HENSOLDT AG

Investor Presentation • Nov 10, 2022

9M 2022 Results – Analyst & Investor Presentation

Taufkirchen, 10th of November 2022

Christian Ladurner, CFO

Disclaimer

Forward Looking Statement

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 9M period ended September 30, 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.

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. Forward-looking 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

Business Update

Business Update

HENSOLDT – 9M 2022 results

HENSOLDT supports German Government with deliveries for Ukraine

COBRA artillery detection radar

One unit delivered to Ukraine in Q3

TRML 4D air defence radar

4 units for IRIS-T SLM air defence system in Ukraine ordered

Mid double digit m€ order intake booked in Q4

Proposed for European Skyshield Initiative

Financials

HENSOLDT – 9M 2022 results

9M 2022 – top line on track 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 – 9M 2022 results

9M 2022 – strong growth in bottom line in €m

(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 non-recurring 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.

Excellent development of net debt: continued strong deleveraging in €m

(1) Net leverage including lease liabilities, excluding pensions.

Focus Areas "Zeitenwende"

		Expected impact for HENSOLDT
1	Ongoing support for Ukraine by German Government in alignment with EU initiatives and Ukraine Defence Contact Group – coordinated by special staff in German MoD	Double-digit € million amount in orders confirmed
2	Special procurement projects and upcoming NATO/European Initiatives (e.g. rapid procurement of Ground Based Air Defence, European Sky Shield Initiative)	New opportunities – double-digit € million amount in orders expected
3	Special Fund ("Sondervermögen Bundeswehr") and potential increase of defence budget for procurement of major programs to close gaps and develop future capabilities	Broad spectrum of opportunities for HENSOLDT continues to materialize

Smooth & visible topline growth

Order intake from special fund and defence budgets expected to come

Source: Company information

HENSOLDT on track

Achievements	▪ Strong order backlog of €5.4bn ▪ Efficient project execution achieving major milestones ▪ Strong profitability before pass-through revenues ▪ Cash generation in Q3 of +108m€	FY 2022 guidance confirmed for all key KPIs: ▪ Book-to-bill ratio of 1.1x – 1.2x ▪ Revenue of ~€ 1.7bn ▪ Adj. EBITDA of €285m – €300m ▪ Further reduction of net leverage
Outlook	▪ Procurement plan of German Government is becoming more concrete ▪ First orders of focus area #1 have materialized ▪ Continuing close exchange with German customer ▪ Smooth and sustainable growth in front of us, but backloaded More details to be presented at CMD on December 14th ▪ HENSOLDT strongly positioned for upcoming growth

Q&A session

Guidance 2022 substantiated

	2022 target	2023 target	Medium term target
Book-to-bill ratio(1)	1.1x – 1.2x	>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)
Adj. pre-tax unlevered FCF(3)	~70% conversion on adjusted EBITDA	NWC: stable, falling slightly as % of revenue Cash tax rate: 28.3%
Net leverage(4)	<1.4x	<1.0x <1.25x
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	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	~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.

Financial Section

Consolidated Income Statement

	First nine months
in € million	2022	2021
Revenue	1,100	850
Cost of sales	-896	-694
Gross profit	205	156
Selling and distribution expenses	-80	-73
General administrative expenses	-66	-59
Research and development costs	-25	-21
Other operating income	15	23
Other operating expenses	-14	-12
Share of profit/loss from investment accounted for using the equity method	—	-2
Earnings before finance result and income taxes (EBIT)	35	12
Interest income	4	6
Interest expense	-32	-35
Other finance income/costs	6	2
Finance result	-21	-28
Earnings before income taxes (EBT)	14	-16
Income taxes	-15	1
Group result	-1	-15
thereof attributable to the owners of HENSOLDT AG	0	-13
thereof attributable to non-controlling interests	-1	-2

Consolidated Statement of Financial Position – Assets

	As at
in € million	9M 2022	YE 2021
Non-current assets	1,323	1,326
Goodwill(1)	658	658
Intangible assets	386	385
Property, plant and equipment	113	108
Right-of-use assets	131	141
Investments and other financial assets(2)	24	22
Other non-current assets	3	3
Deferred tax assets	8	11
Current assets	1,612	1,629
Other(3)	26	10
Inventories	562	444
Contract assets	233	170
Trade receivables	254	309
Other current assets	152	167
Cash and cash equivalents	385	529
Total assets	2,935	2,956

(1) Adjustment of previous year's figures due to a purchase price adjustment after the measurement period by €+ 6 million.

(2) Includes Other investments and non-current other financial assets, Non-current other financial assets.

(3) Includes Other non-current financial assets, due on short-notice, Other current financial assets and Income tax receivables.

Consolidated Statement of Financial Position – Equity & Liabilities

	As at
in € million	9M 2022	YE 2021
Share capital	105	105
Capital reserve and other reserves(1)	666	513
Retained earnings(2)	-212	-212
Equity held by shareholders of HENSOLDT AG	559	406
Non-controlling interests	10	11
Equity, total	569	417
Non-current liabilities	1,136	1,284
Non-current provisions	277	497
Non-current financing liabilities(3)	617	622
Non-current contract liabilities	23	12
Non-current lease liabilities	130	139
Other non-current liabilities	8	10
Deferred tax liabilities	81	4
Current liabilities	1,230	1,255
Current provisions	166	188
Current financing liabilities(4)	171	176
Current contract liabilities	467	500
Current lease liabilities	18	16
Trade payables	313	269
Other current liabilities	85	94
Tax liabilities	9	11
Total equity and liabilities	2,935	2,956

(1) Includes Capital reserve, Other reserves.

(2) Adjustment of previous year's figures due to a purchase price adjustment after the measurement period by €+ 6 million.

(3) Includes Non-current financing liabilities, Other non-current financial liabilities.

(4) Includes Current financing liabilities, Other current financial liabilities.

Consolidated Statement of Cash Flow (1/2)

	First nine months
in € million	2022	2021
Group result	-1	-15
Depreciation and amortisation	78	91
Financial expenses (net)	23	25
Change in
Provisions	4	2
Inventories	-122	-108
Contract balances	-84	21
Trade receivables	59	31
Trade payables	44	28
Other assets and liabilities	1	-48
Interest paid	-19	-27
Income tax payments (-) / refunds (+)	-6	-6
Other(1)	9	-10
Cash flow from operating activities	-15	-16
Acquisition / addition of intangible assets and property, plant and equipment	-68	-73
Acquisition of associates, other investments and other non-current financial assets	-2	-9
Acquisition of subsidiaries net of cash acquired	-1	-8
Other(2)	0	2
Cash flow from investing activities	-70	-88

(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 Flow (2/2)

First nine months
2022	2021
-15	-16
-70	-88
-22	-283
-14	-12
-26	-14
0	0
—	-3
0	—
-62	-313
2	0
-145	-418
529	646
385	228

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

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

	First nine months
in € million	2022	2021
Order intake	1,377	2,821
Sensors	1,198	2,516
Optronics	185	309
Elimination/Transversal/Others	-6	-4
in € million
Revenue	1,100	850
Sensors	919	661
Optronics	184	191
Elimination/Transversal/Others	-3	-2

in € million

Adjusted EBITDA(1)	126	110
Sensors	105	89
Optronics	21	24
Elimination/Transversal/Others	—	-2

(1) Adjusted EBITDA is defined as EBIT adjusted for depreciation and amortisation (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.

Overview of EBITDA and EBIT adjustments

EBITDA adjustments	First nine months
in € million	2022	2021
EBIT	35	12
(+) Depreciation	33	32
(+) Amortisation	45	59
EBITDA	113	103
(+) Transaction costs	0	0
(+) IPO related costs	—	1
(+) Other non-recurring effects	13	6
Adjusted EBITDA	126	110

EBIT adjustments	First nine months
in € million	2022	2021
EBIT	35	12
(+) Effect on earnings from purchase price allocations	27	48
thereof intangible assets	27	47
thereof property, plant and equipment	0	1
(+) Transaction costs	0	0
(+) IPO related costs	—	1
(+) Other non-recurring effects	13	6
Adjusted EBIT	76	67

Reconciliation of reported to adjusted pre-tax unlevered FCF

	First nine months
in € million	2022	2021
Cash flow from operating activities	-15	-16
Cash flow from investing activities	-70	-88
Free cash flow	-85	-105
(+) Transaction costs	0	0
(+) IPO related costs	–	4
(+) Other non-recurring effects	9	6
(+) Interest(1), income taxes(2) and M&A-activities(3)	27	46
Adjusted pre-tax unlevered free cash flow	-49	-48
Cash flow from financing activities	-62	-313

(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.

Q3 Financial Overview HENSOLDT Group

	Third quarter
in € million	2022	2021
Order intake	428	709
Book-to-bill ratio(1)	1.0	2.0
Revenue	418	364
Adjusted EBIT(2)	49	51
Adjusted EBITDA(3)	65	66
Adjusted EBITDA margin	15.7%	18.2%
Adjusted pre-tax unlevered free cash flow(4)	108	9

24

(1) Book-to-Bill ratio is defined as order intake / reported revenue for the relevant period

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

(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, 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

Back-up

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: investorrelations@hensoldt.net
• 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