Vertical Aerospace Ltd. · NYSE:EVTL
Vertical Aerospace — Investor Day (September 2021)
54 slides from Vertical Aerospace's investor day presentation, Sep 22, 2021
Slide 1: Analyst Day
P I O N E E R S I N E L E C T R I C A V I A T I O N ANALYST DAY 22.09.2021 1
Slide 2: Legal Disclaimer
LEGAL DISCLAIMER About this Presentation information. These statements are inherently uncertain and investors are cautioned are necessarily subject to uncertainty and risk due to a variety of factors. These and included in this presentation have been subject to rounding adjustments. Certain other no
Slide 3: Led by a Proven Entrepreneur
LED BY A PROVEN STEPHEN FITZPATRICK ENTREPENEUR Stephen founded and built UK energy retailer OVO Energy to a $7bn revenue, 5m customer business in a heavily regulated industry1 A N A L Y S T D A Y – S E P 2 0 2 1 Source: 1. Ovo Energy and its retail partners serve nearly 5m customers 3
Slide 4: Today's Speakers & Agenda
STEPHEN FITZPATRICK MICHAEL CERVENKA PAUL HARPER EDUARDO DOMINGUEZ VINNY CASEY Founder and CEO President Head of Certification Chief Commercial Officer Chief Financial Officer Stephen founded and built UK energy Previously Head of Future Business at Previously UK A380 Chief Previously CEO of Airbus
Slide 5: eVTOL Is a $1tn Market
EVTOL IS URBANIZATION IS UNSTOPPABLE GROUND TRANSPORT CANNOT COPE DECARBONIZATION IS IMPERATIVE A $1TN Today, 55% of the world’s population lives in cities, 32 billion hours in the US alone are lost to congestion MARKET1 a proportion that is expected to increase to 68% by every year in an increasing
Slide 6: This Is Not What the Answer Looks Like
THIS IS NOT WHAT THE ANSWER LOOKS LIKE A N A L Y S T D A Y - S E P 2 0 2 1 66
Slide 7: VA-X4 Is the Answer
VA-X4 IS THE ANSWER SAFE QUIET AFFORDABLE EMISSION FREE Expected to certify to EASA <40dB in cruise1 c.$65 per pax for a 25 mile journey 2 100% electric powertrain3 commercial aircraft safety standards A N A L Y S T D A Y - S E P 2 0 2 1 Source: 1. Based on projected VA-X4 noise level of <40dB in cr
Slide 8: Significant Advances in Technology
BATTERY CELL ENERGY DENSITY (Wh/kg)1 BATTERY CELL PRICE ($/kWh)2 290 100+ mile 800 Range 270 700 600 Energy Density (Wh/kg)1 250 Price ($/kWh)2 500 230 400 210 300 ~ $1 /seat/mile 190 operating cost 200 170 100 150 0 2015 2016 2017 2018 2019 2020 2021 2022 2013 2014 2015 2016 2017 2018 2019 2020 SIG
Slide 9: Why Vertical?
WHY 1. CERTIFICATION CONFIDENCE 2. MARKET LEADING PER-ORDER BOOK 3. ASSET-LIGHT AND SCALEABLE 4. ATTRACTIVE VALUATION VERTICAL? The VA-X4 is designed to use existing, $5.4bn global pre-order book for up to Less than 50% of the capital spend of our Attractive entry valuation given the certifiable tec
Slide 10: Significant Momentum Since Merger Announcement
INCREASED PRE-ORDER BOOK CONFIDENCE FOR 2024 CONTINUE TO BUILD WORLD CLASS FROM 1,000 to 1,3501 CERTIFICATION ORGANIZATION Entered into partnership agreement with Marubeni to On track for Design Organisation Approvals in line ~70 new hires into the engineering team explore a Japanese AAM joint-ventu
Slide 11: Why Vertical?
1. WHY VERTICAL? 2. KEY TECHNOLOGIES 3. CERTIFICATION PROGRAM 4. ORDERBOOK 5. BUSINESS MODEL A N A L Y S T D A Y - S E P 2 0 2 1 1 1
Slide 12: Successful in Flight
SUCCESSFUL VA-X1 VA-X2 IN FLIGHT First flew in 2018 at Cotswold Airport in Kemble, UK. This aircraft has been extensively tested and flown dozens of times. VA-X1. Our proof- First flew in 2019 at Llanbedr Airfield, UK. Successfully demonstrated safe flight with a deliberate ‘motor out’ – a critical
Slide 13: Evolved by Design
MULTICOPTER VECTORED THRUST Vertical VA-X1 Vertical VA-X2 Vertical VA-X4 2018 2019 2020 Rotors provide lift during vertical take-off and landing Rotors provide lift throughout flight Wing provides lift during efficient and fast cruise ü Proof of concept for scale electrified flight ü Optimized for h
Slide 14: VA-X4
VA-X4 CAPACITY RANGE TOP SPEED CO2 EMISSIONS CERTIFICATION OPERATING COST 5 People 100+ miles 200+ mph 0 EASA/CAA c.$1.06 per seat mile 1x Pilot up to an altitude of 5,000ft for a 25 mile journey 4x Passengers A N A L Y S T D A Y - S E P 2 0 2 1 Note: Aircraft statistics are expected figures based o
Slide 15: Over 120 Engineers with Extensive Experience
ENGINEERING LEADS CERTIFICATION AND SAFETY TECHNOLOGY AND DATA ERIC SAMSON TIM WILLIAMS PAUL HARPER TIM CRUNDWELL VIC TERRY JAMES MCMILLAN Head of Engineering Chief Engineer Head of Certification Senior Stress Engineer Head of Digital Systems Head of Data Management Design release approval on Releas
Slide 16: Key Technology Choices
VERTICAL CAPEX NEED FOR OWN / OWNERSHIP IS WORLD CLASS COMPONENT RATIONALE CERTIFICATION AND PARTNER STRATEGICALLY PARTNERS EXIST INDUSTRIALISATION IMPORTANT • eVTOLs have unique safety, power & energy needs. No partner solution available BATTERY SYSTEM • The battery system is commercially critical
Slide 17: Vertical Is Standing on the Shoulders of Giants
VERTICAL IS STANDING ON THE SHOULDERS OF GIANTS 1. BATTERY 2. ROTORS 3. AERODYNAMICS 4. SCALABILITY Targeting battery pack energy density of 8-rotor design provides the optimum total rotor area, In-house simulation validated with extensive testing Modular fuselage design, assembly and +220 Wh/kg usi
Slide 18: Proprietary Battery
1. EXISTING TECHNOLOGY PROVEN TRACK RECORD AEROSPACE EXCELLENCE PROPRIETARY Designed around cells already in commercial automotive application. Not reliant on future, Expert team of senior battery engineers have already developed two bespoke batteries designed specifically for Novel carbon composite
Slide 19: Revolutionary Rotor Design
LOW NOISE 2. HIGH PERFORMANCE HIGH EFFICIENCY REVOLUTIONARY High performance computing simulation and testing Adaptive pitch control and unique rotor stow Aerodynamic testing at both sub-scale and full scale single and multi-rotor maximizes performance capabilities enable rapid rotor design evolutio
Slide 20: Optimized Aerodynamics
3. HIGHLY STABLE EFFICIENT IN CRUISE CONFIDENCE IN DESIGN OPTIMIZED V-tail empennage provides optimum Maximized wingspan to achieve cruise State of the art computational fluid dynamics and aircraft stability in all flight phases with efficiency while still fitting onto existing simulation environmen
Slide 21: Modular Design
4. SCALABLE ARTCHITECTURE MODULAR DESIGN READILY UPGRADEABLE MODULAR Scalability of existing VA-X4 architecture Modular fuselage allows development of a Retro-fitting of upgraded batteries and minimizes certification process to add new family of eVTOL variants, allowing extension automation systems
Slide 22: In Summary
IN SUMMARY WORLD CLASS TEAM WITH SIGNIFICANT EXPERIENCE A DESIGN THAT CAN ADDRESS THE LARGEST MARKET WORLD CLASS PARTNER ECOSYSTEM A N A L Y S T D A Y - S E P 2 0 2 1 2 2
Slide 23: Certification Program
1. WHY VERTICAL? 2. KEY TECHNOLOGIES 3. CERTIFICATION PROGRAM 4. ORDERBOOK 5. BUSINESS MODEL A N A L Y S T D A Y - S E P 2 0 2 1 2 3
Slide 24: Outstanding Certification Team
PAUL HARPER ERIC SAMSON TIM WILLIAMS PAUL COTTON Chief Engineer Head of Independent Head of Certification Head of Engineering Systems Monitoring Chief Airworthiness Engineer for Design Release Approval on Release/Chief Engineer on Rolls- Royce Turbomeca RTM322 01/9, 3 decades of aerospace Airbus A38
Slide 25: Experienced in Build and Testing
DEMONSTRATED DEDICATED 50,000SQFT TEST TWO PREVIOUS FULL-SCALE ü Successful testing under Civil Aviation Approvals FACILITY AT COTSWOLD AIRPORT PROTOTYPES FLOWN ü Electric Powertrain and flight controls integration ü Deliberate motor out safe flight 2 5 EXPERIENCED IN BUILD AND TESTING A N A L Y S T
Slide 26: VA-X4 Prototype Aircraft Expected to Fly Q1 2022
Need to replace with Equipmake Picture WING IN MANUFACTURE ERGONOMICS FINALIZED FUSELAGE IN MANUFACTURE ELECTRIC POWERTRAIN TESTED ROTORS IN MANUFACTURE SIMULATOR FINALIZED BATTERIES IN FINAL TEST TESTING FLIGHT CONTROLS VA-X4 PROTOTYPE AIRCRAFT EXPECTED TO FLY Q1 2022 A N A L Y S T D A Y - S E P 2
Slide 27: Clear Roadmap to Certification
AIRCRAFT TECHNICAL CERTIFICATION MEANS OF DESIGN COMPLIANCE EASA GLOBAL CERTIFICATION ORGANIZATION FAMILIARIZATION BASIS COMPLIANCE DEMONSTRATION CERTIFICATION1 CERTIFICATION BASIS APPROVAL (DOA) Engagement around Define which Defined standards set Secure DOA Collection of how the VA-X4 requirements
Slide 28: Certification Milestones
TODAY VA-X1 VA-X2 VA-X4 VA-X4 VA-X4 Build 4 x Production Test Flight Test Flight Design Start Prototype Prototype cert aircraft Build Start First Flight BUILD MILESTONES Flight certification 50,000sqft Design tests begin Airport Test Freeze Facility DOA & TC ACTIVITY WITH CERTIFICATION MILESTONES CA
Slide 29: Working in Partnership with EASA
KEY EUROCAE WORKING GROUPS THAT ARE DEFINING eVTOL STANDARDS ELECTRICAL LIFT / THRUST SAFETY FLIGHT AVIONICS PARTICIPANTS FROM VERTICAL’S PARTNER ECOSYSTEM LIMHI SOMERVILLE DANIEL KENDRICK PAUL HARPER DR SOPHIE ROBINSON ALISTAIR WYATT Head of Battery Senior Certification Engineer Head of Certificati
Slide 30: EASA Certification Expected to Unlock Global Market
INTERNATIONAL PORTABILITY CERTAINTY OF TRANSFERABILITY HIGH GLOBAL SAFETY STANDARD ü Advanced economies are indicating they will likely align EASA certification de-risks business against possible with CAA, EASA and FAA requirements hike in standards given EASA certification is at such a high level E
Slide 31: In Summary
IN SUMMARY ALREADY ~4 YEARS INTO OUR CERTIFICATION JOURNEY SUCCESSFULLY FLOWN MULTIPLE FULL-SCALE PROTOTYPES ON TRACK FOR CERTIFICATION IN 2024 A N A L Y S T D A Y - S E P 2 0 2 1 3 1
Slide 32: Orderbook
1. WHY VERTICAL? 2. KEY TECHNOLOGIES 3. CERTIFICATION PROGRAM 4. ORDERBOOK 5. BUSINESS MODEL A N A L Y S T D A Y - S E P 2 0 2 1 3 2
Slide 33: Market Leading Pre-Order Book
PRE-ORDER BOOK (# AIRCRAFT)1 PRODUCTION TARGETS (# AIRCRAFT) PRODUCTION VOLUMES 2,000 INDICATIVE ALLOCATION OF 100 1,350 PRE-ORDERED AIRCRAFT 50 200 1,500 150 500 1,000 250 350 250 50 TOTAL 2024E 2025E 2026E 2027E 2028E MARKET LEADING - - Secured sizable pre-orders from some of the world’s largest p
Slide 34: Global Commercial Ecosystem
up to 150 aircraft up to 350 aircraft up to 100 aircraft up to 200 aircraft up to 250 aircraft 50 up to 500 aircraft up to aircraft 15 operating markets EASA CERTIFICATION STRATEGIC COOPERATION LOCAL MARKET UNLOCKS GLOBAL ON REGIONAL EXPERTISE AND DEMAND CERTIFICATION BRAND STRENGTH GLOBAL COMMERICI
Slide 35: Compelling Proposition
PROPOSITION TARGET CUSTOMERS Airlines Helicopters Tourism General Aviation Combined OEM aircraft sales and aftermarket services Launch partners with existing proven demand COMPELLING - - Strong proposition that offers compelling unit economics for our partners with recurring revenue streams for Vert
Slide 36: VA-X4 Is Designed and Tailored to Mission
2. INTER CITY AND POINT TO POINT 3. INTER ISLANDS & TOURISM (25 – 100 AIRPORT TRANSIT (25 – 50 MILES) ROUTES (60 – 100 MILES)2 MILES)2 TOP 50 CITIES BY - United States POPULATION AS OF 20181 - Rest of World VA-X4 IS DESIGNED AND - - Using feedback from our customers, the VA-X4 is tailored to the nee
Slide 37: VA-X4 Product Family
ADAPTABLE TO MULTIPLE APPLICATIONS MEDIVAC PASSENGER CARGO Medical emergency response version, enabling single patient Passenger transport vehicle tailored to mission. Different versions and Cargo version enabling point to hub, hub to point goods transportation transportation options EACH VARIANT TA
Slide 38: Commercial Partnership with American Airlines
215 MN PASSENGERS PER ANNUM1 6,800 FLIGHTS PER DAY1 365 DESTINATIONS1 10 AIRPORT HUBS1 COMMERCIAL PARTNERSHIP - - Vertical’s strategic airline partner for US operations American Airlines has pre-ordered, subject to certain conditions, up to 350 WITH AMERICAN AIRLINES Aircraft - Bring unrivaled US fo
Slide 39: New York
NEW YORK AIRPORTS – MANHATTAN – LEISURE Services to and from JFK representing an attractive market for first and JFK – business proposition extensions / feeders M A NH AT TAN VERTICAL 5 MINS As well as high frequency JFK – Manhattan shuttle services, there are 13 M IL ES several high GDP per capita
Slide 40: UK Joint Venture with Virgin Atlantic
5.9 MN PASSENGERS PER ANNUM (2019) 25 DESTINATIONS1 16 COUNTRIES2 UK JOINT VENTURE - - Vertical’s joint venture partner for UK operations Virgin Atlantic has a pre-order option for up to 150 Aircraft WITH VIRGIN ATLANTIC - Brings exceptional brand and history of innovation in flight A N A L Y S T D
Slide 41: London
LONDON CAMBRIDGE - LHR VERTICAL 22 M I N S 56 M IL ES HEATHROW HUB CATCHMENT AREA CAR/TAXI 1 H R 30 M I N S CAR/TAXI 2 H R S 10 M I N S There are 37 towns and cities with populations over 100,000 within 100 miles of Heathrow Airport These towns and cities represent a target population of 7.7m (exclu
Slide 42: Global Reach with Avolon
FLORIDA NEW YORK DUBLIN DUBAI HONG KONG SHANGHAI 837 GLOBAL HQ OWNED, MANAGED AND COMMITTED AIRCRAFT 1 $31BN TOTAL ASSETS 1 ONWARD LEASE Avolon has successfully onward leased up to 250 VA-X4 aircraft to 149 AIRLINE CUSTOMERS GOL, Brazil’s largest domestic GLOBALLY 1 airline 2 SÃO PAULO SINGAPORE GLO
Slide 43: Japan Joint Venture with Marubeni
JAPAN JOINT VENTURE - - Vertical and Marubeni to explore joint venture for Japan operations Marubeni has a pre-order option, subject to certain conditions, for up to 200 Aircraft WITH MARUBENI - Brings exceptional strength and depth with strong existing aerospace ecosystem - Expected to de-risk JCAB
Slide 44: Commercial Partnership with Bristow
240 15 $1.2BN COUNTRIES OF OPERATION1 AIRCRAFT FLEET1 REVENUE1 COMMERCIAL - - Vertical’s strategic partner for helicopter operations Bristow has pre-ordered up to 50 aircraft, subject to certain conditions PARTNERSHIP WITH - One of the world’s leading helicopter operators with decades of VTOL experi
Slide 45: Commercial Partnership with Iberojet
250 23 3.7BN HOTELS1 COUNTRIES1 REVENUE1 COMMERCIAL - - Iberojet has pre-ordered up to 100 aircraft, subject to certain conditions Iberojet operates flights within Spain (including the Balearics and the Canary PARTNERSHIP WITH Islands) as well in the Caribbean and Mexico - Iberojet is part of Avoris
Slide 46: In Summary
IN SUMMARY SCALE OF PRE-ORDERS VALIDATES PRODUCT & BUSINESS MODEL GLOBAL DEMAND CONFIRMS THE RIGHT APPROACH TO CERTIFICATION OUR PARTNER ECOSYSTEM GIVES CONFIDENCE IN OUR GO TO MARKET A N A L Y S T D A Y - S E P 2 0 2 1 4 6
Slide 47: Business Model
1. WHY VERTICAL? 2. KEY TECHNOLOGIES 3. CERTIFICATION PROGRAM 4. ORDERBOOK 5. BUSINESS MODEL A N A L Y S T D A Y - S E P 2 0 2 1 4 7
Slide 48: Three Phase Development & Commercialization Plan
PHASE I: VA-X4 DESIGN & CERTIFICATION PHASE II: STATE OF THE ART ASSEMBLY PHASE III: COMMERCIAL PLATFORM & PROGRAM (2021–2024) FACILITY (2023–2024) ORGANIZATION (2023–2024) - Continue development of proprietary technology and further - Highly automated production processes leveraging latest - R&D to
Slide 49: Capital Requirements Through Commercialization ($M)
Net funding requirement of $223m Certified aircraft and 1,500+ unit production facility Phase I: VA-X4 Design & Certification Program (2021–2024) Phases II State of the Art Assembly Facility (2023–2024) 479 (256) Phase III Commercial Platform & Organization (2023–2024) 45 108 Available Cash 27 75 13
Slide 50: Strong Visibility on Costs
UNIT COST BREAKDOWN1 VERTICAL AEROSPACE COSTS – LONG TERM BREAKDOWN $mm GROSS PROFITS STRUCTURES (31%) Costs of Goods Sold 4,509 Operating Expenses 453 3,352 346 SYSTEMS (44%) 2,210 264 4,056 PRODUCTION 3,006 COSTS AVIONICS (19%) 1,946 661 183 201 478 109 ASSEMBLY AND 92 DELIVERY (3%) 2024E 2025E 20
Slide 51: Exceeding $1bn EBITDA by 2026
GLOBAL VA-X4 PRODUCTION VOLUME TARGET VERTICAL AEROSPACE ADJUSTED EBITDA1 – LONG TERM TARGET Number of aircraft $mm 2,761 Volume already sold under conditional pre-order = 1,350 2,072 Significant certainty on costs through strategic partnerships with Vertical’s 1,357 top-tier supply chain 2,000 1,50
Slide 52: Attractive Valuation
SUCCESSFULLY FLOWN FULL SCALE PROTOTYPES1 PRE-ORDER BOOK (NUMBER OF AIRCRAFT)1 1,350 220 250 GROSS FUNDING REQUIREMENTS ($MN)2 ENTERPRISE VALUE ($BN)3 2,320 3.6 2.4 1,210 1,160 1.8 2.0 479 ATTRACTIVE VALUATION A N A L Y S T D A Y - S E P 2 0 2 1 1. Peer investor presentations, press releases. Vertic
Slide 53: Analyst Presentation
53 ANALYST PRESENTATION WHY CERTIFICATION MARKET LEADING ASSET-LIGHT ATTRACTIVE VERTICAL? CONFIDENCE PRE-ORDER BOOK AND SCALEABLE VALUATION A N A L Y S T D A Y - S E P 2 0 2 1 5 3
Slide 54: Thank You
ar — VERTICAL THANK YOU