Leonardo S.p.A. — Investor Presentation 2021

Jul 29, 2021

2Q/1H2021 Results Presentation

Alessandra Genco Chief Financial Officer

Alessandro Profumo Chief Executive Officer

Rome, 29 July 2021

Agenda

• 2Q/1H2021 Results Chief Financial Officer

• Sector Results

• Appendix

Key messages Chief Executive Officer

Key messages

• Solid first half results with strong and resilient military-governmental business
• All businesses on track to deliver targets: FY21 Guidance confirmed
• Some positive signs in challenging civil aeronautics
• Strong foundations and core fundamentals giving confidence in medium-long term
• Capabilities, innovative technologies and security solutions across the Group generating growth opportunities
• Strong commitment to ESG with successful achievements

Solid first half and on track Progressing well with our Plan: 2021 Guidance confirmed

• FOCF at € 1.4 bn, on track to achieve FY2021 guidance
• Strong liquidity and financial flexibility
• Net Debt 2021 guidance confirmed at €3.2bn

Strong confidence in medium long term potential of our main businesses

Helicopters

• Strong military/governmental and resilient civil business
• Attractive Customer Support & Training business
• Solid backlog and leading product portfolio
• Continue to invest to build the future (i.e. Kopter acquisition, AW609, Hero, AW169) Helicopter

Aircraft

• Structurally strong business
• Well positioned on key international programmes (i.e. EFA, Tempest, JSF, EuroMALE)
• Programme excellence in training with continued investments supporting growth
• Best in class profitability

Aerostructures

• Proactively addressing challenges in civil aeronautics
• Prospects of market recovery in Narrow Body and Regional

Electronics

• Strong order book
• Long-term trusted relationships with customers globally
• Well positioned on key international programmes (i.e. EFA, Tempest, JSF, EuroMALE)
• Attractive long term opportunities across avionics, land and naval programmes
• Range of new programmes in development providing fuel for growth

Leonardo DRS

• Strong backlog (Unfunded of \$11bn)
• Top line growth confirmed, well positioned towards US DoD key priorities
• Margin expansion driven by programmes moving from development to production

© 2020 Leonardo - Società per azioni 5 *Excluding other activities and elimination

ESG: underpinning our purpose and strategy

Effective management of economic, environmental and social risks and opportunities creates long-term value, ensuring reliable and robust returns 10% of MBO linked to ESG targets

• First Integrated report in 2020 combining financial and ESG information

• Key results achieved in 2020

• Clear alignment of executive pay with ESG targets to ensure sustainability is embedded in culture and behaviors

20% of Long Term Incentive Plan linked to ESG targets

© 2020 Leonardo - Società per azioni 6 * The indicator is calculated according to the location-based method as a ratio of emissions of Scopes 1 and 2 location-based (tCO2e) to revenues (€mil.) per year (Intensity of CO2 emissions on revenues)

Agenda

• 2Q/1H2021 Results Chief Financial Officer

• Sector Results

• Appendix

Key messages Chief Executive Officer

1H 2021 Highlights

Solid first half on track with continued strong commercial activity and strengthening performance

• Continued strong demand for our products supports growing top line
• Backlog at € 35.9 bn, book to bill >1
• Order intake of € 6.7 bn, up 9.5% YoY
• Revenues at € 6.3 bn, up 7.9% YoY
• Cautious on timing of civil recovery; some positive signs in narrow body and regional
• Strengthening performance as we increase volumes and reduce COVID impact
• EBITA at € 400 mln, up 37% YoY
• Group cash flow, on track to achieve FY2021 Guidance
• FOCF at € -1.4 bn significantly improved vs 1H2020, reflecting usual seasonality
• Strong liquidity position confirmed; no refinancing needs until 2022
• On track to deliver FY2021 Guidance

Order Intake Continued strong commercial activity

	€ mln	∆ % YoY
1H2020A	6,104
HELICOPTERS	2,009	-20.5%	Large IMOS contract booked in 1H20 . In 2021 Orders for 36 TH-73A (AW119) for the US Navy, follow-on tranche of NEES for Italian army, 9AW139 for Saudi Royal Court
ELECTRONICS EUROPE	2,433	71.3%	EFA Germany and equipment for two U212 Near Future Submarines (NFS). In Cyber, SICOTE (Territory Control System) phase 4
LEONARDO DRS	1,190	-17.6%	Mounted Family of Computer Systems (MFoCS) for US Army and IM-SHORAD (Initial-Maneuver-Short Range Air Defense)
AIRCRAFT	1,235	84.6%	Finalisation of a major export contracts for M-346
AEROSTRUCTURES	133	-61.2%	Affected by lower OEM demand
ELIMINATIONS & OTHER	-318
1H2021A*	6,682	9.5%

© 2020 Leonardo - Società per azioni 9

* Including ca. € 133 mln of negative forex

Revenues Strong top line performance across the Group

	€ mln	∆ % YoY
1H2020A	5,878
HELICOPTERS	1,890	11.6%	Ramp-up in military/governmental (NH90 Qatar and TH-73A US Navy); AW189/AW149 and AW169
ELECTRONICS EUROPE	2,092	15.5%	Growth across businesses delivering on strong backlog
LEONARDO DRS	1,111	0.4%	+9.4 in USD, confirming growing path – adverse translation FX impact
AIRCRAFT	1,234	14.9%	Increase driven by M-346 trainers
AEROSTRUCTURES	305	-35.5%	B787 and ATR production slowdown
ELIMINATIONS & OTHER	-287
1H2021A*	6,345	7.9%

* Including ca. € 111 mln of negative forex

EBITA and Profitability

Strengthening performance as we increase volumes and reduce COVID impact

	€ mln	RoS	∆ % YoY
1H2020A	292
HELICOPTERS	148	7.8%	6.5%
ELECTRONICS EUROPE	201	9.6%	97.1%
LEONARDO DRS	96	8.7%	50.0%
AIRCRAFT	150	12.2%	23.0%
AEROSTRUCTURES	-82	-26.9%	-583.3%
ATR	-21		38.2%
SPACE	23		330%
CORPORATE & OTHER	-115	-59.0%
1H2021A*	400	6.3%	37.0%

* Including ca. € 6 mln of negative forex

From EBITA to Net Result Net Result benefitting from EBITA increase

• EBIT up 53% due to EBITA increase

• Net Result mainly benefitting from EBITA increase, with lower impact from FX hedging activity and lower financial expenses
• 1H21 FOCF at -€1.4bn, materially up vs 1H2020, reflecting usual seasonality

Strong liquidity position at ca. € 4.2 bn

• Cash availability and credit facilities ensure Group's liquidity above € 4.2 bn
• Confirmed credit lines equal to € 1.8 bn
• Unconfirmed credit lines equal to € 0.8 bn
• Credit Lines signed in May 2020 equal to € 1.25 bn(1)

(1) €750mln Term Loan fully cancelled at the end of 2020 following the bond issuance and EIB financing

2021 Guidance confirmed

		FY2020A	FY2021 Guidance*
New Orders	(€ bn)	13.8	ca. 14
Revenues	(€ bn)	13.4	13.8-14.3
EBITA	(€ mln)	938	1,075-1,125
FOCF	(€ mln)	40	ca. 100
Group Net Debt	(€ bn)	3.3	ca. 3.2**

2021E

• Military/governmental business robust and resilient driving top-line growth, improving profitability and FOCF generation
• Civil Aeronautics expected to continue to be impacted by COVID related market downturn

*Assuming progressive improvement in the global health situation through the year with consequent normalization of operating / market conditions

**Assuming no dividend payable for 2020 results

2021 exchange rate assumptions: € / USD = 1.18 and € / GBP = 0.90

Closing remarks

• Back on the growth path
• Continued strong commercial activity globally building our backlog (book-to-bill>1)
• Top line growth across all sectors
• Robust profitability benefitting from increasing volumes and solid industrial performance
• Cash flow on track supported by detailed action plan delivering first effects in 1H21

© 2019 Leonardo - Società per azioni 16 Q&A

SECTOR RESULTS

Helicopters

DELIVERIES BY PROGRAMME

2021 OUTLOOK*

• Growth driven by military/governmental business offsetting COVID related civil softness
• Profitability supported by efficiency initiatives and impacted by prime contractorship margin dilution

Defence Electronics & Security

ELECTRONICS - EU

	2Q 2020 € mln	2Q 2021	% Change	1H2020	1H2021	% Change	FY 2020
Orders	558	889	59.3%	1,420	2,433	71.3%	4,710
Revenues	966	1,161	20.2%	1,812	2,092	15.5%	4,147
EBITA	56	122	117.9%	102	201	97.1%	360
RoS	5.8%	10.5%	4.7 p.p.	5.6%	9.6%	4.0 p.p.	8.7%

LEONARDO DRS

	2Q 2020 \$ mln	2Q 2021	% Change	1H2020	1H2021	% Change	FY 2020
Orders	914	720	(21.2%)	1,592	1,435	(9.9%)	3,054
Revenues	643	658	2.3%	1,219	1,339	9.8%	2,757
EBITA	33	58	75.8%	70	116	65.7%	202
RoS	5.1%	8.8%	3.7.p.p.	5.7%	8.7%	3.0 p.p	7.3%

2021 OUTLOOK*

• Growth in revenues recovering from 2020 pandemic slow down
• Profitability improvement supported by efficiency despite pass through and programmes under development

*In absence of further worsening of the pandemic and consequent additional restrictions which may compromise current scenario

Avg. exchange rate €/\$ @ 1.1014 in 1H2020 Avg. exchange rate €/\$ @ 1.2057 in 1H2021

Aeronautics

AIRCRAFT

€ mln	2Q 2020	2Q 2021	% Change	1H2020	1H2021	% Change	FY 2020
Orders	154	640	315.6%	669	1,235	84.6%	2,031
Revenues	643	724	12.6%	1,074	1,234	14.9%	2,634
EBITA	96	103	7.3%	122	150	23.0%	355
RoS	14.9%	14.2%	(0.7 p.p)	11.4%	12.2%	0.8 p.p.	13.5%
AEROSTRUCTURES

	€ mln	2Q 2020	2Q 2021	% Change	1H2020	1H2021	% Change	FY 2020
Orders		199	97	(51.3%)	343	133	(61.2%)	581
Revenues		245	194	(20.8%)	473	305	(35.5%)	819
EBITA		14	(36)	(357.1%)	(12)	(82)	(583.3%)	(86)
RoS		5.7%	(18.6%)	(24.3 p.p)	(2.5%)	(26.9%)	(24.4 p.p.)	(10.5%)

ATR

	€ mln	2Q 2020	2Q 2021	% Change	1H2020	1H2021	% Change	FY 2020
EBITA		(17)	(7)	58.8%	(34)	(21)	38.2%	(69)

• Aircraft production increase driven by EFA Kuwait, F35 and proprietary products (M-345, M-346)
• Aerostructures and GIE-ATR still heavily impacted by the civil market downturn caused by COVID

*In absence of further worsening of the pandemic and consequent additional restrictions which may compromise current scenario

© 2020 Leonardo - Società per azioni 20

Space

€ mln	2Q 2020	2Q 2021	% Change	1H2020	1H2021	% Change	FY 2020
EBITA	(8)	20	350.0%	(10)	23	330.0%	23

2021 OUTLOOK*

• Volumes an profitability expected to increase supported by gradual recovery of Manufacturing
• Confirmed solid performance of Satellite services

*In absence of further worsening of the pandemic and consequent additional restrictions which may compromise current scenario

APPENDIX

2Q/1H2021 Results Group Performance

€ mln	2Q 2020	2Q 2021	% Change	1H2020	1H2021	% Change	FY 2020
New Orders	2,683	3,261	21.5%	6,104	6,682	9.5%	13.754
Backlog				35,920	35,883	-0.1%	35.516
Revenues	3,287	3,555	8.2%	5,878	6,345	7.9%	13.410
EBITA	251	305	21.5%	292	400	37.0%	938
RoS	7.6%	8.6%	1.0 p.p.	5.0%	6.3%	1.3 p.p.	7%
EBIT	197	272	38.1%	227	347	52.9%	517
EBIT Margin	6.0%	7.7%	1.7%	3.9%	5.5%	1.6 p.p.	3.9%
Net result before extraordinary transactions	118	179	51.7%	59	177	200.0%	241
Net result	119	179	50.4%	60	177	195.0%	243
EPS (€ cents)	0.206	0.309	50.0%	0.103	0.306	197.1%	0.419
FOCF	-294	42	114.3%	-1,889	-1,380	26.9%	40
Group Net Debt				5,074	4,613	-9.1%	3.318
Headcount				49,733	49,980	0.5%	49.882

© 2020 Leonardo - Società per azioni 23 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

Balanced debt maturity profile No refinancing needs until 2022

	As of today	Before last review	Date of review
Moody's	Ba1 / Stable Outlook	Ba1 / Positive Outlook	October 2018
S&P	BB+ / Stable Outlook	BB+ / Positive Outlook	April 2020
Fitch	BBB- / Negative Outlook	BBB- / Stable Outlook	May 2020

Covenant

	FY2020A Post IFRS 16		FY2020A Post IFRS 16
EBITDA*	€ 1,378 mln	Group Net Debt	€ 3,318 mln
Net Interest	€ 168 mln	Leasing (IFRS 16)	- € 555 mln
		Financial Debt to MBDA	- € 663 mln
		Group Net Debt for Covenant	€ 2,100 mln
		EBITDA*	€ 1,378 mln
EBITDA / Net Interest	8.2	Group Net Debt / EBITDA	1.5
THRESHOLD	> 3.25	THRESHOLD	< 3.75

* EBITDA net of depreciation of rights of use

Remuneration Policy aligned with shareholders interests, business strategy and ESG criteria

• Convergence of interests between management and shareholders
• Aligning the remuneration package with international market best practices
• Including Sustainability/ESG objectives, consistently with business strategy
• Complying with transparency and merit system principles of the Group strategy
• Attracting / retaining key performer resources
• Reducing excessively risk-oriented behavior

Fixed Remuneration	Short-Term Variable Remuneration	Long-Term Variable Remuneration
44%	29%	27%

CEO Remuneration components

© 2020 Leonardo - Società per azioni 26

CEO short term variable remuneration (MBO)

MBO Beneficiaries (Chief Executive Officer and Top Management) all have 10% ESG-linked metrics.

Long Term Incentive Plan (LTIP)

© 2020 Leonardo - Società per azioni 28 Beneficiaries: Chief Executive Officer and key managers (executive in the Company, Subsidiaries, associates (former employees) in top management and/or other management positions in the Company or Subsidiaries) up to a maximum of 250 resources.

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.

Contacts

Valeria Ricciotti

Head of Investor Relations and Credit Rating Agencies

+39 06 32473.697

valeria.ricciotti@leonardocompany.com

Leonardo Investor Relations and Credit Rating Agencies

+39 06 32473.512

ir@leonardocompany.com

leonardocompany.com