HENSOLDT AG

Investor Presentation • Dec 12, 2024

HENSOLDT

Focusing on Execution, Growth and Innovation

Capital Markets Day 2024
12th December 2024

Content \& Agenda

Detect and Protecto

(1) Executing and growing in a dynamic market

Key enablers for growth

Growth Strategy

North Star to take HENSOLDT to the next level

Navigating our path towards HENSOLDT 2.0

Strong drivers to increase defence spending

High visibility from order backlog and pipeline

Important orders received during first 9 months

Technological leadership in a rapidly changing operational environment

HENSOLDT strongly positioned in key defence programs in Germany and Europe across all domains

Source: HENSOLDT AG

HENSOLDT has gained trust and support of political stakeholders

HENSOLDT the national German sensor champion

• further strengthened with the acquisition of ESG

Key supplier to German armed forces

• products support German government's strategy

Pure-play and platform independence

• our core DNA for future growth

Trusted partner with government stakeholders

• intensive dialogue across political landscape

25.1\% German Government shareholding

• protecting German key technology
  

(2) North Star: our strategy to capture future growth

North Star is our clear vision to guide the next stage of growth

Four axes define our strategy

Our formula to reach €5bn revenues by 2030

5 terms to boost our growth and ensure long-term resilience

Key enablers to deliver at scale

HENSOLDT GO! delivers

Industrial, agile \& resilient

Significantly increased production capacity at the Ulm site

Project Highlights

Headcount increase of $140+$ FTEs

Ramp-up of new machinery, including

• new assembly line and mechanical and electronic machinery for for TRML-4D production
• Investments into automation of testing for final assembly
• New testing chambers and tester for transmit and receive modules to service Spexer commitments

Key facts

TRML-4D Production Capacity
(units per annum)

Spexer Production Capacity ${ }^{(1)}$ (units per annum)

Increased production capacity at the Oberkochen and Wetzlar sites

Project Highlights

Headcount increase of 50 FTEs, especially in the area
of ground-based systems
Start of production for new products, including new WAO and SETAS

Movement to Wetzlar concluded
Oberkochen move on track
Further ramp-up prepared for 2025, especially in ground-based systems

Key facts

Sights ${ }^{(1)}$
(units per annum)

2023

SETAS
(units per annum)

New logistic center at the Laichingen site

Project Highlights

Centralised logistics operations for sites in southern Germany

29.600 m 2 centre with $10 \mathrm{k}+$ pallets and -40 k RackBot containers

Go-live successfully performed end of October 2024

First SAP S4 HANA module (EWM) launched to enable real time traceability

#oneSAPnow as key enabler for North Star

Integration on track for our global end-to-end business and IT transformation

In the past months, the program has achieved several milestones...

Source: HENSOLOT AG

ESG integration on track, synergy potential confirmed

HENSOLDT Grow with focus

Oliver Dörre, CEO

The world is facing ongoing conflicts and instability

Our customers invest into defence

Market growth strong across major market segments

Accessible market continues to outperform topline spending trend

ESG adds significant new market presence and capabilities

HENSOLDT growth fuelled by strong German customer demand

Facets of German defence spending...
...with HENSOLDT positioned across all

Detect and Protects

Grow with focus

Achieve sustainable and profitable growth

Focused international growth ambition and smart go-to-market approach

New partnerships reinforce our strategy

HENSOLDT

Pioneer software defined defence

Oliver Dörre, CEO

Our customer's push towards increased software-centricity means a paradigm shift in defence

HENSOLDT is at the core of the smart and connected battlefield

Based on our core portfolio, SDD will enhance our solution offerings and add new revenue streams

Smart and connected sensor specialist

Reinforce product core positioning

• High volumes
• High margin
• Enabler for international growth and key account diversification

Data driven service provider

Diversity services offer

• Long-term contracts, resilient business
• High margin
• Stronger customer intimacy through day-to-day support

Multi-domain solutions integrator

Develop from "Islands of excellence"

• Higher value capture across platforms and domains
• Secure long-term positioning
• Higher value for customer

HENSOLDT will play a pivotal role in the SDD ecosystem

Sensor data fusion and Al building blocks are in our portfolio today

Source: HENSQLD7.AO

Sensor data fusion and Al building blocks are in our portfolio today

Source: HENSOLOT AG

TwinSens case study

Increase survivability and accuracy

Connectivity between remote sensors

Fusion of dual-band surveillance data

Automation through Machine Learning and AI

Cyber-hardened and jamming resistant

Our roadmap to software-centricity

Source: HENOOLDT AG

Exponential future growth, based on a strong foundation

HENSOLDT
Lead our team into the future

Lars Immisch, CHRO

HENSOLDT

Leading our teams into the future, based on six guiding principles

HENSOLDT is one of the most attractive employers in the defence industry

Case study: from individual to collective hiring

Our sustainability strategy: a holistic approach

Use-case: sustainability links to executive pay

Order Intake

Industry leading sustainability ratings across providers

We continuously strive to demonstrate our excellence and improve our performance

SUSTAINALYTICS

In 2024, HENSOLDT AG ranked:
(1) $1^{\text {st }}$ in Aerospace \& Defence industry

Among top $15 \%$ globally across all sectors

MSCI

"AA"(leader) rating in 2024

S\&P Global

Above sector average in 2023

Among Top 50\% performers across all industries

HENSOLDT Financials

Christian Ladurner, CFO

9M 2024 results on track to deliver on our 2024 guidance

Order intake in line with expectations	Robust order backlog	Strong book-to-bill ratio
€ 1,356m	€ 6,513m	$1.3 x$
Excellent revenue performance	Strong adjusted EBITDA ${ }^{(1)}$ result	Solid adjusted EBITDA ${ }^{(1)}$ margin
$€ 1,377 \mathrm{~m}$ Core revenue ${ }^{(2)}: € 1,280 \mathrm{~m}$	$€ 187 \mathrm{~m}$	$14.6 \%$

Short term guidance confirmed - medium term margin target raised

	2024 guidance	2025 guidance	Medium term target
Book-to-bill ratio	$\sim 1.2 x$	Orders to grow significantly faster than revenue	Orders to grow significantly faster than revenue
Revenue growth ${ }^{(1)}$	$\sim € 2.3 b n$ With stranger growth in core revenue excl. pass-through	Low double-digit growth	$10 \%$ average annual growth
Adjusted EBITDA margin ${ }^{(2)}$	$\sim 18-19 \%$ before pass-through revenue	$\sim 18-19 \%$ before pass-through revenue	$\begin{aligned} & 50-60 \% \ & \text { average conversion on adjusted EBTDA } \end{aligned}$
Adjusted FCF ${ }^{(3)}$	$\sim 50 \%$ average conversion on adjusted EBTDA	$50-60 \%$ average conversion on adjusted EBTDA	$50-60 \%$ average conversion on adjusted EBTDA
Net leverage ${ }^{(4)}$	$\leq 2.0 x$	$\sim 1.6 x$	further declining
Dividend	$30 \%-40 \%$ of adjusted net income	$30 \%-40 \%$ of adjusted net income	$30 \%-40 \%$ of adjusted net income

[^0]
[^0]: (1)Averageshare of pass-through revenue of total revenue was $\sim 9 \%$ between 2020A and 2023E; pass through share of total revenue is expected to be in the mid-single digit percentage range between 2024E and 2026E. (2) Adjusted EBITDA margin excluding certain special items relating to transaction costs. Small-Prow related special items and other special items. (3) Adjusted Free Cash Flow is defined as free cash flow excluding certain special items as we has M\&A activities. (4) Net leverage includes lease liabilities, but excluded pensions.

Order backlog 2024E provides excellent visibility

-86\% revenue for 2025E covered ${ }^{(3)}$

ESG revenue and cost synergies ensure strong value creation

On track and realized by 2028

Clear trend towards a more international business profile

Revenue exposure from Germany will be reduced from $\sim 60 \% 2024$ E to $\sim 55 \% 2027$ E

Structural growth in both segments

Doubling revenues from 2022A to 2027E

• Both, Sensors and Optronics segments contribute equally to our growth targets
• Following recovery in 2024, Optronics growth momentum will further accelerate

R\&D investment constantly growing

Self-funded R\&D constant while customer-funded R\&D increases from 2020A 8\% to 2025E 15\%

Capital allocation framework

Supporting growth profile by preserving a conservative financial debt profile

Key take aways

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 another 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 9M period ended September 30, 2024 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 portfollo, 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, 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