Leonardo S.p.A.

Earnings Release • May 8, 2019

1Q 2019 Results Presentation

Alessandro Profumo Chief Executive Officer Alessandra Genco Chief Financial Officer

Rome, 8 May 2019

Investor Relations and Credit Rating Agencies

Executing the Industrial Plan Chief Executive Officer

1Q 2019 Results & Outlook Chief Financial Officer

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Appendix

© Leonardo - Società per azioni

Solid start to the year

Good progress on top line growth

• o Orders up 16% at € 2.5 bn
• o Revenues up 11% at € 2.7 bn
• o EBITA up 7% at € 163 mln
• o Net Result up 54% at € 77 mln
• o FOCF at € (1.1) bn

2019 Guidance confirmed

Fully focused on Industrial Plan execution

Executing the Industrial Plan

Strong demand for our products

2019: € 380 mln for 4 AW101 plus support and training o Deliveries by 2022

2018: > € 115 for 4 M346 plus support o Deliveries by 2020

2018-2019: Mounted Family of Computer Systems (MFoCS II) for U.S. Army

2018: \$ 1.4 bn for up to 84 MH139 plus support and training for U.S. Air Force o Initial operational capability by 2021

USA

Executing the Industrial Plan Chief Executive Officer

1Q 2019 Results & Outlook Chief Financial Officer

5

Appendix

© Leonardo - Società per azioni

1Q 2019 Highlights

Solid 1Q 2019 performance

• o Orders at € 2.5 bn, up 16% YoY
• o Revenues at € 2.7 bn, up 11 % YoY
• o EBITA at € 163 mln, up 7 % YoY, with RoS at 6.0%
• o FOCF at € (1.1) bn influenced by seasonality
• o Net Debt at € 4.0 bn, reflecting IFRS16 adoption from 1 st January 2019

2019 Guidance confirmed

Order intake

Solid performance driven by Leonardo DRS and Helicopters

Revenues

Positive momentum in Defence Electronics and Helicopters

EBITA and Profitability

Solid performance across all businesses, with lower contribution from JVs

Net Result

Below the line benefitting from lower restructuring, PPA and net financial expenses

• EBIT up 29%,driven by higher EBITA, lower restructuring costs and PPA
• Net Result benefitting from higher EBIT and lower financial expenses despite higher taxes

FY 2019 Guidance confirmed

		FY2018A	FY2019 Guidance
New Orders	(€ bn)	15.124	12.5 - 13.5
Revenues	(€ bn)	12.240	12.5 - 13.0
EBITA	(€ bn)	1.120	1.175 - 1.225
FOCF	(€ mln)	336	ca. 200
Group Net Debt	(€ bn)	2.4	ca. 2.3

ca. 2.8*

2018 exchange rate assumptions: €/USD 1.25 and €/GBP 0.90

*Including IFRS16 effect of ca. € 0.4 - 0.5 bn

Closing remarks

• Good progress on top line growth
• 2019 Guidance confirmed
• Fully focused on Industrial Plan execution

SECTOR RESULTS

THANK YOU FOR YOUR ATTENTION

Helicopters

Well positioned to capture growth opportunities

	€ min	1Q 2018	1Q 2019	% Change	FY 2018
Orders		611	688	12.6%	6.208
Revenues		750	813	8.4%	3.810
EBITA		53	56	5.7%	359
RoS		7.1%	6.9%	-0.2 p.p.	9.4%

2019 OUTLOOK

• Well placed in most attractive segments
• Profitability strengthening; back to double digit in 2020
• Continuing industrial processes optimisation to improve competitiveness

DELIVERIES BY PROGRAMME

Defence Electronics & Security Remain strong

		ELECTRONICS - EU

	€ mln	1Q 2018	1Q 2019	% Change	FY 2018
Orders		622	823	32.3%	4.409
Revenues		789	874	10.8%	4,011
EBITA		55	76	38.2%	394
RoS		7.0%	8.7%	1.7 p.p.	9.8%

	S min	1Q 2018	1Q 2019	% Change	FY 2018
Orders		424	780	84.0%	2.880
Revenues		455	524	15.2%	2.339
EBITA		22	27	22.7%	151
RoS		4.9%	5.2%	0.3 p.p.	6.5%

Avg. exchange rate €/\$ @ 1.1357 in 1Q2019 Avg. exchange rate €/\$ @ 1.2295 in 1Q2018

2019 OUTLOOK

• 2019 revenue expected to increase
• Profitability improvement
• Leonardo DRS benefitting from positive market trends

Aeronautics

Aircrafts positive outlook offsetting lower ATR

	€ mln	1Q 2018	1Q 2019	% Change	FY 2018
rders		723	454	-37.2%	2.569
evenues		639	644	0.8%	2.896
BITA		47	37	-21.3%	328
OS		7.4%	5.7%	-1.7 p.p.	11.3%

2019 OUTLOOK

• Higher revenues compared to 2018
  • o Aircraft production increase (especially EFA Kuwait)

Good levels of profitability supported by

• o Solid Aircraft performance
• o First signs of recovery in Aerostructures benefitting from efficiency improvement in line with expectations

Space Pressure on Manufacturing

2019 OUTLOOK

Continued downturn in telecommunication market expected to affect Manufacturing activities

APPENDIX

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© Leonardo - Società per azioni

1Q 2019 Results Group Performance

€ min	1Q 2018	1Q 2019	% Change	FY 2018
New Orders	2,164	2,518	16.4%	15,124
Backlog	33,360	36,575	9.6%	36,118
Revenues	2,451	2,725	11.2%	12,240
FRITA	153	163	6.5%	1,120
RoS	6.2%	6.0%	-0.2 p.p.	9.2%
EBIT	121	156	28.9%	715
EBIT Margin	4.9%	5.7%	0.8 p.p.	5.8%
Net result before extraordinary transactions	50	17	54.0%	421
Net result	50	77	54.0%	510
EPS (€ cents)	0.087	0.134	54.0%	0.888
FOCF	-1.057	-1,114	-5.4%	336
Group Net Debt	3,595	4,016	11.7%	2,351
Headcount	45 606	48 040	53%	46.462

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

Solid Financial Position as at end of March 2019

Repayment Conditions of New Debt Instruments

The Term Loan Facility is characterized by a 5 years bullet repayment; the EIB financing is a 12 year amortizing loan with a 4 year grace period

CREDIT RATING	As of today	Before last review	Date of review
Moody's	Ba1 / Stable Outlook*	Ba1 / Positive Outlook	October 2018
S&P	BB+ / Stable Outlook	BB+ / Negative Outlook	April 2015
Fitch	BBB- / Stable Outlook	BB+ / Positive Outlook	October 2017

*Moody's stated that this review is not due to Leonardo's stand-alone credit rating but is the consequence of Italy's country downgrade

(1) Pro forma of EIB Financing drawndown and excluding reimbursements due in 2019

Availability of adequate committed liquidity lines as at end of March 2019

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

• o 31 March cash balance of € 1.0 bn
• o Credit lines worth € 2.5 bn (confirmed and unconfirmed)
• o The Revolving Credit Facility signed on 14 February 2018 amounts at € 1.8 bn with a margin of 75bps and will expire in 2023
• o Bank Bonding lines of approximately € 2.8 bn to support Leonardo's commercial activity

• (1) Based on rating as of 31/03/2019
• (2) Average. Expected to be renewed at maturity

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IFRS 16

• IFRS 16 redefines recording methods of operating leases in the financial statements imposing a single recognition method for all types of leasing, with the consequent recognition in the balance sheet of the tangible assets and liabilities for future payments

• The main impacts deriving from the application of the new principle are:

  • o recording of non-current assets equal to rights of use on tangible and intangible assets against existing leasing contracts

• o recognition of financial liabilities equal to the present value of future rentals

• The Group has applied this principle starting from 1 st January 2019
• The estimated impact on the Group Financial Debt for FY 2019 will be ca. € 0.4-0.5 bn

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

Raffaella Luglini Chief Stakeholder Officer raffaella.luglini@leonardocompany.com

Valeria Ricciotti Head of Investors Relations and Credit Rating Agencies +39 06 32473.697 valeria.ricciotti@leonardocompany.com

ir@leonardocompany.com

Manuel Liotta Head of Sustainability +39 06 32473.666 manuel.liotta@leonardocompany.com