Rome 05 May 2022 18:04 Inside Information
Growth path confirmed
- Backlog at € 36.3 bn ensures a coverage in terms of production slightly higher than 2.5 years
- Strong commercial performance, with no jumbo orders included
- Book to Bill at 1.2x
- RoS at 4.4%, up 1 p.p.
- FOCF at € -1.1 bn, an improvement of over 300 million YoY
- Strong liquidity position
FY 2022 Guidance confirmed
Leonardo's Board of Directors, convened today under the Chairmanship of Luciano Carta, examined and unanimously approved results of the first quarter 2022.
Alessandro Profumo, Leonardo CEO, stated “1Q 2022 showed a good start to the year and results in line with Leonardo's growth path, which we had already restarted in the previous year. The defence and governmental business achieved good order intake in the first quarter, with growing revenues and profitability and improving cash flow. We are well positioned in European co-operation programmes and in markets that are committed to growing defence spending. All this means we confirm the outlook and full year 2022 Guidance. We can also be very confident of our key business strengths and fundamentals supporting our medium term outlook. We also continue to make good progress optimising our portfolio and making us more focused on our core businesses, thanks to the sale of GES and of our 50% stake of AAC JV. At the same time, we continue to execute our disciplined financial strategy and are pleased to see yesterday that S&P revised Leonardo’s outlook to positive on improving credit metrics”.
1Q 2022 financial results
The results of these first three months of 2022 reflect the path to growth and increased profitability which was expected. The volume of new orders has continued to increase significantly, as well as Revenues and EBITA in all the main Business areas.
The cash flows, although affected by the usual seasonal profile characterised by significant outflows in the first part of the year, are clearly improving compared to the same period of the prior year, already improving compared to the first quarter of 2020.
The Group Net Debt figure, even though reflecting the acquisition of the 25.1% investment in the German company Hensoldt (€mil. 606, plus related transaction costs), which completed at the beginning of January 2022, has risen only € 148 million compared to the first quarter of 2021 thanks to the significant improvement in the FOCF.
Key Performance Indicator
(*) EBITDA this is EBITA before amortisation, depreciation (net of those relating to goodwill or classified among “non-recurring costs”) and adjustments impairment.
(**) EBITA is obtained by eliminating from EBIT the following items: any impairment in goodwill; amortisation and impairment, if any, of the portion of the purchase price allocated to intangible assets as part of business combinations, restructuring costs that are a part of defined and significant plans; other exceptional costs or income, i.e. connected to particularly significant events that are not related to the ordinary performance of the business.
(***) EBIT is obtained by adding to earnings before financial income and expense and taxes and taxes the Group’s share of profit in the results of its strategic Joint Ventures (GIE-ATR, MBDA, Thales Alenia Space and Telespazio).
Commercial Performance
- New Orders, amounted to EUR 3,789 million significantly increased (+10.8%) compared to the first quarter of 2021
- Backlog, amounted to EUR 36,278 million, ensures a coverage in terms of production slightly higher than 2.5 years. The book to bill ratio (the ratio of New Orders for the period to Revenues) is higher than 1.2.
Business Performance
- Revenues, amounted to EUR 3,006 million, showed a solid increase (about +8%) compared to the first quarter of 2021 (€bil. 2.8) driven by the strong performance of Helicopters and by the higher production volumes of the Aircraft Division
- EBITA, amounted to EUR 132 million, and recorded, on the whole, strong growth (39%) with a considerable increase in all business segments, with particular reference to the activities of Electronics in Europe, in addition to the higher contribution provided by all the strategic Joint Ventures. Profitability also improved significantly, with a ROS of 4.4%, up by about 1 percentage point
- EBIT, amounted to EUR 123 million, benefitted from an improvement of EBITA, compared to the first quarter of 2021 (€mil. 75). At EBIT level, non-recurring costs showed a significant decrease vis-à-vis the decision to stop classifying – starting from 2022 – the charges linked to the COVID-19 emergency within recurring costs included in EBITA. Overall, EBIT showed an increase of 64%.
- Net Result before extraordinary transactions, which posted a profit of EUR 74 million, (negative for €mil. 2 in the first quarter of 2021), is equal to the Net Result and benefitted from the EBIT performance, as well as from lower financial and tax charges.
Financial performance
- Free Operating Cash Flow (FOCF), negative for EUR 1,080 million, showed a significant improvement (24%) compared to the first quarter of 2021 (negative for €mil. 1,422). This result, although confirming the usual seasonal trend that is characterised by significant cash absorptions in the first part of the year, reflects the expected positive trend towards improvement
- Group Net Debt, of EUR 4,788 million, was higher compared to 31 December 2021 (€mil. 3,122), mainly as a result of the abovementioned FOCF performance as well as of the acquisition, completed in January 2022, of the investment in Hensoldt AG and the share of related transaction costs paid. The acquisition of the aforesaid investment is also reflected in the increase in non-current assets