The document is a letter from Bluebell Partners, an investment firm, to the Italian Ministry of Economics and Finance expressing concerns about the recently designated directors for the board of Leonardo SpA. Specifically, the letter argues that the designated directors, including the proposed CEO Alessandro Profumo, lack relevant industry experience for Leonardo's sectors and that Profumo faces legal issues that should disqualify him under the Ministry's own guidelines. The letter warns that these appointments could damage investor confidence in the Italian market and Leonardo as a strategic company if merit, competence and integrity are not the primary criteria used for board appointments.

1. Bluebell Partners
Bluebell Partners Limited
www.bluebellpartners.com
Michelin House - 81 Fulham Road
London SW3 6RD
1
Mr. Paolo Gentiloni
Prime Minister of the Republic of Italy
Palazzo Chigi - Piazza Colonna 370
00187 Roma - Italia
27th of March 2017
Dear Mr. Gentiloni,
Subject: Designation of Leonardo SpA’s Directors
Over the past few years the Italian government has undertaken significant steps to make the Italian market
more open and transparent, thus attracting capital from institutional foreign investors. For example the reform of the
co-operative banks and the privatisations of Poste Italiane and ENAV have been widely appreciated by the investor
community. The attempt of the Ministry of Economics and Finance on the 23rd of April 2013 to introduce the
‘honourability clause’ (“clausola di onorabilità”) in companies where the State is shareholder signalled a clear direction
of travel. The undergoing process of reforms in the public sector was also centred on promoting ‘core values’ such as
meritocracy and competence which are the traditional values of the private sectors.
Institutional investors, both domestically and internationally, are following very closely the current round of
senior management appointments to companies under the influence of the Italian government. In particular the
designation at Leonardo S.p.A. was met with unanimous disbelief. If carried out, in our view the consequences for
the government could include a loss of investors’ confidence in the Italian market (equity and fixed income) - or at
least a heightened perception of risk – and concerns over the government industrial policy, given the relevance of
Leonardo as a leading industrial group and its international presence.
You will find attached a letter which we sent today to the Ministry of Economics and Finance explaining our
concerns on the designation at Leonardo, which based on the feedback received, are widely shared by the market.
Should you be available, we would welcome the opportunity to meet with you and discuss it in person.
Yours sincerely

2. Bluebell Partners
Bluebell Partners Limited
www.bluebellpartners.com
Michelin House - 81 Fulham Road
London SW3 6RD
2
Mr. Pier Carlo Padoan
Ministry of Economics and Finance
Via XX Settembre
00187 Roma
27th
of March 2017
Dear Mr. Padoan,
Subject: Designation of Leonardo S.p.A. Directors
We at Bluebell Partners value highly the role of the Italian State in providing strategic
guidance to Leonardo S. p. A. (former Finmeccanica) in its role as reference shareholder (30,27%).
We consider Leonardo a leading high-tech company, a key player in the global aerospace, defence
and security industry - sectors of strategic interest for the Italian government - and a major
contributor to the country’s industrial policy also thanks to its international presence.
Under the leadership of Mr. Moretti, the company was able to achieve significant results,
both commercially and financially, by completely reorganizing its business and exiting from non-
core sectors. In the 2014-2016 period, Leonardo managed to achieve net profit1
of € 545 million
(compared to a net loss of €649 million in 2013), cut net debt by 28% (from €3.9 bn in 2013 to
€2.8 bn in 2016), increase return on capital by more than five percentage points (from 11.6% in
2013 to 16.9% in 2016), generate a positive free operating cash flow of approx. €700 million (from
a negative FOCF of 220 million in 2013) and resume paying dividends. Since the appointment of
the exiting board to the day prior to speculation of a newly designated board, Leonardo’s share
price rose by 133% (from €5.98 to €13.93).
Now that this initial phase of relaunch of Leonardo can be considered completed, we
respect the decision by the government to seek a new leadership to continue and accelerate a path
of sustainable growth aimed at creating value for all stakeholders, including customers,
shareholders, employees and the broader Italian economy.
1 before extraordinary transactions

3. Bluebell Partners
Bluebell Partners Limited
www.bluebellpartners.com
Michelin House - 81 Fulham Road
London SW3 6RD
3
It will be crucially important to maintain a strong risk management culture as the nature
of the business is such that losses on few contracts could jeopardise the results of the entire
company. Strong leadership and industry knowledge would also be required to strategically re-
position the business in the defence industry which is increasingly dominated by few global players.
It will also be critically important to preserve and maintain a culture of integrity to protect and
enhance the company’s franchise.
With due respect, in our view the list of designated directors indicated on the 18th
of March
2017 for the new board of Leonardo does not fully meet the following criteria:
(i) the guidelines set on the 26th
of January 2017 by the exiting board - majority designated by
the Treasury in 2014 - according to which the new Chief Executive Officer should have,
among others “accumulated adequate experience in one or more businesses in the Aerospace, Defence
and Security sector or in other sectors related to it in terms of technological level and innovation, industrial
characteristics, international scope and geopolitical relevance, market scope and size of its major competitors
and analogous strategic problems” and possess a “a reputation for intellectual independence and personal
integrity”;
(ii) the directive passed by the Ministry of Economics and Finance on the 24th
of April 2013
(Monti Government) requiring the Treasury to take actions “at the renewal of the board of
directors” at companies whereas the State holds a significant interest, to introduce in the by-
laws the ‘honourability clause’ (“clausola di onorabilità”) which calls for ineligibility (or
immediate removal from office) of directors sentenced or indicted for crimes including a
“breach of bank, financial, security law”. The directive is still in place and whilst in May 2014 it
failed to obtain the relevant shareholders’ approval (66.1% vs. 66,6% required), according
to our interpretation the Treasury has an ongoing obligation (also moral and political) to
propose it again at the forthcoming shareholders’ meeting scheduled on May 2nd
on first
call;
(iii) the expectations of the market based on broadly shared principles (competence,
independency and integrity) as proved by the sharp fall (approx. 7,4%) of Leonardo’s stock
price in the following three day period causing shareholders - including the Italian tax
payers - a euro 600 million loss.

4. Bluebell Partners
Bluebell Partners Limited
www.bluebellpartners.com
Michelin House - 81 Fulham Road
London SW3 6RD
4
By looking more closely to the designated slate of directors, it is possible to draw the
following observations:
1. Mr. Profumo is a highly regarded business leader and should be credited for having
modernised the Italian banking system as he built UniCredit from a small Italian lender
into an European champion. Nevertheless, this early success was followed by mixed results
following the acquisition of HVB (2005) and Capitalia (2007) which proved costly to
shareholders repeatedly called to contribute fresh capital (€ 3.0 bn in 2009, € 4.0 bn in
2010, € 7.5 bn in 2012 and € 13.0 in 2017). Mr Profumo was ousted in 2010 with a €40
million severance package which attracted criticism under ethical arguments;
2. as Chairman of Monte dei Paschi di Siena (2012-2015), Mr. Profumo failed to accomplish
the turn-around of the bank – admittedly a challenging task – as MPS is now seeking public
rescue funds following two capital increases (€5.0 bn in 2014; 3.0 bn in 2015) which
resulted in an equivalent loss for shareholders;
3. given his forty year career almost entirely spent in the financial sector, Mr. Profumo lacks
industry expertise in Leonardo’s sectors of activity: the CEOs of Leonardo’s leading
competitors2
on average have in excess of twenty four years of relevant industry expertise.
We consider the appointment of a director general from within Leonardo – a move that
we read may be considered – as both revealing and sub-optimal;
4. Mr. Profumo did not hold a CEO post at a public company since 2010, when he resigned
from UniCredit, making his profile more suitable for a non-executive chairmanship’s role;
5. According to news reported by the press, on March 22nd
2017, an Italian judge has ordered
Mr. Profumo for his alleged responsibility, as former chairman of Monte dei Paschi di
Siena, to face trial in a case of alleged usury which would constitute a cause of ineligibility
under the Ministry of Economic and Finance directive dated 24th
of April 2013;
2
Thales, Lockheed Martin, Raytheon, BAE Systems and United Technology

5. Bluebell Partners
Bluebell Partners Limited
www.bluebellpartners.com
Michelin House - 81 Fulham Road
London SW3 6RD
5
6. Mr. Profumo is also currently investigated for five billions of derivative transactions
entered at Monte dei Paschi di Siena by his predecessors which the bank continued to
account as Italian government bonds in FY2012-1H2015 at the time he was Chairman. In
August 2016, the prosecutors asked Mr. Profumo to be acquitted, but the decision has
been opposed by interested parties and in October 2016 the General Attorney instructed
for an expert opinion released in January 2017 which provided new evidence. A final ruling
is pending following a court hearing held on March 15th
2017;
7. The ‘sympathy’ never denied by Mr. Profumo for the Democratic Party, which is leading
the government coalition by whom he has been designated, generates legitimate concerns
over greater future political influence on an otherwise publicly listed company;
8. In his previous post as an executive of a publicly listed company, Mr. Profumo was
designated as Chairman of Monte dei Paschi di Siena (April 2012) by the then leading
shareholder (MPS Foundation, 40,77% of share capital) whose board is nominated by the
local authorities (City of Siena, the Province of Florence and the Region of Tuscany)
historically controlled by the Democratic Party;
9. Leaving aside the perspective CEO and Chairman, it is hardly possible to recognize any
relevant industry expertise within the other designated directors, which include (a) a
member staff of the Democratic Party responsible for Europe and North America also
adviser to the former Minister for Foreign Affairs member of the Democratic Party; (b) a
Deputy-Minister to the former Minister for Foreign Affairs member of the Democratic
Party; (c) an advisor to the former Prime Minister who was also then Secretary of the
Democratic Party.
***
Over the past few years the Italian government has undertaken significant steps to make
the Italian market more open and transparent, thus attracting capital from institutional foreign
investors. For example, the reform of the co-operative banks and the privatisations of Poste
Italiane and ENAV have been widely appreciated by the investor community.

6. Bluebell Partners
Bluebell Partners Limited
www.bluebellpartners.com
Michelin House - 81 Fulham Road
London SW3 6RD
6
The process of reforms in the public sector was also centred on promoting values such as
meritocracy and competence which are traditional core values in the private sectors.
Institutional investors are following closely the round of senior management appointments
to companies under the influence of the Italian government. There is not a single investor we have
spoken to in the last few days who has not expressed surprise for the designations at Leonardo.
In our view the real danger is the loss of credibility in the role played by the State as a
sensible shareholder which could ultimately produce more negative consequences than investors
exiting the stock.
We respectfully ask the Ministry of Economics and Finance to preserve the public and
private interests supporting the election of a board which fully satisfies values such as high industry
competence, proven track record, integrity and independence.
Yours sincerely,