Leonardo revises 2018 guidance in H1 results


Leonardo has increased both its free operating cash flow (FCOF) and its new-order revenue guidance after finalising a deal with Qatar for 28 NH90s.

The Italian helicopter manufacturer has raised its new-order revenue guidance from Eu12.5-13 billion to Eu14-14.5 billion after having finalised a lucrative deal with the State of Qatar for 28 new NH90s.

It also tripled its FCOF guidance for 2018 from its previous target of Eu100 million to Eu300-350 million.

The State of Qatar first signed an order for 22 NH90s in 2014 and decided to increase its commitment to 28 in March 2018, finalising the deal in May. The helicopters are manufactured by NHI Helicopter — a collaborative military-helicopter project between fellow manufacturers Airbus, Fokker and Bell.

At the start of 2018, the deal was only partially included in Leonardo’s initial 2018 guidance.

Leonardo announced in a statement: “The Board of Directors has decided to revise upwards the Group Guidance for the full year 2018 to reflect the expected effectiveness of the contract from the Ministry of Defence of Qatar for NH90 multirole helicopters, that had been only partially factored into Group Guidance, and the potential for certain export campaigns not to be full finalised by year-end.”

The group’s revenue and EBITA guidance remains unchanged.

H1 Results

Looking at the rest of the results, Leonardo’s helicopter orders slumped in the first half of 2018 but remained in line with expectations.

New order intake for the first half of 2018 was valued at Eu4.6 billion, down from the from the Eu5.06 billion the company secured in the same period last year.

EBITA rose 8.4% over H1 last year to Eu470 million. Leonardo’s EBIT amounted to Eu240 million but was affected by once-off early-retirement payments to Italian unions that cost the company Eu170 million.

Net result for the first half of 2018 was Eu106 million but was affected again by the once-off cost. The final figure is less than half the net result in H1 2017 (Eu213 million) but without the cost, would have been a 11% increase year-on-year.

Leonardo also decreased its debt, closing H1 2018 with Eu 3,474 million, down from Eu3,577 million from the first half of 2017.

Leonardo ended the first half of 2018 with a negative EU 809 million cash flow, a significant increase from the negative 531 million from the same period last year.

Alessandro Profumo, Leonardo’s CEO, said: “First half 2018 results are in line with expectations. We are fully focused on executing the Industrial Plan: Helicopters are successfully recovering, DRS is benefitting from US market improvement and we have taken steps forward in cost control. All of these will ensure long-term sustainable growth to the Group”.

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