Finmeccanica announced Tuesday approved the group’s industrial plan for FY2015 guidance.
The Plan is also the start of a re-launch and development of the Group, with a focus on the areas of excellence and a more effective commercial presence in key international markets.
The board has also has approved raised 2014 Guidance on Orders, Revenues, EBITA and Free Operating Cash Flow. The results of the recent estimates examination for FY2014 will be considered for final approval on March 18, the statement said.
The Plan aims at strengthening the Group in the core business - hi-tech A, D&S - and includes significant improvements in industrial, economic and financial performance, that will result in a more comparable performance with A, D&S competitors within the sector, even after the first three years of the Plan.
The overall FY2014 Order intake is now expected at €15.2-15.5 billion ($17.1- 17.5 billion) , more than €1.5 billion ($1.7 billion) higher than the previous guidance. “Book to bill” orders are expected to garner more than €1 billion ($1.1 billion).
The industrial plan aims at a significant increase in A, D&S EBITA (+20% from 2014 to 2016) and A, D&S RoS (EBITA/Revenues, +150 basis points from 2014 to 2016) and reduction in SG&A by more than 10% from 2013 to 2015, with the SG&A/revenues ratio reducing from 9.3% to less than 8% (with expectations of moderate growth in revenues).
A reduction of CAPEX and rationalization of capitalized R&D of more than 20% from 2013 to 2017, rebalancing the depreciation over investments ratio and thus significantly improving the self-financing capacity of the Group.
A reduction of operating working capital, net of reducing customers advances, of more than 15% in from 2013 to 2017, through a more effective management of supply chain and deliveries of products and services.
The Group expects to generate a positive FOCF even in 2015 and expected to increase over time. This will support Group Net Debt reduction, expected below €3.5billion ($3.94 billion) by the end of 2017, and improve Debt/EBITDA and Debt/Equity ratios.
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