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Leonardo S.p.A.

Investor Presentation • Jul 28, 2017

4038_ir_2017-07-28_7d50f0ed-acd2-4ad6-9504-f33c16d718b2.pdf

Investor Presentation

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1H 2017 Results Presentation

Alessandro ProfumoGian Piero Cutillo

Chief Executive Officer Chief Financial Officer

London, 28 July 2017

Why I joined Leonardonot just a business, but a pathway into the future

"Leonardo is a high-tech industrial andmanufacturing group, strategic for Italy and forevery country in which it operates. It is now

a healthy, efficient and integrated Company, rich in professionalism, know-how and talent, with the goal to face as true leader thefuture challenges of global competition"

Clear priorities for Leonardo's sustainable leadership in the long term

Our strategy, technologies and innovation, combined with a strong system of values, will be crucial to our success

Roadmap towards the strategic update and new Industrial Plan

Strategy and New Industrial Plan

1H Key messages

On track and fully focused on delivering the Industrial Plan

  • Good commercial performance
  • Stable revenues
  • RoS solidly improved at 9.0% thanks to Aeronautics and E,D&SS
  • FOCF benefitted of Kuwait contract advance payment
  • Net Debt includes the cash outflow due to strategic initiatives (Daylight Solutions / Avio) and dividends
  • FY2017 Guidance confirmed

New Orders

Good momentum in 2017 confirmed

Revenues

Closing the gap with 2016

EBITA and Profitability

Steady improvement driven by efficiencies, despite challenges

Net Result Before Extraordinary Transactions

Solid bottom line

1H2016

Better tax management offset higher Net financial expenses (benefitting frompositive fair value in 2016 for approx. € 30 mln)

FY2017 Guidance reaffirmed

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(*) Assuming €/\$ exchange rate at 1.15 and €/£ at 0.85

SECTOR RESULTS

1H2017 resultsHelicopters

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Higher orders YoY, still in challenging and uncertain markets

  • Stabilisation of production volumes reduced the YoY gap in Revenues
  • Double-digit profitability solidly maintained
  • FY2017 Revenues and profitability broadly in line with 2016

1H2017 results

Electronics, Defence & Security Systems*

2
Q		 1
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M
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Of which

DRS:

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\$
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p.		 7.
3
%

Good commercial performance even with some expected declines

Revenues in line YoY

  • Profitability continued toimprove due to Industrial Plan actions andrecovery in some areas
  • 2017 Revenues andProfitability substantiallyin line with 2016
  • DRS expected to confirmthe business growth anda further increase inprofitability

Avg. exchange rate €/\$ @1.0825 in 1H2017Avg. exchange rate €/\$ @1.1157 in 1H2016

1H2017 resultsAeronautics

2
Q		 F
Y
€
M
ln		 2
0
1
7		 2
0
1
6		 %
C
h
a
n
g
e		 2
0
1
7		 2
0
1
6		 %
C
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6
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9
2		 (
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3.
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%		 1,
7
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1.
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%
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I
T
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9
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1
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%		 0.
8
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%
  • Significant New Orders in both Divisions
  • Revenues started to see the contribution of EFA Kuwait contract
  • Higher EBITA driven by both Divisions: Aircraft (EFA) and Aerostructures (industrial efficiencies)
  • 2017 Revenues in line with 2016, with "Double digit" profitability confirmed

1H2017 resultsSpace

Q
2		 F
Y
€
M		 ln 2
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1
6		 %
C
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%
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7

Results substantially in line with 2016 with flattish Manufacturing and a slight decline inServices

2017 Profitability in line with 2016, with growing Manufacturing Revenues

1H2017 results

Group Performance

Q
2		 F
Y
€
M
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0
1
7		 2
0
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6		 %
C
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a
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6		 %
C
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3		 (
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%		 2,
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7		 (
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1
5,

Financial position (as of end of June 2017) and Rating

Liquidity position (as of end of June 2017)

In order to cope with possible swings in financing needs, Leonardo can leverage:

  • –30 June cash balance of approx. €1.8 Billion
  • – Credit lines worth €2.7 Billion (confirmed and unconfirmed)
  • The Revolving Credit Facility was renegotiated on 6 July 2015 lowering the margin from 180bps to 100bps. The renegotiated facility has an amount of €2.0bn and will expire in July 2020
  • – Bank Bonding lines of approximately €4.1 Billion to support Leonardo's commercial activity

(1) Based on rating as of 31/03/2017

(2) Average. Expected to be renewed at maturity

Availability ofadequatecommittedliquidity lines

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 domesticallyand 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 toachieve 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.

Contacts

[email protected] www.leonardocompany.com/investors

Raffaella Luglini

EVP External Relations, Communication, Investor Relations and Sustainability+39 06 [email protected]

Valeria Ricciotti

Equity Analysts & Investors+39 06 [email protected]

Alessio Crosa

Fixed Income Analysts & Investors and relationship with Credit Rating Agencies+39 06 [email protected]

Manuel Liotta

Group Sustainability & ESG+39 06 [email protected]

2016 Annual Results

Quick linksAnnual report 2016 Press release

Video webcast

Sustainability

Member since 2010Partecipation since

2008

24We do business in a sustainable manner, with a continued commitment to economic and social development and the protection of public health and the environment.

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