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2016 Leonardo-Finmeccanica - Societ per azioni

Evento organizzato da Istituto Italiano di Project Management

Project Risk Management in LEONARDO Finmeccanica Managing Project Risks in Complex Scenarios

Sante Torino Project Risk Management Dpt. sante.torino@leonardocompany.com

Roma, 28 Novembre 2016

Project Risk Management in LEONARDO - Finmeccanica Managing Project Risks in Complex Scenarios Sante Torino Project Risk Management Dpt.

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2016 Leonardo-Finmeccanica - Societ per azioni

2016: A new beginning

One Company, Stronger Together 1 January 2016: the One Company is born through merger operations for the incorporation of OTO Melara and WASS into Finmeccanica and the absorption of the activities carried out by AgustaWestland, Alenia Aermacchi and Selex ES. The industrial entity maintains Parent Company and Corporate Centre functions for DRS Technologies, MBDA, Telespazio, Thales Alenia Space, and ATR.

Finmeccanica is now Leonardo

28 April 2016: our name changes to Leonardo, inspired by Leonardo da Vinci, a universally recognised symbol of

creativity and innovation. Leonardo represents the ideal bridge between historical legacy and our future in the high-tech

industrial sectors.

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2016 Leonardo-Finmeccanica - Societ per azioni

SUMMARY

LEONARDO - Finmeccanica overview: a challenging & risky project environment

Think One Company: managing the Change to the unified Project Risk Management

Effective Project Risk Analysis & Reporting

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2016 Leonardo-Finmeccanica - Societ per azioni

Our Business

Leonardo is a global high-tech company and one of the key actors in Aerospace, Defence and

Security worldwide.

HELICOPTERS SPACE

Helicopters

Aircraft

Security & Information Systems

Aerostructures

Airborne & Space Systems

Land & Naval Defence Electronics

Defence Systems

DIVISIONS

SUBSIDIARIES AND JOINT VENTURES

DRS Technologies (100% Leonardo)

Telespazio (67% Leonardo and 33% Thales)

Thales Alenia Space (67% Thales and 33% Leonardo)

MBDA (37.5% BAE Systems, 37.5% Airbus Group, 25%

Leonardo)

ATR (50% Leonardo and 50% Airbus Group)

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2016 Leonardo-Finmeccanica - Societ per azioni

KEY FIGURES 2015

Group Results Full Year 2015 (in bln.)

RESULTS 2015 in mln.

Revenues 12,995

New Orders 12,371

Order Backlog 28,793

R&D 1,426

The subdivision by sectors reflects the Companys organisation in 2015.

34% HELICOPTERS

41% DEFENCE AND SECURITY ELECTRONICS

24% AERONAUTICS

4% DEFENCE SYSTEMS

-5% ELIMINATIONS

2% OTHER ACTIVITIES

41% HELICOPTERS

36% DEFENCE AND SECURITY ELECTRONICS

21% AERONAUTICS

4% DEFENCE SYSTEMS

-3% ELIMINATIONS

1% OTHER ACTIVITIES

32% HELICOPTERS

54% DEFENCE AND SECURITY ELECTRONICS

14% AERONAUTICS

6% DEFENCE SYSTEMS

-7% ELIMINATIONS

1% OTHER ACTIVITIES

TOTAL SHAREHOLDER COMPOSITION

ORDER BACKLOG NEW ORDERS REVENUES

13.0 28.8 12.4

50.0% INSTITUTIONAL INVESTORS

30.2% ITALIAN MINISTRY OF ECONOMY AND FINANCE

19.8% RETAIL INVESTORS (ITALY ONLY)

9.4% ITALY

90.6% REST OF THE WORLD

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2016 Leonardo-Finmeccanica - Societ per azioni

With 218 sites worldwide, Leonardo has a strong industrial presence in four markets.

Domestic Markets

Data as of 31.12.2015

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2016 Leonardo-Finmeccanica - Societ per azioni

About 150 countries use our

products, systems, and services

Global Presence*

* Industrial Legal Entities, Partnerships (JVs-Consortia), Branch and Representative Offices

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2016 Leonardo-Finmeccanica - Societ per azioni

Responsibility

We fully embrace the responsibilities that come with being a corporate citizen. We develop our

business with a focus on sustainability, a key driver of our strategy; every phase of operations is

informed by this, from the design to the production and support, to the impact on the end user and

supply chain.

All our activities are planned with a view to the impact on the company, stakeholders, people and the

environment.

Leonardos ability to be proactive in the processes of development defines us as a sustainable

business and a socially responsible Group.

Member of DJSI since 2009-2010 Accession to CDP since 2008

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2016 Leonardo-Finmeccanica - Societ per azioni

Key International Cooperation Programmes

EUROFIGHTER TYPHOON

Advanced air defence and superiority fighter with multi-role capabilities.

F-35

New generation multi-role fighter with advanced air-to-ground capabilities and stealth characteristics.

NH90

Medium lift, multi-role military helicopter developed from NATO Staff requirements.

FREMM (European Multimission Frigate)

New generation frigates programme developed by a joint Italian-French cooperation project.

GALILEO

European global navigation satellite system.

nEUROn

European programme for a new unmanned combat air vehicle (UCAV) with stealth capabilities.

NATO-AGS (Alliance Ground Surveillance)

NATO system for intelligence, surveillance and recognition activities.

CLEAN SKY

European research programme for the development of breakthrough technologies to increase the environmental performances of air transport.

SESAR (Single European Sky ATM Research)

European research programme for the modernisation of the air traffic management system.

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2016 Leonardo-Finmeccanica - Societ per azioni

Long term duration

Delivery of financial performances

High level of systems customization

Innovative contents and technical complexity

Large number of resources involved, both in house and outside

Large number of stakeholders

PRM approach starts analyzing Projects major Characteristics

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2016 Leonardo-Finmeccanica - Societ per azioni

Key Success Factors

manage the Key Success Factors and related Risks

Focus on Customer

Capabilities

Suppliers/Partners

System of Systems Engineering / Integration

Sensors & SW Technology

Production

Customer Support

Management

Platforms

Subsystems

Global Solutions Provider

On time deliveries, within budget constraints,

within technical and operational requirements

Single contract interface

Major Risk Management Categories P

lann

ing

Customer

Technical

Subcontractor

Partner /

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2016 Leonardo-Finmeccanica - Societ per azioni

Example of Major Risks & Causes

Management of highly complex

programmes

Critical lead time

Technology/technical solutions not

readily available

Planning

Site/Shipset unavailable

Critical/unusual tests

Additional requests/changes

by the Customer

Non compliance/remarks

during qualification/tests

Critical/borderline

performance requirements

Baseline configuration

changes

Reliance on partners/suppliers (lead

time; single source)

Lack of valid offers (not received in

due time or not received at all)

Delay of partners/suppliers

(equipment, services, civil works)

Customer

Technical

Subcontractor

Partner /

and perform dedicated Treatment Action Plans

Analysis of the Risk

Categories

Risk clustering according to

relevant risk category

Identification of major causes

Definition of cross response

plans and specific actions

Treatment Strategy

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2016 Leonardo-Finmeccanica - Societ per azioni

SUMMARY

LEONARDO - Finmeccanica overview: a challenging & risky project environment

Think One Company: managing the Change to the unified Project Risk Management

Effective Project Risk Analysis & Reporting

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2016 Leonardo-Finmeccanica - Societ per azioni

ASSESS STRENGTHEN DEVELOP EXECUTE

Managing the Change in Project Risk Management

Risk Management Organization

Mature Process and Methodology

Integrated Supporting Tools

Training (Process and Tools)

Ch

ange

Le

vers

Co

mp

lexit

y &

Eff

ort

Communication and Sponsorship

Risk Managers Individual Approach

Think One Company

Nov-14 : CRO appointment Jan-16 : One Company

Risk Manager as the key Agent driving the

Change!

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2016 Leonardo-Finmeccanica - Societ per azioni

Risk Management Organization Model

Risk Process,

Methodology, Tools,

TERRA Administration,

Central Risk Reporting,

Independent Review

CEO

Chief Risk Officer

Project Risk Management

Enterprise Risk Management

Risk Manager Helicopters

Risk Manager Aircraft

Risk Manager Aerostructures

Risk Manager Airborne & Space

Systems

Risk Manager Security &

Information Systems

Risk Manager De