Leonardo (LDO) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw strong double-digit growth in orders, revenues, and EBITDA/EBITA, with improved cash flow, reduced net debt, and robust international expansion; export orders rose to 67% of total, reflecting a well-balanced geographic and business mix.

• Major progress was made in aerostructures, including a new exclusive partnership agreement and ongoing due diligence with a strategic partner, aiming for a finalized deal by July; joint ventures in advanced drones (Baykar) and land defense (Rheinmetall) are advancing rapidly.

• S&P upgraded the credit rating to BBB (stable) and Moody’s revised outlook to positive, reflecting improved financial strength.

• The company is executing a capacity boost initiative and efficiency plans to address rising defense demand, focusing on production efficiency, supply chain resilience, and portfolio optimization.

• Full-year 2025 guidance is reaffirmed, expecting continued strong commercial momentum, revenue growth, improved profitability, and further net debt reduction.

Financial highlights

• Orders increased by 20.6% year-over-year to €6.9 billion (excluding U.S. contribution in some reports); revenues grew 14.9% to €4.2 billion; EBITDA/EBITA rose 17.9% to €211 million; return on sales stable at 5.1%.

• Free operating cash flow improved to -€580 million, supported by higher EBITDA/EBITA and milestone payments, though still negative due to seasonal trends.

• Net debt reduced to €2.1 billion from €2.9 billion, aided by proceeds from the UAS business sale.

• Book-to-bill ratio at 1.7x, with group backlog at a record €46.2 billion (+7% YoY).

• Net result before extraordinary items grew to €115 million (+23.7% YoY); bottom-line net result €396 million, benefiting from UAS business sale but down YoY due to prior year’s Telespazio gain.

Outlook and guidance

• Full-year 2025 guidance confirmed: new orders ~€21 billion, revenues ~€18.6 billion, EBITA ~€1,660 million, FOCF ~€870 million, net debt ~€1.6 billion.

• Guidance assumes no major deterioration in geopolitical, supply chain, or macroeconomic conditions, and stable FX rates.

• Capacity boost plan and increased dividend payments, as well as planned M&A (~€500 million), are incorporated in the outlook.