Mello Presentation

24 May 2023

Executive Summary

FINANCIALS

  • Trading in line with expectations for H1 FY 2023
  • Sales are expected to be £7 million, up 15%
  • Five-yearAgreement with GKN Aerospace expected to be worth in excess of US$100 million in revenue over 5 years
  • Sales only commenced at the end of H1 FY23;
    Significant investment in developing the US Facility
  • As a result reported EBITDA is expected to be a loss of £0.9m for H1 FY23
    (H1 FY22: £0.2m loss)

CLIENTS

  • Customers include GKN Aerospace, Safran, BAE Systems, Spirit, Aernnova. High barriers to entry including global approval with Airbus, Boeing and
    NADCAP
  • Velocity's main competitors are customers performing the work in-house. By using Velocity proprietary services and technology, manufacturers reduce costs and free up resource to focus on their core business

MARKET OPPORTUNITY

  • Contracted business should deliver a three-fold increase in sales from 2022-2024
  • The aerospace sector to achieve net zero by 2050. Demand for composites will grow as new generation aircraft are built
  • Aerospace sector potentially worth $6.5b per annum
  • There are opportunities outside aerospace, Total Annual Composites Market Opportunity of $41 billion

THE FUTURE

  • Growth will increasingly come from new facility in Alabama with capacity to double in size
  • The commercial value of contracted business is currently estimated to be worth between £30m to £36m per annum at OEM planned production rates
  • Healthy short-term pipeline of new business opportunities in Europe and North America
  • Composite material usage is expected to grow significantly in civil aircraft and other transportation modes

© Velocity Composites Plc - MAY 2023

© Velocity Composites Plc - MAY 2023

2

Experienced Board

Andy Beadon

Jon Bridges

Adam Holden

Annette Rothwell

David Bailey

Non-Executive Chairman

CEO

Group Finance Director

Non-Executive Director

Non-Executive Director

Andy has over 30

Jon has over 25 years'

Adam has 19 years

Annette has extensive

David has contributed

years experience in

experience within the

of experience in the

experience in

to the strategic direction

finance, technology and

advanced composites

accounting profession,

industries undergoing

of the UK's aerospace

manufacturing. He is a

industry and is an

including KPMG, Northern

transformational change.

industry and cross-

Chartered Account, and

experienced composite

Rail and the private equity

Since 2011, she has served

sector composites sector

worked at Executive

engineer. Jon is a founder

backed food

as a director on the board

as a Board member

Board level for 20 years

of Velocity and known for

manufacturer, BBF.

of the Midlands Aerospace

of the Aerospace

in a series of advanced

his extensive knowledge

Alliance, the regional

Growth Partnership and

material technology

around composite process

body for the Aerospace,

Composites Leadership

businesses, both listed

technologies.

Defence and Security

Forum. He has a PHD in

and privately owned.

industry. She is has

aeronautics and an in-depth

held a number of senior

practical knowledge around

aerospace roles with

operational excellence and

global responsibility for

sustainability within multiple

supply chain management

manufacturing sectors.

and procurement.

© Velocity Composites Plc - FEB 2023 © Velocity Composites Plc - MAY 2023

3

The Demand for Velocity Composites' Services

Market

Growth opportunities continue to arise in both the aerospace (civil and defence) and non- aerospace sectors. The Industrial material composite sectors are a high growth markets, with the use of these advanced materials replacing heavier metal parts in Aerospace and other sectors such as automotive. This change is still in its infancy and independent analysts predict rapid growth in composite usage in manufacturing over the next two decades.

Sustainability

As both aerospace and other transport systems move to carbon neutrality, vehicles

need to be lighter and stronger in order to utilise alternative power sources

Outsourcing

Provides the customer with the opportunity to reduce waste and focus on their core

business to support the growth in the use of advanced composite structures

Digitisation

Velocity's technology and services reduce waste in all forms from the global

composites supply chain and increases quality and conformity

Efficiency

© Velocity Composites Plc - MAY 2023

Velocity's technology drives efficient management and use of raw materials,

delivering 10%-20% cost reduction to customers

4

Composite Materials

  • A combination of a matrix and a reinforcement, which when combined gives properties superior to the properties of the individual components
  • In the case of an aerospace composite, the reinforcement is the fibres and the matrix is the thermosetting resin
  • Better weight saving, strength, corrosion resistance and fatigue resistance when compared with metals
  • Less weight equals less cost for airlines and increased range
  • One shot process - properties fixed when resin cures

COMPOSITE USE IN PLANES

COMPOSITES

50%

5

© Velocity Composites Plc - May 2023

Attachments

Disclaimer

Velocity Composites plc published this content on 24 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 May 2023 16:26:18 UTC.