Avio

Earnings Release • Sep 12, 2024

SEPTEMBER 12, 2024

Avio 1H 2024 Results

Disclaimer

This document has been prepared by Avio S.p.A. ("Avio" or the "Company"). This document might contain certain forward-looking statements that reflect the Company's management's current views with respect to future events and financial and operational performance of the Company and its subsidiaries. These forward-looking statements are based on Avio's current expectations and projections about future events. Because these forward-looking statements are subject to risks and uncertainties, actual future results or performance may differ materially from those expressed in or implied by these statements due to any number of different factors, many of which are beyond the ability of Avio to control or estimate. You are cautioned not to place undue reliance on the forwardlooking statements contained herein, which are made only as of the date of this presentation. Avio does not undertake any obligation to publicly release any updates or revisions to any forward-looking statements to reflect events or circumstances after the date of this presentation. Any reference to past performance or trends or activities of Avio shall not be taken as a representation or indication that such performance, trends or activities will continue in the future. This document does not constitute an offer to sell or the solicitation of an offer to buy Avio's securities, nor shall the document form the basis of or be relied on in connection with any contract or investment decision relating thereto, or constitute a recommendation regarding the securities of Avio.

Agenda

Highlights 1.

Giulio Ranzo, Chief Executive Officer

1H 2024 Financials

Alessandro Agosti, Chief Financial Officer

1H 2024 highlights

• Last flight of VEGA successfully completed, delivering into orbit Sentinel-2C
• VEGA C latest developments:
  • ✓ Return-to-flight on track by year-end: first Z40 static firing test successfully completed in May 2024. A second Z40 static firing test confirmed to take place in October
  • ✓ Avio authorized by ESA since July to conduct VEGA commercial operations and to be launch operator of VEGA following VV29 (Q4 2025)
• Ariane 6 maiden flight successfully completed in July
• Defense propulsion business: two important new contracts signed in the USA with Raytheon and US Army
• FY 2024 Guidance confirmed

VEGA VV24 mission successfully completed

• On September 5th(1) VEGA launcher successfully deployed into sun-synchronous orbit Sentinel-2C, a Copernicus satellite for the European Commission. The mission marked the handover to the VEGA C launcher
• Starting from its inaugural flight in February 2012, VEGA has carried out a total of 22 launches:
  • ✓ more than 120 satellites deployed into orbit, with extreme orbital accuracy
  • ✓ approximately 18 tonnes of total launched mass (~800 Kg per launch)
  • ✓ 91% success rate overall

Source: ESA, CNES, Arianespace (1) CEST time zone Sentinel 2-C in clean room | Sentinel 2-C encapsulated in VEGA fairing VV24 lift-off

VEGA launcher: a 12-year history of success and "first times"

countries

Most notable launches (1) Reliability during first 22 missions

AVERAGE: 90%

VV04 (IXV)

Launch of reentry demonstrator Intermediate eXperimental Vehicle, that showed Europe had the technology to launch a vehicle to space and return it safely to Earth. This demonstration mission was a precursor to the reuseable Space Rider spacecraft

Feb 11, 2015

VV06 (LISA Pathfinder)

Successfully placing the LISA Pathfinder spacecraft on an elliptic low earth parking orbit, from where the satellite's own propulsion module took it on its operational orbit around the L1 Lagrange point (i.e. 1.5 million Km from Earth)

VV16 (Small Spacecraft

Sep 2, 2020

Source: ESA, Arianespace (1) illustrative, not exhaustive (2) Includes partial failures

Dec 2, 2015

VEGA C return-to-flight operations underway

• On May 28th the Zefiro 40 solid rocket motor, the second stage of the VEGA C launcher, was successfully tested. The initial post-test review indicated that the new nozzle assembly performed as expected throughout the scheduled 94 seconds burning time of the test, simulating a nominal in-flight performance
• Second firing test scheduled for October: Zefiro 40 QM4 Test Article shipped and arrived in Sardinia, ongoing finalization of Test Article on the test bench

QM3 hot firing test

QM4 moved to test bench

Success for Ariane 6 maiden flight

• On July 9th , Ariane 6 launcher successfully completed its maiden flight from the French Guiana Space Centre, placing into orbit multiple payloads
• Avio is partner of the Ariane 6 program providing the solid rocket boosters P120C and the liquid oxygen turbopumps for the core stage Vulcain 2.1 engine and the upper stage Vinci engine. The P120C motors had an optimal performance
• Avio is already working on a more powerful version of the booster (P160) which will increase the thrust of the launcher and its payload capacity. The P160 will be the world largest carbon fiber monolithic motor and will also be equipped on Vega C

SOURCE: ESA, Arianespace

10

Evolution of responsibilities on VEGA launcher activities

▪ On July 5th ESA Council authorized Avio to conduct VEGA commercial operations and to be launch operator of VEGA following VV29 (Q4 2025), pending award of license from French authorities

Applications and services acceleration

Orbital propulsion technology

NextGen EU: next-gen launchers and applications progressing as expected

Launcher Products acceleration LOX-CH technology

Space Transportation Systems Multi-Purpose Green Engine In-Orbit Servicing module

Objective: Accelerate development and know-how with 2 small Flight Demonstrators (design, manufacturing & launch)

Start of HWIL activities in apr-24

M10 firing test planned in October 24

M10 for IFD1 Flight: manufacturing on going, TCA and Nozzle Printed in house

Objective: Achieve full-scale hot firing demonstration of a 60ton LOX-Methane engine by 2026

Pre-burner firing test by end of March Assembly line operative by end of '24

Objective: Create a highly versatile "Green" engine for orbital propulsion and in-orbit services and logistics

Manufacturing and integration of the first two engine models by Oct. 2024

Objective: Develop enabling technologies to fulfill in-orbitservicing mission objectives

System Req. Review passed Preliminary Design review ongoing

Thrust chamber

HWIL: Hardware in the Loop TCA: Thrust Chamber Assembly

Injector section

Avio USA to play a pivotal role in engaging the US market

▪ Avio established Avio USA, a wholly owned subsidiary headquartered in Arlington, Virginia, which is structured to operate in compliance with US security and export-control regulations and is governed by a US-led board of directors

Marty Bollinger – Chairman of Avio USA

• Ret. Senior Partner at Booz Allen Hamilton
• Extensive consulting experience in US Aerospace & Defense
• Lecturer for Navy Officers

James Syring – CEO of Avio USA

• Ret. US Navy Vice Admiral
• Former Director of the US Missile Defense Agency
• Former President, USAA Insurance Company

New opportunities in the US defense propulsion market

▪ As a result of the scouting and the engaging activities performed by Avio and Avio USA since its inception, on July 23rd Avio announced two important contracts with two different US counterparts, Raytheon and US Army, which mark a very important milestone for the future development of the defense propulsion business of the company

Avio signed a contract with Raytheon, an RTX (NYSE: RTX) business, leaders in defense solutions for the U.S. Government and Allied Demand, to initiate and progress the development of critical solid rocket motors for defense applications. The contract furthers the systems engineering work required to mature these solid rocket motors into a production-ready state

More info here

AVIO S.p.A. and U.S. Army Combat Capabilities Development Command Aviation & Missile Center partner for the development and fast-prototyping of a solid rocket motor for surface-toair applications. The project leverages on both Parties' expertise to qualify the propulsion system in a design-tomanufacturing approach, offering possibility for a future rapid transition to Production

More info here

These wins further extend growth prospects in defense business

Defense propulsion backlog (€m) Defense propulsion production (volumes eq.)

• High level of defense propulsion orders in 1H 2024 (approx. €100m)
• Steep increase in Aster, CAMM-ER and MARTE production
• Includes expected rollout from new EU and US contracts

Agenda

Highlights Giulio Ranzo, Chief Executive Officer

2.

1H 2024 Financials

Alessandro Agosti, Chief Financial Officer

Defense propulsion and Ariane 6 intakes drive order backlog in 1H 2024

Figures in €m

Main comments

• In 1H 2024 order intakes were over €200m and related to:
  • ➢ Defense propulsion for about €100m, mainly for ASTER missile production
  • ➢ Ariane for about €80m, mainly for production of P120/P160 motors
  • ➢ Vega for about €30m, mainly for Vega E development
• Defense propulsion activities reached 23% of total backlog at the end of 1H 2024, more than half of Vega backlog
• At the end of 1H 2024 approx. 60% of backlog related to production activities and 40% to development activities

Revenues increase for Defense propulsion and Technology Development Projects

Figures in €m

1H 2024 results vs 1H 2023

Avio Group Main financials
	1H 2023 Actual (€m)	1H 2024 Actual (€m)	Delta (€m)	Delta (%)
NET REVENUES	157,7	180,6 1.	22,9	14,5%
EBITDA REPORTED % on net revenues	5,2 3,3% N/R N/R	8,1 4,5%	2,9	56,8%
EBITDA ADJUSTED % on net revenues	5 3 2 10,5 , , 3. 6,6%	5 10,6 2. 5,9%	0,1	1,2%
EBIT REPORTED % on net revenues	(3,9) -2,5%	4. (0,4) -0,2%	3,5	n.m.
EBIT ADJUSTED % on net revenues	1,4 0,9%	2,1 1,2%	0,7	n.m.
PROFIT BEFORE TAX % on net revenues	(3,7) -2,3%	(0,5) -0,3%	3,2	-86,4%
NET RESULT % on net revenues	(3,9) -2,4%	(1,8) -1,0%	2,1	-53,8%

Main comments

• 1. Significant increase in revenues mainly for defense propulsion production activities and technology development projects (NextGen EU)
• 2. EBITDA Adjusted in line with 1H 2023, driven by higher revenues compensated by a slowdown in Ariane 6 and Vega production activities
• 3. The reduction of non-recurring costs, mainly related to the return to flight of the Vega C, contributed to a significantly higher EBITDA Reported vs. 1H 2023
• 4. Positive effect on EBIT driven by EBITDA and lower depreciations following the review, in the second half of 2023, of economic useful lives of certain production assets in connection with the phase-out/phase-in of both Ariane (A5>A6) and Vega (Vega>Vega C)

1H 2024 results vs 2023 | Sources and uses

Avio Group Sources and uses
	31 DEC 2023	30 JUN 2024
	Actual	Actual
	(€m)	(€m)
WORKING CAPITAL	(171)	(128) 1.
DEFERRED TAX ASSETS	81,2	80,6
PROVISIONS	(52,8)	(45,0) 2.
GOODWILL AND OTHER INTANGIBLE	89,2	87,6
FIXED ASSETS	285,6	3. 284,7
FINANCIAL RECEIVABLES	2,0	2,0
NET INVESTED CAPITAL	234,2	282,2
NET CASH POSITION	76,1	4. 21,5
EQUITY	(310,4)	(303,7)
TOTAL SOURCES	(234,2)	(282,2)

Main comments

• 1. Structurally negative working capital thanks to cash advances from order intakes. Typical seasonal trend driven by cyclical flow down to subcontractors and procurement of certain strategic Long Lead Items of Vega C to sustain future production volumes
• 2. Decrease in provisions mainly for use against Vega C return-to-flight costs incurred in the semester and previously provided for
• 3. Mainly for capex for technology development projects, Vega cadence increase and innovation projects (AI), net of depreciation
• 4. Typical seasonal trend of Net Financial Position mainly driven by working capital

Net Cash Position bridge

Figures in €m

Quarterly evolution of EBITDA and Net Cash Position

Figures in €m

2022 2023 2024

FY 2024 Guidance confirmed

• 10%-15% growth vs 2023
• New orders from defense propulsion business
• Backlog expected to start roll-out
• 10% growth vs 2023
• Growth in defense propulsion activities and Technology Development Projects
• 10% growth vs 2023
• Backlog roll-out to "unlock" production and economies of scale
• 10%-20% growth vs 2023
• Marginal effect of financial charges and taxation

THANK YOU FOR YOUR ATTENTION

CONTACTS Investor.relations@avio.com

The information contained in this document is Avio S.p.A. proprietary and is disclosed in confidence. It is the property of Avio S.p.A. and shall not be used, disclosed to others or reproduced, without the express written consent of Avio S.p.A.