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00:00Apart from the pledges, which is the impact that all these announcements are having on
00:04your business?
00:05Well, let's stay on real numbers, because so far there's a lot of discussion, but real
00:10numbers have to be considered carefully.
00:13As far as I know, at domestic level, we expect an increase of a few billions in the defence
00:20expenditure.
00:21If I remember correctly, the forecast is from 32 billion to 36 billion this year, which
00:27is a remarkable increase, but still far from the target of 2%, which I believe will be
00:34reached gradually.
00:36At European level, we know there is an intention to invest approximately 150 billions, I believe
00:44from existing funds, like Cohesion Funds, that should be in the form of grants, and there's
00:49discussion ongoing about extra 600 or so, but I think where this money will be taken and
00:57the way this will be managed, this is still under discussion, so clearly we need more
01:02investment in defence, because we are under threat, this is very clear.
01:06On the other hand, the numbers are still in progress.
01:09Market-wise, we have to consider that there is a lot of demand of new defence systems, and
01:16this is what has generated the increase in the defence market, the actual one.
01:22So, I can see in London, for instance, we have a steadily increase in orders, and of course
01:28revenues, that comes from the tension in the global market, and there's a lot of requests
01:35for advanced defence systems.
01:38So, I think it's too early to draw a conclusion about the numbers, let's see what happens in
01:42the next few months, let's see what Europe will decide.
01:44Did you already see, you know, an impact on your orders?
01:48Yeah, as I said, this first quarter we have an increase of approximately more than 20% year
01:54over year, and in general the financial figures are growing, yes.
01:58I mean, needless to say, we are almost in a war economy, and definitely the defence industries
02:05are involved, the primary industries to be involved in this race for defence and protection.
02:12Now, we should also consider that most of these investments are not necessarily in weapons.
02:18There's a lot of digital infrastructure, new technologies, so maybe in the future we will
02:25have to reconsider how we evaluate the investment in defence, in that it is not only weapons or
02:31armoured systems, but will be also digital infrastructure, supercomputation, cloud, artificial intelligence,
02:38cyber security, space.
02:41Those things, not necessarily have been included so far into the true defence investment, but
02:48very likely in the future this will be the case.
02:50We have discussed in the past several times about, you know, the future of Europe, the importance
02:56of Europe, you have been, you know, working as Minister before getting the CEO job.
03:03Do you think we are, somehow, President Trump is making a favour to Europe, accelerating what
03:10you have been advocating for a while, the need for a cohesive defence, a common system most?
03:16Honestly, I don't think anybody is making favour to anybody else in this moment.
03:21There is an interconnection or an overlap of economical and financial issues and military
03:28and defence and global security issues.
03:30Sometimes the situation is a bit confused.
03:33For instance, applying tariffs made a shock to the market, but if we see in defence the impact
03:40of tariffs is relatively small.
03:43Especially for Leonardo having local production in the US and local sell in the US.
03:51On the other hand, I understand the argument that there is an unbalancement in the trading
03:57situation between Europe and the US, but this economy shouldn't be defence.
04:02On the other hand, I believe that the actual situation that has been created in Ukraine after
04:09the Russian invasion made clear that, first of all, Europe is too fragmented.
04:14So, even though we have maybe one and a half million soldiers in Europe, those are fragmented
04:20into 27 armies.
04:22We have many fighters, many tanks, many helicopters.
04:26We have so many defence platforms.
04:29In the end, they were not very effective in the investment of our defence budget.
04:34The second thing that I think should be noted is that no country can make on its own at European
04:41level to support and defend Ukraine.
04:44So, clearly, that was a bell.
04:47We have to wake up.
04:48We have to create a sort of European defence space.
04:53We have to boost the collaboration among defence companies.
04:57I mean, creating giants.
04:59I mean, if you see how big are the American and Chinese defence companies, they are much bigger
05:03than the biggest European ones, including Leonardo.
05:07That means facilitating the aggregation.
05:09That means favouring the synergy.
05:12Sometimes, from the industrial point of view, this means making choices and making priorities
05:17very clear.
05:19So, this is happening.
05:21And in view of the NATO alliance that I believe should stay, should remain, should be reinforced,
05:28it is very important that Europe gets stronger and that we need to be a solid, more reliable
05:35partner in the NATO alliance as a continent.
05:39And this will make NATO stronger and ultimately will make for the Western countries life safer
05:45in the future.
05:46So, no favours.
05:47But, of course, the change of landscape has accelerated transformation that we should have
05:53considered maybe already a few years ago.
05:56Do you see room that, you know, those needs will lead to real consolidation?
06:02So, you know, big M&A in the industry in Europe?
06:05Or, like, you know, government has not yet ready for it?
06:09You know, making big M&As in defence means that some government essentially steps back from
06:14national sovereignty.
06:15Maybe it is a bit too early.
06:17We have to create a culture.
06:18We have to create a mutual trust.
06:20But, for sure, favouring the aggregation in joint ventures, like the one we did with
06:25Rimetal or within the NATO umbrella with Bicar for drones, that is, for sure, a quick and
06:31effective way to favour the aggregation, to favour the synergy.
06:35I have no doubt that in the future Europe will find a way to make real margin acquisition
06:41or, you know, giants.
06:43But I think we have to do those things somehow progressively because you don't change the
06:48culture of 27 countries that are historically different and also socially different.
06:54So, we have to accelerate the creation of the United States of Europe on one hand.
07:01But on the other hand, I mean, history matters.
07:03So, we need to work on that.
07:05How is, you know, going, you know, your joint venture with Rimetal?
07:10Could this be widened to other, you know, sector or platforms?
07:15Well, the first point that I have to mention is that this joint venture makes a lot of sense
07:20because there are complementary technology between two complementary industries and if
07:25you put them together, one plus one is equal three.
07:28OK, the extra one comes from the integration, the advantage that comes from the integration
07:35of new payloads, new electronics, new satellite connections, new weapons with the advanced
07:42armored vehicle technology of Rimetal.
07:44So, this is a typical example of synergy that is beneficial for both.
07:49By the time we can really make land vehicles that are state of the art, I mean, simply better
07:56than the competitors because they are more digital, more interconnected, more interoperable,
08:01faster, more effective, and so on and so forth.
08:04This, of course, is very important for future export.
08:07So, if we will be really clever, as we hope to be, we will make machines that are very competitive,
08:14that will open a much bigger market than the market we are tackling now, which is, for the
08:19time being, the Italian land defense market.
08:24Would the vehicle defense unit fit in this JV?
08:31The IVECO defense, I mean, as well known, IVECO has put on sale the IVECO defense.
08:39They have capabilities, they have production capability.
08:42They make a number of vehicles, military vehicles.
08:45So, that could be complementary to the, and also useful in the organization of the Rimetal
08:51and Alto joint venture.
08:52But we are at the early stage.
08:54So, as I have the chance to mention to our investors, we participated in the early stage
09:00with the non-binding offer.
09:02We will see what happens.
09:04And if this will continue, there will be, as usual, a data room opening, and we will see.
09:08Some people see the potential space joint venture with Thaler and Airbus as a test of consolidation.
09:15How are talks progressing?
09:17It's a lot of work.
09:19We are discussing, because obviously, in space, Europe has a problem, because we were a bit
09:29fragmented again, and, you know, other countries have been doing really fast.
09:32I mean, don't forget that India is on the moon, China is on the moon, US are launching,
09:37I think, 90 launch per year.
09:39So, clearly, Europe is being strongly connected to institutional funds for the space space,
09:48and being strongly influenced by the national sovereignty in the space business, has lost
09:53several trains.
09:54So, we are discussing among peers, Thaler, Airbus, and ourselves, to see whether we can get to
09:58together.
09:59But, of course, now we are in the stage that, after having considered all the, you know,
10:04kind of legal implications, organizational implications, we are now entering into the,
10:08entering the real discussion, which means financials and value creation.
10:14So, we are working quite actively, with a very good constructive spirit, but numbers and
10:21products will define, ultimately, whether this is convenient or not.
10:25Sure.
10:26But, you see, you're really working on it.
10:29Oh, yeah, yeah.
10:30Sure.
10:31Of course.
10:32Yeah, we're working.
10:33Do you expect some news, or to get to a, you know, a proper deal?
10:36We have a roadmap.
10:37We are working.
10:38Yeah, there is a roadmap.
10:39But, this is now kind of confidential, but we have a roadmap.
10:43So, yeah, the work is in progress, and we're working, we're working a lot.
10:48Yeah.
10:49There's another, you know, division where, probably, Europe should do something more
10:55together, is when we're talking about warplanes.
10:59There's also, obviously, you're working with the, with the, with the UK and your alliance,
11:06but we heard other, the CEOs in the industry and the Arbor say, you know, there's room to
11:11do things together.
11:12Do you see chances that a JV there will be, become a proper European one with the German
11:17and the French?
11:18That's a very interesting point.
11:19I mean, well, first of all, let's say the frontier of fighters and military aviation,
11:25stands in the sixth generation fighter, which is conceived to be a sort of flying supercomputer,
11:31governing drones that are kind of controlled by, by a swarm intelligence.
11:37I mean, to make it a bit pictorial.
11:39So, the GCAP consortium, the GCAP joint venture between BAE, UK, Leonardo in Italy, and Mitsubishi
11:47heavy industries in Japan, now is integrating the, the, the, the project for the GCAP itself.
11:53So, the aircraft and the, the, the NATCO, the national companies that are constituting
11:58the joint venture that are also considering in parallel, but separately also different technologies
12:03for the drones and for the, for the AI.
12:06So, the joint venture has been launched, we are already working.
12:09In Europe, as you know, there are other potential competitors, the France-German initiatives,
12:16the AFGAS.
12:17Yeah.
12:18As far we, there was also the possibility of, as far as we know, there was the Lockheed Martin,
12:23but I think now this, this program has been interrupted by the Trump administration, though
12:28some funding went to Boeing for a similar enterprise.
12:31China, very likely, is working on the sixth generation.
12:34So, the question is, how much room there will be in the planet after 2040, 2045 for those
12:41six generation fighters?
12:43Those are like, you know, system of systems.
12:46I mean, I would compare them to the aircraft carrier ship.
12:50Yeah.
12:51You need one aircraft carrier and 90 ships in that case, and 90 aircraft, sorry.
12:55In that case would be one GCAP and maybe 40 drones.
12:58Yeah.
12:59So, in the future we have to see what kind of market, what kind of efficiency the system
13:03can reach, how it will be effective in terms of adjuncts or drones, and how it will be effective
13:09in terms of AI.
13:11I wouldn't discard the idea that in the future we get together with other partners.
13:17It's such a set of, a frontier effort that maybe, rather than developing three, four competitive
13:24aircraft, in the future we will get together.
13:27But it's too early to say.
13:28We are still in the face of conceiving the machine and, you know, addressing the key,
13:32the key problem.
13:33Even the basic idea of the GCAP at the moment is under discussion.
13:37It will be this, that big or that big or, you know, kind of characteristics, requisites
13:41are still under discussion.
13:42I will be very open anyway to future partnerships, but clearly this will be decided by the states,
13:48not by the companies.
13:50Absolutely.
13:51You have a big price in the U.S. with DRS, no?
13:54Is there any plan to detangle yourself from DRS further, selling for the stake or, you know?
14:01The U.S. together with the U.K. is our most important domestic market because after Italy
14:06we have U.S. and U.K.
14:08And not only DRS, we have helicopters, we have electronics, cybersecurity.
14:12We have, I think, 7,000 people there, which is good in this moment because we produce there
14:17and we have a market there.
14:18It's approximately more than $4 billion, if I remember correctly, per year.
14:22We are happy with the progress there.
14:24We plan to improve our presence and to improve our production.
14:28We are also reinforcing the structure in the U.S.
14:31DRS is doing extremely well.
14:33There are a few programs that are very strategic for the future.
14:36I can't say details, but that we are discussing.
14:39For the time being, there is no motivation to detangle or, you know, to change the setup.
14:45We are happy with this and it's an additional technology value that DRS gives to the company.
14:50Of course, as you know, markets are changing very quickly and should the situation change
14:55in one way or another, we'll be ready to make our choices.
14:58But at the moment DRS is doing well and we are collaborating on hot topics.
15:04And let me conclude with a sort of personal question, you know.
15:07You know, with such a huge interest on defense and on, you know, also the security of the CEO
15:16is becoming a concern in some countries.
15:19You know, how your life has changed in the last few months and do you still, you know,
15:24think you are in the right place to help?
15:26No, you never feel in the right place when you have to do with the life of people.
15:30I mean, I'm a father of three children, so I feel this not only as a CEO but also as a father
15:37that is thinking that should things go bad and war expand on the planet.
15:41I have three kids that could be, you know, soldiers in the future.
15:43And I really don't like to read every day that a hundred thousand young people killed
15:47at the border of Ukraine and Russia.
15:49That's for me as a father is terrible.
15:51As a manager, as an individual, I live in a situation where, of course, I'm protected by
15:57armored escort.
15:58I have a car that is three tons because it's a blindo car in the city where I live and here in Rome.
16:05When I was minister a few years ago, I was on the escort.
16:09To be honest, I'm a bit fed up, but apparently this is part of my job.
16:12I'm sure it will not last so long.
16:15Sometimes you have to make sacrifices as an individual to do your job.
16:19That's it.
16:21All over the Cardinals.
16:22That's it.
16:23I'm sure it is.
16:24I also made a appeal against DACA in Afghanistan.
16:26You know, the Cardinals.
16:28That's who you already received.
16:30.
16:31There are some of them Ohh full liebe канал� 누�
16:36today.
16:38.
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