FY 2019 Results Presentation

Rome, 13 March 2020

Agenda

Part 1: Setting the business up to succeed in the long term Alessandro Profumo, Chief Executive Officer

Strengthen our core
- ^o Focus on top line growth & profitability improvement William J. «Bill» Lynn III, CEO of Leonardo DRS
- ^o Customer satisfaction…our daily effort and ultimate goal Gian Piero Cutillo, MD Helicopters
Transform to grow
- ^o Towards more efficient organisation Norman Bone, MD Electronics
- ^o From product seller to solution provider Lucio Valerio Cioffi, MD Aircraft
Master the new
-

Part 2: Delivering on promises

-

Q&A

^o Leonardo's future approach to Innovation Roberto Cingolani, Chief Technology & Innovation Officer

• Long term targets Alessandro Profumo, Chief Executive Officer • FY2019 Results & Outlook Alessandra Genco, Chief Financial Officer

Part 3: Key takeaway messages Alessandro Profumo, Chief Executive Officer

Setting the business up to succeed in the long term

Alessandro Profumo Chief Executive Officer

Rome, 13 March 2020

We are very clear on the company we want to be

• A company delivering long-term sustainable growth

• Clear ambitions in our priority sectors

• Significant actions behind those ambitions

• Doing what we said we would do

Delivering long term sustainable growth Stronger international footprint

Outstanding achievements

i.e. NH90 in Qatar
i.e. MH-139, TH-119 and MFoCS in US
i.e. M345 in Italy
i.e. AESA radar in UK (hundreds of Electronics contracts with individual value < € 10 mln)

Top line growth driven by high quality products and solutions

Accelerating Order Intake

ca. € 30 bn in 2018-2019
> 40% of 2018-2022 target

Long term sustainable growth underpinned by Customer Support, Services & Training

Really valuable part of our business

Higher margin
Multi year revenue visibility

Making significant progress at Group level

Up to 22% of 2019 Group Revenues
Top ranked in Civil Helicopters Customer Support (Pro Pilot) for the 2 nd year in a row and with higher score across all key indicators

Creates long term loyalty and repeat business

• We have one of world's best flight training school (IFTS)

Delivering on long term sustainable growth

*ROIC (Return on Invested Capital) = EBITA / Average Net Invested Capital

Clear targets in our priority sectors

GLOBAL

World leader in Helicopters and in Simulation solutions & Training
Leader in Europe in Defence Electronics and reference partner for DoD and US primes
Key player in international cooperation programmes (i.e. Eurofighter LTE, Tempest)
Partner of choice of Institutions for Safety and Cyber Security
Key player in Space through the Space Alliance

Clear view of the strategic path

STRENGTHEN OUR CORE

Keep strong focus on our core to fuel growth
Delivering the significant Backlog
Exploiting full potential of product Portfolio (platforms + sensors & systems)
Grow Customer Support & Training
Capturing growing demand for Cyber Defence

LEONARDO DRS TOP LINE GROWTH & PROFITABILITY IMPROVEMENT

CUSTOMER SUPPORT IN HELICOPTERS

TRANSFORM TO GROW

Adding new capabilities
Leveraging these capabilities in a more integrated way across businesses
Evolving to meet changing market and customer needs

ELECTRONICS MORE EFFICIENT ORGANISATION

AIRCRAFT GOING FROM PLATFORM SELLER TO SOLUTIONS PROVIDER

MASTER THE NEW ACCELERATING INNOVATION

Identify, develop, leverage, scale new technologies "transversal" across the Group
Fully digitalized in engineering, products and offering
Drive innovation leveraging our 10,000 engineers talent pool

LEONARDO MASTER PLAN TO INNOVATION

Clear view of the strategic path

STRENGTHEN OUR CORE

Keep strong focus on our core to fuel growth
Delivering the significant Backlog
Exploiting full potential of product Portfolio (platforms + sensors & systems)
Grow Customer Support & Training
Capturing growing demand for Cyber Defence

LEONARDO DRS TOP LINE GROWTH & PROFITABILITY IMPROVEMENT

CUSTOMER SUPPORT IN HELICOPTERS

TRANSFORM TO GROW

Adding new capabilities
Leveraging these capabilities in a more integrated way across businesses
Evolving to meet changing market and customer needs

ELECTRONICS MORE EFFICIENT ORGANISATION

AIRCRAFT GOING FROM PLATFORM SELLER TO SOLUTIONS PROVIDER

MASTER THE NEW ACCELERATING INNOVATION

Identify, develop, leverage, scale new technologies "transversal" across the Group
Fully digitalized in engineering, products and offering
Drive innovation leveraging our 10,000 engineers talent pool

LEONARDO MASTER PLAN TO INNOVATION

Clear view of the strategic path

STRENGTHEN OUR CORE

Keep strong focus on our core to fuel growth
Delivering the significant Backlog
Exploiting full potential of product Portfolio (platforms + sensors & systems)
Grow Customer Support & Training
Capturing growing demand for Cyber Defence

LEONARDO DRS TOP LINE GROWTH & PROFITABILITY IMPROVEMENT

CUSTOMER SUPPORT IN HELICOPTERS

TRANSFORM TO GROW

Adding new capabilities
Leveraging these capabilities in a more integrated way across businesses
Evolving to meet changing market and customer needs

ELECTRONICS MORE EFFICIENT ORGANISATION

AIRCRAFT GOING FROM PLATFORM SELLER TO SOLUTIONS PROVIDER

MASTER THE NEW ACCELERATING INNOVATION

Identify, develop, leverage, scale new technologies "transversal" across the Group
Fully digitalized in engineering, products and offering
Drive innovation leveraging our 10,000 engineers talent pool

LEONARDO MASTER PLAN TO INNOVATION

Strengthen our core Focus on top line growth & profitability improvement

William J. «Bill» Lynn III CEO of Leonardo DRS

Rome, 13 March 2020

Leonardo DRS – past performance an indicator of sustained success

Predictable defence spending with emphasis on 'near peer' adversaries
- o 2020 Defence spending projects healthy 3% growth
- o Growth curve 'flattens' in 2021 & beyond but spending at historically high levels with bipartisan support
- o Emphasis of spending geared towards China and Russia
  - o Creating urgent need for advanced capability rewarding agile companies

• Leonardo DRS uniquely positioned to excel

o Leonardo DRS revenue growth continues to outperform U.S. defence market 3 straight years of 10+% organic revenue growth (2-3x market peers)
o Recent success and organisational alignment driving continued sustained growth confidence
- o Foundational type programmes awarded driving visible hard and 'soft' backlog supporting sustained growth
- o Agile Mid-Tier Position enabling enhanced 'quick to market' strategy supplementing growth potential
- o Strong product alignment with Army and Navy modernisation initiatives
  - o Modernisation elements of DoD growing at higher rates than overall Defence Spending
Profitability growth
- o Revenue growth & margin expansion driving current profit (EBITA) 19% higher than Prior Year
- o Continued margin expansion to compound projected revenue expansion

© 2019 Leonardo - Società per azioni 13 Leonardo DRS poised to continue growth and expand margins

US Defence spending DoD overview, priorities, and outlook

Geopolitical trends assure strong DoD spending

Near peer threats require rapid fielding of capabilities in new domains
Persistent threats from recent conflict zones require resources, modernisation, and new technological capability

DOD Topline Budget moderating, but stable

Strong defence budget of 5% growth for 2017-2019
Growth tempers to 3% in 2020
FY2021 Budget and Beyond stable at current levels

Election year provides for some uncertainty

Election uncertainties make it difficult to completely predict outcome
Some Democratic candidates have hinted at defence budget cuts

FY2021 Budget supports national defence strategy

Builds a ready, agile, all domain joint force, including space and cyber
Modernises a more lethal force, and maximizes readiness

Leonardo DRS continuing to outperform US Defence market

LEONARDO DRS MULTI YEAR GROWTH TREND > 2X INDUSTRY AVERAGE

DRIVEN BY FAVORABLE MARKET POSITIONING AS A MID-TIER

The benefit of US market consolidation

The market continues to consolidate around us, creating new opportunities for increased market share in the core business areas where we operate
As a mid-tier, we have been able to out-perform larger defence companies that operate in broader areas of the defence market

Size & Agility

Our management structure is lean and less-layered, affording competitive prices and agility in decision making
We have targeted R&D into the fastest growing markets related to our core competencies
A platform agnostic approach allows us to provide solutions to new platforms as well as modernisation upgrades to existing fleets

Alignment of strongest capabilities in the fastest growing areas of the defence budget

• Leonardo DRS will continue to out-perform the market by targeting investments in these fast growing areas of Army modernisation, Navy shipbuilding, Airborne & Communications

Defence Electronics & propulsion key modernisation priorities

© 2019 Leonardo - Società per azioni 16 Addressable markets growing faster than overall Defence Budget

Alignment with Warfighter Needs Propelling Growth

Driving improving profitability

17.5% EBITA CAGR since 2016 – driving increased shareholder return
Increased EBITA margins drive improved free cash flow generation
- o Programme portfolio / required investments allow for above market conversion of EBITA into FOCF
4 Levers to Further Margin Enhancement

Key Takeaways

Optimistic outlook for sustained growth
- ^o 2016-2019 multi year revenue and EBITA CAGR of 15.9% and 17.3% respectively confirm continued growth exceeding industry peers
Confident for sustained future growth over the Budget Plan period
- In a stable budget environment, Leonardo DRS is aligned with key market priorities
- Lean cost structure and platform-agnostic offerings provide Leonardo DRS a competitive edge
Profit is growing, confident in future profitability expansion
- o Revenue growth, programme life-cycle, efficiency efforts launched and selective pursuits all support continued margin expansion over the Plan period
- o Profit expansion will drive increased FOCF performance while maintaining our already above market FOCF conversion of EBITA

Strenghten the core Customer satisfaction…our daily effort and ultimate goal

Gian Piero Cutillo MD Helicopters

Rome, 13 March 2020

Customer satisfaction… our daily effort and ultimate goal Helicopters Customer Centric approach enabling long term business sustainability

2019 IN A NUTSHELL…

Strong position in the civil market, reinforced through Kopter acquisition
Key achievements in military, also thanks to our dual use platforms
Customer Support & Training significantly contributing to our top line

…CUSTOMERS REMAIN OUR PRIORITY

We have outstanding products
and enhanced Customer services

Solid offer to respond to global market trends Further increasing Customer satisfaction and intimacy

• Dual Use platforms for full spectrum of missions • Family concept to optimise fleets • Best value for money matching most stringent performance, mission capabilities and safety • Turn-key solutions for all applications • State-of-the-art simulation technology for training offer SUCCESSFUL PRODUCT LINE EXCELLENT CUSTOMER SUPPORT OFFER

• Digital services and analytics, maximizing safety and Customer value co-creation

Comprehensive product portfolio aimed at matching all mission needs Continuously capabilities improvements to satisfy the most demanding rotary wing requirements

Well recognised by the market

AW139: 1,000+ deliveries to date, multirole market reference in its category
AW169: successful in EMS, Parapublic, Private/Corporate and also Offshore
Our Dual-use products are best value for money: recent success in US for MH139 and TH119 in less than 18 months

Our effective Customer centric approach… to an increasing fleet utilisation We are a business partner, not only Original Equipment Manufacturers

* Leonardo reference market for CS&T limited to fleet and excluding mid-life upgrades | Purely Directional

Worldwide presence to be close to our Customers

Our global network assures direct access to our support and training services everywhere

Our Service and Logistic Centres are spread in all continents, to match our Customers' needs and their Fleets

Capillary Training network: the right choice as confirmed by Customers' Satisfaction

End-to-end support services thanks to streamlined processes Well recognised by the market

Our Vision is to be recognised as the World's premier Flight Services & Training Solutions Partner in the Rotary Wing Industry, exceeding our Customer Expectations, providing Safe and Efficient Training and Technical Services

Full set of Training solutions: to maximize Customer value Combining Advanced Simulation with Unparalleled Flexibility

TRAINING FOR THE WHOLE CREW…

1. Flight Training for air crew
2. Maintenance Training for ground crew
3. Operational Training ready for our Customers' missions

… INTEGRATING LIVE AND VIRTUAL

Distance Learning / Computer Based
Classroom Training/ Practical Elements featuring cutting-edge Virtual Reality
Top Level Simulation Fidelity

GLOBAL REACH

We boost the whole Customer value chain through digital services

DIGITAL SERVICES

FIRST CLASS PROCESSES

ADVANCED TRAINING SOLUTIONS

GLOBAL REACH

Real-time diagnostics to increase Safety Co-developed with our Customers

On track for sustainable growth

Successful product + excellent Customer Service offer = long run business sustainability

Customer Centric approach to meet Customers requirement to secure long term sustainability of the business
Focused investments to improve our value proposition (products and services)
Digital Services to streamline industrial processes and increase flight Safety
Fully committed to execute our Industrial Plan

Transform to grow Towards more efficient organisation

Norman Bone MD Electronics

Rome, 13 March 2020

Agenda – Transform to Grow

1. The rationale – a reminder
2. The journey – so far
3. The Plan - update
4. The benefit

Key messages

The global Defence Marketplace is evolving and consolidating
- ^o Political/Financial
- ^o Market
- ^o Industrial
- ^o Technology
Electronics is one of our biggest Divisions, addressing the largest part of the A&D market

• Bringing Business Units together to make them stronger, through:

^o Internationalisation
^o Focus on performance
^o Product Development Synergies
^o Electronics is a Financial Performer
Double Digit profitability one year ahead of Plan
- ^o CAGR in excess of market trend
- ^o Cash generation above Group average
- ^o Delivering long term sustainable growth

TODAY

^o Our transformation journey so far
^o Key elements to our strategy

Our strategy

OVERALL

Integrate the division & set strategy for growth, ensuring delivery of performance and synergies
"Empower" our people to increase our market share and improve our profitability

FINANCIAL GOALS

Grow the division at above the market CAGR
Reposition the division in the global marketplace
Be leaders in Internationalisation, in the Electronics business segment
Focus on winning long term sustainable business by delivering on existing programmes
Develop partnership approach
Maintain/Improve double digit profitability
Maintain/Improve cash generation

PRODUCTS & MARKET OFFERINGS

Create a coherent portfolio of products & services matched to the market needs
Invest against robust business cases which deliver growth and efficiency

INTERNAL FOCUS

Focus on using best practice to drive efficiencies and control costs to deliver bottom line results
Develop a distinctive culture across business units, geographies and professional communities, to drive business performance through behaviour

Order Intake World Map 2020

Focusing on Performance…

1 st February 2019 Leonardo creates a new Electronics division as shown below, which brings together the former:

Airborne and Space Systems division
Land and Naval Defence Electronics division
Defence Systems division
Automation Systems and Traffic Control Systems Lines of Business (both formerly under Security and Information Systems Division)

Automation managed separately

Long term strategic direction
Execution issues to be addressed

Vitrociset added to perimeter

Addressed historical inconsistencies

• I.e. air traffic control

Electronics

Norman Bone

How we are transforming our business…

Our path to double digit profitability…

2019 EBITA – ROS (%)

EBITA

The Future - Tempest

Building from the Inside Out
In July 2018 the UK Government launched its Combat Air Strategy, delivering an ambitious vision for the future. The strategy confirmed the UK's intent to remain at the cutting edge of combat air systems development in order to meet the UK's National Security Objectives to best protect its people, project influence and promote prosperity
This commitment includes working alongside international partners to develop and deliver the best possible capability
The inclusion of Italy in the programme marks the third partner nation, following Sweden in July 2019.
The project is on schedule for key decision gate at the end of 2020 to confirm the class of Capability, Partnering Approach, Cost and Delivery Schedule

Key messages

The global Defence Marketplace is evolving and consolidating
Electronics is one of our biggest Divisions, addressing the largest part of the A&D market
Bringing Business Units together to make them stronger, through:
- ^o Internationalisation
- ^o Focus on performance
- ^o Product Development Synergies
- ^o Electronics is a Financial Performer
Double Digit profitability one year ahead of Plan
- ^o CAGR in excess of market trend
- ^o Cash generation above Group average
- ^o Delivering long term sustainable growth

Transform to grow From product seller to solution provider

Lucio Valerio Cioffi MD Aircraft

Rome, 13 March 2020

Confirming strong growth, profitability and cash generation

• Comprehensive product range already in the market providing solid and profitable base

• Clear strategy to transform the business and ensure long term value

NOTE: Before COVID-19 Outbreak

Strong and comprehensive product range…

		•	550+ aircraft flying		•	Production strong ramp-up
International Collaborations		•	580,000 hours achieved		•	…Additional opportunities
(Fighters)	EUROFIGHTER	•	Efa Kuwait Program	JSF F-35	•	MR&O Start-Up
		•	Best in class Advanced Trainer		•	The best basic trainer
Trainers		•	Established and Proven…		•	Cheaper … easier to maintain
	M-346 AJT	•	Opportunities in Light Fighter	M-345 HET (2020)	•	First delivery in 2020
Tactical		•	Tactical Transport …and		•	Reliable and affordable
transport & Special		•	Multi-use capabilities		•	Suited to Maritime Patrol
missions	C-27J	•	Avionics upgrade	ATR Special Missions	•	Leonardo Mission systems

CUSTOMER SUPPORT, SERVICES AND TRAINING

How we are transforming to grow – International Collaborations Solid, competitive and profitable in a long term growing market

© 2019 Leonardo - Società per azioni 44 …Strictly linked to our world class training solutions

How we are transforming to grow – delivering training solutions Leader in a growing market thanks to our ability to deliver training solutions for next generation pilots worldwide

OPPORTUNITIES TO BUILD OUR LEADERSHIP POSITION

Cost-effective training solutions
Covering the whole syllabus
Operational capability to further enhance commercial offer
Opening new markets
Upgradable capabilities to evolve with customer needs worldwide

Strong Outlook

We have strongly delivered in 2019
We have best-in-class solutions already in the market
We can exploit European and worldwide opportunities in a growing market (i.e. International Cooperations and Integrated Training Systems)
We are exploiting new disruptive technologies to remain competitive
We are well placed in the short term and the longer term

Master the new Leonardo's future approach to Innovation

Roberto Cingolani Chief Technology & Innovation Officer

London, 13 March 2020

Summary

Summary and short bio of the speaker
Role of the Chief Technology & Innovation Officer and Benchmark
Leonardo 2030 Masterplan: threefold strategy
Leonardo 2030 Masterplan: key actions
Conclusions

About the speaker: Roberto Cingolani, born Dec.1961. Degree in Physics, Two PhD Scientific Background: Physics, Nanotechnology, Materials Science, Robotics & A Scientific activities: Academic and Industrial research activities in Italy, Germany, USA and Japan Managerial Expertise: 2006 2019, CEO and CTO of the Italian Institute of Technology (about 1800 researchers from 60 countries, >800 international patents, > 20 start up, around 130 Meu yearly budget) Personal track record: >1000 scientific publications, > 120 international patents, H index =92, >33000 citations (source Google Scholar)

ROLE OF THE CTIO

The role of the CTIO is to improve the governance of the engineering and to inject innovation at different levels, from "gradual" optimisation to "game changing" technologies, contributing to a challenging and "sustainable Leonardo 2030" vision

BENCHMARK

Based on the international benchmark of the Aerospace & Defence sector (A&D) the following conclusions are drawn

Reinforce corporate innovation and low TRL R&D
Long term Research, Technology and Innovation masterplan 2020-2030
Slight effort to reach the standard IRAD investment level of the A&D sector (around 5% of total revenues)
Long term sustainability masterplan (2020-2030) addressing the UN Sustainability Agenda and the New European Green Deal

Leonardo 2030 Masterplan: threefold strategy

1. ENSURE DEVELOPMENT OF CURRENT KNOWHOW/PRODUCTS THROUGH

1. The assessment and reorganisation of the network of outsourced R&D actions
2. The reinforcement of the Intellectual Property (IP) strategy (corporate IP office)
3. The choice/development of enabling technologies needed to keep current Leonardo products competitive
4. The acceleration of the digitalisation of products engineering

2. ENSURE INNOVATION TO ENVISAGE FUTURE PRODUCTS AND COMPETITIVE MARKETS

1. Identify high-risk / high-return R&D interdivisional programmes to be developed at corporate level to accelerate innovation in the next decade
2. Create the Leonardo Labs: a corporate research infrastructure dedicated to innovation and to the R&D interdivisional programmes for future markets

3. DEVELOP A SUSTAINABILITY MASTERPLAN MAKING LEONARDO READY TO THE FUTURE GLOBAL SUSTAINABILITY CHALLENGES

1. 10 UN sustainablity goals targeted by 2030 (> 70 targets)
2. All targets of the New European Green Deal targeted

Leonardo 2030 Masterplan: the key actions → IDENTIFICATION OF THE

INTERDIVISIONAL PROGRAMMES (VERSUS CLASS OF PRODUCTS)

Leonardo 2030 Masterplan: the key actions → A LARGE SCALE INFRASTRUCTURE FOR HIGH PERFORMANCE COMPUTING AND BIG DATA ANALYTICS

The frontier of the in-silicon design: faster, cheaper, more efficient
The journey towards the Digital Twin
Satellite services: geo-observation, image analysis (better services and better products)
Artificial intelligence and Internet of Things
Cyber secure technologies
Predictive Maintenance: real time analysis of data transmitted by flying systems (new services and products)
Simulation and training systems, Augmented reality and virtual environments for multiple applications

HPC

INFINIBAND

50 Gbyte/s

Leonardo 2030 Masterplan: the key actions → INTELLIGENT AUTONOMOUS SYSTEMS

The embodyment of A.I. to obtain smart unmanned systems capable of «deciding and actuating», based on the unique integration of different Technology Platforms:

1. A.I., Deep learning and Machine Learning → Big Data & High Performance Computing
1. Sensing network → New sensors and sensing technologies (i.e. Quantum)
1. Fast wireless transmission protocols (i.e. 5G) → i.e. 5G
1. Actuators and Bodies → new robotics for sea, land, air, space
1. Power sources → Batteries, Supercapacitors, Fuel Cells

2019 Nanchang Flight Convention

Internet of Things (210 Beu in 2022) https://www.key4biz.it
Industry 4.0 (40 Beu investment till 2020) https://www.eca.europa.eu
Autonomous cars (> 50 Beu investment till 2020) https://www.ilsole24ore.com
Space Robotic Market (3,5 Beu in 2025) https://www.prnewswire.com › news-releases › space...
Flying, Land, Submarine drone market 140 BUS\$ nel 2020 https://recensionidroni.com/infografica-il-mercato-dei-droni-e-in-continua-crescita/

THE SPACE COMPANY

Space X (Elon Musk)
Blue Origin (Jeff Bezos)
ISpace
Intuitive Robotics
Astrobotic
Oceaneering International
Maxar Technologies
Northrop Grumman
Motiv Space Systems
Altius Space Machines

Leonardo 2030 Masterplan: the key actions →

AIRCRAFT ELECTRIFICATION

FUTURE TRENDS

Reduce Carbonisation
Increase short range regional transport
Develop urban mobility vehicles for 3D traffic
Devolp Swarm A.I.
Develop controls
Develop hybrid, electric and new generation propulsion systems
Develop distributed propulsion

The Norway case study: >70 airports and > 40 heliports. Average distance 150 km. Typical aircraft size: 10 to 40 seats Complete decarbonisation to be achieved by 2030

Leonardo 2030 Masterplan: the key actions →

LEONARDO CORPORATE LABS

The organisation of the network of labs is provisional. Work will be finalised during 2020

Delivering on promises Long term targets

Alessandro Profumo Chief Executive Officer

Rome, 13 March 2020

**Doing what we said we would do, embracing new challenges ahead 2020-2024 TARGETS* 2018-2019 ACHIEVEMENTS**

*Before COVID-19 Outbreak

Delivering on promises FY2019 Results & Outlook

Alessandra Genco Chief Financial Officer

Rome, 13 March 2020

In 2018 we presented a Plan setting the business up to win – our journey so far Planting the seeds for growth…

• We entered a new phase aimed at long term sustainable profitable growth

• A lot was achieved in recent years: we have delivered on promises

• We continue to be fully focused on execution

FY 2019 highlights Met or beated 2019 targets on all metrics

Executed on our Industrial Plan
Delivered on

• 2020 Guidance reflects continuous progress towards Industrial Plan targets

*Including IFRS16 effect

Order Intake Continuous strong commercial momentum across the Group

Revenues Strong growth across the Group

EBITA and Profitability

Higher performance across all businesses, with lower contribution from Space Manufacturing and ATR

From EBITA to Net Result

Below the line benefitting from lower restructuring costs and PPA

EBIT up 61.3%, driven by lower restructuring and PPA
Net financial expenses include € 20 mln of buy back costs
Net Result benefitting from the release of risk provision set against guarantees given upon disposal of AnsaldoBreda transportation business (2Q19)

Investments as foundation for future sustainable growth

• Innovative products and solutions

^o ATR 42-600 Short Take off and Landing (STOL)
^o Falco Xplorer
^o New single engine development SH09 post Kopter acquisition*

• Addressing customers requirements

^o AESA applications radars for naval and airborne
^o Cyber resilient products and systems
Leading player in European and International cooperation programmes
- ^o Tempest
- ^o AWHERO and C&C Naval Systems for OCEAN 2020
Building cross-divisional capabilities to "empower" our products
- ^o Simulation, big data analytics

*Closing expected in 1H2020

On track to deliver material step up in FOCF

2018 – 2019

AHEAD OF PLAN

2020 ONWARD

STRONG UNDERLYING IMPROVEMENT WITH CLEAR DRIVERS

Operating profit growth
Cash profile of EFA Kuwait
Working Capital management through Industrial process optimisation, counterbalancing unwinding of customer advances
Gradual progress in Aerostructures

Note: Projections before COVID-19 outbreak

Delivering more than promised: further strengthening our capital structure

(1) Including Bonds, Term Loan, EIB and CDP loans

(2) Including US Bonds tendered in 2017 and 2019

(3) Pro forma for €100mil CDP loan

Note: Projections before COVID-19 outbreak

Significantly lower Cost of Funding, beating targets

(1) Pro forma for €100mil CDP Loan.

Note: Projections before COVID-19 outbreak

2020 Guidance before Covid-19 impact

Despite the challenges in making forecasts in the current situation due to the COVID-19 emergency, Leonardo believes it is appropriate to provide Guidance in a continuity scenario, without including COVID-19 impacts

		FY2019A	FY2020 Guidance
New Orders	(€ bn)	14.105	ca. 14
Revenues	(€ bn)	13.784	14.0 – 14.5
EBITA	(€ mln)	1,251	1,325 – 1,375
FOCF	(€ mln)	241	400 – 450
Group Net Debt	(€ bn)	2.8*	2.8**

*Including IFRS 16 effect of ca. € 0.5 bn

**Including € 0.1 bn higher IFRS16 effect, Kopter acquisition (ca. € 0.2 bn) and assuming dividend payment

2020 exchange rate assumptions: € / USD = 1.15 and € / GBP = 0.88

Covid-19 impact

Leonardo acknowledges that COVID-19 will likely impact on the ordinary business
This is despite mitigating actions promptly put in place and aimed at preserving business and production continuity and fully ensuring health and safety of our employees
Areas likely to be impacted are:
- o commercial campaigns
- o continuity of supply chain
- o production times / flows
- o timing of acceptance processes of products/activities by customers
As the situation keeps evolving, we cannot yet reliably quantify the impact on our 2020 performance
We will update the market as soon as an assessment of the possible impact, including recovery actions, is available
These short-term challenges do not change the Group's solid medium-long term fundamentals
- o strong backlog of over € 36 billion
- o long term attractiveness and relative resilience of our key markets
- o leading products and market positions across businesses, leveraging an international presence

Key takeaway messages

Alessandro Profumo Chief Executive Officer

Rome, 13 March 2020

Setting the business up to succeed in the long term

Clear view on our future
Fully committed to delivering as a Team
Full support from our institutional stakeholders
Delivering on our promises

SECTOR RESULTS

Helicopters Well positioned to capture market opportunities

€ mln	4Q 2018	4Q 2019	% Change	FY 2018	FY 2019	% Change
Orders	1,523	2,407	+58.0%	6,208	4,641	-25.2%
Revenues	1,154	1,289	+11.7%	3,810	4,025	+5.6%
EBITA	142	161	+13.4%	359	431	+20.0%
RoS	4.9%	12.5%	+7.6 p.p.	9.4%	10.7%	+1.3 p.p.

2020 OUTLOOK*

Growth driven by delivering on the Backlog, quality of product portfolio and strong position in most attractive market segments
Profitability solidly at double digit

Helicopters

Defence Electronics & Security Growing Revenues and Profitability

ELECTRONICS - EU

€ mln	4Q 2018	4Q 2019	% Change	FY 2018	FY 2019	% Change
Orders	2,448	1,780	-27.3%	4,408	4,444	+0.8%
Revenues	1,408	1,551	+10.2%	4,010	4,289	+6.%
EBITA	176	190	+8.0%	394	427	+8.3%
RoS	12.5%	12.4%	-0.1 p.p.	9.8%	10.0%	+0.2p.p.
LEONARDO DRS
\$ mln	4Q 2018	4Q 2019	% Change	FY 2018	FY 2019	% Change
Orders	929	670	-27.9%	2,879	2,923	+1.5%
Revenues	798	913	+14.4%	2,339	2,729	+16.7%
EBITA	67	92	+37.3%	151	208	+37.8%
RoS	8.4%	10.1%	+1.2 p.p.	6.5%	7.6%	+1.1p.p.

Avg. exchange rate €/\$ @ 1.11950 in FY2019 Avg. exchange rate €/\$ @ 1.18100 in FY2018

2020 OUTLOOK*

Slight growth in revenues
Profitability improvement despite passthrough and programmes under development
Leonardo DRS to continue to grow top line and profitability
Leonardo DRS Soft Backlog accounting for > 4x current Backlog (ca. \$ 3 bn)

Aeronautics Solid Aircraft performance

€ mln	4Q 2018	4Q 2019	% Change	FY 2018	FY 2019	% Change
Orders	1,149	776	-32.5%	2,569	2,788	+8.5%
Revenues	871	1,086	+24.7%	2,896	3,390	+17.3%
EBITA	161	197	+22.3%	328	362	+10.3%
RoS	12.6%	18.1%	+5.5 p.p.	11.3%	10.7%	-0.6 p.p.

2020 OUTLOOK*

Higher revenues compared to 2019
- ^o Aircraft production increase (EFA Kuwait)
Gradual recovery in Aerostructures
ATR poised to confirm its market leadership position

Space Pressure on Manufacturing

2020 OUTLOOK*

2019 downsizing in Manufacturing affecting 2020
Revenues in line with 2019
Profitability expected to increase supported by gradual recovery of Manufacturing and satellite services improvement

APPENDIX

4Q/FY 2019 Results Group Performance

€ mln	4Q 2018	4Q 2019	% Change	FY 2018	FY 2019	% Change
New Orders	5,734	5,526	-3.6%	15,124	14,105	-6.7%
Backlog				36,118	36,513	+1.1%
Revenues	4,000	4,650	+16.3%	12,240	13,784	+12.6%
EBITA	488	565	+15.8%	1,120	1,251	+11.7%
RoS	12.2%	12.2%	+0.0 p.p.	9.2%	9.1%	-0.1p.p.
EBIT	343	505	+47.2%	715	1,153	+61.3%
EBIT Margin	8.6%	10.9%	+2.3p.p.	5.8%	8.4%	+2.6p.p.
Net result before extraordinary transactions	257	355	+38.1%	421	722	+71.5%
Net result	247	357	+44.5%	510	822	+61.2%
EPS (€ cents)	0.427	0.613	+43.6%	0.888	1.422	+60.2%
FOCF	1,136	1,458	+28.3%	336	241	-28.3%
Group Net Debt				2,351	2,847	+21.1%
Headcount				46,462	49,530	+6.6.%

Free Operating Cash-Flow (FOCF): this is the sum of the cash flows generated by (used in) operating activities (which includes interests and income taxes paid) and the cash flows generated by (used in) ordinary investment activity (property, plant and equipment and intangible assets) and dividends received

2017 – 2019 As promised, we refinanced only ≈ 65% of expiring debt(1)

€ mln

(1) Including US Bonds tendered in 2017 and 2019 (2) Including forex impact (3) Pro forma for €100mil CDP Loan

Note: Projections before COVID-19 outbreak

We reduced debt, while growing through M&A and remunerating shareholders

(1) It includes Avio, Daylight Solutions, Vitrociset and pro forma for Kopter

Solid Financial Position as end of December 2019

of New Debt Instruments

The Cassa Depositi e Prestiti (CDP) financing is characterised by a 6 year bullet repayment Repayment Conditions

CREDIT RATING

(1) Pro forma for CDP financing arranged in 2019 and signed in January 2020

Availability of adequate committed liquidity lines as end of December 2019

In order to cope with possible swings in financing needs, Leonardo can leverage:

31 December cash balance of approx. € 2.0 bn
Credit lines worth € 2.5 bn (confirmed and unconfirmed)
The Revolving Credit Facility signed on 14 February 2018 amounts at € 1.8 bn with a margin of 75bps and will expire in 2023
Bank Bonding lines of approximately € 3.4 bn to support Leonardo's commercial activity

(1) Based on rating as of 31/12/2019

(2) Average. Expected to be renewed at maturity

Development costs capitalised as intangible assets as at 31 December 2019

€ mln	Self Funded National Security	Self Funded Other	Total
01 January 2019 Opening Balance	1,760	476	2,236
Gross R&D capitalised Depreciation and write offs Disposals Other Changes (*)	204 -102 0 -57	66 -32 -2 -5	270 -134 -2 -62
Net R&D capitalised	45	27	72
31 December 2019	1,805	503	2,308

(*) Movements w/o cash and PL effects

SAFE HARBOR STATEMENT

NOTE: Some of the statements included in this document are not historical facts but rather statements of future expectations, also related to future economic and financial performance, to be considered forward-looking statements. These forward-looking statements are based on Company's views and assumptions as of the date of the statements and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Given these uncertainties, you should not rely on forward-looking statements.

The following factors could affect our forward-looking statements: the ability to obtain or the timing of obtaining future government awards; the availability of government funding and customer requirements both domestically and internationally; changes in government or customer priorities due to programme reviews or revisions to strategic objectives (including changes in priorities to respond to terrorist threats or to improve homeland security); difficulties in developing and producing operationally advanced technology systems; the competitive environment; economic business and political conditions domestically and internationally; programme performance and the timing of contract payments; the timing and customer acceptance of product deliveries and launches; our ability to achieve or realise savings for our customers or ourselves through our global cost-cutting programme and other financial management programmes; and the outcome of contingencies (including completion of any acquisitions and divestitures, litigation and environmental remediation efforts).

These are only some of the numerous factors that may affect the forward-looking statements contained in this document. The Company undertakes no obligation to revise or update forward-looking statements as a result of new information since these statements may no longer be accurate or timely.

Contacts

Valeria Ricciotti

Head of Investor Relations and Credit Rating Agencies

+39 06 32473.697

[email protected]

Leonardo Investor Relations and Credit Rating Agencies

+39 06 32473.512

[email protected]

leonardocompany.com

AI Terminal

Leonardo S.p.A.

4038_10-k_2020-03-13_f7dc8f91-ed9e-4f35-9025-ded8d153eef6.pdf

FY 2019 Results Presentation

Agenda

Part 1: Setting the business up to succeed in the long term Alessandro Profumo, Chief Executive Officer

Part 2: Delivering on promises

-

Q&A

Setting the business up to succeed in the long term

We are very clear on the company we want to be

Delivering long term sustainable growth Stronger international footprint

Outstanding achievements

Accelerating Order Intake

Long term sustainable growth underpinned by Customer Support, Services & Training

Really valuable part of our business

Making significant progress at Group level

Creates long term loyalty and repeat business

Delivering on long term sustainable growth

Clear targets in our priority sectors

GLOBAL

Clear view of the strategic path

STRENGTHEN OUR CORE

TRANSFORM TO GROW

MASTER THE NEW ACCELERATING INNOVATION

Clear view of the strategic path

STRENGTHEN OUR CORE

TRANSFORM TO GROW

MASTER THE NEW ACCELERATING INNOVATION

Clear view of the strategic path

STRENGTHEN OUR CORE

TRANSFORM TO GROW

MASTER THE NEW ACCELERATING INNOVATION

Strengthen our core Focus on top line growth & profitability improvement

Leonardo DRS – past performance an indicator of sustained success

• Leonardo DRS uniquely positioned to excel

© 2019 Leonardo - Società per azioni 13 Leonardo DRS poised to continue growth and expand margins

US Defence spending DoD overview, priorities, and outlook

Geopolitical trends assure strong DoD spending

DOD Topline Budget moderating, but stable

Election year provides for some uncertainty

FY2021 Budget supports national defence strategy

Leonardo DRS continuing to outperform US Defence market

LEONARDO DRS MULTI YEAR GROWTH TREND > 2X INDUSTRY AVERAGE

The benefit of US market consolidation

Size & Agility

Alignment of strongest capabilities in the fastest growing areas of the defence budget

Defence Electronics & propulsion key modernisation priorities

© 2019 Leonardo - Società per azioni 16 Addressable markets growing faster than overall Defence Budget

Alignment with Warfighter Needs Propelling Growth

Driving improving profitability

Key Takeaways

Strenghten the core Customer satisfaction…our daily effort and ultimate goal

Customer satisfaction… our daily effort and ultimate goal Helicopters Customer Centric approach enabling long term business sustainability

2019 IN A NUTSHELL…

…CUSTOMERS REMAIN OUR PRIORITY

Solid offer to respond to global market trends Further increasing Customer satisfaction and intimacy

Comprehensive product portfolio aimed at matching all mission needs Continuously capabilities improvements to satisfy the most demanding rotary wing requirements

Our effective Customer centric approach… to an increasing fleet utilisation We are a business partner, not only Original Equipment Manufacturers

Worldwide presence to be close to our Customers

Our Service and Logistic Centres are spread in all continents, to match our Customers' needs and their Fleets

End-to-end support services thanks to streamlined processes Well recognised by the market

Full set of Training solutions: to maximize Customer value Combining Advanced Simulation with Unparalleled Flexibility

TRAINING FOR THE WHOLE CREW…

… INTEGRATING LIVE AND VIRTUAL

We boost the whole Customer value chain through digital services

Real-time diagnostics to increase Safety Co-developed with our Customers

On track for sustainable growth

Transform to grow Towards more efficient organisation

Agenda – Transform to Grow

Key messages

TODAY

Our strategy

OVERALL

FINANCIAL GOALS

PRODUCTS & MARKET OFFERINGS

INTERNAL FOCUS

Order Intake World Map 2020

Focusing on Performance…

Automation managed separately

**Doing what we said we would do, embracing new challenges ahead 2020-2024 TARGETS* 2018-2019 ACHIEVEMENTS**