Leonardo-Finmeccanica

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Leonardo-Finmeccanica
Formerly called
Finmeccanica
Società per azioni
Traded as BITFNC
Industry Aerospace, defence
Founded 1948; 68 years ago (1948)
Headquarters Rome, Italy
Key people
Giovanni De Gennaro (Chairman)
Mauro Moretti (CEO)
Products Aeronautics, helicopters, space, electronics, defence systems
Revenue € 13 billion (2015)[1]
Profit € 527 million (2015)[1]
Number of employees
About 47,000[2]
Website www.leonardocompany.com

Leonardo-Finmeccanica is an Italian multinational aerospace, defence and security company headquartered in Rome in Italy and with operations worldwide. It is the ninth-largest defence contractor in the world based on applicable 2014 revenues.[3] The company is partially owned by the Italian government through the Ministry of Economy and Finance, which holds 30.2% of the company's shares and is its largest shareholder.

On 1 January 2016, Leonardo-Finmeccanica became a single industrial company by integrating the activities of its subsidiaries AgustaWestland, Alenia Aermacchi, Selex ES, Oto Melara and WASS. The company is organised into seven divisions (Helicopters, Aircraft, Aerostructures, Airborne & Space Systems, Land & Naval Defence Electronics, Defence Systems, Security & Information Systems) and is also the parent company and corporate centre for the subsidiaries and joint ventures DRS Technologies, Telespazio, Thales Alenia Space, MBDA and ATR. Leonardo-Finmeccanica is listed on the Borsa Italiana and is a constituent of the FTSE MIB and Dow Jones Sustainability Indices.

As of April 2016, the company is known by the transitional name of Leonardo-Finmeccanica as part of the restructuring process of the company carried out by CEO Mauro Moretti from the beginning of his mandate in 2014. The company will change its name to Leonardo S.p.A. on 1 January 2017, after the Italian inventor Leonardo Da Vinci.[4][5]

History[edit]

1948: The year of foundation[edit]

The company was established in 1948 as a subholding for mechanical industry of state owned IRI. Finmeccanica has held for years some historic Italian enterprises, such as Alfa Romeo (automobile), Aeritalia (aerospace) and Ansaldo (engineering). From 1960s to 1980s Italy's defence and aerospace industry was split in different state-holding entities: so EFIM owned the helicopters manufacturer Agusta, the defence company Oto Melara and the electronic enterprise Officine Galileo, whereas STET (another IRI subsidiary) held Selenia, Elsag and SGS Thomson, all electronic enterprises with specializations in security and defense. In 1989 an internal IRI reorganization process brought STET electronic enterprises to Finmeccanica, that from Aeritalia-Selenia merger made up its aerospace subsidiary Alenia.

The 90s[edit]

In 1992 EFIM wound up because of troubled financial situation; so Agusta, Oto Melara, Officine Galileo and Breda passed to Finmeccanica, which became one of the most important Italian industrial groups. Finmeccanica, which was previously fully state owned by IRI, went under a privatization process in 1993, when it was listed in Milan Borsa Italiana.

In 1992 Finmeccanica's Agusta became a 32% partner in NHIndustries, the prime contractor for NH90 helicopter, along with Eurocopter (62.5%) and Fokker (5.5%).

Early 2000s[edit]

In July 2000 Finmeccanica and the British GKN agreed to merge their respective helicopter subsidiaries (Agusta and GKN-Westland Helicopters) to form AgustaWestland. In December 2001 the missile business of Alenia Marconi Systems (AMS), a joint Finmeccanica/BAE Systems company, was merged with other European missile manufacturers to form MBDA which thus became the world's second largest missile manufacturer.[6] In July 2003 Finmeccanica and BAE Systems announced their intention to set up three joint venture companies, to be collectively known as Eurosystems. These companies would have pooled the avionics, C4ISTAR and communications businesses of the two companies.[7] In March 2007 BAE Systems sold its 25% share to Finmeccanica for €400 million.[8] In January 2013 the company merged with Finmeccanica's other defence electronics companies, SELEX Elsag and SELEX Sistemi Integrati, to become Selex ES. In May 2008 Finmeccanica announced its intention to purchase the U.S. defense contractor DRS Technologies for nearly $5.2 billion. On 22 October 2008 the sale of DRS Technologies was finalized.[9]

2011–2013[edit]

During 2011–2013, Finmeccanica emails were published by WikiLeaks and Finmeccanica was subject to judicial inquiries on several fronts and management changes.

According to Finmeccanica emails published in the Syria Files release by WikiLeaks on 5 July 2012,[10] Finmeccanica increased its sale of mobile communications equipment to Syrian authorities during 2011, delivering 500 of these to the Damascus suburb Muadamia in May 2011,[11][12] after the Syrian uprising had started, and sending engineers to Damascus in February 2012 to provide training in using the communications equipment in helicopter terminals,[13] while the uprising continued.[14] Finmeccanica stated that the equipment sales were legal, they occurred "before the outbreak of conflict inside Syria", and the equipment "was designed for use by emergency responders" for civilian use only.[14]

On 12 February 2013, the chief executive, Giuseppe Orsi, was arrested on corruption charges. Prosecutors alleged that he paid bribes to ensure the sale of 12 helicopters to the Indian government, when he was head of the group's AgustaWestland unit.[15][16]

In July 2013, the Letta government appointed former police chief Giovanni De Gennaro as Chairman of Finmeccanica. In December 2013 Finmeccanica sold 39.55% of its share capital in Ansaldo Energia to Fondo Strategico Italiano. The remaining 15% of Finmeccanica's share will be sold by December 31, 2017.

2014-2016[edit]

In the first half of 2014, Finmeccanica's new Chief Executive Officer and General Manager Mauro Moretti started a process of profound change for the Group, both in terms of strategic choices and organizational structure. The goal was to create a more cohesive and efficient group in which all processes (research, marketing and sales, engineering, procurement, strategies and governance) are centralized and integrated and can interact more effectively. This encompasses the 100% owned companies of the core aerospace and defence business (AgustaWestland, Alenia Aermacchi, Oto Melara, Selex ES and WASS) being transformed into seven new Finmeccanica divisions. The current holding company will then become an operating company based on seven major business areas, maintaining its parent company and corporate centre function for the Group companies excluded from the model (DRS Technologies, Telespazio, Thales Alenia Space, MBDA and ATR). At the end of 2014, Finmeccanica transferred its stake in BredaMenarinibus to the newco Industria Italiana Autobus (20% Finmeccanica and 80% King Long), thereby taking a further step in the Group's portfolio rationalization process.

In 2015 Hitachi signed a binding agreement with Finmeccanica for Hitachi's acquisition of the AnsaldoBreda business, excluding some revamping activities and residual contracts, and of the entire Finmeccanica stake in the share capital of Ansaldo STS, approximately 40% of the total capital. FATA, another subsidiary of the Finmeccanica Group since 2004 that was not part of the core business, was sold in 2015 to the Gruppo Danieli, dealing in the production of steel plants.

On 1 January 2016, Finmeccanica become a single integrated industrial entity that have absorbed the activities of AgustaWestland, Alenia Aermacchi, Selex ES, OTO Melara and WASS.

From Finmeccanica to Leonardo[edit]

The company rebranding operation, led by Mauro Moretti, began in March 2016, with the proposal to change the company name, as of 1 January 2017, made by the Board of Directors at the shareholders meeting. With shareholder approval of the new company name on 28 April 2016, Finmeccanica officially became Leonardo from 1 January 2017 (Leonardo-Finmeccanica until 31 December 2016), a name inspired by the Italian scientist Leonardo da Vinci.[5][17][18]

Organization[edit]

Aeronautics

Leonardo-Finmeccanica designs, develops, produces, maintains and upgrades commercial, military and military training aircraft, as well as producing aerostructures. The Company is part of a network of joint ventures and product partnerships, including such programmes as Eurofighter (with BAE Systems and Airbus Group) to build the supersonic multi-role Typhoon and ATR (with Airbus Group) to build the family of turboprop regional aircraft of the same name.

Aeronautics
M-346

Helicopters

Leonardo-Finmeccanica is active in the helicopter market, managing: development to production, pilot training and after sales support. Leonardo-Finmeccanica produces a range of helicopters for the commercial and defence markets, including all the main weight categories, from 1.8-tonne single-engined to 16-tonne three-engined helicopters.

Helicopters
AW101

Electronics, Defence & Security Systems

Leonardo-Finmeccanica develops and integrates systems for the air and sea traffic management and the control and protection of land and sea borders; it also develops secure communications networks and solutions for the management of infrastructure and systems. The services include the design and management of IT infrastructure and data processing for intelligence and cyber security. Leonardo-Finmeccanica is active in the design, development and production of naval artillery, armoured vehicles and underwater systems. In the Electronics, Defence and Security Systems sector, Leonardo-Finmeccanica operates through its US subsidiary DRS Technologies and the joint venture MBDA (37.5% BAE Systems, 37.5% Airbus Group and 25% Leonardo-Finmeccanica) that produces missiles and missile systems.

Electronics, Defence & Security Systems

Space

In the space sector, Leonardo-Finmeccanica is active mainly through joint ventures Telespazio (Leonardo-Finmeccanica 67% - Thales 33%) and Thales Alenia Space (Leonardo-Finmeccanica 33% - Thales 67%).Telespazio offers a wide range of skills and services from design and development of space systems, launch services management and in-orbit satellites to Earth observation services, integrated communications and satellite navigation and localisation. Thales Alenia Space is engaged in the design, integration, testing and implementation of innovative space systems, equipped with the latest technology, for navigation, telecommunications, meteorology, environmental control, defence, scientific missions and Earth observation.

Subsidiaries

  • 100% Agustawestland Nv
  • Finmeccanica Do Brasil Ltda·
  • 100% Finmeccanica Finance Sa·
  • 100% Finmeccanica Global Services Spa
  • 100% Finmeccanica North America Inc.
  • 100% Finmeccanica Uk Ltd·
  • 100% Meccanica Holdings Usa Inc.
  • 100% So.Ge.Pa.

Joint ventures

  • 50% AMSH BV
  • 14% AVIO SPA·
  • 14% BCV INVESTMENTS SCA·
  • 31% ELETTRONICA SPA·
  • 50% EUROSYSNAV SAS·
  • 11% EUROTECH SPA
  • 31% IND. A. E M. R. PIAGGIO SpA
  • 25% LIBYAN ITALIAN ADVANCED TECH. CO.·
  • 30% NGL PRIME SPA·
  • 33% THALES ALENIA SPACE SAS,
  • 67% Telespazio Spa

Others

  • 10% ATITECH SPA·
  • 20% INDUSTRIA ITALIANA AUTOBUS SPA·
  • 14% ITP SRL

Shareholder structure[edit]

As of 13 March 2016 Leonardo-Finmeccanica's largest shareholder was Italian Ministry of Economy and Finances with 30.20%. Other declared shareholdings at this date were Norges Bank (2.03%) and Libyan Investment Authority (2.01%).[19] and the Vanguard Group (1,30%).

Key Budget Items (2007 - 2015)[edit]

In million of €
2007 2008 2009 2010 2011 2012 2013 2013* 2014 2014** 2015
Orders 17.916 17.5757 21.099 22.453 17.434 15.869 17.571 15.059 15.619 12.667 12.371
Order book 39.304 42.937 45.143 48.668 46.005 44.908 42.697 36.831 38.234 29.383 28.793
Revenue 13.429 16.504 18.176 18.695 17.318 16.504 16.033 13.690 14.663 12.764 12.995
Ebita 7,8% 8,7% 8,7% 8,5% -216 1.006 949 878 1.080 980 1.208
Net profit 521 621 718 557 -2.306 -792 74 74 20 20 527
Ordinary net profit nd nd nd nd nd nd 74 (649) 70 15 253
Group net borrowing 1.158 3.383 3.070 3.133 3.443 3.382 3.316 3.902 3.962 3.962 3.278
FOCF 375 469 563 443 -358 91 (307) (220) (137) 65 307
Employees 60.748 73.398 73.056 75.197 70.474 67.408 63.835 56.282 54.380 54.380 47.156
  • * Restated figures due to the adoption of IFRS 11, which resulted in the deconsolidation of the Joint Venture Group.
  • **Restated figures as a result of the reclassification of the transport sector as a discontinued operation.

Sources: Finmeccanica Budget - 2014

References[edit]

  1. ^ a b "Annual Report 2013". Finmeccanica. 
  2. ^ [1]
  3. ^ Aude Fleurant; Sam Perlo-Freeman; Pieter D. Wezeman; Sieman T. Wezeman; Noel Kelly (December 2015). "The SIPRI Top 100 Arms-producing and Military Services Companies, 2014" (PDF). SIPRI: 3. Retrieved 17 May 2016. 
  4. ^ Official Press Release. "FINMECCANICA: SHAREHOLDERS' MEETING APPROVES THE CHANGE OF THE COMPANY'S NAME AND THE 2015 FINANCIAL STATEMENTS". Leonardocompany.com. 
  5. ^ a b Kington, Tom (April 28, 2016). "It's Official: Finmeccanica Is Now Leonardo". Defense News. Retrieved May 1, 2016. 
  6. ^ "EADS, BAE and Finmeccanica Complete MBDA Merger". Defense Daily International. 2001-12-21. the new MBDA, the world's second largest missile manufacturer behind Raytheon 
  7. ^ "BAE ties up £2.6bn Italian deal". BBC News. 3 June 2003. Retrieved 13 September 2007. 
  8. ^ Parmalee, Patricia J. (9 April 2007). "Selex Sale Sealed". Aviation Week and Space Technology. The McGraw-Hill Companies. 
  9. ^ "Finmeccanica completes $5.2B DRS buy". The Business Journal of Milwaukee. 22 October 2008. 
  10. ^ "List of documents – Release How the Finmeccanica technology is helping the Syrian regime". WikiLeaks. 5 July 2012. Archived from the original on 5 July 2012. Retrieved 6 July 2012. 
  11. ^ "RE: Delivery of 500 Vehicular Radio VS3000 (1000 box)". WikiLeaks. 9 May 2011. Archived from the original on 5 July 2012. Retrieved 6 July 2012. 
  12. ^ Squires, Nick (5 July 2012). "WikiLeaks begins publishing tranche of Syria emails". The Daily Telegraph. Archived from the original on 5 July 2012. Retrieved 6 July 2012. 
  13. ^ Moschonas, Ilias (2 February 2012). "SELEX reply on urgent requests". WikiLeaks. Archived from the original on 6 July 2012. Retrieved 6 July 2012. 
  14. ^ a b Mackenzie, James; Andrew Roche; Pravin Char (5 July 2012). "Finmeccanica sold radio equipment to Syria: report". Reuters. Archived from the original on 5 July 2012. Retrieved 6 July 2012. 
  15. ^ Finmeccanica's Giuseppe Orsi held on corruption charges BBC
  16. ^ Emilio Parodi and Stephen Jewkes (12 February 2013). "Finmeccanica head arrested over India bribe allegations". Reuters. 
  17. ^ "Finmeccanica: Shareholders' Meeting approves the change of the Company's name and the 2015 Financial Statements". Finmeccanica. April 28, 2016. Retrieved April 29, 2016. 
  18. ^ Ansa Nesw. "Finmeccanica meeting approves new name, 'Leonardo'". 
  19. ^ "Azionisti rilevanti di FINMECCANICA SPA". Commissione Nazionale per le Società e la Borsa. Retrieved 27 December 2014. 

External links[edit]