Leonardo, a leading defense contractor, has recently expanded its portfolio through acquisitions in land systems, cybersecurity, and AI-enabled mission software, as Europe's defense spending accelerates in response to geopolitical tensions and increased NATO targets [1]. CEO Lorenzo Mariani stated that the company will continue to pursue acquisitions and strategic partnerships to support long-term growth, highlighting the importance of ramping up processes to meet soaring demand for military equipment [1].
In March, Leonardo completed a 1.6-billion-euro ($1.8 billion) acquisition of Iveco Defence Vehicles. Its U.S. subsidiary, Leonardo DRS, agreed this week to acquire software company Raft for $450 million, aiming to expand its AI and mission software capabilities. Earlier this year, Leonardo also agreed to acquire British cybersecurity company Becrypt [1]. These moves reflect a broader trend in the European defense industry, with peers such as Fincantieri and Hensoldt also making significant acquisitions to secure supply chains and expand production capacity [1].
Leonardo reported a record order backlog in its latest earnings, rising 30% year-on-year to 59 billion euros by the quarter ended June. The company raised its full-year guidance after reporting a 45% increase in new orders during the first six months of the year. It now expects earnings before interest, tax, and amortization (EBITA) of 2.21 billion euros, up from its previous forecast of 2.03 billion euros [1].
CEO Mariani emphasized that accelerating processes and leveraging M&A are key to delivering on customer needs, both in Europe and the U.S. The company is positioned to benefit from the ongoing surge in European defense spending, driven by the geopolitical environment and increased NATO commitments [1].
CONCLUSION
Leonardo's aggressive acquisition strategy and improved financial guidance underscore its strong position amid rising European defense budgets. The company's record order backlog and increased EBITA forecast signal robust demand and positive market sentiment. Investors and industry observers can expect continued dealmaking and growth as Leonardo capitalizes on the defense sector's expansion.