Slide 1: FY 2022 Results – A Stronger Leonardo
FY 2022 Results – A Stronger Leonardo Rome 10th March 2023
Slide 2: Agenda
Agenda • Key messages Alessandro Profumo, Chief Executive Officer • Industrial review Lucio Valerio Cioffi, General Manager • Financial review Alessandra Genco, Chief Financial Officer • Medium-long term outlook Alessandro Profumo, Chief Executive Officer • Q&A • Sector results • Appendix 2 © 2022 L
Slide 3: FY2022: a year of solid execution and commercial success
FY2022: a year of solid execution and commercial success DELIVERING ON PROMISES • Meeting or exceeding Guidance • Continuing to deliver and making the Group stronger, more resilient, sustainable • Set up to capture best growth opportunities ACCELERATING • Growing order book across all divisions at €
Slide 4: A Stronger Leonardo: Successful Delivery of 2018-2022 Industrial Plan
A Stronger Leonardo: Successful Delivery of 2018-2022 Industrial Plan ORDERS (€bn) CAGR 18-22: 3.4% 17,3 15,1 14,1 14,3 13,8 Delivering results in line or exceeding yearly Guidance 2018* 2019 2020 2021 2022** REVENUES (€bn) CAGR 18-22: 4.7% 14,7 13,8 14,1 13,4 12,2 Emerging stronger commercially and
Slide 5: Significant progress delivering against our roadmap towards the future
Significant progress delivering against our roadmap towards the future STRENGTHEN OUR CORE TRANFORM TO GROW MASTER THE NEW Reinforce the core business and Leveraging digitalisation to capture Create advanced technological core activities new opportunities solutions to drive innovation Increasing cri
Slide 6: Core business growing stronger
Core business growing stronger Helicopters and Aircraft Helicopters • Continued strong commercial momentum; € 6 bn of new orders in 2022 • Global market leading product portfolio 2022 Backlog € 13.6bn 2018-2022 Revenues*: +4.5% • Defence/governmental, customer support & training core strengths, acce
Slide 7: Core business growing stronger
Core business growing stronger Electronics and Leonardo DRS • Technology leadership in key focus areas i.e. sensors, radars, electro-optical and combat Electronics management systems driving solid revenue and profitability growth 2022 Backlog € 12.4 bn • Strategic presence across Air, Land and Sea,
Slide 8: Customer, Support & Training providing resiliency, solid revenue stream & long-term visibility
Customer, Support & Training providing resiliency, solid revenue stream & long- term visibility CUSTOMER SUPPORT & TRAINING 2017 2022 Target 2022 ~ 4,000 Helicopters flying <20% >25% >28% % of 2022 Group % of Group revenue % of Group revenue revenue and backlog CS&T REVENUE CONTRIBUTION OF KEY DIVIS
Slide 9: Interoperability and strategic presence across all domains
Interoperability and strategic presence across all domains Strategic presence as leader across Helicopters, Simulation & Training and EU Defence Electronics Key player in European Cooperation Programmes, Safety and Security partner for Institutions PLATFORMS FIXED ROTARY Strong and unique portfolio
Slide 10: Important progress towards ESG milestones in 2022
Important progress towards ESG milestones in 2022 • -15% CO2 Scope 1 & 2 emissions** vs 2021 Progress on environment • -7% intensity* of energy consumption vs 2021 and climate change • -4% intensity* of waste produced vs 2021 Committed • -13% intensity* of water withdrawals vs 2021 to SBTI • >4,900
Slide 11: Agenda
Agenda • Key messages Alessandro Profumo, Chief Executive Officer • Industrial review Lucio Valerio Cioffi, General Manager • Financial review Alessandra Genco, Chief Financial Officer • Medium-long term outlook Alessandro Profumo, Chief Executive Officer • Q&A • Sector results • Appendix 11 © 2022
Slide 12: Strong fundamental drivers of commercial outlook over medium term
Strong fundamental drivers of commercial outlook over medium term Positive market outlook in our core defence markets • A,D&S market CAGR over the next 5 years: ca. 6% • A,D&S annual average market value: ca. €800 bln • Leonardo’s addressable market: ca 15% of the global A,D&S market Defence Italy:
Slide 13: Positive order intake momentum providing long-term visibility
Positive order intake momentum providing long-term visibility Well positioned to capture future opportunities ORDER INTAKE LEVERAGING ON GROUP STRENGTHS 2018-2022 • Strong position in key domestic markets Cumulative value: • Enhanced strength across international export markets Ca. €75 bln • Partner
Slide 14: Well positioned to capture opportunities in Global Monitoring
Well positioned to capture opportunities in Global Monitoring Our strengths v Expertise in control Secure-by-design Computing and storage Modular solutions Integrating data and room creation and solutions and predictive platform (e.g., predictive systems from third management, both in analysis-based
Slide 15: Innovation is the key for our future
Innovation is the key for our future Group capabilities and technological innovation to drive long-term growing commercial success DIGITAL TWIN AND DAVINCI-1 HPC IN HELICOPTERS ADVANCED SIMULATION Certification by Simulation • Digital Twin application for predictive maintenance QUANTUM ELECTRIFICATI
Slide 16: Innovation is key for our future: Global Combat Air Programme (GCAP)
Innovation is key for our future: Global Combat Air Programme (GCAP) Groundbreaking ‘System of Systems’ connecting all domains LEAD SYSTEM INTEGRATORS • ALL DOMAIN • CONNECTIVITY • AUTOMATION • AI, BIG DATA • DIGITAL TWIN • SECURE BY DESIGN 16 © 2022 Leonardo - Società per azioni FY 2022 Results
Slide 17: Aerostructures recovery plan on track
Aerostructures recovery plan on track Confirming breakeven by end of 2025 PROGRESS SO FAR • Reduced headcount by 20% ACTION • Reducing cost through automation and digitalization PLAN • Final phase our investment plan to achieve manufacturing efficiency gains • Pursuing new opportunities • Increasing
Slide 18: Agenda
Agenda • Key messages Alessandro Profumo, Chief Executive Officer • Industrial review Lucio Valerio Cioffi, General Manager • Financial review Alessandra Genco, Chief Financial Officer • Medium-long term outlook Alessandro Profumo, Chief Executive Officer • Q&A • Sector results • Appendix 18 © 2022
Slide 19: FY22: Making the Group stronger, resilient and sustainable
FY22: Making the Group stronger, resilient and sustainable Delivering above FY22 guidance Original 2022 Updated 2022 2021A1 2022A %Δ Guidance Guidance • Continuing on our track record of ORDERS (€bn) 14.3 ca. 15.0 ca. >16.0 17.3 +21.0% execution • Strong growth in new orders with REVENUES 14.1 14.5-
Slide 20: Order Intake
Order Intake Continued strong commercial momentum € mln ∆ % YoY FY2021A** 14,267 32 AW149 Poland; modernization of AW101/CH-149 “Cormorant” fleet; US Navy TH- 73A (AW119); 20 AW119Kx, 10 AW139, 4 AW169 LUH for Italy; 6 AW189 China; 5 HELICOPTERS 6,060 38.7% AW119Kx Israel; MLU of 1 AW101; 4 AW609; v
Slide 21: Revenues
Revenues Growing top line and continued strong programme delivery € mln ∆ % YoY FY2021A** 14,050 Ramp-up in defence/governmental (NH90 Qatar and TH-73A US Navy); HELICOPTERS 4,547 9.4% AW169, Customer support and training Delivery on backlog and capturing new opportunities globally; Higher volumes i
Slide 22: EBITA and Profitability
EBITA and Profitability Improving Profitability € mln RoS ∆ % YoY FY2021A** 1,114 7.6% FY2021 Restated 1,060*** 7.5%*** HELICOPTERS 415 9.1% 2.2% Higher volumes with higher pass-through contribution ELECTRONICS 553 11.7% 14.0% Increase across all business areas and all domains Confirmed margin expan
Slide 23: From EBITA to Net Result
From EBITA to Net Result Stronger bottom line thanks to EBITA increase FY 2021A FY 2022A +9.3% +5.5% +18.7% +58.8% YoY YoY YoY YoY 1,114 54 5 1,218 -114 -119 -101 911 -24 1,060 -89 961 -213 235 932 € mln -22 € mln -51 -158 587 697 -166 EBITA Non recurring Restructuring PPA EBIT Net financial Income
Slide 24: On track with our commitment to improve cash flow
On track with our commitment to improve cash flow (€ mln) 2018-2025e FOCF Main drivers FOCF Aerostructures cash drain €3bn cumulative FOCF • Mid-single digit revenue growth • High single digit EBITA growth 539 600 • Continued cash discipline in 336 241 40 209 core -157 • Consistent contribution from
Slide 25: Leonardo investments for innovation, growth and sustainability
Leonardo investments for innovation, growth and sustainability Strongly aligned to SDG goals 50% of SDG-aligned investments Our main contribution to SDG(2) Improving resources efficiency and productivity by innovation & promoting safety at work Ensuring resilient infrastructures, increasing efficien
Slide 26: 55% of Leonardo funding sources now are "ESG linked"
55% of Leonardo funding sources now are “ESG linked" Financing sources ESG linked financial ~€6,0bn transactions 55% €2.4 bn ESG linked Revolving Credit ESG Facility (RCF) linked €600 mln ESG linked Term Loan (to refinance January 2022 debt maturing) NEW €260 mln EIB Loan 2022 KPIs selected fully al
Slide 27: Reduced debt by ca. 35% and decreased cost of funding by ca. 45%
Reduced debt by ca. 35% and decreased cost of funding by ca. 45% Focus on deleveraging Gross debt(1) Cost of funding € 4.6bn 5.4% 4.7% € 3.0bn 4.0% 3.0% 3.5% 3.0% 2.3% 2016 2022 2016 2017 2018 2019 2020 2021 2022 • Important deleveraging achieved in 2022 vs 2016 • In 2022 full redemption of 2039 and
Slide 28: Capital allocation – Deleveraging is written on the cards
Capital allocation – Deleveraging is written on the cards CAPITAL DEPLOYMENT PORTION OF CASH IN HAND CASH FLOW GENERATED Cash Flow aimed at Gross Debt and generation and Shareholder reduction available cash remuneration • Cash flow generation will be devoted to • Deleveraging: Priority No. 1 • Maint
Slide 29: 2023 Outlook
2023 Outlook 2022A 2023E1 ORDERS (€bn) 17.3 ca.17 REVENUES (€bn) 14.7 15-15.6 • Continued solid commercial momentum, with book-to-bill>1x • Successfully navigating inflationary EBITA (€mln) 1,218 1,260-1,310 pressures • Continued improvement in FOCF and focus on deleveraging FOCF (€mln) 539 ca. 600
Slide 30: Agenda
Agenda • Key messages Alessandro Profumo, Chief Executive Officer • Industrial review Lucio Valerio Cioffi, General Manager • Financial review Alessandra Genco, Chief Financial Officer • Medium-long term outlook Alessandro Profumo, Chief Executive Officer • Q&A • Sector results • Appendix 30 © 2022
Slide 31: Confidence in the medium-term
Confidence in the medium-term Based on strong fundamentals of our businesses KEY ESG PRIORITIES 2023 – 2027 TARGETS1 SUPPORTING OUR KEY COMMERCIAL 2022-2026 Cumulated ca € 90 bn AND INDUSTRIAL GOALS ORDERS (€ 80 bn vs previous plan) Book to bill >1 ENABLING SUSTAINABLE GROWTH BY INNOVATION AND TECHN
Slide 32: Closing remarks
Closing remarks • Leonardo is stronger, more robust, resilient and sustainable • Successfully capturing increasing opportunities • Continued strong commercial activity globally building our backlog • Top line growth across all defence/governmental sectors • Robust profitability benefitting from incr
Slide 33: Agenda
Agenda • Key messages Alessandro Profumo, Chief Executive Officer • Industrial review Lucio Valerio Cioffi, General Manager • Financial review Alessandra Genco, Chief Financial Officer • Medium-long term outlook Alessandro Profumo, Chief Executive Officer • Q&A • Sector results • Appendix 33 © 2022
Slide 34: Q&A
Q&A 34 © 2022 Leonardo - Società per azioni FY 2022 Results
Slide 35: Agenda
Agenda • Key messages Alessandro Profumo, Chief Executive Officer • Industrial review Lucio Valerio Cioffi, General Manager • Financial review Alessandra Genco, Chief Financial Officer • Medium-long term outlook Alessandro Profumo, Chief Executive Officer • Q&A • Sector results • Appendix 35 © 2022
Slide 36: Helicopters
Helicopters Solid business with accelerated civil recovery 2018-2022 Results 4Q22 Results Orders (€ mln) Revenues (€ mln) EBITA (€ mln) and Profitability 6,208 4,547 6,060 4,025 4,157 3,972 4Q 2021 4Q 2022 % Change 3,810 10.7% 9.1% 9.8% 4,641 4,494 9.6% € mln 4,370 9.4% 431 406 415 359 Orders 1,979
Slide 37: Electronics
Electronics Growing Revenues and Profitability 2018-2022 Results 4Q22 Results ELECTRONICS - EU Orders Revenues EBITA and Profitability 5,392 5,628 4,519 4,712 4Q 2021 4Q 2022 % Change 4,289 4,147 € mln 4,710 4,011 4,409 4,444 11.7% Orders 1,529 2,134 41.5% 10.7% 10.0% 553 Revenues 1,496 1,562 7.9% 2
Slide 38: Aircraft
Aircraft Solid performance 4Q22 Results 2018-2022 Results Orders (€ mln) Revenues (€ mln) EBITA (€ mln) and Profitability 2,668 2,800 3,268 3,085 4Q 2021 4Q 2022 % Change 2,634 13.2% 13.7% € mln 2,031 2,329 1,904 13.8% 13.7% 1,700 13.5% 432 421 1,932 Orders 1,025 1,163 13.5% 355 320 Revenues 1,147 1
Slide 39: Aerostructures and ATR
Aerostructures and ATR Gradual recovery 2018-2022 Results 4Q22 Results Orders (€ mln) Revenues (€ mln) EBITA (€ mln) and Profitability Aerostructures 925 948 1,125 1,020 € mln 4Q 2021 4Q 2022 % Change Aerostructures 97 ATR Orders 66 78 18.2% 819 581 53 Revenues 37 124 235.1% EBITA -78 -49 37.2% 420
Slide 40: Space
Space Recovery of Manufacturing and confirmed solid performance of Satellite services 2018-2022 Results 4Q22 Results EBITA (€m) 58 62 4Q 2021 4Q 2022 % Change 31 € mln 39 EBITA 25 21 -16,0% 23 2018 2019 2020 2021 2022 2023 Outlook(*) • Growing volumes driven by solid and increasing backlog • Profita
Slide 41: Agenda
Agenda • Key messages Alessandro Profumo, Chief Executive Officer • Industrial review Lucio Valerio Cioffi, General Manager • Financial review Alessandra Genco, Chief Financial Officer • Medium-long term outlook Alessandro Profumo, Chief Executive Officer • Q&A • Sector results • Appendix 41 © 2022
Slide 42: Revenue and Backlog diversification
Revenue and Backlog diversification REVENUES AND BACKLOG BY REVENUES AND BACKLOG BY BUSINESS GEOGRAPHY REVENUES REVENUES 31% 22% 27% 35% 13% Italy Defence Electronics 21% 14% UK Helicopters US Aircraft Rest of Europe 39% 23% 23% 45% Aerostructures 29% 11% Rest of World 3% 21% 26% 3% 14% BACKLOG BACK
Slide 43: 4Q/FY 2022 Results
4Q/FY 2022 Results Group Performance 4Q 2021 4Q 2022 % Change FY 2021 FY 2022 % Change € mln New Orders 5,041 5,547 10.0% 14,307 17,266 +20.7% Backlog 35,534 37,506 +5.5% Revenues 4,571 4,796 4,9% 14.135 14,713 +4.1% EBITA 516 599 16.1% 1,123 1,218 +8.5% RoS 11.3% 12.5% 1.2 p.p. 7.9% 8.3% 0.4p.p. EB
Slide 44: Solid Group liquidity ensures adequate financial flexibility
Solid Group liquidity ensures adequate financial flexibility • Available credit lines • ESG Credit Line signed in October 2021 equal to € 2.4 bn • Existing unconfirmed credit lines equal to € 1.0 bn • Commercial Paper, signed in August 2022, equal to € 1.0 bn • New «Sustainability-Linked» EIB loan e
Slide 45: Balanced debt maturity profile
Balanced debt maturity profile TL DRS RADA Bond Dollar Bond Euro In € mil EIB Term Loan 100 CDP 600 Debt maturity Average life: ≈ 3,3 years 600 500 500 169 11 11 11 11 63 63 63 63 63 19 38 50 44 25 13 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Repayment Conditions of • Leonardo DRS, foll
Slide 46: Capex initiatives that align our portfolio with SDGs represent 50% of the total
Capex initiatives that align our portfolio with SDGs represent 50% of the total New initiatives increasing New products included in our industrial process efficiency SDGs-aligned portfolio Energy efficiency M-346 and M-345 Transition to LED technology for most Our trainers through a greater use of s
Slide 47: Development costs capitalised as intangible assets as at 31 December 2022
Development costs capitalised as intangible assets as at 31 December 2022 Self Funded National Self Funded Other Total Security € mln 01 January 2022 Opening Balance 1,760 849 2,609 Gross R&D capitalised 98 133 231 Depreciation and write offs (85) (40) (125) Disposals - (1) (1) Subtotal 13 92 105 Ot
Slide 48: Covenant FY2022
Covenant FY2022 FY2022A FY2022A Post IFRS 16 Post IFRS 16 EBITDA* € 1,671 mln Group Net Debt € 3,016 mln Net Interest € 104 mln Leasing (IFRS 16) - € 570 mln Financial Debt to MBDA - € 713 mln Group Net Debt for Covenant € 1,733 mln EBITDA* € 1,671 mln EBITDA / Net Interest 16.1 Group Net Debt / EBI
Slide 49: Defence Budget perspectives
Defence Budget perspectives USA Asia Pacific • USA: the main defense spender • Asia Pacific: > 570B $ in 2022 CAGR 22-27 worldwide (> 780B $ in 2022) CAGR 22-27 ~ +4.4% ~ -0.3% NA ~ +2.0% LA • China the main spender • Return to growth expected from • 2026 (>840 B $ expected in • Significant Defense
Slide 50: Important progress towards ESG from 2018
Important progress towards ESG from 2018 2018 – 2022 progress Progress on • -37% intensity* CO2 Scope 1 & 2 emissions location based • -24% intensity* of energy consumption environment and • -26% intensity* of waste produced climate change • -30% intensity* of water withdrawals • 75% of employees wo
Slide 51: Our main ESG achievements in 2022
Our main ESG achievements in 2022 LEONARDO SCALE LEONARDO SECTOR RATING (low | high) RANKING Score in the sector average MSCI A CCC|AAA Top 10 BBB SUSTAINALYTICS 21.2 40+| 0 2nd/99 34.9 medium risk Severe - Negligible S&P 87 0|100 1st/92 22 CDP A- D-|A - C MOODY’S ESG 62 0|100 3rd/19 41 ISS ESG C D-
Slide 52: SAFE HARBOR STATEMENT
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 Co
Slide 53: CONTACTS
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 leonardo.com 53 © 2022 Leonardo - Società per azioni