Leonardo S.p.A. — Call Transcript 2026

Good afternoon to everybody, welcome to our 2025 preliminary results presentation. I'm Claudia Introvigne, as I think you already know me. I'm the responsible for Investor Relations here in Leonardo, and today I'm really pleased to have with me our CEO, Roberto Cingolani, and our CFO, Giuseppe Aurilio, who is at his first report here in Leonardo. We are pleased to present our preliminary results, which will be focused on 2025. Please remember that you are all invited on the 12th of March to our industrial plan presentation, when we will also present to you our 2026 guidance. Please bear it in mind in the Q&A session that will follow. Thank you, and now I will hand over to our CEO, Roberto. Thank you. Thank you, Claudia. Hello, guys. Nice to see you again digitally. As usual, we make the pre-closing, the preliminary of the year, the Q4. Then in about three weeks, we will have a much longer session about the update of the new industrial plan. Somehow, this is the last Q4 we celebrate together. It's a farewell, it's a farewell session. I'll have to be back the day after, the 12th, of course, March. Today, we want to share with you some of the data. First of all, let me acknowledge the fantastic work that we did with the new team, with Claudia, that you already met a couple of, I think in the last, in the last report, the Q3, and with Giuseppe Aurilio, who was integrated immediately in the team. The transition was extremely smooth. Giuseppe knew very well the company, was in the company for many, many years, and we were extremely effective. Maximum satisfaction from my side about the progress of the work and the reporting with the new team. Let's see the numbers. Numbers for the Q4, though preliminary, they're almost exact, I would say. They're very satisfactory. Let me start with the comparison year-over-year. About orders, we were expecting something in the range of EUR 22 billion-EUR 22.7 billion. That was the updated guidance, and we closed with EUR 23.8 billion, to be compared to EUR 20.8 billion last year. It's +14%. Concerning revenues, we closed with EUR 19.5 billion, +11%. The guidance was EUR 18.6 billion. Last year, it was EUR 17.6 billion. The EBITDA is also remarkably growing. We closed EUR 1.75 billion, +18%. Our guidance, updated guidance, reported EUR 1.66 billion. Last year, it was EUR 1.48 billion. The return of sales is increased by 0.6%. We go from 8.4% to 9.4% this Q4. Cash generation is also, I mean, for the first time, we break the psychological threshold of EUR 1 billion. I think we finished EUR 1 billion plus some little money extra. The updated guidance was EUR 0.92 billion to EUR 0.98 billion. Last year, it was EUR 0.84 billion. The net debt is reduced by 44% down to the level of EUR 1 billion. Last year was EUR 1.8 billion. I think we got all the results we had in mind, slightly better than the updated guidance. Let me make the story, because this is the last Q4 in the mandate, I think it's interesting to discuss with you the significant growth and the financial transformation that Leonardo underwent over the last less than three years. Orders have been growing by 38%. When we started our mandate, they were in the range of EUR 17 billion. Today, we are in the range of almost EUR 24 billion. Revenues were growing by 33% over the three years, from EUR 14.7 billion to EUR 19.5 billion, and I think this is encouraging. I think this is even more encouraging to see that EBITDA and free operating cash flow were growing super linearly compared to the orders and revenues. As you see, the EBITDA was rising from EUR 1.2 billion up to EUR 1.75 billion, 44%, and the free operating cash flow grew by 88%, from EUR 0.5 billion to EUR 1 billion. I think this is, this deserves some consideration. First of all, let me remind you my usual gesture. At the beginning, I said, orders, revenues, EBITDA and FOC, we're not happy because the orders were growing, but the FOC was not growing properly, and actually, the target was to have something like this, so the curve should have been kind of parallel. I think we are on the right track. For sure, orders and revenues are growing, but you see EBITDA and free operating cash flow are growing faster. That means our recovery in terms of performances, efficiency, cleaning the portfolio, and so on and so forth, are now giving the right results. Concerning the analysis of the other KPIs, let's say in the last three years, the net debt, as I told before, was going down from EUR 3 billion to EUR 1 billion. Actually, this 67% reduction comes from, first of all, the savings, the efficiency, and the rationalization of the portfolio we did so far. It comes from the sale of the underwater marine activity, the UAS. On top of that, it comes from the higher cash generation that really allowed us to go down to a debt level that is unprecedentedly low in the history of the company, recent history of the company. The dividend, and this is very important for us, when we started, we had a rather modest dividend that was stationary for many, many years. We were in the range of EUR 0.14 per share. This has been increased regularly every year. Today, we are at 0.52 EUR per share. The CAGR was +275%. What is important for us is that the dividend yield now is aligned to the European average of the peers. We were below the lowest decade in 2022. The CAGR of the growth of our dividend is much faster than the average one of the peers in Europe. We grew up by 55%. What I would like to anticipate, I mean, for me, this is very important. I would like Leonardo to be always attractive and satisfactory for our investors. This year, we're going to increase further the dividend. Of course, we are making the detailed calculation. This will depend on the net income. Very likely we will improve, kind of +20%, because this will follow the expected increase of the net income. Anyway, this is very important for Leonardo, because we have to be in the right range as a company with ambition, and of course, we want to reward our investors. Finally, the employees. When we started, we were about 50,000 people. Today, we are about 73,000 people. The growth is 22%. What is very important is not only the absolute number, but also the typology of people and the age and the gender. In the three years that we just finished now, we hired, net 17,000 people. The important thing is that about 70% of those people are STEM, so they own essentially a technology degree in science, engineering, mathematics, whatsoever. More than 30% are women, and what is more important is that 55% of those are below 30 years old. That means that in these three years, we also started an unprecedented transformation in the human capital, getting younger people, much more technology-oriented, which followed the portfolio transformation of the company, because we need by far more STEM to be competitive in terms of new technology and new solutions for defense and security. At the beginning of the three years, that was the picture. We summarize on the left, orders. This have been discussed already. Revenues, EBITDA, EUR 1.2 billion, free operating cash flow, EUR 0.5 billion, dividend per share, EUR 0.15, 50,000 people, roughly, and the market cap was EUR 4.6 billion. Our portfolio, our matrix portfolio, was relatively complex. We had, in the air domain, all kind of aircraft and helicopters, not yet the 6th-generation fighter. A lot of electronics in all domain: land, air, maritime, space, and we had some starting cybersecurity activity and very poor digitalization. At the very beginning, three years ago, there were businesses that were in silos, not interacting very well to each other, so far from the modern multi-domain concept, interoperability concept, that are becoming essential, mandatory for the future defense. There were several unresolved issues in terms of performance and efficiency, and capacity. The product portfolio was fragmented. We had to clean it substantially, also cutting development lines that were absolutely off core business. There was a very limited digital capability. I'm sure you remember this was one of the first, the point when we started our enterprise. Innovation was quite slow, and maybe the confidence of the investors was not so high. Over these three years, we were working quite hard. I'm not going to read again the numbers, just reminding the thank you to your trust. We could go up in the market cap to EUR 34 billion, and I thank you for this investment, believing in Leonardo. What is more important is that the matrix of products now is very complete. We cover the entire air domain with all platforms, manned and unmanned, which is very important. There was no unmanned whatsoever before. Electronics is becoming the glue of all the platforms. Digitalization is transversal to all our platforms, from digital twin to digital toolkit for manufacturing. AI, more than 2,200 people that are using AI in production and more than 200 developers of AI capabilities. We doubled our computational power and our storage with the new Davinci-2 supercomputer. Land, with the recent agreement with Rheinmetall, the acquisition of Iveco, there's another company we're starting to discuss with. Inland, we cover all the manned and unmanned platforms, infantry vehicle, main battle tanks, wheeled and with trucks. Maritime, we own absolutely the control over the combat system of warship. Space, we started our constellation. We developed with a lot of effort, a new division now we own the entire spectrum of satellite services applications. As you know, we are discussing the constitution of big company at European level with our peers, Thales and Airbus. Cybersecurity underwent a strong impulse that you've seen from the numbers. Later, Giuseppe will give you more details. What happened in those three years? New product and portfolio rationalization, that was essential to complete the matrix. Without this complete matrix, we cannot be in the multi-domain as a leader and not as followers. We made a number of strategic partnership and joint venture and selective M&A acquisition. This part is what we, you remember at the beginning, we presented as our inorganic growth plan. The strategic partnership are bringing in very good results. We now have all the platforms for drones. By the way, I anticipate that in April, we will launch our first drones from the Ronchi dei Legionari plant in collaboration with our friends in Baykar. GCAP, you know everything, because this is the Edgewing company has been constituted, and we are up and running. Actually, I think this is the last big consortium left in the international landscape, so we're in a very good position. Bromo for the space, I already mentioned. Selective M&A moves, especially in the field of cybersecurity, were very convincing. We now own in cooperation with our partners zero trust capability, and we are developing very quickly the portfolio of cybersecurity. We accelerated the digitalization in a way that has never been done before, including doubling the power, the global power computation and storage that we have in the company. We have launched the Capacity Boost program. I'm happy to say that the Capacity Boost program has now reached a maturity point. We have more than 300 manufacturing and production pilot programs, and there is a team of about 100 people distributed in the company that are working directly onto the production line. This went from theory to production line in about six months. Of course, we are pursuing our disciplined capital allocation program. This is fundamental. The numbers are good. The net income is good. Free generation, pre-cash generation is good. Debt is under control. This is the time to make a very ambitious but disciplined capital allocation to accelerate further the growth of Leonardo for the next years. At the beginning, three years ago, we had a rather incomplete portfolio, little digitalization in that some cybersecurity was the only thing available. Of course, we knew at that time that it was very important to create the capability for a multi-domain technology. Now, actually, after three years, with the effort we did, we are able to face the market with a very complete portfolio. There is everything from the constellation to all the manned and unmanned flying systems, to all the land, manned and unmanned flying system, entire suite for global combat system in the ships. The space has been substantially improved in terms of data analysis, constellation, ground stations, and so on. On top, high-performance computing and cloud for AI generation has been improved substantially. Cybersecurity has been reinforced and is growing fast. As I said before, the constellation is there to provide data and supervision. In the end of the day, we said three things three years ago, bullets and bytes. At that time, it sounds like a very exotic statement. I think now it's commonly accepted everywhere in the world. Large part of the effort in defense goes through digital technologies, coupled to bullets technologies, let's say, metal mechanic or platforms. The second message was, no one can make it on its own, so joint ventures, acquisition, alliances are fundamental to accelerate the response towards the dramatic demand that we have on the market, and also to facilitate the creation of a European space of defense, which is, before being political, this has to be industrial. Finally, we are preparing ourselves to face the real challenge of the next, the next decades, and possibly more than one decade, which is passing from the bare defense, which means essentially weapons and weapon system, to a much more complicated, global security approach, which should defend our countries by the hybrid wars. No matter whether we will have conventional wars in the next decade, or all the wars will finish, and we will have another kind of war, which is a cyber war, safety, security of the infrastructures, energy security, food security, all those things will cause damages and economical losses that are incredibly high. We are preparing Leonardo, ready to face both challenges. This will be the content of the new plan, the updated plan, that we will introduce to you guys on March 12. I don't say more. I cannot spoil more. There will be numbers, there will be forecasts, but of course, there will be strategies that will design, will pave the way to the future of Leonardo. I conclude before giving the words to Giuseppe, with a bit of sustainability. I'm very proud to say that, meanwhile, Leonardo was growing quite fast in terms of group revenues, so basically, in a few years, we grew up by 40%. Well, of course, consider that this was the COVID time, so that was a very complicated period. Let's say that most of the growth was in the last three years, as I said before. We were able to work quite effectively on water withdrawal, waste production, and reduction of emission by Scope 1 and Scope 2. You see, how counteracting are the, is the growth of the business compared to the improvement in terms of sustainability, Scope 1, Scope 2, waste produced, and water withdrawal. Those are the numbers, if you like to see them. On top, the workforce, as I told you before, was increasing substantially, increasing, improving diversity, and improving the global fraction of young people below 30. Also reinforcing the innovation, because today we have reached approximately 20% increase year-over-year in innovation. Today, Leonardo can safely state that we invest 15% of our revenues in R&D, which is actually the safest way to be very competitive in the future at the level of the best companies in the world. What we did so far has given a very good results in terms of ESG rating. In this radar plot, you see Leonardo nowadays, those are the main ranking that I'm sure you're familiar to, so I'm not taking time to go through them, where we are always in a very good situation. This curve is the radar curve average of the peers. It seems that the Leonardo has gained a very prominent advantage in terms of sustainability of the business compared to the peers. Of course, the core business is to make the best technology ever, but also being sustainable is very important. Before concluding and giving the stage to Giuseppe Aurilio, I want to anticipate two things that I'm sure you're gonna ask me because I promised you to give some important update about Aerostructures and about Iveco. I'm gonna do this now. Happy to answer your question, of course, but I think it's good that I anticipate the core. Concerning Iveco, the closing, we confirmed the closing by March this year, we're very close to finish the acquisition. We are very happy in terms of industry opportunities, wield and track the systems. The demand is very strong. We are delivering already to the Ministry of Defense the early machines with Rheinmetall, and the capacity will increase thanks to the Iveco absorption. Concerning the trucks, our colleagues in Rheinmetall are now testing the situation with the antitrust, of course, so this is a mandatory step. We will give them, approximately six months of exclusivity in order to check, how this can be developed. Anyway, we're gonna close because the agreement is that we close. We are in a hurry to increase our capacity. The truck business itself is a truck business, is a business that has a rather good margin, 12%-13%. There is absolutely no warning, and there is a quite an interesting backlog of orders, so we look forward to see what the antitrust analysis that our colleagues in Rheinmetall will do together with the Leonardo team, and then we will decide how to proceed by, I think, by the mid-2026. There are also other potential companies interested, but as we told you since the very beginning, we try to pursue the strategy with Rheinmetall, wait for the antitrust, and then make a decision. There is no worry at all, whatever will be the outcome of those analysis in the next few months. Concerning Aerostructures, I have news that are important. We, I was personally visiting the top management of our counterpart, potential counterpart. They still ask some confidentiality for six months, but I can tell you where we are in a very detailed way. Our standalone plan was accepted and evaluated very well by the partner. We evaluated the standalone plan of the partner, which is very interesting. The idea is to create a joint venture, which is gonna be something like a 50/50 at the beginning. It's an international company. The brain at the beginning stays, of course, in Italy, but we push substantially the production because our partner is both financial and industrial, and they have a strong demand of components for civil aviation, but also for military aviation, rotorcraft, and in the near future, potentially also space. This is gonna be a gate towards new global company that, starting with Aerostructures, gonna open to big markets in the, generally speaking, their domain, aerospace domain. Everything is ready. The due diligence lasted 14 months so far. There were approximately 70 items, 70 assessment lines. About seven should be finalized this month. The others are completed, green spot, so they're done. Our partners is waiting for the confirmation that some incentives will come when by the local ministers. That will complete the financial plan, and the commitment, because the exclusivity is given up to June, is to sign before that date. I think, industrially speaking, we finished our work. Our customers, so the main builder, are aware of that. We, of course, confirm that the very beginning we will keep, absolutely, the quality, as usual, in our plants, while we transfer some of that technology, some of those technologies, in the partner company, in the partner plants. We expect a very smooth transition, quite an announcement of the business, which is gonna be because it's gonna be a global player, not a limited division, let's say. I expect to see a positive impact already in the 2026 balance sheet, as soon as we complete. I can't say more details because confidentiality is a primary requirement for our partner, but I think I gave you a clear picture. You know where we go, and you know that 95% of the job has been done. Thank you very much for your attention. I give the stage to Giuseppe for the financials, we'll be happy to answer your questions. Thank you, guys. Thank you, Roberto, and good afternoon to everyone. I'm very pleased to be here presenting our full year results, our strong performance for the year, and looking forward to meet you as many as possible of you, in Rome when presenting our updated industrial plan. Let me start with some initial consideration, as I'm now serving as CFO of Leonardo since three months. As Roberto was saying, my transition was very smooth. I found a very strong management team and a very strong team, so this is helping me a lot in understanding the complexity of our business. I found a company and a group which has a very clear strategy. I was impressed when reading back all the papers that we were presenting to the market, how linear is the connection between what we said at the beginning of the three-year mandate and what we have been doing during these three years. I found also a group which has transformed a lot at a very quick pace. I see from a financial point of view, the difference in terms of profitability and cash flow generation. As you were seeing, where Roberto was presenting the results for the three years, the increase in EBITDA and free operating cash flow is much bigger compared to the top line. This means that we have been doing a great job in recovery, efficiency, and improving cash flow generation. Very strong performance. I said, we exceeded all the guidance in all the KPIs. Orders are at around EUR 24 billion this year, driven by successful export campaign. We will see when discussing about the divisions, that this increase is spread over all the divisions. Of course, there is a focus, a specific focus on Aeronautics, because it's where we got the Kuwait service order, follow on a very big order in Kuwait. Revenues were at EUR 19.5 billion, so well above our guidance. The same for EBITDA, EUR 1.75 billion. The EBITDA increased both for the volume effect, but also because we recovered profitability with the return on sale up to 9% from 8.4%, so 60 basis points up. Free operating cash flow was above the EUR 1 billion threshold, which was impressive to me. If I think back about my first period in Leonardo, you know, I was also in the CFO department, and we were struggling every day on cash flow generation to improve, but with the level of the target, which was completely different. Being above EUR 1 billion was a challenging target, and I'm very happy about these results. These are led the debt, net debt down to EUR 1 billion. Of course, we have here the positive impact of the cash flow generation for the year, but also the proceeds from the disposal of the UAS business early 2025. I said, we are continuing growing, but increasing profitability and cash generation. Let's focus on the orders. For the year, orders were up 15% year-on-year, with total backlog at EUR 47 billion. As you can see, the book-to-bill was above 1 in all the division, at 1.2 at group level. With a very strong increase, as said in Aeronautics, where we have the effect of the extension of the support service contract for the EFA Kuwait, but also very good momentum, so new orders on trainers, C-27J, and of course, we have strong opportunities also for the future. Defense Electronics, we see there is an increase of 5%, 8%, if we look at Europe, you know that, inside the electronics defense, we have Europe, U.S., it is DRS, plus the contribution, at least at EBITDA level of our JVs. Leonardo DRS was negative year-on-year, but just because of the exchange rate of the translation of the dollar, which was negative, otherwise it would be positive by 4% compared to 2024. Helicopters market a growth of about 5%. Here, the growth was driven also by the customer service activities, which is very important in our strategy, as it is part of the roadmap that we have to increase profitability in helicopters, and we will see later on some results on that. We are growing a lot in our three bigger pillars: electronics, helicopters, and aeronautics. I'm happy to highlight that we are above EUR 1 billion orders per year, also in cyber and space, which were very small when starting the execution of this industrial plan. You may remember that cybersecurity was about EUR 0.4 in terms of revenue in 2022. Now we get at EUR 1 billion orders. Space was not a division, it was a part of other division. The activities in space were part of other division or were operated through the Space Alliance. Now it's a division, with EUR 1 billion orders and EUR 1 billion revenues per year. I think this is a very good sign of the proper industrial plan, which was set at the beginning of the three year, and the execution of that industrial plan. This increase in orders, of course, has pushed up also revenues, which were up 11% compared to 2024. Double-digit growth also over all the divisions. We are growth at group level, but also the same pace in all the division. Defense, Electronics and Security, we have a strong growth in Europe, 11%. Also in Leonardo DRS, again, this 8% that you read on the table, of course, is affected by the negative translation difference on the dollars, otherwise it will be above 10%. Very strong increase also in Leonardo DRS. Helicopters were up by 11% compared to last year, one year ahead of industrial plan targets, where we were supposed to get the same level of revenues in 2026. Higher volumes driven both by the helicopter and the platforms, but I said also that the customer support. If we look at the deliveries of the helicopter division, this year we are slightly down in total compared to last year, 182 deliveries versus 191. The mix is completely different because in 2024, the weight of light and very light helicopters was much bigger. For instance, we had 42 light helicopters against 14 this year for the U.S. Navy. You can understand that the number in total of deliveries is lower this year, but the mix is more favorable in terms of unit per delivery. I want to underline also the increase in contribution of customer support, where we have higher margins, and this is an important part of our roadmap to improve profitability in helicopters. Aeronautics performed in a very solid manner. I think we are well progressing in all the main programs, if proprietary platforms, GCAP, JCAF, very solid performance. Aerostructure were slightly negative, in line with the budget, we will come back on this point while discussing about the profitability, because I think Aerostructure was a key point. Of course, the cybersecurity pace are increasing, following the success we have on the commercial side. Revenues at the end, EUR 19.5 billion, with Italy accounting for about 23%. The international dimension of the group is increasing every year as planned in our industrial plan. This increase in revenues has a positive impact on EBITDA, which is up 18% year-on-year. This is not only because of the volume effect that you see on the table, that a portion of that increase is linked to volume effect, but of course, we have also a significant increase in profitability. We said that the return on sales has gone up by 60 basis points, from 8.4% to 9%. This is a clear effect of the actions we are doing to improve our profitability and cash generation. Also here, we had a small negative impact for the translation of the dollar figures of DRS, but quite small. If we look at the EBITDA by segment, I think it's interesting to deep dive on each division, starting from Defense Electronics, which is this year, above EUR 1 billion in terms of EBITDA, with our return on sales close to 13%. Slightly better, apparently, compared to last year. I think I said earlier, we need to look at the composition of the value of the EBITDA for the division. As you know, we have four building blocks. We have Electronics Europe, and here, our EBITDA was about 11% from 10.3% in 2024. Very good increase. We have Leonardo DRS, which has increased its profitability from 10% to 10.4%. Also, we have the contribution of our JV and strategic partnership, MBDA and Hensoldt, which in total gives a contribution of EUR 180 million, which is about EUR 20 million less than 2024. If we look at the overall ROS, we see a slight, only a slight increase, but because it is affected by the negative variation compared to last year of our JV. A little bit surprising, this negative variation, I will explain better why. As you know, we put in our EBITDA the net result coming from the JV. We put on our EBITDA also the impact, which is below the EBIT lane, line of those JV. Mainly tax, which were this year higher in MBDA. MBDA is a group which is performing very well. This year is going to be close to EUR 6 billion in terms of revenue, with a backlog of EUR 44 billions. Double-digit profitability, so it's performing very well. If you go to the last line of the profit and loss, we got a tax charge because of the tax reform in France, which has affected the net result. Profitability in electronic division, growing slightly, but only because of this impact on the JV. Helicopters, we have increased our profitability from 8.8% to 9% ROS. Here we see the benefits from our actions on the efficiency on engineering and our supply chain management, but also the increased contribution from customer support. As I said, we have bigger, higher margins on customer support, and this is part of our strategy. Aircraft, again, very solid performance in Aircraft Division, close to 13%, driven by the programs I was mentioning before. Aerostructure was negative by EUR 130 million, around EUR 130 million. Still negative, but in line with our provision, and this is true for all the KPIs of Aerostructure, including cash flow. The plan we made is solid. During the year, we increased also the shipsets at the rates on B787. You know that it is our bigger program in Aerostructure. During the year, we started from four shipsets as per month, we arrived at seven at the end of the year. Very good progress. We got an agreement also with Boeing that makes our rate plan for also for the future, much more robust and reliable. This gives confidence about the solidity of the plan we made on Aerostructure. An additional point about Aerostructure, if you look at Q4 only, you see that Aerostructure is at a break-even. This is due to the impact, of course, of the increase of the rates on B787, also on the closure of some smaller programs, which has allowed us to release some contingency. It's a very good sign because it implies a progress and a benefit on the activities we do for Boeing. It's also not an indicator of the trend going forward. We expect Aerostructure to be in a loss position also in 2026. We maintain the plan we said in the past. We will go in more detail, of course, in March. I can anticipate you that, of course, if you see break-even in Q4, it's not what you have to expect in 2026. I said, a very important milestone, the agreement with Boeing. It's around 50% of the business. We have other activities which are more or less fine, and these are reducing the issues on Aerostructure on around 30% of our revenues. It has the activities we do with ATR and Airbus. Boeing now is a more solid profile. Cybersecurity is up 63% compared to last year. Of course, this is mainly due to the different scale. We are increasing scale a lot in cybersecurity, the fixed costs have been absorbed much better than in the past. SG&A as well, were lower in contribution to the revenue. This has increased the margins. Also, I have to say that we have some very good new programs which are contributing to the EBITDA. Finally, Space, where, again, we have a very significant increase, +90%. This is part, let's say, organic. It means that the activities we do on the service segment, where we have been doing very well this year, very strong increase in revenues, a very strong increase in profitability. It's also due to the lower loss of Thales Alenia Space. You know, we put here the 33% of the net result of TAS. Last year was negative by around EUR 50 million. This year is still in a loss position by EUR 23 million. Of course, the reduction is a benefit for the result of the division. TAS is progressing in its recovery plan, still negative. It's progressing as expected on its plan. The results include also the benefit from our efficiency plan that we launched at the beginning of the our industrial plan, when executing our industrial plan. We see that also this year, like in the past year, the benefit from the efficiency plan exceeded the budget. We were higher than the budget. This gives us a strong confidence that we will be able to achieve also the scale that we have in the plan for the future years. We are progressing very well also in the efficiency plan, and this is sustaining our EBITDA. The increase of our EBITDA, of course, is increasing our free operating cash flow, which is 21% up compared to last year, with the same conversion rate, which means that this year we have been able to translate all the improvements we've done on the operational side, on the EBITDA in cash. Very important, because this is a key factor for our future development. Operating cash flow was EUR 2.3 billion, and it was able to pay back also additional investments. We are, this year, at around EUR 1 billion, increasing compared to last year. Of course, this is a trend that we will see also in March when presenting the new industrial plan. Of course, we paid also interest in taxes for EUR 0.3, leading to a free operating cash flow of EUR 1 million. Again, this is a best ever. It's a comment that is applicable to all the KPIs, because it's a best ever for all the KPIs. But in free operating cash flow, as we were seeing when looking at three-year mandate of the current board of directors, is the most powerful indicator of the improvement of the group. Thanks to this cash flow generation, group net debt has gone down by 44% year-on-year, starting from EUR 1.8 billion and closing at EUR 1.0 billion. We have, of course, also the benefit coming from the proceeds of the sales of the UAS business, EUR 0.4. Also, as Roberto was mentioning at the beginning, we paid a much higher dividend this year, EUR 0.3. Net final position, EUR 1 billion. I think it's important also to look inside this EUR 1 billion to understand how it is built up, to understand how flexible and solid is our balance sheet. We have a group net debt that is in total EUR 1 billion, but excluding lease liabilities and net payables to joint venture is positive by EUR 0.9. What is this line? This line, borrowings loans to joint venture, is the cash that our joint venture deposit to us, mainly MBDA, of course. It's our share of cash in the joint venture. As said, the trend in MBDA is such that, I mean, this is cash we usually have in our hands and it's owned to MBDA, to the JV, but of course it's our share of cash in the JV. If we look at the subtotal before those two lines, we have a positive net financial position by EUR 1 billion. Very important also to link with the commitments we have, the potential outflows we have in 2026. In March, when closing the Iveco deal, we will have a cash outflows that before the cash in the company is around EUR 1.7 billion, but we have the money available to pay that amount. Very good results, very well positioned for the 2026, also based on a strong fourth quarter. Which is part, by the way, of the actions that we are doing on the cash flow generation and the profitability, trying not to be too much concentrated in the last part of the year. De-risking the free operating cash flow, also trying to anticipate and be compliant with the milestones we have during the year, in order not to be too stressed at the end of the year. Still, some area of improvements, because if you look at the trend of the free operating cash flow, it's of course, negative, and probably it's something related to the business which cannot change, but it's strongly negative over the first three quarters, but much less compared to the past. This is an effort that we are doing. We are trying to make revenues, profit, free operating cash flow more linear over the year. I think this year we have been quite successful in doing this. Of course, to do that, you have to focus mainly on the execution of the contract, on the achievement of milestone, and then on revenues and EBITDA, to be sure that you are able to cash in the money before the year end. Again, this is our full year results, this makes us very confident about the future development of the group. Thank you, Giuseppe. Now I think that, we are ready to take your questions. The first questions is coming from Sam Burgess, from Goldman Sachs. Please go ahead. Thank you. We cannot hear anything. We can't hear anything. Can you hear me? Can you hear me? Yeah, now we can hear you. Okay. Yes. Now, yes. Thank you. Great. Sorry about that. Good afternoon, and thanks for the presentation. Given we're getting some guidance in a couple of weeks, I'll try and contain myself on any forward-looking financial questions. I saw R&D had a very strong 20% year-on-year increase, running well ahead of sales growth. Can you just give us some color on the areas of investment here, and whether this level of investment is likely to continue? A follow on from that, in your discussions with the Italian government customer, are there any capability areas that you are not currently delivering where they would like to see investment? That would be really helpful. A third, if I can ask a third, would be: within your cybersecurity business, are you seeing any new market entrants anywhere you compete, that might be kind of AI-focused startups? Thank you. Yeah. Thank you, Sam. Complex question. I'll try to simplify the answer. The pillar of the R&D X investment, for sure, are digital, particularly doubling the computational power and the storage capability. This is necessary because we plan to have ground stations for the data analysis that are produced in the multi-domain, and we need a very fast machine for algorithms and decision-making in real time. Of course, good investment is being done through the NatCo for the drones and the adjunct for the GCAP, for the swarm intelligence. That's very important because as you can imagine, the GCAP itself is a platform, but the NatCos are developing a kind of a synergistically but independent to each other, their drones and their... The adjunct and their swarm intelligence capability. That's very important. We are investing a lot in command and control because, of course, within the Michelangelo, as you might remember from the previous presentation, the idea that we have to develop a module that becomes a hyper-layer communication among different platforms, and the module itself is agnostic with respect to the platform or to the effector. It could be adapted to let an aircraft manufactured by a company and a tank manufactured by another company under the same command and control and under the net umbrella. That requires a specific investment in terms of new electronics and, of course, the sensors. We are investing on the long-range radars because we have started the activity on the 1,300 km-1,400 km range radars. That will be the last ring of the chain for sensors, radars that go from 30 km to, you know, almost 2,000. Investment is done in many other areas. Cybersecurity is presently undergoing a strong acceleration in that whatever we will do in the future, either cyber war, anti-threat, or multi-domain, Michelangelo Dome, whatever, we will need a strong capability in cybersecurity. All signals will be wireless. You know, you really need to be strong in terms of cybersecurity. Those things are developed in parallel. Compared to the past, those are not silos or silos. Those are synergistically developed programs, in which all divisions and all engineers are talking to each other. I think this is the main difference, that there is a coordination in terms of how we develop the new technologies for the multi-domain application, let's say, dual-use, hybrid war applications, and so on and so forth. Concerning our estimate of the competitiveness in the future landscape of hybrid war, that, of course, is it's a very complicated question. Let me tell you something we are now developing, we're studying, more than developing. If you see, in some of the important sites, where the statistics are developed for defense and so on, you see that, for instance, the cost of the Ukrainian war is in the range of a fraction of EUR trillion, EUR 0.4 trillion or so, over the years. You read that the forecast for the damage caused by cyber war, cyberattack in the future, is gonna grow exponentially. In 2020, the cyber crime caused losses for approximately EUR 1 trillion in a year. The forecast for 2030 is EUR 1 trillion per month. Obviously, if you compare the expectation of the market that will be involved in the anti-threat for the hybrid war, this is much bigger than the conventional defense. It's hard to say what part of this market can be targeted by a company at the moment. No one has this kind of statistics. This is what we're doing now. We're trying to evaluate where we can focus our attention, and for sure, cyber threats will be central. For sure, there will be infrastructural threats that can be primarily reduced by satellite observation. All those things are being analyzed at the moment. I think by March 12th, we're gonna bring you some forecast, at least large, of what could be our positioning and what could be the size of the hybrid war products in terms of financials and the R&D effort, whereas the one in terms of a standard war, let's say, multi-domain war, that's much more clear, and we know exactly where to go. You will get all the numbers in a couple of weeks' time. Very comprehensive. Thank you very much, Roberto. Thank you, Sam. Next question is coming from Alessandro Pozzi from Mediobanca. Please go ahead. Hi, thank you for taking the question, sir. I have three, if I may. The first one on Aerostructures. I think it's positive to see that you've turned a profit in Q4, even though was mainly driven by contingencies. Can you perhaps quantify what was the impact of contingencies in Q4 there? While on the topic, in your opening remarks, you mentioned the deal is getting closer with your partner. Can you perhaps maybe tell us what the new JV in Aerostructures could look like? What could be the parameter, and what could be the potential for growth there? The second question on margins, I think you've broken down the elements of the margin increase, volumes versus mix. I was wondering what is the impact also from the cost efficiency that you are implementing into allowing the company to increase margins at the EBITDA level? Final question on free cash flow. I think it's good to see that you're increasing cash conversion. Can you give us a sense of whether there was any positive working capital impact on on cash flow, thinking more in terms of advanced payments. Thank you. All right. Alessandro, I'll give you a partial answer, of course. Okay I will ask Giuseppe Aurilio, to complete the answer. Concerning free operating cash flow, I will leave the stage directly to Giuseppe in a minute. Concerning margin and cost efficiency, you know, we had a maniac approach in cost saving. I will not bother you anymore every six months telling you how much we are saving in the saving plan, but I can assure you, we are exactly on track. That famous EUR 1.8 billion savings done on the direct and indirect procurement, it's absolutely in agenda. It's at reach. There is a strong commitment, so no departure from the commitment. Second, a lot of efficiency in the production. The Capacity Boost that we mentioned a few months ago, is now operating in most of the harder platforms, where there is a lot of work to be done. We're incorporating Iveco for the land defense. We are doing a lot of things, optimization also in helicopters. Electronics, I mean, I think you noted how fast was growing electronics. I think we were growing from a few billion to almost EUR 8 billion this year. Obviously, electronics has to update its own organization because it's so central in the payload strategy and in all the joint ventures that Leonardo is doing. I mean, we are providing weapons and sensors and payloads to land defense, to the DCAP, to drones. Basically, this is at large, all electronics. There, we are working a lot in efficiency, in not reorganization, but efficiency in the organization. That includes hiring new engineers, hiring new people, improving the industrial capability. Those things are rolling. It's a continuous progress. What I can say, of course, Giuseppe will be more precise, the fact that in three years, we grew up by, let's say, 20%-30% orders and revenues, and by 40% and 80%, EBITDA and free operating cash flow means that, though with some jet lag, with some delay, you do see now that things are improving the way we wanted. Of course, Giuseppe is monitoring this with very specific measures that he will tell you, but I can guarantee there is absolute attention and commitment in the company to keep all those parameters in terms of efficiency and margins high. Concerning Aerostructures, yeah, the deal is getting closed, is getting close indeed. We, at the beginning of the company, will be a 50/50 company. You have to consider that it's very important for the trust of our customers, that are important customers, such as Airbus and Boeing, that we have to guarantee that, of course, we keep the standard. Meanwhile, we build something much bigger with a much bigger market. We are making the calculation what, how big this market could be. This will be disclosed very soon, but I can tell you, I mean, it's by far more than what we have now in terms of Aerostructures, is substantially higher, maybe triple or so. Let's see for the numbers also, what will be the incentives policy that the country we're talking to will be able to put on the table, but the numbers are definitely quite big. I think that in the future, we will be able to place the position in terms of size of the new company in the top three around the world, let's say, as an indication. Okay? Which is definitely much bigger than Aerostructure. Okay, about the release of. When you can announce that? Look, concerning me, I would be ready yesterday. Concerning our partner, I think they're also impatient, but as I said, there are also kind of political steps that they are not in our hands. The agreement is that we give the exclusivity for closing up to June. I believe that yeah, that should be the range. Thank you. Okay, about the release of contingency and Aerostructure, the order of magnitude is about EUR 15 million. Consider also that we had an acceleration on the delivery rate just in the last quarter, we delivered, we took a margin, although small, in the last quarter, over something that has been produced earlier, and it was in the stocks. The order of magnitude is in that range, EUR 15 million-EUR 20 million. About the cost efficiency, Roberto has perfectly replied, of course, it is included in the improvement you see in the EBITA when we talk about improvement of profitability is driven by these efficiency actions. Free operating cash flow, it's of course, it's a mix of different divisions, different type of contracts. We got some advanced payments, as it is customary on the export contracts. On the other end, in some divisions, we had a negative impact deriving from the celebration of the production. Overall, the working capital is going to contribute, more or less in line with last year, so slightly negative to the free operating cash flow. Thank you. By the way, it is important to underline that the more we grow, especially on the international market, the more we get recurring advances, so it's a recurring event, I mean. Okay, thank you. The next question is coming from Carlos Iranzo, from Bank of America. Please go ahead. Hi, guys. Good afternoon, and thanks for taking my questions. I actually have two, if I may. First one, I would like to come back to Aerostructures. Regarding the split in the joint venture, the 50/50, is it always going to be 50/50, or could you progressively transfer ownership to the partner down the line? Then I just wanted to see if you can share a little bit of color on the Electronics Europe margin in 2025. Ex the joint venture contribution, basically looks like there is a very little margin improvement year-over-year. What are the reasons that have prevented you from increasing margins a little bit more in 2025? Is it mix? Is it R&D? Is it phasing of some contracts? Thank you. Okay, thank you, Carlos. I'm going to answer first about the Aerostructures. I think I can safely say that the starting 50/50 is going to change, primarily because this is a long pathway towards transferring or doubling technologies is a very complex, like in aerospace. I believe that it's very natural to think that while we make the new plant in partner country, we need to train and create the conditions to produce components that are certificated. What I imagine normally is that you improve the quality of the fabrication, you gain certification, and then you can transfer more and more their activities while you develop brand-new activities somewhere else. Yes, I believe that with progressing the standard of the industrial setup, industrial capability in the new company, there will be the possibility to change the ratio between the share among the two partners. I think so. The timing for that, it depends on the results, how fast the quality will grow, how soon they will be capable to reach the right standard for aviation authorities, and so on, so forth. We're totally committed, and the good thing is that we're not making something to make it shorter. We are expanding substantially the product portfolio, and of course, there is even more job force that will be employed. It's really a think big program. It's not a think small program. For sure, there will be an evolution dictated by the standard of qualification, the standard of fabrication. Concerning the margin of electronics, of course, I leave the stage to Giuseppe in a minute, but I just want to wrap up one thing. The big program where you expect how to say, big margins and big money to come are land defense, Rheinmetall. That started one year ago, and we delivered the first, I think, six infantry vehicles, and we are presently developing the complete version, what we call the Italian version, that integrates all the sensors and the weapons and command and control electronics into the machine. I think the first machine will be delivered in the next months. We are now starting to work on the MBT main battle tank prototype. If you see the order profile that we presented in the plan, but I will eventually update this, remind you in the presentation of March, the delivery should rise in 2028, 2029, 2030, with about 100 pieces per year. At that point, you will see massive impact, because there will be massive transfer of those technology. At the moment, we are talking about small units, six, seven, 10, maybe, and also still at the development level, because we are, especially on the main battle tank, we're working on the first prototypes. I think there is a kind of little jet lag between when you start producing the platforms or delivering the first five to six platforms and when you go into the massive production, which is expected to be in the next two to three years. I think for the infantry vehicle, is from 2027, the massive growth. I think next year is something like 15. I don't remember exactly, but 27 growth. For the main battle tank, it's around 29-30. At that point, you will see big numbers coming. The second big program is drones. Drones, we had a spectacular acceleration, because in eight months, that is in April, we will have the first mid-size drones produced, assembled, produced and assembled in Ronchi dei Legionari, our plant in northern Italy. We are working on a daily basis with Baykar to integrate brand-new technologies. There are important things I will tell you in two weeks, when we will present the update of the plan, telling you that we are making a really paramount effort on accelerating drones and unmanned flying objects, including rotorcraft, not only fixed wing. Also there, before selling hundreds of pieces, there will be kind of one year, six months of delay. We have to demonstrate the machines landing in special conditions or serving in a crew, sorry, in a swarm, operating in a swarm. Those things are planned for the next few months. Once again, you will see the impact on electronics immediately after. GCAP, well, I mean, you know, this is a longer program, but again, there we are investing another level. I think this is quite normal, but the very good thing is that we are slightly ahead of schedule with the drones, absolutely on schedule with the land defense systems, and the GCAP is doing well, and by the way, it remained the only one program worldwide. I believe that you will see the development of the margins, and the numbers of electronics, in due time, without any surprise. Carlos, about the margins in Electronics, when we look at Europe only, it has been increasing over the year. It was 10.3%, I think, at, in 2024, and now it's close to 11%. Again, the slight increase of Electronics is due to dilution coming from the JV, not from the trend of Electronics Europe, which is doing very well. Of course, R&D is increasing, as said, but we are paying back with the profitability we are producing. Yeah, and also, Carlos, one last remark. Of course, you've seen our intention, our plan with the Michelangelo Dome that we presented just a few months ago, and will be a strong part of the future plan. And there, even if you are platform agnostic, so in principle, we could not sell a single platform in principle, but it would be a lot of electronics in terms of radars, sensors, weapons, and command and control modules that will be immediately added to the portfolio. I expect that also to be an important source of upside for the electronics, profit margins, but also for the entire group. It's gonna be something big, collective for all the divisions. Okay, thank you, Carlos. Understood. Very clear. Thank you. Thank you, Carlos. Thank you. Now, the next question is coming from Martino De Ambroggi from Equita. Thank you. Good afternoon, everybody. Again, on Aerostructures, sorry. Just to have a rough figure on what was the free cash flow, because we know the EBITDA, but what was the free cash flow for Aerostructures standalone in, 2025? Just a follow-up on the previous answer, if I understand correctly, I don't know if it's your main goal or if it's an option, but, there is a possibility to see Leonardo going below 50% of the new entity. I have another question later. Okay, I will start from the free operating cash flow. You know, the loss at EBITDA level this year was something like EUR -130 million. Of course, we invest in Aerostructure. We are still investing in Aerostructure because to be prepared to the plan Roberto was describing, in any case, we need to invest. The investment this year was about EUR 40 million-EUR 45 million, so you can easily get that the free operating cash flow was negative in the area of EUR 0.2 billion. Concerning your question, Martino, about deconsolidating, let me say, in my rude language, yeah, I don't see any problem in the future. The point is that this is not simply consolidating or deconsolidating. The point is that we have to provide a horizon, a future to the entire Aerostructures business, not only connected to our traditional customer, but also to military machines and extending, expanding the market to big airlines and so on, so forth, so that deconsolidating or consolidating, in any case, this has to be positive on itself. Having said this, yeah, I think that we will evaluate with great attention that the quality of the manufacturing will reach the right standard, and at that point, we can easily change our share. No problem at all. Anyway, you know, the workforce will be unaffected. I think that the market the player will be very big, on a very big market, on a large market area in the world. I think the vision is very positive. The outlook is very positive. Okay, thank you. The second question is on two future opportunities. Any update on the U.K. jumbo helicopter order? On the recent agreement you signed with an Indian partner, is this something that could be reflected in your business plan in the next business plan, or it's more much farther away? Martino, I'm bound to 24 hours to confidentiality issues. If you have the patience to wait for 24 hours, we're gonna talk again. What can I tell you more? I can tell you that we've been working very, very intensively with the, with our U.K. branch and with the U.K. government. Let's wait for one, two days, and things will come clear. Sorry, which was the Indian? Okay, I wait. For India part? No, no, not for India, for, only for U.K. Yeah. For India, Giuseppe is gonna tell you. Related to India, we set up a partnership with Adani Group, which is instrumental for addressing the growing India military demand, creating a hub for helicopter manufacturing and sustainment. You know, that there will be the need to replace 1,000 units in the next few years. It's a very big market for us. We are currently responding to navy and army tenders for about 300 helicopters. We'll see. However, we see also strong potential on the civil market because of the kind of the country. I think also the civil market, there is a strong potential. It is our best interest to be present there in the way we can. Yeah, Martino, sorry, because I never like to keep analysts, investors, hanging on. I will tell you tomorrow, after 23 months, so I don't like this. The way I'm transparent is against my nature, let's say. I can tell you one thing. As long as I will be here, for the next years, I promise that Leonardo will be an international company, a truly multinational company, not an Italian company, but a multinational company. In this respect, you can imagine how important for me, for us is, that our second and third domestic countries, such as U.K. and U.S., are fundamental to be considered a truly multinational company with very high tech capability and not simply a domestic company making domestic defense. I'm telling you this, I'm anticipating you this, because of the commitment that I got with the authorities in U.K., is that I strongly want a powerful, complete, committed, Leonardo U.K. Because this is essential not only for us, for our multinational vision, but also for the future of the continental European defense. I know the U.K. is not a European Commission, but it's Europe continentally. This was my first statement with the authorities, and I think it will be reflected in the forthcoming decisions. I'm very, very optimistic. Thank you, Martino. Okay. Thank you, Roberto. Thank you. Let's go to the next question from Sebastian Growe of BNP Paribas. Please go ahead. Yeah. Hi, good afternoon. First of all, can you hear me well? Yes, sir. Okay, cool. Yeah, then, hi, Claudia, Roberto, and Giuseppe. Thanks for taking the questions I do have. The first one was be around defense electronics. Giuseppe, you pointed to the four drivers behind the EBITA and the DS segment. Apparently, MBDA has played an increasingly important role over the last years, and based on the disclosure that we received from Airbus last week, it looks as if MBDA's operating profit margin declined by about 20 basis points, and that despite almost 20% revenue growth. The question I'm having simply is: What is the driver behind this margin contraction, and can you provide any more color how to think of the cadence with regard to the mentioned EUR 44 billion order backlog at MBDA? I would have one more around aeronautics, but maybe we can take the DS question first. Okay. Yeah, relating to MBDA, I think, again, the company is performing very well. It's well above the double digit. It was even higher last year, probably. You know, again, it's more than 10% return on sales. Of course, they are investing a lot. They are preparing themselves to execute a EUR 44 billion backlog. They are investing both in CapEx and in R&D to be ready to execute that backlog. The main impact that you see in our numbers, as I said, it's below the line because it's because of the increased tax charge they have in France. It was supposed to be a one-off. Probably, it will be also in 2026, confirmed for 2026, but it's a tax charge which was not there in 2024. Okay, gotcha. Can you eventually give some guidance or indication, at least, in regards to the future top-line dynamics at MBDA? I think we have seen now, over the last three years, growth rate accelerating from about mid-single digits to then 10% in 2024, and now getting close to 20, I said, in the year 2025. How to think really about the trajectory of that EUR 44 billion backlog? We will reflect, as usual, the net profit in our numbers. Of course, I mean, I cannot give you guidance about the MBDA performance in the future. I know what they are doing. We will reflect in our plan, but I mean, I cannot give you guidance on the top line of MBDA because it's something they have to do. Okay, fair enough. Let's move on quickly to aeronautics, please, and more specifically here to the aircraft business. I noticed that the margin was down year-over-year, which I assume is due to the consolidation of the GCAP program. Talking about that very consolidation, it looks as if GCAP added about EUR 300 million or so to revenues. However, the EBITA addition was less than EUR 10 million, from what I could reconcile. I guess my question is, how to think of the future sales and margin trajectory for the GCAP program in particular year? Now, you were perfect in getting the right answer because, of course, in GCAP, we have aircraft acting as a prime, of course, the margin is a little bit diluted. Not at group level, because, of course, also the other division are contributing to GCAP. If you look at aircraft standalone, of course, there is a small dilution. In terms of how the trend from here. In terms of trends for the future, I think, I mean, based on the programs that we were mentioning, Eurofighter, M-346, C-27J, JSAF, I think. The manned also. I think the profile of aircraft is very solid. Yep. Great. Thank you very much, both. Thank you. Thank you. Thank you, Sebastian. Next question is coming from Afonso Osório from Barclays. Hello. Yeah, thank you for taking my questions as well. I'll just stick to these M&A deals that you've been doing here. Two questions, I think it's quite quick. The first one on the Iveco deal. Thank you, Roberto, for all the detail you've given us. You mentioned giving the exclusivity for six months to Rheinmetall, but given that you will close the deal by March, how should we think about the contribution from this business for you specifically this year in 2026? Are you basically assuming a 100% contribution for you this year, or will you, in two weeks' time, give the targets for 2026, assuming you sell a part of that to Rheinmetall? The second question is and apologies for coming back to Aerostructures, but just to double-check, will you consolidate steel numbers or deconsolidate the numbers once you announce the JV? Thank you. Okay. Afonso, concerning Iveco, at the beginning, let's say we close and we buy the toll while our partners are, you know, waiting to understand what could be the situation with the antitrust. This seems to be usual now. Also with Bromo is the same. We need to wait. We do all the industrial work, and then we have to wait for months and months to see what happens with the antitrust. Okay, let's see. Obviously, by the time we buy it, this will be fully incorporated in our finance, in our balance sheet. By the way, as I said, it's absolutely not bad because they have a very good backlog of orders. The margins of the trucks is not absolutely not bad. It's a double digit, quite solid. I should also mention that we are discussing about the future programs for big artillery mounted on trucks. Therefore, that could be also instrumental to the creation of new products. I believe that's a very, a very safe situation in terms of industry product. Also, I'd like to tell you more industrial detail in the plant Piacenza. There's currently a double capacity in that, in the same plant, We produce, they produce both trucks and armored vehicles. Even in the case we decide to split this, so to carve out, we need to do some industrial optimization, and so this would require some months. It, it's absolutely under control. Whatever we do, I could say whatever we do for the next maybe couple of years will be anyway safe. I think the decision should be made before, depending on the outcome of the antitrust, and at that point, we will see. As I said before, there are others company that will be interested, where they're having no problem with the antitrust, but of course, we would privilege at the moment, the relationship with the, with Rheinmetall because this was the original plan. If this will not be possible, we're going to find... We're going to have other solutions. As I said, we are ready to go work. We have the pipeline of orders. Things are running. We didn't stop one day the plants, so it's a really safe situation. Regarding the, the deconsolidation, the potential deconsolidation of Aerostructures, of course, as Roberto was describing, the partner is not only a financial partner, is a financial partner with an industrial strong interest in the combination. Of course, the governance we are discussing reflect this point. Of course, they want to have also vision, and therefore, not allowing us to consolidate, Aerostructures. Okay, thank you. We can proceed with the next question from Christophe Menard from Deutsche Bank. Before taking my question, I have three. The first one is on, you mentioned prepayments. Can you tell us what level of prepayments you had at company level in 2025 versus and how it compares to 2024? Second question is on Aerostructure. Again, you mentioned a number of investments that could be coming in the future. What would be the free cash flow outlook for Aerostructure as a consequence? I mean, we understand EBITDA there will be some EBITDA breakeven going forward, but should we expect a series of CapEx investment in the coming years? The last question is, it's probably a little bit granular, but on defense electronics in Q4 in Europe, it seems the sales dropped quite a lot. Is there any reason for this? I mean, versus my expectation, I have a miss of around EUR 600 million. Just wanted to see whether that was related to a specific program. Thank you. Okay. Regarding the first question, you know, we look at the working capital as a wall. I think I said, working capital is contributely, negatively, the same area than in 2024. Of course, the line items might be different, but the overall contribution of working capital is in that range. Aerostructure, I said, I mean, we are progressing also with executing our industrial plan in our structure, and of course, as part of this plan, we have an investment plan to digitalize the factories, to improve the efficiency of the divisions. Of course, we are investing, and this is consistent with what we are discussing with the partner. Giuseppe, that was instrumental for our partner to accept and evaluate very well. Yeah our standalone plan. Yeah. Without those, improvement would have been less attractive. Yeah. This was, I mean, this is kind of past you, it's done. Yeah. This is factored in our plan when we say that it will be a break-even in 2028, 2029. Now, we will see the updated plan. That's where we go. easily understand that, we are there, we are still there, the investments are already included in that plan. Q4 electronics, I think, compared to last year, Electronics Europe was something like 7% higher. The point is that back what I was saying when commenting the cash flow, as a general trend, we are working a lot to make the trend more linear over the year, not to focus on the last quarters for deliveries, invoices, cash in. This is a big effort. The results you see that we do improve. We do better in the first three quarter, and maybe we are less focused on the fourth quarter. This is important to us as an action because, I mean, you can have a better management of cash flow only if you are able to make this trend more linear. You see maybe the negative side of the coin, but for us it's an effort to be more linear over the year. We will not be, say, again, cash positive probably during the year because of the trend of the payments of the customers. Knowing that, we have to be able to progress on making more linear our milestone, our invoicing, and our revenues. Very good. Thank you, Christophe. Thank you very much for the color. Thank you. We move on with the last question coming from Adrien Rabiot from Bernstein. Hi, thank you for taking my question. I just had one, please. A few months ago, you told us you were reviewing the Hensoldt stake. I was wondering if you had any update on that side, please? Yes, Adrien, thank you for the question. I spoke recently to the CEO of Hensoldt. Actually, the plan was to meet end of February, beginning of March, to update the mutual situation, primarily their situation in Germany, then very likely I will go to Germany, talk to the authorities to see what if and how we can proceed with the deal. There are different options on the table. One could be essentially selling part of the shares to let the German government, for instance, to grow in their share in the Hensoldt, like it's happening in other companies. We are very open to this. All the, all the options are on the table, and I think by March, we should end of February, beginning of March, we should have a touch base. Having said this, the numbers of Hensoldt are okay. They are than we expected. No, no particular, no particular warning about that. We decided. We're trying to go towards a conclusion by the first, the second quarter, basically, so by before the summer, to see what to do. Thank you very much. Thanks for squeezing me in. Welcome. Welcome. Thank you. Thank you. Thank you all for your participation in our conference call at this point. We hope to see you all in Rome on the 12th of March for our business plan update. Thank you. Good afternoon. Bye. Bye-bye.

Speaker 6: Good afternoon to everybody, welcome to our 2025 preliminary results presentation. I'm Claudia Introvigne, as I think you already know me. I'm the responsible for Investor Relations here in Leonardo, and today I'm really pleased to have with me our CEO, Roberto Cingolani, and our CFO, Giuseppe Aurilio, who is at his first report here in Leonardo. We are pleased to present our preliminary results, which will be focused on 2025. Please remember that you are all invited on the 12th of March to our industrial plan presentation, when we will also present to you our 2026 guidance. Please bear it in mind in the Q&A session that will follow. Thank you, and now I will hand over to our CEO, Roberto. Good afternoon to everybody, welcome to our 2025 preliminary results presentation. good afternoon to everybody welcome to our 2025 preliminary results presentation I'm Claudia Introvigne, as I think you already know me. i'm claudia introvigne as i think you already know me I'm the responsible for Investor Relations here in Leonardo, and today I'm really pleased to have with me our CEO, Roberto Cingolani, and our CFO, Giuseppe Aurilio, who is at his first report here in Leonardo. i'm the responsible for investor relations here in leonardo and today i'm really pleased to have with me our ceo roberto cingolani and our cfo giuseppe aurilio who is at his first report here in leonardo We are pleased to present our preliminary results, which will be focused on 2025. we are pleased to present our preliminary results which will be focused on 2025 Please remember that you are all invited on the 12th of March to our industrial plan presentation, when we will also present to you our 2026 guidance. please remember that you are all invited on the 12th of march to our industrial plan presentation when we will also present to you our 2026 guidance Please bear it in mind in the Q&A session that will follow. please bear it in mind in the q&a session that will follow Thank you, and now I will hand over to our CEO, Roberto. thank you and now i will hand over to our ceo roberto

Speaker 9: Thank you. Thank you, Claudia. Hello, guys. Nice to see you again digitally. As usual, we make the pre-closing, the preliminary of the year, the Q4. Then in about three weeks, we will have a much longer session about the update of the new industrial plan. Somehow, this is the last Q4 we celebrate together. It's a farewell, it's a farewell session. I'll have to be back the day after, the 12th, of course, March. Today, we want to share with you some of the data. Thank you. thank you Thank you, Claudia. thank you claudia Hello, guys. hello guys Nice to see you again digitally. nice to see you again digitally As usual, we make the pre-closing, the preliminary of the year, the Q4. as usual we make the pre-closing the preliminary of the year the q4 Then in about three weeks, we will have a much longer session about the update of the new industrial plan. then in about three weeks we will have a much longer session about the update of the new industrial plan Somehow, this is the last Q4 we celebrate together. somehow this is the last q4 we celebrate together It's a farewell, it's a farewell session. it's a farewell it's a farewell session I'll have to be back the day after, the 12th, of course, March. i'll have to be back the day after the 12th of course march Today, we want to share with you some of the data. today we want to share with you some of the data First of all, let me acknowledge the fantastic work that we did with the new team, with Claudia, that you already met a couple of, I think in the last, in the last report, the Q3, and with Giuseppe Aurilio, who was integrated immediately in the team. The transition was extremely smooth. Giuseppe knew very well the company, was in the company for many, many years, and we were extremely effective. Maximum satisfaction from my side about the progress of the work and the reporting with the new team. Let's see the numbers. Numbers for the Q4, though preliminary, they're almost exact, I would say. They're very satisfactory. Let me start with the comparison year-over-year. First of all, let me acknowledge the fantastic work that we did with the new team, with Claudia, that you already met a couple of, I think in the last, in the last report, the Q3, and with Giuseppe Aurilio, who was integrated immediately in the team. first of all let me acknowledge the fantastic work that we did with the new team with claudia that you already met a couple of i think in the last in the last report the q3 and with giuseppe aurilio who was integrated immediately in the team The transition was extremely smooth. the transition was extremely smooth Giuseppe knew very well the company, was in the company for many, many years, and we were extremely effective. giuseppe knew very well the company was in the company for many many years and we were extremely effective Maximum satisfaction from my side about the progress of the work and the reporting with the new team. maximum satisfaction from my side about the progress of the work and the reporting with the new team Let's see the numbers. let's see the numbers Numbers for the Q4, though preliminary, they're almost exact, I would say. numbers for the q4 though preliminary they're almost exact i would say They're very satisfactory. they're very satisfactory Let me start with the comparison year-over-year. let me start with the comparison year-over-year About orders, we were expecting something in the range of EUR 22 billion-EUR 22.7 billion. That was the updated guidance, and we closed with EUR 23.8 billion, to be compared to EUR 20.8 billion last year. It's +14%. Concerning revenues, we closed with EUR 19.5 billion, +11%. The guidance was EUR 18.6 billion. Last year, it was EUR 17.6 billion. The EBITDA is also remarkably growing. We closed EUR 1.75 billion, +18%. Our guidance, updated guidance, reported EUR 1.66 billion. Last year, it was EUR 1.48 billion. The return of sales is increased by 0.6%. We go from 8.4% to 9.4% this Q4. About orders, we were expecting something in the range of EUR 22 billion-EUR 22.7 billion. about orders we were expecting something in the range of eur 22 billion-eur 22.7 billion That was the updated guidance, and we closed with EUR 23.8 billion, to be compared to EUR 20.8 billion last year. that was the updated guidance and we closed with eur 23.8 billion to be compared to eur 20.8 billion last year It's +14%. it's +14% Concerning revenues, we closed with EUR 19.5 billion, +11%. concerning revenues we closed with eur 19.5 billion +11% The guidance was EUR 18.6 billion. the guidance was eur 18.6 billion Last year, it was EUR 17.6 billion. last year it was eur 17.6 billion The EBITDA is also remarkably growing. the ebitda is also remarkably growing We closed EUR 1.75 billion, +18%. we closed eur 1.75 billion +18% Our guidance, updated guidance, reported EUR 1.66 billion. our guidance updated guidance reported eur 1.66 billion Last year, it was EUR 1.48 billion. last year it was eur 1.48 billion The return of sales is increased by 0.6%. the return of sales is increased by 0.6% We go from 8.4% to 9.4% this Q4. we go from 8.4% to 9.4% this q4 Cash generation is also, I mean, for the first time, we break the psychological threshold of EUR 1 billion. I think we finished EUR 1 billion plus some little money extra. The updated guidance was EUR 0.92 billion to EUR 0.98 billion. Last year, it was EUR 0.84 billion. The net debt is reduced by 44% down to the level of EUR 1 billion. Last year was EUR 1.8 billion. I think we got all the results we had in mind, slightly better than the updated guidance. Let me make the story, because this is the last Q4 in the mandate, I think it's interesting to discuss with you the significant growth and the financial transformation that Leonardo underwent over the last less than three years. Cash generation is also, I mean, for the first time, we break the psychological threshold of EUR 1 billion. cash generation is also i mean for the first time we break the psychological threshold of eur 1 billion I think we finished EUR 1 billion plus some little money extra. i think we finished eur 1 billion plus some little money extra The updated guidance was EUR 0.92 billion to EUR 0.98 billion. the updated guidance was eur 0.92 billion to eur 0.98 billion Last year, it was EUR 0.84 billion. last year it was eur 0.84 billion The net debt is reduced by 44% down to the level of EUR 1 billion. the net debt is reduced by 44% down to the level of eur 1 billion Last year was EUR 1.8 billion. last year was eur 1.8 billion I think we got all the results we had in mind, slightly better than the updated guidance. i think we got all the results we had in mind slightly better than the updated guidance Let me make the story, because this is the last Q4 in the mandate, I think it's interesting to discuss with you the significant growth and the financial transformation that Leonardo underwent over the last less than three years. let me make the story because this is the last q4 in the mandate i think it's interesting to discuss with you the significant growth and the financial transformation that leonardo underwent over the last less than three years Orders have been growing by 38%. When we started our mandate, they were in the range of EUR 17 billion. Today, we are in the range of almost EUR 24 billion. Revenues were growing by 33% over the three years, from EUR 14.7 billion to EUR 19.5 billion, and I think this is encouraging. I think this is even more encouraging to see that EBITDA and free operating cash flow were growing super linearly compared to the orders and revenues. As you see, the EBITDA was rising from EUR 1.2 billion up to EUR 1.75 billion, 44%, and the free operating cash flow grew by 88%, from EUR 0.5 billion to EUR 1 billion. I think this is, this deserves some consideration. First of all, let me remind you my usual gesture. Orders have been growing by 38%. orders have been growing by 38% When we started our mandate, they were in the range of EUR 17 billion. when we started our mandate they were in the range of eur 17 billion Today, we are in the range of almost EUR 24 billion. today we are in the range of almost eur 24 billion Revenues were growing by 33% over the three years, from EUR 14.7 billion to EUR 19.5 billion, and I think this is encouraging. revenues were growing by 33% over the three years from eur 14.7 billion to eur 19.5 billion and i think this is encouraging I think this is even more encouraging to see that EBITDA and free operating cash flow were growing super linearly compared to the orders and revenues. i think this is even more encouraging to see that ebitda and free operating cash flow were growing super linearly compared to the orders and revenues As you see, the EBITDA was rising from EUR 1.2 billion up to EUR 1.75 billion, 44%, and the free operating cash flow grew by 88%, from EUR 0.5 billion to EUR 1 billion. as you see the ebitda was rising from eur 1.2 billion up to eur 1.75 billion 44% and the free operating cash flow grew by 88% from eur 0.5 billion to eur 1 billion I think this is, this deserves some consideration. i think this is this deserves some consideration First of all, let me remind you my usual gesture. first of all let me remind you my usual gesture At the beginning, I said, orders, revenues, EBITDA and FOC, we're not happy because the orders were growing, but the FOC was not growing properly, and actually, the target was to have something like this, so the curve should have been kind of parallel. I think we are on the right track. For sure, orders and revenues are growing, but you see EBITDA and free operating cash flow are growing faster. That means our recovery in terms of performances, efficiency, cleaning the portfolio, and so on and so forth, are now giving the right results. Concerning the analysis of the other KPIs, let's say in the last three years, the net debt, as I told before, was going down from EUR 3 billion to EUR 1 billion. At the beginning, I said, orders, revenues, EBITDA and FOC, we're not happy because the orders were growing, but the FOC was not growing properly, and actually, the target was to have something like this, so the curve should have been kind of parallel. at the beginning i said orders revenues ebitda and foc we're not happy because the orders were growing but the foc was not growing properly and actually the target was to have something like this so the curve should have been kind of parallel I think we are on the right track. i think we are on the right track For sure, orders and revenues are growing, but you see EBITDA and free operating cash flow are growing faster. for sure orders and revenues are growing but you see ebitda and free operating cash flow are growing faster That means our recovery in terms of performances, efficiency, cleaning the portfolio, and so on and so forth, are now giving the right results. that means our recovery in terms of performances efficiency cleaning the portfolio and so on and so forth are now giving the right results Concerning the analysis of the other KPIs, let's say in the last three years, the net debt, as I told before, was going down from EUR 3 billion to EUR 1 billion. concerning the analysis of the other kpis let's say in the last three years the net debt as i told before was going down from eur 3 billion to eur 1 billion Actually, this 67% reduction comes from, first of all, the savings, the efficiency, and the rationalization of the portfolio we did so far. It comes from the sale of the underwater marine activity, the UAS. On top of that, it comes from the higher cash generation that really allowed us to go down to a debt level that is unprecedentedly low in the history of the company, recent history of the company. The dividend, and this is very important for us, when we started, we had a rather modest dividend that was stationary for many, many years. We were in the range of EUR 0.14 per share. This has been increased regularly every year. Actually, this 67% reduction comes from, first of all, the savings, the efficiency, and the rationalization of the portfolio we did so far. actually this 67% reduction comes from first of all the savings the efficiency and the rationalization of the portfolio we did so far It comes from the sale of the underwater marine activity, the UAS. it comes from the sale of the underwater marine activity the uas On top of that, it comes from the higher cash generation that really allowed us to go down to a debt level that is unprecedentedly low in the history of the company, recent history of the company. on top of that it comes from the higher cash generation that really allowed us to go down to a debt level that is unprecedentedly low in the history of the company recent history of the company The dividend, and this is very important for us, when we started, we had a rather modest dividend that was stationary for many, many years. the dividend and this is very important for us when we started we had a rather modest dividend that was stationary for many many years We were in the range of EUR 0.14 per share. we were in the range of eur 0.14 per share This has been increased regularly every year. this has been increased regularly every year Today, we are at 0.52 EUR per share. The CAGR was +275%. What is important for us is that the dividend yield now is aligned to the European average of the peers. We were below the lowest decade in 2022. The CAGR of the growth of our dividend is much faster than the average one of the peers in Europe. We grew up by 55%. What I would like to anticipate, I mean, for me, this is very important. I would like Leonardo to be always attractive and satisfactory for our investors. This year, we're going to increase further the dividend. Today, we are at 0.52 EUR per share. today we are at 0.52 eur per share The CAGR was +275%. the cagr was +275% What is important for us is that the dividend yield now is aligned to the European average of the peers. what is important for us is that the dividend yield now is aligned to the european average of the peers We were below the lowest decade in 2022. we were below the lowest decade in 2022 The CAGR of the growth of our dividend is much faster than the average one of the peers in Europe. the cagr of the growth of our dividend is much faster than the average one of the peers in europe We grew up by 55%. we grew up by 55% What I would like to anticipate, I mean, for me, this is very important. what i would like to anticipate i mean for me this is very important I would like Leonardo to be always attractive and satisfactory for our investors. i would like leonardo to be always attractive and satisfactory for our investors This year, we're going to increase further the dividend. this year we're going to increase further the dividend Of course, we are making the detailed calculation. This will depend on the net income. Very likely we will improve, kind of +20%, because this will follow the expected increase of the net income. Anyway, this is very important for Leonardo, because we have to be in the right range as a company with ambition, and of course, we want to reward our investors. Finally, the employees. When we started, we were about 50,000 people. Today, we are about 73,000 people. The growth is 22%. What is very important is not only the absolute number, but also the typology of people and the age and the gender. In the three years that we just finished now, we hired, net 17,000 people. Of course, we are making the detailed calculation. of course we are making the detailed calculation This will depend on the net income. this will depend on the net income Very likely we will improve, kind of +20%, because this will follow the expected increase of the net income. very likely we will improve kind of +20% because this will follow the expected increase of the net income Anyway, this is very important for Leonardo, because we have to be in the right range as a company with ambition, and of course, we want to reward our investors. anyway this is very important for leonardo because we have to be in the right range as a company with ambition and of course we want to reward our investors Finally, the employees. finally the employees When we started, we were about 50,000 people. when we started we were about 50,000 people Today, we are about 73,000 people. today we are about 73,000 people The growth is 22%. the growth is 22% What is very important is not only the absolute number, but also the typology of people and the age and the gender. what is very important is not only the absolute number but also the typology of people and the age and the gender In the three years that we just finished now, we hired, net 17,000 people . in the three years that we just finished now we hired net 17,000 people The important thing is that about 70% of those people are STEM, so they own essentially a technology degree in science, engineering, mathematics, whatsoever. More than 30% are women, and what is more important is that 55% of those are below 30 years old. That means that in these three years, we also started an unprecedented transformation in the human capital, getting younger people, much more technology-oriented, which followed the portfolio transformation of the company, because we need by far more STEM to be competitive in terms of new technology and new solutions for defense and security. At the beginning of the three years, that was the picture. We summarize on the left, orders. The important thing is that about 70% of those people are STEM, so they own essentially a technology degree in science, engineering, mathematics, whatsoever. the important thing is that about 70% of those people are stem so they own essentially a technology degree in science engineering mathematics whatsoever More than 30% are women, and what is more important is that 55% of those are below 30 years old. more than 30% are women and what is more important is that 55% of those are below 30 years old That means that in these three years, we also started an unprecedented transformation in the human capital, getting younger people, much more technology-oriented, which followed the portfolio transformation of the company, because we need by far more STEM to be competitive in terms of new technology and new solutions for defense and security. that means that in these three years we also started an unprecedented transformation in the human capital getting younger people much more technology-oriented which followed the portfolio transformation of the company because we need by far more stem to be competitive in terms of new technology and new solutions for defense and security At the beginning of the three years, that was the picture. at the beginning of the three years that was the picture We summarize on the left, orders. we summarize on the left orders This have been discussed already. Revenues, EBITDA, EUR 1.2 billion, free operating cash flow, EUR 0.5 billion, dividend per share, EUR 0.15, 50,000 people, roughly, and the market cap was EUR 4.6 billion. Our portfolio, our matrix portfolio, was relatively complex. We had, in the air domain, all kind of aircraft and helicopters, not yet the 6th-generation fighter. A lot of electronics in all domain: land, air, maritime, space, and we had some starting cybersecurity activity and very poor digitalization. At the very beginning, three years ago, there were businesses that were in silos, not interacting very well to each other, so far from the modern multi-domain concept, interoperability concept, that are becoming essential, mandatory for the future defense. This have been discussed already. this have been discussed already Revenues, EBITDA, EUR 1.2 billion, free operating cash flow, EUR 0.5 billion, dividend per share, EUR 0.15, 50,000 people, roughly, and the market cap was EUR 4.6 billion. revenues ebitda eur 1.2 billion free operating cash flow eur 0.5 billion dividend per share eur 0.15 50,000 people roughly and the market cap was eur 4.6 billion Our portfolio, our matrix portfolio, was relatively complex. our portfolio our matrix portfolio was relatively complex We had, in the air domain, all kind of aircraft and helicopters, not yet the 6th-generation fighter. we had in the air domain all kind of aircraft and helicopters not yet the 6th-generation fighter A lot of electronics in all domain: land, air, maritime, space, and we had some starting cybersecurity activity and very poor digitalization. a lot of electronics in all domain land air maritime space and we had some starting cybersecurity activity and very poor digitalization At the very beginning, three years ago, there were businesses that were in silos, not interacting very well to each other, so far from the modern multi-domain concept, interoperability concept, that are becoming essential, mandatory for the future defense. at the very beginning three years ago there were businesses that were in silos not interacting very well to each other so far from the modern multi-domain concept interoperability concept that are becoming essential mandatory for the future defense There were several unresolved issues in terms of performance and efficiency, and capacity. The product portfolio was fragmented. We had to clean it substantially, also cutting development lines that were absolutely off core business. There was a very limited digital capability. I'm sure you remember this was one of the first, the point when we started our enterprise. Innovation was quite slow, and maybe the confidence of the investors was not so high. Over these three years, we were working quite hard. I'm not going to read again the numbers, just reminding the thank you to your trust. We could go up in the market cap to EUR 34 billion, and I thank you for this investment, believing in Leonardo. There were several unresolved issues in terms of performance and efficiency, and capacity. there were several unresolved issues in terms of performance and efficiency and capacity The product portfolio was fragmented. the product portfolio was fragmented We had to clean it substantially, also cutting development lines that were absolutely off core business. we had to clean it substantially also cutting development lines that were absolutely off core business There was a very limited digital capability. there was a very limited digital capability I'm sure you remember this was one of the first, the point when we started our enterprise. i'm sure you remember this was one of the first the point when we started our enterprise Innovation was quite slow, and maybe the confidence of the investors was not so high. innovation was quite slow and maybe the confidence of the investors was not so high Over these three years, we were working quite hard. over these three years we were working quite hard I'm not going to read again the numbers, just reminding the thank you to your trust. i'm not going to read again the numbers just reminding the thank you to your trust We could go up in the market cap to EUR 34 billion, and I thank you for this investment, believing in Leonardo. we could go up in the market cap to eur 34 billion and i thank you for this investment believing in leonardo What is more important is that the matrix of products now is very complete. We cover the entire air domain with all platforms, manned and unmanned, which is very important. There was no unmanned whatsoever before. Electronics is becoming the glue of all the platforms. Digitalization is transversal to all our platforms, from digital twin to digital toolkit for manufacturing. AI, more than 2,200 people that are using AI in production and more than 200 developers of AI capabilities. We doubled our computational power and our storage with the new Davinci-2 supercomputer. Land, with the recent agreement with Rheinmetall, the acquisition of Iveco, there's another company we're starting to discuss with. What is more important is that the matrix of products now is very complete. what is more important is that the matrix of products now is very complete We cover the entire air domain with all platforms, manned and unmanned, which is very important. we cover the entire air domain with all platforms manned and unmanned which is very important There was no unmanned whatsoever before. there was no unmanned whatsoever before Electronics is becoming the glue of all the platforms. electronics is becoming the glue of all the platforms Digitalization is transversal to all our platforms, from digital twin to digital toolkit for manufacturing. digitalization is transversal to all our platforms from digital twin to digital toolkit for manufacturing AI, more than 2,200 people that are using AI in production and more than 200 developers of AI capabilities. ai more than 2,200 people that are using ai in production and more than 200 developers of ai capabilities We doubled our computational power and our storage with the new Davinci-2 supercomputer. we doubled our computational power and our storage with the new davinci-2 supercomputer Land, with the recent agreement with Rheinmetall, the acquisition of Iveco, there's another company we're starting to discuss with. land with the recent agreement with rheinmetall the acquisition of iveco there's another company we're starting to discuss with Inland, we cover all the manned and unmanned platforms, infantry vehicle, main battle tanks, wheeled and with trucks. Maritime, we own absolutely the control over the combat system of warship. Space, we started our constellation. We developed with a lot of effort, a new division now we own the entire spectrum of satellite services applications. As you know, we are discussing the constitution of big company at European level with our peers, Thales and Airbus. Cybersecurity underwent a strong impulse that you've seen from the numbers. Later, Giuseppe will give you more details. What happened in those three years? New product and portfolio rationalization, that was essential to complete the matrix. Inl and, we cover all the manned and unmanned platforms, infantry vehicle, main battle tanks, wheeled and with trucks. inl and we cover all the manned and unmanned platforms infantry vehicle main battle tanks wheeled and with trucks Maritime, we own absolutely the control over the combat system of warship. maritime we own absolutely the control over the combat system of warship Space, we started our constellation. space we started our constellation We developed with a lot of effort, a new division now we own the entire spectrum of satellite services applications. we developed with a lot of effort a new division now we own the entire spectrum of satellite services applications As you know, we are discussing the constitution of big company at European level with our peers, Thales and Airbus. as you know we are discussing the constitution of big company at european level with our peers thales and airbus Cybersecurity underwent a strong impulse that you've seen from the numbers. cybersecurity underwent a strong impulse that you've seen from the numbers Later, Giuseppe will give you more details. later giuseppe will give you more details What happened in those three years? what happened in those three years New product and portfolio rationalization, that was essential to complete the matrix. new product and portfolio rationalization that was essential to complete the matrix Without this complete matrix, we cannot be in the multi-domain as a leader and not as followers. We made a number of strategic partnership and joint venture and selective M&A acquisition. This part is what we, you remember at the beginning, we presented as our inorganic growth plan. The strategic partnership are bringing in very good results. We now have all the platforms for drones. By the way, I anticipate that in April, we will launch our first drones from the Ronchi dei Legionari plant in collaboration with our friends in Baykar. GCAP, you know everything, because this is the Edgewing company has been constituted, and we are up and running. Without this complete matrix, we cannot be in the multi-domain as a leader and not as followers. without this complete matrix we cannot be in the multi-domain as a leader and not as followers We made a number of strategic partnership and joint venture and selective M&A acquisition. we made a number of strategic partnership and joint venture and selective m&a acquisition This part is what we, you remember at the beginning, we presented as our inorganic growth plan. this part is what we you remember at the beginning we presented as our inorganic growth plan The strategic partnership are bringing in very good results. the strategic partnership are bringing in very good results We now have all the platforms for drones. we now have all the platforms for drones By the way, I anticipate that in April, we will launch our first drones from the Ronchi dei Legionari plant in collaboration with our friends in Baykar. by the way i anticipate that in april we will launch our first drones from the ronchi dei legionari plant in collaboration with our friends in baykar GCAP, you know everything, because this is the Edgewing company has been constituted, and we are up and running. gcap you know everything because this is the edgewing company has been constituted and we are up and running Actually, I think this is the last big consortium left in the international landscape, so we're in a very good position. Bromo for the space, I already mentioned. Selective M&A moves, especially in the field of cybersecurity, were very convincing. We now own in cooperation with our partners zero trust capability, and we are developing very quickly the portfolio of cybersecurity. We accelerated the digitalization in a way that has never been done before, including doubling the power, the global power computation and storage that we have in the company. We have launched the Capacity Boost program. Actually, I think this is the last big consortium left in the international landscape, so we're in a very good position. Bromo for the space, I already mentioned. actually i think this is the last big consortium left in the international landscape so we're in a very good position bromo for the space i already mentioned Selective M&A moves, especially in the field of cybersecurity, were very convincing. selective m&a moves especially in the field of cybersecurity were very convincing We now own in cooperation with our partners zero trust capability, and we are developing very quickly the portfolio of cybersecurity. we now own in cooperation with our partners zero trust capability and we are developing very quickly the portfolio of cybersecurity We accelerated the digitalization in a way that has never been done before, including doubling the power, the global power computation and storage that we have in the company. we accelerated the digitalization in a way that has never been done before including doubling the power the global power computation and storage that we have in the company We have launched the Capacity Boost program. we have launched the capacity boost program I'm happy to say that the Capacity Boost program has now reached a maturity point. We have more than 300 manufacturing and production pilot programs, and there is a team of about 100 people distributed in the company that are working directly onto the production line. This went from theory to production line in about six months. Of course, we are pursuing our disciplined capital allocation program. This is fundamental. The numbers are good. The net income is good. Free generation, pre-cash generation is good. Debt is under control. This is the time to make a very ambitious but disciplined capital allocation to accelerate further the growth of Leonardo for the next years. I'm happy to say that the Capacity Boost program has now reached a maturity point. i'm happy to say that the capacity boost program has now reached a maturity point We have more than 300 manufacturing and production pilot programs, and there is a team of about 100 people distributed in the company that are working directly onto the production line. we have more than 300 manufacturing and production pilot programs and there is a team of about 100 people distributed in the company that are working directly onto the production line This went from theory to production line in about six months. this went from theory to production line in about six months Of course, we are pursuing our disciplined capital allocation program. of course we are pursuing our disciplined capital allocation program This is fundamental. this is fundamental The numbers are good. the numbers are good The net income is good. the net income is good Free generation, pre-cash generation is good. free generation pre-cash generation is good Debt is under control. debt is under control This is the time to make a very ambitious but disciplined capital allocation to accelerate further the growth of Leonardo for the next years. this is the time to make a very ambitious but disciplined capital allocation to accelerate further the growth of leonardo for the next years At the beginning, three years ago, we had a rather incomplete portfolio, little digitalization in that some cybersecurity was the only thing available. Of course, we knew at that time that it was very important to create the capability for a multi-domain technology. Now, actually, after three years, with the effort we did, we are able to face the market with a very complete portfolio. There is everything from the constellation to all the manned and unmanned flying systems, to all the land, manned and unmanned flying system, entire suite for global combat system in the ships. The space has been substantially improved in terms of data analysis, constellation, ground stations, and so on. At the beginning, three years ago, we had a rather incomplete portfolio, little digitalization in that some cybersecurity was the only thing available. at the beginning three years ago we had a rather incomplete portfolio little digitalization in that some cybersecurity was the only thing available Of course, we knew at that time that it was very important to create the capability for a multi-domain technology. of course we knew at that time that it was very important to create the capability for a multi-domain technology Now, actually, after three years, with the effort we did, we are able to face the market with a very complete portfolio. now actually after three years with the effort we did we are able to face the market with a very complete portfolio There is everything from the constellation to all the manned and unmanned flying systems, to all the land, manned and unmanned flying system, entire suite for global combat system in the ships. there is everything from the constellation to all the manned and unmanned flying systems to all the land manned and unmanned flying system entire suite for global combat system in the ships The space has been substantially improved in terms of data analysis, constellation, ground stations, and so on. the space has been substantially improved in terms of data analysis constellation ground stations and so on On top, high-performance computing and cloud for AI generation has been improved substantially. Cybersecurity has been reinforced and is growing fast. As I said before, the constellation is there to provide data and supervision. In the end of the day, we said three things three years ago, bullets and bytes. At that time, it sounds like a very exotic statement. I think now it's commonly accepted everywhere in the world. Large part of the effort in defense goes through digital technologies, coupled to bullets technologies, let's say, metal mechanic or platforms. On top, high-performance computing and cloud for AI generation has been improved substantially. on top high-performance computing and cloud for ai generation has been improved substantially Cybersecurity has been reinforced and is growing fast. cybersecurity has been reinforced and is growing fast As I said before, the constellation is there to provide data and supervision. as i said before the constellation is there to provide data and supervision In the end of the day, we said three things three years ago, bullets and bytes. in the end of the day we said three things three years ago bullets and bytes At that time, it sounds like a very exotic statement. at that time it sounds like a very exotic statement I think now it's commonly accepted everywhere in the world. i think now it's commonly accepted everywhere in the world Large part of the effort in defense goes through digital technologies, coupled to bullets technologies, let's say, metal mechanic or platforms. large part of the effort in defense goes through digital technologies coupled to bullets technologies let's say metal mechanic or platforms The second message was, no one can make it on its own, so joint ventures, acquisition, alliances are fundamental to accelerate the response towards the dramatic demand that we have on the market, and also to facilitate the creation of a European space of defense, which is, before being political, this has to be industrial. Finally, we are preparing ourselves to face the real challenge of the next, the next decades, and possibly more than one decade, which is passing from the bare defense, which means essentially weapons and weapon system, to a much more complicated, global security approach, which should defend our countries by the hybrid wars. The second message was, no one can make it on its own, so joint ventures, acquisition, alliances are fundamental to accelerate the response towards the dramatic demand that we have on the market, and also to facilitate the creation of a European space of defense, which is, before being political, this has to be industrial. the second message was no one can make it on its own so joint ventures acquisition alliances are fundamental to accelerate the response towards the dramatic demand that we have on the market and also to facilitate the creation of a european space of defense which is before being political this has to be industrial Finally, we are preparing ourselves to face the real challenge of the next, the next decades, and possibly more than one decade, which is passing from the bare defense, which means essentially weapons and weapon system, to a much more complicated, global security approach, which should defend our countries by the hybrid wars. finally we are preparing ourselves to face the real challenge of the next the next decades and possibly more than one decade which is passing from the bare defense which means essentially weapons and weapon system to a much more complicated global security approach which should defend our countries by the hybrid wars No matter whether we will have conventional wars in the next decade, or all the wars will finish, and we will have another kind of war, which is a cyber war, safety, security of the infrastructures, energy security, food security, all those things will cause damages and economical losses that are incredibly high. We are preparing Leonardo, ready to face both challenges. This will be the content of the new plan, the updated plan, that we will introduce to you guys on March 12. I don't say more. I cannot spoil more. There will be numbers, there will be forecasts, but of course, there will be strategies that will design, will pave the way to the future of Leonardo. I conclude before giving the words to Giuseppe, with a bit of sustainability. No matter whether we will have conventional wars in the next decade, or all the wars will finish, and we will have another kind of war, which is a cyber war, safety, security of the infrastructures, energy security, food security, all those things will cause damages and economical losses that are incredibly high. no matter whether we will have conventional wars in the next decade or all the wars will finish and we will have another kind of war which is a cyber war safety security of the infrastructures energy security food security all those things will cause damages and economical losses that are incredibly high We are preparing Leonardo, ready to face both challenges. we are preparing leonardo ready to face both challenges This will be the content of the new plan, the updated plan, that we will introduce to you guys on March 12. this will be the content of the new plan the updated plan that we will introduce to you guys on march 12 I don't say more. i don't say more I cannot spoil more. i cannot spoil more There will be numbers, there will be forecasts, but of course, there will be strategies that will design, will pave the way to the future of Leonardo. there will be numbers there will be forecasts but of course there will be strategies that will design will pave the way to the future of leonardo I conclude before giving the words to Giuseppe, with a bit of sustainability. i conclude before giving the words to giuseppe with a bit of sustainability I'm very proud to say that, meanwhile, Leonardo was growing quite fast in terms of group revenues, so basically, in a few years, we grew up by 40%. Well, of course, consider that this was the COVID time, so that was a very complicated period. Let's say that most of the growth was in the last three years, as I said before. We were able to work quite effectively on water withdrawal, waste production, and reduction of emission by Scope 1 and Scope 2. You see, how counteracting are the, is the growth of the business compared to the improvement in terms of sustainability, Scope 1, Scope 2, waste produced, and water withdrawal. Those are the numbers, if you like to see them. I'm very proud to say that, meanwhile, Leonardo was growing quite fast in terms of group revenues, so basically, in a few years, we grew up by 40%. i'm very proud to say that meanwhile leonardo was growing quite fast in terms of group revenues so basically in a few years we grew up by 40% Well, of course, consider that this was the COVID time, so that was a very complicated period. well of course consider that this was the covid time so that was a very complicated period Let's say that most of the growth was in the last three years, as I said before. let's say that most of the growth was in the last three years as i said before We were able to work quite effectively on water withdrawal, waste production, and reduction of emission by Scope 1 and Scope 2. we were able to work quite effectively on water withdrawal waste production and reduction of emission by scope 1 and scope 2 You see, how counteracting are the, is the growth of the business compared to the improvement in terms of sustainability, Scope 1, Scope 2, waste produced, and water withdrawal. you see how counteracting are the is the growth of the business compared to the improvement in terms of sustainability scope 1 scope 2 waste produced and water withdrawal Those are the numbers, if you like to see them. those are the numbers if you like to see them On top, the workforce, as I told you before, was increasing substantially, increasing, improving diversity, and improving the global fraction of young people below 30. Also reinforcing the innovation, because today we have reached approximately 20% increase year-over-year in innovation. Today, Leonardo can safely state that we invest 15% of our revenues in R&D, which is actually the safest way to be very competitive in the future at the level of the best companies in the world. What we did so far has given a very good results in terms of ESG rating. On top, the workforce, as I told you before, was increasing substantially, increasing, improving diversity, and improving the global fraction of young people below 30. on top the workforce as i told you before was increasing substantially increasing improving diversity and improving the global fraction of young people below 30 Also reinforcing the innovation, because today we have reached approximately 20% increase year-over-year in innovation. also reinforcing the innovation because today we have reached approximately 20% increase year-over-year in innovation Today, Leonardo can safely state that we invest 15% of our revenues in R&D, which is actually the safest way to be very competitive in the future at the level of the best companies in the world. today leonardo can safely state that we invest 15% of our revenues in r&d which is actually the safest way to be very competitive in the future at the level of the best companies in the world What we did so far has given a very good results in terms of ESG rating. what we did so far has given a very good results in terms of esg rating In this radar plot, you see Leonardo nowadays, those are the main ranking that I'm sure you're familiar to, so I'm not taking time to go through them, where we are always in a very good situation. This curve is the radar curve average of the peers. It seems that the Leonardo has gained a very prominent advantage in terms of sustainability of the business compared to the peers. Of course, the core business is to make the best technology ever, but also being sustainable is very important. Before concluding and giving the stage to Giuseppe Aurilio, I want to anticipate two things that I'm sure you're gonna ask me because I promised you to give some important update about Aerostructures and about Iveco. I'm gonna do this now. In this radar plot, you see Leonardo nowadays, those are the main ranking that I'm sure you're familiar to, so I'm not taking time to go through them, where we are always in a very good situation. in this radar plot you see leonardo nowadays those are the main ranking that i'm sure you're familiar to so i'm not taking time to go through them where we are always in a very good situation This curve is the radar curve average of the peers. this curve is the radar curve average of the peers It seems that the Leonardo has gained a very prominent advantage in terms of sustainability of the business compared to the peers. it seems that the leonardo has gained a very prominent advantage in terms of sustainability of the business compared to the peers Of course, the core business is to make the best technology ever, but also being sustainable is very important. of course the core business is to make the best technology ever but also being sustainable is very important Before concluding and giving the stage to Giuseppe Aurilio , I want to anticipate two things that I'm sure you're gonna ask me because I promised you to give some important update about Aerostructures and about Iveco. before concluding and giving the stage to giuseppe aurilio i want to anticipate two things that i'm sure you're gonna ask me because i promised you to give some important update about aerostructures and about iveco I'm gonna do this now. i'm gonna do this now Happy to answer your question, of course, but I think it's good that I anticipate the core. Concerning Iveco, the closing, we confirmed the closing by March this year, we're very close to finish the acquisition. We are very happy in terms of industry opportunities, wield and track the systems. The demand is very strong. We are delivering already to the Ministry of Defense the early machines with Rheinmetall, and the capacity will increase thanks to the Iveco absorption. Concerning the trucks, our colleagues in Rheinmetall are now testing the situation with the antitrust, of course, so this is a mandatory step. Happy to answer your question, of course, but I think it's good that I anticipate the core. happy to answer your question of course but i think it's good that i anticipate the core Concerning Iveco, the closing, we confirmed the closing by March this year, we're very close to finish the acquisition. concerning iveco the closing we confirmed the closing by march this year we're very close to finish the acquisition We are very happy in terms of industry opportunities, wield and track the systems. we are very happy in terms of industry opportunities wield and track the systems The demand is very strong. the demand is very strong We are delivering already to the Ministry of Defense the early machines with Rheinmetall, and the capacity will increase thanks to the Iveco absorption. we are delivering already to the ministry of defense the early machines with rheinmetall and the capacity will increase thanks to the iveco absorption Concerning the trucks, our colleagues in Rheinmetall are now testing the situation with the antitrust, of course, so this is a mandatory step. concerning the trucks our colleagues in rheinmetall are now testing the situation with the antitrust of course so this is a mandatory step We will give them, approximately six months of exclusivity in order to check, how this can be developed. Anyway, we're gonna close because the agreement is that we close. We are in a hurry to increase our capacity. The truck business itself is a truck business, is a business that has a rather good margin, 12%-13%. There is absolutely no warning, and there is a quite an interesting backlog of orders, so we look forward to see what the antitrust analysis that our colleagues in Rheinmetall will do together with the Leonardo team, and then we will decide how to proceed by, I think, by the mid-2026. We will give them, approximately six months of exclusivity in order to check, how this can be developed. we will give them approximately six months of exclusivity in order to check how this can be developed Anyway, we're gonna close because the agreement is that we close. anyway we're gonna close because the agreement is that we close We are in a hurry to increase our capacity. we are in a hurry to increase our capacity The truck business itself is a truck business, is a business that has a rather good margin, 12%-13%. the truck business itself is a truck business is a business that has a rather good margin 12%-13% There is absolutely no warning, and there is a quite an interesting backlog of orders, so we look forward to see what the antitrust analysis that our colleagues in Rheinmetall will do together with the Leonardo team, and then we will decide how to proceed by, I think, by the mid-2026. there is absolutely no warning and there is a quite an interesting backlog of orders so we look forward to see what the antitrust analysis that our colleagues in rheinmetall will do together with the leonardo team and then we will decide how to proceed by i think by the mid-2026 There are also other potential companies interested, but as we told you since the very beginning, we try to pursue the strategy with Rheinmetall, wait for the antitrust, and then make a decision. There is no worry at all, whatever will be the outcome of those analysis in the next few months. Concerning Aerostructures, I have news that are important. We, I was personally visiting the top management of our counterpart, potential counterpart. They still ask some confidentiality for six months, but I can tell you where we are in a very detailed way. Our standalone plan was accepted and evaluated very well by the partner. We evaluated the standalone plan of the partner, which is very interesting. There are also other potential companies interested, but as we told you since the very beginning, we try to pursue the strategy with Rheinmetall, wait for the antitrust, and then make a decision. there are also other potential companies interested but as we told you since the very beginning we try to pursue the strategy with rheinmetall wait for the antitrust and then make a decision There is no worry at all, whatever will be the outcome of those analysis in the next few months. there is no worry at all whatever will be the outcome of those analysis in the next few months Concerning Aerostructures, I have news that are important. concerning aerostructures i have news that are important We, I was personally visiting the top management of our counterpart, potential counterpart. we i was personally visiting the top management of our counterpart potential counterpart They still ask some confidentiality for six months, but I can tell you where we are in a very detailed way. they still ask some confidentiality for six months but i can tell you where we are in a very detailed way Our standalone plan was accepted and evaluated very well by the partner. our standalone plan was accepted and evaluated very well by the partner We evaluated the standalone plan of the partner, which is very interesting. we evaluated the standalone plan of the partner which is very interesting The idea is to create a joint venture, which is gonna be something like a 50/50 at the beginning. It's an international company. The brain at the beginning stays, of course, in Italy, but we push substantially the production because our partner is both financial and industrial, and they have a strong demand of components for civil aviation, but also for military aviation, rotorcraft, and in the near future, potentially also space. The idea is to create a joint venture, which is gonna be something like a 50/50 at the beginning. the idea is to create a joint venture which is gonna be something like a 50/50 at the beginning It's an international company. it's an international company The brain at the beginning stays, of course, in Italy, but we push substantially the production because our partner is both financial and industrial, and they have a strong demand of components for civil aviation, but also for military aviation, rotorcraft, and in the near future, potentially also space. the brain at the beginning stays of course in italy but we push substantially the production because our partner is both financial and industrial and they have a strong demand of components for civil aviation but also for military aviation rotorcraft and in the near future potentially also space This is gonna be a gate towards new global company that, starting with Aerostructures, gonna open to big markets in the, generally speaking, their domain, aerospace domain. Everything is ready. The due diligence lasted 14 months so far. There were approximately 70 items, 70 assessment lines. About seven should be finalized this month. The others are completed, green spot, so they're done. This is gonna be a gate towards new global company that, starting with Aerostructures, gonna open to big markets in the, generally speaking, their domain, aerospace domain. this is gonna be a gate towards new global company that starting with aerostructures gonna open to big markets in the generally speaking their domain aerospace domain Everything is ready. everything is ready The due diligence lasted 14 months so far. the due diligence lasted 14 months so far There were approximately 70 items, 70 assessment lines. there were approximately 70 items 70 assessment lines About seven should be finalized this month. about seven should be finalized this month The others are completed, green spot, so they're done. the others are completed green spot so they're done Our partners is waiting for the confirmation that some incentives will come when by the local ministers. That will complete the financial plan, and the commitment, because the exclusivity is given up to June, is to sign before that date. I think, industrially speaking, we finished our work. Our customers, so the main builder, are aware of that. We, of course, confirm that the very beginning we will keep, absolutely, the quality, as usual, in our plants, while we transfer some of that technology, some of those technologies, in the partner company, in the partner plants. Our partners is waiting for the confirmation that some incentives will come when by the local ministers. our partners is waiting for the confirmation that some incentives will come when by the local ministers That will complete the financial plan, and the commitment, because the exclusivity is given up to June, is to sign before that date. that will complete the financial plan and the commitment because the exclusivity is given up to june is to sign before that date I think, industrially speaking, we finished our work. i think industrially speaking we finished our work Our customers, so the main builder, are aware of that. our customers so the main builder are aware of that We, of course, confirm that the very beginning we will keep, absolutely, the quality, as usual, in our plants, while we transfer some of that technology, some of those technologies, in the partner company, in the partner plants. we of course confirm that the very beginning we will keep absolutely the quality as usual in our plants while we transfer some of that technology some of those technologies in the partner company in the partner plants We expect a very smooth transition, quite an announcement of the business, which is gonna be because it's gonna be a global player, not a limited division, let's say. I expect to see a positive impact already in the 2026 balance sheet, as soon as we complete. I can't say more details because confidentiality is a primary requirement for our partner, but I think I gave you a clear picture. You know where we go, and you know that 95% of the job has been done. Thank you very much for your attention. I give the stage to Giuseppe for the financials, we'll be happy to answer your questions. Thank you, guys. We expect a very smooth transition, quite an announcement of the business, which is gonna be because it's gonna be a global player, not a limited division, let's say. we expect a very smooth transition quite an announcement of the business which is gonna be because it's gonna be a global player not a limited division let's say I expect to see a positive impact already in the 2026 balance sheet, as soon as we complete. i expect to see a positive impact already in the 2026 balance sheet as soon as we complete I can't say more details because confidentiality is a primary requirement for our partner, but I think I gave you a clear picture. i can't say more details because confidentiality is a primary requirement for our partner but i think i gave you a clear picture You know where we go, and you know that 95% of the job has been done. you know where we go and you know that 95% of the job has been done Thank you very much for your attention. thank you very much for your attention I give the stage to Giuseppe for the financials, we'll be happy to answer your questions. i give the stage to giuseppe for the financials we'll be happy to answer your questions Thank you, guys. thank you guys

Speaker 7: Thank you, Roberto, and good afternoon to everyone. I'm very pleased to be here presenting our full year results, our strong performance for the year, and looking forward to meet you as many as possible of you, in Rome when presenting our updated industrial plan. Let me start with some initial consideration, as I'm now serving as CFO of Leonardo since three months. As Roberto was saying, my transition was very smooth. I found a very strong management team and a very strong team, so this is helping me a lot in understanding the complexity of our business. I found a company and a group which has a very clear strategy. Thank you, Roberto, and good afternoon to everyone. thank you roberto and good afternoon to everyone I'm very pleased to be here presenting our full year results, our strong performance for the year, and looking forward to meet you as many as possible of you, in Rome when presenting our updated industrial plan. i'm very pleased to be here presenting our full year results our strong performance for the year and looking forward to meet you as many as possible of you in rome when presenting our updated industrial plan Let me start with some initial consideration, as I'm now serving as CFO of Leonardo since three months. let me start with some initial consideration as i'm now serving as cfo of leonardo since three months As Roberto was saying, my transition was very smooth. as roberto was saying my transition was very smooth I found a very strong management team and a very strong team, so this is helping me a lot in understanding the complexity of our business. i found a very strong management team and a very strong team so this is helping me a lot in understanding the complexity of our business I found a company and a group which has a very clear strategy. i found a company and a group which has a very clear strategy I was impressed when reading back all the papers that we were presenting to the market, how linear is the connection between what we said at the beginning of the three-year mandate and what we have been doing during these three years. I found also a group which has transformed a lot at a very quick pace. I see from a financial point of view, the difference in terms of profitability and cash flow generation. As you were seeing, where Roberto was presenting the results for the three years, the increase in EBITDA and free operating cash flow is much bigger compared to the top line. This means that we have been doing a great job in recovery, efficiency, and improving cash flow generation. Very strong performance. I was impressed when reading back all the papers that we were presenting to the market, how linear is the connection between what we said at the beginning of the three-year mandate and what we have been doing during these three years. i was impressed when reading back all the papers that we were presenting to the market how linear is the connection between what we said at the beginning of the three-year mandate and what we have been doing during these three years I found also a group which has transformed a lot at a very quick pace. i found also a group which has transformed a lot at a very quick pace I see from a financial point of view, the difference in terms of profitability and cash flow generation. i see from a financial point of view the difference in terms of profitability and cash flow generation As you were seeing, where Roberto was presenting the results for the three years, the increase in EBITDA and free operating cash flow is much bigger compared to the top line. as you were seeing where roberto was presenting the results for the three years the increase in ebitda and free operating cash flow is much bigger compared to the top line This means that we have been doing a great job in recovery, efficiency, and improving cash flow generation. this means that we have been doing a great job in recovery efficiency and improving cash flow generation Very strong performance. very strong performance I said, we exceeded all the guidance in all the KPIs. Orders are at around EUR 24 billion this year, driven by successful export campaign. We will see when discussing about the divisions, that this increase is spread over all the divisions. Of course, there is a focus, a specific focus on Aeronautics, because it's where we got the Kuwait service order, follow on a very big order in Kuwait. Revenues were at EUR 19.5 billion, so well above our guidance. The same for EBITDA, EUR 1.75 billion. The EBITDA increased both for the volume effect, but also because we recovered profitability with the return on sale up to 9% from 8.4%, so 60 basis points up. I said, we exceeded all the guidance in all the KPIs. i said we exceeded all the guidance in all the kpis Orders are at around EUR 24 billion this year, driven by successful export campaign. orders are at around eur 24 billion this year driven by successful export campaign We will see when discussing about the divisions, that this increase is spread over all the divisions. we will see when discussing about the divisions that this increase is spread over all the divisions Of course, there is a focus, a specific focus on Aeronautics, because it's where we got the Kuwait service order, follow on a very big order in Kuwait. of course there is a focus a specific focus on aeronautics because it's where we got the kuwait service order follow on a very big order in kuwait Revenues were at EUR 19.5 billion, so well above our guidance. revenues were at eur 19.5 billion so well above our guidance The same for EBITDA, EUR 1.75 billion. the same for ebitda eur 1.75 billion The EBITDA increased both for the volume effect, but also because we recovered profitability with the return on sale up to 9% from 8.4%, so 60 basis points up. the ebitda increased both for the volume effect but also because we recovered profitability with the return on sale up to 9% from 8.4% so 60 basis points up Free operating cash flow was above the EUR 1 billion threshold, which was impressive to me. If I think back about my first period in Leonardo, you know, I was also in the CFO department, and we were struggling every day on cash flow generation to improve, but with the level of the target, which was completely different. Being above EUR 1 billion was a challenging target, and I'm very happy about these results. These are led the debt, net debt down to EUR 1 billion. Of course, we have here the positive impact of the cash flow generation for the year, but also the proceeds from the disposal of the UAS business early 2025. I said, we are continuing growing, but increasing profitability and cash generation. Free operating cash flow was above the EUR 1 billion threshold, which was impressive to me. free operating cash flow was above the eur 1 billion threshold which was impressive to me If I think back about my first period in Leonardo, you know, I was also in the CFO department, and we were struggling every day on cash flow generation to improve, but with the level of the target, which was completely different. if i think back about my first period in leonardo you know i was also in the cfo department and we were struggling every day on cash flow generation to improve but with the level of the target which was completely different Being above EUR 1 billion was a challenging target, and I'm very happy about these results. being above eur 1 billion was a challenging target and i'm very happy about these results These are led the debt, net debt down to EUR 1 billion. these are led the debt net debt down to eur 1 billion Of course, we have here the positive impact of the cash flow generation for the year, but also the proceeds from the disposal of the UAS business early 2025. of course we have here the positive impact of the cash flow generation for the year but also the proceeds from the disposal of the uas business early 2025 I said, we are continuing growing, but increasing profitability and cash generation. i said we are continuing growing but increasing profitability and cash generation Let's focus on the orders. For the year, orders were up 15% year-on-year, with total backlog at EUR 47 billion. As you can see, the book-to-bill was above 1 in all the division, at 1.2 at group level. With a very strong increase, as said in Aeronautics, where we have the effect of the extension of the support service contract for the EFA Kuwait, but also very good momentum, so new orders on trainers, C-27J, and of course, we have strong opportunities also for the future. Let's focus on the orders. let's focus on the orders For the year, orders were up 15% year-on-year, with total backlog at EUR 47 billion. for the year orders were up 15% year-on-year with total backlog at eur 47 billion As you can see, the book-to-bill was above 1 in all the division, at 1.2 at group level. as you can see the book-to-bill was above 1 in all the division at 1.2 at group level With a very strong increase, as said in Aeronautics, where we have the effect of the extension of the support service contract for the EFA Kuwait, but also very good momentum, so new orders on trainers, C-27J, and of course, we have strong opportunities also for the future. with a very strong increase as said in aeronautics where we have the effect of the extension of the support service contract for the efa kuwait but also very good momentum so new orders on trainers c-27j and of course we have strong opportunities also for the future Defense Electronics, we see there is an increase of 5%, 8%, if we look at Europe, you know that, inside the electronics defense, we have Europe, U.S., it is DRS, plus the contribution, at least at EBITDA level of our JVs. Leonardo DRS was negative year-on-year, but just because of the exchange rate of the translation of the dollar, which was negative, otherwise it would be positive by 4% compared to 2024. Helicopters market a growth of about 5%. Defense Electronics, we see there is an increase of 5%, 8%, if we look at Europe, you know that, inside the electronics defense, we have Europe, U.S., it is DRS, plus the contribution, at least at EBITDA level of our JVs. defense electronics we see there is an increase of 5% 8% if we look at europe you know that inside the electronics defense we have europe u.s it is drs plus the contribution at least at ebitda level of our jvs Leonardo DRS was negative year-on-year, but just because of the exchange rate of the translation of the dollar, which was negative, otherwise it would be positive by 4% compared to 2024. leonardo drs was negative year-on-year but just because of the exchange rate of the translation of the dollar which was negative otherwise it would be positive by 4% compared to 2024 Helicopters market a growth of about 5%. helicopters market a growth of about 5% Here, the growth was driven also by the customer service activities, which is very important in our strategy, as it is part of the roadmap that we have to increase profitability in helicopters, and we will see later on some results on that. We are growing a lot in our three bigger pillars: electronics, helicopters, and aeronautics. I'm happy to highlight that we are above EUR 1 billion orders per year, also in cyber and space, which were very small when starting the execution of this industrial plan. You may remember that cybersecurity was about EUR 0.4 in terms of revenue in 2022. Now we get at EUR 1 billion orders. Space was not a division, it was a part of other division. Here, the growth was driven also by the customer service activities, which is very important in our strategy, as it is part of the roadmap that we have to increase profitability in helicopters, and we will see later on some results on that. here the growth was driven also by the customer service activities which is very important in our strategy as it is part of the roadmap that we have to increase profitability in helicopters and we will see later on some results on that We are growing a lot in our three bigger pillars: electronics, helicopters, and aeronautics. we are growing a lot in our three bigger pillars electronics helicopters and aeronautics I'm happy to highlight that we are above EUR 1 billion orders per year, also in cyber and space, which were very small when starting the execution of this industrial plan. i'm happy to highlight that we are above eur 1 billion orders per year also in cyber and space which were very small when starting the execution of this industrial plan You may remember that cybersecurity was about EUR 0.4 in terms of revenue in 2022. you may remember that cybersecurity was about eur 0.4 in terms of revenue in 2022 Now we get at EUR 1 billion orders. now we get at eur 1 billion orders Space was not a division, it was a part of other division. space was not a division it was a part of other division The activities in space were part of other division or were operated through the Space Alliance. Now it's a division, with EUR 1 billion orders and EUR 1 billion revenues per year. I think this is a very good sign of the proper industrial plan, which was set at the beginning of the three year, and the execution of that industrial plan. This increase in orders, of course, has pushed up also revenues, which were up 11% compared to 2024. Double-digit growth also over all the divisions. We are growth at group level, but also the same pace in all the division. Defense, Electronics and Security, we have a strong growth in Europe, 11%. The activities in space were part of other division or were operated through the Space Alliance. the activities in space were part of other division or were operated through the space alliance Now it's a division, with EUR 1 billion orders and EUR 1 billion revenues per year. now it's a division with eur 1 billion orders and eur 1 billion revenues per year I think this is a very good sign of the proper industrial plan, which was set at the beginning of the three year, and the execution of that industrial plan. i think this is a very good sign of the proper industrial plan which was set at the beginning of the three year and the execution of that industrial plan This increase in orders, of course, has pushed up also revenues, which were up 11% compared to 2024. this increase in orders of course has pushed up also revenues which were up 11% compared to 2024 Double-digit growth also over all the divisions. double-digit growth also over all the divisions We are growth at group level, but also the same pace in all the division. we are growth at group level but also the same pace in all the division Defense, Electronics and Security, we have a strong growth in Europe, 11%. defense electronics and security we have a strong growth in europe 11% Also in Leonardo DRS, again, this 8% that you read on the table, of course, is affected by the negative translation difference on the dollars, otherwise it will be above 10%. Very strong increase also in Leonardo DRS. Helicopters were up by 11% compared to last year, one year ahead of industrial plan targets, where we were supposed to get the same level of revenues in 2026. Higher volumes driven both by the helicopter and the platforms, but I said also that the customer support. If we look at the deliveries of the helicopter division, this year we are slightly down in total compared to last year, 182 deliveries versus 191. Also in Leonardo DRS, again, this 8% that you read on the table, of course, is affected by the negative translation difference on the dollars, otherwise it will be above 10%. also in leonardo drs again this 8% that you read on the table of course is affected by the negative translation difference on the dollars otherwise it will be above 10% Very strong increase also in Leonardo DRS. very strong increase also in leonardo drs Helicopters were up by 11% compared to last year, one year ahead of industrial plan targets, where we were supposed to get the same level of revenues in 2026. helicopters were up by 11% compared to last year one year ahead of industrial plan targets where we were supposed to get the same level of revenues in 2026 Higher volumes driven both by the helicopter and the platforms, but I said also that the customer support. higher volumes driven both by the helicopter and the platforms but i said also that the customer support If we look at the deliveries of the helicopter division, this year we are slightly down in total compared to last year, 182 deliveries versus 191. if we look at the deliveries of the helicopter division this year we are slightly down in total compared to last year 182 deliveries versus 191 The mix is completely different because in 2024, the weight of light and very light helicopters was much bigger. For instance, we had 42 light helicopters against 14 this year for the U.S. Navy. You can understand that the number in total of deliveries is lower this year, but the mix is more favorable in terms of unit per delivery. I want to underline also the increase in contribution of customer support, where we have higher margins, and this is an important part of our roadmap to improve profitability in helicopters. Aeronautics performed in a very solid manner. I think we are well progressing in all the main programs, if proprietary platforms, GCAP, JCAF, very solid performance. The mix is completely different because in 2024, the weight of light and very light helicopters was much bigger. the mix is completely different because in 2024 the weight of light and very light helicopters was much bigger For instance, we had 42 light helicopters against 14 this year for the U.S. for instance we had 42 light helicopters against 14 this year for the u.s Navy. navy You can understand that the number in total of deliveries is lower this year, but the mix is more favorable in terms of unit per delivery. you can understand that the number in total of deliveries is lower this year but the mix is more favorable in terms of unit per delivery I want to underline also the increase in contribution of customer support, where we have higher margins, and this is an important part of our roadmap to improve profitability in helicopters. i want to underline also the increase in contribution of customer support where we have higher margins and this is an important part of our roadmap to improve profitability in helicopters Aeronautics performed in a very solid manner. aeronautics performed in a very solid manner I think we are well progressing in all the main programs, if proprietary platforms, GCAP, JCAF, very solid performance. i think we are well progressing in all the main programs if proprietary platforms gcap jcaf very solid performance Aerostructure were slightly negative, in line with the budget, we will come back on this point while discussing about the profitability, because I think Aerostructure was a key point. Of course, the cybersecurity pace are increasing, following the success we have on the commercial side. Revenues at the end, EUR 19.5 billion, with Italy accounting for about 23%. The international dimension of the group is increasing every year as planned in our industrial plan. This increase in revenues has a positive impact on EBITDA, which is up 18% year-on-year. Aerostructure were slightly negative, in line with the budget, we will come back on this point while discussing about the profitability, because I think Aerostructure was a key point. aerostructure were slightly negative in line with the budget we will come back on this point while discussing about the profitability because i think aerostructure was a key point Of course, the cybersecurity pace are increasing, following the success we have on the commercial side. of course the cybersecurity pace are increasing following the success we have on the commercial side Revenues at the end, EUR 19.5 billion, with Italy accounting for about 23%. revenues at the end eur 19.5 billion with italy accounting for about 23% The international dimension of the group is increasing every year as planned in our industrial plan. the international dimension of the group is increasing every year as planned in our industrial plan This increase in revenues has a positive impact on EBITDA, which is up 18% year-on-year. this increase in revenues has a positive impact on ebitda which is up 18% year-on-year This is not only because of the volume effect that you see on the table, that a portion of that increase is linked to volume effect, but of course, we have also a significant increase in profitability. We said that the return on sales has gone up by 60 basis points, from 8.4% to 9%. This is a clear effect of the actions we are doing to improve our profitability and cash generation. Also here, we had a small negative impact for the translation of the dollar figures of DRS, but quite small. This is not only because of the volume effect that you see on the table, that a portion of that increase is linked to volume effect, but of course, we have also a significant increase in profitability. this is not only because of the volume effect that you see on the table that a portion of that increase is linked to volume effect but of course we have also a significant increase in profitability We said that the return on sales has gone up by 60 basis points, from 8.4% to 9%. we said that the return on sales has gone up by 60 basis points from 8.4% to 9% This is a clear effect of the actions we are doing to improve our profitability and cash generation. this is a clear effect of the actions we are doing to improve our profitability and cash generation Also here, we had a small negative impact for the translation of the dollar figures of DRS, but quite small. also here we had a small negative impact for the translation of the dollar figures of drs but quite small If we look at the EBITDA by segment, I think it's interesting to deep dive on each division, starting from Defense Electronics, which is this year, above EUR 1 billion in terms of EBITDA, with our return on sales close to 13%. Slightly better, apparently, compared to last year. I think I said earlier, we need to look at the composition of the value of the EBITDA for the division. As you know, we have four building blocks. We have Electronics Europe, and here, our EBITDA was about 11% from 10.3% in 2024. Very good increase. We have Leonardo DRS, which has increased its profitability from 10% to 10.4%. If we look at the EBITDA by segment, I think it's interesting to deep dive on each division, starting from Defense Electronics, which is this year, above EUR 1 billion in terms of EBITDA, with our return on sales close to 13%. if we look at the ebitda by segment i think it's interesting to deep dive on each division starting from defense electronics which is this year above eur 1 billion in terms of ebitda with our return on sales close to 13% Slightly better, apparently, compared to last year. slightly better apparently compared to last year I think I said earlier, we need to look at the composition of the value of the EBITDA for the division. i think i said earlier we need to look at the composition of the value of the ebitda for the division As you know, we have four building blocks. as you know we have four building blocks We have Electronics Europe, and here, our EBITDA was about 11% from 10.3% in 2024. we have electronics europe and here our ebitda was about 11% from 10.3% in 2024 Very good increase. very good increase We have Leonardo DRS, which has increased its profitability from 10% to 10.4%. we have leonardo drs which has increased its profitability from 10% to 10.4% Also, we have the contribution of our JV and strategic partnership, MBDA and Hensoldt, which in total gives a contribution of EUR 180 million, which is about EUR 20 million less than 2024. If we look at the overall ROS, we see a slight, only a slight increase, but because it is affected by the negative variation compared to last year of our JV. A little bit surprising, this negative variation, I will explain better why. As you know, we put in our EBITDA the net result coming from the JV. We put on our EBITDA also the impact, which is below the EBIT lane, line of those JV. Mainly tax, which were this year higher in MBDA. MBDA is a group which is performing very well. Also, we have the contribution of our JV and strategic partnership, MBDA and Hensoldt, which in total gives a contribution of EUR 180 million, which is about EUR 20 million less than 2024. also we have the contribution of our jv and strategic partnership mbda and hensoldt which in total gives a contribution of eur 180 million which is about eur 20 million less than 2024 If we look at the overall ROS, we see a slight, only a slight increase, but because it is affected by the negative variation compared to last year of our JV. if we look at the overall ros we see a slight only a slight increase but because it is affected by the negative variation compared to last year of our jv A little bit surprising, this negative variation, I will explain better why. a little bit surprising this negative variation i will explain better why As you know, we put in our EBITDA the net result coming from the JV. as you know we put in our ebitda the net result coming from the jv We put on our EBITDA also the impact, which is below the EBIT lane, line of those JV. we put on our ebitda also the impact which is below the ebit lane line of those jv Mainly tax, which were this year higher in MBDA. mainly tax which were this year higher in mbda MBDA is a group which is performing very well. mbda is a group which is performing very well This year is going to be close to EUR 6 billion in terms of revenue, with a backlog of EUR 44 billions. Double-digit profitability, so it's performing very well. If you go to the last line of the profit and loss, we got a tax charge because of the tax reform in France, which has affected the net result. Profitability in electronic division, growing slightly, but only because of this impact on the JV. Helicopters, we have increased our profitability from 8.8% to 9% ROS. Here we see the benefits from our actions on the efficiency on engineering and our supply chain management, but also the increased contribution from customer support. As I said, we have bigger, higher margins on customer support, and this is part of our strategy. This year is going to be close to EUR 6 billion in terms of revenue, with a backlog of EUR 44 billions. this year is going to be close to eur 6 billion in terms of revenue with a backlog of eur 44 billions Double-digit profitability, so it's performing very well. double-digit profitability so it's performing very well If you go to the last line of the profit and loss, we got a tax charge because of the tax reform in France, which has affected the net result. if you go to the last line of the profit and loss we got a tax charge because of the tax reform in france which has affected the net result Profitability in electronic division, growing slightly, but only because of this impact on the JV. profitability in electronic division growing slightly but only because of this impact on the jv Helicopters, we have increased our profitability from 8.8% to 9% ROS. helicopters we have increased our profitability from 8.8% to 9% ros Here we see the benefits from our actions on the efficiency on engineering and our supply chain management, but also the increased contribution from customer support. here we see the benefits from our actions on the efficiency on engineering and our supply chain management but also the increased contribution from customer support As I said, we have bigger, higher margins on customer support, and this is part of our strategy. as i said we have bigger higher margins on customer support and this is part of our strategy Aircraft, again, very solid performance in Aircraft Division, close to 13%, driven by the programs I was mentioning before. Aerostructure was negative by EUR 130 million, around EUR 130 million. Still negative, but in line with our provision, and this is true for all the KPIs of Aerostructure, including cash flow. The plan we made is solid. During the year, we increased also the shipsets at the rates on B787. You know that it is our bigger program in Aerostructure. During the year, we started from four shipsets as per month, we arrived at seven at the end of the year. Very good progress. Aircraft, again, very solid performance in Aircraft Division, close to 13%, driven by the programs I was mentioning before. aircraft again very solid performance in aircraft division close to 13% driven by the programs i was mentioning before Aerostructure was negative by EUR 130 million, around EUR 130 million. aerostructure was negative by eur 130 million around eur 130 million Still negative, but in line with our provision, and this is true for all the KPIs of Aerostructure, including cash flow. still negative but in line with our provision and this is true for all the kpis of aerostructure including cash flow The plan we made is solid. the plan we made is solid During the year, we increased also the shipsets at the rates on B787. during the year we increased also the shipsets at the rates on b787 You know that it is our bigger program in Aerostructure. you know that it is our bigger program in aerostructure During the year, we started from four shipsets as per month, we arrived at seven at the end of the year. during the year we started from four shipsets as per month we arrived at seven at the end of the year Very good progress. very good progress We got an agreement also with Boeing that makes our rate plan for also for the future, much more robust and reliable. This gives confidence about the solidity of the plan we made on Aerostructure. An additional point about Aerostructure, if you look at Q4 only, you see that Aerostructure is at a break-even. This is due to the impact, of course, of the increase of the rates on B787, also on the closure of some smaller programs, which has allowed us to release some contingency. It's a very good sign because it implies a progress and a benefit on the activities we do for Boeing. It's also not an indicator of the trend going forward. We got an agreement also with Boeing that makes our rate plan for also for the future, much more robust and reliable. we got an agreement also with boeing that makes our rate plan for also for the future much more robust and reliable This gives confidence about the solidity of the plan we made on Aerostructure. this gives confidence about the solidity of the plan we made on aerostructure An additional point about Aerostructure, if you look at Q4 only, you see that Aerostructure is at a break-even. an additional point about aerostructure if you look at q4 only you see that aerostructure is at a break-even This is due to the impact, of course, of the increase of the rates on B787, also on the closure of some smaller programs, which has allowed us to release some contingency. this is due to the impact of course of the increase of the rates on b787 also on the closure of some smaller programs which has allowed us to release some contingency It's a very good sign because it implies a progress and a benefit on the activities we do for Boeing. it's a very good sign because it implies a progress and a benefit on the activities we do for boeing It's also not an indicator of the trend going forward. it's also not an indicator of the trend going forward We expect Aerostructure to be in a loss position also in 2026. We maintain the plan we said in the past. We will go in more detail, of course, in March. I can anticipate you that, of course, if you see break-even in Q4, it's not what you have to expect in 2026. I said, a very important milestone, the agreement with Boeing. It's around 50% of the business. We have other activities which are more or less fine, and these are reducing the issues on Aerostructure on around 30% of our revenues. It has the activities we do with ATR and Airbus. Boeing now is a more solid profile. Cybersecurity is up 63% compared to last year. Of course, this is mainly due to the different scale. We expect Aerostructure to be in a loss position also in 2026. we expect aerostructure to be in a loss position also in 2026 We maintain the plan we said in the past. we maintain the plan we said in the past We will go in more detail, of course, in March. we will go in more detail of course in march I can anticipate you that, of course, if you see break-even in Q4, it's not what you have to expect in 2026. i can anticipate you that of course if you see break-even in q4 it's not what you have to expect in 2026 I said, a very important milestone, the agreement with Boeing. i said a very important milestone the agreement with boeing It's around 50% of the business. it's around 50% of the business We have other activities which are more or less fine, and these are reducing the issues on Aerostructure on around 30% of our revenues. we have other activities which are more or less fine and these are reducing the issues on aerostructure on around 30% of our revenues It has the activities we do with ATR and Airbus. it has the activities we do with atr and airbus Boeing now is a more solid profile. boeing now is a more solid profile Cybersecurity is up 63% compared to last year. cybersecurity is up 63% compared to last year Of course, this is mainly due to the different scale. of course this is mainly due to the different scale We are increasing scale a lot in cybersecurity, the fixed costs have been absorbed much better than in the past. SG&A as well, were lower in contribution to the revenue. This has increased the margins. Also, I have to say that we have some very good new programs which are contributing to the EBITDA. Finally, Space, where, again, we have a very significant increase, +90%. This is part, let's say, organic. It means that the activities we do on the service segment, where we have been doing very well this year, very strong increase in revenues, a very strong increase in profitability. It's also due to the lower loss of Thales Alenia Space. You know, we put here the 33% of the net result of TAS. Last year was negative by around EUR 50 million. We are increasing scale a lot in cybersecurity, the fixed costs have been absorbed much better than in the past. we are increasing scale a lot in cybersecurity the fixed costs have been absorbed much better than in the past SG&A as well, were lower in contribution to the revenue. sg&a as well were lower in contribution to the revenue This has increased the margins. this has increased the margins Also, I have to say that we have some very good new programs which are contributing to the EBITDA. also i have to say that we have some very good new programs which are contributing to the ebitda Finally, Space, where, again, we have a very significant increase, +90%. finally space where again we have a very significant increase +90% This is part, let's say, organic. this is part let's say organic It means that the activities we do on the service segment, where we have been doing very well this year, very strong increase in revenues, a very strong increase in profitability. it means that the activities we do on the service segment where we have been doing very well this year very strong increase in revenues a very strong increase in profitability It's also due to the lower loss of Thales Alenia Space. it's also due to the lower loss of thales alenia space You know, we put here the 33% of the net result of TAS. you know we put here the 33% of the net result of tas Last year was negative by around EUR 50 million. last year was negative by around eur 50 million This year is still in a loss position by EUR 23 million. Of course, the reduction is a benefit for the result of the division. TAS is progressing in its recovery plan, still negative. It's progressing as expected on its plan. The results include also the benefit from our efficiency plan that we launched at the beginning of the our industrial plan, when executing our industrial plan. We see that also this year, like in the past year, the benefit from the efficiency plan exceeded the budget. We were higher than the budget. This gives us a strong confidence that we will be able to achieve also the scale that we have in the plan for the future years. This year is still in a loss position by EUR 23 million. this year is still in a loss position by eur 23 million Of course, the reduction is a benefit for the result of the division. of course the reduction is a benefit for the result of the division TAS is progressing in its recovery plan, still negative. tas is progressing in its recovery plan still negative It's progressing as expected on its plan. it's progressing as expected on its plan The results include also the benefit from our efficiency plan that we launched at the beginning of the our industrial plan, when executing our industrial plan. the results include also the benefit from our efficiency plan that we launched at the beginning of the our industrial plan when executing our industrial plan We see that also this year, like in the past year, the benefit from the efficiency plan exceeded the budget. we see that also this year like in the past year the benefit from the efficiency plan exceeded the budget We were higher than the budget. we were higher than the budget This gives us a strong confidence that we will be able to achieve also the scale that we have in the plan for the future years. this gives us a strong confidence that we will be able to achieve also the scale that we have in the plan for the future years We are progressing very well also in the efficiency plan, and this is sustaining our EBITDA. The increase of our EBITDA, of course, is increasing our free operating cash flow, which is 21% up compared to last year, with the same conversion rate, which means that this year we have been able to translate all the improvements we've done on the operational side, on the EBITDA in cash. Very important, because this is a key factor for our future development. Operating cash flow was EUR 2.3 billion, and it was able to pay back also additional investments. We are, this year, at around EUR 1 billion, increasing compared to last year. We are progressing very well also in the efficiency plan, and this is sustaining our EBITDA. we are progressing very well also in the efficiency plan and this is sustaining our ebitda The increase of our EBITDA, of course, is increasing our free operating cash flow, which is 21% up compared to last year, with the same conversion rate, which means that this year we have been able to translate all the improvements we've done on the operational side, on the EBITDA in cash. the increase of our ebitda of course is increasing our free operating cash flow which is 21% up compared to last year with the same conversion rate which means that this year we have been able to translate all the improvements we've done on the operational side on the ebitda in cash Very important, because this is a key factor for our future development. very important because this is a key factor for our future development Operating cash flow was EUR 2.3 billion, and it was able to pay back also additional investments. operating cash flow was eur 2.3 billion and it was able to pay back also additional investments We are, this year, at around EUR 1 billion, increasing compared to last year. we are this year at around eur 1 billion increasing compared to last year Of course, this is a trend that we will see also in March when presenting the new industrial plan. Of course, we paid also interest in taxes for EUR 0.3, leading to a free operating cash flow of EUR 1 million. Again, this is a best ever. It's a comment that is applicable to all the KPIs, because it's a best ever for all the KPIs. But in free operating cash flow, as we were seeing when looking at three-year mandate of the current board of directors, is the most powerful indicator of the improvement of the group. Thanks to this cash flow generation, group net debt has gone down by 44% year-on-year, starting from EUR 1.8 billion and closing at EUR 1.0 billion. Of course, this is a trend that we will see also in March when presenting the new industrial plan. of course this is a trend that we will see also in march when presenting the new industrial plan Of course, we paid also interest in taxes for EUR 0.3, leading to a free operating cash flow of EUR 1 million. of course we paid also interest in taxes for eur 0.3 leading to a free operating cash flow of eur 1 million Again, this is a best ever. again this is a best ever It's a comment that is applicable to all the KPIs, because it's a best ever for all the KPIs. it's a comment that is applicable to all the kpis because it's a best ever for all the kpis But in free operating cash flow, as we were seeing when looking at three-year mandate of the current board of directors, is the most powerful indicator of the improvement of the group. but in free operating cash flow as we were seeing when looking at three-year mandate of the current board of directors is the most powerful indicator of the improvement of the group Thanks to this cash flow generation, group net debt has gone down by 44% year-on-year, starting from EUR 1.8 billion and closing at EUR 1.0 billion. thanks to this cash flow generation group net debt has gone down by 44% year-on-year starting from eur 1.8 billion and closing at eur 1.0 billion We have, of course, also the benefit coming from the proceeds of the sales of the UAS business, EUR 0.4. Also, as Roberto was mentioning at the beginning, we paid a much higher dividend this year, EUR 0.3. Net final position, EUR 1 billion. I think it's important also to look inside this EUR 1 billion to understand how it is built up, to understand how flexible and solid is our balance sheet. We have a group net debt that is in total EUR 1 billion, but excluding lease liabilities and net payables to joint venture is positive by EUR 0.9. What is this line? This line, borrowings loans to joint venture, is the cash that our joint venture deposit to us, mainly MBDA, of course. It's our share of cash in the joint venture. We have, of course, also the benefit coming from the proceeds of the sales of the UAS business, EUR 0.4. we have of course also the benefit coming from the proceeds of the sales of the uas business eur 0.4 Also, as Roberto was mentioning at the beginning, we paid a much higher dividend this year, EUR 0.3. also as roberto was mentioning at the beginning we paid a much higher dividend this year eur 0.3 Net final position, EUR 1 billion. net final position eur 1 billion I think it's important also to look inside this EUR 1 billion to understand how it is built up, to understand how flexible and solid is our balance sheet. i think it's important also to look inside this eur 1 billion to understand how it is built up to understand how flexible and solid is our balance sheet We have a group net debt that is in total EUR 1 billion, but excluding lease liabilities and net payables to joint venture is positive by EUR 0.9. we have a group net debt that is in total eur 1 billion but excluding lease liabilities and net payables to joint venture is positive by eur 0.9 What is this line? what is this line This line, borrowings loans to joint venture, is the cash that our joint venture deposit to us, mainly MBDA, of course. this line borrowings loans to joint venture is the cash that our joint venture deposit to us mainly mbda of course It's our share of cash in the joint venture. it's our share of cash in the joint venture As said, the trend in MBDA is such that, I mean, this is cash we usually have in our hands and it's owned to MBDA, to the JV, but of course it's our share of cash in the JV. If we look at the subtotal before those two lines, we have a positive net financial position by EUR 1 billion. Very important also to link with the commitments we have, the potential outflows we have in 2026. In March, when closing the Iveco deal, we will have a cash outflows that before the cash in the company is around EUR 1.7 billion, but we have the money available to pay that amount. Very good results, very well positioned for the 2026, also based on a strong fourth quarter. As said, the trend in MBDA is such that, I mean, this is cash we usually have in our hands and it's owned to MBDA, to the JV, but of course it's our share of cash in the JV. as said the trend in mbda is such that i mean this is cash we usually have in our hands and it's owned to mbda to the jv but of course it's our share of cash in the jv If we look at the subtotal before those two lines, we have a positive net financial position by EUR 1 billion. if we look at the subtotal before those two lines we have a positive net financial position by eur 1 billion Very important also to link with the commitments we have, the potential outflows we have in 2026. very important also to link with the commitments we have the potential outflows we have in 2026 In March, when closing the Iveco deal, we will have a cash outflows that before the cash in the company is around EUR 1.7 billion, but we have the money available to pay that amount. in march when closing the iveco deal we will have a cash outflows that before the cash in the company is around eur 1.7 billion but we have the money available to pay that amount Very good results, very well positioned for the 2026, also based on a strong fourth quarter. very good results very well positioned for the 2026 also based on a strong fourth quarter Which is part, by the way, of the actions that we are doing on the cash flow generation and the profitability, trying not to be too much concentrated in the last part of the year. De-risking the free operating cash flow, also trying to anticipate and be compliant with the milestones we have during the year, in order not to be too stressed at the end of the year. Still, some area of improvements, because if you look at the trend of the free operating cash flow, it's of course, negative, and probably it's something related to the business which cannot change, but it's strongly negative over the first three quarters, but much less compared to the past. This is an effort that we are doing. Which is part, by the way, of the actions that we are doing on the cash flow generation and the profitability, trying not to be too much concentrated in the last part of the year. which is part by the way of the actions that we are doing on the cash flow generation and the profitability trying not to be too much concentrated in the last part of the year De-risking the free operating cash flow, also trying to anticipate and be compliant with the milestones we have during the year, in order not to be too stressed at the end of the year. de-risking the free operating cash flow also trying to anticipate and be compliant with the milestones we have during the year in order not to be too stressed at the end of the year Still, some area of improvements, because if you look at the trend of the free operating cash flow, it's of course, negative, and probably it's something related to the business which cannot change, but it's strongly negative over the first three quarters, but much less compared to the past. still some area of improvements because if you look at the trend of the free operating cash flow it's of course negative and probably it's something related to the business which cannot change but it's strongly negative over the first three quarters but much less compared to the past This is an effort that we are doing. this is an effort that we are doing We are trying to make revenues, profit, free operating cash flow more linear over the year. I think this year we have been quite successful in doing this. Of course, to do that, you have to focus mainly on the execution of the contract, on the achievement of milestone, and then on revenues and EBITDA, to be sure that you are able to cash in the money before the year end. Again, this is our full year results, this makes us very confident about the future development of the group. We are trying to make revenues, profit, free operating cash flow more linear over the year. we are trying to make revenues profit free operating cash flow more linear over the year I think this year we have been quite successful in doing this. i think this year we have been quite successful in doing this Of course, to do that, you have to focus mainly on the execution of the contract, on the achievement of milestone, and then on revenues and EBITDA, to be sure that you are able to cash in the money before the year end. of course to do that you have to focus mainly on the execution of the contract on the achievement of milestone and then on revenues and ebitda to be sure that you are able to cash in the money before the year end Again, this is our full year results, this makes us very confident about the future development of the group. again this is our full year results this makes us very confident about the future development of the group

Speaker 6: Thank you, Giuseppe. Now I think that, we are ready to take your questions. The first questions is coming from Sam Burgess, from Goldman Sachs. Please go ahead. Thank you. We cannot hear anything. Thank you, Giuseppe. thank you giuseppe Now I think that, we are ready to take your questions. now i think that we are ready to take your questions The first questions is coming from Sam Burgess, from Goldman Sachs. the first questions is coming from sam burgess from goldman sachs Please go ahead. please go ahead Thank you. thank you We cannot hear anything. we cannot hear anything

Speaker 7: We can't hear anything. We can't hear anything. we can't hear anything

Speaker 10: Can you hear me? Can you hear me? Can you hear me? can you hear me Can you hear me? can you hear me

Speaker 7: Yeah, now we can hear you. Yeah, now we can hear you. yeah now we can hear you

Speaker 6: Okay. Yes. Now, yes. Thank you. Okay. okay Yes. yes Now, yes. now yes Thank you. thank you

Speaker 10: Great. Sorry about that. Good afternoon, and thanks for the presentation. Given we're getting some guidance in a couple of weeks, I'll try and contain myself on any forward-looking financial questions. I saw R&D had a very strong 20% year-on-year increase, running well ahead of sales growth. Can you just give us some color on the areas of investment here, and whether this level of investment is likely to continue? A follow on from that, in your discussions with the Italian government customer, are there any capability areas that you are not currently delivering where they would like to see investment? That would be really helpful. Great. great Sorry about that. sorry about that Good afternoon, and thanks for the presentation. good afternoon and thanks for the presentation Given we're getting some guidance in a couple of weeks, I'll try and contain myself on any forward-looking financial questions. given we're getting some guidance in a couple of weeks i'll try and contain myself on any forward-looking financial questions I saw R&D had a very strong 20% year-on-year increase, running well ahead of sales growth. i saw r&d had a very strong 20% year-on-year increase running well ahead of sales growth Can you just give us some color on the areas of investment here, and whether this level of investment is likely to continue? can you just give us some color on the areas of investment here and whether this level of investment is likely to continue A follow on from that, in your discussions with the Italian government customer, are there any capability areas that you are not currently delivering where they would like to see investment? a follow on from that in your discussions with the italian government customer are there any capability areas that you are not currently delivering where they would like to see investment That would be really helpful. that would be really helpful A third, if I can ask a third, would be: within your cybersecurity business, are you seeing any new market entrants anywhere you compete, that might be kind of AI-focused startups? Thank you. A third, if I can ask a third, would be: within your cybersecurity business, are you seeing any new market entrants anywhere you compete, that might be kind of AI-focused startups? a third if i can ask a third would be within your cybersecurity business are you seeing any new market entrants anywhere you compete that might be kind of ai-focused startups Thank you. thank you

Speaker 9: Yeah. Thank you, Sam. Complex question. I'll try to simplify the answer. The pillar of the R&D X investment, for sure, are digital, particularly doubling the computational power and the storage capability. This is necessary because we plan to have ground stations for the data analysis that are produced in the multi-domain, and we need a very fast machine for algorithms and decision-making in real time. Of course, good investment is being done through the NatCo for the drones and the adjunct for the GCAP, for the swarm intelligence. That's very important because as you can imagine, the GCAP itself is a platform, but the NatCos are developing a kind of a synergistically but independent to each other, their drones and their... Yeah. yeah Thank you, Sam. thank you sam Complex question. complex question I'll try to simplify the answer. i'll try to simplify the answer The pillar of the R&D X investment, for sure, are digital, particularly doubling the computational power and the storage capability. the pillar of the r&d x investment for sure are digital particularly doubling the computational power and the storage capability This is necessary because we plan to have ground stations for the data analysis that are produced in the multi-domain, and we need a very fast machine for algorithms and decision-making in real time. this is necessary because we plan to have ground stations for the data analysis that are produced in the multi-domain and we need a very fast machine for algorithms and decision-making in real time Of course, good investment is being done through the NatCo for the drones and the adjunct for the GCAP, for the swarm intelligence. of course good investment is being done through the natco for the drones and the adjunct for the gcap for the swarm intelligence That's very important because as you can imagine, the GCAP itself is a platform, but the NatCos are developing a kind of a synergistically but independent to each other, their drones and their... that's very important because as you can imagine the gcap itself is a platform but the natcos are developing a kind of a synergistically but independent to each other their drones and their The adjunct and their swarm intelligence capability. That's very important. We are investing a lot in command and control because, of course, within the Michelangelo, as you might remember from the previous presentation, the idea that we have to develop a module that becomes a hyper-layer communication among different platforms, and the module itself is agnostic with respect to the platform or to the effector. It could be adapted to let an aircraft manufactured by a company and a tank manufactured by another company under the same command and control and under the net umbrella. That requires a specific investment in terms of new electronics and, of course, the sensors. The adjunct and their swarm intelligence capability. the adjunct and their swarm intelligence capability That's very important. that's very important We are investing a lot in command and control because, of course, within the Michelangelo, as you might remember from the previous presentation, the idea that we have to develop a module that becomes a hyper-layer communication among different platforms, and the module itself is agnostic with respect to the platform or to the effector. we are investing a lot in command and control because of course within the michelangelo as you might remember from the previous presentation the idea that we have to develop a module that becomes a hyper-layer communication among different platforms and the module itself is agnostic with respect to the platform or to the effector It could be adapted to let an aircraft manufactured by a company and a tank manufactured by another company under the same command and control and under the net umbrella. it could be adapted to let an aircraft manufactured by a company and a tank manufactured by another company under the same command and control and under the net umbrella That requires a specific investment in terms of new electronics and, of course, the sensors. that requires a specific investment in terms of new electronics and of course the sensors We are investing on the long-range radars because we have started the activity on the 1,300 km-1,400 km range radars. That will be the last ring of the chain for sensors, radars that go from 30 km to, you know, almost 2,000. Investment is done in many other areas. Cybersecurity is presently undergoing a strong acceleration in that whatever we will do in the future, either cyber war, anti-threat, or multi-domain, Michelangelo Dome, whatever, we will need a strong capability in cybersecurity. All signals will be wireless. You know, you really need to be strong in terms of cybersecurity. Those things are developed in parallel. Compared to the past, those are not silos or silos. We are investing on the long-range radars because we have started the activity on the 1,300 km- 1,400 km range radars. we are investing on the long-range radars because we have started the activity on the 1,300 km- 1,400 km range radars That will be the last ring of the chain for sensors, radars that go from 30 km to, you know, almost 2,000. that will be the last ring of the chain for sensors radars that go from 30 km to you know almost 2,000 Investment is done in many other areas. investment is done in many other areas Cybersecurity is presently undergoing a strong acceleration in that whatever we will do in the future, either cyber war, anti-threat, or multi-domain, Michelangelo Dome, whatever, we will need a strong capability in cybersecurity. cybersecurity is presently undergoing a strong acceleration in that whatever we will do in the future either cyber war anti-threat or multi-domain michelangelo dome whatever we will need a strong capability in cybersecurity All signals will be wireless. all signals will be wireless You know, you really need to be strong in terms of cybersecurity. you know you really need to be strong in terms of cybersecurity Those things are developed in parallel. those things are developed in parallel Compared to the past, those are not silos or silos. compared to the past those are not silos or silos Those are synergistically developed programs, in which all divisions and all engineers are talking to each other. I think this is the main difference, that there is a coordination in terms of how we develop the new technologies for the multi-domain application, let's say, dual-use, hybrid war applications, and so on and so forth. Concerning our estimate of the competitiveness in the future landscape of hybrid war, that, of course, is it's a very complicated question. Let me tell you something we are now developing, we're studying, more than developing. Those are synergistically developed programs, in which all divisions and all engineers are talking to each other. those are synergistically developed programs in which all divisions and all engineers are talking to each other I think this is the main difference, that there is a coordination in terms of how we develop the new technologies for the multi-domain application, let's say, dual-use, hybrid war applications, and so on and so forth. i think this is the main difference that there is a coordination in terms of how we develop the new technologies for the multi-domain application let's say dual-use hybrid war applications and so on and so forth Concerning our estimate of the competitiveness in the future landscape of hybrid war, that, of course, is it's a very complicated question. concerning our estimate of the competitiveness in the future landscape of hybrid war that of course is it's a very complicated question Let me tell you something we are now developing, we're studying, more than developing. let me tell you something we are now developing we're studying more than developing If you see, in some of the important sites, where the statistics are developed for defense and so on, you see that, for instance, the cost of the Ukrainian war is in the range of a fraction of EUR trillion, EUR 0.4 trillion or so, over the years. You read that the forecast for the damage caused by cyber war, cyberattack in the future, is gonna grow exponentially. In 2020, the cyber crime caused losses for approximately EUR 1 trillion in a year. The forecast for 2030 is EUR 1 trillion per month. If you see, in some of the important sites, where the statistics are developed for defense and so on, you see that, for instance, the cost of the Ukrainian war is in the range of a fraction of EUR trillion, EUR 0.4 trillion or so, over the years. if you see in some of the important sites where the statistics are developed for defense and so on you see that for instance the cost of the ukrainian war is in the range of a fraction of eur trillion eur 0.4 trillion or so over the years You read that the forecast for the damage caused by cyber war, cyberattack in the future, is gonna grow exponentially. you read that the forecast for the damage caused by cyber war cyberattack in the future is gonna grow exponentially In 2020, the cyber crime caused losses for approximately EUR 1 trillion in a year. in 2020 the cyber crime caused losses for approximately eur 1 trillion in a year The forecast for 2030 is EUR 1 trillion per month. the forecast for 2030 is eur 1 trillion per month Obviously, if you compare the expectation of the market that will be involved in the anti-threat for the hybrid war, this is much bigger than the conventional defense. It's hard to say what part of this market can be targeted by a company at the moment. No one has this kind of statistics. This is what we're doing now. We're trying to evaluate where we can focus our attention, and for sure, cyber threats will be central. For sure, there will be infrastructural threats that can be primarily reduced by satellite observation. All those things are being analyzed at the moment. Obviously, if you compare the expectation of the market that will be involved in the anti-threat for the hybrid war, this is much bigger than the conventional defense. obviously if you compare the expectation of the market that will be involved in the anti-threat for the hybrid war this is much bigger than the conventional defense It's hard to say what part of this market can be targeted by a company at the moment. it's hard to say what part of this market can be targeted by a company at the moment No one has this kind of statistics. no one has this kind of statistics This is what we're doing now. this is what we're doing now We're trying to evaluate where we can focus our attention, and for sure, cyber threats will be central. we're trying to evaluate where we can focus our attention and for sure cyber threats will be central For sure, there will be infrastructural threats that can be primarily reduced by satellite observation. for sure there will be infrastructural threats that can be primarily reduced by satellite observation All those things are being analyzed at the moment. all those things are being analyzed at the moment I think by March 12th, we're gonna bring you some forecast, at least large, of what could be our positioning and what could be the size of the hybrid war products in terms of financials and the R&D effort, whereas the one in terms of a standard war, let's say, multi-domain war, that's much more clear, and we know exactly where to go. You will get all the numbers in a couple of weeks' time. I think by March 12th, we're gonna bring you some forecast, at least large, of what could be our positioning and what could be the size of the hybrid war products in terms of financials and the R&D effort, whereas the one in terms of a standard war, let's say, multi-domain war, that's much more clear, and we know exactly where to go. i think by march 12th we're gonna bring you some forecast at least large of what could be our positioning and what could be the size of the hybrid war products in terms of financials and the r&d effort whereas the one in terms of a standard war let's say multi-domain war that's much more clear and we know exactly where to go You will get all the numbers in a couple of weeks' time. you will get all the numbers in a couple of weeks' time

Speaker 10: Very comprehensive. Thank you very much, Roberto. Very comprehensive. very comprehensive Thank you very much, Roberto. thank you very much roberto

Speaker 6: Thank you, Sam. Next question is coming from Alessandro Pozzi from Mediobanca. Please go ahead. Thank you, Sam. thank you sam Next question is coming from Alessandro Pozzi from Mediobanca. next question is coming from alessandro pozzi from mediobanca Please go ahead. please go ahead

Speaker 3: Hi, thank you for taking the question, sir. I have three, if I may. The first one on Aerostructures. I think it's positive to see that you've turned a profit in Q4, even though was mainly driven by contingencies. Can you perhaps quantify what was the impact of contingencies in Q4 there? While on the topic, in your opening remarks, you mentioned the deal is getting closer with your partner. Can you perhaps maybe tell us what the new JV in Aerostructures could look like? What could be the parameter, and what could be the potential for growth there? Hi, thank you for taking the question, sir. hi thank you for taking the question sir I have three, if I may. i have three if i may The first one on Aerostructures. the first one on aerostructures I think it's positive to see that you've turned a profit in Q4, even though was mainly driven by contingencies. i think it's positive to see that you've turned a profit in q4 even though was mainly driven by contingencies Can you perhaps quantify what was the impact of contingencies in Q4 there? can you perhaps quantify what was the impact of contingencies in q4 there While on the topic, in your opening remarks, you mentioned the deal is getting closer with your partner. while on the topic in your opening remarks you mentioned the deal is getting closer with your partner Can you perhaps maybe tell us what the new JV in Aerostructures could look like? can you perhaps maybe tell us what the new jv in aerostructures could look like What could be the parameter, and what could be the potential for growth there? what could be the parameter and what could be the potential for growth there The second question on margins, I think you've broken down the elements of the margin increase, volumes versus mix. I was wondering what is the impact also from the cost efficiency that you are implementing into allowing the company to increase margins at the EBITDA level? Final question on free cash flow. I think it's good to see that you're increasing cash conversion. Can you give us a sense of whether there was any positive working capital impact on on cash flow, thinking more in terms of advanced payments. Thank you. The second question on margins, I think you've broken down the elements of the margin increase, volumes versus mix. the second question on margins i think you've broken down the elements of the margin increase volumes versus mix I was wondering what is the impact also from the cost efficiency that you are implementing into allowing the company to increase margins at the EBITDA level? i was wondering what is the impact also from the cost efficiency that you are implementing into allowing the company to increase margins at the ebitda level Final question on free cash flow. final question on free cash flow I think it's good to see that you're increasing cash conversion. i think it's good to see that you're increasing cash conversion Can you give us a sense of whether there was any positive working capital impact on on cash flow, thinking more in terms of advanced payments. can you give us a sense of whether there was any positive working capital impact on on cash flow thinking more in terms of advanced payments Thank you. thank you

Speaker 9: All right. Alessandro, I'll give you a partial answer, of course. All right. all right Alessandro, I'll give you a partial answer, of course. alessandro i'll give you a partial answer of course

Speaker 3: Okay Okay okay

Speaker 9: I will ask Giuseppe Aurilio, to complete the answer. Concerning free operating cash flow, I will leave the stage directly to Giuseppe in a minute. Concerning margin and cost efficiency, you know, we had a maniac approach in cost saving. I will not bother you anymore every six months telling you how much we are saving in the saving plan, but I can assure you, we are exactly on track. That famous EUR 1.8 billion savings done on the direct and indirect procurement, it's absolutely in agenda. It's at reach. There is a strong commitment, so no departure from the commitment. Second, a lot of efficiency in the production. I will ask Giuseppe Aurilio, to complete the answer. i will ask giuseppe aurilio to complete the answer Concerning free operating cash flow, I will leave the stage directly to Giuseppe in a minute. concerning free operating cash flow i will leave the stage directly to giuseppe in a minute Concerning margin and cost efficiency, you know, we had a maniac approach in cost saving. concerning margin and cost efficiency you know we had a maniac approach in cost saving I will not bother you anymore every six months telling you how much we are saving in the saving plan, but I can assure you, we are exactly on track. i will not bother you anymore every six months telling you how much we are saving in the saving plan but i can assure you we are exactly on track That famous EUR 1.8 billion savings done on the direct and indirect procurement, it's absolutely in agenda. that famous eur 1.8 billion savings done on the direct and indirect procurement it's absolutely in agenda It's at reach. it's at reach There is a strong commitment, so no departure from the commitment. there is a strong commitment so no departure from the commitment Second, a lot of efficiency in the production. second a lot of efficiency in the production The Capacity Boost that we mentioned a few months ago, is now operating in most of the harder platforms, where there is a lot of work to be done. We're incorporating Iveco for the land defense. We are doing a lot of things, optimization also in helicopters. Electronics, I mean, I think you noted how fast was growing electronics. I think we were growing from a few billion to almost EUR 8 billion this year. Obviously, electronics has to update its own organization because it's so central in the payload strategy and in all the joint ventures that Leonardo is doing. I mean, we are providing weapons and sensors and payloads to land defense, to the DCAP, to drones. The Capacity Boost that we mentioned a few months ago, is now operating in most of the harder platforms, where there is a lot of work to be done. the capacity boost that we mentioned a few months ago is now operating in most of the harder platforms where there is a lot of work to be done We're incorporating Iveco for the land defense. we're incorporating iveco for the land defense We are doing a lot of things, optimization also in helicopters. we are doing a lot of things optimization also in helicopters Electronics, I mean, I think you noted how fast was growing electronics. electronics i mean i think you noted how fast was growing electronics I think we were growing from a few billion to almost EUR 8 billion this year. i think we were growing from a few billion to almost eur 8 billion this year Obviously, electronics has to update its own organization because it's so central in the payload strategy and in all the joint ventures that Leonardo is doing. obviously electronics has to update its own organization because it's so central in the payload strategy and in all the joint ventures that leonardo is doing I mean, we are providing weapons and sensors and payloads to land defense, to the DCAP, to drones. i mean we are providing weapons and sensors and payloads to land defense to the dcap to drones Basically, this is at large, all electronics. There, we are working a lot in efficiency, in not reorganization, but efficiency in the organization. That includes hiring new engineers, hiring new people, improving the industrial capability. Those things are rolling. It's a continuous progress. What I can say, of course, Giuseppe will be more precise, the fact that in three years, we grew up by, let's say, 20%-30% orders and revenues, and by 40% and 80%, EBITDA and free operating cash flow means that, though with some jet lag, with some delay, you do see now that things are improving the way we wanted. Basically, this is at large, all electronics. basically this is at large all electronics There, we are working a lot in efficiency, in not reorganization, but efficiency in the organization. there we are working a lot in efficiency in not reorganization but efficiency in the organization That includes hiring new engineers, hiring new people, improving the industrial capability. that includes hiring new engineers hiring new people improving the industrial capability Those things are rolling. It's a continuous progress. those things are rolling it's a continuous progress What I can say, of course, Giuseppe will be more precise, the fact that in three years, we grew up by, let's say, 20%-30% orders and revenues, and by 40% and 80%, EBITDA and free operating cash flow means that, though with some jet lag, with some delay, you do see now that things are improving the way we wanted. what i can say of course giuseppe will be more precise the fact that in three years we grew up by let's say 20%-30% orders and revenues and by 40% and 80% ebitda and free operating cash flow means that though with some jet lag with some delay you do see now that things are improving the way we wanted Of course, Giuseppe is monitoring this with very specific measures that he will tell you, but I can guarantee there is absolute attention and commitment in the company to keep all those parameters in terms of efficiency and margins high. Concerning Aerostructures, yeah, the deal is getting closed, is getting close indeed. We, at the beginning of the company, will be a 50/50 company. You have to consider that it's very important for the trust of our customers, that are important customers, such as Airbus and Boeing, that we have to guarantee that, of course, we keep the standard. Meanwhile, we build something much bigger with a much bigger market. We are making the calculation what, how big this market could be. Of course, Giuseppe is monitoring this with very specific measures that he will tell you, but I can guarantee there is absolute attention and commitment in the company to keep all those parameters in terms of efficiency and margins high. of course giuseppe is monitoring this with very specific measures that he will tell you but i can guarantee there is absolute attention and commitment in the company to keep all those parameters in terms of efficiency and margins high Concerning Aerostructures, yeah, the deal is getting closed, is getting close indeed. concerning aerostructures yeah the deal is getting closed is getting close indeed We, at the beginning of the company, will be a 50/50 company. we at the beginning of the company will be a 50/50 company You have to consider that it's very important for the trust of our customers, that are important customers, such as Airbus and Boeing, that we have to guarantee that, of course, we keep the standard. you have to consider that it's very important for the trust of our customers that are important customers such as airbus and boeing that we have to guarantee that of course we keep the standard Meanwhile, we build something much bigger with a much bigger market. meanwhile we build something much bigger with a much bigger market We are making the calculation what, how big this market could be. we are making the calculation what how big this market could be This will be disclosed very soon, but I can tell you, I mean, it's by far more than what we have now in terms of Aerostructures, is substantially higher, maybe triple or so. Let's see for the numbers also, what will be the incentives policy that the country we're talking to will be able to put on the table, but the numbers are definitely quite big. I think that in the future, we will be able to place the position in terms of size of the new company in the top three around the world, let's say, as an indication. Okay? Which is definitely much bigger than Aerostructure. This will be disclosed very soon, but I can tell you, I mean, it's by far more than what we have now in terms of Aerostructures, is substantially higher, maybe triple or so. this will be disclosed very soon but i can tell you i mean it's by far more than what we have now in terms of aerostructures is substantially higher maybe triple or so Let's see for the numbers also, what will be the incentives policy that the country we're talking to will be able to put on the table, but the numbers are definitely quite big. let's see for the numbers also what will be the incentives policy that the country we're talking to will be able to put on the table but the numbers are definitely quite big I think that in the future, we will be able to place the position in terms of size of the new company in the top three around the world, let's say, as an indication. i think that in the future we will be able to place the position in terms of size of the new company in the top three around the world let's say as an indication Okay? okay Which is definitely much bigger than Aerostructure. which is definitely much bigger than aerostructure

Speaker 3: Okay, about the release of. Okay, about the release of. okay about the release of When you can announce that? When you can announce that? when you can announce that

Speaker 9: Look, concerning me, I would be ready yesterday. Concerning our partner, I think they're also impatient, but as I said, there are also kind of political steps that they are not in our hands. The agreement is that we give the exclusivity for closing up to June. I believe that yeah, that should be the range. Look, concerning me, I would be ready yesterday. look concerning me i would be ready yesterday Concerning our partner, I think they're also impatient, but as I said, there are also kind of political steps that they are not in our hands. concerning our partner i think they're also impatient but as i said there are also kind of political steps that they are not in our hands The agreement is that we give the exclusivity for closing up to June. the agreement is that we give the exclusivity for closing up to june I believe that yeah, that should be the range. i believe that yeah that should be the range

Speaker 3: Thank you. Thank you. thank you

Speaker 7: Okay, about the release of contingency and Aerostructure, the order of magnitude is about EUR 15 million. Consider also that we had an acceleration on the delivery rate just in the last quarter, we delivered, we took a margin, although small, in the last quarter, over something that has been produced earlier, and it was in the stocks. The order of magnitude is in that range, EUR 15 million-EUR 20 million. About the cost efficiency, Roberto has perfectly replied, of course, it is included in the improvement you see in the EBITA when we talk about improvement of profitability is driven by these efficiency actions. Free operating cash flow, it's of course, it's a mix of different divisions, different type of contracts. Okay, about the release of contingency and Aerostructure, the order of magnitude is about EUR 15 million. okay about the release of contingency and aerostructure the order of magnitude is about eur 15 million Consider also that we had an acceleration on the delivery rate just in the last quarter, we delivered, we took a margin, although small, in the last quarter, over something that has been produced earlier, and it was in the stocks. consider also that we had an acceleration on the delivery rate just in the last quarter we delivered we took a margin although small in the last quarter over something that has been produced earlier and it was in the stocks The order of magnitude is in that range, EUR 15 million-EUR 20 million. the order of magnitude is in that range eur 15 million-eur 20 million About the cost efficiency, Roberto has perfectly replied, of course, it is included in the improvement you see in the EBITA when we talk about improvement of profitability is driven by these efficiency actions. about the cost efficiency roberto has perfectly replied of course it is included in the improvement you see in the ebita when we talk about improvement of profitability is driven by these efficiency actions Free operating cash flow, it's of course, it's a mix of different divisions, different type of contracts. free operating cash flow it's of course it's a mix of different divisions different type of contracts We got some advanced payments, as it is customary on the export contracts. On the other end, in some divisions, we had a negative impact deriving from the celebration of the production. Overall, the working capital is going to contribute, more or less in line with last year, so slightly negative to the free operating cash flow. We got some advanced payments, as it is customary on the export contracts. we got some advanced payments as it is customary on the export contracts On the other end, in some divisions, we had a negative impact deriving from the celebration of the production. on the other end in some divisions we had a negative impact deriving from the celebration of the production Overall, the working capital is going to contribute, more or less in line with last year, so slightly negative to the free operating cash flow. overall the working capital is going to contribute more or less in line with last year so slightly negative to the free operating cash flow

Speaker 3: Thank you. Thank you. thank you

Speaker 7: By the way, it is important to underline that the more we grow, especially on the international market, the more we get recurring advances, so it's a recurring event, I mean. By the way, it is important to underline that the more we grow, especially on the international market, the more we get recurring advances, so it's a recurring event, I mean. by the way it is important to underline that the more we grow especially on the international market the more we get recurring advances so it's a recurring event i mean

Speaker 6: Okay, thank you. The next question is coming from Carlos Iranzo, from Bank of America. Please go ahead. Okay, thank you. okay thank you The next question is coming from Carlos Iranzo, from Bank of America. the next question is coming from carlos iranzo from bank of america Please go ahead. please go ahead

Speaker 4: Hi, guys. Good afternoon, and thanks for taking my questions. I actually have two, if I may. First one, I would like to come back to Aerostructures. Regarding the split in the joint venture, the 50/50, is it always going to be 50/50, or could you progressively transfer ownership to the partner down the line? Then I just wanted to see if you can share a little bit of color on the Electronics Europe margin in 2025. Ex the joint venture contribution, basically looks like there is a very little margin improvement year-over-year. What are the reasons that have prevented you from increasing margins a little bit more in 2025? Is it mix? Is it R&D? Is it phasing of some contracts? Thank you. Hi, guys. hi guys Good afternoon, and thanks for taking my questions. good afternoon and thanks for taking my questions I actually have two, if I may. i actually have two if i may First one, I would like to come back to Aerostructures. first one i would like to come back to aerostructures Regarding the split in the joint venture, the 50/50, is it always going to be 50/50, or could you progressively transfer ownership to the partner down the line? regarding the split in the joint venture the 50/50 is it always going to be 50/50 or could you progressively transfer ownership to the partner down the line Then I just wanted to see if you can share a little bit of color on the Electronics Europe margin in 2025. then i just wanted to see if you can share a little bit of color on the electronics europe margin in 2025 Ex the joint venture contribution, basically looks like there is a very little margin improvement year-over-year. ex the joint venture contribution basically looks like there is a very little margin improvement year-over-year What are the reasons that have prevented you from increasing margins a little bit more in 2025? what are the reasons that have prevented you from increasing margins a little bit more in 2025 Is it mix? is it mix Is it R&D? is it r&d Is it phasing of some contracts? is it phasing of some contracts Thank you. thank you

Speaker 9: Okay, thank you, Carlos. I'm going to answer first about the Aerostructures. I think I can safely say that the starting 50/50 is going to change, primarily because this is a long pathway towards transferring or doubling technologies is a very complex, like in aerospace. I believe that it's very natural to think that while we make the new plant in partner country, we need to train and create the conditions to produce components that are certificated. What I imagine normally is that you improve the quality of the fabrication, you gain certification, and then you can transfer more and more their activities while you develop brand-new activities somewhere else. Okay, thank you, Carlos. okay thank you carlos I'm going to answer first about the Aerostructures. i'm going to answer first about the aerostructures I think I can safely say that the starting 50/50 is going to change, primarily because this is a long pathway towards transferring or doubling technologies is a very complex, like in aerospace. i think i can safely say that the starting 50/50 is going to change primarily because this is a long pathway towards transferring or doubling technologies is a very complex like in aerospace I believe that it's very natural to think that while we make the new plant in partner country, we need to train and create the conditions to produce components that are certificated. i believe that it's very natural to think that while we make the new plant in partner country we need to train and create the conditions to produce components that are certificated What I imagine normally is that you improve the quality of the fabrication, you gain certification, and then you can transfer more and more their activities while you develop brand-new activities somewhere else. what i imagine normally is that you improve the quality of the fabrication you gain certification and then you can transfer more and more their activities while you develop brand-new activities somewhere else Yes, I believe that with progressing the standard of the industrial setup, industrial capability in the new company, there will be the possibility to change the ratio between the share among the two partners. I think so. The timing for that, it depends on the results, how fast the quality will grow, how soon they will be capable to reach the right standard for aviation authorities, and so on, so forth. We're totally committed, and the good thing is that we're not making something to make it shorter. We are expanding substantially the product portfolio, and of course, there is even more job force that will be employed. It's really a think big program. Yes, I believe that with progressing the standard of the industrial setup, industrial capability in the new company, there will be the possibility to change the ratio between the share among the two partners. yes i believe that with progressing the standard of the industrial setup industrial capability in the new company there will be the possibility to change the ratio between the share among the two partners I think so. i think so The timing for that, it depends on the results, how fast the quality will grow, how soon they will be capable to reach the right standard for aviation authorities, and so on, so forth. the timing for that it depends on the results how fast the quality will grow how soon they will be capable to reach the right standard for aviation authorities and so on so forth We're totally committed, and the good thing is that we're not making something to make it shorter. we're totally committed and the good thing is that we're not making something to make it shorter We are expanding substantially the product portfolio, and of course, there is even more job force that will be employed. we are expanding substantially the product portfolio and of course there is even more job force that will be employed It's really a think big program. it's really a think big program It's not a think small program. For sure, there will be an evolution dictated by the standard of qualification, the standard of fabrication. Concerning the margin of electronics, of course, I leave the stage to Giuseppe in a minute, but I just want to wrap up one thing. The big program where you expect how to say, big margins and big money to come are land defense, Rheinmetall. That started one year ago, and we delivered the first, I think, six infantry vehicles, and we are presently developing the complete version, what we call the Italian version, that integrates all the sensors and the weapons and command and control electronics into the machine. I think the first machine will be delivered in the next months. It's not a think small program. it's not a think small program For sure, there will be an evolution dictated by the standard of qualification, the standard of fabrication. for sure there will be an evolution dictated by the standard of qualification the standard of fabrication Concerning the margin of electronics, of course, I leave the stage to Giuseppe in a minute, but I just want to wrap up one thing. concerning the margin of electronics of course i leave the stage to giuseppe in a minute but i just want to wrap up one thing The big program where you expect how to say, big margins and big money to come are land defense, Rheinmetall. the big program where you expect how to say big margins and big money to come are land defense rheinmetall That started one year ago, and we delivered the first, I think, six infantry vehicles, and we are presently developing the complete version, what we call the Italian version, that integrates all the sensors and the weapons and command and control electronics into the machine. that started one year ago and we delivered the first i think six infantry vehicles and we are presently developing the complete version what we call the italian version that integrates all the sensors and the weapons and command and control electronics into the machine I think the first machine will be delivered in the next months. i think the first machine will be delivered in the next months We are now starting to work on the MBT main battle tank prototype. If you see the order profile that we presented in the plan, but I will eventually update this, remind you in the presentation of March, the delivery should rise in 2028, 2029, 2030, with about 100 pieces per year. At that point, you will see massive impact, because there will be massive transfer of those technology. At the moment, we are talking about small units, six, seven, 10, maybe, and also still at the development level, because we are, especially on the main battle tank, we're working on the first prototypes. We are now starting to work on the MBT main battle tank prototype. we are now starting to work on the mbt main battle tank prototype If you see the order profile that we presented in the plan, but I will eventually update this, remind you in the presentation of March, the delivery should rise in 2028, 2029, 2030, with about 100 pieces per year. if you see the order profile that we presented in the plan but i will eventually update this remind you in the presentation of march the delivery should rise in 2028 2029 2030 with about 100 pieces per year At that point, you will see massive impact, because there will be massive transfer of those technology. at that point you will see massive impact because there will be massive transfer of those technology At the moment, we are talking about small units, six, seven, 10, maybe, and also still at the development level, because we are, especially on the main battle tank, we're working on the first prototypes. at the moment we are talking about small units six seven 10 maybe and also still at the development level because we are especially on the main battle tank we're working on the first prototypes I think there is a kind of little jet lag between when you start producing the platforms or delivering the first five to six platforms and when you go into the massive production, which is expected to be in the next two to three years. I think for the infantry vehicle, is from 2027, the massive growth. I think next year is something like 15. I don't remember exactly, but 27 growth. For the main battle tank, it's around 29-30. At that point, you will see big numbers coming. The second big program is drones. Drones, we had a spectacular acceleration, because in eight months, that is in April, we will have the first mid-size drones produced, assembled, produced and assembled in Ronchi dei Legionari, our plant in northern Italy. I think there is a kind of little jet lag between when you start producing the platforms or delivering the first five to six platforms and when you go into the massive production, which is expected to be in the next two to three years. i think there is a kind of little jet lag between when you start producing the platforms or delivering the first five to six platforms and when you go into the massive production which is expected to be in the next two to three years I think for the infantry vehicle, is from 2027, the massive growth. i think for the infantry vehicle is from 2027 the massive growth I think next year is something like 15. i think next year is something like 15 I don't remember exactly, but 27 growth. i don't remember exactly but 27 growth For the main battle tank, it's around 29-30. for the main battle tank it's around 29-30 At that point, you will see big numbers coming. at that point you will see big numbers coming The second big program is drones. the second big program is drones Drones, we had a spectacular acceleration, because in eight months, that is in April, we will have the first mid-size drones produced, assembled, produced and assembled in Ronchi dei Legionari, our plant in northern Italy. drones we had a spectacular acceleration because in eight months that is in april we will have the first mid-size drones produced assembled produced and assembled in ronchi dei legionari our plant in northern italy We are working on a daily basis with Baykar to integrate brand-new technologies. There are important things I will tell you in two weeks, when we will present the update of the plan, telling you that we are making a really paramount effort on accelerating drones and unmanned flying objects, including rotorcraft, not only fixed wing. Also there, before selling hundreds of pieces, there will be kind of one year, six months of delay. We have to demonstrate the machines landing in special conditions or serving in a crew, sorry, in a swarm, operating in a swarm. Those things are planned for the next few months. Once again, you will see the impact on electronics immediately after. We are working on a daily basis with Baykar to integrate brand-new technologies. we are working on a daily basis with baykar to integrate brand-new technologies There are important things I will tell you in two weeks, when we will present the update of the plan, telling you that we are making a really paramount effort on accelerating drones and unmanned flying objects, including rotorcraft, not only fixed wing. there are important things i will tell you in two weeks when we will present the update of the plan telling you that we are making a really paramount effort on accelerating drones and unmanned flying objects including rotorcraft not only fixed wing Also there, before selling hundreds of pieces, there will be kind of one year, six months of delay. also there before selling hundreds of pieces there will be kind of one year six months of delay We have to demonstrate the machines landing in special conditions or serving in a crew, sorry, in a swarm, operating in a swarm. we have to demonstrate the machines landing in special conditions or serving in a crew sorry in a swarm operating in a swarm Those things are planned for the next few months. those things are planned for the next few months Once again, you will see the impact on electronics immediately after. once again you will see the impact on electronics immediately after GCAP, well, I mean, you know, this is a longer program, but again, there we are investing another level. I think this is quite normal, but the very good thing is that we are slightly ahead of schedule with the drones, absolutely on schedule with the land defense systems, and the GCAP is doing well, and by the way, it remained the only one program worldwide. I believe that you will see the development of the margins, and the numbers of electronics, in due time, without any surprise. GCAP, well, I mean, you know, this is a longer program, but again, there we are investing another level. gcap well i mean you know this is a longer program but again there we are investing another level I think this is quite normal, but the very good thing is that we are slightly ahead of schedule with the drones, absolutely on schedule with the land defense systems, and the GCAP is doing well, and by the way, it remained the only one program worldwide. i think this is quite normal but the very good thing is that we are slightly ahead of schedule with the drones absolutely on schedule with the land defense systems and the gcap is doing well and by the way it remained the only one program worldwide I believe that you will see the development of the margins, and the numbers of electronics, in due time, without any surprise. i believe that you will see the development of the margins and the numbers of electronics in due time without any surprise

Speaker 7: Carlos, about the margins in Electronics, when we look at Europe only, it has been increasing over the year. It was 10.3%, I think, at, in 2024, and now it's close to 11%. Again, the slight increase of Electronics is due to dilution coming from the JV, not from the trend of Electronics Europe, which is doing very well. Of course, R&D is increasing, as said, but we are paying back with the profitability we are producing. Carlos, about the margins in Electronics, when we look at Europe only, it has been increasing over the year. carlos about the margins in electronics when we look at europe only it has been increasing over the year It was 10.3%, I think, at, in 2024, and now it's close to 11%. it was 10.3% i think at in 2024 and now it's close to 11% Again, the slight increase of Electronics is due to dilution coming from the JV, not from the trend of Electronics Europe, which is doing very well. again the slight increase of electronics is due to dilution coming from the jv not from the trend of electronics europe which is doing very well Of course, R&D is increasing, as said, but we are paying back with the profitability we are producing. of course r&d is increasing as said but we are paying back with the profitability we are producing

Speaker 9: Yeah, and also, Carlos, one last remark. Of course, you've seen our intention, our plan with the Michelangelo Dome that we presented just a few months ago, and will be a strong part of the future plan. And there, even if you are platform agnostic, so in principle, we could not sell a single platform in principle, but it would be a lot of electronics in terms of radars, sensors, weapons, and command and control modules that will be immediately added to the portfolio. I expect that also to be an important source of upside for the electronics, profit margins, but also for the entire group. It's gonna be something big, collective for all the divisions. Yeah, and also, Carlos, one last remark. yeah and also carlos one last remark Of course, you've seen our intention, our plan with the Michelangelo Dome that we presented just a few months ago, and will be a strong part of the future plan. of course you've seen our intention our plan with the michelangelo dome that we presented just a few months ago and will be a strong part of the future plan And there, even if you are platform agnostic, so in principle, we could not sell a single platform in principle, but it would be a lot of electronics in terms of radars, sensors, weapons, and command and control modules that will be immediately added to the portfolio. and there even if you are platform agnostic so in principle we could not sell a single platform in principle but it would be a lot of electronics in terms of radars sensors weapons and command and control modules that will be immediately added to the portfolio I expect that also to be an important source of upside for the electronics, profit margins, but also for the entire group. i expect that also to be an important source of upside for the electronics profit margins but also for the entire group It's gonna be something big, collective for all the divisions. it's gonna be something big collective for all the divisions

Speaker 6: Okay, thank you, Carlos. Okay, thank you, Carlos. okay thank you carlos

Speaker 4: Understood. Very clear. Thank you. Understood. understood Very clear. very clear Thank you. thank you

Speaker 9: Thank you, Carlos. Thank you, Carlos. thank you carlos

Speaker 6: Thank you. Now, the next question is coming from Martino De Ambroggi from Equita. Thank you. thank you Now, the next question is coming from Martino De Ambroggi from Equita. now the next question is coming from martino de ambroggi from equita

Speaker 8: Thank you. Good afternoon, everybody. Again, on Aerostructures, sorry. Just to have a rough figure on what was the free cash flow, because we know the EBITDA, but what was the free cash flow for Aerostructures standalone in, 2025? Just a follow-up on the previous answer, if I understand correctly, I don't know if it's your main goal or if it's an option, but, there is a possibility to see Leonardo going below 50% of the new entity. I have another question later. Thank you. thank you Good afternoon, everybody. good afternoon everybody Again, on Aerostructures, sorry. again on aerostructures sorry Just to have a rough figure on what was the free cash flow, because we know the EBITDA, but what was the free cash flow for Aerostructures standalone in, 2025? just to have a rough figure on what was the free cash flow because we know the ebitda but what was the free cash flow for aerostructures standalone in 2025 Just a follow-up on the previous answer, if I understand correctly, I don't know if it's your main goal or if it's an option, but, there is a possibility to see Leonardo going below 50% of the new entity. just a follow-up on the previous answer if i understand correctly i don't know if it's your main goal or if it's an option but there is a possibility to see leonardo going below 50% of the new entity I have another question later. i have another question later

Speaker 7: Okay, I will start from the free operating cash flow. You know, the loss at EBITDA level this year was something like EUR -130 million. Of course, we invest in Aerostructure. We are still investing in Aerostructure because to be prepared to the plan Roberto was describing, in any case, we need to invest. The investment this year was about EUR 40 million-EUR 45 million, so you can easily get that the free operating cash flow was negative in the area of EUR 0.2 billion. Okay, I will start from the free operating cash flow. okay i will start from the free operating cash flow You know, the loss at EBITDA level this year was something like EUR -130 million. you know the loss at ebitda level this year was something like eur -130 million Of course, we invest in Aerostructure. of course we invest in aerostructure We are still investing in Aerostructure because to be prepared to the plan Roberto was describing, in any case, we need to invest. we are still investing in aerostructure because to be prepared to the plan roberto was describing in any case we need to invest The investment this year was about EUR 40 million-EUR 45 million, so you can easily get that the free operating cash flow was negative in the area of EUR 0.2 billion. the investment this year was about eur 40 million-eur 45 million so you can easily get that the free operating cash flow was negative in the area of eur 0.2 billion

Speaker 9: Concerning your question, Martino, about deconsolidating, let me say, in my rude language, yeah, I don't see any problem in the future. The point is that this is not simply consolidating or deconsolidating. The point is that we have to provide a horizon, a future to the entire Aerostructures business, not only connected to our traditional customer, but also to military machines and extending, expanding the market to big airlines and so on, so forth, so that deconsolidating or consolidating, in any case, this has to be positive on itself. Having said this, yeah, I think that we will evaluate with great attention that the quality of the manufacturing will reach the right standard, and at that point, we can easily change our share. No problem at all. Concerning your question, Martino, about deconsolidating, let me say, in my rude language, yeah, I don't see any problem in the future. concerning your question martino about deconsolidating let me say in my rude language yeah i don't see any problem in the future The point is that this is not simply consolidating or deconsolidating. the point is that this is not simply consolidating or deconsolidating The point is that we have to provide a horizon, a future to the entire Aerostructures business, not only connected to our traditional customer, but also to military machines and extending, expanding the market to big airlines and so on, so forth, so that deconsolidating or consolidating, in any case, this has to be positive on itself. the point is that we have to provide a horizon a future to the entire aerostructures business not only connected to our traditional customer but also to military machines and extending expanding the market to big airlines and so on so forth so that deconsolidating or consolidating in any case this has to be positive on itself Having said this, yeah, I think that we will evaluate with great attention that the quality of the manufacturing will reach the right standard, and at that point, we can easily change our share. having said this yeah i think that we will evaluate with great attention that the quality of the manufacturing will reach the right standard and at that point we can easily change our share No problem at all. no problem at all Anyway, you know, the workforce will be unaffected. I think that the market the player will be very big, on a very big market, on a large market area in the world. I think the vision is very positive. The outlook is very positive. Anyway, you know, the workforce will be unaffected. anyway you know the workforce will be unaffected I think that the market the player will be very big, on a very big market, on a large market area in the world. i think that the market the player will be very big on a very big market on a large market area in the world I think the vision is very positive. i think the vision is very positive The outlook is very positive. the outlook is very positive

Speaker 8: Okay, thank you. The second question is on two future opportunities. Any update on the U.K. jumbo helicopter order? On the recent agreement you signed with an Indian partner, is this something that could be reflected in your business plan in the next business plan, or it's more much farther away? Okay, thank you. okay thank you The second question is on two future opportunities. the second question is on two future opportunities Any update on the U.K. jumbo helicopter order? any update on the u.k jumbo helicopter order On the recent agreement you signed with an Indian partner, is this something that could be reflected in your business plan in the next business plan, or it's more much farther away? on the recent agreement you signed with an indian partner is this something that could be reflected in your business plan in the next business plan or it's more much farther away

Speaker 9: Martino, I'm bound to 24 hours to confidentiality issues. If you have the patience to wait for 24 hours, we're gonna talk again. What can I tell you more? I can tell you that we've been working very, very intensively with the, with our U.K. branch and with the U.K. government. Let's wait for one, two days, and things will come clear. Sorry, which was the Indian? Martino, I'm bound to 24 hours to confidentiality issues. martino i'm bound to 24 hours to confidentiality issues If you have the patience to wait for 24 hours, we're gonna talk again. if you have the patience to wait for 24 hours we're gonna talk again What can I tell you more? I can tell you that we've been working very, very intensively with the, with our U.K. branch and with the U.K. government. what can i tell you more i can tell you that we've been working very very intensively with the with our u.k branch and with the u.k government Let's wait for one, two days, and things will come clear. let's wait for one, two days and things will come clear Sorry, which was the Indian? sorry which was the indian

Speaker 8: Okay, I wait. For India part? Okay, I wait. okay i wait For India part? for india part

Speaker 9: No, no, not for India, for, only for U.K. No, no, not for India, for, only for U.K. no no not for india for only for u.k

Speaker 7: Yeah. Yeah. yeah

Speaker 9: For India, Giuseppe is gonna tell you. For India, Giuseppe is gonna tell you. for india giuseppe is gonna tell you

Speaker 7: Related to India, we set up a partnership with Adani Group, which is instrumental for addressing the growing India military demand, creating a hub for helicopter manufacturing and sustainment. You know, that there will be the need to replace 1,000 units in the next few years. It's a very big market for us. We are currently responding to navy and army tenders for about 300 helicopters. We'll see. However, we see also strong potential on the civil market because of the kind of the country. I think also the civil market, there is a strong potential. It is our best interest to be present there in the way we can. Related to India, we set up a partnership with Adani Group, which is instrumental for addressing the growing India military demand, creating a hub for helicopter manufacturing and sustainment. related to india we set up a partnership with adani group which is instrumental for addressing the growing india military demand creating a hub for helicopter manufacturing and sustainment You know, that there will be the need to replace 1,000 units in the next few years. you know that there will be the need to replace 1,000 units in the next few years It's a very big market for us. it's a very big market for us We are currently responding to navy and army tenders for about 300 helicopters. we are currently responding to navy and army tenders for about 300 helicopters We'll see. we'll see However, we see also strong potential on the civil market because of the kind of the country. however we see also strong potential on the civil market because of the kind of the country I think also the civil market, there is a strong potential. i think also the civil market there is a strong potential It is our best interest to be present there in the way we can. it is our best interest to be present there in the way we can

Speaker 9: Yeah, Martino, sorry, because I never like to keep analysts, investors, hanging on. I will tell you tomorrow, after 23 months, so I don't like this. The way I'm transparent is against my nature, let's say. I can tell you one thing. Yeah, Martino, sorry, because I never like to keep analysts, investors, hanging on. yeah martino sorry because i never like to keep analysts investors hanging on I will tell you tomorrow, after 23 months, so I don't like this. i will tell you tomorrow after 23 months so i don't like this The way I'm transparent is against my nature, let's say. the way i'm transparent is against my nature let's say I can tell you one thing. i can tell you one thing As long as I will be here, for the next years, I promise that Leonardo will be an international company, a truly multinational company, not an Italian company, but a multinational company. In this respect, you can imagine how important for me, for us is, that our second and third domestic countries, such as U.K. and U.S., are fundamental to be considered a truly multinational company with very high tech capability and not simply a domestic company making domestic defense. I'm telling you this, I'm anticipating you this, because of the commitment that I got with the authorities in U.K., is that I strongly want a powerful, complete, committed, Leonardo U.K. As long as I will be here, for the next years, I promise that Leonardo will be an international company, a truly multinational company, not an Italian company, but a multinational company. as long as i will be here for the next years i promise that leonardo will be an international company a truly multinational company not an italian company but a multinational company In this respect, you can imagine how important for me, for us is, that our second and third domestic countries, such as U.K. and U.S., are fundamental to be considered a truly multinational company with very high tech capability and not simply a domestic company making domestic defense. in this respect you can imagine how important for me for us is that our second and third domestic countries such as u.k and u.s are fundamental to be considered a truly multinational company with very high tech capability and not simply a domestic company making domestic defense I'm telling you this, I'm anticipating you this, because of the commitment that I got with the authorities in U.K., is that I strongly want a powerful, complete, committed, Leonardo U.K. i'm telling you this i'm anticipating you this because of the commitment that i got with the authorities in u.k is that i strongly want a powerful complete committed leonardo u.k Because this is essential not only for us, for our multinational vision, but also for the future of the continental European defense. I know the U.K. is not a European Commission, but it's Europe continentally. This was my first statement with the authorities, and I think it will be reflected in the forthcoming decisions. I'm very, very optimistic. Because this is essential not only for us, for our multinational vision, but also for the future of the continental European defense. because this is essential not only for us for our multinational vision but also for the future of the continental european defense I know the U.K. is not a European Commission, but it's Europe continentally. i know the u.k is not a european commission but it's europe continentally This was my first statement with the authorities, and I think it will be reflected in the forthcoming decisions. this was my first statement with the authorities and i think it will be reflected in the forthcoming decisions I'm very, very optimistic. i'm very very optimistic

Speaker 6: Thank you, Martino. Thank you, Martino. thank you martino

Speaker 8: Okay. Thank you, Roberto. Okay. okay Thank you, Roberto. thank you roberto

Speaker 6: Thank you. Let's go to the next question from Sebastian Growe of BNP Paribas. Please go ahead. Thank you. thank you Let's go to the next question from Sebastian Growe of BNP Paribas. let's go to the next question from sebastian growe of bnp paribas Please go ahead. please go ahead

Speaker 11: Yeah. Hi, good afternoon. First of all, can you hear me well? Yeah. yeah Hi, good afternoon. hi good afternoon First of all, can you hear me well? first of all can you hear me well

Speaker 6: Yes, sir. Yes, sir. yes sir

Speaker 11: Okay, cool. Yeah, then, hi, Claudia, Roberto, and Giuseppe. Thanks for taking the questions I do have. The first one was be around defense electronics. Giuseppe, you pointed to the four drivers behind the EBITA and the DS segment. Apparently, MBDA has played an increasingly important role over the last years, and based on the disclosure that we received from Airbus last week, it looks as if MBDA's operating profit margin declined by about 20 basis points, and that despite almost 20% revenue growth. The question I'm having simply is: What is the driver behind this margin contraction, and can you provide any more color how to think of the cadence with regard to the mentioned EUR 44 billion order backlog at MBDA? I would have one more around aeronautics, but maybe we can take the DS question first. Okay, cool. okay cool Yeah, then, hi, Claudia, Roberto, and Giuseppe. yeah then hi claudia roberto and giuseppe Thanks for taking the questions I do have. thanks for taking the questions i do have The first one was be around defense electronics. the first one was be around defense electronics Giuseppe, you pointed to the four drivers behind the EBITA and the DS segment. giuseppe you pointed to the four drivers behind the ebita and the ds segment Apparently, MBDA has played an increasingly important role over the last years, and based on the disclosure that we received from Airbus last week, it looks as if MBDA's operating profit margin declined by about 20 basis points, and that despite almost 20% revenue growth. apparently mbda has played an increasingly important role over the last years and based on the disclosure that we received from airbus last week it looks as if mbda's operating profit margin declined by about 20 basis points and that despite almost 20% revenue growth The question I'm having simply is: What is the driver behind this margin contraction, and can you provide any more color how to think of the cadence with regard to the mentioned EUR 44 billion order backlog at MBDA? the question i'm having simply is what is the driver behind this margin contraction and can you provide any more color how to think of the cadence with regard to the mentioned eur 44 billion order backlog at mbda I would have one more around aeronautics, but maybe we can take the DS question first. i would have one more around aeronautics but maybe we can take the ds question first

Speaker 7: Okay. Yeah, relating to MBDA, I think, again, the company is performing very well. It's well above the double digit. It was even higher last year, probably. You know, again, it's more than 10% return on sales. Of course, they are investing a lot. They are preparing themselves to execute a EUR 44 billion backlog. They are investing both in CapEx and in R&D to be ready to execute that backlog. The main impact that you see in our numbers, as I said, it's below the line because it's because of the increased tax charge they have in France. It was supposed to be a one-off. Probably, it will be also in 2026, confirmed for 2026, but it's a tax charge which was not there in 2024. Okay. okay Yeah, relating to MBDA, I think, again, the company is performing very well. yeah relating to mbda i think again the company is performing very well It's well above the double digit. it's well above the double digit It was even higher last year, probably. it was even higher last year probably You know, again, it's more than 10% return on sales. you know again it's more than 10% return on sales Of course, they are investing a lot. of course they are investing a lot They are preparing themselves to execute a EUR 44 billion backlog. they are preparing themselves to execute a eur 44 billion backlog They are investing both in CapEx and in R&D to be ready to execute that backlog. they are investing both in capex and in r&d to be ready to execute that backlog The main impact that you see in our numbers, as I said, it's below the line because it's because of the increased tax charge they have in France. the main impact that you see in our numbers as i said it's below the line because it's because of the increased tax charge they have in france It was supposed to be a one-off. it was supposed to be a one-off Probably, it will be also in 2026, confirmed for 2026, but it's a tax charge which was not there in 2024. probably it will be also in 2026 confirmed for 2026 but it's a tax charge which was not there in 2024

Speaker 11: Okay, gotcha. Can you eventually give some guidance or indication, at least, in regards to the future top-line dynamics at MBDA? I think we have seen now, over the last three years, growth rate accelerating from about mid-single digits to then 10% in 2024, and now getting close to 20, I said, in the year 2025. How to think really about the trajectory of that EUR 44 billion backlog? Okay, gotcha. okay gotcha Can you eventually give some guidance or indication, at least, in regards to the future top-line dynamics at MBDA? can you eventually give some guidance or indication at least in regards to the future top-line dynamics at mbda I think we have seen now, over the last three years, growth rate accelerating from about mid-single digits to then 10% in 2024, and now getting close to 20, I said, in the year 2025. i think we have seen now over the last three years growth rate accelerating from about mid-single digits to then 10% in 2024 and now getting close to 20 i said in the year 2025 How to think really about the trajectory of that EUR 44 billion backlog? how to think really about the trajectory of that eur 44 billion backlog

Speaker 7: We will reflect, as usual, the net profit in our numbers. Of course, I mean, I cannot give you guidance about the MBDA performance in the future. I know what they are doing. We will reflect in our plan, but I mean, I cannot give you guidance on the top line of MBDA because it's something they have to do. We will reflect, as usual, the net profit in our numbers. we will reflect as usual the net profit in our numbers Of course, I mean, I cannot give you guidance about the MBDA performance in the future. of course i mean i cannot give you guidance about the mbda performance in the future I know what they are doing. i know what they are doing We will reflect in our plan, but I mean, I cannot give you guidance on the top line of MBDA because it's something they have to do. we will reflect in our plan but i mean i cannot give you guidance on the top line of mbda because it's something they have to do

Speaker 11: Okay, fair enough. Let's move on quickly to aeronautics, please, and more specifically here to the aircraft business. I noticed that the margin was down year-over-year, which I assume is due to the consolidation of the GCAP program. Talking about that very consolidation, it looks as if GCAP added about EUR 300 million or so to revenues. However, the EBITA addition was less than EUR 10 million, from what I could reconcile. I guess my question is, how to think of the future sales and margin trajectory for the GCAP program in particular year? Okay, fair enough. okay fair enough Let's move on quickly to aeronautics, please, and more specifically here to the aircraft business. let's move on quickly to aeronautics please and more specifically here to the aircraft business I noticed that the margin was down year-over-year, which I assume is due to the consolidation of the GCAP program. i noticed that the margin was down year-over-year which i assume is due to the consolidation of the gcap program Talking about that very consolidation, it looks as if GCAP added about EUR 300 million or so to revenues. talking about that very consolidation it looks as if gcap added about eur 300 million or so to revenues However, the EBITA addition was less than EUR 10 million, from what I could reconcile. however the ebita addition was less than eur 10 million from what i could reconcile I guess my question is, how to think of the future sales and margin trajectory for the GCAP program in particular year? i guess my question is how to think of the future sales and margin trajectory for the gcap program in particular year

Speaker 7: Now, you were perfect in getting the right answer because, of course, in GCAP, we have aircraft acting as a prime, of course, the margin is a little bit diluted. Not at group level, because, of course, also the other division are contributing to GCAP. If you look at aircraft standalone, of course, there is a small dilution. Now, you were perfect in getting the right answer because, of course, in GCAP, we have aircraft acting as a prime, of course, the margin is a little bit diluted. now you were perfect in getting the right answer because of course in gcap we have aircraft acting as a prime of course the margin is a little bit diluted Not at group level, because, of course, also the other division are contributing to GCAP. not at group level because of course also the other division are contributing to gcap If you look at aircraft standalone, of course, there is a small dilution. if you look at aircraft standalone of course there is a small dilution

Speaker 11: In terms of how the trend from here. In terms of how the trend from here. in terms of how the trend from here

Speaker 7: In terms of trends for the future, I think, I mean, based on the programs that we were mentioning, Eurofighter, M-346, C-27J, JSAF, I think. In terms of trends for the future, I think, I mean, based on the programs that we were mentioning, Eurofighter, M-346, C-27J, JSAF, I think. in terms of trends for the future i think i mean based on the programs that we were mentioning eurofighter m-346 c-27j jsaf i think

Speaker 9: The manned also. The manned also. the manned also

Speaker 7: I think the profile of aircraft is very solid. Yep. I think the profile of aircraft is very solid. i think the profile of aircraft is very solid Yep. yep

Speaker 11: Great. Thank you very much, both. Great. great Thank you very much, both. thank you very much both

Speaker 6: Thank you. Thank you. Thank you. thank you Thank you. thank you

Speaker 7: Thank you, Sebastian. Thank you, Sebastian. thank you sebastian

Speaker 6: Next question is coming from Afonso Osório from Barclays. Next question is coming from Afonso Osório from Barclays. next question is coming from afonso osório from barclays

Speaker 2: Hello. Yeah, thank you for taking my questions as well. I'll just stick to these M&A deals that you've been doing here. Two questions, I think it's quite quick. The first one on the Iveco deal. Thank you, Roberto, for all the detail you've given us. You mentioned giving the exclusivity for six months to Rheinmetall, but given that you will close the deal by March, how should we think about the contribution from this business for you specifically this year in 2026? Are you basically assuming a 100% contribution for you this year, or will you, in two weeks' time, give the targets for 2026, assuming you sell a part of that to Rheinmetall? Hello. hello Yeah, thank you for taking my questions as well. yeah thank you for taking my questions as well I'll just stick to these M&A deals that you've been doing here. i'll just stick to these m&a deals that you've been doing here Two questions, I think it's quite quick. two questions i think it's quite quick The first one on the Iveco deal. the first one on the iveco deal Thank you, Roberto, for all the detail you've given us. thank you roberto for all the detail you've given us You mentioned giving the exclusivity for six months to Rheinmetall, but given that you will close the deal by March, how should we think about the contribution from this business for you specifically this year in 2026? you mentioned giving the exclusivity for six months to rheinmetall but given that you will close the deal by march how should we think about the contribution from this business for you specifically this year in 2026 Are you basically assuming a 100% contribution for you this year, or will you, in two weeks' time, give the targets for 2026, assuming you sell a part of that to Rheinmetall? are you basically assuming a 100% contribution for you this year or will you in two weeks' time give the targets for 2026 assuming you sell a part of that to rheinmetall The second question is and apologies for coming back to Aerostructures, but just to double-check, will you consolidate steel numbers or deconsolidate the numbers once you announce the JV? Thank you. The second question is and apologies for coming back to Aerostructures, but just to double-check, will you consolidate steel numbers or deconsolidate the numbers once you announce the JV? the second question is and apologies for coming back to aerostructures but just to double-check will you consolidate steel numbers or deconsolidate the numbers once you announce the jv Thank you. thank you

Speaker 9: Okay. Afonso, concerning Iveco, at the beginning, let's say we close and we buy the toll while our partners are, you know, waiting to understand what could be the situation with the antitrust. This seems to be usual now. Also with Bromo is the same. We need to wait. We do all the industrial work, and then we have to wait for months and months to see what happens with the antitrust. Okay, let's see. Obviously, by the time we buy it, this will be fully incorporated in our finance, in our balance sheet. By the way, as I said, it's absolutely not bad because they have a very good backlog of orders. Okay. okay Afonso, concerning Iveco, at the beginning, let's say we close and we buy the toll while our partners are, you know, waiting to understand what could be the situation with the antitrust. afonso concerning iveco at the beginning let's say we close and we buy the toll while our partners are you know waiting to understand what could be the situation with the antitrust This seems to be usual now. this seems to be usual now Also with Bromo is the same. also with bromo is the same We need to wait. we need to wait We do all the industrial work, and then we have to wait for months and months to see what happens with the antitrust. we do all the industrial work and then we have to wait for months and months to see what happens with the antitrust Okay, let's see. okay let's see Obviously, by the time we buy it, this will be fully incorporated in our finance, in our balance sheet. obviously by the time we buy it this will be fully incorporated in our finance in our balance sheet By the way, as I said, it's absolutely not bad because they have a very good backlog of orders. by the way as i said it's absolutely not bad because they have a very good backlog of orders The margins of the trucks is not absolutely not bad. It's a double digit, quite solid. I should also mention that we are discussing about the future programs for big artillery mounted on trucks. Therefore, that could be also instrumental to the creation of new products. I believe that's a very, a very safe situation in terms of industry product. Also, I'd like to tell you more industrial detail in the plant Piacenza. There's currently a double capacity in that, in the same plant, We produce, they produce both trucks and armored vehicles. The margins of the trucks is not absolutely not bad. the margins of the trucks is not absolutely not bad It's a double digit, quite solid. it's a double digit quite solid I should also mention that we are discussing about the future programs for big artillery mounted on trucks. i should also mention that we are discussing about the future programs for big artillery mounted on trucks Therefore, that could be also instrumental to the creation of new products. therefore that could be also instrumental to the creation of new products I believe that's a very, a very safe situation in terms of industry product. i believe that's a very a very safe situation in terms of industry product Also, I'd like to tell you more industrial detail in the plant Piacenza. also i'd like to tell you more industrial detail in the plant piacenza There's currently a double capacity in that, in the same plant, We produce, they produce both trucks and armored vehicles. there's currently a double capacity in that in the same plant we produce they produce both trucks and armored vehicles Even in the case we decide to split this, so to carve out, we need to do some industrial optimization, and so this would require some months. It, it's absolutely under control. Whatever we do, I could say whatever we do for the next maybe couple of years will be anyway safe. I think the decision should be made before, depending on the outcome of the antitrust, and at that point, we will see. Even in the case we decide to split this, so to carve out, we need to do some industrial optimization, and so this would require some months. even in the case we decide to split this so to carve out we need to do some industrial optimization and so this would require some months It, it's absolutely under control. it it's absolutely under control Whatever we do, I could say whatever we do for the next maybe couple of years will be anyway safe. whatever we do i could say whatever we do for the next maybe couple of years will be anyway safe I think the decision should be made before, depending on the outcome of the antitrust, and at that point, we will see. i think the decision should be made before depending on the outcome of the antitrust and at that point we will see As I said before, there are others company that will be interested, where they're having no problem with the antitrust, but of course, we would privilege at the moment, the relationship with the, with Rheinmetall because this was the original plan. If this will not be possible, we're going to find... We're going to have other solutions. As I said, we are ready to go work. We have the pipeline of orders. Things are running. We didn't stop one day the plants, so it's a really safe situation. As I said before, there are others company that will be interested, where they're having no problem with the antitrust, but of course, we would privilege at the moment, the relationship with the, with Rheinmetall because this was the original plan. as i said before there are others company that will be interested where they're having no problem with the antitrust but of course we would privilege at the moment the relationship with the with rheinmetall because this was the original plan If this will not be possible, we're going to find... if this will not be possible we're going to find We're going to have other solutions. we're going to have other solutions As I said, we are ready to go work. as i said we are ready to go work We have the pipeline of orders. we have the pipeline of orders Things are running. things are running We didn't stop one day the plants, so it's a really safe situation. we didn't stop one day the plants so it's a really safe situation

Speaker 7: Regarding the, the deconsolidation, the potential deconsolidation of Aerostructures, of course, as Roberto was describing, the partner is not only a financial partner, is a financial partner with an industrial strong interest in the combination. Of course, the governance we are discussing reflect this point. Of course, they want to have also vision, and therefore, not allowing us to consolidate, Aerostructures. Regarding the, the deconsolidation, the potential deconsolidation of Aerostructures, of course, as Roberto was describing, the partner is not only a financial partner, is a financial partner with an industrial strong interest in the combination. regarding the the deconsolidation the potential deconsolidation of aerostructures of course as roberto was describing the partner is not only a financial partner is a financial partner with an industrial strong interest in the combination Of course, the governance we are discussing reflect this point. of course the governance we are discussing reflect this point Of course, they want to have also vision, and therefore, not allowing us to consolidate, Aerostructures. of course they want to have also vision and therefore not allowing us to consolidate aerostructures

Speaker 6: Okay, thank you. We can proceed with the next question from Christophe Menard from Deutsche Bank. Okay, thank you. okay thank you We can proceed with the next question from Christophe Menard from Deutsche Bank. we can proceed with the next question from christophe menard from deutsche bank

Speaker 5: Before taking my question, I have three. The first one is on, you mentioned prepayments. Can you tell us what level of prepayments you had at company level in 2025 versus and how it compares to 2024? Second question is on Aerostructure. Again, you mentioned a number of investments that could be coming in the future. What would be the free cash flow outlook for Aerostructure as a consequence? Before taking my question, I have three. before taking my question i have three The first one is on, you mentioned prepayments. the first one is on you mentioned prepayments Can you tell us what level of prepayments you had at company level in 2025 versus and how it compares to 2024? can you tell us what level of prepayments you had at company level in 2025 versus and how it compares to 2024 Second question is on Aerostructure. second question is on aerostructure Again, you mentioned a number of investments that could be coming in the future. again you mentioned a number of investments that could be coming in the future What would be the free cash flow outlook for Aerostructure as a consequence? what would be the free cash flow outlook for aerostructure as a consequence I mean, we understand EBITDA there will be some EBITDA breakeven going forward, but should we expect a series of CapEx investment in the coming years? The last question is, it's probably a little bit granular, but on defense electronics in Q4 in Europe, it seems the sales dropped quite a lot. Is there any reason for this? I mean, versus my expectation, I have a miss of around EUR 600 million. Just wanted to see whether that was related to a specific program. Thank you. I mean, we understand EBITDA there will be some EBITDA breakeven going forward, but should we expect a series of CapEx investment in the coming years? i mean we understand ebitda there will be some ebitda breakeven going forward but should we expect a series of capex investment in the coming years The last question is, it's probably a little bit granular, but on defense electronics in Q4 in Europe, it seems the sales dropped quite a lot. the last question is it's probably a little bit granular but on defense electronics in q4 in europe it seems the sales dropped quite a lot Is there any reason for this? is there any reason for this I mean, versus my expectation, I have a miss of around EUR 600 million. i mean versus my expectation i have a miss of around eur 600 million Just wanted to see whether that was related to a specific program. just wanted to see whether that was related to a specific program Thank you. thank you

Speaker 7: Okay. Regarding the first question, you know, we look at the working capital as a wall. I think I said, working capital is contributely, negatively, the same area than in 2024. Of course, the line items might be different, but the overall contribution of working capital is in that range. Aerostructure, I said, I mean, we are progressing also with executing our industrial plan in our structure, and of course, as part of this plan, we have an investment plan to digitalize the factories, to improve the efficiency of the divisions. Of course, we are investing, and this is consistent with what we are discussing with the partner. Okay. okay Regarding the first question, you know, we look at the working capital as a wall. regarding the first question you know we look at the working capital as a wall I think I said, working capital is contributely, negatively, the same area than in 2024. i think i said working capital is contributely negatively the same area than in 2024 Of course, the line items might be different, but the overall contribution of working capital is in that range. of course the line items might be different but the overall contribution of working capital is in that range Aerostructure, I said, I mean, we are progressing also with executing our industrial plan in our structure, and of course, as part of this plan, we have an investment plan to digitalize the factories, to improve the efficiency of the divisions. aerostructure i said i mean we are progressing also with executing our industrial plan in our structure and of course as part of this plan we have an investment plan to digitalize the factories to improve the efficiency of the divisions Of course, we are investing, and this is consistent with what we are discussing with the partner. of course we are investing and this is consistent with what we are discussing with the partner

Speaker 9: Giuseppe, that was instrumental for our partner to accept and evaluate very well. Giuseppe, that was instrumental for our partner to accept and evaluate very well. giuseppe that was instrumental for our partner to accept and evaluate very well

Speaker 7: Yeah Yeah yeah

Speaker 9: our standalone plan. our standalone plan. our standalone plan

Speaker 7: Yeah. Yeah. yeah

Speaker 9: Without those, improvement would have been less attractive. Without those, improvement would have been less attractive. without those improvement would have been less attractive

Speaker 7: Yeah. Yeah. yeah

Speaker 9: This was, I mean, this is kind of past you, it's done. This was, I mean, this is kind of past you, it's done. this was i mean this is kind of past you it's done

Speaker 7: Yeah. This is factored in our plan when we say that it will be a break-even in 2028, 2029. Now, we will see the updated plan. Yeah. yeah This is factored in our plan when we say that it will be a break-even in 2028, 2029. this is factored in our plan when we say that it will be a break-even in 2028 2029 Now, we will see the updated plan. now we will see the updated plan

Speaker 9: That's where we go. That's where we go. that's where we go

Speaker 7: easily understand that, we are there, we are still there, the investments are already included in that plan. Q4 electronics, I think, compared to last year, Electronics Europe was something like 7% higher. The point is that back what I was saying when commenting the cash flow, as a general trend, we are working a lot to make the trend more linear over the year, not to focus on the last quarters for deliveries, invoices, cash in. This is a big effort. The results you see that we do improve. We do better in the first three quarter, and maybe we are less focused on the fourth quarter. easily understand that, we are there, we are still there, the investments are already included in that plan. easily understand that we are there we are still there the investments are already included in that plan Q4 electronics, I think, compared to last year, Electronics Europe was something like 7% higher. q4 electronics i think compared to last year electronics europe was something like 7% higher The point is that back what I was saying when commenting the cash flow, as a general trend, we are working a lot to make the trend more linear over the year, not to focus on the last quarters for deliveries, invoices, cash in. the point is that back what i was saying when commenting the cash flow as a general trend we are working a lot to make the trend more linear over the year not to focus on the last quarters for deliveries invoices cash in This is a big effort. this is a big effort The results you see that we do improve. the results you see that we do improve We do better in the first three quarter, and maybe we are less focused on the fourth quarter. we do better in the first three quarter and maybe we are less focused on the fourth quarter This is important to us as an action because, I mean, you can have a better management of cash flow only if you are able to make this trend more linear. You see maybe the negative side of the coin, but for us it's an effort to be more linear over the year. We will not be, say, again, cash positive probably during the year because of the trend of the payments of the customers. Knowing that, we have to be able to progress on making more linear our milestone, our invoicing, and our revenues. This is important to us as an action because, I mean, you can have a better management of cash flow only if you are able to make this trend more linear. this is important to us as an action because i mean you can have a better management of cash flow only if you are able to make this trend more linear You see maybe the negative side of the coin, but for us it's an effort to be more linear over the year. you see maybe the negative side of the coin but for us it's an effort to be more linear over the year We will not be, say, again, cash positive probably during the year because of the trend of the payments of the customers. we will not be say again cash positive probably during the year because of the trend of the payments of the customers Knowing that, we have to be able to progress on making more linear our milestone, our invoicing, and our revenues. knowing that we have to be able to progress on making more linear our milestone our invoicing and our revenues

Speaker 5: Very good. Very good. very good

Speaker 6: Thank you, Christophe. Thank you, Christophe. thank you christophe

Speaker 5: Thank you very much for the color. Thank you very much for the color . thank you very much for the color

Speaker 6: Thank you. We move on with the last question coming from Adrien Rabiot from Bernstein. Thank you. thank you We move on with the last question coming from Adrien Rabiot from Bernstein. we move on with the last question coming from adrien rabiot from bernstein

Speaker 1: Hi, thank you for taking my question. I just had one, please. A few months ago, you told us you were reviewing the Hensoldt stake. I was wondering if you had any update on that side, please? Hi, thank you for taking my question. hi thank you for taking my question I just had one, please. i just had one please A few months ago, you told us you were reviewing the Hensoldt stake. a few months ago you told us you were reviewing the hensoldt stake I was wondering if you had any update on that side, please? i was wondering if you had any update on that side please

Speaker 9: Yes, Adrien, thank you for the question. I spoke recently to the CEO of Hensoldt. Actually, the plan was to meet end of February, beginning of March, to update the mutual situation, primarily their situation in Germany, then very likely I will go to Germany, talk to the authorities to see what if and how we can proceed with the deal. There are different options on the table. One could be essentially selling part of the shares to let the German government, for instance, to grow in their share in the Hensoldt, like it's happening in other companies. We are very open to this. Yes, Adrien, thank you for the question. yes adrien thank you for the question I spoke recently to the CEO of Hensoldt. i spoke recently to the ceo of hensoldt Actually, the plan was to meet end of February, beginning of March, to update the mutual situation, primarily their situation in Germany, then very likely I will go to Germany, talk to the authorities to see what if and how we can proceed with the deal. actually the plan was to meet end of february beginning of march to update the mutual situation primarily their situation in germany then very likely i will go to germany talk to the authorities to see what if and how we can proceed with the deal There are different options on the table. there are different options on the table One could be essentially selling part of the shares to let the German government, for instance, to grow in their share in the Hensoldt, like it's happening in other companies. one could be essentially selling part of the shares to let the german government for instance to grow in their share in the hensoldt like it's happening in other companies We are very open to this. we are very open to this All the, all the options are on the table, and I think by March, we should end of February, beginning of March, we should have a touch base. Having said this, the numbers of Hensoldt are okay. They are than we expected. No, no particular, no particular warning about that. We decided. We're trying to go towards a conclusion by the first, the second quarter, basically, so by before the summer, to see what to do. All the, all the options are on the table, and I think by March, we should end of February, beginning of March, we should have a touch base. all the all the options are on the table and i think by march we should end of february beginning of march we should have a touch base Having said this, the numbers of Hensoldt are okay. having said this the numbers of hensoldt are okay They are than we expected. they are than we expected No, no particular, no particular warning about that. no no particular no particular warning about that We decided. we decided We're trying to go towards a conclusion by the first, the second quarter, basically, so by before the summer, to see what to do. we're trying to go towards a conclusion by the first the second quarter basically so by before the summer to see what to do

Speaker 1: Thank you very much. Thanks for squeezing me in. Thank you very much. thank you very much Thanks for squeezing me in. thanks for squeezing me in

Speaker 9: Welcome. Welcome. Welcome. welcome Welcome. welcome

Speaker 6: Thank you. Thank you. Thank you all for your participation in our conference call at this point. We hope to see you all in Rome on the 12th of March for our business plan update. Thank you. Good afternoon. Thank you. thank you Thank you. thank you Thank you all for your participation in our conference call at this point. thank you all for your participation in our conference call at this point We hope to see you all in Rome on the 12th of March for our business plan update. we hope to see you all in rome on the 12th of march for our business plan update Thank you. thank you Good afternoon. good afternoon

Speaker 9: Bye. Bye-bye. Bye. bye Bye-bye. bye-bye