Newswire
Rome: Italian aerospace and defence group Leonardo this week upgraded its financial guidance for 2026 after reporting a sharp increase in new orders, stronger profitability and improved cash generation during the first half of the year, reflecting sustained demand across its defence and security businesses.
The company announced that new contracts surged 45% in the first six months of 2026, prompting management to raise its full-year forecasts for orders, core operating profit and free cash flow.
Leonardo said its strong momentum continued into the second quarter, supported by robust commercial performance across all business divisions, alongside rising profitability and healthy cash generation.
The revised outlook also incorporates the expected contribution from the €1.6 billion acquisition of Iveco Defence Vehicles (IDV), completed in March, which has strengthened Leonardo’s position in the military land systems sector.
Under the updated guidance, the company now expects new orders of €28.2 billion in 2026, significantly higher than its previous forecast of €25 billion, which had excluded the IDV acquisition. On a comparable basis, the earlier target stood at €26.2 billion.
Leonardo also increased its forecast for earnings before interest, taxes and amortisation (EBITA) to €2.21 billion, compared with its original estimate of €2.03 billion. Including the IDV acquisition, the earlier projected figure had been €2.15 billion, making the revised target another improvement in expected operating performance.
The company maintained its revenue forecast of approximately €22.1 billion for the full year, indicating continued confidence in steady business growth despite challenging global economic conditions.
However, Leonardo revised its year-end net debt projection to €2.2 billion, up from the previous estimate of €800 million, primarily reflecting the cash outflow associated with the acquisition of Iveco Defence Vehicles. The company noted that the updated debt estimate does not yet include the financial impact of the recently announced acquisition of Raft by its U.S.-based subsidiary, Leonardo DRS.
Chief Executive Lorenzo Mariani, who assumed leadership of the company in May, said the group’s expanding order book, rising revenues and improving operating profitability demonstrated its ability to successfully execute programmes, expand production capacity and respond to evolving market requirements.
Mariani added that Leonardo remains focused on pursuing additional mergers and acquisitions while strengthening strategic partnerships to support the company’s long-term growth strategy.
During the January-June period, new orders increased 38.8% year-on-year on a comparable basis, while revenues rose 8.2% despite adverse currency movements affecting contributions from the company’s U.S. operations, particularly Leonardo DRS in the electronics segment.
Net debt at the end of the first half reached €3.25 billion, an increase of nearly 50% from a year earlier, largely due to financing the IDV acquisition.
The improved guidance underscores Leonardo’s confidence that sustained defence spending, expanding production capabilities and strategic acquisitions will continue to drive growth as governments across Europe and other regions increase investments in defence and security.
