Strong fundamentals give us confidence in the short, medium and long term outlook
Competencies, advanced technologies and innovation capabilities as a base for new growth opportunities post COVID
The BoD has approved the start of the merger by incorporation of Vitrociset
Rome, 29 July 2021- Leonardo's Board of Directors, convened today under the Chairmanship of Luciano Carta, examined and unanimously approved the results of the first half 2021.
Alessandro Profumo, Leonardo CEO, stated "First half 2021 results are solid, and we are back on a sustainable growth path. Our commercial activity has been intensive and we are continuing to achieve strong order intake, despite the pandemic; our strong backlog has supported good top line growth (revenues and new orders), our industrial performance and FOCF materially improved. Our Military/Governmental business remains very strong and robust. We are seeing some more positive signs in civil aeronautics, although remaining cautious about the timing of its recovery."
"We are on track to achieve our full year 2021 Guidance - concludes Alessandro Profumo -. Our strong fundamentals give us confidence in our ability to create value sustainably for all our stakeholders in the medium-long term. We intend to leverage competencies, advanced technologies and innovation capabilities as a base for new growth opportunities post COVID."
Leonardo, a global high-technology company, is among the top world players in Aerospace, Defence and Security and Italy's main industrial company. Organized into five business divisions, Leonardo has a significant industrial presence in Italy, the United Kingdom, Poland and the USA, where it also operates through subsidiaries that include Leonardo DRS (defense electronics), and joint ventures and partnerships: ATR, MBDA, Telespazio, Thales Alenia Space and Avio. Leonardo competes in the most important international markets by leveraging its areas of technological and product leadership (Helicopters, Aircraft, Aerostructures, Electronics, Cyber Security and Space). Listed on the Milan Stock Exchange (LDO), in 2020 Leonardo recorded consolidated revenues of €13.4 billion and invested €1.6 billion in Research and Development. The company has been part of the Dow Jones Sustainability Index (DJSI) since 2010 and has been named as sustainability global leader in the Aerospace & Defence sector for the second year in a row of DJSI in 2020.
The results recorded in the first half of 2021 confirm the expectations of recovery in growth and an increase in profitability as reported in the Financial Statements at 31 December 2020, showing a marked improvement in the Group's industrial performance; in the first half of 2020, this indicator had been in fact particularly affected by the initial effects of the COVID-19 pandemic outbreak, which then gradually stabilised over the subsequent months, including as a result of the measures put in place in order to ensure the business continuity. The volume of new orders is at excellent levels, confirming the good competitive positioning of the Group's products and solutions, with revenues growing in all the main business areas and a Book to Bill higher than 1.
The challenges that have been reported in the civil sector in recent months have been confirmed in a scenario that is still characterised by the pandemic: in particular, Aerostructures was affected by the fall in volumes and the consequent failure of the industrial assets to operate at full capacity, which led to a further decline in results compared to the first half of 2020.
The cash flows are clearly improving, although affected by the usual seasonal trend characterised by significant outflows in the first part of the year.
Key Performance Indicators
Net result before
Group Net Debt
EBITDA this is EBITA before amortisation, depreciation (net of those relating to goodwill or classified among "non-recurring costs") and adjustments impairment.
EBITA is obtained by eliminating from EBIT the following items: any impairment in goodwill; amortisation and impairment, if any, of the portion of the purchase price allocated to intangible assets as part of business combinations, restructuring costs that are a part of defined and significant plans; other exceptional costs or income, i.e. connected to particularly significant events that are not related to the ordinary performance of the business.
EBIT is obtained by adding to earnings before financial income and expense and taxes and taxes the Group's share of profit in the results of its strategic Joint Ventures (GIE-ATR, MBDA, Thales Alenia Space and Telespazio).
New Orders, amounted to EUR 6,682 million showing a strong increase compared to the first six months of 2020. The Defence Electronics and Security business in the European component and Aircraft within Aeronautics recorded an excellent performance in terms of sales. The Helicopters business showed a downturn, although against the previous year which was positively affected by the acquisition of the major IMOS order, while in Aeronautics the decline in the civil component continues
Backlog, amounted to EUR 35,883 million, ensures a coverage in terms of equivalent production of more than 2.5 years
Revenues, amounted to EUR 6,345 million, showed during the first half of 2021 a significant increase, driven by the performance of the Defence Electronics and Security and Helicopters, and was only partially offset by the expected reduction in volumes in the Aerostructures, which continued to be adversely affected by a decline in production rates on the B787 and ATR programmes
EBITA, amounted to EUR 400 million, (with a ROS of 6.3%) recorded a significant total growth rate (+37%) with a considerable increase in all business segments, except for Aerostructures, which was due to higher volumes of revenues and the improvement in profitability. There was also a higher contribution provided by all the strategic Joint Ventures, with particular reference to the Manufacturing sector of the Space Alliance
EBIT, amounted to EUR 347 million, showed, compared to the first half of 2020 (€ 227 mln), a substantial increase (+53%) while continuing to record - albeit to a lesser extent - charges linked to the compliance with the Government's instructions relating to COVID-19, including to protect the health of its workers
Net Result before extraordinary transactions, which posted a profit of EUR 177 million, equal to Net Result, benefitted from the EBIT performance, as well as from lower financial costs which, in the period under comparison, were strongly affected by the component related to the hedging activity to counter foreign exchange risk. The Net Result was also influenced by the tax benefits deriving from the adoption of the tax concessions provided for by Article 110 of Law Decree 104/2020 on the realignment between the tax and statutory values of goodwill
Free Operating Cash Flow (FOCF), negative for EUR 1,380 million, improving significantly compared to the figure of 30 June 2020 (negative for € 1,889 mln). This result, although confirming the usual interim trend that is characterised by significant cash absorptions in the first part of the year, reflects the expected positive trend towards improvement
Group Net Debt, of EUR 4,613 million, showed an increase compared to 31 December 2020 (€
3,318 mln), mainly as a result of the above mentioned FOCF performance
In consideration of the results achieved in the first half of 2021 and of the expectations for the quarters to follow, and on the basis of an expected improvement in the global health situation with consequent gradual normalization of operating and market conditions, we confirm 2021 Guidance disclosed in March 2021, summarized below
Group Net Debt
*Assuming progressive improvement in the global health situation through the year with consequent normalization of operating / market conditions
Leonardo S.p.A. published this content on 29 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 November 2021 00:09:05 UTC.