Leonardo Unveils Ambitious 2024–2028 Industrial Plan: Giving Digitalization, Artificial Intelligence, and Security Priority in a Changing Global Defence Environment
Leonardo revealed its industrial plan for 2024-2028, highlighting major ambitions in its aerospace, electronics, and helicopter sectors. Furthermore, the corporation intends to capitalize on new prospects in cybersecurity and space, acknowledging their importance in future defense efforts. Leonardo aspires to strengthen its position as a global aerospace and defense industry leader by capitalizing on its knowledge and resources in these critical areas. This forward-thinking approach demonstrates the company’s dedication to innovation, diversification, and solving emerging security concerns in an increasingly complicated world.
Rome: As it concentrates on security operations, Italy’s Leonardo will make investments in digitalization, artificial intelligence, and networked platforms over the next five years, the defence giant announced on Tuesday.
Chief Executive Roberto Cingolani stated in a statement that “the global geopolitical scenario calls for a new global security paradigm, where we aim to play a proactive role in the evolution of the European defence sector.”
Amidst a thriving defence market, Leonardo’s stock soars 6.8% on strong profit and cash flow forecasts; a robust 2024–2028 plan reflects a 40% year-to-date surge.
Leonardo shares rose 6.8% on Tuesday morning as analysts praised the company’s predicted profits and cash flow as described in its industrial plan. This spike occurred in the midst of a strong market for defense equities, with Leonardo’s shares up around 40% since the start of the year. Analysts’ positive reactions show their belief in the company’s strategic direction and ability to capitalize on market prospects. This rising trend bolsters investor confidence and underlines Leonardo’s position as a vital player in the military industry, poised for long-term growth and profitability.
According to the state-controlled company, orders will total 105 billion euros ($114.77 billion) by the end of 2028, growing at a compound average annual rate of 4%.
Between 2024 and 2028, the company’s revenues are expected to expand at a stable 6% annual rate, totaling 95 billion euros. Concurrently, core earnings are expected to increase from 1.44 billion euros to 2.5 billion euros by the end of the term. These projections are consistent with the company’s strategic efforts and market expectations, indicating a trajectory of continued growth and increased profitability throughout the defined term. Such estimates highlight the success of the company’s strategic planning and capacity to capitalize on market possibilities, ultimately increasing shareholder value and sustaining long-term growth.
Leonardo Charts Sturdy Financial Progress: Boosting Business Transformation by 2028 with Strategic Alliances, Massive Digitalization Initiatives, and an Expected Doubling of Free Operating Cash Flow
By the end of 2028, it is expected that free operating cash flow (FOCF) would have virtually doubled from 0.7 billion euros at the end of the current year to 1.35 billion euros. This anticipated growth demonstrates the company’s improved financial performance and operational efficiency throughout the chosen time period. A rise in FOCF indicates increased liquidity, bolstering the company’s ability to engage in strategic projects, explore development prospects, and provide long-term value to its stakeholders.
According to Cingolani, the industrial plan has outlined a strategy for maximising Leonardo’s business growth potential, resulting in greater top-line growth, double-digit profitability by 2026, and doubling FOCF by the plan’s conclusion.
Cingolani, a former government minister who was appointed CEO in May of last year, has been advocating for partnerships with other European army organizations in order to more effectively and less fragmentedly capitalise on the growing military budgets of the bloc.
He pledged to adopt a number of cost-cutting measures, group-wide efficiency improvements, and significant digitization and rationalization of products and services. These measures are intended to achieve gross savings of 1.8 billion euros throughout the course of the business plan. The organization aims to increase its overall competitiveness and profitability by streamlining operations, optimizing resources, and embracing digital transformation. Such strategic initiatives demonstrate a proactive attitude to addressing difficulties, promoting innovation, and increasing value creation throughout the firm.
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