Velocity Composites PLCLSE: VEL

Investor Presentation June 2022

· Issued by Velocity Composites PLC

Key figures

  • Revenue increase of +32% at £5.9m (H1 FY21: £4.4m) as sales recover and customer demand stabilises
  • Gross margin 23.5% (H1 FY21: 25.1%) some contractual margin squeeze and shorter term labour inefficiencies held to support recovery
  • Single aisle production down ~25% and also impacted by B737Max issue from 2019
  • Twin aisle (composite focussed) production down ~50%

On 6ix: 6ix.com/news/velocity-composites-investor-presentation-june-2022

Investor Presentation

Half Year Results

For the 6 months ended 30.04.22

H1 FY22 Highlights

  • Increasingly strong new business pipeline, particularly North America
  • Recovery in core contracted business
  • Investment in resource and people through period to support new customer growth and technology development
  • Implementation of operational technology and improved production rates to drive efficiencies in H2 and beyond
  • Roll out of new "Digital Manufacturing Cell" to underpin margin realisation
  • Initial wins in non-aerospace business - validate business model transfer
  • Robust cash and liquidity

2022 JUNE - Plc Composites Velocity ©

2

Financial Summary

  • Revenue increase of +32% at £5.9m
    (H1 FY21: £4.4m) as sales recover and customer demand stabilises
  • Gross margin 23.5% (H1 FY21: 25.1%) some contractual margin squeeze and shorter term labour inefficiencies held to support recovery
  • Loss before tax improvement +£0.4m to £0.7m (H1 FY21: loss £1.1m) and +£0.4m EBITDA loss improvement to £0.2m (H1 FY21: loss £0.6m), supported by sales improvement and lower Administrative overheads
  • Cash at Bank £2.0m (H1 2021: £3.5m) and £2.5m undrawn IDF headroom, movement driven by working capital investment to support sales recovery. Partly due to timing on customer receivables, with position higher at £2.7m at 24 June
  • Outlook - currently in line with expectations

© Velocity Composites Plc - JUNE 2022

3

Market Outlook

Air Travel Recovering

  • Air travel impacted by Covid-19 but now recovering, albeit slower in Asia due to Omicron restrictions
  • Single aisle (A320/B737) will recover faster than twin aisle travel (A350/
    B787)
  • Knock on effect on airline fleet renewal and aircraft build rates, particularly with high oil price
  • Composite heavy platforms mainly twin aisle, but sustainability means all new platforms will be composite

2022 JUNE - Plc Composites Velocity ©

4

Market Outlook - Aircraft Deliveries

2022 JUNE - Plc Composites Velocity ©

YTD figures as at 29.06.22. Source: https://en.wikipedia.org/wiki/Competition_between_Airbus_and_Boeing

  • Single aisle production down ~25% and also impacted by B737Max issue from 2019
  • Twin aisle (composite focussed) production down ~50%
  • Recovery continuing through 2023 and 2024

5

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