Italy’s Leonardo to focus on ‘bytes and data’, new CEO says

By Alvise Armellini

ROME (Reuters) -Italy’s state-controlled defence and aerospace group Leonardo needs to focus on the fast-growing cybersecurity and space sectors to keep up with industry trends, its new CEO said on Friday.

Roberto Cingolani, a scientist and former energy and environment minister who was installed in May, spoke as the company reported for the first half of the year a jump in new orders, driven by its helicopter division, and falling debt.

It also confirmed financial targets for 2023.

“Defence is increasingly made with bytes and data, instead of bullets,” Cingolani said during a call with analysts, announcing a new industrial plan that will be unveiled in early 2024.

Cingolani said Leonardo would strengthen its core defence business, but also move into “cutting-edge and disruptive technologies” and compete with big data industries, expanding its use of artificial intelligence (AI).

He spoke of making the company more efficient, optimising its product portfolio, expanding its international presence, and better focusing its research & development (R&D) activities.

“We have to do few things very well, rather than many things in a mediocre way,” he said.

In the first half of 2023, Leonardo’s new orders rose to almost 8.7 billion euros ($9.60 billion), up 18.9% year-on-year, while group net debt fell to 3.6 billion euros from 4.8 billion euros in the first half of last year.

H1 revenues were up 4.8% to just under 6.9 billion euros, while earnings before interest, taxes depreciation and amortisation (EBITDA) rose by 3.5% to 703 million euros.

Leonardo’s confirmed guidance for 2023 includes a forecast for new orders at around 17 billion euros, revenues in the 15-15.6 billion euro range, EBITA at 1.26-1.31 billion euros and group net debt of about 2.6 billion euros.

Like other defence groups, the Italian company has benefited from rising military spending in the wake of Russia’s invasion of Ukraine, and is involved in the GCAP next-generation fighter jet programme between Italy, Britain and Japan.

Leonardo’s Milan-listed shares have risen by more than 46% since January, and are up about 20% from a year ago. On Friday, before results were announced, they closed up 0.7% at 11.88 euros.

($1 = 0.9064 euros)

(Reporting by Alvise Armellini, editing by Gavin Jones and Deepa Babington)