Investor Presentaon - Teleborsaavio-data.teleborsa.it/2017/Investor-Presentation-Star-Conference-9... · AVIO SpA- All rights reserved – subject to the restric9ons of last page

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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


Avio:aEuropeanleaderinSpaceTransporta,on

3

•  50yearsinSpaceLaunchers

•  EuropeanexpertinSolidPropulsion

•  PrimeContractorofVega(EUlightlauncher)

•  PartnertoAriane(EUheavylauncher)

•  850employees

•  300M€revenues

•  ListedontheMilanStockExchange

•  MarketCap.350M€


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


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%


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


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


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


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


GrowingcustomerconfidenceonthenewVegaCwhileitsdevelopmentachievesconcreteprogressin2017

10

•  Contractsignedfor«Batch3»orderof10Vega/VegaClaunchersin2019-2021

•  2VegaClaunches(2020and2021)tocarry4hi-resoluHonopHcalsatellite

•  1VegaClaunchin2021tocarrythenewASICOSMOSkyMedsatellite

Commercialachievements Industrialachievements

P120newplant

Z40IMC Z40nozzleassembled

P120IMC P120cas,ng(LMC)


Vegaofferingalsobeingexpandedwithadvancedsolu,onsforextendedLEOmissions

11

SSMS–"SmallSatelliteMissionService”

•  P/Ldeploymentinmul,ple

orbitalplanes

•  PoCflightin2019

SpaceRider–Launch,orbi,ngandre-entry

• Downloadandretrieval• FollowupofIXVexperience(2015)

• Flight2020


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


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


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


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)


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


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


Appendix

19


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


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


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


Thegrowingdemandofsmallsatsischangingtheapproachtothelaunchservicetype

Single/DualLaunch PiggybackRide “Mul,-des,na,on”

23

1

2

Today

• Singlepayloadtobedispatcheddirectlytoitsdes9na9onorbit

• Smallerpayloadstobedispatchedonthesameorbitalplaneofthemainsatellite

Yesterday

1

2

3

4

• Mul9plepayloadstodedeployedtomul9pleorbitalplanes

Tomorrow


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


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


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


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


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


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


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.

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Investor Presentaon - Teleborsaavio-data.teleborsa.it/2017/Investor-Presentation-Star-Conference-9... · AVIO SpA- All rights reserved – subject to the restric9ons of last page