Leonardo: positive and effective management in response to the pandemic

(To Leonardo)
05/11/20

Leonardo's Board of Directors, which met today under the chairmanship of Luciano Carta, unanimously examined and approved the results as at 30 September 2020. “The results of the first nine months show that we have responded promptly to the short-term challenges of 2020, reacting effectively to the dynamics of a constantly changing environment. We have taken actions to become more resilient and agile: we have reduced costs, prioritized investments without causing program delays, reoriented orders by receiving significant support from our domestic customers, reconfigured production lines to respond to restrictions due to COVID, we have implemented in a quick and effective way of smart working, carrying out production and rationalizing our business in line with demand. We have a solid financial position, made even more robust by the signing of additional credit lines in May and the refinancing of the bond maturing in 2021: we therefore have no need for capital increases or further debt refinancing. We are demonstrating a steady operating recovery quarter after quarter. We trust in our strengths, in the solid business fundamentals in a market that is still growing and we are well positioned for sustainable development in the medium to long term, also in support of Italy. Our trust is based on our business mix, strong order book, customer relationships, leading position in key segments with quality products and services, our role in leading international programs and our drive for innovation. aimed at identifying new business opportunities " commented Alessandro Profumo, Leonardo's CEO.

The results of the first nine months of 2020 confirm the resilience of the Group already highlighted in the half-year financial report, in an unprecedented context, with a commercial performance that is confirmed on the same levels as last year, benefiting from government / military orders from part of domestic customers in the face of some shifts in the countryside export and the decline in demand in the civil sector.

Revenue volumes are also substantially in line with the first nine months of 2019, supported by a solid Backlog and the growth of the EFA Kuwait program and of Leonardo DRS, able to compensate for the slowdowns induced by the pandemic.

La performance despite being impacted by the effects of COVID-19, confirms the effectiveness of the initiatives implemented to ensure the gradual recovery of full business operations. Profitability is also affected by the lower contribution of the JVs and by a mix of activities characterized by programs under development or in which the Group operates as a Premium, with lower than average margins but essential for the current and future positioning of the Group's products and technologies.

Finally, cash flow is affected by the shift towards the end of the year in collections linked to the slippage of milestone of activity and delivery of machines due to COVID-19, which led to an increase in working capital with consequent cash absorption.

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