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HENSOLDT AG Investor Presentation 2021

Feb 24, 2021

714_ip_2021-02-24_225f1222-e204-49c5-84ff-a68dc5e7688e.pdf

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HENSOLDT

FY 2020 Preliminary Results – Analyst & Investor Presentation

Taufkirchen, 24th of February 2021

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 financial year 2020 ended December 31, 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 defence 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 defence 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

HENSOLDTBusiness Update

HENSOLDT: Strong momentum

(1) 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.

4

We fully delivered on our 2020 guidance

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(1) 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, (2) Book-to-Bill ratio is defined as order intake / reported revenue for the relevant period, (3) 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, IPO related costs and other non-recurring effects / reported revenue for the relevant period, (4) Net financial leverage including lease liabilities, excluding pensions.

We continue to invest in…

(1) Reflects self-funded R&D investment in 2020A including R&D costs and additions to capitalized development costs

FY 2020 preliminary – step change in top line 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.

FY 2020 preliminary – further growth in bottom line in €m

Pass-through business and major projects in early stage develop as expected

thanks to strong operative cash profile in Q4

(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, IPO related costs and other non-recurring effects.(2) 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, IPO related 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.

Further deleveraging in €m

(1) Net debt excluding pension liabilities.

Dividend proposal 2020

Guidance outlined a dividend pro-rata (25%) of up to 20% of adjusted net income 2020

Due to the excellent business development, the management board will propose to the supervisory board and the AGM a dividend per share of €0.13

This corresponds to ~20% of adjusted net income 2020 on full-year basis

Guidance 2021 and medium term targets confirmed

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(1) Book-to-Bill ratio is defined as order intake / reported revenue for the relevant period. (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, IPO related costs and other non-recurring effects / / reported revenue for the relevant period. (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) Net financial leverage including lease liabilities, excluding pensions.

We walk the talk

HENSOLDT is on track and has delivered or even exceeded guidance in all KPIs for 2020

HENSOLDT fully confirms mid-term guidance for all KPIs

  • Further growth in top and bottom line
  • Profitability remains on high level due to efficient project execution
  • Further investments in technology leadership
  • Operative cash generation enables further deleveraging
  • Dividend policy unchanged

What is next: We execute our business plan

Soft order backlog continues to mature

European key programs evolving

Increasing defence electronics content is driving future growth

Source: RSAdvisors. (1) Defined as value of built-in electronic or digital systems (e.g. stabilisation systems for turrets, situational awareness systems, radar, electronic warfare systems etc.) as a percentage of total platform value.

European defence electronics demand 2020 to 2025 in €m

Budgets allocated to defence electronics procurement and RTD&E by Region

Source: Jane's Defense Sector Budgets 04/2020, Rusia and China excluded Defense Electronics consist of Optronics, Radar, Communications, C2, Intelligence and Sonar (excluding Avionics) – Excluding Russia and China – Exchange rate (USD/EUR) = 1,127 (1) CAGR 2020-2025, including inflation effects

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

Focused M&Astrategy targeting bolt-on acquisitions

Continue to push leading edge technologies, e.g. data analytics, cyber protection, fully digital radar and EW systems

Benefit from the supercycle with tailwindin home countries, strong order backlog and substantial pipeline

Further expand ESG activities First sustainability report to be published in April 2021

HENSOLDTFinancial Section

Reconciliation of reported to adjusted pre-tax unlevered FCF

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

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Overview of EBITDA and EBIT adjustments

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Key KPIs HENSOLDT Group

€m

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(1) 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. (2) Book-to-Bill ratio is defined as order intake / reported revenue for the relevant period. (3) 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, IPO related 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, IPO related costs and other non-recurring effects. (4) 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. (5) 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.(6) Net

25

financial leverage including lease liabilities, excluding pensions.

A unique high growth defence and security investment proposition

Source: Company information, RSAdvisors. (1) Sensor solutions comprise c.100% of group revenues. (2) Based on being the "key sensor technology provider for the German government" (as per RSAdvisors). (3) Reflects self-funded R&D investment in 2020A including R&D costs and additions to capitalized development costs. (4) Reflects 2020A revenue distribution for HENSOLDT based on end-customer. (5) Firm and soft order backlog coverage for 2020A, calculated as firm and soft order backlog as of December 31, 2020 (defined as firm order backlog as of December 31, 2020 plus expected order intake volume (given recent budget approvals, partial budget approvals, budget committee endorsements, and pricing incentives)) until 2022, divided by 2020A revenue. Firm order backlog is defined as the value of the order book at a 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. (6) Calculated as a percentage of revenue. (7) Pipeline is defined as 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.

27

Acquisition of SAIL LABS – Creating a virtual sensor

HENSOLDT is a "true defence" company with a strong focus on ESG

OUR PURPOSE

We at HENSOLDT exist to pioneer technologies and human potential that promote the protection of all kind of species worldwide.

Our activities shall serve the higher purpose of securing the freedom and future of our planet, our nature and our lives.

Protect With Our Products

We strive to protect the nations with our sensor solutions and electronics portfolio to foster the security and resilience of our society.

Embrace Human Potential

We recognize our employees as our most valuable asset. Our goal is to enhance a culture of life-long learning and offer opportunities to the generation of tomorrow.

Demonstrate Integrity

We seek responsible leadership and are keen to anchor our culture of Integrity and honesty through strong corporate values and principles.

Strengthen Societal Engagement

We foster relationships of the local communities. Transparency and communication shall encourage a collaborative atmosphere and strengthen society´s trust.

Fight For Our Planet

We aim to reduce the environmental Impact of our operations, promote alternative energies and contribute to combat the world´s climate challenges.

HENSOLDT takes action to foster sustainability

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ESG parameters account for 30% of management's LTIP

Environmental Targets 2024

  • •Increase of Renewable Energies up to 70%
  • •Reduction of CO2 Emissions by 20%
  • •Reduction of VOC (volatile organic compounds) by 20%

Diversity Targets 2024

  • •Women in Leadership Team: 25%
  • •Women in Executive Committee: 35%
  • •Women among Experts: 10%

Achievements

  • Materiality Assessment 2020 according to GRI and SASB
  • Holistic sustainability program following multinational frameworks
  • Group-wide sustainability data management and reporting tool
  • Sustainability Governance and ESG Committee
  • Definition of ESG Targets 2024 Germany

Ambitions

  • Sustainability to be fully anchored in our corporate culture
  • Publication of Group Sustainability Report in 04/2021
  • Development of HENSOLDT climate strategy
  • Participation in ESG Ratings and Sustainability Indices

IR Contacts

Contact: Veronika ZimmermannJulia Szeszat Phone: +49 89 51518 2499Contact

Email: [email protected]

Internet: www.hensoldt.net

HENSOLDT share

Type of share: Bearer shares

Stock Exchange: Frankfurt Stock Exchange

Security reference number: ISIN DE000HAG0005

Reports

  • Financial Reports: https://investors.hensoldt.net
  • Annual Report: https://annualreport.hensoldt.net
  • Sustainability Report: www.hensoldt.net

Upcoming IR events*

Dates might be subjected to changes

*

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