Leonardo reported a sharp increase in new orders and profitability for the first quarter of 2026, driven by a surge in demand for military hardware and the strategic acquisition of a major land defence business. The company booked €9 billion in new orders during the first three months of the year, a 31% increase over the same period in 2025. Management attributed the growth to a high “book-to-bill” ratio of 2.0x, meaning the company is taking in twice as many orders as it is currently billing in revenue.
A central component of the quarter was the finalisation of the €1.6 billion acquisition of Iveco Group’s Defense business (IDV) on March 18. The deal is intended to transform Leonardo into an integrated manufacturer of both armoured vehicle chassis and the electronic systems that operate them. While the IDV business was not included in the quarter’s earnings performance due to the late March closing date, it added €5.6 billion to Leonardo’s total order backlog, which now stands at a record €57 billion. The company expects IDV to contribute approximately €1.1 billion in revenue through the remainder of 2026.
Sector Performance
- Electronics: The Defense Electronics sector remains the company’s largest revenue driver, generating €1.97 billion in the quarter. Operating profit (EBITA) for the sector rose 21.9% to €228 million, aided by new contracts for SAMP-T NG radar systems and ballistic missile defense sensors for the Italian Army.
- Aeronautics: New orders in the aircraft division nearly doubled to €2.69 billion. This was supported by major contracts for Eurofighter Typhoon jets for the Italian and German air forces, as well as M-346 trainer aircraft for Austria.
- Helicopters: The division secured a contract for the UK Ministry of Defence’s New Medium Helicopter program, which includes the supply of 23 AW149 helicopters.
- Cyber and Space: These smaller divisions saw significant margin improvements, with the Space sector doubling its operating profit compared to the previous year.
Financial Position
The company’s net debt rose to €3.05 billion, up from €2.13 billion a year earlier, primarily due to the cash outlay for the IDV acquisition. However, free operating cash flow improved by 29%, showing a reduction in the typical cash absorption seen during the first quarter.
CEO Roberto Cingolani stated that the results confirm the “financial solidity” of the group, noting that recent rating upgrades from Moody’s and a positive outlook revision from Standard & Poor’s reflect the company’s strengthening position.
Leonardo confirmed its full-year 2026 guidance, which forecasts roughly €21 billion in revenue and €25 billion in new orders, excluding the newly added contribution from the IDV business.
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