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11. Equity investments and share of profits (losses) of equity-accounted investees

 20162015
 Equity investmentsRisk provisionsTotalEquity investmentsRisk provisionsTotal
Material joint venture947 947925 925
Joint venture not individually material:76(2)7480(3)77
- Aviation Training Int. Ltd18-1824-24
- Rotorsim Srl28-2827-27
- Advanced Acoustic Concepts LLC22-2220-20
- Rotorsim USA LLC8-88-8
- Closed Joint Stock Company Helivert-(2)(2)-(3)(3)
- Superjet International SpA---1-1
 1,023(2)1,0211,005(3)1,002
       
Associates100 100112(1)111
 1,123(2)1,1211,117(4)1,113

The Leonardo Group operates in certain sectors also through entities jointly controlled with third parties and valued under the equity method, since they qualify as joint ventures.

Below are reported the joint ventures considered material in terms of volumes and from a strategic viewpoint for the Group:

Company nameNature of the relationMain operating locationRegistered office% ownership
Telespazio GroupJV with Thales, among the main global providers of satellite servicesRome, ItalyRome, Italy67%
Thales Alenia Space GroupJV with Thales, among the main European leaders in the satellite systems and at the forefront of orbit infrastructuresToulouse, FranceCannes, France33%
GIE ATRJV with Airbus Group, among the global leaders in regional turboprop aircraft with a capacity of between 50 and 70 seatsToulouse, FranceToulouse, France50%
MBDA GroupJV with Airbus Group and BAE Systems, among the world leaders in missiles and missile systemsParis, FranceParis, France25%

In particular, as regards the companies falling under the so-called Space Alliance - Thales Alenia Space and Telespazio – the Company carried out for the purposes of the 2014 consolidated financial statements, during the first classification, an in-depth analysis of the existing arrangements, in order to verify whether situations of control (with reference to Telespazio) or of significant influence (with reference toThales Alenia Space) existed, both entities being considered by Leonardo as Joint Ventures. Specifically, the Space Alliance univocally regulates the governance of both companies, making reference to shareholders’ agreements prepared alike. With particular reference to Telespazio, in which the Group holds more than 50% of the stakes, the analyses performed led to deem that the company’s governance is such that Telespazio can be regarded as a jointly controlled entity by virtue of the composition rules for the decision-making bodies - these rules being such that cannot be defined as merely “protective”, as referred to in IFRS10 – and due to the expected unanimous consent of the shareholders on particularly significant matters for the company’s management. Moreover, the substantive analysis, carried out taking into account the peculiarity of the businesses, highlighted that the methods to resolve deadlocks (i.e. when a stalemate in the decision-making process occurs and the shareholders have no possibility to jointly decide on matters about which they are required to make decisions through the unanimous consent mechanism) do not allow the majority venturer to impose its will. This is because, in case no decision can be reached, despite the complex escalation mechanism under the shareholders’ agreements, the minority venturer has the right to dissolve the Joint Venture, recovering the assets originally assigned, through a call option or, solely if this option is not exercisable, to leave the Joint Venture through a put option. Finally, in the event of a decision-making deadlock, the joint venture might be eventually wound up or the minority venturer might sell its interest: in both of these cases, the venturers might be required to share or transfer part of the assets – with particular reference to technological expertise or know-how – originally assigned.

On the contrary, the analysis performed by the other venturer led to different conclusions with reference to Thales Alenia Space, which is fully consolidated by Thales in spite of the previously described governance structure. The application of such different conclusions on Leonardo, with the full consolidation of Telespazio into Leonardo, would have changed the Group’s main indicators as follows:

 20162015
Revenues+569+610
EBITA+34+14
EBIT+32+5
Net results (Non-controlling interests)+8-
FOCF+12+16
Group Net Debt+19+8

We provide below a summary of the financial data of the aforementioned material joint ventures (the fair value of which is not available since they are not traded in any active market), as well as a reconciliation with the data included in these consolidated financial statements:

 31 December 2016
 TelespazioThales Alenia SpaceMBDAGIE ATROther JV not individually materialTotal
Non-current assets2971,8752,336168  
Current assets3591,4974,3721,091  
- of which cash and cash equivalent16111307  
Non-current liabilities452811,281112  
- of which non-current financial liabilities2-1175  
Current liabilities3351,3955,131691  
- of which current financial liabilities93814-  
NCI net equity (100%)15-1-  
Group net equity (100%)2611,696295456  
       
Revenue (100%)5772,4933,1401,787  
Amortisation, depreciation and impairment losses (100%)32529028  
Financial income (expense) (100%)(4)(13)(21)(3)  
Income taxes (100%)(17)(39)(71)(3)  
       
Profit (loss) from continuing operations (100%)28171209331  
Profit (loss) from discontinued operations, net of taxes (100%)----  
Other comprehensive income (expense) (100%)-(2)(203)   
Total comprehensive income (expense) (100%)281696331  
       
% Groups' interest in equity at 1 January16154083232781,094
% Groups' interest in profit (loss) from continuing operations195652166(1)292
% Groups' interest in profit (loss) from discontinued operations, net of taxes---- -
% Groups' interest in other comprehensive income (expense)-(1)(51)- (52)
% Groups' interest in total comprehensive income (expense)19551166(1)240
Dividends received(4)(35)(11)(177)(5)(232)
Disposals    (1)(1)
Exchange differences   8(3)5
Other changes(1)(1)1-76
% Groups' interest in equity at 31 December17555974229751,112
Consolidation adjustments10(216)116 1(89)
Equity investments at 31 December185343190229761,023
       
% Groups' interest in profit (loss)195652166(1)292
Consolidation adjustments-2-- 2
Share of profits (losses) of equity-accounted investees195852166(1)294
 295  

 31 December 2015
 TelespazioThales Alenia SpaceMBDAGIE ATROther JV not individually materialTotal
Non-current assets3191,8652,00998  
Current assets3351,4453,3401,194  
- of which cash and cash equivalent16105915  
Non-current liabilities452701,059127  
- of which non-current financial liabilities5-96  
Current liabilities3551,4083,954702  
- of which current financial liabilities62529-  
NCI net equity (100%)14-2-  
Group net equity (100%)2401,632334463  
Revenues (100%)6332,0853,0651,756  
Amortisation, depreciation and impairment losses (100%)35488426  
Financial income (expense) (100%)(3)(9)2-  
Income taxes (100%)(1)(27)(74)-  
Profit (loss) from continuing operations (100%)1106215340  
Profit (loss) from discontinued operations, net of taxes (100%)----  
Other comprehensive income (expense) (100%)(2)(2)73   
Total comprehensive income (expense) (100%)(1)104288340  

% Groups' interest in equity at 1 January1735432611880940
% Groups' interest in profit (loss) from continuing operations135541703263
% Groups' interest in profit (loss) from discontinued operations, net of taxes------
% Groups' interest in other comprehensive income (expense)(1)(1)18- 16
% Groups' interest in total comprehensive income (expense)-34721703279
Dividends received(11)(38)(16)(65)(9)(139)
       
Equity investments of Discontinued Operations------
Acquisitions2-2--4
Disposals------
Exchange differences(2)-(3)9(1)3
Other changes(1)12-57
% Groups' interest in equity at 31 December16154083232781,094
Consolidation adjustments12(219)116-2(89)
Equity investments at 31 December173321199232801,005
       
% Groups' interest in profit (loss)135541703263
Consolidation adjustments 1---1
Share of profits (losses) of equity-accounted investees136541703264
 261  

Below is provided a summary of the aggregate financial data of the associates, inasmuch as there are no associates which are individually material for the Group:

 Associates not individually material
 31 December 201631 December 2015
% Groups' interest in equity at 1 January112173
% Groups' interest in profit (loss) from continuing operations411
% Groups' interest in profit (loss) from discontinued operations, net of taxes  
% Groups' interest in other comprehensive income (expense) -
% Groups' interest in total comprehensive income (expense)411
Dividends received(6)(44)
Equity investments of Discontinued Operations (32)
Subscriptions and capital increases 3
Acquisitions 8
Disposals(9)(2)
Exchange differences(4)3
Other changes(1)(12)
% Groups' interest in equity at 31 December96108
Consolidation adjustments44
Equity investments at 31 December100112
   
% Groups' interest in profit (loss)411
Consolidation adjustments  
Share of profits (losses) of equity-accounted investees411