Prospectus for the Public Offering in the Federal Republic of Germany

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Prospectus for the Public Offering in the Federal Republic of Germany Prospectus for the public offering in the Federal Republic of Germany of 45,808,333 bearer shares (Inhaberaktien) with no par value (Stückaktien), consisting of (i) 25,000,000 bearer shares (Inhaberaktien) with no par value (Stückaktien) to be newly issued, (ii) 8,333,333 existing bearer shares (Inhaberaktien) with no par value (Stückaktien) from the holdings of the selling shareholder, (iii) 6,500,000 existing bearer shares (Inhaberaktien) with no par value (Stückaktien) from the holdings of the selling shareholder, subject to the exercise of an upsize option by the selling shareholder on the date of pricing, and (iv) 5,975,000 existing bearer shares (Inhaberaktien) with no par value (Stückaktien) from the holdings of the selling shareholder to cover a potential over-allotment and for the admission to trading on the regulated market segment (regulierter Markt) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) with simultaneous admission to the sub-segment of the regulated market with additional post-admission obligations (Prime Standard) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) of up to 105,000,000 bearer shares (Inhaberaktien) with no par value (Stückaktien) – each such share with a proportionate amount of EUR 1.00 in the share capital and with full dividend rights as from January 1, 2020 – of HENSOLDT AG Taufkirchen, Germany Price Range: EUR 12.00 – EUR 16.00 International Securities Identification Number (ISIN): DE000HAG0005 German Securities Code (Wertpapier-Kenn-Nummer, WKN): HAG000 Common Code: 222839734 Trading Symbol: HAG Joint Global Coordinators and Joint Bookrunners BofA Securities J.P.Morgan KKR Capital Markets Deutsche Bank Joint Bookrunners Citigroup COMMERZBANK UniCredit Bank AG Crédit Agricole CIB Co-Manager Mizuho International plc The date of this prospectus is September 15, 2020 TABLE OF CONTENTS I. SUMMARY OF THE PROSPECTUS ......................................... S-1 II. ZUSAMMENFASSUNG DES PROSPEKTS ................................... S-8 1. RISK FACTORS ......................................................... 1 1.1. Risks Related to the Markets We Operate in ................................... 1 1.2. Risks Related to Our Operations ............................................ 8 1.3. Legal, Regulatory, Tax, and IP-Related Risks .................................. 16 1.4. Financial Risks ........................................................... 23 1.5. Risks Related to the Offering and the Company’s Shares ........................ 26 2. GENERAL INFORMATION ................................................ 30 2.1. Responsibility for the Content of the Prospectus ................................ 30 2.2. Subject Matter of the Prospectus ............................................ 31 2.3. Forward-Looking Statements ............................................... 31 2.4. Information from Third Parties .............................................. 33 2.5. Documents Available for Inspection .......................................... 34 2.6. Note on Currency ......................................................... 35 2.7. Note Regarding the Presentation of Certain Financial Information ................. 36 2.8. Non-IFRS Measures/Alternative Performance Measures ......................... 37 2.9. Note Regarding Figures and Technical Terms ................................. 38 3. THE OFFERING ......................................................... 39 3.1. Subject Matter of the Offering ............................................... 39 3.2. Information on the Shares .................................................. 40 3.3. ISIN, WKN, Common Code, and Trading Symbol ............................... 41 3.4. Price Range, Offer Period, Offer Price, and Allotment ........................... 41 3.5. Allotment Criteria ......................................................... 42 3.6. Anticipated Timetable for the Offering ........................................ 43 3.7. Stock Exchange Admission and Commencement of Trading ..................... 44 3.8. Delivery and Payment ..................................................... 44 3.9. Stabilization Measures, Over-Allotments, and Greenshoe Option .................. 44 3.10. MiFID II Product Governance Requirements ................................... 45 3.11. Lock-Up Commitments .................................................... 46 3.12. Designated Sponsor ...................................................... 47 3.13. Interests of Parties Participating in the Offering ................................ 47 i 4. PROCEEDS AND COSTS OF THE OFFERING AND THE LISTING, REASONS FOR THE OFFERING AND THE LISTING AND USE OF PROCEEDS ................. 50 4.1. Proceeds and Costs of the Offering and the Listing ............................. 50 4.2. Reasons for the Offering and the Listing and Use of Proceeds .................... 51 5. DIVIDEND POLICY ....................................................... 52 5.1. General Rules on Allocation of Profits and Dividend Payments .................... 52 5.2. Dividend Policy and Earnings per Share ...................................... 53 6. DILUTION .............................................................. 55 7. CAPITALIZATION AND INDEBTEDNESS .................................... 56 7.1. Capitalization Table ....................................................... 56 7.2. Indebtedness Table ....................................................... 57 7.3. Indirect and Contingent Liabilities ............................................ 57 7.4. Working Capital Statement ................................................. 57 7.5. No Significant Change ..................................................... 57 8. OPERATING AND FINANCIAL REVIEW ..................................... 58 8.1. Overview of Our Business Activities .......................................... 58 8.2. Presentation of Financial Information and Principal Factors Affecting Comparability . 58 8.3. Key Factors Affecting Our Results of Operations and Financial Condition ........... 65 8.4. Our Key Performance Indicators and Other Alternative Performance Measures ...... 75 8.5. Description of Selected Items of Our Consolidated Income Statement .............. 79 8.6. Results of Operations – Review of Selected Items of Our Consolidated Income Statement ............................................................... 81 8.7. Financial Condition – Review of Selected Items of Our Consolidated Financial Position ................................................................. 95 8.8. Liquidity and Capital Resources ............................................. 99 8.9. Financial and Contingent Liabilities .......................................... 104 8.10. Off-Balance Sheet Arrangements ............................................ 106 8.11. Quantitative and Qualitative Disclosure about Financial Risk Management .......... 106 8.12. Significant Accounting Policies Concerning Judgments, Estimates, and Assumptions ............................................................. 106 8.13. Additional Information relating to the Audited Unconsolidated Financial Statements . 107 9. MARKETS AND COMPETITIVE ENVIRONMENT .............................. 108 9.1. Market Overview and Drivers ............................................... 108 9.2. Key Trends and Drivers .................................................... 108 9.3. The Global Defense Market ................................................ 113 9.4. The Global Defense Electronics Market ....................................... 115 9.5. Accessible Defense Electronics Market ....................................... 118 9.6. Deep Dive – The German Defense and Defense Electronics Market ............... 122 ii 9.7. Certain Non-Defense Markets .............................................. 124 9.8. Competitive Environment .................................................. 127 10. BUSINESS .............................................................. 129 10.1. Overview ................................................................ 129 10.2. Our Strengths ............................................................ 130 10.3. Our Strategy ............................................................. 136 10.4. History of HENSOLDT ..................................................... 140 10.5. Our Technology and Products .............................................. 141 10.6. Key Platforms and Systems ................................................ 151 10.7. Our Aftersales Business ................................................... 161 10.8. Research and Development, Intellectual Property, and Trade Secrets .............. 164 10.9. Our Sales Approach ...................................................... 166 10.10. Our M&A Activities ........................................................ 173 10.11. Production .............................................................. 174 10.12. Procurement ............................................................. 176 10.13. Compliance ............................................................. 178 10.14. Quality Management ...................................................... 179 10.15. IT Infrastructure and Data Protection ......................................... 179 10.16. Employees .............................................................. 180 10.17. Health and Safety, Corporate Social Responsibility ............................. 182 10.18. Real Estate .............................................................. 182 10.19. Insurance ..............................................................
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