Leonardo S.p.A. — Investor Presentation 2022

Jul 28, 2022

2Q/1H 2022 Results Presentation

Rome

28 July 2022

• Q&A
• Sector results
• Appendix

• Key messages Alessandro Profumo, Chief Executive Officer

• Financial review Alessandra Genco, Chief Financial Officer

WELL POSITIONED IN THE DEFENCE ARENA

Good 1H2022 results, delivering strong performance

• Building on good start to the year
• Order intake of € 7.3 bn, up 9.4%
• Revenues at € 6.6 bn, up 3.6% YoY
• EBITA at € 418 mln, up 12% YoY vs 1H2021 restated*
• RoS at 6.4% (7.4% without pass through)
• ROIC at 10.5%, vs 10.3% 1H21
• FOCF at € -962 mln, improved by more than 400 million YoY
• € 1.76 bn gross contract for 32 AW149 in Poland signed in July
• S&P and Moody's revised outlook to positive
• FY2022 Guidance confirmed

* Restatement to include 1H2021 covid costs within EBITA as previously accounted below the line

Important strategic progresses

ESG: DEMONSTRATING DEEP COMMITMENT IN OUR FIRST ESG INVESTOR DAY

POSITIONING FOR TOMORROW'S DEFENCE MARKET

• ESG fully embedded in our Industrial Plan, LTI and Financial strategy

• Important progress and goals achieved

• In Europe: reinforced positioning in Defence Electronic through the 25.1% stake in Hensoldt

• In the US: fully delivering on promises in Leonardo DRS
• continued growth on a stand-alone basis
• more focused on its core business (disposal of AAC completed; disposal GES about to be finalized)
• reinforced through the combination with RADA, also a way to list it in highly volatile markets

Leonardo DRS merger with RADA: excellent strategic fit, very well placed within Leonardo Group

• Important strategic move to strengthen our position in a very attractive market
• Leonardo DRS + RADA very well placed to be a leader in rapidly growing Force Protection market
• Creating opportunities in the US and internationally, leveraging Leonardo's global presence
• Reshaping of Leonardo DRS portfolio as promised, focusing on its core strategic businesses
• increasing exposure to high growth and high margin market segments

• adding Israel as a new domestic market

• Increased addressable market and strong fit/diversity of programs

• Complementary technologies in force protection market
• Stronger position in US market and international expansion opportunities, leveraging Leonardo's global presence
• Strong balance sheet providing flexibility
• Exciting Value creation opportunity

RADA in the wider LDO Group Value proposition Complementary tactical radar sensors portfolio

Business strengthening

Technological exploitation

Broader domestic footprint

Exploit EU/international market

Enhancement of market positioning in the tactical operational environment, enabling an integrated approach

RADA products will allow Leonardo to bring innovative integrated solutions to market

Adding Israel, a technology leader and advanced Defence customer, as a new domestic market

Support RADA organic expansion accessing EU / export markets and new programmes

The merger of RADA & DRS provides significant upside beyond the base case

• Q&A
• Sector results
• Appendix

• Key messages Alessandro Profumo, Chief Executive Officer

• Financial review Alessandra Genco, Chief Financial Officer

1H 2022 Highlights

• Strong commercial activity, with book to bill at 1.1x
• Backlog at € 36.4 bn
• Order intake of € 7.3 bn, up 9.4% with no jumbo orders included
• Continued strong demand for our products supports growing top line
• Revenues at € 6.6 bn, up 3.6% YoY
• Strong profitability improvement
• EBITA at € 418 mln, up 11.8% YoY vs 1H2021 restated*
• Stepping up cash flow generation as promised
• FOCF at € -962 mln vs € -1.4 bn in 1H21
• Strong liquidity position
• 2022 Guidance confirmed

^* Restatement to include 1H2021 covid costs within EBITA as previously accounted below the line

Order Intake

Commercially strong, reflecting continued strength of defence-governmental business

	€ mln	∆ % YoY
1H2021A	6,682
HELICOPTERS	2,183	8.7%
ELECTRONICS EUROPE	2,540	4.4%
LEONARDO DRS	1,307	9.8%
AIRCRAFT	1,490	20.6%
AEROSTRUCTURES	158	18.8%
ELIMINATIONS & OTHER	-368
1H2022A*	7,310	9.4%

* Including ca. € 197 mln of positive forex

Revenues

Solid performance confirming growth path

	€ mln	∆ % YoY
1H2021A	6,345
HELICOPTERS	2,110	11.6%	Ramp-up mainly in NH90 Qatar and AW169
ELECTRONICS EUROPE	2,109	0.8%	+4.4% like for like** driven by Defence Systems
LEONARDO DRS	1,133	2.0%	Softness due to timing of new acquisitions and some shifts in the Supply Chain. Positive FX effect
AIRCRAFT	1,261	2.2%	Increase driven by C27-J and logistics EFA
AEROSTRUCTURES	234	-23.3%	Decrease in line with plan; production increase in 2H2022 based on customer demand
ELIMINATIONS & OTHER	-271
1H2022A*	6,576	3.6%

* Including ca. € 158 mln of positive forex

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

EBITA and Profitability

Improving Profitability

	€ mln	RoS	∆ % YoY
1H2021A	400	6.3%
1H2021 Restated	374	5.9%
HELICOPTERS	151	7.2%	2.0%	Higher volumes with higher pass-through contribution
ELECTRONICS EUROPE	210	10.0%	4.5%	Increase across all business areas, mainly in Defence Systems
LEONARDO DRS	104	9.2%	8.3%	Confirmed margin expansion primarily driven by the transition of development programmes into production
AIRCRAFT	152	12.1%	1.3%	Continued progress on milestone delivery, confirming strong profitability
AEROSTRUCTURES	-88	-37.6%	-7.3%	Low asset utilisation due to low production volumes
ATR	-1		+95.2%	Increase driven by efficiency plan and signing of a customer settlement
SPACE	3		-87.0%	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	-113
1H2022A*	418	6.4%	+11.8% **	Including ca. € 11 mln of positive forex **vs 1H2021 restated

From EBITA to Net Result

Stronger bottom line thanks to EBITA increase

• Net Result benefitting from EBIT increase, with lower impact from financial expenses and income taxes
• Stepping up cash flow : 1H 2022 FOCF at € - 962 mln, up 30.3% vs 1H 2021 (€ - 1,380 mln), in line with plan
• also Improving quality, as promised

2022 Guidance confirmed

		FY2021A	FY2022 Guidance(1)
New Orders	(€ bn)	14.3	ca. 15.0
Revenues	(€ bn)	14.1	14.5-15.0
EBITA	(€ mln)	1,123	1,180-1,220(2)
FOCF	(€ mln)	209	ca. 500
Group Net Debt	(€ bn)	3.1	ca.3.1(3)

Assuming USD/€ exchange rate at 1.18 and €/GBP exchange rate at 0.90

• (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.

Agenda

• Q&A
• Sector results
• Appendix

• Key messages Alessandro Profumo, Chief Executive Officer

• Financial review Alessandra Genco, Chief Financial Officer

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(*)

• Growth driven by delivery of programmes in backlog, defence-governmental business and gradual recovery in civil, still affect 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

		2Q/1H22 Results
ELECTRONICS -	EU
	€ mln	2Q 2021	2Q 2022	% Change
Orders		889	1,051	18.2%
Revenues		1,161	1,154	-0.6%
EBITA		122	119	-2.5%
RoS		10.5%	10.3%	-0.2 p.p.
	€ mln	1H 2021	1H 2022	% Change
Orders		2,433	2,540	4.4%
Revenues		2,092	2,109	0.8%
EBITA		201	210	4.5%
RoS		9.6%	10.0%	+0.4 p.p.
LEONARDO DRS
	\$ mln(*)	2Q 2021	2Q 2022	% Change
Orders		720	683	-5.1%
Revenues		658	627	-4.7%
EBITA		58	52	-10.3%
RoS		8.8%	8.3%	-0.5 p.p.
	\$ mln(*)	1H 2021	1H 2022	% Change
Orders		1,435	1,430	-0.3%
Revenues		1,339	1,239	-7.5%
EBITA		116	114	-1.7%
RoS		8.7%	9.2%	+0.5 p.p.

* Avg. exchange rate €/\$ @ 1.2057 in 1H2021, Avg. exchange rate €/\$ @ 1.0940 in 1H2022

** 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

485

10,7%

8,7%

258

9,0%

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

2Q/1H22 Results
Aerostructures
	€ mln	2Q 2021	2Q 2022	% Change
Orders		97	64	(34.0%)
Revenues		194	111	(42.8%)
EBITA		(36)	(42)	(16.7%)
RoS		(18.6%)	(37.8%)	(19,2 p.p)
	€ mln	1H 2021	1H 2022	% Change
Orders		133	158	18.8%
Revenues		305	234	(23.3%)
EBITA		(82)	(88)	(7.3%)
RoS		(26.9%)	(37.6%)	(10.7 p.p.)
ATR
	€ mln	2Q 2021	2Q 2022	% Change
EBITA		(7)	9	+228.6%
	€ mln	1H 2021	1H 2022	% Change
EBITA		(21)	(1)	95.2%

Aerostructures 1H22 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 and profitability improvement expected in Manufacturing due to efficiency actions in place to recover competitiveness on Telecommunication business

* 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

2Q/1H 2022 Results

Group Performance

€ mln	2Q 2021	2Q 2022	% Change	1H2021	1H2022	% Change
New Orders	3,261	3,521	+7.9%	6,682	7,310	+9.4%
Backlog				35,883	36,358	+1.3%
Revenues	3,555	3,570	+0.4%	6,345	6,576	+3.6%
EBITA	305	286	-6.2%	400	418	+4.5%
EBITA Restated*	290	286	-1.4%	374	418	+11.8%
RoS	8.6%	8.0%	-0.6 p.p.	6.3%	6.4%	+0.1 p.p.
RoS Restated*	8.2%	8.0%	-0.2 p.p.	5.9%	6.4%	+0.5 p.p.
EBIT	272	239	-12.1%	347	362	+4.3%
EBIT Margin	7.7%	6.7%	-1 p.p.	5.5%	5.5%	0.0 p.p.
Net result before extraordinary transactions	179	193	+7.8%	177	267	+50.8%
Net result	179	193	+7.8%	177	267	+50.8%
EPS (€ cents)	0.309	0.333	+7.8%	0.306	0.462	+50.8%
FOCF	42	118	+181.0%	-1,380	-962	+30.3%
Group Net Debt				4,613	4,793	+3.9%
Headcount				49,980	50.441	0.9%

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-hands ensure a Group's liquidity of approx. € 3.8 bn

Balanced debt maturity profile

	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

2Q/1H22 Results

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

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.

29

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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