HENSOLDT AG

Investor Presentation • Feb 23, 2024

HENSOLDT

FY 2023 Preliminary Results – Analyst & Investor Presentation Taufkirchen, 23rd of February 2024

Thomas Müller, CEO Oliver Dörre, designated CEO Christian Ladurner, CFO

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, 2023 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 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.

Disclaimer 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

We have fully delivered on our FY 2023 guidance

	2023 preliminary	Change vs 2022	vs guidance
Book-to-bill ratio(1)	1.1x	-0.1x
Revenue	€1,847m	+16% in core revenue
EBITDA(2) Adjusted	€329m	+€37m
EBITDA margin(3) Adjusted	19.9%	-0.5%-point
FCF(4) Adjusted pre-tax unlevered	€259m	+€40m
Net leverage (5)	0.2x	-	-
Net leverage before capital raise(6)	0.9x	-0.3x

(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 effects on earnings from purchase price allocations), as well as certain special items relating to transaction costs, OneSAPnow-related special items and other special items. (3) Excl. pass-through revenue, (4) Adjusted pre-tax unlevered free cash flow is defined as free cash flow adjusted for special items as well as interest, income 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 Statement of Cash Flow. (5) Net leverage including lease liabilities, excluding pensions. (6) Net leverage before capital raise for acquisition of ESG.

Key Strategic Achievements 2023

Visit of chancellor Scholz to our Ulm site in January Admission to MDAX in March

Oliver Dörre nominated to succeed Thomas Müller as CEO

Signing of ESG acquisition in December 2023

Key orders received in 2023 – Sensors segment

5

Key orders received in 2023 – Optronics segment

German defence spending consists of three components

German defence spending at historic high with more than 2% of GDP in 2024

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

International program landscape

Source: Renaissance Strategic Advisors, Bundeswehr, HENSOLDT AG. Note: All based on current estimates and subject to change.

Top orders expected in 2024

HENSOLDT

Financials

FY 2023 – excellent performance in top line in €m

(1) Order intake shows the future revenue potential from orders where a contract becomes effective and enforceable. (2) Order backlog is defined as the value of the order book as of the respective reporting date by recording customer orders starting with the opening backlog, taking into account revenue and adjustments for the respective reporting period, and ending with the ending backlog.

FY 2023 – strong growth in bottom line in €m

(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 pre-tax unlevered free cash flow is defined as free cash flow adjusted for special items as well as interest, income 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 Statement of Cash Flow.

FY 2023 – 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, OneSAPnow-related special items as well as other special items.

FY 2023 – Optronics 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, OneSAPnow-related special items as well as other special items.

Deleveraging from FY 2021 to FY 2023 in €m

(1) Net leverage including lease liabilities, excluding pensions. (2) Includes Non-current financing liabilities, Other non-current financial liabilities, Current financing liabilities and Other current financial liabilities.

Dividend proposal 2023

Guidance outlines a dividend of up to 30% - 40% of adjusted net income 2023

Adjusted net income of €119m 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 €0.40

€0.40

2024 preliminary guidance specified – before ESG acquisition

	2024 preliminary guidance(5)
Book-to-bill ratio	1.1 - 1.2x
Revenue growth(1)	~2 bn€ with stronger growth in core revenue excl. pass-through
Adjusted EBITDA margin(2)	19% - 20% before pass-through revenue
Adjusted FCF(ગ	~50% conversion on adjusted EBITDA
Adjusted pre-tax unlevered FCF(4)	70% - 80% conversion on adjusted EBITDA
Dividend	30% - 40% of adjusted net income

Switch of guidance KPI from Adjusted pre-tax unlevered FCF to Adjusted FCF but financial performance unchanged

(1) Average share of pass-through revenue of total revenue was ~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, 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) Adjusted pre-tax unlevered free cash flow is defined as free cash flow adjusted for special items as well as interest, income tax and M&A activities. (5) excluding contributions from the ESG acquisition which is likely to be closed (=first time consolidation) around end of Q1 2024; the 2024 guidance will be updated upon first-time consolidation of ESG and will then also include the ESG acquisition; for details on ESG, see slides 20 and 21 below.

Updated preliminary medium term guidance – before ESG acquisition

	Previous medium term target	New 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%(5) average annual growth
Adjusted EBITDA margin(2)	>19% before pass-through revenue	19% - 20% before pass-through revenue
Adjusted FCF(3)	n/a	50% - 60% average conversion on adjusted EBITDA
Adjusted pre-tax unlevered FCF(4)	70% - 80% average conversion on adjusted EBITDA	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 ~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, 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) Adjusted pre-tax unlevered free cash flow is defined as free cash flow adjusted for special items as well as interest, income tax and M&A activities.(5) excluding material M&A

Strong growth and cash flow profile (IFRS, €m 2023E)
Revenue	~€330m	Low double-digit annual growth
EBITDA	~14% margin	<1.5% maintenance capex(3)
Seasonal profile 2024	 More balanced revenue profile than HENSOLDT organic  Cash profile heavily Q1 weighted

Significant growth opportunity driven by 5-year pipeline of ~€5bn(2)

(1) For further details on the ESG acquisition see the presentation for the analyst call on 6 December 2023 which is available on our website. (2) Unweighted pipeline for 2024-28E. (3) % of revenue

ESG acquisition - Compelling strategic rationale for combination

Attractive business…	…Even stronger together
State-of-the-art innovation, software engineering and system integration capabilities	• Highly complementary expansion of integrated sensor solutions offering
Trusted partner to the German Armed Forces and international allies	Transformed innovation capacity for battlefield digitalisation and MDO(1) •
MDO(1) enabler with cross-domain and cross-divisional capabilities	• Attractive combined positioning for future defence programmes
Proven management leading large, highly skilled engineering workforce	• Significant cost and revenue synergies
High growth with strong outlook from order backlog and large pipeline	• Great cultural fit with shared vision for accelerated profitable growth

(1) Multi-Domain Operations

Next steps

Signing ESG acquisition		Closing ESG acquisition & update guidance incl. ESG
Dec 5th 2023		Closing likely to happen by end of Q1 2024(1)
	Regulatory approvals / waiting periods
	Preparation PMI
		Start PMI

(1) All closing conditions under the ESG share purchase agreement have been fulfilled except for one regulatory approval which is pending and one regulatory waiting period that runs until mid-March 2024. We are confident that the outstanding approval will be given in due course and expect closing likely to happen around end of Q1/2024.

Capital allocation

While preserving a conservative financial debt profile

Key financial takeaways

Visibility	• Strong order intake in all divisions • High revenue coverage from firm order backlog	2024 revenue backed by 85% order backlog (1)
Top-line growth	• Again, excellent conversion into revenue	Core revenue growth +16% 2022 – 2023 preliminary
Profitability	• Relative margins on high level • Further investments in bid budgets and R&D covered	Adj. EBITDA(2) excl. 19.9% 2023 preliminary pass-through
Liquidity	• Strong operating cash generation • Deleveraging in line with plan	Net leverage before capital raise(3) 0.9x 2023 preliminary
Outlook	• Short- and medium term guidance updated for top and bottom line • Dividend policy confirmed	Proposal for €0.40 per share +33% compared to FY 2022

(1) Order backlog is defined as the value of the order book as of the respective reporting date by recording customer orders starting with the opening backlog, taking into account revenue and adjustments for the respective reporting period, and ending with the ending backlog. (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, OneSAPnow-related special items and other special items. (3) Targeted net financial leverage including lease liabilities, excluding pensions.

Introducing Oliver Dörre

What we will focus on in 2024 to secure the growth and go beyond

and Delivery

Execution Internationalization

Digitalization

Thank you!

HENSOLDT

Q&A session

HENSOLDT

Financial Section

Consolidated Income Statement

		Fiscal year
in € million	2023 (preliminary)	2022
Revenue	1,847	1,707
Cost of sales	-1,431	-1,314
Gross profit	416	393
Selling and distribution expenses	-111	-107
General administrative expenses	-118	-92
Research and development costs	-30	-36
Other operating income	22	21
Other operating expenses	-21	-21
Other result from investments	5	8
Earnings before finance result and income taxes (EBIT)	162	166
Interest income	18	9
Interest expense	-82	-44
Other finance income/costs	-7	-1
Finance result	-72	-37
Earnings before income taxes (EBT)	91	130
Income taxes	-35	-49
Group result	56	80
thereof attributable to the owners of HENSOLDT AG	54	78
thereof attributable to non-controlling interests	2	2

Consolidated Statement of Financial Position – Assets

	31 Dec.
in € million	2023 (preliminary)	2022
Non-current assets	1,405	1,335
Goodwill	658	658
Intangible assets	380	384
Property, plant and equipment	140	121
Right-of-use assets	189	140
Investments and other financial assets(1)	26	23
Other non-current assets	3	2
Deferred tax assets	9	6
Current assets	2,155	1,644
Other(2)	34	30
Inventories	625	516
Contract assets	196	182
Trade receivables	382	323
Other current assets	116	133
Cash and cash equivalents	802	460
Total assets	3,560	2,979

(1) Includes Other investments and other non-current financial assets and 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 & Liabilities

	31 Dec.
in € million	2023 (preliminary)	2022
Share capital	116	105
Capital reserve and other reserves	730	554
Retained earnings	-37	-55
Equity held by shareholders of HENSOLDT AG	808	604
Non-controlling interests	16	13
Equity, total	824	616
Non-current liabilities	1,263	1,160
Non-current provisions	354	282
Non-current financing liabilities(1)	631	621
Non-current contract liabilities	–	11
Non-current lease liabilities	191	140
Other non-current liabilities	14	11
Deferred tax liabilities	74	94
Current liabilities	1,473	1,203
Current provisions	214	181
Current financing liabilities(2)	30	16
Current contract liabilities	578	488
Current lease liabilities	20	18
Trade payables	457	379
Other current liabilities	136	101
Tax liabilities	39	19
Total equity and liabilities	3,560	2,979

(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 Flows (1/2)

	Fiscal year
in € million	2023 (preliminary)	2022
Group result	56	80
Depreciation, amortisation and impairments of non current assets	120	103
Financial expenses (net)	41	27
Change in
Provisions	45	-22
Inventories	-128	-75
Contract balances	65	-25
Trade receivables	-66	-13
Trade payables	78	110
Other assets and liabilities	52	42
Interest paid	-44	-26
Interest received	9	1
Income tax payments (-) / refunds (+)	-27	-11
Other(1)	66	52
Cash flow from operating activities	267	244
Acquisition / addition of intangible assets and property, plant and equipment	-115	-95
Acquisition of associates, other investments and other non-current financial assets	-9	-5
Acquisition of subsidiaries net of cash acquired	-1	-1
Other(2)	2	0
Cash flow from investing activities	-122	-101

(1) Includes impairments/reversals of impairments of inventories, trade receivables and contract assets, Profit / loss from disposals of non-current assets, Other non-cash expenses/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 Flows (2/2)

	Fiscal year
in € million	2023 (preliminary)	2022
Cash flow from operating activities	267	244
Cash flow from investing activities	-122	-101
Proceeds/repayment of financing liabilities(1)	10	-169
Payment of lease liabilities	-19	-19
Dividend payments	-32	-26
Dividends on non-controlling interest	-0	-0
Issue of shares	241	–
Transaction costs paid on issue of equity	-3	–
Other	–	0
Cash flow from financing activities	197	-214
Effects of movements in exchange rates on cash and cash equivalents	0	2
Net changes in cash and cash equivalents	342	-69
Cash and cash equivalents
Cash and cash equivalents on 1 January	460	529
Cash and cash equivalents on 31 December	802	460

(1) Proceeds / repayment from financing liabilities to banks, Change in other financing liabilities

Reconciliation to group figures

	Fiscal year
in € million	2023 (preliminary)	2022
Order intake	2,087	1,993
Sensors	1,587	1,675
Optronics	510	333
Elimination/Transversal/Others	-9	-15
in € million
Revenue	1,847	1,707
Sensors	1,546	1,404
Optronics	309	310
Elimination/Transversal/Others	-8	-7
in € million
Adjusted EBITDA(1)	329	292
Sensors	306	233
Optronics	24	59
Elimination/Transversal/Others	–	–

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

Overview of EBITDA and EBIT adjustments

EBITDA adjustments	Fiscal year
in € million	2023 (preliminary)	2022
EBIT	162	166
(+) Depreciation	48	44
(+) Amortisation	66	59
EBITDA	276	270
(+) Transaction costs	10	0
(+) Effects on earnings from purchase price allocations	6	–
(+) OneSAPnow related special items	12	1
(+) Other special items	25	21
Adjusted EBITDA	329	292

EBIT adjustments	Fiscal year
in € million	2023 (preliminary)	2022
EBIT	162	166
(+) Effect on earnings from purchase price allocations	37	36
thereof intangible assets	36	36
thereof property, plant and equipment	0	0
thereof inventories	–	–
(+) Transaction costs	10	0
(+) OneSAPnow related special items	12	1
(+) Other special items	25	21
Adjusted EBIT	246	224

Reconciliation of reported to adjusted pre-tax unlevered FCF

	Fiscal year
in € million	2023 (preliminary)	2022
Cash flow from operating activities	267	244
Cash flow from investing activities	-122	-101
Free cash flow	145	143
(+) Transaction costs	4	19
(+) OneSAPnow related special items	12	0
(+) Other special items	30	15
(+) M&A-activities(1)	7	6
(+) Interest(2) and income taxes(3)	62	36
Adjusted pre-tax unlevered free cash flow	259	219
Cash flow from financing activities	197	-214

(1) Defined as sum of 'Acquisition of associates, other investments and other non-current financial assets', 'Proceeds from sale of intangible assets and property, plant and equipment',

'Acquisition of subsidiaries net of cash acquired', 'Proceeds from disposals of associates, other investments and non-current financial assets' and 'Other cash flows from investing activities' as reported in the Consolidated Statement of Cash Flows.

(2) Defined as 'Interest paid' (including interest on lease liabilities) and 'Interest received' as reported in the Consolidated Statement of Cash Flows.

(3) Defined as 'Income tax payments / refunds' as reported in the Consolidated Statement of Cash Flows.

Consolidated Statement of Cash Flow

Q4 Financial Overview HENSOLDT Group

	Fourth quarter
in € million	2023 (preliminary)	2022
Order intake	806	616
Book-to-bill ratio(1)	1.1x	1.0x
Revenue	711	607
Adjusted EBIT(2)	151	149
Adjusted EBITDA(3)	178	166
Adjusted EBITDA margin	25.1 %	27.3 %
Adjusted pre-tax unlevered free cash flow(4)	386	268

(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 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 EBITDA is defined as EBIT adjusted for depreciation and amortisation (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. (4) Adjusted pre-tax unlevered free cash flow is defined as free cash flow adjusted for special items as well as interest, income 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

Reconciliation of reported to adjusted net income

	Fiscal year
in € million	2023 (preliminary)	2022
Group result	56	80
(+) Effect on earnings from purchase price allocations	37	36
(+) Transaction costs	10	0
(+) OneSAPnow related special items	12	1
(+) Other special items	26	24
Adjusted net income pre-tax adjustment	140	141
(+) Tax adjustments(1)	-21	-17
Adjusted net income	119	124

(1) Includes tax adjustments for effects on earnings from PPA, OneSAPnow-related special items as well as other special items.

EBIT to net income bridge

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IR Contacts

• Contact: Veronika Endres Tim Schmid
• Phone: +49 89 51518 2057 +49 89 51518 2625
• Email: investorrelations@hensoldt.net
• Internet: www.hensoldt.net

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• Security reference number: ISIN DE000HAG0005

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