FOG HORN

RAFAEL Registers Record Breaking Year in Sales &
Orders

RAFAEL concludes 2022 with record-highs in sales of
approximately $3.45 billion, orders of approximately $4.8 billion, backlog of
approximately $10.1 billion, and a net profit of $150 million

Today (Wednesday), Rafael Advanced Defense Systems Ltd.
announces its financial results for 2022, as approved by the company’s board of
directors, with sales amounting to $3.45 billion and a net profit (without the
special tax for previous years’ profits) of $150 million.  The volume of orders is $4.8 billion and the order backlog is $10.1
billion, which is about 3 years of sales.  *In 2022, Rafael paid the State of Israel a special tax on retained
profits from previous years amounting to some $128
million.

The backlog of orders breaks a record, crossing the 10
billion dollar mark and standing at approximately $10.2 billion compared to
approximately $9.2 billion in the corresponding period last year- the increase
is mainly due to orders received in Israel and
abroad.

The net profit (without the special tax) in 2022
amounted to about $150 million, compared to the net profit of about $133 million
in 2021. The company’s sales in 2022 totaled approximately $3.45 million,
compared to approximately $3.07 billion in
2021.

CEO and President of RAFAEL, Maj. Gen. (Ret.) Yoav
Har-Even:

“2022 was a challenging year in many respects:  Starting with the continued impact of
the COVID-19 Pandemic, the challenge of recruiting and retaining manpower,
difficulties in the supply chain, and of course the changes and transformations
in the markets in Israel and globally which were impacted by the campaign in
Ukraine and other major events.  Through proper preparation and the practical implementation of the
company’s strategic vision, RAFAEL completed 2022 with a successful year. This
financial year brought with it technological breakthroughs and marketing
achievements, both in Israel and worldwide, and again with very promising
financial results.  Even through
the challenges and complexity of the past year, RAFAEL continued to be a central
pillar supporting the country’s security, with significant contributions to the
IDF and the defense establishment as a whole by providing a wide range of
capabilities and advanced systems that are the products of the considerable
investments in research and development. Above all, we rely on the quality of
our manpower, this is what allows us to overcome challenges and achieve the
goals set before us. In this regard, we have taken major steps on all levels to
preserve, develop and recruit the best candidates for our workforce and we will
continue to do so moving forward in 2023. We are already in the midst of another
very successful year. I would like to take this opportunity to thank the
outgoing Chairman of RAFAEL, Dr. Uzi Landau, for his 6 years of leadership and
invaluable work for the company and on behalf of RAFAEL’s management and board
of directors, I would like to thank the RAFAEL employees and their
families.”

In 2022, Rafael recorded several monumental
achievements both in terms of development and testing, as well as commercial
success and business operations.  The company continued to position itself as a global leader in the realm
of air defense and strengthened its presence in markets worldwide.  Through the successful testing of the IRON BEAM High Energy Laser Weapon
System – a powerful laser system designed to intercept aerial threats that will
be a complementary capability to the IRON DOME system.  The development of the system is a technological breakthrough at the
global level and joins the list of RAFAEL systems that feature sophisticated
technologies not seen in other systems in their respective class.  Also in 2022, RAFAEL signed a strategic teaming agreement for the
development of the IRON BEAM system with Lockheed Martin.  The company also completed a live fire test of the ‘IRON DOME’ battery in
cooperation with the US Army. RAFAEL unveiled the new SPIKE NLOS 6th Generation
Missile – the most advanced anti-tank missile in the world and conducted a
successful test of the C-DOME – the naval application of the IRON DOME.  RAFAEL introduced ICE BREAKER, the
advanced air-to-ground missile, the first Israeli missile to incorporate an
advanced electro-optical homing warhead capable of autonomously classifying
targets.

 The 2022
Fiscal Year also saw other major commercial achievements as RAFAEL acquired two
international companies to support the company’s increase in activity:
American-based PVP and British-based Pearson
Engineering.

Continuing its track record of excellence, RAFAEL again
secured the Israel Security Award (the 58th in its history) for a unique
project.

In 2022, RAFAEL also reached a feat in the recruitment
of employees with approximately 1,300 employees joining the
company.

RAFAEL is the largest employer in the northern part of
Israel with some 8,000 employees and annual acquisitions in the amount of about
4 billion dollars from subcontractors, most of them in the north of the
country.  Since becoming a private
government-owned company, RAFAEL has transferred to the state dividends totaling
over 2.5 billion NIS.

About 8.9% of the company’s total sales are allocated
to invest in research and development.  The investment also includes joint
activities with academic institutions in Israel and abroad and involvement in
various civic activities, including collaborations with startups and innovation
centers. 

Data for the 4th quarter of 2022 (in
NIS):

The financial results for the fourth quarter of 2022,
which ended on 12/31/2022, show sales amounting to 3,863 million shekels, an
increase of about 15% from the corresponding period last year and a net profit
of 301 million shekels (excluding the special tax for previous years’ profits)
against net profit of 270 million shekels in the corresponding period last year.
In the fourth quarter, Rafael paid a special tax to the State of Israel in the
amount of 227 million shekels for retained profits from previous years (over 10
years).

For additional information or to coordinate an
interview, please contact Daniel Tsemach