Leonardo S.p.A. — Investor Presentation 2021

Mar 10, 2021

FY 2020 Results Presentation

Rome, 10 March 2021

2

Agenda

>	Key messages	Alessandro Profumo, Chief Executive Officer
>	Industrial review	Lucio Valerio Cioffi, General Manager
>	Financial review	Alessandra Genco, Chief Financial Officer
>	Q&A

Appendix

Key Messages

• We have successfully navigated the Group through 2020, resilient performance
• Taking actions on optimising the portfolio for growth in our core businesses
• Addressing challenges in businesses exposed to civil aeronautics
• Strong foundations and core fundamentals give us confidence in both short and medium/long term
• Well positioned for post Covid opportunities

We successfully navigated 2020 with a strong, solid & resilient business performance We delivered on Q4 as we said we would

• Continued momentum despite civil slowdown • Strong support from military / governmental domestic customers • Resilient customer support and training COMMERCIALLY STRONG SOLID RESULTS • Strong cash generation in Q4 • No need for additional liquidity • No refinancing needs until 2022 STRONG LIQUIDITY AND FINANCIAL FLEXIBILITY ORDERS € 13.8 bn HELICOPTERS AERONAUTICS DEFENCE ELECTRONICS & SECURITY EBITA € 938 mln HELICOPTERS AERONAUTICS DEFENCE ELECTRONICS & SECURITY REVENUES € 13.4 bn ROS 7% 29% 47% 24% HELICOPTERS AERONAUTICS DEFENCE ELECTRONICS & SECURITY 31% 51% 18% BACKLOG* € 35.5 bn 20% 12% 29% 10% 28% NORTH AMERICA REST OF EUROPE REST OF WORLD UK ITALY *not including Soft Backlog ROIC* 7.9% 11.3% Excluding passthrough • Strong performance considering the pressure on civil aeronautics • Aerostructures absorbed more that 300 million of FOCF during the year FOCF € 40 mln 34% 48% 18%

*ROIC (Return on Invested Capital) = EBITA / Average Net Invested Capital

© 2019 Leonardo - Società per azioni 4 clear evidence the business is under control

Strong reaction to crisis

• Actions to get back to adequate levels of productivity delivered results
• More than € 500 m of cost savings, exceeding our targets
• Net investment savings of € 425 mln, ahead of plan

clear evidence the business is under control

We see a clear path to improve efficiency, address issues in mediumlonger term and mitigate effects in short term Focus on structural issues, mainly in civil businesses, to improve profitability and cash flow

• Review of strategic options to accelerate transformation and address structural issues
  • Aerostructures: proactive approach
  • ATR: reinforcing world leadership in Turboprop
  • Electronics: efficiency improvement plan launched
  • Taking portfolio actions on Automation

Results achieved are showing we are on the right path Continuing to execute our strategic plan "Be Tomorrow-2030" based on strengthening the core, transforming to grow and mastering the new

KOPTER Acquisition

• Strengthening worldwide leadership in core businesses
• Entering a new helicopter segment
• Opening new market opportunities
• New competencies boosting future developments towards more disruptive technologies (i.e. hybrid/electrical propulsion)

DRS IPO of a minority stake

• Transaction to allow the financial market to better assess the embedded value of DRS
• DRS to further strengthen performance transitioning programmes from development to production
• Retain a majority stake and a significant exposure in US

Innovation

• At the forefront of innovation
  • Leonardo Labs
  • HPC "davinci-1"
• Driving key enabling capabilities i.e. big data, cloud, AI, augmented reality, simulation
• Enhancing core capabilities deployed across divisions
  • Aircrafts
  • Helicopters
  • Radars
  • Sensors
  • C&C

Strong confidence in our core business fundamentals … well positioned for medium-long term

• Core businesses delivering well, with resilient military/governmental
• Addressing short-term challenges in a complex scenario
• Robust 2021 guidance on orders & revenues, with a solid underpinning of EBITA and FOCF, despite civil Aeronautics
• Future opportunities post Covid, leveraging transversal capabilities
• Confidence in medium-long term outlook and continuing to invest for it
• ESG enhancing our future performance

Agenda

-

• Key messages Alessandro Profumo, Chief Executive Officer

• Industrial review Lucio Valerio Cioffi, General Manager

• Financial review Alessandra Genco, Chief Financial Officer

• Q&A

• Appendix

Focussed on shaping for the future Mission and key priorities

Positioning for the future: addressing post Covid challenges in civil Aeronautics Two different paths for Aerostructures and ATR

AEROSTRUCTURES ATR

Taking action to address issues: clear roadmap Reinforcing leadership in regional market

• Rationalise industrial sites towards programmes and technologies
• Continue investing to increase efficiency/flexibility
• Headcount reduction
  • Early retirements (NPV positive)
  • Upskilling/Reskilling and redeployment within the Group
  • Working on ways for additional retirements to achieve the target

• Addressing issues and taking steps

  • Enhance new composite collaboration (i.e Solvay)
  • Diversifying site production (i.e. EuroDrone)
  • New contract setup for A220 (benefits from 2H2023)

• Turboprop market to recover earlier vs entire civil aeronautics

  • 2020 bottom year (10 deliveries)
• Leader in regional market
  • ATR fleet flying
  • 6 Gross orders
  • 85 New roots opened
• Good market opportunities (i.e. a/c replacement)
• Industrial efficiency plan
  • Profitability improvement
  • Enlarging portfolio (STOL)
  • Delivering new Cargo version

New opportunities post COVID

Leveraging existing assets, capabilities and technologies to support Italian and European Next Gen

New opportunities post COVID …. key role to play in Italy's recovery

Agenda

-

• Q&A

• Appendix

Key messages Alessandro Profumo, Chief Executive Officer

Industrial review Lucio Valerio Cioffi, General Manager

Financial review Alessandra Genco, Chief Financial Officer

Key financial highlights

• Strong commercial performance (book to bill 1x) and resilient top line
• Solid EBITA in main businesses, offsetting worsening civil market and JVs
• Record Q4 cash generation, as expected
• Strong liquidity & financial flexibility
• 2021 Guidance reflecting resilient business while also including civil aeronautics challenges
• Confidence in short and medium/long term

FY 2020 results 2020 targets met and exceeded at Order intake and FOCF level

• Successfully navigated 2020 with a strong, solid & resilient business performance

Order Intake

Continued strong commercial performance also supported by domestic customers

	€ mln	∆ % YoY
FY 2019A	14,105
HELICOPTERS	4,494	-3.2%
ELECTRONICS EUROPE*	4,710	+6.0%
LEONARDO DRS*	2,674	+2.4%
AIRCRAFT**	2,031	+6.7%
AEROSTRUCTURES**	581	-38.7%
ELIMINATIONS & OTHER	-773
FY 2020A***	13,754	-2.5%

* Excluding € 10 mln of Defence Electronics & Security eliminations

** Excluding € 60 mln of Aeronautics eliminations

© 2019 Leonardo - Società per azioni 17 *** Including ca. € 104 mln of negative forex

Revenues Resilient top line performance

	€ mln	∆ % YoY
FY 2019A	13,784
HELICOPTERS	3,972	-1.3%	NH90 Qatar and TH-73A US offsetting expected reduction on certain programmes and civil deliveries
ELECTRONICS EUROPE*	4,147	-3.3%	Slight decrease due to slowdown in bookings related to COVID-19
LEONARDO DRS*	2,414	-1.0%	Solid performance confirmed; 2019 benefitting from the peak in deliveries of APS (Active Protection System)
AIRCRAFT**	2,634	+13.1%	EFA Kuwait ramp up more than offsetting COVID-19 slowdowns
AEROSTRUCTURES**	819	-27.2%	B787 and ATR production rates reduction due to COVID-19
ELIMINATIONS & OTHER	-480
FY 2020A***	13,410	-2.7%

* Excluding € 36 mln of Defence Electronics & Security eliminations

** Excluding € 49 mln of Aeronautics eliminations

© 2019 Leonardo - Società per azioni 18 *** Including ca. € 95 mln of negative forex

EBITA and Profitability Solid EBITA performance, notwithstanding COVID-19 impacts

	€ mln (RoS)	RoS	∆ % YoY
FY 2019A	1,250	9.1%
HELICOPTERS	383	9.6%	-11.1%
ELECTRONICS EUROPE	360	8.7%	-15.7%
LEONARDO DRS	177	7.3%	-4.8%
AIRCRAFT	355	13.5%	+10.9%
AEROSTRUCTURES	-86	-10.5%	n.a.
ATR	-69	n.a.	n.a.
SPACE	23	n.a.	-41.0%
CORPORATE & OTHER	-205		-5.7%
FY 2020A*	938	7.0%	-25.0%

* Including ca. € 8 mln of negative forex

From EBITA to Net Result

Non-cash one time write-off of the asset base of civil aeronautics programmes to reflect revised production schedule

• EBIT down 55% due to EBITA decrease, write-downs in the Aerostructures against lower production rates and COVID-19 related costs
• Net Result mainly affected by EBIT performance, net of the tax benefit associated with lower taxable income and "patent box" effects and a lower impact of financial costs
• FY19 Net Result benefitted from the release of the risk provision set against guarantees given upon disposal of transportation business of AnsaldoBreda

Impressive FOCF in Q4 to deliver on targets

• Resilient performance at FOCF level as expected and promised
• Working capital under control in non-civil activities
• Lower investments also benefitting from extraordinary goverment grants cash-ins
• Cost savings measures
• Solid business performance offset growing drag from or civil businesses

Strong creditworthiness

• Anticipated refinancing of bonds maturing in 2021 taking advantage of favourable market conditions
• Cost of funding reduced to 3% in advance of targets

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

(2) Including Bond, Term Loan, EIB and CDP

(3) Pro forma for CDP financing arranged in 2019

(4) Pro forma for January 2021 bond reimbursement and the EIB financing drawdown

© 2019 Leonardo - Società per azioni 22

Strong liquidity position at € 5.6bn

• Cash availability(1) and credit facilities ensure a Group's liquidity above € 5.5 bn
  • Existing credit lines (confirmed and unconfirmed) equal to € 2.7 bn
  • New Credit Line signed in May 2020 equal to € 1.25 bn(2)

(1) Pro forma for January 2021 bond reimbursement and the EIB financing drawdown

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

True believers ESG enhancing our future performance Key results achieved

• ESG is forefront of our minds and its been part of our journey for 10 years now

Leonardo contributes to the SDGs through investments and innovation First Integrated Reporting in 2020

• In 2021-2022, Leonardo invests on yearly average around € 600-700 mln(1)
• Leonardo commits to around 50% of SDGs-aligned investments
• The initiatives mainly impact SDG 9 "Industry, Innovation & Infrastructure" followed by SGD 8 "Decent work and economic growth" and SGD 11 "Sustainable Cities & Communities"

SDGs-aligned investments Our main contribution to the SDGs

2021 Guidance

Assuming progressive improvement in the global health situation through the year with consequent normalization of operating

		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 no dividend payable for 2020 results

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

Q&A

© 2019 Leonardo - Società per azioni 27

SECTOR RESULTS

Helicopters Military-governmental supporting growth

€ mln	4Q 2019	4Q 2020	% Change	FY 2019	FY 2020	% Change
Orders	2,407	1,340	-44.3%	4,641	4,494	-3.2%
Revenues	1,289	1,330	+3.2%	4,025	3,972	-1.3%
EBITA	161	164	+1.9%	431	383	-11.1%
RoS	12.5%	12.3%	-0.2 p.p.	10.7%	9.6%	-1.1 p.p.

2021 OUTLOOK*

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

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

Helicopters

Defence Electronics & Security Growing Revenues and Profitability

ELECTRONICS - EU

€ mln	4Q 2019	4Q 2020	% Change	FY 2019	FY 2020	% Change
Orders	1,780	2,464	38.4%	4,444	4,710	+6.0%
Revenues	1,551	1,416	-8.7%	4,289	4,147	-3.3%
EBITA	190	144	-24.2%	427	360	-15.7%
RoS	12.4%	10.2%	-2.4 p.p.	10.0%	8.7%	-1.3 p.p.
LEONARDO DRS
\$ mln	4Q 2019	4Q 2020	% Change	FY 2019	FY 2020	% Change
Orders	670	511	-23.7%	2,923	3,054	+4.5%
Revenues	913	825	-9.6%	2,729	2,757	+1.0%
EBITA	92	88	-4.3%	208	202	-2.9%
RoS	10.1%	10.7%	+0.6 p.p.	7.6%	7.3%	-0. 3.p.

Avg. exchange rate €/\$ @ 1.1195 in FY2019

Avg. exchange rate €/\$ @ 1.1422 in FY2020

2021 OUTLOOK*

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

© 2019 Leonardo - Società per azioni 31 *In absence of further worsening of the pandemic and consequent additional restrictions which may compromise current scenario

Aeronautics Solid Aircraft performance, Aerostructures still impacted by COVID-19

AIRCRAFT

	€ mln	4Q 2019	4Q 2020	% Change	FY 2019	FY 2020	% Change
Orders		383	1,259	+221.9%	1,904	2,031	6.7%
Revenues		827	930	+15.6%	2,329	2,634	+13.1%
EBITA		132	151	+14.4%	320	355	+10.9%
RoS		15.9%	16.2%	-0.01 p.p.	+13.7%	+13.5%	-0.2 p.p.

AEROSTRUCTURES +

€	4Q 2019 mln	4Q 2020	% Change	FY 2019	FY 2020	% Change
Orders	413	132	-62.9%	948	581	-38.7%
Revenues	279	189	-24.0%	1,125	819	-27.2%
EBITA	16	-39	-337.5%	-11	-86	-681.8%
RoS	5.73%	-20.7%	-23.6 p.p.	-1.0%	-10.5%	-9.5 p.p.

ATR

€	4Q 2019 mln	4Q 2020	% Change	FY 2019	FY 2020	% Change
EBITA	49	-7	-114.3%	53	-69	-230.2%

2021 OUTLOOK*

• 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

Space Recovery of manufacturing and confirmed solid performance of satellite services

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

4Q/FY 2020 Results Group Performance

	4Q 2019	4Q 2020	% Change	FY 2019	FY 2020	% Change
€ mln
New Orders	5,526	5.244	-5.1%	14,105	13.754	-2.5%
Backlog				36,513	35.516	-2.7%
Revenues	4,650	4.385	-5.7%	13,784	13.410	-2.7%
EBITA	565	441	-21.9%	1,251	938	-25.0%
RoS	12.2%	10.1%	-2.1 p.p.	9.1%	7%	-2.1 p.p.
EBIT	505	122	-75.8%	1,153	517	-55.2%
EBIT Margin	10.9%	2.8%	-8.1 p.p.	8.4%	3.9%	-4.5 p.p.
Net result before extraordinary transactions	355	106	-70.1%	722	241	-666%
Net result	357	106	-70.5%	822	243	-70.4%
EPS (€ cents)	0.619	0.182	-70.6%	1.428	0.419	-70.7%
FOCF	1,458	2.636	+80.8%	241	40	-83.4%
Group Net Debt				2,847	3.318	+16.5%
Headcount				49,530	49.882	+0.7%

Free Operating Cash-Flow (FOCF): this 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

Repayment Conditions of New Debt Instruments

• • €500mln bond issued in July 2020 is characterized by a 5 year bullet repayment
  • EIB financing is a 12 year amortizing loan with a 4 year grace period

CREDIT RATING

	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

(1) Pro forma for January 2021 bond reimbursement and the EIB financing drawdown

© 2019 Leonardo - Società per azioni 36

Development costs capitalised as intangible assets as at 31 December 2020

€ mln	Self Funded National Security	Self Funded Other	Total
01 January 2020 Opening Balance	1,805	503	2,308
Gross R&D capitalised Depreciation and write offs Disposals Subtotal	(18) (56) - (74)	121 (88) (2) 31	103 (144) (2) (43)
Other Changes (*) Net R&D capitalised 31 December 2020	(21) (95) 1,710	179(**) 210 713	158 115 2,423

(*) Movements w/o cash and PL effects (**) Kopter

Covenant FY2020

	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

Defence Budget perspectives

Current estimations on Helicopter market

Market value of new western-built* helicopters (\$bn)

• Civil market expected to grow again, reaching pre-Covid level by 2024-2025

CIVIL REFERENCE MARKET GLOBAL MILITARY MARKET GLOBAL CS&T MARKET

• Opportunistic market, more resilient and less impacted by the pandemic
• Expected increasing importance of military variant of dual use helicopters, especially for multirole segment
• Leonardo addressable market is around ~40%

• Global CS&T market, includes all OEMs and main MRO service providers (Engine, Avionics, etc); Upgrades (~\$2bn per year) are excluded
• Growth in 2021-2025 mainly driven by military programs
• Leonardo addressable market is the one related to LH fleet only (~10% of total fleet)

Note(*): excluded eastern-built helicopters (Russian H., Avicopter, HAL, KAI and TAI); Source: LH Internal analysis (based on deliveries evaluated at standard prices, Economic Conditions 2020).

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

© 2019 Leonardo - Società per azioni 42

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