Leonardo's Board of Directors examined and unanimously approved the draft financial statements and the consolidated financial statements as at 31 December 2017. New orders amounted to 11,6 billion, revenues equal to 11,5 billion, with Ebitda at 1,07 billion and profitability (RoS) at 9,2%. The operating cash flow is instead equal to 537 million. The Board also proposed the payment of a dividend of 14 cents, unchanged compared to 2016.
Alessandro Profumo, Leonardo's Chief Executive Officer commented: “2017 closed with results in line with forecasts; 2018 will be a year of consolidation and we are entering a new phase of solid and long-term sustainable growth, characterized by an improvement in the top-line, profitability and a growing cash flow starting from 2020. We are focused on realizing of all the targets of the Industrial Plan 2018-2022 with lmain goal of creating long-term value for the benefit of all stakeholders. Also this year we have proposed the distribution of the dividend as a fundamental element of the remuneration of the shareholders”.
According to what has already been expressed in the plan, 2018 will be a year of consolidation: the guidance presented in January has been confirmed, the year opens with an order backlog of 33,6 billion and with the aim of sustainable growth, based on the helicopter business but also on the improvement of the aircraft, also thanks to the Eurofighter programme. Solid progress, explains the note released by Leonardo, is also expected within Electronics, Defense and Security Systems.
The data for 2017 are therefore in line with the revised Guidance and, as expected, are affected by some non-structural difficulties encountered in the Helicopters sector. The sector continues to represent a business of excellence, with a range of leading products in the reference markets, growing shares in the most attractive market segments and development prospects as highlighted in the 2018-2022 Business Plan. Indeed, the latter is based on solid and sustainable long-term growth of all the Group's key businesses; Indeed, Leonardo will be able to take advantage of its favorable market positioning, the solid order backlog (over 33,6 billion as at 31 December 2017) and the organizational model of the «One Company» to seize market opportunities, through the definition of a new commercial strategy associated with strict control of costs and investments and a disciplined financial strategy focused on cash generation, thus returning to lasting and sustainable growth. The critical issues encountered in 2017 were clearly understood and promptly addressed, undertaking corrective actions in terms of organizational, process and governance changes.
In detail, the results for 2017 highlight:
- New orders: equal to 11.595 million euros. The 2016 figure included the exceptional effect of the acquisition of the EFA Kuwait contract for an amount of € 7,95 billion, excluding which the amount of orders shows a slight decrease (-3%), attributable in particular to the aforementioned difficulties of Helicopters and the drop in Electronics, whose results were also affected by the negative exchange rate effect, particularly on the British pound.
- Order backlog: equal to 33.578 million euros (-3,5% compared to December 2016). The order backlog ensures coverage in terms of equivalent production of just under 3 years (2017 revenue base).
- Revenues: equal to 11.527 million euros, a slight decrease (-4%) compared to 2016, also due to the unfavorable exchange rate trend deriving from the translation of revenues into GBP and, to a lesser extent, into USD (approx. €160 millions). In detail, against a sharp reduction in Helicopters, which were affected by delays in production activities on certain product lines as well as the aforementioned exchange rate effect, Electronics and Aeronautics (which begins to benefit from revenues from the EFA Kuwait programme) show revenues in line with 2016. The book to bill is equal to 1, in line (excluding the effect of the EFA Kuwait contract) with 2016.
- EBITA: equal to 1.066 million euros, a decrease of 14,9% compared to 2016 (with a ROS down by 1,2 pp), influenced by the drop in volumes and profitability of the Helicopters as well as, to a lesser extent, by the results of the 'Aeronautics and Electronics, against a lower loss than in 2016 of the other activities.
- EBIT: equal to 833 million euros; the decrease in EBITA was partly offset by the reduction in non-recurring and restructuring charges (-€47 million), leading to a decrease in EBIT of €149 million compared to 2016.
- Net ordinary result: equal to 274 million euros, a decrease compared to 2016, due to the decrease in EBITA and higher financial expenses. The €157 million worsening of financial expenses compared to 2016 is attributable to the expenses (€97 million) deriving from the buy-back transactions on part of the Group's bond issues (transactions illustrated in detail in the section “Financial transactions”), while the financial year 2016 had benefited from positive exchange differences also reflected in the fair value of derivatives, with a delta of + € 75 million compared to 2017.
- Net result: equal to 274 million euros, equal to the ordinary net result, in the absence of extraordinary transactions (2016 was, on the other hand, affected by the effects deriving from the sale of assets on the Superjet program in the Aeronautics sector and the sale of the Environmental business of DRS, net of the capital gain on the sale of FATA).
- Free Operating Cash Flow (FOCF): equal to 537 million euros, worsening compared to 2016 (706 million euros), which benefited from the particularly limited cash absorption from net investing activities.
- Group net debt: equal to 2.579 million euros, an improvement of 9% compared to 2016, despite the disbursements deriving from the acquisition of Daylight Solutions and the additional shares of Avio (for a total of € 168 million), as well as from the payment of dividends (€81 million). The negative change in financial payables is attributable to the repayment of the bond loan maturing in December and the bond buybacks carried out in 2017, net of the placement of a new bond loan of € 600 million.
Today Leonardo also communicated that he has signed an agreement in Qatar for over 3 billion euros with the NHI consortium, of which the group led by Alessandro Profumo is prime contractor. This important agreement meant that, in a bad day for Piazza Affari, the Leonardo stock was the best in the Ftse Mib and among the very few in positive territory.
