Leonardo S.p.A. — Earnings Release 2022

Nov 3, 2022

3Q/9M 2022 Results Presentation

Rome

3 November 2022

Agenda

• Q&A
• Sector results
• Appendix

• Key messages Alessandro Profumo, Chief Executive Officer

• Financial review Alessandra Genco, Chief Financial Officer

9M2022 results on track

SOLID PERFORMANCE

MACRO HEADWINDS

SUCCESSFULLY NAVIGATING

• Solid 9M performance
• Strong and robust defence/governmental business
• Gradual recovery in civil Aerostructures
• Order intake of € 11.7 bn, up 26.8%*
  • € 1.43** bn contract for 32 AW149 in Poland signed in July
• Revenues at € 9.9 bn, up 4.0%* and book to bill at 1.2x
• EBITA at € 619 mln, up 9.0%* vs 9M2021 restated***
• RoS at 6.2% (7.2% without pass through)
• FOCF at € -894 mln, improved by ca. 500 mln YoY
• Net Debt at € 4,359 mln, reflecting Hensoldt acquisition and the disposal of GES and AAC
• FY2022 Guidance confirmed, with order upgrade to >€ 16 bn and slightly better FOCF and Net Debt
• Buy-back of US\$ bonds
• Redeployment of higher-than-expected proceeds from disposals
• Taking advantage of current market opportunities
• Paying down the most expensive debt instruments in our portfolio

***Restatement to include 9M2021 covid costs within EBITA as previously accounted below the line

^* Adjusted perimeter to exclude the contribution of Global Enterprise Solutions in August and September 2021 (closing of disposal on 1/08/2022). Avg. exchange rate August-September 2021€/\$ @ 1.19671 **€ 1.76 bn gross contract

Positioned for the future

Important strategic moves

HENSOLDT

• 25.1% stake for € 617* mln
• Leading provider of sensor solutions for defence and security applications

• Reinforcing Leonardo's positioning in Defence Electronics segment

• Continued commercial growth on a stand-alone basis

• More focused on its core business with GES and AAC disposals completed
• Combination with RADA reinforcing core business of sensors and integrated systems
• RADA well positioned in high-growth segment of defence market
• Creating significant commercial and technological opportunities
• A way to list DRS in volatile markets
• Proceeding on transaction milestones
  • 19th October: RADA EGM approval received
  • 24th October: CFIUS approval received
  • End-November/beginning of December: expected closing

Delivering on our serious commitment to ESG

By committing to the Science-Based Targets Initiative

Scope 1+ 2 emissions target: -40% by 2030*

▪ Target already set and aligned with SBTI

Scope 3 emissions: preliminary activities

• Developed first complete mapping of Group Scope 3 emissions
• Identified most relevant Scope 3 categories for Leonardo

Our roadmap for the SBT

Reduce impact of own operations

Engage the supply chain

Cooperate with customers

Introduce more efficient technologies

* Market based emissions. Reduction in absolute value. Baseline: year 2019

Closing remarks

Fully on track in the first 9 months, raising Guidance for new order intake at >€16bn and slightly better FOCF and Net Debt

• Solid performance across the Group in the first 9 months
• Very strong commercial momentum, with impressive order intake in Q3 and confidence in Q4 order pipeline
• Improving profitability and cash flow generation
• Actively managing impact of complex external environment
• Continued strong confidence in the medium-long term

Agenda

• Q&A
• Sector results
• Appendix

• Key messages Alessandro Profumo, Chief Executive Officer

• Financial review Alessandra Genco, Chief Financial Officer

9M 2022 Highlights

• Strong commercial activity, with book to bill at 1.2x
• Backlog at € 37.4 bn, supports growing long-term revenue visibility
• Order intake of € 11.7 bn, up 26.8%*, significantly higher YoY, even excluding Polish helicopter order
• Continued strong demand for our products supports top-line growth
• Revenues at € 9.9 bn, up 4.0%*
• Strong profitability improvement
• EBITA at € 619 mln, up 9.0%* vs 9M2021 restated**, with RoS at 6.2% (7.2% excluding pass-through)
• Improving cash flow generation and on track to meet FY target
• FOCF at € -894 mln vs € -1.4 bn* in 9M21
• 2022 Guidance confirmed, with order upgrade to > €16 bn, slightly better FOCF and Net Debt

Solid performance successfully navigating macro headwinds

* Adjusted perimeter to exclude the contribution of Global Enterprise Solutions in August and September 2021 (closing of disposal on 1/08/2022). Avg. exchange rate August-September 2021€/\$ @ 1.19671 **Restatement to include 9M2021 covid costs within EBITA as previously accounted below the line

Order Intake

Very strong commercial performance and momentum, with book to bill at 1.2

	€ mln	∆ % YoY
9M2021A	9,240***
HELICOPTERS	4,623	93.4%
ELECTRONICS EUROPE	3,495	-9.5%
LEONARDO DRS	2,163	37.2%***
AIRCRAFT	1,637	-0.4%
AEROSTRUCTURES	342	14.4%
ELIMINATIONS & OTHER	-541
9M2022A*	11,719	26.8%***

*Including ca. € 298 mln of positive forex

**Reclassification of the Automation business in "Other activities" starting from January 2022

*** Adjusted perimeter to exclude the contribution of Global Enterprise Solutions in August and September 2021 (closing of disposal on 1/08/2022). Avg. exchange rate August-September 2021 €/\$ @ 1.19671

Revenues

Continued solid performance delivering on strong backlog

	€ mln	∆ % YoY
9M2021A	9,531***
HELICOPTERS	3,153	16.0%	Ramp-up mainly in NH90 Qatar, AW169 and CS&T
ELECTRONICS EUROPE	3,149	4.2%	+7.4% like-for-like** mainly driven by Defence Systems
LEONARDO DRS	1,759	4.3%***	Some softness due to shifts in the Supply Chain. Positive FX effect
AIRCRAFT	1,959	-7.6%	Lower production for trainers and EFA Kuwait partially offset by growing activities in European defence, EFA logistics and C-27J. EFA Kuwait ramp up in 2021.
AEROSTRUCTURES	351	-13.3%	Lower B787 production offset by higher rates for Airbus programmes. B787 expected to recover in Q4 as per plan
ELIMINATIONS & OTHER	-454
9M2022A*	9,917	4.0%***

* Including ca. € 264 mln of positive forex

**Reclassification of the Automation business in "Other activities" starting from January 2022

*** Adjusted perimeter to exclude the contribution of Global Enterprise Solutions in August and September 2021 (closing of disposal on 1/08/2022). Avg. exchange rate August-September 2021€/\$ @

1.19671

EBITA and Profitability

Improving Profitability

	€ mln	RoS	∆ % YoY
9M2021A	603***	6.3%***
9M2021 Restated	568***	6.0%***
HELICOPTERS	234	7.4%	4.9%	Higher volumes with higher pass-through contribution
ELECTRONICS EUROPE	306	9.7%	8.9%	Increase across all business areas, mainly Defence Systems
LEONARDO DRS	151	8.6%	7.9%***	Confirmed margin expansion primarily driven by the transition of development programmes into production
AIRCRAFT	242	12.4%	0.4%	In line with 9M2021. Confirming strong profitability
AEROSTRUCTURES	-134	n.m.	-7.2%	Production volumes to recover in 4Q22 as per plan
ATR	-4		84.0%	Increase driven by efficiency plan and signing of customer settlement
SPACE	10		-73.0%	Decrease due to risk provisions on a contract related to Russia, in addition to the unfavorable comparison base (tax benefit accounted in 2021)
CORPORATE & OTHER	-186			Including ca. € 16 mln of positive forex *vs 9M2021 restated
9M2022A*	619	6.2%	9.0%**	*** Adjusted perimeter to exclude the contribution of Global Enterprise Solutions in August and September 2021 (closing of disposal on 1/08/2022). Avg. exchange rate August-September 2021€/\$ @ 1.19671

From EBITA to Net Result

Stronger bottom line driven by EBITA increase

• Net Result benefitting from EBIT increase, with lower impact from restructuring costs, financial expenses and income taxes, and the gain from the sale of GES and AAC
• Stepping up cash flow : 9M 2022 FOCF at € - 894 mln, up 35.5% vs 9M 2021 (€ - 1,387 mln), in line with plan
• also Improving quality, as promised

Expected debt maturity profile after active liability management

• Taking advantage of current market opportunities
• Redeeming 300mln of US Dollar bond expiring 2039 and 2040
• Paying down the most expensive instruments in our portfolio

Higher than expected proceeds from disposals allowing Net Debt reduction in 2022

Guidance upgraded for 2022 new orders; slightly better FOCF and Net Debt

Guidance confirmed on Revenues and EBITA

		FY2021A	FY2022 Guidance(1)	FY2022 Guidance, new (4) Perimeter	Updated FY2022 Guidance(1)
New Orders	(€ bn)	14.3	ca. 15.0	ca. 14.9	ca. >16.0	Guidance upgrade for new orders driven by Poland AW149 contract
Revenues	(€ bn)	14.1	14.5-15.0	14.4-14.9	14.4-15.0	and more visibility on Italian defence/governmental
EBITA	(€ mln)	1,123	1,180-1,220(2)	1,170-1,210(2)	1,170-1,220(2)	contracts
FOCF	(€ mln)	209	ca. 500	ca. 470	ca. 500	Strong focus on cash generation
Group Net Debt	(€ bn)	3.1	ca.3.1(3)	ca.3.1(3)	ca.3.0(5)	and solid financial position

Based on €/USD exchange rate at 1.18 and €/GBP exchange rate at 0.90

* Adjusted perimeter to exclude the contribution of Global Enterprise Solutions in August and September 2021 (closing of disposal on 1/08/2022). Avg. exchange rate August-September 2021€/\$ @ 1.19671

• (1) Based on the current assessment of the effects deriving from the geopolitical and global health situation on the supply chain and labour market and the global economy and assuming no additional major deterioration
• (2) Including COVID-related costs previously included among non recurring costs below EBITA
• (3) Assuming 25.1% acquisition of Hensoldt for € 606 mln, disposals for ca. € 300 mln and dividend payment for € 0.14 p.s
• (4) Guidance adjusted for seven months' contribution of GES (Jan –July 2022) vs 12 months assumed in previuos guidance and 12 month contribution of Hensoldt
• (5) Including higher disposal proceeds and make-whole costs

Agenda

• Q&A
• Sector results
• Appendix

• Key messages Alessandro Profumo, Chief Executive Officer

• Financial review Alessandra Genco, Chief Financial Officer

Live Q&A initial remarks

Fully on track in the first 9 months, raising Guidance for New order intake at >€16bn and slightly better FOCF and Net Debt

• Solid performance across the Group in the first 9 months
• Very strong commercial momentum, with impressive order intake in Q3 and confidence in Q4 order pipeline
• Improving profitability and cash flow generation
• Actively managing impact of complex external environment
• Continued strong confidence in the medium-long term

Q&A

Agenda

• Q&A
• Sector results
• Appendix

• Key messages Alessandro Profumo, Chief Executive Officer

• Financial review Alessandra Genco, Chief Financial Officer

Helicopters Solid business with civil recovering

2022 Outlook(*)

• Orders benefitting from AW149 Poland and faster than expected civil market recovery
• Growth driven by delivery of programmes in backlog, defence-governmental business and gradual recovery in civil, still affected by the pandemic
• Profitability supported by optimisation of industrial processes and improved competitiveness, despite pass through activities and production mix

(*) Based on the current assessment of the effects deriving from the geopolitical and global health situation on the supply chain and labour market and the global economy and assuming no additional major deterioration

Helicopters

Defence Electronics & Security

Growing Revenues and Profitability

2022 Outlook (**)

• Growing volumes supported by solid backlog of existing programmes, further strengthened in 2021
• Profitability improvement driven by execution and efficiency measures, despite pass through and programmes under development transitioning towards a more mature phase

ELECTRONICS - EU
$\epsilon$ mln	3Q 2021	3Q 2022	% Change
Orders	1.502	955	$-36.4%$
Revenues	1.001	$^{04}$	3.9%
EBITA	79	96	21.5%
RoS	+7 9%	9.2%	$+1.3$ p.p.

$\epsilon$ mln	9M 2021	9M 2022	% Change
Orders	3.861	3495	$-9.5%$
Revenues	3.023	3.149	4 2%
EBITA	281	306	8.9%
RoS	9.3%	97%	$+0.4$ p.p.

DRS
	3Q 2021	3Q 2021 Adjusted *	3Q 2022	% Change	% Chang Adjusted
	484	453	874	80.6%	929%
		680	634	$-11.9%$	$-6.8%$
	E7	cη		ATE0I	0.001

$mln^{\binom{n}{2}}$	9M 2021	9M 2021 Adjusted*	9M 2022	% Change	% Change Adjusted*
rders	1.919	1.888	2.304	20.1%	22.0%
evenues	2.059	2.019	1.873	$-9.0%$	$-72%$
BITA	173	168	161	$-6.9%$	$-4.2%$
o S	$+8.4%$	8.3%	$+8.6%$	$+0.2$ p.p.	$0.3$ p.p.

3Q/9M22 Results

* Avg. exchange rate €/\$ @ 1.1967 in 9M2021, Avg. exchange rate €/\$ @ 1.0650 in 9M2022

** Based on the current assessment of the effects deriving from the geopolitical and global health situation on the supply chain and labour market and the global economy and assuming no additional major deterioration

*** Adjusted perimeter to exclude the contribution of Global Enterprise Solutions in August and September 2021 (closing of disposal on 1/08/2022). Avg. exchange rate August-September 2021€/\$ @ 1.19671

Aircraft Solid performance

2022 Outlook(*)

• Aircraft production increase driven by EFA Kuwait and M-345/M-346; Tempest initial R&D activities expected

* Based on the current assessment of the effects deriving from the geopolitical and global health situation on the supply chain and labour market and the global economy and assuming no additional major deterioration

Aerostructures and ATR

Gradual recovery

2022 Outlook(**)

• Aerostructures gradual recovery despite continued softness in target civil market; ATR recovering faster, leveraging 2021 results

		3Q/9M22 Results
Aerostructures
	€ mln	3Q 2021	3Q 2022	% Change
Orders		166	184	10.8%
Revenues		100	117	17.0%
EBITA		-43	-46	-7.0%
RoS		-43.0%	-39.3%	-0.7 p.p.
	€ mln	9M 2021	9M 2022	% Change
Orders		299	342	14.4%
Revenues		405	351	-13.3%
EBITA		-125	-134	-7.2%
RoS		-30.9%	-38.2%	-7.3 p.p.
ATR
	€ mln	3Q 2021	3Q 2022	% Change
EBITA		-4	-3	25%
	€ mln	9M 2021	9M 2022	% Change
EBITA		-25	-4	84%

Aerostructures 9M22 revenue by programme

* Based on the current assessment of the effects deriving from the geopolitical and global health situation on the supply chain and labour market and the global economy and assuming no additional major deterioration

Space

Recovery of Manufacturing and confirmed solid performance of Satellite services

2022 Outlook(*)

• Growing volumes driven by increased backlog. One-off charges related to Russia-Ukraine conflict

* Based on the current assessment of the effects deriving from the geopolitical and global health situation on the supply chain and labour market and the global economy and assuming no additional major deterioration

Agenda

• Q&A
• Sector results
• Appendix

• Key messages Alessandro Profumo, Chief Executive Officer

• Financial review Alessandra Genco, Chief Financial Officer

3Q/9M 2022 Results

Group Performance

€ mln	3Q 2021	3Q 2022	% Change	9M2021	9M2022	% Change
New Orders	2,584	4,409	+70.6%	9,266	11,719	+26.5%
Backlog				35,235	37,353	+6.0%
Revenues	3.219	3,341	+3.8%	9,564	9,917	+3.7%
EBITA	207	201	-2.9%	607	619	+2.0%
EBITA Restated*	198	201	+1.5%	572	619	+8.2%
RoS	+6.4%	+6.0%	-0.4 p.p.	6.3%	6.2%	-0.1 p.p.
RoS Restated*	+6.2%	+6.0%	-0.2 p.p.	6.0%	6.2%	+0.2 p.p.
EBIT	98	190	93.9%	445	552	+24.0%
EBIT Margin	+3.0%	5.7%	+2.7%	+4.7%	5.6%	+0.9 p.p.
Net result before extraordinary transactions	52	120	+130.8%	229	387	+69.0%
Net result	52	395	+659.6%	229	662	+189.1%
EPS (€ cents)	0.090	0.689	+665.5%	0.396	1.151	+190.6%
FOCF	-7	+68	n.a.	-1,387	-894	+35.5%
Group Net Debt				4,690	4.359	-7.1%
Headcount				50,139	50,677	+1.1%

Free Operating Cash-Flow (FOCF): is the sum of the cash flows generated by (used in) operating activities (which includes interests and income taxes paid) and the cash flows generated by (used in) ordinary investment activity (property, plant and equipment and intangible assets) and dividends received

* Restatement to include covid costs in 2021 as they were accounted below the line in 2021 and on EBITA in 2022

Backlog and revenues by Geography

Solid Group liquidity ensures adequate financial flexibility

• Available credit lines
• New ESG Credit Line signed in October 2021 equal to € 2.4 bn
• Existing credit lines unconfirmed equal to € 1.0 bn

together with cash in-hand ensure a Group liquidity of approx. € 4.2 bn

Balanced debt maturity profile

Redeeming 300mln of US Dollar bond expiring 2039 and 2040

	As of today	Before last review	Date of review
Moody's	Ba1 / Positive Outlook	Ba1 / Stable Outlook	July 2022
S&P	BB+ / Positive Outlook	BB+ / Stable Outlook	May 2022
Fitch	BBB- / Stable Outlook	BBB- / Negative Outlook	January 2022

Covenants FY2021

	FY2021A Post IFRS 16		FY2021A Post IFRS 16
EBITDA*	€ 1,538 mln	Group Net Debt	€ 3,122 mln
Net Interest	€ 138 mln	Leasing (IFRS 16)	- € 568 mln
		Financial Debt to MBDA	- € 664 mln
		Group Net Debt for Covenant	€ 1,890 mln
		EBITDA*	€ 1,538 mln
EBITDA / Net Interest	11.1	Group Net Debt / EBITDA	1.2
THRESHOLD	> 3.25	THRESHOLD	< 3.75

* EBITDA net of depreciation of rights of use

Impact of changes in perimeter

		Change in Perimeter					Delta 9M22 vs 9M21 Adjusted
$(\in$ m)	9M21 Reported	GES (Aug.-Sept. 2021)	9M21 Adjusted*	FY21 Adjusted*	9M22	$\epsilon$ m	$\frac{9}{6}$	of which FX
Order Intake	9.266	26	9.240	14.267	11.719	2.479	26.8%	298
Revenues	9.564	33	9.531	14.050	9.917	386	4.0%	264
EBITA	607	4	603	1.114	619	16	2.7%	16
EBITA Restated (**)	572	4	568	1.060	619	51	$9.0\%$
ROS	6.3%		6.3%	7.9%	6.2%		$-0.1$ p.p.
ROS Restated (**)	6.0%		6.0%	7.5%	6.2%		0.2 p.p.
FOCF	$-1.387$	23	$-1.410$	188	$-894$	516	36.6%	$-48$

* Adjusted perimeter to exclude the contribution of Global Enterprise Solutions in August and September 2021 (closing of disposal on 1/08/2022). Avg. exchange rate August-September 2021€/\$ @ 1.19671 **Restatement to include covid costs in 2021 as they were accounted below the line in 2021 and on EBITA in 2022

SAFE HARBOR STATEMENT

NOTE: Some of the statements included in this document are not historical facts but rather statements of future expectations, also related to future economic and financial performance, to be considered forward-looking statements. These forward-looking statements are based on Company's views and assumptions as of the date of the statements and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Given these uncertainties, you should not rely on forward-looking statements.

The following factors could affect our forward-looking statements: the ability to obtain or the timing of obtaining future government awards; the availability of government funding and customer requirements both domestically and internationally; changes in government or customer priorities due to programme reviews or revisions to strategic objectives (including changes in priorities to respond to terrorist threats or to improve homeland security); difficulties in developing and producing operationally advanced technology systems; the competitive environment; economic business and political conditions domestically and internationally; programme performance and the timing of contract payments; the timing and customer acceptance of product deliveries and launches; our ability to achieve or realise savings for our customers or ourselves through our global cost-cutting programme and other financial management programmes; and the outcome of contingencies (including completion of any acquisitions and divestitures, litigation and environmental remediation efforts).

These are only some of the numerous factors that may affect the forward-looking statements contained in this document.

The Company undertakes no obligation to revise or update forward-looking statements as a result of new information since these statements may no longer be accurate or timely.

34

CONTACTS

Valeria Ricciotti

Head of Investor Relations and Credit Rating Agencies

+39 06 32473.697

valeria.ricciotti@leonardo.com

Leonardo Investor Relations and Credit Rating Agencies

+39 06 32473.512

ir@leonardo.com

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