Leonardo-Finmeccanica Q1-2016: EBITDA up 14% compared to first quarter 2015

• The first quarter of 2016 confirms the Group positive commercial, economic and financial performance
• EBITDA at EUR 326 million, +14% compared to first quarter 2015, EBITA at EUR 164 million (+5%) and EBIT at EUR 134 million (+22%)
• Net Result materially positive at EUR 64 million, 6 times the EUR 11 million of the first quarter 2015. Net Result before extraordinary transactions positive for EUR 56 million, 14 times the EUR 4 million of the first quarter 2015
• Guidance 2016 raised to factor in the improvements in New Orders and FOCF, due to the important international commercial success achieved with the contract for 28 Eurofighter Typhoon to the Ministry of Defence of Kuwait, signed on April 5  

ROME, 09-May-2016 — /EuropaWire/ — The Board of Directors of Leonardo-Finmeccanica, convened under the chairmanship of Gianni De Gennaro, examined and unanimously approved the results of the first quarter 2016.

The first months of 2016 confirmed the positive performance of the Group in terms of both results of operations and financial position, showing an increase in particular in EBIT (+22%) and, above all, in net result before extraordinary transactions, equal to 14 times that recorded in the corresponding period of the previous year.

In details, the results in the first quarter of 2016 (which no longer include any contribution from theTransportation business that has been transferred to Hitachi in 2015 and that has been classified separately under “discontinued operations” in the comparative period) showed:

• New Orders: amounted at EUR 2,564 million, satisfactory commercial performance achieved, with book-to-bill ratio equal to 1, in line with 2015. New orders in the first quarter do not include the contract for the supply of 28 Eurofighter Typhoon aircraft signed on 5 April 2016 with the Kuwaiti Ministry of Defence. The contract, whose total value is approaching €bil. 8, will be booked in the order backlog when the first advance payment is collected, probably in the second quarter of the year. The activities will cover eight years, with an impact on the profit and loss that will be meaningless in 2016 but will increase and became particularly significant starting from 2019. In financial terms, the effect deriving from the collection of the advance will entail an improvement of FOCF of about €mil 600 in the two-year period 2016/2017, while the subsequent years will be affected by the absorption of this improvement related to working capital requirements deriving from the peak of the production.
• Orders backlog: amounting to EUR 27,863 million, and characterized by a more rigorous selection of the orders based on stricter profitability criteria, and ensuring about two and a half years of equivalent production.
• Revenues: amounted at EUR 2,536 million, -4.4% compared to the first quarter 2015.
• EBITDA: positive EUR 326 million, 13.6% higher than the 287 million of the first quarter 2015. Also the EBITDA margin, at 12.9%, increased by 210bp compared to 10.8% in the first quarter 2015.
• EBITA: positive EUR 164 million, improved (+4.5%) compared to the 154 million of the first quarter 2015, driven by the improvement of the operating productivity, mainly visible in the increase of the EBITA per capita. ROS was at 6.5%, 60 bps higher than in the first quarter 2015.
• EBIT: positive EUR 134 million, +21.8% compared to the 110 million of the first quarter 2015.
• Net Result before extraordinary transactions: positive EUR 56 million, 14 times the positive 4 million of the first quarter 2015.
• Net Result: positive EUR 64 million, including the capital gain from the disposal of FATA, and 6 times the positive 11 million of the first quarter 2015, which had benefitted from the results from the Transportation operations sold during fourth quarter 2015.
• Group Net Debt: amounted to EUR 4,212 million and improved by 896 million compared to 5,108 million at 31 March 2015. The increase in comparison with 3,278 million at 31 December 2015 was essentially due to the negative effect of the cash flows of the period, reflecting the typical seasonality in the Group’s performance.
• Free Operating Cash Flow (FOCF): negative EUR 876 million, slightly improved compared to the negative 880 million of the first quarter 2015, in line with the normal seasonal fluctuation in Group collections and payments.

Outlook

Following the signature of the contract with the Ministry of Defense of Kuwait for the supply of 28 Eurofighter Typhoon, 2016 guidance are now revised to include a significant improvement in New Orders and FOCF, compared to the original 2016 guidance published with 2015 results.

2016 New Orders guidance increased for the effect of the award of the Kuwait contract (approaching €bil. 8 value). In financial terms, the effect deriving from the collection of the advance will entail an improvement of FOCF of about €mil 600 in the two-year period 2016/2017, of which approximately €mil 200 in the first year, with a consequent improvement in the expected Net Debt. The Group expects meaningless profit and loss impacts on 2016.

Therefore, 2016 full-year guidance are now updated as follows::

(*)Exchange rate assumptions: €/USD 1.15; €/GBP 0,75

To access the webcast of the presentation (starting at 5.30 pm CET) and download the documentation of the 1Q 2016  results, please click on the following link

Q1 2016 Results  – webcast and presentation

Full results