Leonardo Spa · MIL:LDO
Leonardo Spa — Finmeccanica — 9M 2013 Earnings Presentation
31 slides from Leonardo Spa's earnings presentation, Nov 8, 2013
Slide 1: 3Q and 9M Results Presentation
3Q and 9M Results Presentation Alessandro Pansa Chief Executive Officer Gian Piero Cutillo Chief Financial Officer 8 November 2013 1
Slide 2: Agenda
AGENDA INTRODUCTION 3Q/9M 2013 RESULTS & 2013 OUTLOOK STRATEGIC UPDATE APPENDIX 2
Slide 3: Progressing in our path to build a sustainable Finmeccanica
PROGRESSING IN OUR PATH TO BUILD A SUSTAINABLE FINMECCANICA In a tough environment we are achieving real restructuring process The Group contains some fundamentally attractive businesses There are some tough issues we are dealing with We remain confident in our medium term journey 3
Slide 4: 3Q/9M 2013 Results & 2013 Outlook
TESTO FINTO Testo 3Q/9M 2013 RESULTS & 2013 OUTLOOK (Gian Piero Cutillo - CFO) 4
Slide 5: 3Q/9M 2013 Highlights
3Q/9M 2013 HIGHLIGHTS TESTO FINTO Testo Strong underlying trading performance in Aeronautics & Helicopters Impact of US budget cuts and challenging markets on Defence Electronics in line with guidance Restructuring progress across all businesses Underlying A&D EBITA in line with plan Transportation
Slide 6: Group Performance (1/2)
GROUP PERFORMANCE (1/2) TESTO FINTO A&D Transportation Testo Total continuing operations % % € Mln 9M2013 9M2012 9M2013 9M2012 9M2013 9M2012 % Change Change Change Orders 8,171 8,905 -8.2% 1,284 1,284 0% 9,440 10,140 -6.9% Backlog ** 31,778 34,219* -7.1% 8,568 8,837* -3.0% 40,233 42,930* -6.3% Reven
Slide 7: Group Performance (2/2)
GROUP PERFORMANCE (2/2) TESTO FINTO Q3 ACTUAL Testo 9M ACTUAL € Mln 2013 2012 % Change 2013 2012 % Change Orders 3,403 2,907 17% 9,440 10,140 -7% Revenues 3,677 3,970 -7.4% 11,343 11,691 -3% EBITA 253 267 -5.2% 697 706 -1% ROS % 6.9% 6.7% 0.2p.p. 6.1% 6.0% 0.1p.p. EBIT 37 234 n.s. 293 589 n.s Net In
Slide 8: Helicopters
HELICOPTERS TESTO FINTO Testo FY 3Q ACTUAL 9M ACTUAL ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 € Mln YoY YoY Orders 809 496 63.1% 2,243 2,276 -1.4% 4,013 Revenues 967 1,064 -9.1% 3,012 2,976 1.2% 4,243 EBITA 125 120 4.2% 411 339 21.2% 473 ROS % 12.9% 11.3% 1.6p.p. 13.6% 11.4% 2.2p.p. 11.1% Orders up
Slide 9: Aeronautics
AERONAUTICS TESTO FINTO Testo FY 3Q ACTUAL 9M ACTUAL ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 € Mln YoY YoY Orders 345 668 -48.4% 2,037 2,224 -8.4% 3,169 Revenues 713 684 4.2% 2,174 2,002 8.6% 2,974 EBITA 87 25 2.48% 148 74 100% 104 ROS % 12.2% 3.7% 8.5p.p. 6.8% 3.7% 3.1p.p. 3.5% Orders down 48% in
Slide 10: European Defence Electronics and Security
EUROPEAN DEFENCE ELECTRONICS AND SECURITY - Selex ES (2012 PRO-FORMA) TESTO FINTO Testo FY 3Q ACTUAL 9M ACTUAL ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 € Mln YoY YoY Orders 643 592 8.6% 1,823 1,998 -8.8% 3,206 Revenues 698 772 -9.6% 2,244 2,465 -9.0% 3,590 EBITA -6 17 n.s 20 98 -80% 156 ROS % -0.9%
Slide 11: US Defence Electronics and Security – DRS
US DEFENCE ELECTRONICS AND SECURITY – DRS TESTO FINTO Testo FY 3Q ACTUAL 9M ACTUAL ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 $ Mln YoY YoY Orders 515 574 -10.3% 1,380 1,790 -22.9% 2,477 Revenues 549 738 -25.6% 1,621 2,092 -22.5% 2,769 EBITA 48 98 -51% 110 179 -38.5% 293 ROS % 8.7% 13.3% -4.6p.p. 6.8
Slide 12: Space and Defence Systems
SPACE 3Q ACTUAL 9M ACTUAL FY ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 € Mln YoY YoY Orders 199 398 Testo485 -50% 639 -24.1% 866 Revenues 241 228 5.7% 729 697 4.6% 1,053 EBITA 18 17 5.9% 54 47 14.9% 84 ROS % 7.5% 7.5% 0p.p. 7.4% 6.7% 0.7p.p. 8.0% 3Q Order decrease due to postponement to 4Q of some o
Slide 13: Transportation
TRANSPORTATION ANSALDO STS TESTO FINTO 3Q ACTUAL Testo 9M ACTUAL FY ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 € Mln YoY YoY Orders 624 255 144,9% 1,014 1,051 -3.5% 1,492 Revenues 283 305 -7,1% 867 874 -0.8% 1,248 EBIT 26 27 -4,8% 78 77 0.9% 117 EBIT/Revenues % 9,1% 8.9% 0,2p.p 9.0% 8.9% 0.1p.p. 9.4%
Slide 14: Impact on FY Results
IMPACT ON FY RESULTS TESTO FINTO Testo Guidance updated for the deconsolidation of Ansaldo Energia No change to Group Order and Revenue guidance in continuing operations FY EBITA guidance down 5%-10%, due to the deterioration in the operating results of Ansaldo Breda FY FOCF significantly impacted b
Slide 15: 2013 Group Guidance
2013 GROUP GUIDANCE FY2013E New Testo (after FY2012A FY2013E Old TESTO FINTO deconsolidation of AEN) € mln Orders 16,703 ca. 17,000 15,500-16,000 Revenues 17,218 ca. 16,700-17,000 15,900-16,200 EBITA 1,080 ca. 1,100 900-950 FOCF 89 ca. 100 (350)-(450) ca. 3,300 ca.3,300 Net Financial debt 3,373 Afte
Slide 16: Strategic Update
TESTO FINTO Testo STRATEGIC UPDATE (Alessandro Pansa - CEO) 16
Slide 17: Finmeccanica's Journey Unchanged
FINMECCANICA'S JOURNEY UNCHANGED Continued commitment to three key priorities: TESTO FINTO Testo Restore our reputation Corporate Sharpen commercial approach Governance Tighter control over group businesses Industrial Creating a sustainable long term portfolio Restructuring Improve the competitivene
Slide 18: Governance
GOVERNANCE Progress at the centre Centralised decision making More challenge for greater control More robust audit function Moving to other operating businesses Cure for the problem areas such as ATC Ensuring commercial agreements no longer assume the efficiencies in their pricing assumptions
Slide 19: Industrial Restructuring
INDUSTRIAL RESTRUCTURING (€mln) We are achieving real progress Helicopters – ROS underpinned by actions Aeronautics – Problem areas fixed: more opportunities Defence Electronics – Improving underlying 475 profitability Efficiencies ahead of plan in Aerospace & Defence 380 FY 2013 target increa
Slide 20: Portfolio Rationalisation - Achievements
PORTFOLIO RATIONALISATION - ACHIEVEMENTS TESTO FINTO Testo Encouraging progress in the quarter Ansaldo Energia disposal financially and strategically important Demonstrates commitment to getting deals done with all stakeholders Proceeds from Ansaldo Energia and Avio disposals to pay down debt 20
Slide 21: Portfolio Rationalisation – Next Steps
PORTFOLIO RATIONALISATION – NEXT STEPS Discussions on transport carried out so far haven’t led to any agreement as of today Reassessing the restructuring of Ansaldo Breda by: Completion of contracts in progress in the best way to limit their losses Acquisition of new orders that is clearly going to
Slide 22: Building a Stronger More Sustainable Finmeccanica
BUILDING A STRONGER MORE SUSTAINABLE FINMECCANICA Testo We are not deterred by specific issues impacting FY13 results We have confidence in our core businesses We have confidence in our restructuring We have made some excellent progress 22
Slide 23: Appendix
TESTO FINTO APPENDIX Testo 23
Slide 24: Energy – Q3/9M numbers to reconcile like for like Group results
ENERGY – Q3/9M numbers to reconcile like for like Group results TESTO FINTO Testo FY 3Q ACTUAL 9M ACTUAL ACTUAL %ch. %ch. 2013 2012 2013 2012 2012 € Mln YoY YoY Orders 241 67 260% 431 512 -15.8% 834 Revenues 144 191 -24.6% 432 493 -12.4% 715 EBITA 9 15 -40% 31 36 -13.9% 65 ROS % 6.3% 7.9% 1.6 p.p. 0
Slide 25: Asset Portfolio Rationalisation – Sale of Ansaldo Energia
ASSET PORTFOLIO RATIONALISATION – SALE OF ANSALDO ENERGIA Testo Transaction agreed on 4 October 2013 with Fondo Strategico Italiano for a fixed price of €777mln for 100% of the Company and an earn out worth up to €130mln Transaction provides for the sale of 99.55%* of the Company, of which 45% owned
Slide 26: Asset Portfolio Rationalisation – Sale of Avio
ASSET PORTFOLIO RATIONALISATION – SALE OF AVIO Testo 21 December 2012: Avio aircraft engine division sold to GE Transaction closed on August 2013 Capital gain of €91mln recognised in 3Q2013 ca. €260mln expected cash in from proceeds Selling price more than two times the investment made in 2006 Avio
Slide 27: Robust Financial Position
ROBUST FINANCIAL POSITION (as of end of September 2013) No meaningful refinancing needs before end 2017 Strong liquidity position Bonds have neither financial covenants nor rating pricing grids Revolving credit facility has no financial covenants Average life ≈ 9.5 years The €2.4bn RCF will expire i
Slide 28: Strong Liquidity Position
STRONG LIQUIDITY POSITION (as of end of September 2013) In order to cope with possible volatilities in financial needs, Finmeccanica can leverage: – 30 September cash balance of €1.0 Billion Availability of – Credit lines worth €3.0 Billion (confirmed and unconfirmed), utilized for €1 Billion at ade
Slide 29: Finmeccanica is part of Dow Jones Sustainability Indexes
FINMECCANICA IS PART OF DOW JONES SUSTAINABILITY INDEXES Finmeccanica achieved the admission to the Dow Jones Sustainability Index World and Europe TESTO FINTO Testo (DJSI World and DJSI Europe) for the fourth year in a row DJSI are the most representative and rigorous stock indexes in terms of sust
Slide 30: 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- TESTO FINTO looking statements. These forward-looking statements Te
Slide 31: Investor Relations Finmeccanica
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 31