Results at

30 September 2020

Disclaimer

This Interim Reporting at 30 September 2020 has been translated into English solely for the convenience of the international reader. In the event of conflict or inconsistency between the terms used in the Italian version of the report and the English version, the Italian version shall prevail, as the Italian version constitutes the sole official document

Results at 30 September 2020

CONTENTS

GROUP RESULTS AND FINANCIAL POSITION .....................................................................

3

Guidance 2020 ......................................................................................................................................

14

Main transactions of the first nine months of 2020 significant events occurred after the period-end ...

16

The results of the third quarter ..............................................................................................................

20

Explanatory notes..................................................................................................................................

21

1.

FINANCIAL INCOME AND EXPENSES .........................................................................................

22

2.

LOANS AND BORROWINGS .......................................................................................................

22

3.

CONTINGENT LIABILITIES........................................................................................................

23

Annex 1: Scope of consolidation...........................................................................................................

24

Annex 2: "Non-GAAP" performance indicators ...................................................................................

25

  • Declaration of the officer in charge of financial reporting pursuant to Art. 154-bis, paragraph 2 of

Legislative Decree no. 58/98 as amended .............................................................................................

28

2

Results at 30 September 2020

Group results and financial position

The results recorded in the first nine months of 2020 confirm the Group's resilience already highlighted in the half-year financial report, in a context without precedent, with a commercial performance that confirms the same levels as in the last year benefitting from orders in the government/military sphere from national clients against certain postponements of the export campaigns and the drop in the civil sector demand.

Revenue volumes are basically in line with those of the first nine months of 2019, supported by a solid Backlog and the growth of the EFA Kuwait programme and of Leonardo DRS, which have been able to offset the slowdowns caused by the pandemic.

The industrial performance, even if affected by the effects of the COVID-19, confirm the efficacy of initiatives implemented to guarantee the gradual recovery of the full business operations. The profitability is affected also by a lower contribution from the JVs and a mix of activities characterised by programmes under development or in which the Group operates as a prime contractor, with profit margins below the average but which are essential to the current and future positioning of the Group's products and technologies.

The cash flows were affected by the shift of receipts towards the end of the year due to the postponement of the milestones of activity and delivery of machines as a result of the COVID-19 pandemic, which entailed an increase in working capital with a consequent cash absorption.

3

Results at 30 September 2020

Key performance indicators ("KPI")

September

September

Change

2019

2019

2020

New orders

8,579

8,510

(0.8%)

14,105

Order backlog

35,672

34,980

(1.9%)

36,513

Revenue

9,134

9,025

(1.2%)

13,784

EBITDA

1,064

866

(18.6%)

1,817

EBITA

686

497

(27.6%)

1,251

ROS

7.5%

5.5%

(2.0) p.p.

9.1%

EBIT

648

395

(39.0%)

1,153

EBIT Margin

7.1%

4.4%

(2.7) p.p.

8.4%

Net Result before extraordinary transactions

367

135

(63.2%)

722

Net result

465

137

(70.5%)

822

Group Net Debt

4,301

5,884

36.8%

2,847

FOCF

(1,217)

(2,596)

(113.3%)

241

ROI

11.4%

7.0%

(4.4) p.p.

16.7%

ROE

10.3%

3.5%

(6.8) p.p.

14.7%

Workforce

49,234

49,973

1.5%

49,530

Please refer to Annex 2 on "Non-GAAP performance indicators" for definitions.

From an operational point of view the initiatives implemented to recover adequate productivity levels and the cost base review entailed a gradual improvement in results over the months, which is particularly evident from the comparative analysis of the quarterly results compared to the prior year.

In particular, the performance of the third quarter showed, with equal revenue developed, a recovery in profitability, with an EBITA benefitting from higher industrial productivity and cost containment and higher than that recorded in the same period of 2019, despite a lower contribution from the JVs.

First quarter

Second quarter

Third quarter

2019

2020

Change

2019

2020

Change

2019

2020

Change

New orders

2,518

3,421

35.9%

3,627

2,683

(26.0%)

2,434

2,406

(1.2%)

Revenue

2,725

2,591

(4.9%)

3,237

3,287

1.5%

3,172

3,147

(0.8%)

EBITA

163

41

(74.8%)

324

251

(22.5%)

199

205

3.0%

ROS

6.0%

1.6%

(4.4) p.p.

10.0%

7.6%

(2.4) p.p.

6.3%

6.5%

0.2 p.p.

The primary changes that marked the Group's performance compared to the previous year are described below. Analyses per business can be found in the section covering the trends in each business segment.

4

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Leonardo S.p.A. published this content on 05 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 November 2020 18:31:01 UTC