Can you provide an overview of the developments and new vision of the company since you became CEO in 2014?

Since 2014, we have aimed to promote cohesion and efficiency in our operations by restructuring the company and reorganizing it around the aerospace, defense, and security activities. The new operating model is based around four major business sectors organized across seven operational divisions that are coherent and consistent in terms of technology, capabilities, and customers. We have moved away from the holding structure of the business and arrived at a new business model with just one integrated and consolidated company rather than a network of independent companies operating in different sectors. This model is supported centrally at a corporate level, sharing processes across functions such as marketing, strategy, communications, legal, and HR. This has streamlined our operations, benefits the customer, and gives us a single voice, allowing us to leverage our position as a large corporation when building relationships with customers, partners, and other companies. The change from Finmeccanica to Leonardo communicates our shift in focus and business culture. Taken from Leonardo Da Vinci, the name exemplifies the roots of disruptive innovation and our new vision.

How do you balance the commercial interest of your investors with the strategic interests of the government?

We have just over 30% of our shares held by the Ministry of Economy and Finance, and 50% by institutional investors. We have no conflict between the interests of the Italian government and the interests of the institutional investors as decisions are made by the corporate governance system in place in Leonardo aimed at creating value for shareholders. Additionally, the Italian government is fully supportive of our business, as exemplified by the order for the Eurofighter Typhoon aircraft from Kuwait, which was signed following a specific Government-to-Government agreement between the Italian and Kuwaiti governments.

What is the motivation behind the cap on the business your suppliers can conduct with the company?

We restrict the percentage of overall output that companies may supply to Leonardo at 70%-75% to encourage competition within the market. A large company like Leonardo can be a huge support to the growth of a country’s industry if it has a balanced and healthy relationship with its suppliers. If SMEs work for just one customer, it is not beneficial for either party. A fully or mostly dependent supplier would have no stimulus to develop or take in new practices, and the company would therefore have no opportunity to grow or diversify their activities. If, on the other hand, our suppliers are competing in international markets, we know that their products and services are of high quality and offered at an appropriate price. This assists our growth and, in turn, we are able to provide them with more business. The objective, therefore, is to support sustainable growth for companies across the supply chain.

Could you share with us your focus on research and development investment and your plans for future growth?

At our company, we have always invested significantly in R&D, with approximately 11% of our revenues (more than €1.4 billion in 2015) going towards this area. In addition, we receive a large amount of national funding, and most of our projects are based on cooperation and collaboration with research centers and universities. Our approach is to identify, acquire, and rapidly and effectively consolidate cutting-edge technologies across the division’s businesses, and apply these to the needs and requirements of the market.

Looking forward, we believe that one key area of focus for the aerospace and defense sector will be unmanned systems, with an increase in their autonomy and performance. To this end, we are investing further in the helicopter domain, developing the next generation civil tilt rotor, which seeks to answer growing demand for substantially higher speed, range, and comfort. This will create an additional rotorcraft market, both commercial and governmental.

We are also looking to grow our market presence in the area of trainers within aeronautics. Another focus area will be the security and defense electronics sector, with key investments in the radar domain, including the development of AESA (Active Electronically Scanned Array) radars and in the four fixed-face Multi-Functional Radar (X and C band). We will also continue to leverage our unique experience and services acquired through the Space Alliance and national and international government institutions to develop our space capabilities.

As an Italian company looking to internationalize, what are your key objectives over the next four years?

As a company, we recognize Italy’s strong capabilities across the aerospace and defense industry and will continue to invest in R&D and innovation to stay ahead and provide unique solutions and products that will meet customer requirements. We are committed to offering our capabilities, investment, heritage, and expertise to maintain our presence at the leading edge of innovation.

One of our main aims is to grow internationally and improve our international operations to offer a complete and integrated service. We also plan to focus more narrowly on those areas where we could become world leaders by consolidating our presence in those areas where we want to be stronger and increase our volumes through investments and growth. In summary, we are committed to delivering value to our customers, employees, and shareholders by driving growth and innovation across our businesses.

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