AVIOSpA-Allrightsreserved–subjecttotherestric9onsoflastpage.
InvestorPresenta,onStarConferenceLondon,9-10October2017
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
Disclaimer
This document has been prepared by Avio S.p.A. Avio S.p.A. (“Avio” or the “Company”). This document is beingprovidedtoyousolelyforyourinformaHonandmaynotbereproducedorredistributedtoanyotherperson.Thisdocumentmightcontaincertainforward-lookingstatementsthatreflecttheCompany’smanagement’scurrentviewswithrespecttofutureeventsandfinancialandoperaHonalperformanceoftheCompanyanditssubsidiaries.These forward-looking statements are based on Avio’s current expectaHons and projecHons about future events.Becausetheseforward-lookingstatementsaresubjecttorisksanduncertainHes,actualfutureresultsorperformancemaydiffermateriallyfromthoseexpressedinorimpliedbythesestatementsduetoanynumberofdifferentfactors,manyofwhicharebeyondtheabilityofAviotocontroloresHmate.YouarecauHonednottoplaceunduerelianceontheforward-lookingstatementscontainedherein,whicharemadeonlyasofthedateofthispresentaHon.AviodoesnotundertakeanyobligaHontopubliclyreleaseanyupdatesorrevisionstoanyforward-lookingstatementstoreflecteventsorcircumstancesaSerthedateofthispresentaHon.AnyreferencetopastperformanceortrendsoracHviHesofAvioshallnotbetakenasarepresentaHonorindicaHonthatsuchperformance,trendsoracHviHeswillconHnueinthefuture.ThisdocumentdoesnotconsHtuteanoffertosellorthesolicitaHonofanoffertobuyAvio’ssecuriHes,norshallthedocumentformthebasisoforbereliedoninconnecHonwithanycontractorinvestmentdecisionrelaHngthereto,orconsHtutearecommendaHonregardingthesecuriHesofAvio.Thisdocumentmaynotbereproduced,redistributedorpublishedinwholeorinpartwithoutAvio’sauthorizaHon.
2
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
Avio:aEuropeanleaderinSpaceTransporta,on
3
• 50yearsinSpaceLaunchers
• EuropeanexpertinSolidPropulsion
• PrimeContractorofVega(EUlightlauncher)
• PartnertoAriane(EUheavylauncher)
• 850employees
• 300M€revenues
• ListedontheMilanStockExchange
• MarketCap.350M€
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
TheLauncherssegmentrepresentsthegatewaytoSpace
Satellite
manufacturing$13.9bn
Satelliteservices(2)
$130.4bnEndusers
Globalspacevaluechain(2016)
Launchindustry(1,2)
$5.7bn
(1): Includes launcher manufacturing and launch service activities (2): Commercial services revenues only
Sources: based on Satellite Industry Association (2016)
GroundSegment$60.1bn
4
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
GrowingdemandforSpacelaunch,compe,,veenvironment
Nr.Spacelaunches(2005-2016)
Falcon9
Soyuz
Proton
PSLV
VegaAriane
Source:theSpaceLaunchReport
55
66 68 6878 74
8478 81
9286 85
405060708090100
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
N°Lau
nche
s
5
CAGR2005-2016:+5%
Nr.LaunchesbyRegion(2006-2016)
302205 158 90 36 31
Russia USA China Europe India Japan
Failurerate%
4% 3% 1% 0%5% 11%
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
TheSpacelaunchservicehastwomainmarketsegments
Geosta,onaryTransferOrbit LowEarthOrbit
• Applica,ons:Broadcas9ng,Telecoms• AvgSatellitemass:5,000kg• AvgServicelife:12-15years• Avg#launches/year(worldwide):36
• Applica,ons:Earthobs.,Internet,Science• AvgSatellitemass:50Kg–1000kg• AvgServicelife:3-7years• Avg#launches/year(worldwide):33
520+Satellites*
Sources:Spaceworks;Interna9onalJournalofScienceandResearch
6
Al,tude36,000km Al,tude500-2,000km
804+Satellites*
Smallsatslaunched:76inH12016211inH12017
268 225
2010-2016 2017-2023
Nr.Sats>1.5toninGTO
440
1263
2010-2016 2017-2023
Nr.Sats<1.5toninLEO
*UCSsatellitedatabase,December2016-GTOsatellitenumberreferstoGEOsatellites
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
AvioisanintegralpartoftheEuropeanspacelaunchofferingwithaleadingroleontheLEOlauncherVega
Produc9on Development
P230Boosters
Ariane5 Ariane6
Turbopump
Tac,calpropulsionAster30 CammER
≈49%
≈47%
≈4%
P80motor
Zefiro23motor
Zefiro9motor
Upperstage
Launchersys.Int.
Vega VegaC
Ariane5–EUHeavylilerinGTOAvioIndustrialpartner
Vega–EULightlauncherinLEOAvioPrimeContractor
7
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
2017flightac,vityontracktocomplete6Arianeand3Vega
Flight&Produc,onac,vity
5successfullaunchesin2017and81consecuHvesuccessfulflights
14FebVA235
SKYBRASIL-1
4MayVA236
SGDCTelebràs
1JuneVA237 VA238
28JuneVA239 VA240
7MarchVV09
Sen,nel2B
2AugustVV10
7NovemberVV11
29September 12December
2successfullaunchesin2017,10inarow(4launchesin10monthsVV07–VV08–VV09–VV10)
Undisclosed
8
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
EUfamilyoflaunchersevolvingtomeetnewmarketdemandforflexibilityandcostcompe,,veness
9
TodayAriane5/Vega
2019VegaC
2024VegaE
Commonfirststage–P120C
2020Ariane62,Ariane64
Perf10.5tons 1.5tons 2.3tons 6tons 11tons 3.0tonsinGTO inLEO inLEO inGTO inGTO inLEO
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
GrowingcustomerconfidenceonthenewVegaCwhileitsdevelopmentachievesconcreteprogressin2017
10
• Contractsignedfor«Batch3»orderof10Vega/VegaClaunchersin2019-2021
• 2VegaClaunches(2020and2021)tocarry4hi-resoluHonopHcalsatellite
• 1VegaClaunchin2021tocarrythenewASICOSMOSkyMedsatellite
Commercialachievements Industrialachievements
P120newplant
Z40IMC Z40nozzleassembled
P120IMC P120cas,ng(LMC)
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
Vegaofferingalsobeingexpandedwithadvancedsolu,onsforextendedLEOmissions
11
SSMS–"SmallSatelliteMissionService”
• P/Ldeploymentinmul,ple
orbitalplanes
• PoCflightin2019
SpaceRider–Launch,orbi,ngandre-entry
• Downloadandretrieval• FollowupofIXVexperience(2015)
• Flight2020
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
Avio:Groupstructure
Others
70%
50%
60%Regulus
50%
40%30%
3% 74%
23%
Fully consolidated Consolidated with equity method Non Consolidated company
12
ELV:VegaLauncher(Colleferro,Kourou)Regulus:Solidpropellant(Kourou)Europropulsion:Solidpropulsionstageintegra9on(Kourou)Arianespace:Ariane&Vegacommercializa9on(Evry,Kourou)
Legend
12
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
AvioispartoftheEUcri,calspaceinfrastructures
13Source:Companyinforma9on
Turin• LOx&LNGturbo-pumpdesign,manufacturingandassembly
Paris• ManagementanddesignofSRMfordevelopmentandproduc9onprograms
KourouCity
KourouEuropeanSpaceport(CSG)• Solidrocketmotorcas9ng(Regulus)
andintegra9on(Europropulsion)• Vegaintegra9onandlaunchopera9ons
(MobileGantry) Airola• CarbonEpoxyPrepregmanufacturingandtes9ng
Colleferro• Solidrocketmotordesign,produc9on• Systemac9vi9es,missiondesign• FlightSodwareFactory• Liquidpropulsiondesign,produc9on,• Stageintegra9on(Vega)• Testcenter
DRAFT Skilledandexperiencedmanagementteam,investedinthecapitalstructurethroughtheInOrbitinvestmentvehicle
FrancescaLillo
VPHSE&MaterialEng
AlessandroAgos9
CFO
CarmineSchips
SVPPlants&Planning
GiulioRanzo
CEO
FrancescoDepasquale
SVPSpaceportOperaHons.
AndreaPreve
ELVGM
GiuseppeCoccon
GiorgioMartellinoGeneralCounsel
RobertoNasiCEO
Secosvim
ManagementinvestedinAviocapitalthroughInOrbitSpA
• ca.4%ofshares• 2yearslockup• 44managersinvolved
SergioScippa
SVPBusiness&CEOREgulus
MarcoBiagioni
SVPPurchasing
SalvatoreSpinosa
SVPIndustrialOperaHons
PaoloBellomi
SVPProductDevelopment
FrancescoLibri
InternalAuditor
14AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
ManricoMastria
SVPQualitySVP
CommunicaHon
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
EconomicHighlightsFY2016
Comments
Doubledigitgrowthon2016
EBITstructuralimprovementalercomple,onofVegadevelopmentphase
Lowerimpactoffixedcosts(highervolumes)anddevelopmentac,vi,esincludingsub-contractedplantconstruc,on
In2016fulldebtinterests(vs.7monthsonlyaccruedinterestin2015)plusone-offdebtearlyrepaymentcost
NetincomeFY2016impactedbynonrecurringfinancialexpensesandcosts
MAINECONOMICS FY2015ACTUAL
FY2016ACTUAL
DELTA
€-M €-M €-M €-M
NETORDERBACKLOG 905.4 775.1 (130.3)
NETREVENUES 257.4 292.0 34.6
EBITDAADJUSTED 35.5 36.5 1.0%onnetrevenues 13.8% 12.5%
EBITDAREPORTED 27.9 26.9 (1.0)%onnetrevenues 10.8% 9.2%
EBITADJUSTED 22.2 26.9 4.7%onnetrevenues 8.6% 9.2%
EBITREPORTED 10.5 13.2 2.7%onnetrevenues 4.1% 4.5%
FINANCIALEXPENSES (3.3) (6.9) (3.6)%onnetrevenues -1.3% -2.4%
NETINCOME 5.4 3.1 (2.3)%onnetrevenues 2.1% 1.2%
15
Non-recurringcostsforbusinesscombina,onandlis,ng
Effectofrevenueaccelera,on
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
EconomicHighlightsHY2017
Comments
+24%growth
Impactofnon-recurringcostsforbusinesscombina,onandlis,ng
+8%growth
Structuralimprovementmainlyauributabletotermina,onofcertainVegaMFR&D
(1)Pro-Formafigurestocompareona“like-for-like”basisthefinancialsofHY2017andHY2016inlightofthebusinesscombina9on
+38%growth
16
MAINECONOMICSHY2016
PRO-FORMA(1)HY2017
PRO-FORMA(1) DELTA
€-M €-M €-M €-M
NETORDERBACKLOG 643.2 716.2 73.0
NETREVENUES 119.4 148.6 29.2
EBITDAADJUSTED 14.1 15.2 1.1%onnetrevenues 11.8% 10.2%
EBITDAREPORTED 10.7 11.2 0.5%onnetrevenues 9.0% 7.6%
EBITADJUSTED 7.5 10.3 2.8%onnetrevenues 6.2% 6.9%
EBITREPORTED 2.0 4.3 2.3%onnetrevenues 1.7% 2.9%
FINANCIALEXPENSES (2.0) (3.1) (1.1)%onnetrevenues -1,6% -2,1%
NETINCOME (1.1) 1.7 3.8%onnetrevenues -1,0% 1.2%
Financialexpensesimpactedbyoneoffdebtrepaymentcostswithnocashouvlow(repaidca.65MEurloaninMay2017)
€90MnewcontractsinHY2017(addi,onalordersacquiredaler30Juneforover€300M)
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
BalanceSheetHighlights
31DEC2016PRO-FORMA(1) MAINSOURCESANDUSES
30JUNE2017ACT DELTA
€-M €-M €-M(78.0) WORKINGCAPITAL (77.4) 0.6
81.2 DEFERREDTAXASSETS 82.0 0.8
(35.8) PROVISIONS(EMPLOYEES'BENEFITSANDRISKS) (24.7) 11.1
80.3 GOODWILL 80.3 -
158.2 FIXEDASSETS 158.3 0.1
7.4 FINANCIALRECEIVABLES 7.4 -
213.4 NETINVESTEDCAPITAL 225.9 12.5
48.3 NETFINANCIALPOSITION 35.9 (12.4)
(261.7) EQUITY (261.8) (0.1)
(213.4) TOTALSOURCES (225.9) (12.5)
Comments
Impactofone-offpaymentoflongtermcompensa,onandincen,veplansuponcomple,onofbusinesscombina,onandlis,ng(2)
Principallydrivenbytheabovechangesinprovisions
(1)Pro-Formafigurestocompareona“like-for-like”basisthefinancialsofHY2017andFY2016inlightofthebusinesscombina9on
(2)Mainlyincludeslongtermcompensa9onsgrantedtoformerDirectorsandtopmanagersinchargebeforethebusinesscombina9onalreadysetupinpreviousyears,incen9veplanrelatedtothebusinesscombina9onSpace2-Avioandu9liza9onoftaxandlegalprovisioninrela9ontotheseklementofcertaindisputesinlinewiththeamountpreviouslysetup
17
Structurallynega,veworkingcapital
Significanttaxassets
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
Newdebtstructure
Oldstructure Newstructure
• TermLoanB
tranche
• TermLoanAtranche
• Revolving
tranche
€65Moutstandingbalancefullyprepayedon22May2017€30Moutstandingbalancefullyprepayedon5October2017€30Mnotu,lizedandterminated
“SeniorTermandRevolvingFacili,esAgreement”(1April2015):
Euro40MillionfinancingbytheEuropeanInvestmentBank(6October2017):
Thefinancingisaimedatsuppor9ngthe:
• developmentofnewproductsandtechnologiesrelatedtospacepropulsionsystemsthroughResearchandDevelopmentac9vi9es
• moderniza9onandexpansionoftheproduc9oncapacityatthefacili9esinColleferro(Rome),themainAvioS.p.A.industrialsiteinItaly
18
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
440
1263268
225
2010-2016 2017-2023
<1.5toninLEO >1.5toninGTO
LaunchdemandforsmallsatellitesinLEOisboomingalsodrivenbytheadventofsmallsatelliteconstella,ons
Lowerorbitservicedwithlightlaunchers
Higherorbitreachedby
heavylaunchers
Nr.satellitesbymass(2010-2023)
62%
38%
20
• Mass:>1.5ton• Applica9on:Tradi,onalCommunica,on
85%
15%
Applica,on Orbit/launchservice
• Mass:<1.5ton• Applica9on:Innova,veEarthObserva,onandCommconstella,ons
• Exampleofoperators:
• Exampleofoperators:
Source:LCAelabora9ononSpaceLaunchReport,Gunther,SpaceworksandOECDdata
Smallsatslaunched:76inH12016211inH12017
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
Over2000satellitestobelaunchedby2024todeploynewconstella,onsinLEO
Sources:TealWorldWideMissionModel,Analysisoflong-termspacemacrotrends,focuslaunchsystemsmarket–BryceTech,LCAElabora9on
21
0,25
0,5
0,1
0,75
SatelliteM
ass(tons)
TotalSatellitesMassNumberofSatellites(Unit)
25 100 150 200 250 300 350 …………………… 70050
1
1,5
2
EightyLEO
SatelliteConstella,onsdeploymentplan(2017-2024)
3Gwebaccessww5GIoT
LowlatencyDatacomms
EarthobservaHon
Telecoms
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
Constella,onsaddressdemandfornewtypesofsatelliteservices
• Mission:Earthimages• Nr.ofSatellites:45sats(120Kg),210cubesats(5Kg)• CommercialServices:
• Climatemonitoring• Cropyieldpredic,on• Urbanplanning&construc,onprojectmonitoring• Disasterresponse
• Funding:$183M
22
• Mission:3GInternetconnec,vityworldwide• Nr.ofSatellites:648-900smallsatellites(150Kg)• CommercialServices:
• Internetforruralanduncoveredareas• In-FlightConnec,vity• Disasterresponseservice
• Funding:$1.7B
• Mission:Earthimages• Nr.ofSatellites:20+dedicatedsats• Ins,tu,onalServices:
• Climatemonitoring• Landuse,urbanmonitoring&homelandsecurity• Disasterresponse
• Funding:€6.7B(67%EUand33%ESA)
• Mission:5Gconnec,vityforInternetofthings• Nr.ofSatellites:288smallsatellites(200Kg)• CommercialServices:
• I.O.T.Automo,ve(self-drivingcars,…)• Precisionagriculture• Transportsandlogis,cs
• Funding:N/A,seriesAfundingcollec,onin2017
EightyLEO
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
Thegrowingdemandofsmallsatsischangingtheapproachtothelaunchservicetype
Single/DualLaunch PiggybackRide “Mul,-des,na,on”
23
1
2
Today
• Singlepayloadtobedispatcheddirectlytoitsdes9na9onorbit
• Smallerpayloadstobedispatchedonthesameorbitalplaneofthemainsatellite
Yesterday
1
2
3
4
• Mul9plepayloadstodedeployedtomul9pleorbitalplanes
Tomorrow
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
10yearsgrowthtrendinreview:accelera,ngrevenuesand3yearsvisibility
Flights
NetOrderBacklog
(M€)
Netrevenues(M€)
A6ini,al
A6Vegafollow-onESA
Developments
Growingflightrates
Cyclicalorderbacklog~3yrsvisibility
Accelera,ngrevenuegrowth
Growingfrequencyofdevel.funding
6 6 7 6 57
46 6 7
1
11
3 2
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
VegaCVegaEIni,al
540432
805707 654
551336
679905
775
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
198 220 236 228 236 224 232 224 257292
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
6 6 756
85
7
9 9
4%(10y)7%(5y) CAGR
CommentsAriane Vega
24
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
NetOrderBacklog
Comments
• Ca.€90MofnewcontractsacquiredinHY2017:
• Vega&Arianeproduc,onanddevelopmentcontracts
• VegaBatch2extensionofperimeterforlaunchpadintegra,onac,vi,es
• ByendofAugust2017addi,onalordersacquiredforover€300M,including:
• VegaBatch3produc,on(10VegaformVV17toVV26,2019–2021)
• VegaC+development
• Aster
643.2
304.5(172.7)
775.1
89.6 (148.6)
716.2
HY2016Backlog
H22016Orders
H22016Revenues
EOY2016Backlog
H12017Orders
H12017Revenues
HY2017Backlog
NetOrderBacklogevolu,on(€-M)
25
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
HYNetRevenues
53.5 61.6
61.580.5
3.6
5.6
HY2016 HY2017Vega Ariane Tac,cal Other
byLineofBusiness(€-M) byAc,vity(€-M)
93.7111.1
24.8
36.8
HY2016 HY2017Produc,on Development Other
119.4
148.6
24.5% 24.5%
31.0%
15.2%
48.0%
18.6%
44.8%
51.5%
41.5%
54.2%
74.8%
25.2%
78.5%
20.8% 119.4
148.6
26
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
EBIT/EBITDAadjustmentsfornonrecurringitems
4.3
4.0
2.0
10.3
2.7
2.2
15.2
ReportedEBIT Nonrecurringexpenses
CustomerRela,onshipAmor,za,on
AdjustedEBIT TangiblesDeprecia,on
Intangibles/R&DAmor,za,on
AdjustedEBITDA
(1)Itincludes1.7MofadvisoryfeesandotherconsultanciescostsincurredinQ1fromformerSpace2inconnec9ontothebusinesscombina9onand1.8MoflegalandadvisoryfeesandotherconsultanciescostsofAvioincurredinQ1relatedtothelis9ngandthemergerwithSpace2
(2)Itrepresentstheamor9za9onoftheintangiblesiden9fiedinthe2007purchasepricealloca9onfollowingtheacquisi9onin2006byCinven.Followingthebusinesscombina9onbetweenAvioandSpace2,thenewPPAprocesswillbecompletedbyQ12018inaccordancewithIFRS3
2017HalfYearAdjustedEBITandAdjustedEBITDA(€-M)
(1)
(2)
27
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
FYBalanceSheet
31DEC2015ACT MAINSOURCESANDUSES
31DEC2016ACT DELTA
€-M €-M €-M
(50.0) WORKINGCAPITAL (78.2) (28.2)
56.8 DEFERREDTAXASSETS 56.1 0.7
(38.3) PROVISIONS(EMPLOYEES'BENEFITSANDRISKS) (35.8) 2.5
367.9 FIXEDASSETS 379.2 11.3
6.5 FINANCIALRECEIVABLES 7.4 0.9
342.9 NETINVESTEDCAPITAL 328.7 (14.2)
(34.1) NETFINANCIALPOSITION (18.6) 15.5
(308.8) EQUITY (310.1) (1.3)
(342.9) TOTALSOURCES (328.7) 14.2
28
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
FYNetFinancialPosi,on
(24.5)
(34.1)26.9
28.2
(2.7)
(9.2) (3.2)(18.6)
NFP2015 REPORTEDEBITDA CHANGEINWORKINGCAPITAL
CHANGEINPROVISONS
CAPEX NETFINANCIALEXPENSES&TAXES
OTHER NFP2016
NFPevolu,onandcashflows(€-M)
OperaHngCashFlow€27.9M NonOperaHngCashFlow€-12.5M
29
AVIOSpA-Allrightsreserved–subjecttotherestrictionsoflastpage.
HYNetFinancialPosi,on
(24,5)(18.6)
11.2
(0.6)
(11.1)
(8.7) (3.1)(0.6)
67.4
35.9
NFP31DEC2016 REPORTEDEBITDA CHANGEINWORKINGCAPITAL
CHANGEINPROVISONS
CAPEX NETFINANCIALEXPENSES
TAXESANDOTHER CASHFROMBUSINESS
COMBINATION
NFP30JUNE2017
NFPevolu,onandcashflows(€-M)
OperaHngCashFlow€-9.3M NonOperaHngCashFlow€-3.7M
30
Theinforma,oncontainedinthisdocumentisAvioS.p.A.proprietaryandisdisclosedinconfidence.ItisthepropertyofAvioS.p.A.andshallnotbeused,disclosedtoothersorreproduced,withouttheexpresswriuenconsentofAvioS.p.A.