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Leonardo (BIT:LDO) reported strong financial results for the first half of 2025, with significant growth across all key metrics and an upgraded full-year guidance, according to the company’s presentation delivered in Rome on July 30.
Financial Performance Highlights
The defense and aerospace company posted impressive growth in the first half of 2025, with revenues reaching €8.9 billion, a 12.9% increase compared to the same period last year. New orders rose to €11.2 billion, up 9.7% year-over-year, while EBITA grew by 15% to €581 million.
The company also made significant progress in strengthening its balance sheet, reducing net debt by 27.6% to €2.2 billion compared to €3.0 billion in the first half of 2024. Free operating cash flow showed a 19% improvement, though it remained negative at -€408 million, typical for the company’s seasonal pattern.
As shown in the following financial results chart, Leonardo demonstrated growth across all key performance indicators:
Based on these strong results, Leonardo has upgraded its full-year 2025 guidance for new orders, free operating cash flow, and net debt. The company’s financial KPIs show consistent growth from 2023 through the 2025 forecast period:
Strategic Initiatives and Capacity Boost
A centerpiece of Leonardo’s presentation was its Capacity Boost program, designed to address the increasing demand in the defense sector. The initiative aims to enhance the company’s ability to fulfill growing orders across its divisions, which are expected to see significant revenue growth through 2029.
The company explained the rationale behind this strategic initiative, citing evolving NATO and European defense strategies that are creating substantial market opportunities:
The Capacity Boost program will focus on divisions responsible for approximately 70% of Leonardo’s revenues, with particularly strong growth projected in the Aircraft division (9.7% CAGR through 2029) and Defense Electronics (7.5% CAGR):
To execute this ambitious growth plan, Leonardo has developed a comprehensive approach with seven flagship initiatives comprising 177 specific projects:
M&A Activities and Strategic Partnerships
Leonardo reported significant progress in its M&A strategy, having evaluated 24 potential targets over the past 15 months with a focus on cyber security, AI, space domains, and capacity enhancement. The company has signed three acquisitions, with the most notable being Iveco Defence.
The acquisition of Iveco Defence, valued at €1.7 billion, represents a major strategic move to strengthen Leonardo’s position in the land defense sector. The company provided key financial metrics of the acquisition:
Leonardo expects to realize significant synergies from the Iveco Defence acquisition, including manufacturing optimization estimated at over €30 million per year:
In the cyber security domain, Leonardo has acquired Axiomatics and a minority stake in SSH to reinforce its "zero trust" proposition, strengthening its authentication and authorization capabilities:
Operational Efficiency and Tariff Mitigation
Leonardo’s efficiency plan has delivered strong results, achieving €142 million in savings across procurement (76%), corporate and travel expenses (10%), and business disposals (14%). The company reported that it has already achieved approximately 65% of the total savings expected for 2025.
The following chart illustrates the efficiency plan’s progress:
Regarding potential US tariffs, Leonardo assessed the impact as minimal, with initial estimates suggesting a maximum impact of $10-20 million in 2025 and 2026, before any mitigation actions. The company noted that 95% of its US revenues come from military sales, which are less likely to be affected by tariffs:
Forward Outlook
Leonardo’s upgraded guidance reflects confidence in its strategic direction and operational performance. The company continues to advance several key initiatives, including joint ventures like LBA Systems and Edgewing Systems (for the GCAP program), which are expected to contribute to future growth.
In the Aerostructures segment, Leonardo is progressing with due diligence for a strategic partnership, with joint industrial plan development expected by the end of the year. This aligns with the Q1 earnings call, where CEO Roberto Cingolani emphasized the goal of creating a significant player in the Aerostructure domain.
The company’s focus on cyber security and digital transformation, combined with its strategic acquisitions and capacity enhancement initiatives, positions Leonardo to capitalize on increasing defense spending across Europe and NATO countries.
With strong first-half results, upgraded guidance, and clear strategic direction, Leonardo appears well-positioned to continue its growth trajectory through the remainder of 2025 and beyond.
Full presentation:
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