Cobham Mission Systems November 28, 2018 Itinerary EVENT PRESENTER TIME Welcome & Introduction David Lockwood CEO, Cobham plc 10:00 Overview of Cobham Jim Barber Mission Systems (CMS) Sector Sector President CMS 10:20 Aerial Refuelling Ken Kota Sr. VP, Business Development & Strategy 10:50 Q&A 11.05 Coffee Break 11:20 Fuel Tank Inerting Kevin McKeown VP & GM Davenport Business Unit 11:40 Oxygen Systems Ken Kota Sr. VP, Business Development & Strategy 11:55 Q&A 12:10 Concluding Remarks David Lockwood CEO, Cobham plc 12:25 Light Lunch 12:35 1 Cobham plc The Cobham Group Revenue Underlying Operating Profit Communications and Aviation Communications and Aviation Connectivity Services Connectivity Services Mission Mission Systems Advanced Advanced Systems Electronic Electronic Solutions £428M Solutions £57M Year ended 30 June 2018 excluding divestments 2 Cobham plc Today’s Presentation The Purpose is to Demonstrate: • Deep technical expertise and differentiation – we do things others can’t • Long heritage, reputation and strong market positions • Attractive growth opportunities - addressing international markets • Execution key to growth and enhancing operating margin 3 Cobham plc Today’s Speakers Mr. Jim Barber Sector President CMS Mr. Ken Kota Sr. VP Business Development & Strategy CMS Mr. Kevin McKeown VP & GM Davenport Business Unit 4 Cobham plc Our Purpose To be the leading provider of innovative critical control solutions for extreme environments 5 Cobham plc Growth from Leading Edge Technology and World Class Capabilities Revenue 100% Capability 80% Commercial /Security Defence 60% & RoW UK Product Areas Product 40% /Security % ~40% ~30% ~30% 20% Defence Revenue US High single to low Low single digit Flat 0% double digit Medium Term Term Medium Growth % p.a. % Growth Year Ended 30 June 2018 6 Cobham plc Increasing Collaboration Between Business Units Brize Norton, UK Wimborne, UK Orchard Park, NY US Davenport, IA US Westminster, MD US Fort Walton Beach, FL US 3 Business Units with 6 Sites 2,000+ Employees 7 Cobham plc Strong Market Conditions Aligned to CMS Capabilities Operational Tempo Increase Compliance and Reduced Passenger Mile Costs Hose and Drogue Air to Air Refueling Fuel Tank Inerting CMS Market Drivers Pilot Performance Passenger Traffic Growth* Oxygen Systems Fuel Tank Inerting *Boeing Commercial Market Outlook 2018-2037 8 Cobham plc Driving to Consistent and Predictable Business Performance Commitment to Improvement Value Chain Activity Performance Measures Cash Conversion Marketing & Sales Op Profit Margin Empowered Leadership Inbound Logistics & Committed Annual Growth Accountable to Change Employees Operations On-time Delivery SHE Culture of Outbound Logistics Continuous Improvement Supply Chain Quality Aftermarket Service Employee Turnover Committed to continuous improvement for customer satisfaction 9 Cobham plc Transformation is Addressing the Whole Value Chain Committed Leadership • Enhanced leadership teams - skill assessment and gap training • Aligning organization around customer-focused Integrated Programme Teams (IPTs) driving accountability and empowerment Continuous Improvement • Process improvement throughout order to cash receipt cycle improve On-time to Promise (OTTP) • Supplier quality and efficiency enhancement - improving technical and contractual flow-down and product requirements documentation • Rigorous risk management though all phases of the program life cycle Empowered & Accountable Employees • Black Belt/Green Belt training and embedding of resources within the business • Focused on root cause and corrective actions to eliminate systemic issues • Improved critical thinking and capability via training – design for manufacturability, design for cost, design for six sigma 10 Cobham plc Today’s Speakers Mr. Jim Barber Sector President CMS Mr. Ken Kota Sr. VP Business Development & Strategy CMS Mr. Kevin McKeown VP & GM Davenport Business Unit 11 Cobham plc 01 Hose & Drogue Refueling Operational Tempo Increase Overseas Contingency Operations are 1930 driving greater platform utilization, increasing operating and maintenance First public demonstration support needs of Cobham Looped Hose refueling USAF undertakes first non-stop flight around the 1950 world with Cobham AAR 1980 RAF undertakes world’s longest bombing run using Cobham AAR 2010 First A400M into service with German Air Force with Cobham AAR 12 Cobham plc Pedigree and Superior Technology Give Competitive Edge Competitive Position • Market leader in Hose & Drogue aerial refueling* • Hose & Drogue on KC-46, A400M, A330, C-130, KC-390 and V-22 • Expected £1.5B* market over the next 5 years • Sole source on every western aircraft with AAR capability currently in production Differentiators • Closed loop control for hose and drogue refueling system • Very high end simulation and modeling capability • Focused AAR optimization and new coupling and stabilizing technologies Market Share* Hose & Other Cobham Drogue 0% 20% 40% 60% 80% 100% *Global Aerial Refueling Systems - Competitive Analysis Stratview Research Oct 20, 2017 and Forecast International 13 Cobham plc Significant Opportunity for Aftermarket Growth CHALLENGE OPPORTUNITY SOLUTION RESULT Record build rates Installed base of Develop and Tightly integrated for AAR capable greater than 1,200 optimize aftermarket customer focused aircraft. pods by 2021. organization and organization to meet Service model will be structure while ever-changing developed to capture innovating product customer needs. the aftermarket upgrade solutions. opportunity. 14 14 Cobham plc Development Phase Ending, Long Life Assets 1995 Today 15+ Years 15 Cobham plc Focus on Growing Aftermarket Business Countries with Cobham AAR Systems or Planned to Procure AAR Systems Europe Units 800 No. America Units 400 800 +85 0 Middle East 400 +200 2017 2021 Units 800 0 2017 2021 400 +16 0 Asia/Pacific 2017 2021 Units So. America 800 Units 800 400 +30 Total AAR Assets* 400 +4 0 2017 2021E 2017 2021 0 2017 2021 ~1,000 1,200+ *Global Aerial Refueling Systems. Competitive Analysis Stratview Research Oct 20, 2017, Forecast International, Company Info 16 Cobham plc Growing Long Term Aftermarket Opportunity • Fielded systems will have a 40+ year lifetime of operation • AAR world-wide fleet recapitalization has started to mature into the production phase increasing manufacturing volumes • Installed base is growing through the mid-2020s • Changing mission needs of our customers provide aftermarket opportunities for upgrades incorporating new innovations • Developing a tightly integrated customer-focused organization to grow our long-term aftermarket business 17 Cobham plc Questions? 18 Cobham plc Today’s Speakers Mr. Jim Barber Sector President CMS Mr. Ken Kota Sr. VP Business Development & Strategy CMS Mr. Kevin McKeown VP & GM Davenport Business Unit 19 Cobham plc 02 Fuel Tank Inerting Compliance and Reduced Passenger Mile Costs Apache helicopter - First Deadline past for fuel tank inerting Cobham Inerting System 1980 compliance. Next generation systems need to reduce operational cost Passenger Traffic Growth* Next 20 years: 4.7% average annual growth 31,300 single aisle aircraft needed 2000 Boeing 787 - First commercial Cobham Air Separation Module for Fuel Tank Inerting 2010 Boeing 737NG - Cobham Air Separation Module for Fuel Tank Inerting 2020 *Boeing Commercial Market Outlook 2018-2037: Page 2 and 10 Next Gen CRATOS System 20 Cobham plc FAA Regulation Opening Commercial Market to Military Technology Competitive Position • Fuel Tank Inerting Systems (FTIS) for commercial market after 2008 FAA regulation change; adopted by rest of the world • Created approximately $300M* per year commercial market for OEM and aftermarket • 737NG Air Separation Module (ASM) adopted by four of the five major US airlines. International airlines pending • Currently have the leading market share position in military market Differentiators • Increased replaceable ASM operating life • Smaller and lighter FTIS using less bleed air • Reduced airline flight hour operational cost Market Share* Military Cobham Other Commercial 0% 20% 40% 60% 80% 100% *Forecast International, Boeing Commercial Market Outlook 2018-2037, Airbus Global Market Forecast 2018-2037 Dataset , Company Info 21 Cobham plc Total Market Opportunity Over Next 10 Years $3.5B to $4.5B* CHALLENGE OPPORTUNITY SOLUTION RESULT Record backlog for FAA regulation and Utilize leading air FTIS that extends commercial aircraft. demand for new separation and useful life and Current legacy commercial aircraft control technology to improves systems are difficult drive solution for create a better FTIS performance and to maintain and affordable and product offering. reduced operating expensive. efficient FTIS costs. technology. *Forecast International, Boeing Commercial Market Outlook 2018-2037, Airbus Global Market Forecast 2018-2037 Dataset , Company Info 22 Cobham plc Progression from Aftermarket ASM to Fully Integrated FTIS Product Current FTIS Replacement ASM Project CRATOS Solution • First Generation System • Replacement • Second generation component for first system • Difficult to maintain generation system and expensive to • Intended for future - operate for the airline • Longer life versus OEM build aircraft supplied ASM • Smaller and lighter FTIS • Reduced flight hour using less bleed air costs from longer life • Further reduced airline • Currently authorized for flight hour operational 737NG, 737MAX, A320 cost over replacement ASM for first generation systems 23 Cobham plc Technology