Eve Holding, Inc.

Good morning and welcome to the EVE Air Mobility first quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the conference over to Lucio Aldworth, Head of Investor Relations. Please go ahead and begin.

Thank you, Operator. Good morning, everyone. This is Lucio Aldworth, the Director of Investor Relations at EAD. And I wanted to welcome everyone to our first quarter 2024 earnings conference call. Our CEO, Johan Bordet, and CFO Eduardo Bacol, who are joining me on the call today, And after the prepared remarks, we will open the call for questions, at which point, Luis Valentin, our Chief Technology Officer, will also join us for more technical questions. We prepared the deck with a few slides and additional pictures that show our achievements in the quarter, as well as the assembly of a full-scale prototype, and that's on our website at ir.easairmobility.com. So please feel free to download it and tag along. Let me first start the presentation by saying that it includes forward-looking statements or statements about events or circumstances that have not yet occurred. These are largely based on our current expectations and projections about future events and financial trends affecting our business and our future financial performance. These statements are subject to risks, uncertainty, and assumptions, including, among other things, general economic, political, and business conditions, both in Brazil and in our market. There was belief, may, will, estimates, continuous, anticipates, intends, expects, and similar words are intended to identify forward-looking statements. When they take no obligation to update publicly or revise any forward-looking statements because of new information, future events, or other factors. With that, the future events and circumstances discussed in this presentation may not occur, and actual results could differ substantially from those anticipated in our forward-looking statements. With that, I will now turn the presentation over to our CEO, Johan.

Thanks, Lucio. Good morning, everyone, and thank you for joining the call today. We had a successful start of 2024 with several important achievements. the most important one being the quick-paced advancement in the assembly of our full-scale prototype. We're right on schedule and expect to conclude it in the second quarter. As you will see the next blue slide, we already installed the pylons and nacelles to house the electric motors and started to install the composite skin of the aircraft. We are also preparing for another round of wind tunnel tests with the rotors on. This will start in a week and will roughly last This will be used to validate and further refine our computer models before our ground test campaign starts in the second semester. In parallel, we continue to down select suppliers and sign binding contracts. These define technical specification for the component and commercial aspect with volumes and unit prices and also the aftermarket support conditions. Just last month, we selected CHI, the Korean Aerospace Industries, and before that, we have selected ACITORY for the wings and also CRUISE for the pilot control or the joystick. We now have more than 90% of all suppliers selected, and we're working to define suppliers for the high-voltage system converter, skids, cabin interior, doors, lighting, transparencies, and other add options, like the landing gear, for example. Lastly, we presented Vector, our urban air traffic management software, at the Airspace World in Geneva with full demonstration of its capabilities. This is a strategically important tool to help scale the urban air mobility swiftly. Up on the next slide, it shows the stage of the assembly of our prototype. As you can see, it's already looking like an EV fill with typical structures of an aircraft. Now, the wing and the engine are fully joined to the fuselage, what we internally call the marriage, and they both have their internal harness installed. These are complex electronic and electric cable systems to carry signals to and from the many sensors in the wings, control surfaces, and flight computer. Also, the internal superstructure already has its electronic components and internal cabling as well. One interesting fact is that, as you can see in the slide three, we temporarily placed the many composite parts of the skin of the prototype with the tape. This allows our engineers to make any adjustment they want to do to make it perfect, the placing of the parts. And once the parts are aligned, we have a perfect fit and then they're installed permanently. Now, moving to the next couple of slides, these have a few pictures that shows in better detail some of the structures of our eVTOLs, such as the starboard side wing and the pylons and also the nacelle. The pylons are the structure that will support the lifters and are connected to the booms and wings. So in the essence, they will support the weight of the entire aircraft during the takeoff and landing. This is when the thrust from the lifter will allow to vertical flight. As you can imagine, the pylons have to be robust, lightweight, and flexible. And as mentioned before, we engaged CHI to provide the pylons for our commercial aircraft. Each pylon will have an electric motor at the front and one in the rear, and these will be housed by the nacelles. Those are the green structures that you can see on those pictures. Now, slide five, it shows that we've already installed the composite skin of the cockpit, which gives the glimpse and how is the final shape and how good the eVTOL will look. I'm a big fan. Also, looking at the engineers that you can see on both pictures, it helps you to put them into perspective and give you a good sense of the size of the eVTOL. We now still need to install the actuators, the control surfaces of the wing and the ambonage, and we expect to conclude in the next few weeks. And once we receive the electric motors in the second semester, and successfully perform the necessary ground tests, we plan to start the test-like campaign later this year. Now, getting to slide six, we can see here the latest addition to our component supplier list, which will start using the first five confirming prototypes. So far in 2024, we announced several suppliers, FATC to provide the control surface and antennas, Afituri for the wings, Cruiser for the pilot control interceptor or the joystick, if you will. We also have signed the TALIS for sensors and Honeywell for guidance and navigation. And lastly, Recaro for the seats. And just recently, we added Kai for the pilot to this list. Our supplier team has been quite busy, as you can see, remembering that we announced the first three suppliers at the Paris Airshow last year. And now we have more than 15 suppliers selected. We have been using the best of breed approach to bring suppliers with experience in aviation and certification. Importantly, they will also support us for the certification campaign and throughout the eVTOL lifecycle. Lastly, these contracts have a defined price and quantity schedule with a scale function with reduction of the unit price as we reach the higher eVTOL volume of production. Commonly, we call it economy scale. We still have a few suppliers to select, But these are not the critical ones, right? Like the skids or the landing gear, transparency, cabin interiors, and lights. And we expect to conclude this selection process very soon. Looking at this list, which will keep increasing, I am very confident of the level of safety for the certification and performance of our eVTOL. Slide seven shows Vector, our urban air traffic management software. On top of the naming of the product, we were part of the integrated demonstration in a NATS booth at the Airspace World in Geneva earlier this year. With NATS being a Tier 1 ANSP, we showcased our work in the urban air traffic management to a global audience. As a reminder, we successfully conducted a five-day exercise in the UK to test Vector with our partner, FlightJet and Helo. This was used to validate and refine the software in the real-world setting, and we tested it under normal conditions and operation, but also under different conditions, such as delays, the bad weather, in-flight emergencies, and other potential unplanned operations. Vector will be an innovative software to support fleet management and control of the airspace that we believe will help to scale the urban air mobility safely and globally. On the slide 8, it shows the latest addition to our backlog. We signed an LOI and letter of intent with AirX for the complete package. AirX is the largest public helicopter air charter service in Japan, and we will be collaborating with them to scale up the UEM there. Not only they are willing to purchase 50 of our eVTOL, but they are also subscribing to the services and operating support businesses along with a vector to manage their fleet. On the slide nine, this brings us to the total backlog to 2,900 aircraft, and these are non-binding letter of intent for 30 different customers spread over 13 countries and different businesses from the mainline to regional airline to helicopter operators, ride-sharing platform, and leasing companies. We also have LOIs for Vector from 16 different customers and believe this reflects the market-leading value proposition that we bring to our customers. Importantly, the value of our backlog is now estimated at $14.5 billion, which is based on the lift price of our EV toll. We previously used a reference price to estimate the value of our backlog, and using a lift price is common practice in aviation and takes into account the different internal and external factors to define the standardized price practice in the sector. We will not disclose the aircraft price of each transaction, and we will use the list price as a reference for the future transaction balance. Beyond that, we are developing a strong network of partners in areas such as infrastructure and energy to address one of the many challenges ahead of urban air mobility, which is to create a whole new ecosystem besides simply developing an aircraft. And because aircraft don't fly without proper maintenance and support, we are highly focused on providing the best-in-class services to EV tolls operators. We have also secured contracts with 12 different customers for maintenance, repair, and overhaul, what we commonly call MRO. That will bring up to the $935 million in revenue to EV over the 5 to 10 years period. Importantly, these customers have placed LOIs for roughly 1,000 of our aircraft, which is about 35% of the order book, so we can potentially expand this business within our own customer base, just like We did in the past quarter with two new service contracts. Now, I'd like to invite the CFO, Edu, to go over the financial and along with the milestone checklist.