Finmeccanica: the Board of Directors approves the interim financial report at 31 March 2012

Key 1Q 2012 figures

  • New orders: EUR 3.480 billion
  • Order backlog: EUR 45.721 billion
  • Revenues: EUR3.686 billion
  • Adjusted EBITA: EUR 173 million
  • Net profit: EUR 25 million
  • Free Operating Cash Flow: negative for EUR 1.138 billion
  • Net debt: EUR4.515 billion

The Free Operating Cash Flow and the net debt, although better than expected, were impacted by the traditional seasonal trend in the Group’s results, in relation to which, the balance between trade collections and payments reveals that payments are considerably higher than collections in the first part of the year.

  • Headcount: 69,652
  • Investment in research and development: EUR 409 million

The Finmeccanica Group at 31 March 2012 achieved results that, though weaker than those for the same period of the year 2011 (in part due to the change in the method of consolidating the Ansaldo Energia group, as described below), are in line with, and for some indicators (Adjusted EBITA and Free Operating Cash Flow) exceeded, the forecasts formulated by the Group for the first quarter.

Starting from the last months of 2011 Finmeccanica has addressed issues related to industrial efficiency and to operational and structural costs through the preparation and implementation of in-depth, detailed plans to improve the levels of competitiveness, efficiency and reorganisation of the Group’s companies.

The monitoring carried out by the Parent Company confirms that these plans, which have progressed in an orderly fashion, and the implementation of the initiatives pertaining to them will enable the Group to achieve its quantitative targets in terms of overall benefits.

Due to the timing of the implementation of these plans, the benefits arising from these initiatives only impact on the results at 31 March 2012 to a limited extent. These results – because of what has been mentioned above and owing to the concentration of the Group’s activities in the second half of the year – are only comparable to a limited extentwith those at 31 March 2011 and are not, traditionally, entirely representative of the trend of the financial year as a whole.

Nevertheless, the initiatives undertaken, and in particular those aimed at making the net capital invested more sustainable and consistent with the projected Group’s industrial profitability, have allowed the Group to achieve in the first quarter of 2012 a return on equity and a return on invested capital which are better than the figures recorded in the first three months of 2011 (ROE at 2.1% against 0.4%; ROI of 8.1% for both two periods). Similarly, Economic Added Value improved from a negative EUR 99 million to a negative EUR 61 million.

Finally, with specific reference to the results at 31 March 2012, we note both a good performance in the acquisition of new orders in the Aerospace and Defence segments (which partially offsets the commercial reduction in the Energy and Transportation divisions) and an increase in net income.

Chairman and Chief Executive Officer, Giuseppe Orsi, declared:

“The results of the first quarter of 2012, achieved against an economic background characterised by the persistence of considerable difficulties and by a marked level of uncertainty, also internationally, show some initial and encouraging positive signs regarding the progress of the reorganisation and efficiency improvement plans already launched. As highlighted during the presentation of the 2011 results, 2012 is still a calibrated year of transition within a challenging and medium term process of recovery”.

Rome 03/05/2012