HENSOLDT AG — Investor Presentation 2020

Nov 10, 2020

HENSOLDT

9M 2020 Analyst and Investor Presentation

Taufkirchen, 10. November 2020

Thomas Müller, CEO Axel Salzmann, CFO

Disclaimer

This presentation and the information contained herein are for information purposes only and should not be treated as investment advice or recommendation. It is not, and nothing in it should be construed as an offer for sale, or as ^a solicitation of an offer to purchase or subscribe to, any securities in any jurisdiction. Neither this presentation nor anything contained therein shall form the basis of, or be relied upon in connection with, any commitment or contract whatsoever. This presentation does not constitute ^a prospectus in whole or in part, and any decision to invest in securities should be made solely on the basis of the information to be contained in ^a prospectus and on an independent analysis of the information contained therein. This presentation may not, at any time, be reproduced, distributed or published (in whole or in part) without prior written consent of HENSOLDT. Any securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or the laws of any state of the United States, and may not be offered, sold or otherwise transferred in the United States absent registration or pursuant to an available exemption from registration under the Securities Act.

Certain financial information including financial information as of and for the nine-month period ended September 30, 2020 is unaudited. This presentation contains certain supplemental financial or operative measures that are not calculated in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") or any other generally accepted accounting principles, and are therefore considered non-IFRS measures. We believe that such non-IFRS measures, when considered in conjunction with (but not in lieu of) other measures that are computed in accordance with IFRS, enhance the understanding of our business, results of operations, financial position or cash flows. There are, however, material limitations associated with the use of non-IFRS measures including (without limitation) the limitations inherent in the determination of relevant adjustments. The non-IFRS measures used by us may differ from, and may not be comparable to, similarly-titled measures used by other companies.

The information contained in this presentation has not been independently verified, and no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information contained herein and no reliance should be placed on it. HENSOLDT does not accept any liability for any loss howsoever arising (in negligence or otherwise), directly or indirectly, from this presentation or its contents or otherwise arising in connection with this presentation. This shall not, however, restrict or exclude or limit any duty or liability to ^a person under any applicable law or regulation of any jurisdiction which may not lawfully be disclaimed (including in relation to fraudulent misrepresentation).

The information contained in this presentation is provided as of the date of this presentation and is subject to change without notice.

Forward Looking Statement

This presentation may contain forward-looking statements about HENSOLDT and its businesses, including statements concerning its strategies, future growth potential of markets and products, profitability in specific areas, future product portfolio, and development of and competition in economics and markets. These statements are based on the current views, expectations, assumptions and information of management, and are based on information currently available to management. Forwardlooking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects" and similar references to future periods.

Any such forward-looking statements involve known and unknown risks which may cause actual results to differ significantly from any future results expressed or implied. While we believe that the assumptions made and the expectations reflected in today's presentation are reasonable, no assurance can be given that such assumptions or expectations will prove to have been correct. The risks and uncertainties which these forward-looking statements may be subject to include (without limitation) future market developments and the impact of global and European social, political and economic events and developments, including the COVID-19 pandemic, as well as defense and security spending by governments, legal restrictions and controls applicable to sales of HENSOLDT's products, including government approval requirements and moratoriums, international conflicts and political developments affecting HENSOLDT, including by way of new export restrictions, trade barriers, or political support for competitors, HENSOLDT's inclusion and participation in major defense projects and platforms and HENSOLDT's competitive situation.

The company assumes no liability whatsoever to update these forward-looking statements or to adjust them to future events or developments.

HENSOLDT's public reports and presentations are available via www.hensoldt.net

A unique high growth defence and security investment proposition

definedas total identified opportunities open for tender based on management estimates of total value of contracts addressable over 2021‐2023E (unadjusted for win probabilities for HENSOLDT). €10bn pipeline including some of the recurring short cycle / aftersales business.

3

HENSOLDT is fully on track

We continue to strengthen our position as a technology leader

/ / C S R d I F F O M M a a r	F i i l M K 1 f l l d t t  r s m e s o n e s u c c e s s u y p a s s e f C F i i d i i I F F i l l d h N i F i t t t t t t t t t r s s e r e s p r o c o n o n o n- r o a n g s s e m n s a e o n e o r e g a n s o m e r r g a e  u y w u f f S ( ) F i i i d i h l l R d k i i i l l I F F t t t t r s r g a e e q p p e a a a r e n s o r p a c a g e n a g a o n, s r e a n c e,  u w u v u v
S D i t p e c r m o m n a n c e u & A i b S l i t r o r n e o u o n s	K l A I- b d d i i f l l d t t t  a a e r o n a s e r a a r w a r n n g r e c e v e r s u c c e s s u y e s e C G O d k d f i f A F F d i B t t t t t t  o u n e r- r o n e s e n s o r p a c a g e c o n r a c e o r p r o e c o n o o r w a r p e r a n g a s e s	3rd
C S i t u s o m e r e r v c e s	f N d i i i d i h i 9 t t t t o r c s e r c e c o n r a c s g n e a r n m e o e a r s  v w u y f f f P l l i l l E i h i i i i d t t t t t t r o p o s a o r a m e a r o o -o n r o g e r s e r c e c o n r a c n a e  u y w u v	quarter highlights
O i t p r o n c s	th 1 0 f f i l f l d l i d 5 t t s s e m o n a o c s m e r o o g e e r e  y u y v F i i i f i d f h U S f M A B R A M S L R F i d d i d 1 t t t r s s g n c a n o r e r r o m e o r a s e r a n g e n e r u p g r a e r e c e v e 

Accessing new markets by smartly combining existing sensors

A step-changing year for HENSOLDT

HENSOLDT fully on track with all KPIs above 2019 level

A firm order backlog of €3.4bn is a strong base for sustainable growth in future

Milestone contracts as a prime contractor underline HENSOLDT's position as a trusted partner for its customers

HENSOLDT is and stays at the edge of technology

The successful integration of five acquisitions has turned HENSOLDT into a company with a global footprint

HENSOLDT is well positioned to benefit from sustainable growth momentum in defence industry

9M 2020 - Financial highlights (1/2) in €m

(1) Order intake is defined as orders where the corresponding selling contract becomes effective and enforceable in accordance with the terms and conditions of the contract. (2) Order backlog is defined as the value of the order book at the respective reporting date by keeping record of customer orders starting from the opening stock and taking into account revenue and adjustments for the respective reporting period, and ending with the final stock.

9M 2020 - Financial highlights (2/2) in €m

execution partly offset by higher functional costs to drive future growth

improved cash conversion (>65%)

(1) Adjusted EBIT is defined as EBIT adjusted for certain non-recurring effects relating to effects on earnings from purchase price allocations, transaction costs, separation costs, and other non-recurring effects. (2) Adjusted EBITDA is defined as EBIT adjusted for depreciation and amortization (including non-recurring effects on earnings from purchase price allocations), as well as certain non-recurring effects relating to transaction costs, separation costs, and other non-recurring effects. (3) Adjusted Pre-Tax Unlevered Free Cash Flow is defined as free cash flow adjusted for non-recurring operating effects as well as interest, tax and M&A activities. The free cash flow is defined as sum of the cash flows from operating and investing activities as reported in the consolidated cash flow statement.. (4) Calculated as a percentage of reported revenue.

Significant deleveraging

11

Key take aways

H E N S L D T i f l l k i l l K P I O t s u y o n r a c n a s
S O f i i H E N L D T l l d i l l K P I c o n r m s o v e r a g u a n c e n a s
G h i b h d b l i t t t t t r o w n o o p a n o o m n e
H i h f i b i l i d f f i i j i t t t t t t g p r o a y u e o e c e n p r o e c e x e c u o n
I d l i i d i d h f l i d i i f i d l i i I P O t t t t t m p r o e q s g n c a n e e e r a g n g v u y u e o s r o n g c a s o w g e n e r a o n a n v s n c e
i B d l l d u s n e s s e v e o p s a s p a n n e

IR Contacts

Upcoming IR events

HENSOLDTFinancial Section

Consolidated Income Statement

	Fir 9 M ths st on
€m	20 20	20 19
Re ve nu e	71 2.1	67 5.2
Co f s st o ale s	( ) 56 8.3	( ) 54 4.3
Im irm t lo s ( -) / re l of im irm t lo s ( +) de iva ble nd tra ntr act set pa en sse ve rsa pa en sse on re ce s a co as s	2.0	0.6
Gr rof it os s p	14 5.7	13 1.5
Se llin d d istr ibu tio g an n e xp en ses	( 64 .5)	( 59 .4)
Ge ral ad min istr ativ ne e e xp en ses	( .2) 64	( .8) 47
Re rch d d lop nt ts sea an eve me cos	( .4) 19	( .0) 27
Ot he ing in rat r o pe co me	14 .4	20 .7
Ot he ing rat r o pe ex pe nse s	( 18 .3)	( 17 .6)
Sh of ofit / l fro fo inv est nt a unt ed sin the uity eth od are pr oss m me cco r u g eq m	( ) 2.6	( ) 0.9
Ea rni s b efo fin lt a nd in s ( EB IT) ta ng re an ce re su co me xe	( 8.8 )	( 0.5 )
Inte t in res co me	2.4	40 .5
Inte t e res xp en se	( 126 .4)	( 63 .8)
Ot r fi / c he in ost na nce co me s	( ) 9.2	( ) 2.3
Fin lt an ce re su	( 13 3.2 )	( 25 .5)
Ea rni s b efo inc e t ng re om ax es	( 14 1.9 )	( 26 .0)
Inc e t om axe s	23 .9	( 8.2 )
Co oli da ted lo ns ss	( ) 11 8.0	( .3) 34
the f a ttri bu tab le the of HE NS OL DT AG to reo ow ne rs	( .7) 117	( .7) 34
the f a ttri bu tab le llin int to tro sts reo no n-c on g ere	( 0.4 )	0.4

Consolidated Statement of Cash Flow

		Fir ths st 9 m on
€m	20 20	20 19
Lo fo r th eri od ss e p	( 11 8.0 )	( 34 .3)
De cia tio nd iza tio ort pre n a am n	87 .7	91 .7
t (n et) Fin an ce cos	119 .7	20 .6
Ch e i rkin ital (1) et an g n n wo g ca p	63 .7	( .2) 72
Inte t p aid res	( 36 .5)	( 34 .2)
Inc e t om ax ex pe nse	( .9) 23	8.2
Ot r(2) he	( ) 5.7	( 2.5 )
Tra ctio efi nci ost nsa n c s o n r na ng	( .9) 14	-
Ca flo fro tin tiv itie sh ws m op era g ac s	72 .1	( 22 .7)
Ac isit ion of int ible nd lan nd uip set rty t a nt qu an g as s a pro pe , p eq me	( .3) 70	( .1) 56
of Ac isit ion iate the r in stm ts a nd oth t in stm ts qu as soc s, o ve en er no n-c urr en ve en	( 5.9 )	( 3.3 )
Dis l of iate the r in nd oth t in stm ts a stm ts po sa as soc s, o ve en er no n-c urr en ve en	0.1	1.7
Ac isit ion of bsi dia ries f c h a uir ed t o qu su ne as cq	4.0	0.0
Ot he r	0.2	0.0
Ca flo fro sh inv tin tiv itie ws m es g ac s	( 71 .8)	( 57 .6)
Pro ds / re of fin cia l lia bili tie (3) nt cee pay me an s	31 .3	31 .1
f le Pa t o lia bili tie ym en ase s	( 10 .5)	( 7.9 )
Iss of sha ue res	30 0.0	-
Tra ctio rel d t o is of uity ost ate nsa n c sue eq	( 6.0 )	-
Ot he r(4)	-	( ) 0.2
Ca sh flo fro fin cin tiv itie ws m an g ac s	31 4.9	23 .0
Eff f m in e xch h a nd h e iva len ect ts ate ts s o ov em en an g e r s o n c as cas qu	( ) 5.1	0.0
Ot he ha r c ng es	( 2.1 )	-
Ne ha in c h a nd h e iva len t c ts ng es as cas qu	30 7.9	( .2) 57
Ca sh d c h e iva len ts an as qu	-	-
Ca sh d c h e iva len be inn ing of riod ts at an as qu g pe	137 .4	22 7.6
Ca sh d c h e iva len d o f p eri od ts at an as qu en	44 5.3	170 .3

(1) Includes changes in provisions, inventories, contract balances, trade receivables, trade payables, other assets and liabilities. (2) Includes allowances on inventories, trade receivables and contract assets, profit/loss from disposal of non-current assets, share of profit in entities recognized according to the equity method, other non-cash expenses/income, income taxes payments / refunds, (3) includes Repayment of financing liabilities to banks, Proceeds from financing liabilities to banks and Proceeds/repayment of other financing liabilities (4) dividend payments to non-controlling interests.

Consolidated Statement of Financial Position – Assets

		As at
€m	9M 20 20	YE 20 19
No t a ets n-c urr en ss	1, 32 4.3	1, 40 2.2
Go od wil l	63 5.1	64 6.8
Inta ible set ng as s	38 8.8	40 3.3
Pro lan nd uip rty t a nt pe , p eq me	100 .5	92 .9
Rig ht- of- set use as s	145 .3	15 4.9
(1) Inv d o the r fi nci al a est nts ts me an na sse	14 .2	69 .1
Ot he nt ets r n on -cu rre ass	4.9	4.9
De fer red ta ts x a sse	35 .4	30 .4
Cu nt ts rre as se	1, 40 1.1	1, 05 1.4
r(2) Ot he	18 .0	11 .9
Inv ies tor en	46 8, 7	41 1.1
Co ntr act set as s	184 .2	165 .9
Tra de iva ble re ce s	188 .9	29 0.8
Cu nts set rre as s	96 .0	34 .3
Ca sh d c h e iva len ts an as qu	44 5.3	13 7.4
To tal ts as se	2, 72 5.3	2, 45 3.6

(1) Includes investments accounted for using the equity method, other investments and other non-current financial assets, non-current other financial assets; (2) Includes Other non-current financial assets, due on short-notice, Other current financial assets, income tax receivables.

Consolidated Statement of Financial Position - Equity and Liabilities

	As at
€m	9M 20 20	YE 20 19
Sh ital are ca p	105 .0	10 .0
Ca ital d o the (1) p re se rve an r re se rve s	52 9.2	34 7.0
Re tai d e ing ne arn s	( ) 33 3.4	( ) 21 5.8
Eq uit he ld by sh ho lde of HE NS OL DT Ho ldi y are rs ng	30 0.8	14 1.2
No llin inte tro ts n-c on g res	10 .3	13 .6
Eq uit al tot y,	31 1.1	15 4.8
No t li ab ilit ies n-c urr en	1, 23 1.4	1, 51 7.9
No isio t p n-c urr en rov ns	45 3.4	41 3.6
(2) No t fi nci liab iliti n-c urr en na ng es	59 3.3	88 7.9
No t c tra ct liab iliti n-c urr en on es	20 .1	16 .3
No t le lia bili tie n-c urr en ase s	14 1.1	14 7.5
Ot he nt liab iliti r n on -cu rre es	6.3	7.7
De fer red x li ab iliti ta es	17 .2	44 .8
Cu nt lia bil itie rre s	1, 182 .9	78 0.9
Cu vis ion nt rre pro s	159 .8	18 5.1
(3) Cu nt f ina nci liab iliti rre ng es	37 2.9	29 .7
Cu lia bili tie nt ntr act rre co s	39 9.3	31 7.1
Cu lea liab iliti nt rre se es	13 .7	13 .0
Tra de ble pa ya s	175 .4	16 8.8
Ot he t lia bili tie r c urr en s	61 .4	67 .1
Ta x li ab iliti es	0.3	0.1
To tal uit d l iab ilit ies eq y an	2, 72 5.3	2, 45 3.6

(1) Includes capital reserve, other reserves. (2) Includes non-current financing liabilities, other non-current financial liabilities. (3) Includes current financing liabilities, other current financial liabilities.

Reconciliation of reported to adjusted pre-tax unlevered FCF

	Fir 9 m ths st on
€m	20 20	20 19
Ca sh flow s f tin ivit ies act rom op era g	72 .1	( 22 .7)
Ca sh flow s f inv ing tivi tie est rom ac s	( 71 .8)	( .6) 57
Fre h f low e c as	0.3	( 80 .3)
(1) (+ ) eff No ing ect n-r ec urr s	26 .1	11 .7
(2), (3) (4) (+ ) Inte inc d M &A tivi tie t e t res om ax an -ac s	39 .3	37 .2
Ad ju d p lev d f sh flo ste tax re- un ere ree ca w	65 .7	( .4) 31
Ca sh flo fro fin cin tiv itie ws m an g ac s	31 4.9	23 .0

(1) Comprises transaction costs, separation costs and other non-recurring effects. (2) Defined as 'Interest paid' (including interest on lease liabilities) as reported in the consolidated cash flow statement. (3) Defined as 'Income taxes payments / refunds' as reported in the consolidated cash flow statement. (4) Defined as sum of 'Share of profit in entities recognized according to the equity method', 'Acquisition of associates, other investments and other non-current investments', 'Disposal of associates, other investments and other non-current investments' 'Proceeds from sale of intangible assets and property, plant and equipment', 'Acquisition of subsidiaries net of acquired cash' and 'Other cash flows from investing activities' as reported in the consolidated cash flow statement.

Reconciliation of order intake, segment revenue and adjusted EBITDA to group figures

	Fir 9 m ths st on
€m	20 20	20 19
Or de r in tak e	2, 00 3.4	66 1.3
Se nso rs	1, 82 3.9	45 4.2
Op tro nic s	182 .4	20 7.8
n/T l/ Ot Eli min atio he ran sve rsa rs	( ) 2.9	( ) 0.7
€m
Re ve nu e	71 2.1	67 5.2
Se nso rs	55 3.6	51 6.4
Op tro nic s	160 .7	15 9.1
Eli min atio n/T l/ Ot he ran sve rsa rs	( 2.2 )	( 0.4 )
€m
(1) Ad ju d E BIT DA ste	102 .8	99 .6

Se nso rs	82 .3	.2 75
Op nic tro s	23 .1	25 .2
Eli min atio n/T l/ Ot he ran sve rsa rs	( ) 2.6	( ) 0.9

(1) Adjusted EBITDA is defined as EBIT adjusted for depreciation and amortization (including non-recurring effects on earnings from purchase price allocations), as well as certain non-recurring effects relating to transaction costs, separation costs, and other non-recurring effects.

Overview of EBITDA and EBIT adjustments

( ) E B I T D A d j €m tm ts a us en
	9M 20 19
EB IT	( 8.8 )	( 0.5 )
(+ ) De cia tio pre n	30 .1	27 .0
(+ ) Am iza tio ort n	57 .5	66 .4
EB ITD A	78 .9	92 .9
(+ ) Tra ctio ost nsa n c s	0.5	-
(+ ) Se rat ion sts pa co	0.0	( ) 6.7
(+ ) Ot eff he rrin ect r n on -re cu g s	23 .4	13 .4
j. Ad EB ITD A	102 .8	99 .6

E B I T d j ( €m ) tm ts a us en
	9M 20 20	9M 20 19
EB IT	( 8.8 )	( 0.5 )
(+ ) Eff s f ect rni rch ice al loc atio on ea ng rom pu ase pr ns	51 .5	55 .6
the f in ible tan ts reo g as se	51 .0	.1 55
f p the ert lan t a nd uip nt reo rop y, p eq me	0.5	0.5
the f in ies tor reo ven	-	-
(+ ) Tra ctio ost nsa n c s	0.5	-
Se (+ ) ion rat sts pa co	0.0	( 6.7 )
(+ ) Ot he rrin eff ect r n on -re cu g s	23 .5	13 .7
j. Ad EB IT	66 .8	62 .1