What will happen to Leonardo according to Leonardo
Leonardo is confident of meeting the guidance this year despite the difficulties in its Aerostructures division. Facts, numbers and scenarios for the former Finmeccanica
Leonardo speaks of a "solid guidance" for 2021.
During the week, the former Finmeccanica presented the 2020 numbers and the prospects for the current year.
The Defense group led by the CEO, Alessandro Profumo, reported revenues of 13.8-14.3 billion euros in 2021. Therefore, an increase compared to 2020 thanks to the contribution of new orders and the development of portfolio activities on military / government programs, especially EFA Kuwait.
All this, however, "in the hypothesis of a progressive improvement in the global health situation with consequent normalization of operating and market conditions".
In any case, the civil component "will still be heavily affected by the effects of the pandemic, with, in particular, a further contraction in the production volumes of theAerostructures Division , as well as forecasts of deliveries still far below pre-Covid19 levels by of the GIE-ATR ".
The Aerostructures division, which produces components for airliners, will continue to have smaller orders from Boeing. This means that losses will be greater this year than in 2020.
"2021 will be characterized as the worst year for production volumes with a production forecast of 4.7 B787 / month compared to the previous 14 and about 22 Atr against 75 in 2019"underlined Michele Zanocco, national secretary of Fim Cisl , following the periodic meeting to verify the situation relating to Leonardo's Aerostructures Division.
The CEO Profumo also added that the proceeds generated by the listing of the subsidiary Drs , as well as those potentially deriving from M&A transactions, are not included in the 2021 guidance.
All the details on the 2021 outlook for each Leonardo division.
HOW IT CLOSED 2020
Leonardo closed 2020 with revenues of € 13.41 billion, substantially in line with the 2019 figure. Net profit instead slipped to € 241 million, ie 70.4% less than in 2019, affected by the worsening of EBITA. The fourth quarter of 2020 saw revenues of 4.39 billion, just below the consensus estimate (4.46 billion).
THE GUIDANCE FOR 2021
Leonardo expects to reach orders for 14 billion euros in 2021 and revenues between 13.8 and 14.3 billion.
The guidance, explains a note from the group, is based on the hypothesis "of a progressive improvement in the global health situation with consequent normalization of operating and market conditions".
The EBITA is expected to improve between 1.075 and 1.225 billion (consensus estimate was 1.06 billion), while the Focf "will continue to benefit from the contribution of the military / government, continuing to feel the pressure on the civilian segment". The statement also reports that "actions have been taken to address the challenges facing civil aviation."
In the medium to long term, Leonardo foresees a “robust and resilient military / government business”. The “solid portfolio” and “new orders”, the note emphasizes, “confirm the confidence in our successful products and services”. The Group envisages “actions aimed at facing the challenges in a complex global scenario” and “new post-Covid-19 opportunities by leveraging transversal capabilities”.
Let's now pass to the outlook for each Leonardo sector.
HELICOPTER SECTOR
"In 2021, revenue volumes are expected to grow" for the helicopter sector "supported by the development of backlog activities on military / government programs and a good flow of new orders, although in a context still characterized by the effects of the pandemic, in particular in the civil market ”, highlights the note. “Profitability is confirmed at good levels also thanks to the initiatives to optimize industrial processes and improve the competitiveness of the main products, despite being affected by a production mix characterized by growing activities on contracts acquired as prime mover”.
ELECTRONICS FOR DEFENSE AND SECURITY
With regard to the defense and security electronics sector, Leonardo expects in 2021 "a recovery of the slowdowns recorded in 2020 due to the pandemic, with growing revenue volumes supported in particular by the portfolio programs, further strengthened in 2020. Improving profitability due to the constant attention to program execution and cost containment, despite the presence of a mix of activities still characterized by programs under development and growing shares of “pass-through” revenues ”.
AERONAUTICS: INCREASE IN REVENUES OF THE AIRCRAFT DIVISION THANKS TO EFA KUWAIT AND F-35
For the Aircraft Division, the group expects "a further increase in revenue volumes, with the first deliveries of the EFA Kuwait aircraft, the solid contribution of the F-35 program and the growth of activities in proprietary products, in particular M-346 and M-345 ".
FURTHER CONTRACTION FOR THE AEROSTRUCTURE DIVISION
Less optimism for the Civil component of Leonardo's aeronautics sector.
"The trend in 2021 will still be heavily influenced by the effects of the pandemic, with repercussions on production activities associated with the decline in demand from customers" underlines the note. "This will lead to a further contraction of the production volumes of the Aerostructures Division, particularly exposed to the drop in installments communicated by Boeing, as well as forecasts of deliveries still far below the pre-Covid-19 levels by the GIE-ATR".
As we said initially, Zanocco (Fim Cisl) highlighted that "2021 will be characterized as the worst year for production volumes with a production forecast of 4.7 B787 / month compared to the previous 14 and about 22 Atr against 75 of 2019. The new forecasts of market recovery, linked to the persistence of the pandemic situation, see 2026 as the year in which it is expected to return to the volumes of 2019 ".
SPACE
Finally, for the space sector, the former Finmeccanica underlined that "2021 is characterized by growing volumes of activity and improving profitability due to the gradual recovery of the manufacturing segment, particularly penalized in 2020 by the effects of Covid-19 and by difficulties on development programs, against the confirmation of a solid operating performance in the satellite services segment ”.
THE COMMENT OF THE ANALYSTS
Analysts appreciate the 2021 guidance.
Morgan Stanley saw the outlook for orders of 14 billion in 2021 as positive. “2021 guidance consistent with expectations. The problem is the aerostructures division ”, pointed out Equita instead.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/cosa-succedera-a-leonardo-secondo-leonardo/ on Sun, 14 Mar 2021 07:09:43 +0000.