L3harris Technologies (LHX) Morgan Stanley 12th Annual Laguna Conference summary

Integration achievements and transformation

• Achieved $650 million in cost savings and divested 10 assets, generating $2.9 billion in proceeds over five years.

• Built a national security-focused portfolio, adding key assets like Viasat's TDL product line and Aerojet Rocketdyne.

• Integration enabled new business areas, such as becoming a prime in space with over 40 satellites in backlog.

• LHX Next initiative targets $1 billion in annual run-rate savings and at least 16% margins by 2026.

• Ahead of schedule on cost savings, with updates expected at Q3 or year-end.

Operational improvements and culture

• Emphasizes agility, reduced bureaucracy, and rapid decision-making.

• Platform-agnostic approach allows focus on customer needs and rapid solution delivery, exemplified by the VAMPIRE program.

• Leadership team combines internal and external talent, supporting growth as a major defense industry player.

• Culture fosters best-of-breed integration and quick delivery for customers.

IMS segment optimization and cost savings

• IMS consolidating facilities, targeting reduction from 100 to 70 sites by 2026.

• Labor actions and infrastructure streamlining, including ERP migration, drive cost savings.

• Sixteen facility closures since 2023, with more planned in the next year.

• Strategic supply chain management and long-term supplier agreements to reduce costs and improve reliability.