Velocity Composites : Investor Presentation October 2023

Investor Presentation

October 2023

Velocity Disclaimer

IMPORTANT NOTICE

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This document and its contents (including any oral information, question and answer session and any other document or materials distributed or disclosed in connection with this document) (the "Presentation") has not been approved by an authorised person within the meaning of the United Kingdom's Financial Services and Markets Act 2000 (the "FSMA"). Reliance upon the Presentation for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. If any person is in doubt as to the contents of the Presentation, they should seek independent advice from a person who is authorised for the purposes of the FSMA and who specialises in advising in investments.

This Presentation, has been prepared by the directors of Velocity Composites plc (the "Company") in connection with a proposed conditional placing through the issue of new ordinary shares in the capital of the Company (the "Placing"), and contains confidential information regarding the Company, its business and operations and members of its group ("Group"). It is provided for the exclusive use of the persons provided with the Presentation and this Presentation and the information disclosed in it and/or any further confidential information made available to any recipient, either verbally or in writing, must be held in complete confidence and without prejudice to the aforesaid, such information and documents containing such information may not be reproduced, used or in any way disclosed without the prior written consent of the Company. The recipient has further agreed to return all documents and other material held by it relating to the Presentation upon request.

The Presentation is being made available to the recipients thereof for the purpose of providing information and is not intended to form the basis of any investment activity or decision, and should not be considered as a recommendation by the Company that any recipient should acquire any interest in the share capital or any other interest in the Company. It does not constitute or form part of and should not be relied upon in connection with any offer, invitation or recommendation to sell or issue, or a solicitation of an offer invitation or recommendation to purchase or subscribe for, any securities or other interest in the Company or any related entity and no legal relations shall be created by its issue. The Presentation shall not form the basis of any prospectus, contract or commitment whatsoever and should not be relied upon in relation to any prospectus, contract

or commitment. is being made available to the recipients thereof for the purpose of providing information and is not intended to form the basis of any investment activity or decision, and should not be considered as a recommendation by the Company that any recipient should acquire any interest in the share capital or any other interest in the Company. It does not constitute or form part of and should not be relied upon in connection with any offer, invitation or recommendation to sell or issue, or a solicitation of an offer invitation or recommendation to purchase or subscribe for, any securities or other interest in the Company or any related entity and no legal relations shall be created by its issue. The Presentation shall not form the basis of any prospectus, contract or commitment whatsoever and should not be relied upon in relation to any prospectus, contract or commitment.

The Presentation is only being made, supplied or directed at (a) persons in a member state of the European Economic Area (the "EEA") who are "qualified investors" (within the meaning of the Prospectus Regulation (Regulation (EU) 2017/1129), as amended (the "Prospectus Regulation")) ("Qualified Investors") and (b) persons in the United Kingdom who are "qualified investors" within the meaning of the Prospectus Regulation as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented (including by the UK Prospectus Amendment Regulations 2019 and the Financial Services and Markets Act 2000 (Prospectus)

Regulations 2019) (the "EUWA") who also: (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 ("Order") (investment professionals), (ii) fall within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations etc.) or (iii) those persons to whom it may otherwise be lawfully communicated (each such persons referred to in (b) being a "Relevant Person"). The Presentation is distributed only to and directed at (a) in the United Kingdom, by persons who are Relevant Persons and (b) in any member state of the EEA, by persons who are Qualified Investors and persons who do not fall within any of these definitions should not rely on the Presentation nor take any action upon it, but should return it immediately to the Company.

To the extent permitted by law or regulation, no undertaking, representation or warranty or other assurance, express or implied, is made or given by or on behalf of the Company or any of its parent or subsidiary undertakings or the subsidiary undertakings of any such parent undertaking, or any of its directors, officers, partners, employees, agents, affiliates, representatives or advisors, or any other person, as to the accuracy, completeness or fairness of the information or opinions contained in the Presentation. Save in the case of fraud, no responsibility or liability is accepted by any person for any errors, omissions or inaccuracies in such information or opinions or for any loss, cost or damage suffered or incurred, however arising, directly or indirectly, from any use of, as a result of the reliance on, or otherwise in connection with, the Presentation. In addition, no duty of care or otherwise is owed by any such person to recipients of the Presentation or any other person in relation to the Presentation.

The Presentation includes "forward-looking statements". All statements other than statements of historical facts in this Presentation, including, without limitation, those regarding the future financial position, objectives, development and strategies of management for future operations of the Company and/or the Group are forward-looking statements. The Company uses the words "anticipates", "estimates", "expects", "believes", "intends", "plans", "may", "will", "should" and any similar expressions to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the Company's control, which may cause the Company's and/or the Group's actual results, performances or achievements of its results, or industry results, to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's and/or the Group's present and future business strategies and the environment in which the Company and/or the Group will operate in the future. As a result of the risks, uncertainties and assumptions the recipients should not place reliance on the forward-looking statements. Whilst all reasonable care has been taken to ensure that the facts stated in the Presentation are accurate, the forecasts, opinions and expectations contained in the Presentation have not been independently verified and accordingly none of Cenkos Securities Plc ("Cenkos") or any of its parent or subsidiary undertakings, or the subsidiary undertakings of any such parent undertakings, or any of such person's directors, officers, partners, employees, agents or advisers, or any other person make any representation or warranty, express or implied, as to future performance or the contents, verification, accuracy or completeness of the Presentation and accordingly disclaim, to the fullest extent permitted by applicable law, any and all liability whether arising in tort, contract or otherwise which they might otherwise be found to have in respect

of the Information. No reliance may be placed for any purpose whatsoever on, the accuracy, completeness or fairness of the information or opinions contained in the Presentation and no responsibility or liability is assumed by any such persons for any such information or opinions or for any errors or omissions.

Cenkos, which is authorised and regulated by the Financial Conduct Authority (the "FCA") in the United Kingdom, is acting as nominated adviser to the Company, and broker in respect of the Placing to and advising the Company and no one else (whether or not a recipient of this Presentation) in connection with the Placing and will not be responsible to anyone, other than the

Company, for providing the protections afforded to customers of Cenkos, nor for providing advice in relation to the Placing or any transaction, matter or arrangement referred to in the Presentation. Cenkos' responsibilities as the Company's Nominated Adviser under the AIM Rules for Companies and the AIM Rules for Nominated Advisers will be owed solely to London Stock Exchange plc and not to the Company, to any of its directors or any other person in respect of a decision to subscribe for or acquire any shares.

The Presentation does not constitute or form part of an offer or invitation to issue or sell, or the solicitation of an offer to subscribe or purchase, any securities to any person in any jurisdiction to whom or in which such offer or solicitation is unlawful, and, in particular, is not for distribution in or into Australia, Canada, Japan, the Republic of South Africa or the United States. The Company has not registered and does not intend to register any shares the subject of the Placing under the US Securities Act of 1933 or under any securities laws of any state or other jurisdiction of the United States and, subject to certain exceptions, such shares will not be offered, sold, resold, taken up, exercised, renounced, transferred or delivered, directly or indirectly, in or into the United States. The relevant clearances have not been, and will not be, obtained from the Securities Commission of any provision or territory of Canada; no document in relation to the Placing has been, or will be, lodged with, or registered by, the Australian Securities and Investments Commission; no registration statement has been, or will be, filed with the Japanese Ministry of Finance in relation to the Placing; and the relevant clearances have not been, and will not be, obtained from the South African Reserve Bank and any other applicable body in the Republic of South Africa in relation

to such shares. Accordingly, such shares will not, directly or indirectly, be offered or sold within the United States Canada, Australia, Japan, the Republic of South Africa or offered or sold to any resident, national or citizen of the United States, Canada, Australia, Japan or the Republic of South Africa.

Cenkos has not authorised the Presentation for any purpose and, without limiting the statutory rights of any person to whom the Presentation is issued, will not be offering advice and will not be responsible for providing customer protections to any other person (whether or not recipients of this Information) in respect of any acquisition of shares, the Placing or any other matter referred to in the Presentation. No person viewing these materials shall be deemed a customer of any of the foregoing parties for any purpose.

By accepting a copy of this Presentation, each recipient agrees to be bound by the foregoing limitations and conditions and, in particular, will be taken to have irrevocably represented, warranted and undertaken that: (i) it has read and agrees to comply with the contents of this disclaimer including, without limitation the obligation to keep the Information confidential; (ii) it acknowledges that the Presentation has not been verified and is therefore subject to change without notice; (iii) it will not rely on the Presentation for the purposes of any involvement in the Company; and (iv) it will not at any time have any discussion, correspondence or contact concerning the Presentation with any of the directors or employees of the Company, the Group, nor with any of the Company's or the Group's suppliers, or any governmental or regulatory body without the prior written consent of the Company.

In addition, each recipient acknowledges that: (i) the contents of the Information include inside information relating directly or indirectly to the Company, the Group and relating to the Placing for the purposes of the Criminal Justice Act 1993 and Article 7 of the Market Abuse Regulation (EU) 596/2014 (as it forms part of UK law by virtue of the EUWA); (ii) it will take the necessary measures to ensure that every person in its organisation acknowledges his/her legal and regulatory duties in relation to the receipt of inside information and is aware of the restrictions relating thereto (including restrictions on (a) dealing in (or encouraging any other person to deal in) the Company's shares whilst in receipt of inside information), (b) using inside information and (c) disclosing, misusing or circulating the relevant inside information; and (iii) it is a person to whom the Information may be lawfully communicated in accordance with the restrictions set out in this disclaimer.

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Investment Case

		•	OUR SOLUTIONS ARE NECESSARY TO THE
			AEROSPACE INDUSTRY If the aerospace industry
			is to meet its projections it needs our solutions to
			reduce costs and accelerate production rates
		•	REVENUE INCREASES 2.5x to 3.0x BY 2024
			Industry players are coming to us. Contracted
			revenue for 2024 of £30m - £36m (2022: £12m;
			Analyst forecast 2023: £16m)
•	FIRST TO MARKET We are the only company to	•	5 YEAR REVENUE TARGET OF £100M WITH
	10% EBITDA Highly qualified pipeline of £250m.
	provide a complete outsourced solution to composite		Funds raised to enable capacity of £70m. Further
	aerostructure manufacturers.		scaling up to be funded through future cash
•	HUGE MARKET GROWTH Aerospace industry		generation. 25% return on capital.
•	ESTABLISHED BUSINESS WITH EXPERIENCED
	currently spends $6.5bn per annum on composite
	materials. Projected tenfold increase of composites		BOARD Business operating for over ten years.
	within aircraft by 2041 to meet net zero.		Industry experience of board of 120+ years.

©©VelocityVelocityCompositesCompositesPlc -Plc -20232023

3

Experienced Board

Andy Beaden	Jon Bridges		Andrew Hebb
Non-Executive Chairman	Chief Executive Officer		Interim Finance Director
Andy has over 30	Jon has 31 years'		Andrew was CFO and
years experience in	experience within the		Company Secretary
finance, technology and	advanced composites		between November 2018
manufacturing. He is a	industry and is an		and August 2020.
Chartered Accountant,	experienced composite		Andrew has been a
and worked at	engineer. Jon is a founder
Executive Board level	of Velocity and known for		professional interim CFO
for 20 years in a series	his extensive knowledge		for several AIM quoted
around composite		and private companies
of advanced material
process technologies.		across a range of sectors
technology businesses,
		since 2009.
both listed and privately
owned.

© Velocity Composites Plc - 2023

Annette Rothwell			David Bailey
Non-Executive Director			Non-Executive Director
Annette has extensive		David has contributed
experience in		to the strategic direction
industries undergoing		of the UK's aerospace
transformational change.		industry and cross-
Since 2011, she has		sector composites sector
served as a director on		as a Board member
the board of the Midlands		of the Aerospace
Aerospace Alliance, the		Growth Partnership and
regional body for the		Composites Leadership
Aerospace, Defence and		Forum. He has a PHD in
Security industry. She 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.	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
• Material has a shelf life until cured

© Velocity Composites Plc - 2023

COMPOSITE USE IN AIRCRAFT

COMPOSITES

50%

5

Composite Content per Aircraft

60%

50%

B787

A350

Wide Body Aircraft Narrow Body Aircraft

© Velocity Composites

Composite Composition

40%

30%

20%

10%

B747		A320	A330
		A310	B777
A300	B767
	B737-300MD-11
MD-80

C Series

MC-21

B777x

A380

(Relative size determined

by maximum take off weight)

Plc - 2023

1970

1980

1990

2000

2010

2020

© Velocity Composites Plc - 2023

6

Sustainability Driving Growth

• Composites play an important role in light weighting all new aircraft platforms, civil and defence

• The aerospace sector has a clear strategy to achieve net zero by 2050 and demand for composites will grow as older platforms are retired for new generation aircraft

• Velocity customers need to do more-for-less to meet the production rate increases of aircraft. Outsourcing is easier when aircraft production rates are increasing

New Generation Aircraft = 25% lower carbon footprint *

service*in	50,000									represent >95% of the fleet
	45,000					History	Outlook			By 2041, new generation
	40,000									passenger aircraft will
aircraft	35,000									10 x growth in new
30,000
passenger	25,000									generation aircraft
	20,000				13%					>95%
No of	15,000					20%
10,000
	5,000
	2000	2005	2010	2015	2019	2021	2026	2031	2036	2041

1st** (e.g. 727) + 2nd** (e.g. MD80) + previous generation** (e.g. A320ceo) aircraft

NEW GENERATION** AIRCRAFT

	CURRENT VELOCITY	POTENTIAL
	PROGRAMMES	PROGRAMMES
AIRBUS	A220, A320NEO,	Any future
	A330NEO, A350	programmes
BOEING	737MAX, 787	777X plus any
		future programmes

Source: Airbus, Global Market Forecast (www.airbus.com/sites/g/files/jlcbta136/files/2022-07/GMF-Presentation-2022-2041.pdf)

7

© Velocity Composites Plc - 2023

The Velocity Solution

Raw Material

Structural Product

Vacuum Bag Product

Finished Part (1m diameter)

Aimed at providing at least 10% material cost saving and 20% time cost saving to customers	8

EXPECTED STOCK

ACTUAL STOCK

MATERIALSUPPLIER

CUSTOMER

D

IBP

MATERIAL D

RAW MATERIAL

D

FREEZER

VC DEMAND

MONTHLY

12 to 34

ERP

DEMAND PLANNING

(KIT/Part level)

DEMAND

ORDER BOOK

Weeks

MANAGEMENT

REVIEW

(WITH RFID)

RAW MATERIAL

2 to 12 Weeks

P.O. COVER

PLANNED

STOCK NEEDED

Vs ACTUAL

STOCK

UNUSED RAW MATERIAL STOCK

PRODUCTION

MEC

LEC

DEFROST

PRODUCTION

D

DIGITAL CELL

D

PRODUCTION

(KIT MANUFACTURE)

SCHEDULING

PLAN & NESTS

Cof C /

FREEZER

DEFROST

MASTER KITS

CUSTOMER

DELIVERY NOTE

KIT LOGISTICS

CLEAN ROOM

D

DASHBOARD

Velocity Technology

9

Where Velocity sits in the Global Composites Industry

Global Material Suppliers / Distributors

Global Primes / Tier 1 Manufacturers

VELOCITY TOTAL KIT PROVISION

• Inventory Finance
• Inventory Management
• Demand Aggregation
• Goods In
• Quality Inspection
• Kit Manufacturing
• Warehousing
• Goods Out / Transportation
• Subcon Integration
• On Site Support

Flow Down Material Pricing

• Velocity has first mover advantage and is the only company to provide an end-to-end solution for manufacturers.
• Our biggest competitor is the customer trying to do the work themselves

© Velocity Composites Plc - 2023	10