May 29, 2019 / 7:17 PM / a year ago

Italian Leonardo's U.S. defense unit grows as military orders rise -CEO

OTTAWA, May 29 (Reuters) - Leonardo SpA’s U.S. defense unit is growing significantly as the American military budget increases and the return on sales should increase, Chief Executive Officer Alessandro Profumo said on Wednesday.

Leonardo, a major Italian defense group, bought DRS Technologies in 2008 and last year said it was not yielding adequate returns. The United States represents about 28% of Leonardo’s total sales.

“It (DRS) is growing significantly, mainly thanks to the fact that the defense budget is growing,” Profumo said in an interview on the sidelines of a security and defense conference in Ottawa.

“We are going at a faster pace than the defense budget and we are winning a huge number of small and medium programs so we are very diversified,” he said.

By end-2022 Leonardo is aiming for close to a double digit compound growth rate for DRS and a double digit return on sales.

“Today we are close to 7% and we want to go up at least to 10% in terms of return on sales,” said Profumo.

Leonardo is also diversifying into services and by the end of 2022 wants 25% of total revenues to come from that sector, up from the current level of between 18% and 19%.

Profumo said he was “pretty confident” Leonardo could meet the 25% target. (Reporting by David Ljunggren; editing by Grant McCool)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below