Finmeccanica's board of directors approved the Interim Financial Report at 30 June 2012
The board of directors has examined the results of operations of the second quarter of 2012
- New orders: €4.2 billion in the second quarter (+13%); €7.7 billion in the first half of the year (+7%).
- Order backlog: €46.1 billion in the first half of the year. The order backlog ensures around two and a half years of production for the group.
- Revenue: €4.3 billion in the second quarter (-3%); €8 billion in the first half of the year (-2%).
- EBITA: €285 million in the second quarter (+33%); €459 million in the first half of the year (+10%).
- Net Profit: €44 million in the second quarter, an increase over the €6 million figure for the corresponding period of the previous year (net of the gain of €443 million generated by the sale of 45% of Ansaldo Energia); €70 million in the first half of the year, an increase over the €13 million figure for the corresponding period of the previous year (net of the above-mentioned gain).
- Free Operating Cash Flow: negative €70 million in the second quarter (-€181 million in the corresponding period of the previous year); a negative €1.208 billion in the first half of the year (-€1.184 billion in the first half of 2011).
- Net financial debt: €4,656 billion at 30 June 2012 (+11%).
Free operating cash flow and net financial debt are impacted by the normal seasonal trend of the group's results of operations, as there are significantly more payments of trade payables than collections of trade receivables in the first half of the year.
- Workforce: 68,813 employees at 30 June 2012 compared to 70,474 employees at 31 December 2011
- Research and development: €943 million in the first half of the year (+7%)
(*) all data are unaudited
(**) Variations expressed according to company premises, that is, taking into consideration the deconsolidation of Ansaldo Energia by 45% (ceded in June 2011).
- Strategic sectors show good performance: the excellent trend for helicopters is continuing; encouraging recovery for aeronautics; the restructuring of defence electronics and security is proceeding to schedule
- Management well focused on implementing the industrial plan in order to build a more focused, integrated and competitive Group, with economic-financial performances which are sustainable in the medium to long-term
- Management confident of achieving the goals it has fixed, although it is aware of the difficulties and the uncertainty of the external environment
The outlook for 2012
In view of the group's results of operations for the first half of 2012 and achieving the milestones set out both in its plans to improve competiveness and efficiency and for restructuring, and the roll out of actions to resolve strategic issues, we confirm the forecasts for the full year 2012 prepared at the time the 2011 Annual Report was being drawn up.
- Revenue: €16.9/€17.3 billion
- EBITA: approximately €1.1 billion
- Free Operating Cash Flow: positive
Giuseppe Orsi, Chairman and CEO of Finmeccanica, commented:
"The results of the first half, and in particular those of the second quarter, show an encouraging improvement in the main indicators and a recovery of profitability, a sign that the restructuring and efficiency plan is progressing according to schedule. Despite a national and international environment characterized by considerable persistent uncertainty, Finmeccanica is confident that it will achieve the targets for 2012 announced in March. 2012 remains, however, a year of delicate transition within a re-launch process which is demanding and will last some time".
The results of operations of Finmeccanica group for the first half of 2012 were better than those for the corresponding period of the previous year and in line with 2012 budget forecasts for the first half of the year. Even though the group's consolidated results for the first half of the year generally do not give an accurate representation of full year performance (as more than half of the group's operations take place in the second half of the year), it should be noted that the benefits witnessed in the second quarter of 2012, stemming from the reorganization and restructuring plans, exceed those of the first quarter of the year.
The first half of the year was impacted by several factors that will affect full year performance in 2012. Specifically, the budget cuts for military and security investment spending since 2010 in the group's key markets (Italy, Great Britain and the United States of America), the consequent increase in customers' attention to product performance/cost sustainability ratios and the shift in demand towards emerging countries with intense competition between companies, which is pushing prices downwards. Finally, the persistent and worsening recession in the Eurozone is making it more difficult (yet, at the same time, vital) to roll out the restructuring initiatives and even more important for companies to achieve a sound financial position.
Initiatives undertaken by the Finmeccanica group during 2011 enabled the group to improve its efficiency and simplify the corporate structure by drawing up and rolling out in-depth plans (detailing actions, costs/benefits, timeframes, restraints and execution milestones) to improve competitiveness and efficiency and to reorganise each company (with expected benefits of more than €440 million in 2013).
Guidance and monitoring undertaken during the reporting period by the parent company (as well as the improvement in the key production indicators for the companies) confirm the actions are being rolled out as scheduled in terms of physical progress and that the trend of financial statements figures is consistent with the quantitative targets in terms of overall benefits. As early as this reporting period, the results were especially strong in the Aerospace and Defence segments. However, their impact on the interim consolidated financial statements is still limited, as their progressive growth is closely related to revenue volumes in certain cases, such as purchases and controllable costs.