HENSOLDT AG

Investor Presentation • Feb 27, 2025

FY 2024 Preliminary Results Analyst \& Investor Presentation

Taufkirchen, $27^{\text {th }}$ February 2025
Oliver Dörre, 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, 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 nonGAAP 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.

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 delivered on and above our FY 2024 guidance

Financial highlights 2024

Key Strategic Achievements 2024

Key Strategic Achievements 2024

North Star - Four axes define our strategy

Grow

with focus

Deliver sustainable and profitable growth in Germany, Europe and selected international markets.

Commitment

Deliver
at scale

Achieve step change in operational excellence to meet volume and performance requirements.

Foundation

Lead our team into the future

Act as #OneHENSOLDT team and become a unique employer of choice in our sector.

Operational achievements 2024

Key orders received in 2024 - Sensors segment

Key orders received in 2024 - Optronics segment

HENSOLDT Financials

FY 2024 - excellent performance in top line

in €m

Very strong order intake

Order intake ${ }^{(1)}$

• Order intake driven by NNbS, ESSI (TRML-4D and Spexer radars), ZEBEL, Leopard 2 and FFM
• Strong contribution from Europe (w/o Germany) accounting to around $40 \%$ of order intake

Execution on track

FY23 Pass-through Core M\&A FY24 prelim

Revenue

• Revenue driven by TRML-4D, baseline business and strong performance of German Optronics business
• ESG delivered as planned
• Further decrease of pass-through revenue

Significant increase of order backlog

Order backlog ${ }^{(2)}$

• New record order backlog provides excellent visibility
• Book-to-bill ratio at 1.3x per FY 2024 exceeding guidance

FY 2024 - strong bottom line sustained

in $\in \mathrm{m}$

Profitability outperforms guidance

Adj. EBITDA ${ }^{(1)}$

• Excellent development of profitability driven by further economies of scale materialized mainly in radar business
• Strong contribution of ESG supported by realization of cost synergies

Cash conversion exceeds guidance

Adj. FCF ${ }^{(3)}$

• Excellent cash generation from operating activities with strong cash contribution from ESG
• Investments in growth well balanced by advance payments received

FY 2024 - Sensors segment

in $\ell$ m

Strong order intake

Order intake ${ }^{(1)}$

• Order intake driven by NNbS, ESSI(TRML-4D and Spexer radars) and ZEBEL
• Well-balanced between Germany and Europe

Solid revenue performance

FY23 Pass-through Core M\&A FY24 prelim

Revenue

• Considerable growth of baseline business with accelerating dynamics in air defence
• Further decrease of pass-through business

Excellent margin performance

Adj. EBITDA ${ }^{(2)}$

• Very strong profitability driven by further economies of scales in radar business and realization of cost synergies in ESG

FY 2024 - Optronics segment

in $\epsilon \mathrm{m}$

Significant increase of order intake

Order intake ${ }^{(1)}$

• Strong order intake leads to record-high order backlog
• Order intake driven by Leopard 2, Fennek, U212 and high-performance optics FFM

Strong revenue growth

EY 2023
FY 2024 prelim

Revenue

• Excellent revenue development of German entity proves turnaround in Optronics business
• Technology change and realignment of market strategy affects South African business

Investments in digitalization and growth

Adj. EBITDA ${ }^{(2)}$

• Improved margin of German entity despite ramp-up of production and investments in digitalization of portfolio

Deleveraging ahead of guidance

Dividend proposal 2024

Guidance outlines a dividend of up to $30 \%$ - $40 \%$ of adjusted net income 2024

Adjusted net income of $€ 185$ m preliminary

The management board intends to propose to the supervisory board and the AGM a dividend per share of $€ 0.50(+25 \%$ compared to 2023)

Guidance 2025 updated and margin target raised

Based on currently approved defence budgets

	Previous 2025 guidance	New 2025 guidance
Order intake / Book-to-Bill	Orders to grow significantly faster than revenue	$-1.2 x$
Revenue growth ${ }^{(1)}$ / Revenue ${ }^{(1)}$	Low double-digit growth	€2,500m - €2,600m
Adjusted EBITDA margin ${ }^{(1)}$ before pass-through	$\begin{gathered} \sim 18 \% \sim 19 \% \ \text { before pass-through revenue } \end{gathered}$	$\begin{gathered} \sim 19 \% \ \text { before pass-through revenue } \end{gathered}$
Adjusted EBITDA margin ${ }^{(2)}$	$\sim 17-18 \%$	$\sim 18 \%$
Adjusted FCP ${ }^{(3)}$	$50 \%-60 \%$ average conversion on adjusted EBITDA	$50 \%-60 \%$ average conversion on adjusted EBITDA
Net leverage ${ }^{(4)}$	$\sim 1.6 x$	$\sim 1.5 x$
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 2020 A and 2023D; pass through share of total revenue is expected to be in the mid-single-digit percentage range between 2024 E and 2028 E.
(2) Adjusted EBITDA margin excluding certain special items relating to transaction costs. OneS4Prow-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 PRA activities.
(4) Net leverage including lease liabilities excluding pensions and liabilities from the agreement for payment services.

Medium-term targets confirmed

Based on currently approved defence budgets

Order intake / Book-to-Bill		Medium-term targets
	Orders to grow significantly faster than revenue
Revenue growth ${ }^{(1)}$	$10 \%$ average annual growth
Adjusted EBITDA margin ${ }^{(2)}$ before pass-through	$\sim 20 \%$ before pass-through revenue		Switch of guidance KPI from "Adjusted EBITDA margin before pass-through" to "Adjusted EBITDA margin"
Adjusted EBITDA margin ${ }^{(2)}$	$\sim 19 \%$
Adjusted FCF ${ }^{(3)}$	$50 \%-60 \%$ average conversion on adjusted EBITDA
Net leverage ${ }^{(4)}$	Further declining
Dividend	$30-40 \%$ of adjusted net income

[^0]
[^0]: (1) Average share of pass-through revenue of total revenue was $\sim 8 \%$ between 2020 A and 2023E; pass through share of total revenue is expected to be in the mid-single digit percentage range between 2024 E and 2028 E
(2) Adjusted EBITDA margin excluding certain special items relating to transaction costs. OneS4Prow-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 MLA activities.
(4) Net leverage including lease liabilities, excluding pensions and liabilities from the agreement for payment services.

Capital allocation

Fund our growth

Dividends

M\&A

Key financial takeaways

Visibility	- Strong order intake in all divisions - High revenue coverage from firm order backlog	$06 \%$
Top-line growth	- Development in line with market dynamics	$+9 \%$
Profitability	- Outstanding performance of adjusted margins - Continued investments in technology R\&D covered	Adj. EBITDA ${ }^{(2)}$ $2024 \text { prelim }$
Liquidity	- Strong operating cash generation - Deleveraging ahead of guidance	Net leverage ${ }^{(3)} 2024$ prelim
Outlook	- FY 2025 guidance raised for bottom line and mid-term targets confirmed - Dividend policy confirmed	Proposal for $€ 0.50$ per share $+25 \%$ compared to FY 2023

[^0]
[^0]: (1) Order backing is defined as the value of the order book as of the respective reporting date by recording customer orders starting with the opening backing, taking into account revenue and adjustments for the respective reporting period, and ending with the ending backing.
(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. OneG#Prose-related special items and other special items.
(3) Net leverage including lease liabilities, excluding pensions and liabilities from the agreement for payment services.

Strong drivers to increase defence spending

German Parliamentary Elections

Elections held on February $23^{\text {rd }}$
Two-party coalition most likely

Clear commitment of CDU and SPD to increase German defence spending

NATO
Capabilities Review

Continuous review of conventional capabilities due to recent Russian aggressions

NATO spending on major front-line capabilities, like air defence, expected to increase

European Sovereignty

New US administration progressively pushing Europe to increase defence spending targets

EU commissioner for Defence Andrius Kubilius indicates catalysing effect on defence spending in Europe

German Parliamentary Elections: Friedrich Merz becomes next Federal Chancellor. Election result enables stable two-party coalition of CDU/CSU and SPD

Top orders expected in 2025

Key take aways

Grow
with focus

Sustainable and profitable growth ahead with rising budgets in Germany and Europe.

Deliver
at scale

Action plans in place to achieve step change in operational excellence to meet volume and performance requirements.

Pioneer
Software-Defined
Defence

Initiatives launched to digitize and enhance platform-independent core products, become an integrator of multi-domain data-enabled solutions, expand into new data services.

Lead our team into the future

Continue to act as #OneHENSOLDT team with a clear vision for growth.

Q\&A session

Back-up

We have delivered on our FY 2024 guidance

	2024 preliminary	vs guidance
Book-to-bill ratio ${ }^{(1)}$	$1.3 x$
Revenue	$€ 2,240 \mathrm{~m}$
Adjusted EBITDA ${ }^{(2)}$	$€ 405 \mathrm{~m}$
Adjusted EBITDA margin before pass-through	$19.4 \%$
Adjusted FCF $^{(\mathbf{3}}$ )	$€ 249 \mathrm{~m}$
Net leverage ${ }^{(4)}$	$1.6 x$

EBIT to net income bridge

in €m

Net leverage development 2025

• Lease liability
• Net debt w/o lease liability

Net leverage ${ }^{(1)}$
Net leverage w/o lease liability ${ }^{(2)}$

1.6x
$0.9 x$
$-1.5 x$
$-0.6 x$

Net debt ${ }^{(1)}$

Move to new site Oberkochen will increase lease liabilities in 2025

Cash performance remains as guided

HENSOLDT Financial Section

Consolidated Income Statement

	Fiscal year
in € million	3024 (preliminary)	$3023^{11}$
Revenue	2,240	1,847
Cost of sales	$-1,732$	$-1,427$
Gross profit	508	420
Selling and distribution expenses	$-128$	$-111$
General administrative expenses	$-162$	$-118$
Research and development costs	$-32$	$-30$
Other operating income	22	22
Other operating expenses	$-24$	$-21$
Share of profit/loss from investment accounted for using the equity method	3	-
Other income / expense from investments	$-3$	5
Earnings before financial result and income taxes (EBIT)	185	166
Interest income	31	18
Interest expense	$-100$	82
Other finance income / expense	1	$-7$
Financial result	$-68$	$-72$
Earnings before income taxes (EBT)	117	94
Income taxes	$-12$	$-36$
Group profit / loss	106	58
thereof attributable to the owners of HENSOLDT AG	108	58
thereof attributable to non-controlling interests	$-2$	2

Consolidated Statement of Financial Position - Assets

	31 Dec.
in € million	3024 (preliminary)	$3023^{(1)}$
Non-current assets	2,289	1,424
Goodwill	1,115	658
Intangible assets	667	399
Property, plant and equipment	202	140
Right-of-use assets	249	189
Investments and other financial assets ${ }^{(1)}$	35	26
Non-current other assets	20	3
Deferred tax assets	1	9
Current assets	2,407	2,155
Other ${ }^{(2)}$	29	34
Inventories	719	625
Contract assets	385	196
Trade receivables	426	382
Current other assets	115	116
Cash and cash equivalents	733	802
Total assets	4,696	3,579

[^0]
[^0]: (1) Includes investments accounted for using the equity method. Other investments and non-current other financial investments. Non-current other financial assets.
(2) Includes Non-current other financial investments, current portion. Other current financial assets and Income tax receivables.
(3) Adjustment of previous year's figures.

Consolidated Statement of Financial Position - Equity \& Liabilities

	31 Dec.
In € million	2024 (preliminary)	$2023^{11}$
Share capital	116	116
Capital reserve and other reserves	511	645
Retained earnings	245	62
Equity held by shareholders of HENSOLDT AG	872	822
Non-controlling interests	14	16
Equity, total	886	838
Non-current liabilities	1,927	1,271
Non-current provisions	418	357
Non-current financing liabilities ${ }^{(1)}$	1,085	631
Non-current contract liabilities	4	-
Non-current lease liabilities	256	191
Non-current other liabilities	15	14
Deferred income	27	-
Deferred tax liabilities	123	79
Current liabilities	1,883	1,470
Current provisions	257	211
Current financing liabilities ${ }^{(2)}$	95	30
Current contract liabilities	776	578
Current lease liabilities	25	20
Trade payables	546	457
Current other liabilities	151	136
Tax liabilities	33	39
Total equity and liabilities	4,696	3,579

[^0]
[^0]: (1) Includes Non-current financing liabilities and Non-current other financial liabilities.
(2) Includes Current financing liabilities and Current other financial liabilities.
(3) Adjustment of previous year's figures

Consolidated Statement of Cash Flows (1/2)

	Fiscal year
in € million	3024 (preliminary)	$3023^{11}$
Group profit / loss	106	58
Depreciation, amortisation and impairments of non-current assets	162	117
Financial expenses (net)	56	41
Change in
Provisions	$-5$	45
Inventories	$-103$	$-128$
Contract balances	34	65
Trade receivables	$-11$	$-66$
Trade payables	69	78
Other assets and liabilities	44	52
Interest paid	$-66$	$-44$
Interest received	21	9
Income tax payments ( - ) / refunds ( + )	$-18$	$-27$
Other ${ }^{(1)}$	23	67
Cash flows from operating activities	311	267
Acquisition / addition of intangible assets and property, plant and equipment	$-199$	$-115$
Payments for investments in non-consolidated affiliates, joint ventures, associates, other investments and other non-current financial assets	$-4$	$-9$
Acquisition of subsidiaries net of cash acquired	$-543$	$-1$
Other ${ }^{(2)}$	2	2
Cash flows from investing activities	$-745$	$-122$

[^0]
[^0]: (1) Includes impairments/reversals of impairments of inventories, trade receivables and contract assets. Share of profits in investments accounted for using the equity method. Profit/loss from disposals of non-current 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 non-consolidated affiliates, joint ventures, associates, other investments and non-current financial assets and Other cash flows from investing activities.
(3) Adjustment of previous year's figures

Consolidated Statement of Cash Flows (2/2)

	Fiscal year
in € million	3024 (preliminary)	2023
Cash flows from operating activities	311	267
Cash flows from investing activities	$-745$	$-122$
Proceeds/repayment of financing liabilities ${ }^{(1)}$	442	10
Payment of lease liabilities	$-27$	$-19$
Dividend payments	$-46$	$-32$
Dividends on non-controlling interest	-	$-0$
Issue of shares	-	241
Transaction costs paid on issue of equity	$-1$	$-3$
Other	-	-
Cash flows from financing activities	367	197
Effects of movements in exchange rates on cash and cash equivalents	$-3$	0
Net changes in cash and cash equivalents	$-69$	342
Cash and cash equivalents
Cash and cash equivalents on 1 January	802	460
Cash and cash equivalents on 31 December	733	802

Reconciliation to group figures

	Fiscal year
in € million	3024 (preliminary)	2023
Order intake	2,904	2,087
Sensors	2,209	1,587
Optronics	740	510
Elimination/Transversal/Others	$-45$	$-9$
in € million
Revenue	2,240	1,847
Sensors	1,908	1,546
Optronics	348	309
Elimination/Transversal/Others	$-15$	$-8$
in € million
Adjusted EBITDA ${ }^{(1)}$	405	329
Sensors	381	306
Optronics	24	24
Elimination/Transversal/Others	-	-

Overview of EBITDA and EBIT adjustments

EBITDA adjustments Fiscal year

in € million	2024 (preliminary)	2023
EBIT ${ }^{(1)}$	185	166
(+) Depreciation	65	48
(+) Amortisation ${ }^{(1)}$	98	63
EBITDA	348	276
(+) Effects on earnings from purchase price allocations	0	6
(+) Transaction costs	3	10
(+) OneSAPnow related special items	12	12
(+) Other special items	42	25
Adjusted EBITDA	405	329

EBIT adjustments Fiscal year

in $€$ million	2024 (preliminary)	2023
EBIT ${ }^{(1)}$	185	166
(+) Effect on earnings from purchase price allocations ${ }^{(1)}$	46	33
thereof intangible assets ${ }^{(1)}$	46	33
thereof property, plant and equipment	0	0
thereof inventories	0	-
(+) Transaction costs	3	10
(+) OneSAPnow related special items	13	12
(+) Other special items	49	25
Adjusted EBIT	295	246

Reconciliation of reported to adjusted FCF

	Fiscal year
in € million	3024 (preliminary)	2023
Cash flows from operating activities	311	267
Cash flows from investing activities	-745	-122
Free cash flow	-434	145
$(+)$ Transaction costs	11	4
$(+)$ OneSAPnow related special items	36	12
$(+)$ M\&A-activities ${ }^{(1)}$	574	7
$(+)$ Other special items	62	30
Adjusted free cash flow	249	198
Cash flow from financing activities	367	197

[^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 in the cash flows from investing activities as reported in the Consolidated Statement of Fade Times. In addition, a compensation obligation paid in connection with the acquisition of the FAST Fiscal is recognized in operating cash flow in the fiscal year 2024.

Q4 Financial Overview HENSOLDT Group

	Fourth quarter
in $€$ million	3024 (preliminary)	2023
Order intake	1,047	806
Book-to-bill ratio ${ }^{(1)}$	$1.2 x$	$1.1 x$
Revenue	863	711
Adjusted EBIT ${ }^{(2)}$	184	151
Adjusted EBITDA ${ }^{(3)}$	217	178
Adjusted EBITDA margin	$25.2 \%$	$25.1 \%$
Adjusted free cash flow ${ }^{(4)}$	406	360

[^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 financial result and income taxes (EBIT), adjusted for certain special items relating to effects on transaction costs, earnings from purchase price allocations. OneSAPnow-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. OneSAPnow-related special items as well as other special items.
(4) Adjusted free cash flow is defined as free cash flow adjusted for special items and M&A activities. The free cash flow is defined as the sum of the cash flows from operating and investing activities as reported in the consolidated statement of cash flows.

Reconciliation of reported to adjusted net income

	Fiscal year
In $€$ million	3024 (preliminary)	$3025^{11}$
Group profit / loss	106	58
(+) Effect on earnings from purchase price allocations	46	33
(+) Transaction costs	3	10
(+) OneSAPnow related special items	13	12
(+) Other special items	49	26
Adjusted net income pre-tax adjustment	216	139
(+) Tax adjustments ${ }^{(1)}$	-30	-20
Adjusted net income	185	119

Special items

in € million	FY 2024 (1000 €)	2023	mid-term
Effect on earnings from purchase price allocations	-46	$-(44)$	$-(33)$
EBIT adjustments	-46	$-(44)$	$-(33)$

in € million	FY 2024 (1000 €)	2023	mid-term
Special items (Truesection Cost, One S4/Prove related items, Other special items)	-64	-45 to -55	significant ramp-down
EBIT adjustments	-64	-45 to -55	significant ramp-down

in € million	FY 2024 (1000 €)	2023	mid-term
Special items (Truesection Cost, One S4/Prove related items, Other special items)	-57	-35 to -45	significant ramp-down
EBITDA adjustments	-57	-35 to -45	significant ramp-down

in € million	FY 2024 (1000 €)	2023	mid-term
Special items (Truesection Cost, One S4/Prove related items, Other special items)	-109	-60 to -80	significant ramp-down
FCF adjustments	-109	-60 to -80	significant ramp-down

Special items are driven by

• Move to new site Oberkochen
• S4HANA implementation

Special items are driven by

• Move to new site Oberkochen
  -S4HANA implementation

Upcoming IR events*

IR Contacts

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

Effect and Protect.