Leonardo: Nine months results in line with expectations in Aeronautics and Defence Electronics

The Board of Directors of Leonardo, convened today under the chairmanship of Gianni De Gennaro, has examined and unanimously approved the results at 30 September 2017 and the results of third quarter 2017

Rome  09 November 2017 17:40 - Inside Information

  • New Orders at EUR 8 billion, + 5% organically, thanks to all Divisions 
  • Stable revenues at EUR 8 billion
  • Solid performance across Defence Electronics and Aeronautics
  • Group EBITA down and RoS at 8.8%, due to the weaker performance of the Helicopters, which faces market and execution challenges
  • Actions are being taken
  • Financial solidity confirmed
  • 2017 Full Year Revenue and EBITA Guidance adjusted to reflect ongoing challenges in Helicopters


The Board of Directors of Leonardo, convened today under the chairmanship of Gianni De Gennaro, has examined and unanimously approved the results at 30 September 2017 and the results of third quarter 2017.


Alessandro Profumo, CEO of Leonardo, commented: “Our Group nine month performance has been broadly on track vs our expectations in Defence Electronics and Aeronautics, but we have seen challenges in our Helicopter business, which we have taken action to address. We can now see that the full year as a whole will be tougher than originally expected. That said, we have continued confidence in the fundamental core strengths of our three key pillars of the Group, and the medium-term opportunity”.


In more detail, the first 9 months 2017 results show:


  • New Orders: equal to almost EUR 8 billion. The figure for the first nine months of 2016 included the non-recurring effect of the acquisition of the EFA Kuwait contract for an amount of €7.95bn, net of which the amount of orders showed an increase of over 5% in 2017, despite the negative effect of €/£ exchange rate.
  • Orders backlog: amounted to EUR 33,931 million, ensures 3 years of equivalent production. Book to Bill is 1 (excluding the effect of EFA Kuwait contract), improved compared to 0.94 of 2016.
  • Revenues: amounted to EUR 7,984 million substantially in line with the corresponding period of 2016, despite the negative exchange rate effect deriving from the conversion of revenues in GBP. Specifically, compared to a reduction in the Helicopters sector, which continues to be affected by the delays in production concerning some product lines, the Aeronautics sector started to benefit from revenues from the EFA Kuwait programme. 
  • EBITA: amounted to EUR 703 million, down by 5.8% compared to 30 September 2016 (with a ROS decreasing by 0.5 p.p.), is mainly affected by the drop in volumes and profitability of the Helicopters sector, against improved results of Aeronautics and Electronics, Defence and Security Systems.
  • Net Result before extraordinary transactions: amounted to EUR 272 million, lower compared to the first nine months of 2016 due to the trend of EBITA and also to the higher non-recurring and restructuring costs in addition to greater financial charges (in 2016 these benefitted from positive foreign exchange differences, which were also reflected in the fair value of derivatives, with a delta of + €mil. 48 compared to 2017).
  • Net Result: amounted to EUR 272 million, equal to the net result before extraordinary transactions on account of the absence of extraordinary transactions (the first nine months of 2016 benefitted from the capital gain from the disposal of Fata, equal to €mil. 10).
  • Free Operating Cash Flow (FOCF): posted a negative value of EUR 972 million, in line with the usual trend in the Group’s performance to report considerable cash absorptions in the first quarters, and lower compared to 2016 which had benefitted to a greater extent from the contribution of the EFA Kuwait contract advance payments.
  • Group Net Debt: The Net Debt is almost in line with that recorded at 30 September 2016 (+3%). Compared to 31 December 2016, the changes were essentially affected by the abovementioned cash absorption, as well as by the cash-out for the acquisition of Daylight Solutions (€mil. 123), the additional stakes in Avio (€mil. 45) and the payment of dividends for €mil. 81.


The Group’s financial results achieved in the first nine months of 2017 reflect the ongoing challenges that the Helicopter business is facing. In particular this segment is still suffering from unfavorable market conditions coupled with delays in achieving adequate profitability in specific products and industrial performance below expectations. 


For this reason, the Board of Directors concluded to revise the Group Guidance for the full year 2017 as follows:

  Guidance Revised guidance
New Orders (€bn.) 12.0 - 12.5 ca 12.0 (*)
Revenues (€bn) ca. 12 11.5 – 12.0
EBITA (€mil.) 1,250 - 1,300 1,050 – 1,100
FOCF (€mil.) 500 – 600 500 – 600 (**)
Indebitamento Netto di Gruppo (€mld.) ca. 2.5 ca 2.5

(*) Assuming finalization of C27J export contracts
(**) Assuming cash-in of EFA Kuwait payments related to 2017 milestones



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