HENSOLDT AG

Investor Presentation • Feb 22, 2023

HENSOLDT

FY 2022 Preliminary Results – Analyst & Investor Presentation Taufkirchen, 23rd of February 2023

Thomas Müller, CEO 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. 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 FY period ended December 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.

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 Russian war against the Ukraine and 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

We have fully delivered on our FY2022 guidance

	2022 preliminary	Change vs 2021	vs guidance
Book-to-bill ratio(1)	1.2x	-1.0x
Revenue	€1,707m	+16%
EBITDA(2) Adjusted	€292m	+€31m
EBITDA margin(3) Adjusted	20.4%	+1%-point
FCF(4) Adjusted pre-tax unlevered	€219m	-€33m
Net leverage(5)	1.2x	-0.5x

(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) Excl. pass-through revenue, (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) Net financial leverage including lease liabilities, excluding pensions.

Key Strategic Achievements 2022

Updated guidance for 2023 and mid-term released at CMD in December 2022

Strategic cooperation with 21strategies on development of AI for next generation defence systems

Successful transition of Management Board with Christian Ladurner as new CFO Lars Immisch as new CHRO

Sustainalytics ranks HENSOLDT AG again #1 in Aerospace and Defence

Further improvement of previous rating achieved

Only company rated "low risk"

Strategic orders received in 2022

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

2 additional units ordered by Ukraine in January 2023

Proposed for European Skyshield Initiative

Leopard 2 Main Battle Tank

HENSOLDT equips the Leopard 2 with:

• − Peri 17 A3 Gyrostabilized commander periscope
  • − ATTICA GL Gunner thermal camera
  • − SPECTUS multispectral sight for driver

We consistently implement our strategy

HENSOLDT GO! Wave 3 to be rolled out between 2023 and 2025

HENSOLDT GO! Wave 1	HENSOLDT GO! Wave 2	HENSOLDT GO! Wave 3
		• Drive internationalization
• Finalize carve-out from Airbus	• Keep momentum to transform	• Improve supply chain robustness
• Drive topline growth	HENSOLDT	and increase inflation resilience
• Improve organizational efficiency	• Optimize HENSOLDT   organization end-to-end	• Increase efficiency further, especially for:
within individual functions		• Engineering
• Optimize capital productivity with	• Further optimize capital productivity with special focus	• Cost & overhead
special focus on cash cycle	on cash cycle	• Working capital
Optimizing individual organization	End-to-end optimization across all functions	End-to-end optimization across all regions

OneERPnow – the efficient way to handle growth

Digital products & services Digital enterprise

Digital work and culture

We find ourselves in a new defence environment

• Significant uptick of threat environment in Europe through Russia's war against Ukraine
• Military tensions rise in both the South China Sea and the Pacific
• Rise in new forms of warfare such as cyber attacks and covert threats to economic infrastructure

• Clear shift in global security perception
• Higher commitment to defence budgets and NATO targets
• In Europe, focus on increasing conventional capabilities, especially on land
• In APAC, strong demand to increase maritime capability
• Increasing push towards future capabilities including smart sensors, electronic warfare, data fusion and analytics

Source: Renaissance Strategic Advisors

Top 5 orders expected in 2023

HENSOLDT

Financials

FY 2022 – strong performance 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 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. (3) Excl. pass-through revenue (3) 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. (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.

FY 2022 – Sensors segment 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) 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

FY 2022 – Optronics segment 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) 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

Deleveraging from FY 2020 to FY 2022 in €m

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

Dividend proposal 2022

Guidance outlined a dividend of up to 20% of adjusted net income 2022

Increased profitability reflected in adjusted net income of €124m preliminary

Due to the excellent business development, the management board intends to propose to the supervisory board and the AGM a dividend per share of €0.30

Updated guidance 2023

	Old 2023 target(5)	New 2023 target
Book-to-bill ratio	>1x	1.1 - 1.2x
Revenue growth(1)	Mid to high single digit	10%(6) 7 - with stronger growth in core revenue excl. pass-through
Adjusted EBITDA margin(2)	~19% before pass-through revenue	~19% before pass-through revenue
Adjusted pre-tax unlevered FCF(3)	NWC: stable, falling slightly as % of revenue Cash tax rate: 28.3%	~70% conversion on adjusted EBITDA
Net leverage(4)	<1.25x	<1.0x
Dividend	30 - 40% of adjusted net income	30 - 40% of adjusted net income

(1) Average share of pass-through revenue of total revenue was ~10% between 2020A and 2022E; pass-through share of total revenue is expected to be in the mid single-digit percentage range between 2023E and 2025E; (2) Adjusted EBITDA margin excluding certain non-recurring effects such as OneERPnow costs. (3) Adjusted Pre-Tax Unlevered Free Cash Flow is defined as free cash flow excluding certain non-recurring effects such as OneERPnow costs as well as interest, tax and M&A activities; (4) Net leverage includes lease liabilities, but excludes pensions; (5) predated Russian war against Ukraine and announcement special fund by German Government; (6) excluding material M&A

Updated increased medium term guidance

	Old medium term target(4)	New medium term target
Order intake	Orders to grow faster than revenue Book-to-bill ratio >1x	Orders to grow significantly faster than revenue
Revenue growth(1)	Mid single digit	10%(5) average annual growth
Adjusted EBITDA margin(2)	~19% before pass-through revenue	>19% before pass-through revenue
Adjusted pre-tax unlevered FCF(3)	NWC: stable, falling slightly as % of revenue Cash tax rate: 28.3%	70-80% average conversion on adjusted EBITDA
Dividend	30 - 40% of adjusted net income	30 - 40% of adjusted net income

(1) Average share of pass-through revenue of total revenue was ~10% between 2020A and 2022E; pass-through share of total revenue is expected to be in the mid single-digit percentage range between 2023E and 2025E; (3) Adjusted EBITDA margin excluding certain non-recurring effects such as OneERPnow costs; (4) Adjusted Pre-Tax Unlevered Free Cash Flow is defined as free cash flow excluding certain non-recurring effects such as OneERPnow costs as well as interest, tax and M&A activities; (4) predated Russian war against Ukraine and announcement special fund by German Government;. (5) excluding material M&A

Capital allocation

Fund our growth Dividends M&A

While preserving a conservative financial debt profile

Key financial takeaways

Visibility	• Strong order intake in all divisions • High revenue coverage from firm order backlog	Order backlog(1) / LTM revenue 3.1x FY2022(2)
Top-line growth	• Again excellent conversion into revenue	Revenue growth +16% 2021 – 2022 preliminary
Profitability	• Relative margins on high level • High positive Net Income • Further investments in bid budgets and R&D covered	Adj. EBITDA(3) excl. 20.4% 2022 preliminary pass-through
Liquidity	• Strong operating cash generation • Deleveraging ahead of plan	Net leverage(4) 1.2x 2022 preliminary
Outlook	• Short- and medium term guidance updated for top and bottom line • Dividend policy confirmed	Proposal for €0.30 per share +20% compared to FY2021

(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) Calculated as FY2022 order backlog divided by LTM revenue. (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) Targeted net financial leverage including lease liabilities, excluding pensions.

HENSOLDT

Q&A session

HENSOLDT

Financial Section

Consolidated Income Statement

		Fiscal year
in € million	2022 (preliminary)	2021
Revenue	1,707	1,474
Cost of sales	-1,314	-1,144
Gross profit	393	330
Selling and distribution expenses	-107	-99
General administrative expenses	-92	-83
Research and development costs	-36	-31
Other operating income	21	29
Other operating expenses	-21	-18
Share of profit/loss from investment accounted for using the equity method	–	-2
Other result from investments	8	–
Earnings before finance result and income taxes (EBIT)	166	126
Interest income	9	4
Interest expense	-44	-42
Other finance income/costs	-1	-3
Finance result	-37	-41
Earnings before income taxes (EBT)	130	85
Income taxes	-49	-22
Group result	80	63
thereof attributable to the owners of HENSOLDT AG	78	63
thereof attributable to non-controlling interests	2	-0

Consolidated Statement of Financial Position – Assets

	31 Dec.
in € million	2022 (preliminary)	2021
Non-current assets	1,335	1,326
Goodwill (1)	658	658
Intangible assets	384	385
Property, plant and equipment	121	108
Right-of-use assets	140	141
Investments and other financial assets(2)	23	22
Other non-current assets	2	3
Deferred tax assets	6	11
Current assets	1,644	1,629
Other(3)	30	10
Inventories	516	444
Contract assets	182	170
Trade receivables	323	309
Other current assets	133	167
Cash and cash equivalents	460	529
Total assets	2,979	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 other non-current financial assets and 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

	31 Dec.
in € million	2022 (preliminary)	2021
Share capital	105	105
Capital reserve and other reserves(1)	554	471
Retained earnings (1) (2)	-55	-171
Equity held by shareholders of HENSOLDT AG	604	406
Non-controlling interests	13	11
Equity, total	616	417
Non-current liabilities	1,160	1,284
Non-current provisions	282	497
Non-current financing liabilities(3)	621	622
Non-current contract liabilities	11	12
Non-current lease liabilities	140	139
Other non-current liabilities	11	10
Deferred tax liabilities	94	4
Current liabilities	1,203	1,255
Current provisions	181	188
Current financing liabilities(4)	16	176
Current contract liabilities	488	500
Current lease liabilities	18	16
Trade payables	379	269
Other current liabilities	101	94
Tax liabilities	19	11
Total equity and liabilities	2,979	2,956

(1) Adjustment of previous year's figures for cash flow hedges by +€5 million in other reserves and by -€5 million in retained earnings

(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 and Other non-current financial liabilities.

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

Consolidated Statement of Cash Flows (1/2)

	Fiscal year
in € million	2022 (preliminary)	2021
Group result	80	63
Depreciation and amortisation	103	126
Financial expenses (net)	27	33
Change in
Provisions	-22	31
Inventories	-75	-44
Contract balances	-25	111
Trade receivables	-13	-22
Trade payables	110	107
Other assets and liabilities	42	-83
Interest paid	-24	-36
Income tax payments (-) / refunds (+)	-11	-9
Other(1)	52	22
Cash flow from operating activities	244	299
Acquisition / addition of intangible assets and property, plant and equipment	-95	-102
Acquisition of associates, other investments and other non-current financial assets	-5	-7
Acquisition of subsidiaries net of cash acquired	-1	-12
Other(2)	0	4
Cash flow from investing activities	-101	-117

(1) Includes impairments/reversals of impairments of inventories, trade receivables and contract assets, Profit / loss from disposals of non-current assets, Share of profit in entities recognized according to 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, Disposal of associates, other investments and other non-current financial assets and Other cash flows from investing activities.

Consolidated Statement of Cash Flows (2/2)

	Fiscal year
in € million	2022 (preliminary)	2021
Cash flow from operating activities	244	299
Cash flow from investing activities	-101	-117
Proceeds/repayment of financing liabilities(1)	-169	-263
Payment of lease liabilities	-19	-16
Dividend payments	-26	-14
Dividends on non-controlling interest	-0	-0
Transaction costs paid on issue of equity	–	-3
Other	0	–
Cash flow from financing activities	-214	-297
Effects of movements in exchange rates on cash and cash equivalents	2	-1
Net changes in cash and cash equivalents	-69	-116
Cash and cash equivalents
Cash and cash equivalents on 1 January	529	645
Cash and cash equivalents on 31 December	460	529

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

Reconciliation to group figures

		Fiscal year
in € million	2022 (preliminary)	2021
Order intake	1,993	3,171
Sensors	1,675	2,774
Optronics	333	405
Elimination/Transversal/Others	-15	-8
in € million
Revenue	1,707	1,474
Sensors	1,404	1,148
Optronics	310	332
Elimination/Transversal/Others	-7	-5
in € million
Adjusted EBITDA(1)	292	261
Sensors	233	194
Optronics	59	68
Elimination/Transversal/Others	–	-2

(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, OneSAPnow related non-recurring effects and other non-recurring effects.

Overview of EBITDA and EBIT adjustments

EBITDA adjustments	Fiscal year
in € million	2022 (prelim.)	2021
EBIT	166	126
(+) Depreciation	44	44
(+) Amortisation	59	82
EBITDA	270	252
(+) Transaction costs	0	0
(+) IPO related costs	–	1
(+) OneSAPnow related non-recurring effects	1	–
(+) Other non-recurring effects	21	8
Adjusted EBITDA	292	261

EBIT adjustments	Fiscal year
in € million	2022 (prelim.)	2021
EBIT	166	126
(+) Effect on earnings from purchase price allocations	36	64
thereof intangible assets	36	63
thereof property, plant and equipment	0	1
thereof inventories	–	–
(+) Transaction costs	0	0
(+) IPO related costs	–	1
(+) OneSAPnow related non-recurring effects	1	–
(+) Other non-recurring effects	21	8
Adjusted EBIT	224	199

Reconciliation of reported to adjusted pre-tax unlevered FCF

	Fiscal year
in € million	2022 (preliminary)	2021
Cash flow from operating activities	244	299
Cash flow from investing activities	-101	-117
Free cash flow	143	182
(+) Transaction costs	19	0
(+) IPO related costs	–	4
(+) OneSAPnow related non-recurring effects	0	–
(+) Other non-recurring effects	15	8
(+) Interest(1), income taxes(2) and M&A-activities(3)	41	58
Adjusted pre-tax unlevered free cash flow	219	252
Cash flow from financing activities	-214	-297

(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',

'Disposal of associates, other investments and other non-current financial assets', 'Acquisition of subsidiaries net of cash required' and 'Other cash flows from investing activities' as reported in the consolidated cash flow statement.

Reconciliation of reported to adjusted net income

	Fiscal year
in € million	2022 (preliminary)	2021
Group result	80	63
(+) Effect on earnings from purchase price allocations	36	64
(+) Transaction costs	0	0
(+) IPO related costs	–	1
(+) OneSAPnow related non-recurring effects	1	–
(+) Other non-recurring effects	24	11
Adjusted net income pre-tax adjustment	141	139
(+) Tax adjustments(1)	-17	-21
Adjusted net income	124	117

(1) Includes tax adjustments for Effect on earnings from PPA, OneSAPnow related non recurring effects and other non-recurring effects

Q4 Financial Overview HENSOLDT Group

	Fourth quarter
in € million	2022 (preliminary)	2021
Order intake	616	351
Book-to-bill ratio(1)	1.0x	0.6x
Revenue	607	625
Adjusted EBIT(2)	149	132
Adjusted EBITDA(3)	166	150
Adjusted EBITDA margin	27.3 %	24.0 %
Adjusted pre-tax unlevered free cash flow(4)	268	300

(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, OneSAPnow related non-recurring effects 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, OneSAPnow related non-recurring effects 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

OneERPnow rollout in waves to de-risk process

~65% capex

Our phased approach distributes costs, risks and workload over the next 5 years

Source: HENSOLDT AG. OneERPnow to be accounted for as non-recurring effect in P&L

Upcoming IR events*

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

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