Leonardo Spa · MIL:LDO
Leonardo Spa — Finmeccanica — H1 2013 Earnings Presentation
37 slides from Leonardo Spa's earnings presentation, Aug 1, 2013
Slide 1: 2Q/1H 2013 Results Presentation
2Q/1H 2013 Results Presentation Alessandro Pansa Chief Executive Officer Gian Piero Cutillo Chief Financial Officer 1 August 2013 1
Slide 2: Agenda
AGENDA INTRODUCTION (Alessandro Pansa - CEO) 2Q/1H 2013 RESULTS & 2013 OUTLOOK (Gian Piero Cutillo - CFO) STRATEGIC UPDATE (Alessandro Pansa - CEO) APPENDIX 2
Slide 3: Progressing in our path to build a sustainable Finmeccanica
PROGRESSING IN OUR PATH TO BUILD A SUSTAINABLE FINMECCANICA H1 results broadly in line with internal plan Second half important, but on track for full year Continued commitment to three key priorities Governance Restructuring Portfolio rationalisation 3
Slide 4: 2Q/1H 2013 Results & 2013 Outlook
2Q/1H 2013 RESULTS & 2013 OUTLOOK (Gian Piero Cutillo - CFO) 4
Slide 5: 1H 2013 Overview
1H 2013 OVERVIEW Group Revenues & Profitability in line/ahead of plan Solid underlying performance in core Aerospace and Defence businesses Continued benefits from established restructuring programmes On track for full year expectations 5
Slide 6: Group Performance (1/2)
GROUP PERFORMANCE (1/2) Finmeccanica A&D E&T Eliminations Group % % € Mln 1H2013 1H2012 1H2013 1H2012 1H2013 1H2012 1H2013 1H2012 Change Change Orders 5,577 6,302 -11.5% 659 1,414 -53.4% -9 -38 6,227 7,678 Backlog 32,546 34,219* -4.9% 10,169 10,815* -6.0% -126 -126 42,589 44,908* Revenues 6,762 6,72
Slide 7: Group Performance (2/2)
GROUP PERFORMANCE (2/2) 2Q ACTUAL 1H ACTUAL FY ACTUAL % % € Mln 2013 2012 2013 2012 2012 Change Change New Orders 3,203 4,200 -24% 6,227 7,678 -18.9% 16,703 Backlog 42,589 46,060 -8% 44,908 Revenues 4,248 4,325 -1.8% 7,951 8,027 -0.9% 17,218 EBITA 286 285 -0.4% 467 459 1.7% 1,080 ROS % 6.7% 6.6% -0.
Slide 8: On track to achieve FY2013 order guidance
ON TRACK TO ACHIEVE FY2013 ORDER GUIDANCE H1 orders vs Ahead: Core Aerospace & Defence internal budget Behind: Energy & Transportation, largely made up plan Aeronautics: 83 ATR orders + 90 options worth >$4.1bn Helicopters: announced contracts for > 20 helicopters worth €330mln (mainly AW139, AW169,
Slide 9: Helicopters
HELICOPTERS FY 2Q ACTUAL 1H ACTUAL ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 € Mln YoY YoY Orders 528 955 -45% 1,434 1,780 -19% 4,013 Revenues 1,091 1,054 4% 2,045 1,912 7% 4,243 EBITA 171 131 31% 286 219 31% 473 ROS % 15.7% 12.4% 3.3pp 14.0% 11.5% 2.5pp 11.1% Order decrease mainly due to phasing. I
Slide 10: Aeronautics
AERONAUTICS FY 2Q ACTUAL 1H ACTUAL ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 € Mln YoY YoY Orders 773 684 13% 1,692 1,556 9% 3,169 Revenues 790 733 8% 1,461 1,318 11% 2,974 EBITA 40 36 11% 61 49 25% 104 ROS % 5.1% 4.9% 0.2pp 4.2% 3.7% 0.5pp 3.5% Orders up 13% in 2Q driven by civil orders (173 ATR or
Slide 11: European Defence Electronics and Security - Selex ES
EUROPEAN DEFENCE ELECTRONICS AND SECURITY - Selex ES (2012 PRO-FORMA) FY 2Q ACTUAL 1H ACTUAL ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 € Mln YoY YoY Orders 704 746 -6% 1,180 1,405 -16% 3,206 Revenues 826 906 -9% 1,546 1,671 -8% 3,590 EBITA 20 53 -62% 26 81 -68% 156 ROS % 2.4% 5.8% -3.4pp 1.7% 4.8% -
Slide 12: US Defence Electronics and Security - DRS
US DEFENCE ELECTRONICS AND SECURITY – DRS FY 2Q ACTUAL 1H ACTUAL ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 $ Mln YoY YoY Orders 500 668 -25% 865 1,216 -29% 2,477 Revenues 538 683 -21% 1,073 1,354 -21% 2,769 EBITA 35 45 -22% 62 81 -24% 293 ROS % 6.4% 6.6% -0.2pp 5.8% 6.0% -0.2pp 10.6% Order intake af
Slide 13: Space and Defence Systems
SPACE 2Q ACTUAL 1H ACTUAL FY ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 € Mln YoY YoY Orders 160 131 22% 286 241 19% 866 Revenues 274 244 12% 484 462 5% 1,053 EBITA 27 19 42% 36 30 20% 84 ROS % 9.9% 7.8% 2.1pp 7.4% 6.5% 0.9pp 8.0% Order increase (+22% in 2Q) thanks to ExoMars contract Revenue increas
Slide 14: Energy and Ansaldo STS
ENERGY (55% Stake) FY 2Q ACTUAL 1H ACTUAL ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 € Mln YoY YoY Orders 162 362 -55% 190 445 -57% 834 Revenues 162 167 -3% 284 306 -7% 715 EBITA 14 9 56% 22 20 10% 65 ROS % 8.6% 5.4% 3.2pp 7.7% 6.5% 1.2pp 9.1% Orders lower due to phasing of Plants&Components and Serv
Slide 15: AnsaldoBreda
ANSALDOBREDA FY 2Q ACTUAL 1H ACTUAL ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 € Mln YoY YoY Orders 31 117 -74% 43 136 -68% 782 Revenues 120 182 -34% 264 359 -26% 456 EBITA -44 -25 -76% -68 -35 -94% -160 ROS % -36.7% -13.7% -23pp -25.8% -9.7% -16pp -35.1% Orders decline due to postponements of some e
Slide 16: 2013 Group Guidance
2013 GROUP GUIDANCE FY2012A FY2013E € mln Orders 16,703 ca. 17,000 Revenues 17,218 Ca. 16,700-17,000 EBITA 1,080 ca. 1,100 FOCF 89 Ca. 100 Net Financial debt 3,373 Ca. 3,300 before disposals 16
Slide 17: Summary
SUMMARY In line with our budget-plan Solid underlying performance in our core A&D businesses, ahead of plan in all our key metrics Shortfall in orders in Energy & Transportation largely made up Real progress in industrial and business restructuring Group business weighted towards second half – chall
Slide 18: Strategic Update
STRATEGIC UPDATE (Alessandro Pansa - CEO) 18
Slide 19: Continued commitment to three key priorities
CONTINUED COMMITTMENT TO THREE KEY PRIORITIES Corporate Restore the company's reputation Governance Behaviour that maximises value and reduces risk Industrial Deliver the right long-term portfolio Restructuring To be more competitive with customers Asset Portfolio Reduce debt Rationalisation Focus i
Slide 20: Governance - continued progress
GOVERNANCE - CONTINUED PROGRESS Board of Directors integration completed and new Chairman appointed, with attributions in Institutional and External Relations, Group’s Security and Internal Audit Centralised Internal Audit External Committee to report on its review by year-end Re-organising the inte
Slide 21: Industrial Restructuring
INDUSTRIAL RESTRUCTURING Aeronautics Addressing four DRS businesses Selex ES Ansaldo Breda Strengthening efficiency and competitveness Key objectives Improving profitability Direct and indirect cost cutting through Increasing capital efficiency More efficient supply chain 21
Slide 22: Restructuring Action Plan - Aeronautics
RESTRUCTURING ACTION PLAN - AERONAUTICS Growing profitability by improving efficiencies 3R Plan execution ahead of targets in Procurement (both direct and indirect) and Engineering Site rationalisation Phase out of Casoria completed in July 2013 Headcount rightsizing Agreements with Unions signed in
Slide 23: Focus on Aeronautics
FOCUS ON AERONAUTICS Growing profitability by improving efficiencies Business Program Winning Delivery Performance Current status YTD Group Consolidated Focus on B787 Military a\c Rump up of production (10 shipset p.m.) TTA & special mission Deliveries of -9 started recently Trainers Reached a recip
Slide 24: Restructuring Action Plan - DRS
RESTRUCTURING ACTION PLAN - DRS Preserving profitability and well positioned in a tough environment Wave one of efficiency improvement completed Additional initiatives launched in 2013 to further reduce headcount and costs, to Progress against protect good profitability plan Headcount (ca. 700 addit
Slide 25: Restructuring Action Plan - Selex ES
RESTRUCTURING ACTION PLAN – Selex ES Progressing ahead of schedule Direct/Indirect headcount rightsizing Agreement with National Trade Unions signed Progress against plan Plan involves 2,529 resources of which 1,938 in Italy Group Consolidated 810 employees put on voluntary redundancy schemes/ redun
Slide 26: Focus on Selex ES
FOCUS ON Selex ES Overall performance satisfying but some technical issues still to be fixed Business Program Delivery Business units broadly performing well Winning YTD Current status Limited issues on individual Group Consolidated Airborne & Space programmes/areas Land & Naval Not completely satis
Slide 27: Reducing the costs of products to be more competitive
REDUCING THE COSTS OF PRODUCTS TO BE MORE COMPETITIVE A modular/common approach Where we are implementing it Helicopter Family (AW139, AW169; AW189) What it does for Finmeccanica? Free up capacity in technical areas/testing Reduced development time for new products Higher product quality (make/buy c
Slide 28: Restructuring Action Plan - AnsaldoBreda
RESTRUCTURING ACTION PLAN – AnsaldoBreda Actions to Programme Proportion of Proportion of Proportion of Contract s Hourly reduce hourly management business in business in business in split rate rate change 2013 2014 2015 • Holland/ Belgium Old entity • IC2/IC4 55% 40% 10% • Other • Restructuring To
Slide 29: Building a successful track record in restructuring
BUILDING A SUCCESSFUL TRACK RECORD IN RESTRUCTURING Additional benefits 50 from new initiatives (€mln) launched in 2012 440 Benefits from initiatives launched in 2011 260 1H2013A FY2013E 2012 efficiency target exceeded (€280mln vs. ca. €250mln targeted) Increased FY2013 target by additional ca. €50m
Slide 30: Asset Portfolio Rationalisation
ASSET PORTFOLIO RATIONALISATION Commitment to make Finmeccanica a more focused Aerospace & Defence Group Commitment to rationalise the portfolio and reduce debt Delivering the right outcomes is a complex process constructive discussions with new Government stakeholders working hard to make progress
Slide 31: Building a stronger more sustainable Finmeccanica
BUILDING A STRONGER MORE SUSTAINABLE FINMECCANICA Solid underlying performance in our core Aerospace & Defence businesses in line with our plan Continued strong progress on Governance and Restructuring Legacy issues continue to weigh on our business, and our work on the portfolio is taking longer th
Slide 32: Appendix
, z FINMECCANICA APPENDIX 32
Slide 33: Right portfolio plan focusing on the right markets
RIGHT PORTFOLIO PLAN FOCUSING ON THE RIGHT MARKETS Energy & Aerospace & Defence Transportation International Strategic sectors Partnerships Defence Electronics and Space, Helicopters Aeronautics Energy, Transportation Security Defence Systems Group 81% of total orders 19% of total orders Proportion
Slide 34: Robust financial position (as of end of June 2013)
ROBUST FINANCIAL POSITION (as of end of June 2013) No meaningful refinancing needs before end 2017 Strong liquidity position Bonds have neither financial covenants nor rating pricing grids Revolving credit facility also has no financial covenants Average life ≈ 10 years The €2.4bn RCF will expire in
Slide 35: Group Performance (2/2)
GROUP PERFORMANCE (2/2) Aerospace & Energy & Finmeccanica Defence Transportation Group % % % % of % of % of Change Change Change Group Group Group vs vs vs 1H2013 1H2013 1H2013 1H2012 H2012 1H2012 Orders 90% -11.5% 10% -53.4% 100% -19% Backlog 76% -4.9% 24% -6.0%* 100% -5%* Revenues 85% 0.6% 15% -7.
Slide 36: 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 C
Slide 37: Investor Relations
TESTO FINTO Testo Investor Relations Finmeccanica ir@finmeccanica.com Website:http://www.finmeccanica.com/en/investors Raffaella Luglini Head of Investor Relations +39 06 32473.066 raffaella.luglini@finmeccanica.com 37