Welcome everybody, and thank you for joining us in our presentation of Leonardo's first half results. My name is Claudia Introvigne, and I'm the Investor Relations Director here in Leonardo.

I'm really pleased to have here with me today Lorenzo Mariani, our CEO and General Manager, and Giuseppe Aurilio, our CFO. They will do a presentation of our strategy, results, and guidance, then we will have a Q&A session.

Let's start. I will hand over to Lorenzo.

Thanks, Claudia, and thanks everybody. It's my first presentation of results as the CEO of Leonardo, and of course, I am happy and proud to be here today with you, with all of you.

I've spent nearly all of my professional life in Leonardo Group, former Finmeccanica, and I must say that today we are in a completely different and better group, not only if we compare it to what it was 20 or 25 years ago, but also comparing it to five years ago. It's different and better in terms of products, portfolio, in terms of market, and in terms of state of mind.

This is what makes me also quite optimistic on the future. I will spend just some minutes to go through the scenario we are operating in and the impact on our strategic and industrial plan, and then I will hand over to our CFO to go more in depth on figures, and I will be available for questions.

Something I think we all know, lesson learned. We are in a new paradigm in our world and in our markets.

Lesson learned from recent conflicts show us that we can have different wars in a single conflict: a traditional one, with artillery, boots on the ground, together with new cyber, electronic warfare, cognitive war, and at the same time, terrible new threats based on advanced technologies. Just an example for all the rest: high hypersonic missiles, gliding missiles.

This has changed completely the need, the requirements of our customers, creating the need for faster and more resilient, and mostly, very integrated solutions. A second cardinal point, we have entered into a period of defense spending acceleration.

This is definitely true in the United States, although with some confrontation sometimes, but also in Europe. Despite different countries behaving in slightly different modes, we are really convinced that we are in a structural, long-term defense spending trend.

Leonardo is in a good position to take advantage and benefit of this situation thanks to the breadth of the portfolio. We have platforms: helicopters, aircraft, after acquiring Iveco, also land systems.

We are in the new domains, such as cyber and space, and we have electronics that goes transversally to all of that. This is what really allows us to be really present in this new multi-domain requirements.

In addition, we are also geographically distributed: Italy, UK, US, Poland, and many other geographies. This is also an additional opportunity for capturing new orders and acquiring new customers.

Then our vision. Continuity.

We have an industrial plan, and we are sticking to that industrial plan. The only real point that I would like to stress is acceleration.

We need to accelerate many of our initiatives because the world outside, based on what I've just said, is really going at a different pace, and we have to be capable to meet the requirements, the changing and quickly changing requirements of our customers. This means also accelerate execution: program development, production, industrialization, engineering.

On-time delivery today means something really different from what it was a few years ago. Of course, accelerate means also scale up our capability to produce, our production capability, sometimes investing in CapEx, sometimes working on efficiency, in order to have some additional capacity from the means we already have in-house.

Then technology. Technology is always a cardinal point for Leonardo, and in order to fulfill those operational new requirements, we have really to invest and to strengthen mostly new technologies, data management, using AI, for sure cyber, and many other high-technology domains.

At the same time, and related to this, also expanding strategic partnerships. We need to do that to access new markets, to guarantee, in some cases, sovereignty, and also to accelerate our entrance into new domains and new technologies.

What does it mean in terms of specific initiatives we are following? Quite a big number, and all of these we are stressing acceleration.

Technology footprint and multi-domain capabilities. I can see three main dossiers that we are treating at the moment.

GCAP, the sixth-generation system and aircraft, where we had recently a great success signing the first big contract, international contract, between the JAGO organization and Edgwing. An additional observer has been added with Canada, who has requested to be part of the program, and for the moment, will be an observer.

That is a very good sign for the follow-on of the program. Then Michelangelo: air defense, integrated air defense, strong focus on new threats.

This is the basis on which Michelangelo has been conceived. All the activities are proceeding in order to have a demonstration for dead-zone protection by the year-end in Ukraine.

We have added to the table two major components that Leonardo can have. One is the missile and anti-missile competence through MBDA.

The second one is the link to our Guardian constellation, the Leonardo constellation we are developing, that, despite being conceived initially for security reasons, can be extended also to defense capabilities in the frame of Michelangelo. Then RAFT acquisition.

As I said, there is an important acquisition in US through our subsidiary DRS. It's a company, medium-sized company, that operates in new technologies, namely AI applications through software for C2 in defense systems that can be easily matched with the need we have in Michelangelo as well.

Then the partnerships: LBA, Leonardo Baykar. A few days ago, we signed the final agreement for this JV after receiving all authorizations from regulatory bodies in Italy and Europe.

We have the first aircrafts ready and be already integrated in our Ronchi dei Legionari plant, and we are going to deliver those before year-end to the first customers, as well as we are preparing presentations and demonstrations for different applications to other customers in Italy and abroad. Bromo: we are preparing together with Thales and Airbus partners our filing to antitrust.

We're working already as a team, ready to build a space domain giant, employing 20,000 and more people, and really being a real actor in this developing scenario. Leonardo Rheinmetall JV is already operational with a first running contract for Italy on the first requirement for the A2CS.

We are envisaging already other two contracts for the new main battle tank, on which I'm optimistic to finalize that in the next coming months. Then the action to optimize and scale up our industrial footprint and capacity.

This means, as I said, restructuring our available capacity, building new one, and sometimes acting on M&A. Iveco, for sure, provides us entrance in a new domain that is the land battlefield, gives us the capability to have a new division that is made by the joint capabilities of Iveco and OTO Melara addressing this strong market, and at the same time, provides us with some industrial footprints and manufacturing capacity that can be made available also to other businesses.

Aerostructures, last but not least. Aerostructures for us is an important business, and we are following two ways that are proceeding according to our industrial plan.

First, restructuring. We need to make this business better, and we need to improve the results, and we are doing that through finding additional work packages with existing customers, moving work package from one plant to another where this can be made more efficiently, reducing, in some cases, the footprint, acting on subcontractors that can be duplicated—double sourcing can always help on that—and also working on our quality systems in order to make the reworking to zero.

At the same time, we are following the path with the prospected partner in order to build a JV that should enhance the footprint of this business abroad, and at the same time, allow us to deconsolidate progressively it from our accounts. This was just a very quick overview.

You can see that all the initiatives I see are accelerating and, in any case, are supporting our ambitions in the industrial plan. This was clearly seen in the half-year accounts, and were the basis for my optimism that led also to the revision of guidance, not only for orders, where it was evident, but also on all the other parameters, thanks to the contribution, as you will see with from Giuseppe Aurilio, of all the divisions, the business divisions.

Now, I will leave the floor to Giuseppe Aurilio, who will go through the details of the different businesses.

Thank you, Lorenzo. I'm very pleased to comment our Q2 and first-half results for 2026.

Very good performance, outstanding first half of the year. We see a very strong commercial momentum, with orders at plus 40% compared to first half of 2025, free operating cash flow plus 40% again, which is, the KPI we are focusing a lot on and where I see the difference compared to my previous experience in Leonardo.

Very strong performance now also on the cash generation. Profitability has increased up to 7.6% in terms of ROS, plus 30% compared to the corresponding period of the prior years, and our adjusted net income has increased by 74%.

Very solid results, very good performance. We see a strong commercial momentum, and that's, is leading us also to upgrade our guidance, as we will discuss in a second.

Now let's focus for a for a while on our results. We see that, as you can see, we are providing all the data without IDV.

IDV has been consolidated in all of our financial flows and income statement since April the 1st, it is contributing for three months to the results. To allow you to make like-for-like comparison, we have provided all these tables, and including the following what the following ones, without the contribution of IDV, which is separately disclosed.

As said, orders: orders are at around €16 billion, strong increase over all the division. Revenues are plus 10% compared to 2025.

Again, it is a positive contribution from all the divisions, perfectly in line with our expectation for full year, where you may remember that we projected a plus 8% on a year-by-year basis. EBITA, we closed the quarter at 0.73, around plus 30% compared to the to the previous year.

Free operating cash flow, it is negative, as it is usual in our business, but much less compared to the past. It is around plus 50%, 45% compared to the previous year, and it is very, very improving compared to the past.

Our net debt has increased obviously as a consequence mainly of the acquisition of Iveco Defence Vehicles. Let's focus on orders.

We said we see a very strong commercial momentum, orders up by around 40%, a total backlog including Iveco of around €59 billion, and a book-to-bill at 1.6, very strong compared to the previous year—it was 1.3 in 2025. If we look at the different division and the performance of the different division, we can see that we had a very strong performance in Defence Electronics, Helicopters, and Aeronautics, of course, but also on the smaller division, Cyber and Space, the performance was very good.

Defence Electronics, we had a very significant results both in Europe and in US. If you look at the euro comparison, Leonardo DRS stands flat, but, of course, it is only because of the negative impact of the translation of the US dollars into euros.

Excluded that impact, DRS has increased by 7%, very, very significant performance. A number of very important orders to us, in Electronic Defence, SAMP/T for Italy, we had ballistic missile defense, the Gripen.

A number of significant orders. Helicopters: Helicopters, we have a peak, clearly, like for Aeronautics, and we will discuss in a second.

Here we booked the NMH order for UK MOD, the 149, 23 149 for the UK MOD. That that was a key milestone for our commercial plan because of the situation in the Yeovil site, it was fundamental for us to get this order in the first half half, as we did.

Aeronautics, here we have the aircraft component, which has recorded an outstanding performances, a number of significant orders: M-346 for the Austrian Air Force, M-346 again for the Italian acrobatic team, but also orders on EFAS Germany and EFAS on Italy. Some very significant orders driving the division up by €2 billion compared to the 2025 first half.

Aerostructures is the only red red number you see on the table, but it is just because of a different phasing compared to 2025 in the orders from B787. We know the accumulated amount for the year.

In 2025, the phasing was different and more concentrated in the first half of the year. Cyber and Space, as said, very good performance.

We are around plus 15% and plus 12% compared to 2025, with a number of important orders distributed over the different business. This is leading to a very good performance also in terms of revenues.

Excluding again the negative impact from the translation of the dollars, we have a plus 10% compared to last year. Again, we are projecting a plus 80 8% on the full year, a very positive performance.

We see Electronics again. We are here affected by the negative impact of the dollar, we see again DRS flat, but instead in dollars, it is growing by 8%, very significant performance.

Electronics Europe is growing by 15%, and we will see this point also when commenting about the profitability. You can understand how brilliant this performance is.

Helicopter is growing at a 4% pace, which is perfectly in line with the target we have for the full year. As you may remember, in the past, Helicopters division has experienced a significant growth both in '24 and in '25, plus 11%, plus 11%.

In 2026, we projected a more moderate grow by 4%, and we are perfectly on line to achieve that target. Positive contribution from the customer support business, which is key for us to improve our profitability, as we will discuss in a second, and very good performance in terms of deliveries, up from 72 to 81, and with a different mix, bigger helicopters compared to the deliveries we made in 2025.

Aeronautics, we had a very strong contribution from the Aircraft division, solid performance, we know on our key programs, we are performing very well, GCAP, EFAS, but also on our proprietary platform, M-346 and C-27J. We see a small difference compared to 2025, which is mainly due to the lower activities we are doing in the Gulf area because of the geopolitical situation.

Not a big number, not an issue for the full year, but just reducing slightly the contribution of of aircraft in terms of revenues in Q2 2026. On the contrary, aerostructuring Aerostructures is marking a significant progress compared to 2025, plus 44%.

This is mainly due to the increase on the rates of production of B787. How key it is the rate of production on that program for us in Aerostructures.

In 2025, we started the year at four deliveries per month, four fuselages delivered per month. Over the year, we increased up to seven.

This year, we started at seven, then up to eight, and we target 10 by year-end. Significant progress on deliveries on B787, clearly implying a plus 44% in terms of revenues for the for the semester.

Cyber and Space again growing a lot, like for orders: plus 17% in Cyber, also due to a number of programs, very important programs, acquired in the past; and Space, which which is doing very well both in payload and robotics business and in the service activities. Overall, strong performance in terms of revenues, plus 10% year-on-year.

Profitability, as said, we have increased our return on sales by 110 basis points, from 6.5 to 7.6. As you see, most of the increase in terms of EBITA is the margin effect, and only one-third is driven by the additional volumes we were commenting earlier.

Very good improvement in profitability. If we look at the breakdown by segment, starting from Defence Electronics: outstanding performance, plus 20% compared to the previous year, with outstanding performance in all the different building blocks.

You may remember that inside the EBITA of Electronic Defence, we have four building blocks. We have Electronics Europe, strong performance, plus 16% compared to last year.

We have DRS, plus 25%, very good results. We have the contribution of our strategic JVs and investments, MBDA and Hensoldt.

Again, plus 20%, very strong results in MBDA and very good results also in Hensoldt. Helicopters, we have an increase which is linked to the increase in volumes, in line with the target for the full year, which is to increase our return on sales up to 9.2%.

It was well below nine in the past, so that's the target for the year. Aeronautics, we see a big increase, plus almost plus 100%.

Aircraft stable for the for the mix I said earlier, very good performance on our key programs, some lower activities on programs in the Gulf area. On the contrary, Aerostructures, and that's the benefit you are seeing on the on the net income of the division, on the contrary, Aerostructures is partially recovering its loss.

If we compare to 2025, thanks to the mainly to the increase of the rates of production, both in B787, but also on ATR, we are reducing the loss by around €30 million. The same applies to ATR, where we have reduced the loss by around €20 million.

It is still a loss, but overall €50 million lower than 2025. Cyber, Cyber is benefiting from a positive mix in terms of programs, it is growing by 34%, but also by operational efficiency.

We are increasing the scale without increasing the cost in a corresponding way, and that's driving such a big increase. Space is increasing by 6%, very good performance again on payload, robotics, and service, solid growth.

In Thales Alenia Space, which is the manufacturing portion of our Space Alliance JV with Thales, we see still a loss at net income level, minus €14 million, in line with the last year. At operating level profit, TAS is improving.

We see here the net result, which is instead in line with last year, mainly because of below-the-line items, which are higher compared to the corresponding period of the previous year. Overall, a very good performance, strong increase in return on sales, strong increase in revenues driving a portion of the increase in EBITA.

Free operating cash flow, as said, we see a very significant improvement, up 45% year-on-year. Of course, we are benefiting from our increased profitability, but we are benefiting also from a number of actions to make our management of working capital more efficient and more effective.

We see strong improvement. It is still negative, as said, it will it will always be negative in the first portion of the year because of the nature of the business, but it is much better compared to the past, and it is even better if we consider that this year, as planned—it was in the plan, it is not a surprise—we had to offset a couple of significant negative items, which is the payment of the NH90 litigation we settled at the end of 2025.

You may remember that we discussed about this point, €113 million cash out in the in the six months. We had also a significant increase in taxes paid, because you know that in the past, in Italy, we had a significant amount of tax losses, which now we have fully used.

We are starting pay taxes without any any tax shield, and so we had around €100 million of additional taxes paid compared to previous year. Very good performance, even better if we consider that we've been able to more than offset these two negative items.

Now let's focus for a second, because we have been commenting the results without IDV, but IDV as well is performing very well. If we look at the results, we see that they are contributing to Leonardo a backlog of €6 billion, around €6 billion, and orders at 0.6, 0.7, which are in line with our full-year expectation of 1.2 for the nine months.

You may remember that we will consolidate IDV for nine months in 2026, starting from the acquisition date. Revenues were at 0.4, in line again with our expectation of 1.1 for the nine months, with an EBITA which is slightly better than what we see in the full year because of a different mix.

We have inside IDV two different business: the armored side and the truck side, now with different margin. The the mix in Q2 was different from the mix we're assuming for the full year, for which we confirm a 11% return on sales over the nine months.

Free operating cash flow was negative, as we said. The same the same thoughts applies also to Iveco, of course, it is a business where it is normal to be negative in the first half of the year, much less compared to the Q1 of Iveco, which was not consolidated by Leonardo, but it was significantly negative.

On the same time, we are working a lot to integrate IDV in our business. There is an integration program team, project team, which is working to fully integrate Iveco defense business with our activities.

The consideration paid for Iveco is driving our net debt, as expected, €3.2 billion of net debt. The total consideration was €1.6 billion, and of course, we had the payment of dividends for 0.4 and the negative free operating cash flow, smaller than we thought, but of course, we have a negative debt of 3.2.

Excluding our share of cash in MBDA, in our joint venture, we have a net debt of around €1 billion. Fully compatible, very solid balance sheet.

We think we are perfectly in line also with our target of leverage we gave for the for the three years, '26-'28. As Lorenzo was describing, we signed DRS has signed the acquisition of RAFT for around $400 million, with a tax benefit of around $50 million.

That was part of our capital allocation we presented during the our industrial plan. You might remember that we said that we were setting up a budget provision of around 1.8, which included also some potential opportunities in US.

This this acquisition is fully compatible with that capital allocation strategy, and of course, we think that it can make it can bring potential very significant benefits for DRS, but also for the whole and wider Leonardo Group. Closing is expected in Q4 2026.

Guidance, now let's focus on the guidance. I will walk through for a for a while, because it is quite complicated this year because of the inclusion also of IDV.

We started with a guidance of orders at €25 billion. This is what we presented as part of our industrial plan, revenues 21, and EBITA 2.03.

We are including we have included in May our preliminary view, which is fully confirmed, of the contribution for the nine months 2026 coming from IDV. This is leading to the updated guidance you see in red, new orders 26.2, revenues 22.1.

Now, as given the very solid performance of the first half of the year, the strong commercial momentum we are seeing, the significant pipeline also we have and we are seeing, we have decided to upgrade our guidance. On orders, we have increased from 26 to €28.2 billion.

We see revenues stable compared to our budget assumptions, we confirm the 22.1 guidance. We see that EBITA is increasing, and therefore, we have upgraded our guidance up to 2.21, which is a double-digit return on sales.

We are targeting to anticipate the target to be a double-digit EBITA company in 2026. It was supposed to be in 2027, and that is that's an very important milestone.

Free operating cash flow, as be as a consequence of the good momentum in orders and the the the improvements we see on profitability, we're increasing the guidance up to 1.37, and as a consequence of that, of course, we see a reduction also in net debt down to 2.2. This is our updated view about the the year, and the situation in June was very good, and so makes us confident to upgrade our guidance.

Okay. Thank you.

Thank you, Lorenzo and Giuseppe. Now we are ready to open our Q&A session.

The first question is coming from Sebastian Growe from Exane BNP Paribas. Please go ahead.

Hi, good afternoon everyone. Thanks for taking my questions.

The first one would be on IDV. You mentioned the strong quarter two profitability, which was owing to favorable mix.

My question is if you could comment on the sales mix between tactical vehicles and trucks in the quarter, and also how you see that mix evolving for the full year. As a follow-on question to IDV, can you remind us please where you stand with regard to the discussions when it comes to potential divestment of the trucks business to Rheinmetall?

Lastly, if I may, on the order pipeline, the guidance implies meaningful slowdown in orders in the second half compared to H1, but also compared to the prior year. I was just curious to hear your thoughts around the order pipeline that you see ahead of you.

Okay. On the split of revenues between trucks and armored, we see at the full year at around 50% or 55% armored, trucks.

Slightly higher the revenues in armored, but quite balanced. Instead, in the first Q2, the mix was much more unbalanced in favor of the armored business, where we have a higher margin.

You may remember we commented on the past, there is a difference in terms of profitability between the two business, and so that's why we see a full year still at 11%. On Rheinmetall for trucks, I think, as there was a gentlemen agreement, but nothing formally binding or something like that with Rheinmetall for them to look at this opportunity.

It is still one of the options. Not the only one, it is one of the options.

We are seeing that the business the truck business is growing, it is profitable. We have been working as part of that integration team I was mentioning earlier to make, safe the supply chain, which was an area of concern for us, not being an automotive group.

I think we are now in a position to better evaluate the different alternatives and decide based, on the most convenient option we can have.

If I may add, Giuseppe. We are continuing, in any case, our talks with Rheinmetall in the frame of the continuous contact we have with them within the joint venture.

No hurry, no hurry, but it is still an hypothesis, and in the meantime, we received inquiries from other who would like to discuss potential buy. Yeah.

For the third question, of course, as the trend in orders is not linear. We have seen that there are a number of jumbo orders in the first half.

We mentioned NMH in UK, M-346, the orders for the acrobatic team in Italy. Orders are not linear.

I think that the target for the full year is a balanced target. Okay.

Thank you. Let's proceed.

The next question comes from Ross Law from Morgan Stanley. Please go ahead.

Hi,

afternoon. Hope you can hear me.

Hope all's well. The first is on Aerostructures, which is obviously appearing to be a lot better across orders, growth, and margin.

Lorenzo, when you spoke about the division in your initial remarks, you spoke first about restructuring and then about the potential JV. I'm just wondering if we should interpret this as a more positive view on the business and maintaining the status quo, given that things are clearly dragging on with your preferred partner.

Then secondly, just on the guidance. Obviously, you've raised EBITA, but not revenues.

What's driving this higher margin? Is it just revenue mix, or is there also operating leverage?

Or maybe efficiency gains? Thanks.

As far as Aerostructures, the plan is still the one of finding an agreement with the potential partner in order to build the JV to have a branch in the second country as well, and to find shares and arrangement in such a way that the business will be deconsolidated, not sold, but deconsolidated. Of course, as things have delayed a little bit due to the conflict in Middle East that prevents detailed negotiation, at least face-to-face in many cases, we are concentrating even more on making that business less money-losing, and this is also providing us a benefit in the negotiations, because of course, when we negotiate with a less problematic business, it is easier to find an agreement to build the JV.

The plan is, in any case, unchanged.

On the EBITA, of course, we are benefiting from operational efficiency due to the increase of scale, and we think the benefit can be higher compared to our initial estimates for budget. Of course, the most important point to me is the solidity of our program performance and execution.

I think the main driver for the increase we are seeing on the full-year results is linked to the very solid performance on programs.

In fact, it was everywhere.

In fact, as Lorenzo was saying, it is spread across all the business.

Okay. Thank you.

The next questions is coming from Alessandro Pozzi from Mediobanca.

Hi there. Good afternoon.

Congratulations to Lorenzo for the first results call. Wish all the best.

The first question on the commercial pipeline, order intake has been really strong in the first half of the year. Can you comment on your thoughts about how orders will develop, where do you see the most demand, and if you can maybe elaborate especially on the Middle East?

Also on the Michelangelo Dome, in your opening remarks, you mentioned that you want to accelerate on a number of programs. I guess the Michelangelo is one of them.

The second question on the pipeline is the defense spending in Italy, your thoughts about whether Italy will access the SAFE funding, and if that is potentially delayed, some of the programs, in particular, the land platform. Can you give us an update on that specific program and whether you think access to SAFE will bring any delay?

Thank you.

I think I got the point, even if we cannot hear very well, but I think I got the points. As far as orders, I think there is a positive outlook on all divisions.

There are even a few jumbo orders as opportunity, but as the timing is of jumbo orders is always uncertain, we tend not to factor them, and not to put them entirely. In terms of divisions, if I had to rank them, I would say that the biggest opportunities for orders I can see in Electronics.

Electronics includes today also the armament OTO Melara, and all the armament component has seen a strong increase in the market following the raise in defense spending. Middle East, yes, Middle East is one of the regions where we are pushing hard not only with the Electronics and also with the including air defense, but also with prospects in Aeronautics, in Helicopters, and in Space.

Also in Space, we have a significant opportunities that we think will materialize in the coming months, maybe within the year, maybe just after. In any case, the outlook is very positive.

Michelangelo Dome, I think I lost part of the question, but the acceleration is both on some streams that had already been launched—I was talking about the dead-zone protection system that has been launched as a demo to be performed before year-end, is a component, a vertical component of Michelangelo—but at the same time, adding two critical element of a dome who has to protect from such threats a nation or large geographical areas that are the missile component through MBDA and the Space division, where we are investing a lot in our Guardian constellation that is a good basis for Earth observation, even if the final version of Michelangelo Dome will need quite a different capability in terms of satellite. Third, the third was on SAFE.

We could not hear very well, but I will provide our understanding on the status of SAFE. SAFE is a different source of funding, it's not necessarily an additional amount of money that could be used by the Italian government.

It could even be substituted to other sources of funding. As far as we know, they're still considering The government is still considering the use of a partial or total of the €14.9 billion that have been booked, but if they use or they do not use, this is not having an impact on the major programs that we have in our industrial plan, in our budget and plan, as those are already at most covered by the defense budget that is in place.

There is a debate at the moment related with exiting Italy exiting from the procedure for excessive deficit in Europe that would allow Italy to invest more over 3% of deficit in defense, and this is a debate that is probably taking place towards the end of the year, and that would allow additional spending for energy and for defense. We're not talking about SAFE taking out money from our programs, but potentially, Italy putting more money in defense and security and in energy.

Hi. I saw the SAFE was supporting the contract for the Italian Army, the land platform contract.

Can you give us an update on whether that could be signed?

I'm optimistic with signing the contract in the coming months, both contracts: the follow-on of the Lynx for A2CS and the new main battle tank based on Panther. These are two different contracts.

They have an hypothesis of partial coverage by SAFE, but there is the concrete possibility to sign them with SAFE or without SAFE.

Thank you.

Thank you. We proceed with David Perry from J.P.

Morgan. Please go ahead.

Hi Giuseppe. Hello Lorenzo for the first time.

Where is it just a high-level question, if I may, for you? You talked about accelerating and I think sharpening up the industrial plan.

Just in terms of the, and I'm not asking you for new guidance, but in terms of the medium-term financial plan that you've inherited from your predecessor, do you think it's realistic? Do you think it's ambitious?

Do you think there's scope to do better? Just be interested in your thoughts.

Just a small detail question for Giuseppe. Just can you talk about the, non-recurring costs in the first half, what they are and what you're expecting for the full year?

Thank you.

The industrial plan I have inherited for me is realistic and sound in terms of initiatives and figures. Of course, we are going to review that towards the end of this year, beginning of 2027.

The fact that we are revising our guidance, improving them, is a good sign, but it's not a commitment to an improvement of the plan, not because it is not possible, but because we have not yet looked properly at that.

Okay. David, on the non-recurring, that amount includes a couple of items: M&A-related costs, you can understand that we are running in parallel a number of actions on that side, and so we are including there the cost related to M&A.

The second one, we are continuing to review our portfolio to better assess whether there are areas of efficiency, there are some non-cash write-off in that item.

For the full year, any

Sorry? The full year, at the moment, in terms of write-off, that's all what we see is there.

In terms of additional cost, you know that we M&A mainly, we know usually we have around €100 million in total for the year.

Thank you. That's very helpful.

Thank you. We will proceed with Afonso Osorio from Barclays.

Hello. Yes, thank you very much.

A few from my side as well, if I may. The first one is on the Kuwait program.

You mentioned some delays in the second quarter, can you quantify that impact? Also, if you can share with us if you expect a catch-up in the third quarter because of that.

That's the first one. The second one in terms of the order intake in the second half, can you remind us if the Eurofighter order to Turkey has been already booked?

If not, would you expect that to fall in the second half? The last one, just to keep on the exceptional charges, in terms of you mentioned the Iveco integration, given that is ongoing now, would you expect any incremental cash exceptional charges in the second half or nothing to flag there?

Thank you.

I think you were referring to the delays on the Kuwait programs. It is not a big number, it is something we will recover in the second half, not a big number.

Of course, the situation there has been critical, and so some of the activities have been deferred to the second quarter. On EFAS, on Turkey, it will be, there is a flow-down, a timing for the flow-down to us where we are not prime, it is not booked at the moment.

Of course, it is in our estimates for the full year.

EFAS is one of the areas where we see opportunities for, not for this year, but for the remaining part of the plan.

That's great. Apologies for the line.

Hm?

Sorry?

I think that the line, we lost him. We proceed with the next question from Martino De Ambroggi from Equita.

Thank you. Good afternoon, everybody.

The first question, Lorenzo, is still on the acceleration that you mentioned. Business plan confirmed, okay, many things to accelerate, but is there your priority list for the to-do things: cost cutting, build-up capacity, M&A, partnerships?

By the way, the cost-cutting plan, 1.8 billion, where we are today? The second question is on for Giuseppe.

In your new free cash flow guidance, what is the input estimated for down payments and the portion of dividends coming from the controlled companies, in particular MBDA and so on? Thank you.

As far as the priorities, I think that all the items you mentioned do not interfere one with the other, they're all being treated as priority. Of course, some of them are fully in our hands.

Now, this is the case, for example, for the joint ventures with Rheinmetall and with Baykar. Of course, as far as DRS is concerned, once the closing will be made, the integration and exploitation.

Others are less fully in our hands. This is the case of Bromo.

For me, it's priority, absolutely, and we are doing all what we can to accelerate the process. In this case, accelerate the filing in the antitrust, but it's obvious that there is an external component that can be an element of acceleration or delay quite independent from us.

I would say that all of those are being pushed, because Aerostructures, for example, was a good example. Before, I highlighted we are absolutely accelerating the process of reaching a level closer to break-even, but nevertheless, in parallel, we are pursuing the M&A case, and the two are interlinked at the end of the day.

For cost cutting,

for cost cutting, the plan for a €1.8 billion over a number of years is going in line with that plan. We're slightly ahead of the plan.

Of course, we will need to amend the review as part of the new industrial plan, also because, clearly, the situation is changing, some of the assumptions are now passed by the time and by the situation. We've been discussing in the past about energy cost, for instance.

Of course, now it is a different situation. That plan, because we are not being impacted in 2026 by the situation, that plan, for the time being, is going in line with our expectation.

As regards the free operating cash flow, of course, we are factoring in our risk and opportunities matrix also additional prepayments, mainly on the international export campaigns. Of course, it is a mix of the two.

Overall, we are assuming contribution from working capital to be neutral or slightly positive for the year.

Okay. Thank you.

Next question is coming from Adrien Rabier from Bernstein.

Good afternoon. Thank you very much.

My questions have been answered, actually, but if I can just ask a very quick one, please. Do you have any update regarding the stake in Hensoldt?

Is the plan still to potentially sell that stake, and what would you do with the proceeds, please?

I think Hensoldt is now going well, good results. The value is, at the moment, much higher than the one we had when we bought the shares.

Of course, at that time, we had a different plan that was about having the majority of that company. Today, it's clearly not possible.

I'm not in a hurry to dispose for two main reasons. One, because I am confident that that market is going very well.

It's a very dynamic one in terms of defense, in any case, we can really think about without risking to lose some value. The second and most important one is that the number of opportunities for Eurofighter and the movements around the sixth-generation fighter suggest that it's prudent to wait a little bit and to seek further opportunities for collaboration between Hensoldt and the Electronics, both the Italian and the UK component, because should the Eurofighter continue to be very healthy, this is an opportunity, and in any case, the GCAP offers potential opportunities that today we cannot evaluate.

Given the fact that I'm confident we will not lose value, we are still having our foot on the German market.

Thank you. Next question is coming from Sash Tusa from Agency Partner.

Please go ahead.

Thank you. Thank you very much, indeed, for your last answer, because that feeds into my question.

Your fellow CEO Charles Woodburn yesterday said that the window is closing for bringing another partner into GCAP quite rapidly if there is to be no change to the entry-into-service target of 2035. I wondered when you think the window shuts industrially to bring another partner, for example, Germany, in?

Then following on from that, there were quite a lot of comments at the Farnborough Airshow from the various meetings organized by the GIGO and Edgwing that Japan and possibly even Italy want to bring the entry into service forward for GCAP. Do you recognize those pressures, and do you think it's industrially realistic to do so?

Thank you.

I will start with the second one. It's true that there is quite a strong push to bring forward the first entry into service of GCAP that was initially stated, that still stated at 2035, closer by a couple of years.

This is something that has been said in meetings by the ministers and has been motivated correctly, in my view, by the urgency of having such a multi-domain system starting to operate as quickly as possible, as early as possible. Feasible?

Yes, but by making that entry into service even more gradual than it was supposed to be, probably modulating the requirements that this initial version will fulfill. It's always possible to be progressively meeting the final requirement, as it has always been the case in such complex programs.

Absolutely, yes. As far as the window, I fully agree with what my friend Charles said.

The window is closing, because otherwise, confidence in time scales will be lost. This is the main reason.

Then, to be really honest, one should think if there is a point in losing some time now to reach a more stable and more healthy consortium and then maybe gain time in the second part of the development. I recognize that normally decisions are taken on what we have on the table today, yes, the window will close very soon.

Thank you.

Thank you. Next question is coming from Gabriele Gambarova from Banca Intesa Sanpaolo.

Good afternoon, Lorenzo, Giuseppe, and Claudia. Thank you for taking my questions.

The first one regards Aerostructures, because in the second quarter, the loss at EBITA level was very, it narrowed to around €20 million, and you are going to accelerate on rates up to 10 by the end of this year, as Giuseppe said. I was wondering if we could assume that the break-even point for Aerostructures will be reached sooner by comparison vis-à-vis the 2028 target that was, let's say, indicated in the past, maybe in 2027?

The second question regards the M-346. It seems that he's living there is really living the time of his life in terms of new orders.

I was wondering if you could comment on the UJTS US Navy, let's say, program where, apparently, you remained almost alone, because there is just another competitor that has just a project and not an proven platform. That's it for me.

Thank you.

I will start with the second one. I fully share your point that 346 is living a fantastic moment, and I think this is also related to correct decisions that have been taken in the past years.

The armored version, the light fighter, the new cockpit, and so the upgraded versions are all features that helped to have success in this market. Yes, I think this moment will continue for a while.

UJTS, unfortunately, 1 + 1 makes two competitors, we are competing. The US market is a very challenging one.

We know these are competitions where every time you learn something very important in terms of process and in terms of product, and we want to pursue that very, very seriously to till the end. We think we have possibilities, but the way is still ahead of us.

On Aerostructures, we see around €20 million of additional losses in the second half. We confirm the budget we gave, based on that, we see that there is still a loss on that, also benefiting from the closure of some programs in the second part of the year.

Overall, we are doing well. B787 is key to improve the performance of Aerostructures, but as Lorenzo was saying, the restructuring plan is much wider.

The solution of B787 is part of the problem. There are other items we are working on, and so at the moment, we know we are fully engaged on the tough restructuring plan to be back at break-even, as we said, not earlier.

Thank you.

Thank you. We have a last question from Christophe Menard from Deutsche Bank.

Yes, good afternoon. Thank you for taking my question.

I had two. The first one is on Bromo.

There was an article in the FT during Farnborough where you seem to express some concerns around antitrust. Is there anything incremental that you can comment on, or was it just a recommendation that you wanted to express?

The second one is on helicopters. The performance in Q2 was actually very strong, and it is one of the divisions where, in my view, at least, the industrial plan was at kind of normal targets.

Is it helicopters something that could surprise positively when you revise or when you look you have a second look at the industrial plan update? Thank you.

As far as Bromo, I remember the article that was reporting just a part of my comments on antitrust. In any case, at the moment, filing, the filing with the EU for the antitrust, it's always a complex process, especially when the business is a complex one, like it is for Space.

Of course, there are other actors, other companies who do not see an opportunity in Bromo, although I see in Bromo an opportunity for the whole European supply chain very clearly. What we are doing now is working really in a very transparent way with the EU on the filing in order to accelerate the process.

Nothing more, nothing less. Very honestly and very transparently, and all three parties, Airbus, Thales, and Leonardo, are contributing in a in good faith to this.

On helicopters, as you have seen, very very strong performance, very good commercial momentum, results are good. The focus on 2026 for us was improving profitability, we are targeting to have our return on sales up to 9.2%, and then over the plan up to 10%.

This means we are working a lot on the processes, on engineering, on the production, and of course, this takes time. Of course, we are optimistic about the future, and we will see when preparing the new industrial plan, but the results of these actions, of course, are spread over time, and not in the short time.

There are important actions in progress already on manufacturing and supply chain, because the demand is there. We think we are very successful with our portfolio, and manufacturing and supply chain are the key elements in order to grow revenues and profitability.

Thank you.

Okay. Thank you.

We now close our Q&A session. Thank you to all for your participation.

The IR team is available if you have any further question. Have a nice evening, and enjoy the summer.

Bye.

Thank you. Bye-bye.

Bye.