Leonardo S.p.A. — Investor Presentation 2024

Feb 29, 2024

FULL YEAR 2023 ANALYST PRESENTATION LEONARDO FY2023 PRELIMINARY RESULTS

FULL YEAR 2023 ANALYST PRESENTATION

29 February 2024

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DISCLAIMER

• It should be noted that the approval of the draft statutory financial statements and the consolidated financial statements of Leonardo as of 31 December 2023 is scheduled for 11 March 2024.
• Therefore, the data reported in this document have not completed the audit process (pursuant to Legislative Decree 39/2010 and Legislative Decree 254/2016) by the appointed auditor and are to be considered "unaudited".
• Furthermore, the activities pursuant to Law 262/2005 carried out on behalf of the Group Manager in Charge on the CorporateAccounting Information Control Model are still ongoing and not completed.

Agenda

1. Key messages, Roberto Cingolani, Chief Executive Officer and General Manager

2. FY2023 preliminary results, Alessandra Genco, Chief Financial Officer

3. Q&A

4. Appendix

FY 2023 preliminary results: delivering on strategy and financial targets

Orders

€17.9bn, +3.8%

Ahead of FY 2023 guidance, with book-to-bill of 1.2x, reflecting strong commercial momentum

Revenues

€15.3bn, +3.9%

In line with guidance, delivering on our strong backlog

EBITA, margin

€1.29bn, +5.8% YoY In line with guidance, margin of 8.4%

€635m, +17.8% YoY FOCF

Ahead of guidance, topline growth with cost & investment discipline

€2.3bn, -23% YoY NET DEBT Ahead of guidance, improving in line with expectations

Good strategic and financial progress in 2023

1 Reorganizing Leonardo

Relaunching Cyber and Space for a new concept of Defence

Strengthening international alliances 3

4 Exit from non-core businesses

5 Increasing financial flexibility

Achieving investment grade rating BBB- Baa3 BBB-6

• Direct reports to CEO reduced from 26 to 10
• Appointed a new Chief Innovation Officer, Chief M&A and Strategy Officer, Chief Sustainability Officer and Cyber Division's Managing Director
• People Strategy focused on building a technology-based company
• Created a new Space business Division

• Land systems

• Telespazio fully consolidated in Leonardo's accounting from FY 2024
• Expected double digit growth for the future

• Skydweller

• Industria Italiana Autobus (IIA)

• GCAP

• Sold 8% stake in DRS in November 2023 through a secondary offering

5

Important progress towards ESG milestones in 2023

Decarbonisation	• -9.5% Scope 1 & 2 market-based emissions vs 2022 • -7.5% water withdrawal vs 2022 • -2.3% energy consumption vs 2022 • Continued commitment to SBTi
Innovation	• R&D as % of revenues at 14% vs 12% in 2022 • Data computing power per capita increased by 4.3% vs 2022 • Data storage capacity per capita increased by 13.9% vs 2022
Diversity and inclusion	• Greater gender balance in top management • 20% of female managers out of total managers vs 19% in 2022 • 22.4% women hires with STEM degree on total hires with STEM degree
Commitment to sustainable finance	• 55% of financial sources ESG linked

Key messages

• Successfully delivered on FY 2023 financial targets
• Good progress on strategy
• Focussed on our new Industrial Plan, to be presented on 12th March
• Transforming Leonardo into a global technology-based company
• Strengthening the core business, while paving the way for the future

1. Key messages, Roberto Cingolani, Chief Executive Officer and General Manager

2. FY2023 preliminary results, Alessandra Genco, Chief Financial Officer

3. Q&A

4. Appendix

Agenda

Fully consolidating Telespazio

• Reviewed Space Alliance agreement with Thales
• From 2024, Leonardo will fully consolidate Telespazio
• For 2022 and 2023, Proforma KPIs available to show the effects of the full consolidation of Telespazio

FY23: Strong commercial and financial performance

Pro-Forma for Telespazio consolidation¹

Financial KPI	FY 2022 (Actual)	FY 2023 (Preliminary)	Change	FY 2023 (Guidance)	FY 2022	FY 2023
New Orders, €bn	17.3	17.9	3.8%	ca. 17	18.0	18.7
Revenue, €bn	14.7	15.3	3.9%	15 – 15.6	15.4	16.0
EBITA, €M	1,218	1,289	5.8%	1,260 – 1,310	1,250	1,326
ROS, %	8.3%	8.4%	0.1 p.p	-	8.1%	8.3%
FOCF, €M	539	635	17.8%	ca. 600	559	652
Net debt 2 , €bn	3.0	2.3	-23%	ca. 2.6	3.0	2.3

1. Telespazio fully consolidated

2. Net debt includes the effect deriving from DRS transaction

Helicopters: robust performance with increasing pace of deliveries

€mln	2022	2023	Change
Orders Revenues EBITA	6,060 4,547 415	5,513 4,725 422	-9.0% 3.9% 1.7%
RoS (%)	9.1%	8.9%	-0.2 p.p.

Highlights

• Continued good order development following a strong 2022
• 185 new helicopters delivered (149 units in 2022)
• Revenue growth driven by dual-use models and CS&T contribution (43% in 2023 vs 36% in 2022)
• Focussed cost actions offsetting inflationary pressures

Defence Electronics: strong commercial performance with growth across all segments Electronics Europe DRS

€mln	2022	2023	Change	\$mln 2022	2023	Change
Orders Revenues EBITA * RoS (%)	5,628 4,712 553 11.7%	6,521 4,907 600 12.2%	15.9% 4.1% 8.5% +0.5 p.p.	3,156 2,693 265 9.8%	3,516 2,826 273 9.7%	11.4% 4.9% +3% -0.1 p.p.

Electronics Europe DRS

• Double-digit order growth, with major UK order of MK2 radars for RAF Typhoon fleet, update of 90 C1 Ariete tanks and JoC COVI
• Revenue growth driven by higher volumes across segments

• EBITA growth in main business areas, Cyber Security, and greater contribution of JVs

• Strong orders, benefitting from key areas of strategic focus

• Revenue growth driven by multimission advanced sensing, naval and ground network computing programs
• Profitability reflecting contracts in developmental stage

Aircraft: resilient margin and profit contribution

€mln	2022	2023	Change
Orders Revenues EBITA RoS (%)	2,800 3,085 421 13.6%	2,395 2,938 419 14.3%	-14.5% -4.8% -0.5% 0.7 p.p.

Highlights

• Solid order intake from Fighter jets and cargo aircraft
• Postponement of some export orders now expected in H1 2024
• Revenues reflecting YoY comparison with 2022, which benefitted from ramp up of EFA Kuwait
• Continued strong profitability, with ~70bps margin improvement led by EFA and JSF programmes

Aerostructures & ATR: further progress in line with recovery plan

€mln	2022	2023	Change
Orders Revenues EBITA* RoS (%)	420 475 (189) (39.8%)	644 636 (151) (23.7%)	53.3% 33.9% 20.1% 16.1 p.p.

Highlights

• Orderbook development reflecting continued recovery in air traffic
• 39 fuselage sections and 32 stabilizers delivered for B787 program (22 fuselages and 13 stabilizers in 2022)
• Revenue growth from increased activity across business lines
• EBITA recovery on track
• Remain committed to breakeven by end 2025
• ATR: delivery of 36 aircraft (25 in 2022) with record year for Services revenue

Space: building blocks in place for new focussed division

Pro-Forma for Telespazio consolidation

€mln	2022	2023	Change
Orders Revenues EBITA * RoS (%)	780 650 63 9.7%	763 701 53 7.6%	-2.2% 7.8% -15.9% -2.1p.p.

Highlights

• Telespazio to be consolidated following amendment of Space Alliance agreement with Thales
• Year-on-year decline in EBITA reflects difficult market environment in satellite manufacturing for commercial telecommunication markets
• Telespazio to benefit from growing demand for services, particularly in the Geo information segments and SatCom

Significant progress in cash generation, in line with targets

• 69% Group cash conversion*
• Slightly lower cash absorption from Aerostructures vs 2022

Main drivers

• Mid-single digit revenue growth
• Mid-single digit EBITA growth
• Continued cash discipline, and working capital efficiency
• Consistent contribution from JVs
• Aerostructures moving to breakeven in 2025

Reduced gross debt by ca. 18% and net debt by ca. 26% and cost of debt below 2023 target

• Important deleveraging achieved in 2023 vs 2021, both in terms of gross (ca. -18%) and net debt (ca. -26%)
• Debt decreased notwithstanding strategic acquisition and continued investments in new products
• Disciplined financial strategy, together with upgrade to Investment Grade obtained from the three Rating Agencies, allowed Leonardo to keep cost of funding around 3.1%, below expected target

Closing remarks

• Financial performance in line with expectations; significant improvement in FOCF
• Helicopters continued robust commercial performance, higher deliveries and customer support
• Defence Electronics strong commercial performance and positive growth across all sectors
• Cyber repositioning the business and leveraging Group's defence & institutional presence
• Aircraft strong delivery of profit and higher margin
• Aerostructures further progress in line with recovery plan
• Space building blocks in place for new focussed division
• Industrial Plan to be presented on 12th March providing strategic direction with near and medium-term targets

Agenda

1. Key messages, Roberto Cingolani, Chief Executive Officer and General Manager

2. FY2023 preliminary results, Alessandra Genco, Chief Financial Officer

3. Q&A

4. Appendix

Agenda

1. Key messages, Roberto Cingolani, Chief Executive Officer and General Manager

2. FY2023 preliminary results, Alessandra Genco, Chief Financial Officer

3. Q&A

4. Appendix

Helicopters

	€ mln	4Q 2022	4Q 2023	% Change
Orders		1,437	1,336	-7.0%
Revenues		1,393	1,523	+9.3%
EBITA		181	172	-5.0%
RoS		13.0%	11.3%	-1.7 p.p.

4Q23 Results

Electronics

2019-2023 Results

Revenues by segment

		Electronics EU (€ mln)
		Leonardo DRS (\$ mln)

		ELECTRONICS -		EU

Orders
Revenues
FBITA
RoS

600

9.7%

12.2%

11.7%

Leonardo DRS

	€ mln
Orders		2,134	1,666	-21.9%
Revenues		1,562	1,614	3.3%
EBITA		247	273	10.5%
RoS		15.8%	16.9%	+1.1p.p.

4Q 2022 4Q 2023 % Change

	\$ mln(*)	4Q 2022	4Q 2023	% Change
Orders		852	1.014	19.0%
Revenues		820	926	12.9%
EBITA		104	115	10.6%
RoS		12.7%	12.4%	-0.3 p.p.

* Avg. exchange rate €/\$ @ 1.05 in FY2022; Avg. exchange rate €/\$ @ 1.08 in FY2023

4Q23 Results

Aircraft

2019-2023 Results

€ mln 4Q 2022 4Q 2023 % Change Orders 1,163 570 -51% Revenues 1,126 1.000 -11.2%

EBITA 178 177 -0.6%

RoS 15.8% 17.7% +1.9 p.p.

Revenues by segment

OE CS&T

Aerostructures and ATR

2019-2023 Results 4Q23 Results

1,125

819

ATR

Revenues by programme

Aerostructures
	€ mln	4Q 2022	4Q 2023	% Change
Orders		78	116	48.7%
Revenues		124	173	39.5%
EBITA		-49	-33	32.7%
RoS		-38.5%	-19.1%	20.4 p.p.

€ mln	4Q 2022	4Q 2023	% Change
EBITA	-2	14	800%

Revenue and Backlog diversification

42% 36% 20% 3% 47% 30% 19% 4% Defence Electronics Helicopters Aircraft Aerostructures REVENUES BACKLOG

Revenues and backlog by business Revenues and backlog by geography

REVENUES	NEW ORDERS	ORDER BACKLOG	EBITA
15.3	17.9	39.5	1.3
€	€	€	BN
BN	BN	BN	€

Solid Group liquidity ensures adequate financial flexibility

• As at 31 December 2023 Leonardo had sources of liquidity available for a total of about € 7.3bn to meet the financing needs of the Group's, broken down as follows:
• Cash in-hands equal to € 2.4bn
• ESG Revolving Credit Facility (RCF) equal to € 2.4bn
• Commercial Paper Program equal to € 1.0bn
• Existing unconfirmed credit lines equal to € 1.0bn
• «Sustainability-Linked» EIB loan equal to € 0.3bn
• Revolving Credit Facility signed by Leonardo DRS, following the merger with RADA, equal to € 0.2bn

55% of Leonardo funding sources are "ESG linked"

Balanced debt maturity profile

CREDIT RATING

	As of today	Before last review	Date of review
S&P	BBB- / Stable Outlook	BB+ / Positive Outlook	August 2023
Moody's	Baa3 / Stable Outlook	Ba1 / Positive Outlook	May 2023
Fitch	BBB- / Stable Outlook	BBB- / Negative Outlook	January 2022

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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