February 5, 2018 / 8:09 AM / 8 months ago

Italy's Leonardo to step up Asia sales under new business plan

SINGAPORE (Reuters) - Italian defence group Leonardo aims to sell around 8.4 billion euros ($10.49 billion) of products in Asia over the next five years as part of a business plan designed to boost exports, a senior executive said.

Leonardo logo is seen during celebrations for the 500th Eurofighter Typhoon produced by the European consortium at Caselle airport in Turin, Italy, April 11, 2017. REUTERS/Stefano Rellandini

The state-backed conglomerate last week promised double-digit profit growth in its first business plan under Chief Executive Alessandro Profumo but disappointed investors on shorter term prospects, three months after a profit warning clubbed shares.

As part of the plan, Leonardo expects to sell 70 billion euros of products like helicopters and weapons systems over the next five years, a growth of around 6 percent a year, with 60 percent of sales to export markets.

Asia is forecast to account for 20 percent of export sales during that period, Chief Commercial Officer Lorenzo Mariani said in a phone interview ahead of the start of the Singapore Airshow on Tuesday.

“We are going to expand very quickly, opening new offices and facilities in Indonesia, Thailand, Australia and Bangladesh,” he told Reuters.

Profumo, a veteran banker, was picked to steer Leonardo on an aggressive expansion drive as part of a broader and longer term strategy targeting higher growth than in the past.

As the group shifts its focus towards foreign markets, Leonardo is due to almost double the number of international marketing offices and open logistics hubs offering customer support to its clients, particularly in key markets such as the Middle East and Asia.  

Leonardo on Monday announced plans to set up a new helicopter maintenance centre in Japan to service the fleet of more than 120 of its rotorcraft operating in the Asian nation.

The Italian company makes civil and military helicopters, as well as aeronautics and weapons systems and the Eurofighter Typhoon fighter jet in partnership with Airbus SE and BAE Systems PLC.

Mariani said Leonardo was in talks with Thailand about selling electronics and helicopters to its military. In Australia it is participating in several naval and land sales campaigns alongside partners, he said.

Leonardo is also seeking to boost sales of maritime security equipment, such as coastal radar and the ATR72MP patrol and electronic surveillance aircraft, in Southeast Asia.

“The areas around Singapore have similar issues related to security as the Mediterranean - for example, protection of commercial activities, coastal security, anti-piracy,” Mariani said. “These are all threats where we can bring a very wide spectrum of solutions.”

Reporting by Jamie Freed in Singapore; Additional reporting by Guilia Segreti in Milan; Editing by Muralikumar Anantharaman

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