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Leonardo expects 'slightly positive' cash flow after strong Q4

MILAN, Jan 28 (Reuters) - Italian defence group Leonardo is set to deliver on its promise of improved free operating cash flow when it reports full-year results after a strong end to 2020 thanks to its military and government business.

In a statement on Thursday after an initial review of last year’s data, the company said it expects to deliver full-year orders, revenue, and earnings before interest, tax and amortization (EBITA) in line with its guidance and to achieve a “neutral, slightly positive” free operating cash flow (FOCF).

Leonardo had said in November it was committed to getting payments from large government and military clients to improve its cash flow in the final part of the year, guiding for neutral FOCF at the time.

The FOCF was negative for 2.6 billion euros ($3.15 billion)through September, partly linked to seasonal issues as well as a build-up in inventories as the coronavirus pandemic delayed deliveries for both civil and military contracts.

“The business continues to respond robustly and manage through the challenges of COVID-19, with cost control measures bearing fruit and industrial efficiency back to normal, helping to offset both JVs and civil performance,” the company said in the statement.

Leonardo is due to report full-year results on March 9. ($1 = 0.8250 euros) (Reporting by Agnieszka Flak Editing by Paul Simao)

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