Avio

Investor Presentation • Sep 11, 2023

Avio HY 2023 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 forward-looking 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.

• Highlights (Giulio Ranzo, CEO)

• Focus on HY 2023 (Giulio Ranzo, CEO)
• HY 2023 Financials (Alessandro Agosti, CFO)
• Outlook and opportunities (Giulio Ranzo, CEO)
• Appendix

Vega launch scheduled for October 4th, subsequent Vega launch planned by spring 2024

Vega C: Independent Evaluation Board (IEB) on Z40 firing test and Vega C return to flight plan under finalization

Vega E: Preliminary Design Review achieved, DM2 engine model successfully tested on ground

Record-high order backlog (1.4Bln€) thanks to new technology development projects and tactical propulsion orders

Improved profitability driven by technology development projects and relief of energy costs

Record-high cash position (over 100M)

FY 2023 Guidance confirmed

• Highlights (Giulio Ranzo, CEO)

• Focus on HY 2023 (Giulio Ranzo, CEO)

• HY 2023 Financials (Alessandro Agosti, CFO)
• Outlook and opportunities (Giulio Ranzo, CEO)
• Appendix

Vega E's M10 LOX-CH engine (new model DM2) succesfully tested

The first 5 engine tests for DM2 were completed, introducing a new, enhanced, lighter, and fully throttleable version of Avio's upper stage engine for the upcoming M-10, the upper stage engine of the Vega-E launcher.

The engine is designed and built by Avio with 100kN of thrust using liquid Oxygen and Methane. It is the first engine of this type in EU.

Vega E

Space Rider successfully passed its Critical Design Review

		ALEK + RM
	Height [m]	7,15
	Max diameter[m]	2,4
	Lift off mass [ton]	3,3
	Power [KW]	3,7

Achievements:

• Design phase completed in July 2023:

• System critical design review successfully passed
• Subsystems and components critical design reviews completed (no red flags)

• Qualification loop started:

• AOM HWIL test facilities in Colleferro completed

Next steps:

• AOM HWIL tests will start in Sep 2023 (duration 1 year)
• AOM Mechanical Tests: HW production ongoing, test foreseen in Apr 2024
• AOM+RM combined tests (mechanical, functional, EMC) from Sep 2024 to Feb 2025

• Maiden flight readiness targeted in 2H 2025:

• Integration in Kourou (French Guyana) in July 2025
• Launch targeted in 2H 2025

New technology development projects started to prepare next-gen launchers

Space Transportation Systems: €185 M

• In-flight demostrator of a LOX-Methane two stage to orbit small launcher
• Two experimental launches (single stage and two stage respectively)
• Composite cryo tanks, simplified Avionics (software-based) and non-pyro separation systems

High Thrust Engine: €100 M

• 60ton thrust class LOX-Methane engine
• Innovative thermodynamic cycle, delivering high specific impulse

Multi-Purpose Green Engine: €55 M

• Highly versatile engine for orbital propulsion
• «Green» engine for inorbit services and logistics

Propulsion for IOS Module: €35 M

• Propulsion techs for an In-Orbit Servicing Mission
• In partnership with Thales, Leonardo, Telespazio, D-Orbit

to be developed within 2026

Space Transportation Systems – New Technologies and Sub-Orbital Demo Flights

and applications Cryogenic Composite Tank

SIA : System Integrated Avionics

In-Flight Demonstrators

2025 M10 LOX-Methane based Engines

NDSS : Non-Detonic Separation System

High Thrust Engine – The 60 tons thrust class LOX/Methane

The most innovative component of the M60 engine is the "Liquid Oxygen Powerpack" which, via a dedicated gas generator, will supply the necessary power to the oxygen line.

Copper-based alloys represents a key element for the development of new Technology HT engines, such as 60-tons class LOxMethane cryogenic engine.

Copper Alloy CC

MPGE – Multi Purpose Green Engine for orbital propulsion and In-orbit Services

2 different engine variants (2000N class) using green propellants

'GE-C' orbital engine (same class as Vega C current upper stage)

First Prototypes in ALM

'MPGE' as a throttable evolution of the GE-C (Space Rider 2GEN, Kick Stage Vega E, IOS 2GEN)

In-Orbit Services Demo missions by 2026 using Vega C

ARP : Avionic and Robotic Platform

TARGET : satellite demo

OSPM : Orbital Service Propulsion Module

Applications:

• Refuelling
• Debris removal
• In-orbit inspection and repair

IOS module accomodation inside VEGA-C Fairing

Investment in T4i Technology for Propulsion and Innovation

On 4th September 2023 Avio invested ~2.5 M€ in T4i's capital, equal to approximately 17% of the shares of T4i.

T4i, spin-off of the University of Padua, was founded in 2014 and it is specialized in 'green' storable chemical propulsion systems, electric propulsion systems, and attitude control thruster.

The agreement will enhance the effectiveness and timeto-market for the introduction of new functional propulsion systems in our strategic plan for application on:

• GEC/MPGE Engine
• IOS propulsion module
• Vega upper stage propulsion

P160C activities update

The P160C is going to be the booster of Ariane 6 Block 2, with the main purpose to meet the needs of Kuiper's constellation and the first stage of the next configuration of Vega Launcher, to increase its performance, competitiveness and also versatility.

Update of the P160C activities at 30 June 2023:

• procurement of process machines, tools and means
• acceptance and process validation
• QM3 (s/n 01) manufacturing

Next steps:

• April 2024: first IMC shipment from Colleferro
• Mid of 2024: casting at Regulus plants
• End of 2024: static firing test

14

The new winding machine

Tactical orders steadily growing, clear future roadmap

Historical Tactical Orders Future Development Roadmap

• Signed 90 EUR Million of new contracts for Aster 30
• Total orders for defense currently around € 300 Mln providing visibility for the next 5 years

Avio is partner of the HYDIS2 consortium for a new endo-atmospheric interceptor. Avio is part of the consortium with other 18 partners and 30 subcontractors. The company will give its contribution in providing the European Armed Forces with the most innovative propulsion solutions.

Our Tactical Products Development Roadmap

End Products

Avio Group SRMs

Agenda

• Highlights (Giulio Ranzo, CEO)
• Focus on HY 2023 (Giulio Ranzo, CEO)

• HY 2023 Financials (Alessandro Agosti, CFO)

• Outlook and opportunities (Giulio Ranzo, CEO)
• Appendix

Record Order Backlog thanks to development technology projects earlier than expected

Order Backlog evolution FY 2022-HY 2023 (€ - M)

Comments

Order intake in HY 2023 mainly include:

• Technology development projects (~370M)
• Defense Production (~110M)

Increase in share of defense and technology development contracts

Revenues growing thanks to Technological Development projects and Defense

by Line of Business (€ - M)

by Activity (€ - M)

Improved results driven by development and defense activities, with decreasing energy costs

	HY 2022	MAIN ECONOMICS	HY 2023
	€ - M		€ - M		Comments
	134.0	NET REVENUES	157.7		Increase in revenues thanks to technological development projects and defense production activities
	3.2	EBITDA REPORTED	5.2		Improved EBITDA driven by higher revenues and relief of energy
N/R	2.4%	% on net revenues	3.3%	N/R	costs
2.5	5.6	EBITDA ADJUSTED	10.5	5.3	Higher non-recurring costs mainly due to provision for the Zefiro 40 anomaly
	4.2%	% on net revenues	6.6%
	(6.2)	EBIT REPORTED	(3.9)
	N.m.	% on net revenues	N.m.		Depreciation unchanged
	(3.7)	EBIT ADJUSTED	1.4
	N.m.	% on net revenues	0.9%
	(6.5)	RESULT BEFORE TAX	(3.7)		Positive contribution from financial items
	N.m.	% on net revenues	N.m.
	(7.6)	NET RESULT	(3.9)		Almost neutral tax burden
	N.m.	% on net revenues	N.m.

20

Gas price decrease in HY 2023 compared to HY 2022 with positive effect on industrial production costs

Italian average monthly gas prices HY 2023 (€/MWh)

Source: GME (Gestore Mercati Energetici)

Non-recurring items impacted by the provision of the cost for an additional Zefiro 40 static firing test

= Like for like

Like for like N/R costs increased by 1.2M€

(1)

Prominent improvement in working capital and cash position

31 DEC 2022	MAIN SOURCES AND USES	31 JUN 2023	DELTA
€ - M		€ - M	€ - M	Comments
(140.9)	WORKING CAPITAL	(183.2)	42.3	Working capital structurally negative with a prominent
81.5	DEFERRED TAX ASSETS	80.9	0.6	positive trend in HY 2023 for advance payments from development contracts
(62.9)	PROVISIONS	(55.3)	(7.7)	Decrease of provisions utilized against Vega C return to flight costs and costs for delays in execution of programs incurred
64.1	GOODWILL	62.8	1.3	in the semester and provided for in 2022
27.6	CUSTOMER RELATIONSHIP ASSET	28.0	(0.3)
248.9	FIXED ASSETS	253.9	(5.0)	Mainly for capex for P120 Vega cadence improvement, development of new launchers of Vega family and new
8.5	RIGHTS OF USE	8.3	0.2	headquarters, net of depreciation
2.0	FINANCIAL RECEIVABLES	2.0	-
228.8	NET INVESTED CAPITAL	197.4	31.4
74.4	NET CASH POSITION	102.2	(27.8)	Better than seasonal typical trend principally for positive
(303.3)	EQUITY	(299.6)	(3.6)	contribution from working capital
(228.8)	TOTAL SOURCES	(197.4)	(31.4)

Increase for advances from development contracts

Data in €-M

Agenda

• Highlights (Giulio Ranzo, CEO)
• Focus on HY 2023 (Giulio Ranzo, CEO)
• HY 2023 Financials (Alessandro Agosti, CFO)
• Outlook and opportunities (Giulio Ranzo, CEO)
• Appendix

FY 2023 Guidance confirmed

27

• Highlights (Giulio Ranzo, CEO)
• Focus on HY 2023 (Giulio Ranzo, CEO)
• HY 2023 Financials (Alessandro Agosti, CFO)
• Outlook and opportunities (Giulio Ranzo, CEO)

• Appendix

Agenda

EBITDA and Cash generation heavily concentrated on Q4s

Net Cash Position (€ - M)

29

CONTACTS Investor.relations@avio.com

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