MILAN (Reuters – Leonardo, an Italian defense and aerospace group, expects to double its free cash flow this year compared to 2021. This is as countries around the globe increase military spending to counter Russia’s invasion in Ukraine.

The group stated that the process of integration, creation and maintenance of European defense and an increase in defence expenditure in EU and neighboring countries can be speeded up. This could create opportunities for businesses operating in this sector.

The company also added that its exposure to Russian operators was approximately 30 million euros (32.97 millions), and had an order backlog of around 25 million euros with Moscow.

There was very little exposure to Ukraine.

This state-controlled organization said that it closely monitors the geopolitical environment and is aligned to Italy’s government policy.

Leonardo posted a positive free cash flow last year of 209million Euros and an increase in net profits by 142% to 587million euro, surpassing full-year guidance.

Sales in defense and government businesses drove a 5% increase in revenue to 14.1 million euros. This was 88% more than the total.

CEO Alessandro Profumo stated that “we are confirming the target of generating a cumulative three billion euro cash flow over 2021-2025 with a substantial step up in 2022”, and added that the company would pay a dividend on 2021 earnings.

The free operating cash flow of the company is forecast to rise to 500,000,000 euros in 2015, and revenues are expected to reach between 14.5 and 15 Billion euros.

The recovery of all businesses has been complete, except Aerostructures which was under restructuring. However, it said that the Aerostructures Division is seeing some signs of recovery in civil aeronautics.

Germany, which long has minimized the military’s role in its foreign policy, along with Denmark and Poland, have each stated they would boost defence spending when war is at their door.

($1 = 0.9099 euro)