Ariane and Vega: Global Customer Base for GEO, MEO and LEO Launches

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Ariane and Vega: Global Customer Base for GEO, MEO and LEO Launches THE EUROPEAN GATEWAY TO SPACE Gabelli Aerospace & Defense Conference September 10th, 2020 Giulio Ranzo - CEO © 2019 AVIO SPA 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. This document may not be reproduced, redistributed or published in whole or in part without Avio’s authorization. © 2019 AVIO SPA 2 Avio: a pure player in Space launchers 400 € Mln 1,000 Mkt Cap Employees 70% 4% Free Float Mgmt Share NEW 2021 European heavy launcher (10.5 tons in GTO) European light launcher (1.5 tons in LEO) Ariane 6 Vega C Avio: Strap-on boosters Avio: System integrator © 2019 AVIO SPA 3 Industrial operations in Europe and French Guyana Colleferro, Rome (GMT +1) N41.727 E13.0030 - SRM design, production - Mission analysis - Flight Software - Stage integration - Testing SRM Manufacturing Launcher integration Main stage Upper stage integration integration French Guiana (GMT -3) N4.003 E52.999 Paris Avio runs three facilities at the (GMT +2) N48.856 E2.351 European Spaceport : Large SRM design/integration Propellant - SRM casting and integration - Vega launcher operation casting Firing tests © 2019 AVIO SPA 4 The launch segment : the gateway to the Space economy Global space value chain (2018) x% = 2015-18 CAGR Launch(1,2) Satellites Ground(3) Services(2,4) $ 6.2bn $ 19.5bn $ 125.2bn $ 126.5bn End users +5% +7% +6% stable Source: Satellite Industry Association (2018) (1): Includes launcher manufacturing and launch service activities (3): Includes GNSS chipsets and Related © 2019 AVIO SPA (2): Commercial services revenues only (4): Includes commercial humanflight 5 Launch demand stable in MEO-GEO, fast-growing in LEO World Market World total mass at launch (tons) X = CAGR Average Sat Key mass at launch applications Orbit (altitude) Average Sat 3,898 mass at launch +3% Other 1.358 3.4 t 2,312 Telecom GEO 4 t -1% 174 1.5 t 1.521 Navigation MEO 1.3 t +3% 2.134 0.5 t 130 +14% LEO 1 t 594 Earth Observation 2009-18 2019-28 © 2019 AVIO SPA Source : Avio estimate on Euroconsult data; Excludes sats with mass <50 Kg 6 Earth Observation and Connectivity services drive demand growth Application Example End Users Infrastructure & Transportation • Investors & financial analysts (Quant, Commodity) • Intelligence analysts • Customs & Border agents Environment & Climate • Farmers • Insurance companies • Meteorological agencies • Civil Protection agencies Security & Intelligence • Defense • Intelligence agencies • Rescue operations Energy & natural resources • Investors & financial analysts (Quant, Commodity) • Insurance companies © 2019 AVIO SPA 7 The beginning of a new era for Vega commercial missions thanks to SSMS VV16 – Vega return to flight with SSMS # of sats to be launched by size* • New Mission Service tapping on the most growing satellite market 9,935 segment, smallsats • Successful VV16 mission for the 3.877 Proof of Concept with 53 satellites from 21 customers from 13 countries • Satellites from 1 to 150 kg released x3 2,298 3.435 in both different orbits and altitudes • Demand and orders already flowing 4 in for next scheduled mission in 1.183 2.623 x2 2021 and later, with Vega C featuring 1.111 an even higher capacity 2009-18 2019-28E Big Sats (>50 kg) Small Sats (<50 kg) Mega Constellations *SOURCE: Euroconsult © 2019 AVIO SPA 8 Ariane and Vega: global customer base for GEO, MEO and LEO launches = Ariane Proba V LISA = Vega Gold Sentinel HellasSat Azerspace 4xSkySat Thor 7 IXV Aeolus Terrestar-1 GHGSat Galileo Hylas Biomass KazEOSat-1 AMC-21 Anik F3 KompSat 7 Lemaitre BepiColombo Nemo HD Galaxy 15 Amaldi Einstein LuxSat SICRAL 2 Superbird VD20x2 Ceres Bsat 3b Spire Spaceflight Undisclosed Ingenio Spainsat MexSat -3 VNredSat-1° Mohammed Vinasat Falcon Arab Eye sat Telkom Brysat RASCOM GSAT Athena-Fidus Vega PeruSat LARES Cosmo 2G Venus GokTurk-1a TheoSat Nilesat Optus OptSat Prisma Ariane 5 TIBA © 2019 AVIO SPA 9 Automation, standardization and cost reduction in the short term… P120 P120 P80 P230 Vega C Ariane 62 Ariane64 Vega Ariane 5 P120 P80 P230 Single main-stage, higher volumes, economies of scale First flight items Vega C MF P120 Full volume production Ariane 6 MF production 2018 2019 2020 2021 2022 2023 © 2019 AVIO SPA 10 … While preparing for the medium to long-term future 2022: Vega Light 2022: Space Rider 2025: Vega E M10 LOX Z9 Methane Engine Z40 300 kg to LEO 800 kg to and from LEO 2,800 kg to LEO ▪ Dedicated launch ▪ Re-entry vehicle ▪ Lower cost/kg than service for smallsats ▪ Space Debris Vega C ▪ Leverage of 2nd and 3rd removal ▪ Increased in-orbit stages of Vega C ▪ Sub-orbital flexibility ▪ Rapid deployment experiments © 2019 AVIO SPA 11 Next steps – Busy 2020 and incoming contracts x% = CAGR 2017-’19 Revenues (€ - M) Net Income (€ - M) Net Financial Position (€ - M) 4% 11% 17% 388,7 368,7 27 343,8 25,8 57,9 21,8 49,1 41,7 2017 2018 2019 2017 2018 2019 2017 2018 2019 Dividends CAPEX (€ - M) 10 11.5 - (€ - M) 29 23 29 © 2019 AVIO SPA 12 Next steps – Busy 2020 and incoming contracts • Upcoming flight activity • VV16 SSMS – 3 September • VV17 – November • VV18 – by January 2021 • Vega C - launch campaign to start beginning 2021 • Ariane 5 VA253 – 14 August • Ariane 5 VA254 – December 2020 • Backlog • Contractualization of the ESA ‘19 MC developments in progress • Tactical production contracts signed in May • Development • Vega C ground qualification review – by year-end • P120 QM2 test (third and last static firing test for Ariane 6) – by September • 2020 Financial results • September 14th: HY 2020 – possible definition of the 2020 Guidance • November 5th: 9M 2020 results © 2019 AVIO SPA 13 Avio stock price vs Consensus Target Price and Benchmarks = Avio Avio Stock Price (Index = 100 = 9.2 €) = Analyst consensus = FTSE All Share ITA Index 210 190 170 150 130 110 90 70 50 Oct 03, 2016 May 24, 2017 Dec 21, 2017 Jul 27, 2018 Mar 04, 2019 Oct 04, 2019 May 13, 2020 © 2019 AVIO SPA 14 End of the COVID-19 lockdown: adaptation to new normal 11 May -Avio VV16 team departing to Kourou on Individual protection equipment Alitalia charter flight from Rome FCO Hand sanitizer dispensers IN OUT Adapted meeting rooms Modified layout to access facilities © 2019 AVIO SPA 15 THANK YOU avio.com © 2019 AVIO SPA Increasing gap between launch demand and supply # of Countries Tot. # world countries: 195 100 80 60 Countries operating Satellites Launching countries 40 Gap 20 0 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017 Source: Web Search; United Nations © 2019 AVIO SPA 17 Launch capabilities highly concentrated. Export mostly from Europe and USA Average Annual Mass Launched in 2009-18 (Tons) Government Commercial & Export 70 62 57 26 45 29 3 38 44 42 33 7 19 1 6 6 6 USA Russia Europe China Japan India © 2019 AVIO SPA 18 The Space Sector remains attractive for private investments despite COVID-19, with all-time record investments in 2020 Equity investments in Space Ventures(1) 12.1 12 Breakdown of cumulated 2009-2019 investments by sector (% of 26$ Bn) 10 +28% CAGR 5% 8 5.8 6 47% 48% 4 3.0 Investment1 ($ bn) Investment1 2 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Other Satellites Launch HY (2) (3) Angels Venture Capital Corporate Other/N.a. (1) Annual non-governmental equity investment (2) Angels include investments from Jeff Bezos, Richard Branson, Elon Musk, and Robert Bigelow (total $>2 bn) (3) Other includes Foundations, Private Equity, Sovereign Funds, Crowd Platforms, etc. Source: Space Angels Q2 2020 Investment Report © 2019 AVIO SPA 19 50 years of track record in Space launch Ariane 1-3 Ariane 5 Vega Ariane 4 Vega Space Ammunitions Separation 9.5 ton 230 ton launch Vega C Ariane 6 Vega E light Rider motors boosters boosters system 1912 1968 1990 2003 2012 2020 2025 2 © 2019 AVIO SPA 0 A public company managed by a team of investors Avio shareholders’ breakdown InOrbit 4% Institutional Anchor Investors Investors 46% 35% Retail Investors ~65% free 15% float Milan Stock Exchange 4% share in Avio Ticker: AVIO.MI – ISIN: IT0005119810 70 Avio managers 2 © 2019 AVIO SPA 1 European Launch capabilities evolving to meet
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