Leonardo unveils ambitious industrial plan with €118B order target

Leonardo's Board of Directors, chaired by Stefano Pontecorvo, has approved an Industrial Plan for 2025-2029. The plan aims to strengthen Leonardo’s global position by integrating digitalization, efficiency measures, and international partnerships while optimizing its product portfolio. Financial Growth and Strategic Goals

The Industrial Plan outlines ambitious financial projections by 2029, including:

Orders reaching €26.2 billion (compared to €20.9 billion in 2024)

Revenues increasing to €24 billion (compared to €17.8 billion in 2024)

EBITA growing to €2.8 billion (compared to €1.5 billion in 2024)

Free Operating Cash Flow (FOCF) reaching €1.53 billion (compared to €0.83 billion in 2024)

For the 2025-2029 period, cumulative orders are expected to total €118 billion, with revenues reaching €106 billion. EBITA is projected to grow at a compound annual growth rate (CAGR) of 13.1%, and FOCF at 15.2%.

CEO and General Manager Roberto Cingolani emphasized that the plan’s efficiency initiatives have already yielded significant results. Cost-saving measures have resulted in gross savings of €1.8 billion, with €191 million realized in 2024 alone.

Digital Transformation and Technological Advancements Leonardo is driving a large-scale digital transformation across its operations, focusing on enhancing efficiency, production optimization, and lifecycle management. Key initiatives include:

The development of a Digital Twin to optimize the product lifecycle through AI and simulation technologies.

Strengthening multidomain interoperability within the Global Combat Air Programme (GCAP), including ISANKE (Integrated Sensing and Non-Kinetic Effects) and ICS (Integrated Communication System).

Advancing AI-powered command and control systems for full multidomain operations.

Expanding post-sales digital services to enhance long-term customer support.

Strategic Partnerships and New Ventures

To accelerate global competitiveness, Leonardo is strengthening its partnerships and establishing new joint ventures, including:

Leonardo Rheinmetall Military Vehicles (LRMV): A joint venture focused on next-generation armored vehicle development, including 1,050 AICS units and 272 MBT units for the Italian Army by 2040, with an expected upside of €1 billion.

Leonardo-Baykar JV: A collaboration to enhance unmanned aerial vehicle (UAV) capabilities by integrating Baykar’s UAV platforms with Leonardo’s mission systems and European certification expertise. This initiative is expected to generate €600 million in revenue.

GCAP Fighter Jet Program: In partnership with Mitsubishi and BAE Systems, Leonardo is contributing expertise in combat electronics and digitalization. The program is backed by €40 billion in investments, with 350 fighter jet orders projected by 2035.

Leonardo Hypercomputing Continuum (LHyC): A new business unit leveraging AI, high-performance computing (HPC), and digital technologies across various industries, expected to generate €230 million in cumulative orders.

Space Division Expansion: Leonardo is consolidating its space initiatives to offer end-to-end solutions in the growing space market, estimated to generate €1.3 billion over the plan period.

Future Outlook and Workforce Development

Leonardo plans to support its growth with a large-scale STEM recruitment initiative to attract talent for future technological developments. Additionally, a disciplined capital allocation strategy will ensure sustainable shareholder returns, with a proposed dividend increase to €0.52 per share in 2025 (up from €0.28 in 2024).

By reinforcing its core business, expanding digital capabilities, and fostering international alliances, Leonardo is positioning itself as a leader in global security and defense technology. The company’s strategic direction reflects the evolving defense landscape, emphasizing the transition from traditional defense to comprehensive global security solutions.