2021 Leonardo +15.0% FTSEMIB +8.6% STOXX 600 +9.6% A&D EU +6.4% 110 70 Jan-21 Feb-21 Mar-21 Apr-21 • In 2021, financial markets performed well, as the investors saw an excellent environment for
Slide 32: Leonardo share price performance above European peers
AGM 2021 Leonardo share price performance above European peers 1 January 2021 – 30 April 2021 Leonardo +15.0% Airbus +11.3% BAE Systems +3.6% Thales +13.2% Rolls-Royce -6.0% Meggitt -0.1% MTU Aero Engines -1.6% 140 120 100 80 60 Jan-21 Feb-21 Mar-21 Apr-21 • Strong YTD performance, above the major E
Slide 33: Agenda
Agenda > 2020 Results > Business Performance & Outlook > Industrial review > Shareholding and share price update > Integrated report > Appendix © 2019 Leonardo - Società per azioni 33
Slide 34: True believers ESG enhancing our future performance
AGM 2021 True believers ESG enhancing our future performance Key results achieved • ESG is forefront of our minds and its been part of our journey for 10 years now 5 CAPITALS 3 “P’s” FINANCIAL • Solid FY2020 Results CAPITAL GROWTH OPPORTUNITIES PEOPLE HUMAN • 9,000 employees in R&D CAPITAL activitie
Slide 35: Contributing to the SDGs through investments and innovation
AGM 2021 Contributing to the SDGs through investments and innovation • In 2021-2022, Leonardo invests on yearly average around 600-700 €mln(1) • Leonardo commits to around 50% of SDGs-aligned investments • The initiatives mainly impact SDG 9 “Industry, Innovation & Infrastructure” followed by SDG 8
Slide 36: ESG targets for 2021-2030
AGM 2021 Forward-looking perspective: ESG targets for 2021-2030 Integrated in our value chain and supporting the SDGs Governance Impacts on SDGs Issue of a Trade Compliance Guideline including Human Rights Impact Assessment (HRIA) 2021 and development of country risk assessment tools for Leonardo Sp
Slide 37: ESG targets for 2021-2030
AGM 2021 Forward-looking perspective: ESG targets for 2021-2030 Integrated in our value chain and supporting the SDGs Planet Impacts on SDGs 10% reduction in electricity consumption* 2025 Reduce energy 4% reduction in emissions Scope I + Scope II (Location Based)* 2025 consumption and CO2 emissions
Slide 38: Appendix
APPENDIX © 2019 Leonardo - Società per azioni 38
Slide 39: Impressive FOCF in Q4 to deliver on targets
AGM 2021 Impressive FOCF in Q4 to deliver on targets • Resilient performance at FOCF level as expected and promised • Working capital under control in non-civil activities • Lower investments also benefitting from extraordinary goverment grants cash-ins • Cost savings measures • Solid business perfo
Slide 40: Balanced debt maturity profile
AGM 2021 Balanced debt maturity profile Bond Dollar In € mil Bond Euro EIB Term Loan CDP DEBT MATURITY Average life: ≈ 4,9 years (1) …. Repayment Conditions of • €500mln bond issued in July 2020 is characterized by a 5 year bullet repayment New Debt Instruments • EIB financing is a 12 year amortizin
Slide 41: Strong liquidity position at €5.6bn
AGM 2021 Strong liquidity position at € 5.6bn • Cash availability(1) and credit facilities ensure a Group’s liquidity above € 5.5 bn • Existing credit lines (confirmed and unconfirmed) equal to € 2.7 bn • New Credit Line signed in May 2020 equal to € 1.25 bn(2) €1.25bn €5.6bn €0.9bn €1.8bn €1.7bn Ca
Slide 42: Development costs capitalised as intangible assets
AGM 2021 Development costs capitalised as intangible assets as at 31 December 2020 Self Funded National Self Funded Other Total Security € mln 01 January 2020 Opening Balance 1,805 503 2,308 Gross R&D capitalised (18) 121 103 Depreciation and write offs (56) (88) (144) Disposals - (2) (2) Subtotal (
Slide 43: Helicopters
AGM 2021 Helicopters DELIVERIES BY PROGRAMME REVENUES BY CUSTOMER/SEGMENT FY2020 = 111 new units FY2020 AW169 AW189 /149 14 10 67% 63% 37% 25 AW109 / AW119 / 33% SW4 / AW009 48 AW139 /W3 9 5 NH90 AW101 Civil Military/Governamental OE CS&T/Other AW FY2019 = 156 new units FY2019 FAMILY AW169 AW189 /14
Slide 44: Safe Harbor Statement
AGM 2021 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 ba
Slide 45: 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 45