HENSOLDT AG

Investor Presentation • Jul 26, 2024

HENSOLDT

H1 2024 Results - Analyst \& Investor Presentation Fürstenfeldbruck, $26^{\text {th }}$ of July 2024

Oliver Dörre, CEO
Christian Ladurner, 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. 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 period ended June 30, 2024 is unaudited. The report is denominated in Euro (€). All amounts in this report are rounded to million or billion Euros. Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. 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-GAAP measures. We believe that such non-GAAP 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-GAAP measures including (without limitation) the limitations inherent in the determination of relevant adjustments. The non-GAAP 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 less 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. 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

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This document and its contents is the property of HENSOLDT AG. It shall not be communicated to any third party without the owner's written consent. © Copyright HENSOLDT AG 2024. All rights reserved.

100 days as CEO of HENSOLDT

German defence spending confirmed at 2\% GDP

• Special fund and financing authorizations will secure 2\% target until 2028
• Mid-term financial planning foresees increase of the regular defence budget to €80bn in 2028
• Clear political commitment to spend $2 \%$ of GDP on defence on a long-term sustainable basis

Market environment remains favourable

Additional defence spending announced until 2028 by European

NATO member states
(+ Austria and Switzerland)

NATO members will reach or exceed $2 \%$ GDP for Defence in 2024 and beyond

Support package announced for Ukraine at NATO Summit. Pledge to strongly enhance air defence capabilities.

Key orders received in Q2 2024

TRML-4D
TRML-4D radars for Latvia and Slovenia
$\sim € 100 \mathrm{~m}$

Skyranger 30

SPEXER radars for Austria and Denmark
$\sim € 75 \mathrm{~m}$

F126 frigates

TRS-4D radars
for F126 frigates
€45m

A400M

Material Management
for A400M provided by ESG
$\sim € 45 \mathrm{~m}$

Key orders expected in 2024

ESG Integration - Fully on track by Day 100

ESG: Solutions provider for CH-47F Chinook platform

HENSOLDT

Financials

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HENSOLDT - H1 2024 results

H1 2024 - excellent performance in top line in $€ \mathrm{~m}$

H1 2024 - strong bottom line sustained in $€ \mathrm{~m}$

Adj. $F C F^{(3)}$

Despite growing business cash flow according to plan with a year-on-year improvement
Good working capital management supported by advance payments received
(1) Adjusted EBITDA is defined as EBIT adjusted for depreciation and amortization (including effects on earnings from purchase price allocations), as well as certain special items relating to transaction costs. OneSAPnow-related special items as well as other special items. (2) Adjusted EBIT is defined as EBIT adjusted for certain special items relating to effects on earnings from purchase price allocations, transaction costs. OneSAPnow-related special items as well as other special items. (3) Adjusted Free Cash Flow is defined as free cash flow excluding certain special items as well as 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 Statement of Cash Flow.

H1 2024 - Sensors segment

in €m

(1) Order intake shows the future revenue potential from orders where a contract becomes effective and enforceable. (2) Adjusted EBITDA is defined as EBIT adjusted for depreciation and amortization (including effects on earnings from purchase price allocations), as well as certain special items relating to transaction costs. One\&MProw related special items as well as other special items.

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H1 2024 - Optronics segment

in €m

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Strong basis and visibility for growth in Optronics

in number of units

• Basis to execute record order book established
• German business already growing with back end loaded seasonality
• Production plans provide visibility for second half of the year
• Move to new site in Oberkochen will further accelerate growth from 2025 onwards

Deleveraging on track

in $€ \mathrm{~m}$

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Guidance short and mid-term confirmed

2024	Organic	$\operatorname{ESG}^{(5)}$	Combined
Book-to-bill ratio	$1.1-1.2 x$	Orders to grow faster than revenues	$1.1-1.2 x$
Revenue growth ${ }^{(1)}$	$\sim 2$ bne with stronger growth in core revenue excl. pass-through	$\sim 300 \mathrm{m} €$	$\sim 2.3$ bne with stronger growth in core revenue excl. pass-through
Adjusted EBITDA margin ${ }^{(2)}$	$19 \%-20 \%$ before pass-through revenue	$\sim 14 \%$	$18 \%-19 \%$ before pass-through revenue
Adjusted FCF ${ }^{(3)}$	$\sim 50 \%$ conversion on adjusted EBITDA	Minor contribution due to strong Q1	$\sim 50 \%$ average conversion on adjusted EBITDA
Net leverage ${ }^{(4)}$			$\sim 2.0 x$
Dividend	$30 \%-40 \%$ of adjusted net income		$30 \%-40 \%$ of adjusted net income

[^0]
[^0]: (1) Average share of pass-through revenue of total revenue was $\sim 9 \%$ between 2020A and 2023A; pass-through share of total revenue is expected to be in the mid-angle-digit percentage range between 2024E and 2026E. (2) Adjusted EBITDA margin excluding certain special items relating to transaction costs. OneSAPnow-related special items and other special items. (3) Adjusted Free Cash Flow is defined as free cash flow excluding certain special items as well as M\&A activities. (4) Net leverage includes lease liabilities, but excludes pensions. (5) Consolidated as of April $2^{\text {nd }} 2024$ (8 months contribution).

HENSOLDT on track

Achievements	- Record order backlog of €6.6bn - Efficient project execution and strong profitability - First pre-payments of our German customer received - ESG integration on track and strong contribution to Group performance FY 2024 guidance confirmed for all KPIs
Outlook	- Further major contracts to be expected in 2024 - Strong basis and excellent visibility in Optronics to execute record order book - All planned synergies for 2024 confirmed Large-scale increase of defence budgets provides visibility and long-term sustainable growth for HENSOLDT

HENSOLDT 2.0

We are actively preparing our future with a comprehensive strategic and organizational transformation

Mid-term priorities

New divisional setup

Radar
Optronics
Services \& Training
Multi Domain Solutions

HENSOLDT

The document and its content is the property of HENSOLDT AG. It shall not be communicated to any third party without the owner's written consent. (c) Copyright HENSOLDT AG 2024. All rights reserved.

HENSOLDT

Q\&A session

Domestic German position strong and broad

Source: Renaissance Strategic Advisors, Bundeswehr, HENSOLDT AG. Note: All based on current estimates and subject to change. (1) No Award/no order intake planned for HENSOLDT yet; (2) Original equipment manufacturer.

... but also for international programs

[^0]
[^0]: Source: Renaissance Strategic Advisors; Bundeswehr; HENSOLDT AG; Note: All based on current estimates and subject to change.

Guidance 2025 confirmed

	Organic	ESG	Combined
Book-to-bill ratio	Orders to grow significantly faster than revenues	Orders to grow faster than revenues	Orders to grow significantly faster than revenues
Revenue growth ${ }^{(1)}$	$10 \%$ average annual growth	$\sim 400 \mathrm{~m} €$	low double-digit growth average annual growth
Adjusted EBITDA margin ${ }^{(2)}$	$19 \%-20 \%$ before pass-through revenue	$\sim 14 \%$	$18 \%-19 \%$ before pass-through revenue
Adjusted FCF $^{(3)}$	$50 \%-60 \%$ average conversion on adjusted EBITDA	$\sim 50 \%$ average conversion on adjusted EBITDA	$50 \%-60 \%$ average conversion on adjusted EBITDA
Net leverage ${ }^{(4)}$			$\sim 1.6 x$
Dividend	$30 \%-40 \%$ of adjusted net income		$30 \%-40 \%$ of adjusted net income

[^0]
[^0]: (1) Average share 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-angle-digit percentage range between 2024E and 2026E. (2) Adjusted EBITDA margin excluding certain special items relating to transaction costs. OneSAProve-related special items and other special items. (3) Adjusted Free Cash Flow is defined as free cash flow excluding certain special items as well as M\&A activities. (4) Net leverage includes lease liabilities, but excludes pensions.

Medium term guidance confirmed

	Organic medium term target	Combined medium term target
Order intake	Orders to grow significantly faster than revenue	Orders to grow significantly faster than revenue
Revenue growth ${ }^{(1)}$	$10 \%$ average annual growth	$10 \%$ average annual growth
Adjusted EBITDA margin ${ }^{(2)}$	$19 \%-20 \%$ before pass-through revenue	$>19 \%$ before pass-through revenue
Adjusted FCF ${ }^{(3)}$	$50 \%-60 \%$ average conversion on adjusted EBITDA	$50 \%-60 \%$ average conversion on adjusted EBITDA
Net leverage ${ }^{(4)}$	Net leverage to further decline	Further declining
Dividend	$30-40 \%$ of adjusted net income	$30-40 \%$ of adjusted net income

[^0]
[^0]: (1) Average share 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-angle-digit percentage range between 2024E and 2026E. (2) Adjusted EBITDA margin excluding certain special items relating to transaction costs. OneSAProve-related special items and other special items. (3) Adjusted Free Cash Flow is defined as free cash flow excluding certain special items as well as M\&A activities. (4) Net leverage includes lease liabilities, but excludes pensions.

HENSOLDT

Financial Section

Consolidated Income Statement

	First half year
in € million	2024	2023
Revenue	849	726
Cost of sales	$-689$	$-602$
Gross profit	160	124
Selling and distribution expenses	$-62$	$-55$
General administrative expenses	$-74$	$-48$
Research and development costs	$-17$	$-13$
Other operating income	8	10
Other operating expenses	$-10$	$-9$
Other result from investments	$-1$	5
Earnings before finance result and income taxes (EBIT)	4	14
Interest income	28	11
Interest expense	$-45$	$-31$
Other finance income / costs	4	$-7$
Finance result	$-13$	$-27$
Earnings before income taxes (EBT)	$-8$	$-12$
Income taxes	$-18$	$-3$
Group result	$-26$	$-16$
thereof attributable to the owners of HENSOLDT AG	$-25$	$-17$
thereof attributable to non-controlling interests	$-1$	1

Consolidated Statement of Financial Position - Assets

	As at
in € million	H1 2024	VE 2023
Non-current assets	2,238	1,405
Goodwill	1,128	658
Intangible assets	638	380
Property, plant and equipment	162	140
Right-of-use assets	266	189
Investments and other financial assets ${ }^{(1)}$	32	26
Other non-current assets	3	3
Deferred tax assets	9	9
Current assets	2,000	2,155
Other ${ }^{(2)}$	14	34
Inventories	749	625
Contract assets	375	196
Trade receivables	304	382
Other current assets	163	116
Cash and cash equivalents	395	802
Total assets	4,238	3,560

Consolidated Statement of Financial Position - Equity \& Liabilities

	As at
in € million	H1 2024	VE 2023
Share capital	116	116
Capital reserve and other reserves	529	645
Retained earnings	100	48
Equity held by shareholders of the HENSOLDT AG	744	806
Non-controlling interests	15	16
Equity, total	759	824
Non-current liabilities	1,907	1,266
Non-current provisions	408	357
Non-current financing liabilities ${ }^{(1)}$	1,073	631
Non-current contract liabilities	6	-
Non-current lease liabilities	262	191
Other non-current liabilities	14	14
Deferred tax liabilities	145	74
Current liabilities	1,572	1,470
Current provisions	219	211
Current financing liabilities ${ }^{(2)}$	21	30
Current contract liabilities	658	578
Current lease liabilities	28	20
Trade payables	485	457
Other current liabilities	125	136
Tax liabilities	37	39
Total equity and liabilities	4,238	3,560

[^0]
[^0]: (1) Includes Non current financing liabilities and Other non-current financial liabilities.
(2) Includes Current financing liabilities and Other current financial liabilities.

Consolidated Statement of Cash Flow (1/2)

	First half year
in € million	2024	2023
Group result	$-26$	$-16$
Depreciation, amortisation and impairments of non-current assets	72	58
Financial expenses (net)	11	15
Change in
Provisions	$-31$	26
Inventories	$-116$	$-121$
Contract balances	$-75$	$-127$
Trade receivables	111	55
Trade payables	7	18
Other assets and liabilities	$-92$	$-16$
Interest paid	$-27$	$-19$
Interest received	13	3
Income tax payments (-) / refunds ( + )	$-11$	$-5$
Other ${ }^{(1)}$	15	8
Cash flows from operating activities	$-151$	$-126$
Acquisition / addition of intangible assets and property, plant and equipment	$-75$	$-48$
Acquisition of associates, other investments and other non-current financial assets	$-2$	$-4$
Acquisition of subsidiaries net of cash acquired	$-543$	$-1$
Other ${ }^{(2)}$	0	2
Cash flows from investing activities	$-620$	$-51$

[^0]
[^0]: (1) Includes impairments/reversals of impairments of inventories, trade receivables and contract assets. Other non-cash expense/income and income tax expense/income.
(2) Includes Proceeds from sale of intangible assets and property, plant and equipment, proceeds from disposals of associates, other investments and non-current financial assets and Other cash flows from investing activities.

Consolidated Statement of Cash Flow (2/2)

	First half year
in $€$ million	2024	3023
Cash flows from operating activities	-151	-120
Cash flows from investing activities	-620	-51
Change in other financing liabilities	429	0
Payment of lease liabilities	-15	-10
Dividend payments	-46	-32
Other	-1	-
Cash flows from financing activities	366	-41
Effects of changes in exchange rates on cash and cash equivalents	-2	0
Net changes in cash and cash equivalents	-408	-212
Cash and cash equivalents
Cash and cash equivalents on 1 January	802	460
Cash and cash equivalents on 30 June	395	247

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

	First half year
in € million	2024	2023
Order intake	1,359	1,071
Sensors	1,253	817
Optronics	139	257
Elimination/Transversal/Others	$-33$	$-3$
in € million
Revenue	849	726
Sensors	744	603
Optronics	108	125
Elimination/Transversal/Others	$-3$	$-3$
in € million
Adjusted EBITDA ${ }^{(1)}$	103	82
Sensors	117	86
Optronics	$-14$	$-4$
Elimination/Transversal/Others	-	-

Overview of EBITDA and EBIT adjustments

EBITDA adjustments
in € million
EBIT
(+) Depreciation
(+) Amortization
EBITDA
(+) Effects on earnings from purchase price allocations
(+) Transaction costs
(+) OneSAPnow-related special items
(+) Other special items
Adjusted EBITDA

First half year

2024	2023
4	14
30	23
42	30
76	66
-	6
2	-
6	3
19	6
103	82

EBIT adjustments

in € million	2024	2023
EBIT	4	14
(+) Effect on earnings from purchase price allocations	20	22
thereof intangible assets	20	21
thereof property; plant and equipment	0	0
thereof inventories	0	-
(+) Transaction costs	2	-
(+) OneSAPnow-related special items	6	3
(+) Other special items	19	6
Adjusted EBIT	52	45

Reconciliation of reported to adjusted FCF

	First half year
In € million	2024	2023
Cash flows from operating activities	-151	-120
Cash flows from investing activities	-620	-51
Free cash flow	-772	-172
$(+)$ Transaction costs	11	-
$(+)$ OneSAPnow-related special items	18	3
$(+)$ M\&A-activities ${ }^{(1)}$	574	3
$(+)$ Other special items	24	9
Adjusted free cash flow	-145	-157
Cash flows from financing activities	$\mathbf{3 6 6}$	$\mathbf{- 4 1}$

[^0]
[^0]: (1) Defined as sum of "Proceeds from sale of intangible assets and property, plant and equipment", "Proceeds from disposal of associates, other investments and non-current financial assets", "Acquisition of associates, other investments and other non current financial assets", "Acquisition of subsidiaries net of cash acquired" as well as "Other cash flows from investing activities" as reported in the Consolidated Statement of Cash Flows. In addition, a compensation obligation paid in connection with the acquisition of the ESG Group is recognized in operating cash flow in the first half of 2024.

Reconciliation of reported to adjusted net income

	First half year
In $€$ million	2024	2023
Group result	-26	-16
$(+)$ Effect on earnings from purchase price allocations	20	22
$(+)$ Transaction costs	2	-
$(+)$ OneSAPnow-related special items	6	3
$(+)$ Other special items	19	6
Adjusted net income pre-tax adjustment	21	15
$(+)$ Tax adjustments ${ }^{(1)}$	-13	-9
Adjusted net income	9	6

Special items

in € million	HH 2024	2024	2025	mid-term
Effect on earnings from purchase price allocations	$-20$	$-(49)$	$-(45)$	$-(35)$
PPA	$-20$	$-(49)$	$-(45)$	$-(35)$

in € million	HH 2024	2024	2025	mid-term
Special Items: / transaction Cost, One to/three related items, Three special items	$-27.7$	$-55 \text { to } 65$	$-45 \text { to } 55$	significant ramp-down
EBIT adjustments	$-27.7$	$-55 \text { to } 65$	$-45 \text { to } 55$	significant ramp-down

in € million	HH 2024	2024	2025	mid-term
Special items: / transaction Cost, One to/three related items, Three special items	$-27.4$	$-50 \text { to } 60$	$-35 \text { to } 45$	significant ramp-down
EBITDA adjustments	$-27.4$	$-50 \text { to } 60$	$-35 \text { to } 45$	significant ramp-down

in € million	HH 2024	2024	2025	mid-term
Special items: / transaction Cost, One to/three related items, Three special items	$-53.4$	$-100 \text { to } 120$	$-60 \text { to } 80$	significant ramp-down
FCF adjustments	$-53.4$	$-100 \text { to } 120$	$-60 \text { to } 80$	significant ramp-down

Special items are driven by

• Move to new site Oberkochen
• Transaction and Integration costs for ESG
• SAH/WA implementation

Special items are driven by

• Move to new site Oberkochen
• Transaction and Integration costs for ESG
• SAH/WA implementation

Q2 Financial Overview HENSOLDT Group

	Second quarter
In $€$ million	2024	2023
Order intake	694	724
Book-to-bill ratio ${ }^{(1)}$	$1.3 x$	$1.9 x$
Revenue	520	388
Adjusted EBIT ${ }^{(2)}$	41	32
Adjusted EBITDA ${ }^{(3)}$	70	52
Adjusted EBITDA margin	$13.4 \%$	$13.3 \%$
Adjusted free cash flow ${ }^{(4)}$	-64	-20

[^0]
[^0]: (1) The book-to-bill ratio is defined as the ratio of order intake to revenue in the relevant fiscal year.
2) Adjusted EBIT corresponds to earnings before finance result and income taxes (EBIT), adjusted for certain special items relating to effects on transaction costs, earnings from purchase price allocations. OneSAProw-related special items as well as other special items.
3) Adjusted EBITDA is defined as EBIT adjusted for depreciation and amortization (including effects on earnings from purchase price allocations), as well as certain special items relating to transaction costs. OneSAProw-related special items as well as other special items.
4) The book-to-bill ratio is defined as the ratio of order intake to revenue in the relevant fiscal year.
5) Adjusted EBIT corresponds to earnings before finance result and income taxes (EBIT), adjusted for certain special items relating to effects on transaction costs, earnings from purchase price allocations. OneSAProw-related special items as well as other special items.
6) Adjusted EBITDA is defined as EBIT adjusted for depreciation and amortization (including effects on earnings from purchase price allocations), as well as certain special items relating to transaction costs. OneSAProw-related special items as well as other special items.
7) The book-to-bill ratio is defined as the ratio of order intake to revenue in the relevant fiscal year.
8) Adjusted EBIT corresponds to earnings before finance result and income taxes (EBIT), adjusted for certain special items relating to effects on transaction costs, earnings from purchase price allocations. OneSAProw-related special items as well as other special items.
9) Adjusted EBITDA is defined as EBIT adjusted for depreciation and amortization (including effects on earnings from purchase price allocations), as well as certain special items relating to transaction costs. OneSAProw-related special items as well as other special items.

HENSOLDT

Back-up

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EBIT to net income bridge

in €m

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Contact

• Contact:

Veronika Endres
Tim Schmid

• Phone:
  +49 89515182057
  +49 89515182625
• Email:
  investorrelations@hensoldt.net
• 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

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This document and its content is the property of HENSOLDT AG. It shall not be communicated to any third party without the owner's written consent. (C) Copyright HENSOLDT AG 2024. All rights reserved.