How Leonardo’s accounts and activities are going with Cingolani

8 May 20243 weeks ago babelfish

Leonardo reported results for the first quarter of 2024: profitability in all business segments. The reflections of the title on Piazza Affari

Revenues, profits and orders growing in the first quarter of the year and Leonardo takes off in Piazza Affari.

Leonardo closed the first quarter of 2024 with a net result of 459 million euros, compared to 40 million in the same period of 2023, which includes, in addition to the ordinary net result, the capital gain recognized following the fair value measurement of the Telespazio group , carried out for the purposes of full consolidation. This was announced by the Italian aerospace and defense group, whose Board of Directors led by Roberto Cingolani approved the results for the first quarter of 2024.

Revenues, equal to 3.6 billion euros, increased by +20.8 percent compared to the first three months of 2023 in all business sectors. Of particular importance is the contribution of defense and security electronics and helicopters. In light of the results, Leonardo confirms the full-year guidance announced in March.

The group's stock thus takes the lead in the Ftse Mib (index at -0.03%) with an increase of 2%, trading at 21.87 euros per share, after gaining over 3 percentage points at more than 22 euros per share. The purchases were driven by the accounts released by the company led by Roberto Cingolani, in line with the objectives announced in March and better than consensus expectations.

All the details on Leonardo's first quarter accounts.

DOUBLE DIGIT GROWTH IN REVENUE

Leonardo's revenues, equal to 3.6 billion euros in the first quarter of 2024, increased by +20.8%, growing in all business sectors, "mainly thanks to the performance of Defense and Security Electronics and of Helicopters. The growth in Revenues is accompanied by a significant and relevant growth in Ebita of 73.3% (+67.0% compared to the proforma figure), bringing the ROS for the period to 5% (3.5% as at 31 March 2023)" we read in the group's report accompanying the accounts.

HOW THE PROFITS GO

The group closed the accounts as of March 31, 2024 with a net result of 459 million euros, compared to 40 million in the same period of 2023, which includes, in addition to the ordinary net result, the capital gain following the fair value measurement of the Telespazio group , carried out for the purposes of full consolidation.

The ordinary net result, equal to 93 million euros (40 million in the first quarter of 2023) "reflects the improvement in Ebit, partially offset by the higher tax burden recorded in the period" indicates the note from the Piazza Monte Grappa company.

INCREASE IN ORDERS

The group also recorded a 14.9% increase in orders, "driven in particular by the European component of the Defense and Security Electronics business".

DEBT IS REDUCE

In the first quarter, the Leonardo group's net debt amounted to 2.93 billion euros and decreased by approximately 0.8 billion compared to March 2023 thanks to the strengthening of the group's cash generation "and the sale of the minority share of Leonardo DRS intervened in the last quarter of 2023 .

IMPROVES FREE OPERATING CASH FLOW

The operating cash flow is negative for 621 million euros, but presents a significant improvement (+11.5%) compared to the first quarter of 2023 (negative for 688 million euros) .

GUIDANCE CONFIRMED

Management then confirmed the 2024 guidance: 19.5 billion euros in new orders, 16.8 billion in revenues, ebita at 1.44 billion, an operating free cash flow of 770 million and debt of 2 billion.

THE WORDS OF CEO CINGOLANI

“We are fully focused on executing the Business Plan. The consolidation of the core defense business is progressing very well thanks to the acceleration of the digitalisation process which creates new opportunities in terms of revenues and generates cost efficiencies; we are incorporating Artificial Intelligence and the Digital Twin into all product catalogs and working on the digital continuum of the Armed Forces” commented Roberto Cingolani, CEO and General Director of Leonardo.

“Future activities are strengthened by the reorganization and governance changes that have allowed the creation of the new Space Division, the acceleration of activities in Cyber Security and the development of a strategy that leverages Generative Artificial Intelligence and multi-domain capabilities to all Leonardo platforms. The efficiency plan is fully operational and in line with achieving the target expected at the end of the year. Finally, regarding the inorganic growth of the Plan, we are continuing to strengthen international alliances by taking an active role in promoting European Defense. All this will allow us to achieve strong growth, greater profitability and better conversion of Ebita into cash" concluded Cingolani.

ANALYSTS COMMENT

Intermonte analysts, recognizing solid results in line with objectives, do not foresee "changes in consensus estimates", reports Radiocor . What is worrying are "the problems in the aerostructure sector due to the B787", i.e. the aircraft produced by Boeing, of which the Italian group is one of the suppliers, which has suffered production slowdowns, problems which "must be monitored as they could affect the short-term performance,” the analysts continue.

And precisely on the impacts on Leonardo of the difficulties Boeing is encountering, Cingolani responded in a conference with analysts that "I suppose there will be a shift in the break-even point" of the aerostructures business. In the 2024-28 plan, presented in mid-March, the group had indicated growth in orders and revenues of 16% and 17% respectively for the aerostructures division, "with EBITA breakeven by the end of 2025".

According to Banca Akros, “the market is aware of the Boeing 787 aspect – there is some uncertainty – and should not react too negatively to the news flow, also considering that the guidance for FY24 is not at risk”.

ON THE SALE OF WASS

Finally, Leonardo is about to conclude, as reported by Il Sole 24 Ore , the deal with Fincantieri for the sale of the ex-Wass activities relating to sonar and torpedoes, with an extraordinary board of directors meeting scheduled for tomorrow. Wass “is something we are working on very actively these days” commented Leonardo's CEO, Roberto Cingolani, during the call for the presentation of the accounts.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/come-vanno-conti-e-attivita-di-leonardo-con-cingolani/ on Wed, 08 May 2024 10:25:17 +0000.