The Board of Directors of Leonardo-Finmeccanica, which met today under the chairmanship of Gianni De Gennaro, unanimously examined and approved the Half-Year Financial Report as at 30 June 2016.
The first half of the 2016 confirms for Leonardo-Finmeccanica the success of the efficiency measures implemented since the launch of the Business Plan, in particular on the production and industrial processes in business areas that in the past had shown profound criticalities. Together with the effects of rationalizing the scope of activities and the product portfolio, these actions have led to a gradual repositioning of the Group, such as to guarantee, even in the presence of a period of difficulty in certain reference markets (including the civil Helicopters impacted by the continuation of the crisis ofOil & Gas), exceeding the objectives set at the base of the Business Plan, in particular the growth of profitability.
In detail, the results of the first six months of the 2016 highlight:
- Orders: equal to 12.867 million euros, up 132% compared to the first half of 2015, in particular due to the acquisition of the contract for the supply of 28 Eurofighter Typhoon aircraft signed on 5 April with the Ministry of Defense of Kuwait, for a total value of € bil. 7,95. The "book-to-bill"Therefore stands at the extraordinary level of 2,4.
- Order backlog: equal to 34.996 million euros (+ 19% compared to June 2015), characterized by growing solidity due to the rigorous selection of the acquired contracts, putting an end to the acquisition of structurally loss-making contracts that in part still hold back the full growth potential of the Group's profitability. The coverage ensured by the order book is approximately two and a half years of equivalent production.
- Revenues: equal to 5.413 million euros, -9,4% compared to the first half of 2015 essentially due to the reduction in revenues in the Helicopters sector, due to the difficulties in the civil market caused by the persistence of theOil & Gas, and from changes in the perimeter especially relating to DRS and FATA.
- EBITDA: positive for 786 million euros, up by 6,5% compared to 738 million in the first half of 2015. EBITDA too margin, equal to 14,5%, shows an increase of 210 bp compared to 12,4% of the first half of the 2015.
- EBITA: positive for 472 million euros, up (+ 4,9%) compared to 450 million in the first half of 2015. ROS stood at 8,7%, up by 120 bp.
- EBIT: positive for 399 million euros, + 13,7% compared to 351 million in the first half of 2015. EBIT too margin, equal to 7,4%, shows an increase of 150 bp compared to 5,9% of the first half of the 2015.
- Ordinary net result: positive for 200 millions of euro, up 120% compared to 91 millions positive in the first half of 2015.
- Net result: positive for 210 million euros, including the gain on the sale of FATA, and strong growth (+ 89%) compared to the 111 million positive in the first half of the 2015, which benefited from the results of the Transportation business sold during the fourth quarter 2015.
- Group net debt: equal to 4.233 million euros, an improvement of 757 million euros (15%) compared to 4.990 million at June 30, 2015 thanks to the positive cash performance of the last months of 2015 and the disposal operations in the Transportation sector , completed in November 2015 and despite negative exchange rate differences. The increase compared to the 3.278 million recorded at 31 December 2015 is essentially due to the usual cash absorption in the first months of the year and the buy-back of treasury shares to service the incentive plans.
- Free Operating Cash Flow (FOCF): negative for 793 million euros, slightly worsening compared to the negative 743 million in the first half of 2015. This trend confirms the Group's normal cash absorption curve in the first period of the year.
Outlook
The forecasts for the 2016 exercise are shown below, as amended in May following the signing of the EFA Kuwait contract:
| final 2015 | Outlook 2016 | |
| Orders (€ bil.) | 12,4 | about 20,0 |
| Revenues (€ bil.) | 13,0 | 12,2 – 12,7 |
| EBITA (€ mil.) | 1.208 | 1.220 – 1.270 |
| FOCF (€ mil.) | 307 | 500 - 600 |
| Group Net Indebtedness (€ bil.) | 3,3 | approx. 2,8 |
(*) Assuming a € / USD exchange rate to 1,15 and € / GBP to 0,75
Based on the performance recorded in June and the revision of the estimates on the results for the next six months, the Group expects to achieve a level of EBITA at the top of theoutlook, confirming the improvement trend of the performance operating and the increasing benefits of efficiency initiatives. This is in the presence of Revenues which could instead be at the low end of the indicated range, as a consequence of the decline in production volumes in Helicopters, conditioned by the effects of the crisis in the sector Oil & Gasand in other civilian markets, which is continuing beyond initial forecasts. In this context, characterized as said by the persistence of the crisis in some reference markets, the achievement of the expected level of orders is particularly challenging. The expected cash generation is confirmed from a financial point of view.
The Group does not foresee significant effects in the short term deriving from the exit process of Great Britain from the EU. However, it should be noted that Leonardo-Finmeccanica is exposed to the risk of translating its assets denominated in foreign currency. Therefore, the possible weakening of the GBP towards the Euro compared to the values assumed in the determination of the guidance for the current year, there would be negative variations in the final figures with respect to these forecasts, with particular reference to the value of the Group's Net Debt
