HENSOLDT

Q1 2022 Results – Analyst & Investor Presentation

Taufkirchen, 5th of May 2022

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 Q1 period ended March 31, 2022 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

HENSOLDT Business Update

New record order backlog at €5.5bn Pipeline further materializes

Germany – €100bn special budget & reconfirmation of 2% target

Announcement of German Chancellor end of February to:
- Establish a special budget of €100bn to equip the Bundeswehr(1)
- Raise annual defence budget from €47bn in 2021 to €50bn p.a. for the period 2022-2026
- Commitment to keep the German defence budget at above 2% of GDP sustainably
Special budget to be invested over the next 5 years contributing to the 2% target

(1) Draft Bill for special budget as well as Draft Bill to include special budget into German constitution (Grundgesetz) to be approved by German Bundestag in Q2/2022

Three Fields of action defined by German Government

Expected impact for HENSOLDT

Opportunities from German budget increase

	German Army	German Air Force	German Navy	Space
Medium - term	 Sights/Sensors for Puma IFV 2. lot  Sights for PzH2000 howitzer upgrade  Night Vision Goggles	 Radars for future Air Defence programs  Escort jamming pod for Eurofighter  Passive Radar  Avionics/EW/Self-protection for future helicopter programs	 Radars for F126 combat ships– vessel 5 + 6  Radars for K130 corvettes 3. batch  Optronics mast systems U212 2. batch	 GESTRA Space Situational Awareness System
Long - term	 Advanced sensor fusion technology for German Army digitalization  MGCS / Leopard 2AX  Military Counter UAV  Sights/Sensors for "Schwerer Waffen träger"Armed APC	 FCAS  LUWES	 F127 Air Defence / BMD frigate  Overall German BMD / AAW Capability	 OPTSAT NG Surveillance Satellite

HENSOLDT Financials

HENSOLDT – Q1 2022 results

Q1 2022 – significant growth 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.

HENSOLDT – Q1 2022 results

Q1 2022 – bottom line follows excellent top line development in €m

Further increase of profitability

Profitability follows higher volumes offset by pass-through business and projects in early stage of life cycle and investments in functional costs to ensure growth

Liquidity within our expectations following investments in working capital to prepare for planned revenues

(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, IPO related costs and other non-recurring effects.(2) Adjusted EBIT is defined as EBIT adjusted for certain nonrecurring effects relating to effects on earnings from purchase price allocations, transaction 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.

Key financial takeaways

Visibility	 Further key orders achieved  Record order backlog(1) of €5.5bn  Sustainable core margin before pass-through revenues  Cash-flow according to plan to ensure further growth
Outlook	Guidance confirmed for all KPIs, for FY2022  Growing order backlog  ~15% growth in revenues to ~€1.7bn  ~12% growth in absolute Adj. EBITDA(2) to €285-300mn  Further reduction of Net Leverage(3)  Dividend up to 20% of Adj. Net Income

(1) 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. (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, IPO related costs and other non-recurring effects / / reported revenue for the relevant period. (3) Targeted net financial leverage including lease liabilities, excluding pensions.

HENSOLDT Q&A session

HENSOLDT Financial Section

Consolidated Income Statement

		First 3 months
€m	2022	2021
Revenue	286	209
Cost of sales	-241	-179
Gross profit	45	30
Selling and distribution expenses	-26	-23
General administrative expenses	-20	-18
Research and development costs	-8	-7
Other operating income	4	4
Other operating expenses	-4	-3
Share of profit/loss from investments accounting for using the equity method	-	-1
Earnings before finance result and income taxes (EBIT)	-10	-18
Interest income	2	2
Interest expense	-12	-13
Other finance income/costs	3	3
Finance result	-7	-7
Earnings before income taxes	-16	-25
Income taxes	-0	3
Group result	-17	-22
thereof attributable to the owners of HENSOLDT AG	-16	-22
thereof attributable to non-controlling interests	-1	-0

Consolidated Statement of Financial Position – Assets

As at
Q1 2022	YE 2021
1,320	1,320
651	651
389	385
109	108
138	141
22	22
3	3
8	11
1,533	1,629
14	10
498	444
185	170
258	309
180	167
398	529
2,853	2,950

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

Consolidated Statement of Financial Position - Equity and Liabilities

As at

€m	Q1 2022	YE 2021
Share capital	105	105
Capital reserve and other reserves(1)	583	513
Retained earnings	-234	-218
Equity held by shareholders of HENSOLDT AG	454	399
Non-controlling interests	12	11
Equity, total	466	410
Non-current liabilities	1,234	1,284
Non-current provisions	420	497
Non-current financing liabilities(2)	622	622
Non-current contract liabilities	23	12
Non-current lease liabilities	137	139
Other non-current liabilities	8	10
Deferred tax liabilities	25	4
Current liabilities	1,153	1,255
Current provisions	186	188
Current financing liabilities(3)	175	176
Current contract liabilities	432	500
Current lease liabilities	17	16
Trade payables	255	269
Other current liabilities	79	94
Tax liabilities	9	11
Total equity and liabilities (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.	2,853	2,950

(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.

Consolidated Statement of Cash Flows (1/2)

	First 3 months
€m	2022	2021
Group result	-17	-22
Depreciation and amortization	25	29
Financial expenses (net)	8	9
Change in
Provisions	8	3
Inventories	-50	-56
Contract balances	-74	23
Trade receivables	56	29
Trade payables	-15	-12
Other assets and liabilities	-31	-17
Interest paid	-9	-10
Income tax paid	-2	-1
Other(1)	-3	-5
Cash flows from operating activities	-104	-28
Acquisition/addition of intangible assets and property, plant and equipment	-22	-20
Acquisition of associates, other investments and other non-current investments	-1	-9
Acquisition of businesses net of cash acquired	-	-2
Other(2)	-0	0
Cash flows from investing activities	-23	-31

(1) Includes impairments/reversals of impairments of inventories, trade receivables and contract assets, Share of profit in entities accounting for using the equity method, Other non-cash expenses/income and Income tax expense/income. (2) Proceeds from sale of intangible assets and property, plant and equipment and Other cash flows from investing activities.

Consolidated Statement of Cash Flows (2/2)

	First 3 months
€m	2022	2021
Cash flows from operating activities	-104	-28
Cash flows from investing activities	-23	-31
Proceeds/repayment of financial liabilities(1)	-0	-243
Payment of lease liabilities	-5	-4
Dividends paid to shareholders of HENSOLDT AG	-	-
Issue of shares	-	-
Transaction cost on issue of equity	-	-3
Cash flows from financing activities	-5	-250
Effects of movements in exchange rates on cash and cash equivalents	1	0
Other adjustments	-	-
Net changes in cash and cash equivalents	-131	-310
Cash and cash equivalents
Cash and cash equivalents at beginning of period	529	645
Cash and cash equivalents at end of period	398	336

(1) Proceeds / repayment from financial liabilities, Change in other financial liabilities

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

		First 3 months
€m	2022	2021
Order intake		681 546
Sensors		627 402
Optronics		55 144
Elimination/Transversal/Others		-2 -0
€m Revenue		286 209
Sensors		242 165
Optronics		45 44
Elimination/Transversal/Others		-1 -0
€m

Adjusted EBITDA(1)	17	15
Sensors	20	13
Optronics	-3	3
Elimination/Transversal/Others	0	-1

Overview of EBITDA and EBIT adjustments

EBITDA adjustments (€m)			EBIT adjustments (€m)
	Q1 2022	Q1 2021		Q1 2022	Q1 2021
EBIT	-10	-18	EBIT	-10	-18
(+) Depreciation	11	10	(+) Effect on earnings from purchase price allocations	9	16
(+) Amortization	14	19	thereof intangible assets	9	16
EBITDA	15	11	thereof property, plant and equipment	0	0
(+) Transaction costs	-	-	thereof inventories	-	-
(+) IPO related costs	-	1	(+) Transaction costs	-	-
(+) Other non-recurring effects	2	3	(+) IPO related costs	-	1
Adjusted EBITDA	17	15	(+) Other non-recurring effects	2	3

	Q1 2022	Q1 2021








Adjusted EBIT	1	2

Reconciliation of reported to adjusted pre-tax unlevered FCF

	First 3 months
€m	2022	2021
Cash flows from operating activities	-104	-28
Cash flows from investing activities	-23	-31
Free cash flow	-127	-59
(+) Transaction costs	-	-
(+) IPO related costs	-	3
(+) Other non-recurring effects	2	3
(+) Interest(1), income taxes(2) and M&A-activities(3)	12	21
Adjusted pre-tax unlevered free cash flow	-114	-32
Cash flows from financing activities	-5	-250

(1) Defined as 'Interest paid' as reported in the consolidated cash flow statement. (2) Defined as 'Income taxes payments / refunds' as reported in the consolidated cash flow statement. (3) Defined as sum of 'Share of profit in entities accounting for using the equity method', 'Proceeds from sale of intangible assets and property, plant and equipment', 'Acquisition of associates, other investments and other non-current investments', 'Acquisition of businesses net of cash required' and 'Other cash flows from investing activities' as reported in the consolidated cash flow statement.

HENSOLDT Back-up

Guidance 2022 unchanged

	2022 target	2023 target	Medium term target
ratio(1) Book-to-bill	>1x	>1x	>1x
Revenue / revenue growth	~€1.7bn (mid-teens growth)	Mid to high single digit	Mid single digit
Adj. EBITDA / Adj. EBITDA margin(2)	€285m – €300m	excl. pass-through ~19% revenues (~€150m)	excl. pass-through >19% revenues (~€100m)
FCF(3) Adj. pre-tax unlevered	~70% conversion on adjusted EBITDA	NWC: stable, falling slightly as % of revenue Cash tax rate: 28.3%
Net leverage(4)	<1.4x	<1.25x	<1.0x
Dividend	Up to 20% of adj. net income	30-40% of adj. net income
Capex and intangible investment	Capex: 2.0-2.5% of revenue Cap. R&D: 2.0-3.0% of revenue
D&A (% of revenues)	~5% (t/o 50% IAS38) of revenue

(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, 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.

IR events*

* Dates might be subjected to changes

IR Contacts

Contact: Veronika Endres Tim Schmid
Phone: +49 89 51518 2057 +49 89 51518 2625
Email: [email protected]
Internet: www.hensoldt.net

Contact HENSOLDT share Reports

Type of share: Bearer shares
Stock Exchange: Frankfurt Stock Exchange
Security reference number: ISIN DE000HAG0005
Financial Reports: https://investors.hensoldt.net
Annual Report: https://annualreport.hensoldt.net
Sustainability Report: www.hensoldt.net

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