Leonardo S.p.A. — Investor Presentation 2022

May 5, 2022

1Q 2022 Results Presentation

Rome

5 May 2022

• Q&A
• Sector results
• Appendix

• Key messages Alessandro Profumo, Chief Executive Officer

• Financial review Alessandra Genco, Chief Financial Officer

Good start to the year: progressing well with our plans

First step to achieve our FY2022 Guidance

GOOD START TO THE YEAR IN LINE WITH EXPECTATIONS

STRONG DEMAND FROM DEFENCE AND GOVERNMENTAL MARKETS

CLEAR RECOVERY PATH IN AEROSTRUCTURES

• Back on a growth path
• Progressing well with our plans
• Order intake of € 3.8 bn, up 10.8% with no jumbo orders included
• Backlog at € 36.3 bn
• Revenues at € 3.0 bn, up 7.7% YoY
• EBITA at € 132 mln, up 38.9% YoY
• RoS at 4.4%, up 1.0 p.p.
• FOCF at € -1.1 bn, up over 300 million YoY
• S&P revised outlook to positive
• Reconfirming 2022 guidance
• Leveraging on our exposure in key domestic markets
• Good continued demand in export markets
• Well positioned in markets that are committed to growing their defence spending
• Moving towards closer European co-operation
• Airbus production recovering
• Boeing 787 deliveries resuming

Strategic progress update: taking actions on portfolio

Disposal of Global Enterprise Solutions and Advanced Acoustic Concepts

Sale of GES

• Leonardo DRS signed a definitive agreement to sell its Global Enterprise Solutions business (GES) to SES for \$ 450 million, gross of taxes
• The disposal will also help optimize our portfolio and make us more focused on our core businesses

Sale of AAC

• Leonardo DRS has signed a definitive agreement to transfer full ownership of Advanced Acoustic Concepts (AAC) Joint Venture to Thales subsidiary TDS, its JV partner
• The transaction is another step in the process of refocusing DRS business portfolio

The completion of both transactions is subject to regulatory clearances and customary closing conditions and is expected in 2H2022

• Q&A
• Sector results
• Appendix

• Key messages Alessandro Profumo, Chief Executive Officer

• Financial review Alessandra Genco, Chief Financial Officer

1Q 2022 Highlights

• Strong commercial activity
• Backlog at € 36.3 bn
• Order intake of € 3.8 bn, up 10.8% with no jumbo orders included
• Continued strong demand for our products supports growing top line
• Revenues at € 3 bn, up 7.7% YoY
• Profitability improving
• EBITA at € 132 mln, up 38.9% YoY
• FOCF in line with plan
• FOCF at € -1.1 bn vs € -1.4 bn in 1Q21
• Strong liquidity position
• 2022 Guidance confirmed

Order Intake

Commercially strong, reflecting continued strength of defence-governmental business

	€ mln	∆ % YoY
1Q2021A	3,421
HELICOPTERS	863	0.9%
ELECTRONICS EUROPE	1,489	-3.6%
LEONARDO DRS	665	12.1%
AIRCRAFT	781	31.3%
AEROSTRUCTURES	94	161.1%
ELIMINATIONS & OTHER	-103
1Q2022A*	3,789	10.8%

* Including ca. € 82 mln of positive forex

Revenues

Solid performance confirming growth path

	€ mln	∆ % YoY
1Q2021A	2,790
HELICOPTERS	923	16.5%	Ramp-up mainly in NH90 Qatar and increased deliveries (19 in 1Q22 vs 13 in 1Q21)
ELECTRONICS EUROPE	955	2.6%	In line with 1Q21
LEONARDO DRS	545	-3.5%	1Q21 benefitted from the postponement of some activities from 2020. Positive FX effect.
AIRCRAFT	571	12.0%	Increase driven by EFA Kuwait and C27-J
AEROSTRUCTURES	123	10.8%	Increase driven by Airbus programmes, production rate increase
ELIMINATIONS & OTHER	-111
1Q2022A*	3,006	7.7%

* Including ca. € 68 mln of positive forex

EBITA and Profitability

Improving Profitability

	€ mln	RoS	∆ % YoY
1Q2021A	95	3.4%
HELICOPTERS	36	3.9%	16.1%	Higher volumes, profitability in line with 1Q21
ELECTRONICS EUROPE	91	9.5%	15.2%	Increase across all business areas, mainly in Defence Systems
LEONARDO DRS	55	10.1%	14.6%	Confirmed margin expansion primarily driven by the transition of development programmes into production
AIRCRAFT	52	9.1%	10.6%	Higher volumes with continued profitability
AEROSTRUCTURES	-46	-37.4%	0.0%	Low asset utilisation due to low volume of production
ATR	-10		28.6%	Higher deliveries (2 in 1Q22 vs 0 in 1Q21)
SPACE	7		133.3%	Higher volumes and improved profitability in Manufacturing. Solid profitability in Services confirmed.
CORPORATE & OTHER	-53
1Q2022A*	132	4.4%	38.9%

* Including ca. € 4 mln of positive forex

© 2022 Leonardo - Società per azioni

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 in line with plan: 1Q 2022 FOCF at € - 1,080 mln, up 24% vs 1Q 2021 (€ - 1,422 mln)

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)

2022 exchange rate assumptions: € / USD = 1.18 and € / GBP = 0.9

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

Helicopters

OE CS&T/Other

OE CS&T/Other

41%

37%

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

* Avg. exchange rate €/\$ @ 1.2056 in 1Q2021, Avg. exchange rate €/\$ @ 1.1225 in 1Q2022

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

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 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

* Based on the current assessment of the effects deriving from the geopolitical and global health situation on the supply chain 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 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

1Q 2022 Results

Group Performance

€ mln	1Q 2022	1Q 2021	% Change	FY 2021
New Orders	3,789	3,421	10.8%	14.307
Backlog	36,278	36,414	-0.4%	35.534
Revenues	3,006	2,790	7.7%	14.135
EBITA	132	95	38.9%	1.123
RoS	4.4%	3.4%	1.0 p.p.	7.9%
EBIT	123	75	64.0%	911
EBIT Margin	4.1%	2.7%	1.4 p.p.	6.4%
Net result before extraordinary transactions	74	-2	3,800.0%	587
Net result	74	-2	3,800.0%	587
EPS (€ cents)	0.129	-0.003	4,400.0%	1.019
FOCF	-1,080	-1,422	24.1%	209
Group Net Debt	4,788	4,640	3,2%	3.122
Headcount	50,106	49,780	0.7%	50.413

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

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 / Stable Outlook	Ba1 / Positive Outlook	October 2018
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

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@leonardo.com

Leonardo Investor Relations and Credit Rating Agencies

+39 06 32473.512

ir@leonardo.com

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