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Helicopters

Helicopters

In 2016, against a background that was still characterised by the crisis of some target markets, new orders were substantially in line with 2015 (without taking account of the negative effect of a different exchange rate), since they benefitted from the good performance recorded during the last quarter, which, in line with forecasts, saw the acquisition of major contracts in the sectors of both military and civil aviation. However, delays and commercial difficulties affected also on the production of AW189 and AW139 helicopters, at a time that was also characterised by the start of operations for the production of the new AW169 helicopter, thus causing a fall in financial results, despite still achieving excellent profits.

New orders. These were substantially in line with 2015, without taking account of the negative effect of the exchange rate applicable to the translation of the companies’ accounts in a currency other than Euro. Among the main orders gained during the year are the contract signed with the Air Weapons and Airworthiness Directorate (Direzione Armamenti Aeronautici e Aeronavigabilità) of the Italian Ministry of Defence relating to the development of the new exploration and escort helicopter (NEES) for the Army, the order gained from the British Ministry of Defence for the provision of support and training services for AW159 Wildcat aircraft deployed by the Army and the Royal Navy, the contracts signed with Sino-US for the supply of AW119Kx, AW139 and AW169 helicopters for search and rescue purposes in China, the orders for the supply of AW139 helicopters to be deployed for governmental purposes in Pakistan and the contract for the supply of six AW139 helicopters to the Finance Police (Guardia di Finanza) in Italy.

Revenues. There was a fall in revenues which was attributable to the abovementioned commercial difficulties and to delays in the progress of production of the new AW169 helicopter, which have been resolved, as well as to the expected reduced work on the AW159/Lynx programmes for the completion of the Wildcat contract for the British Ministry of Defence and to a lower contribution from Product Support.

EBITA. The reduction was substantially due to the effect of lower revenues, while profits remained stable at around 12%, despite being affected in particular by the extension of the activities for the development of the new AW169 helicopter, thus benefitting from a continued focus on cost curbing, as well as from some improvements to military programmes.

Outlook. In 2017, against a background that, even showing signs of recovery, remains characterised by uncertainty and the difficulties experienced in some target markets, production volumes are expected to be substantially in line with 2016 – supported by a 2016 book-to-bill that was higher than 1 and a coverage of order backlog of around 75% - while profits should still record double digit figures, at the levels of 2016, thus benefitting from operational efficiency improvement actions and the gradual development and the consequent entry in full operation of production activities on the new AW169 helicopter.