Slide 1: Investor Presentation
Filed by Social Capital Hedosophia Holdings Corp. Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934 Subject Company: Virgin Galactic Commission File No. 333-233098 Investor Presentation 5P[[! (Filed by Social Capital
Slide 2: Disclaimer and forward-looking statements
This investor presentation (this “presentation”) is for informational purposes only. This presentation has been prepared on a confidential basis for the exclusive use of the party to whom SCH and Virgin Galactic (as defined herein) delivers this presentation (such party, together with its subsidiari
Slide 3: Introduction to Virgin Galactic
Introduction to Virgin Galactic Introduction to Virgin Galactic
Slide 4: December 13, 2018 first commercial space vehicle to put humans into space
December 13, 2018 First commercial space vehicle to put humans into space First crewed space launch from US soil since 2011 3 December 13, 2018 First commercial space vehicle to put humans into space First crewed space launch from US soil since 2011 3
Slide 5: February 22, 2019 first non-pilot crew member flown
To check February 22, 2019 First non-pilot crew member flown on a commercial space vehicle First non-pilot crew member flown at Mach 3+ First non-pilot crew member to unstrap and float freely in space on a commercial space vehicle 4 To check February 22, 2019 First non-pilot crew member flown on a c
Slide 6: First Astronaut Wings Awarded for a Space Flight Built for Commercial Service
First Astronaut Wings Awarded for a Space Flight Built for Commercial Service First astronaut wings awarded for a space vehicle built for commercial service 5 February 7, 2019 First astronaut wings awarded for a space flight built for commercial service First Astronaut Wings Awarded for a Space Flig
Slide 7: May 10, 2019 move-in at Spaceport America
May 10, 2019 Move-in initiated for world’s first purpose-built commercial spaceport, Spaceport America 6May 10, 2019 Move-in initiated for world’s first purpose-built commercial spaceport, Spaceport America 6
Slide 8: August 15, 2019 reveal of Spaceport America interiors
August 15, 2019 Reveal of Spaceport America interiors 7August 15, 2019 Reveal of Spaceport America interiors 7
Slide 9: VSS Unity
VSS Unity The world’s first private, crewed spaceship designed for commercial service to take humans to space 8VSS Unity The world’s first private, crewed spaceship designed for commercial service to take humans to space 8
Slide 10: VMS Eve
VMS Eve The world’s largest all-composite aircraft in service 9VMS Eve The world’s largest all-composite aircraft in service 9
Slide 11: Growth in Addressable Market ($10M+ Net Worth Individuals)
Growth in Addressable Market ($10M+ Net Worth Individuals) 2,378 1,781 Our 600+ Customers 2018A 2023E 6.0% CAGR 10Growth in Addressable Market ($10M+ Net Worth Individuals) 2,378 1,781 Our 600+ Customers 2018A 2023E 6.0% CAGR 10
Slide 12: Virgin Galactic's Once-in-a-Lifetime Spaceflight
Virgin Galactic’s Once-in-a-Lifetime Spaceflight Apogee Re-entry with folded tailbooms Passengers experience 60 second rocket weightlessness burn, accelerating to Mach 3 VSS Unity and Unpowered glide VMS Eve separate at to landing ~45,000 feet SPACEPORT AMERICA, NEW MEXICO Note: Not to scale. 11Virg
Slide 13: Virgin Galactic's History
Virgin Galactic’s History 2018 2020 2004 2005 2010 Virgin Galactic’s first Expected launch of commercial SpaceShipOne wins the Announcement of VG’s George Whitesides joins space flight human spaceflight operations X Prize manufacturing entity VG from NASA 2004 2008-2009 2016 2019 Virgin Galactic fou
Slide 14: Virgin Galactic Today
Virgin Galactic Today The Spaceline The OEM § WhiteKnightTwo (“WK2”) and SpaceShipTwo (“SS2”) operator § Vertically integrated, end-to-end aerospace manufacturer § Designs and manages the customer travel experience § Design, manufacturing and production capabilities § Headquarters: Spaceport America
Slide 15: World-Class Executive Team
World-Class Executive Team George Whitesides CEO, Virgin Galactic 20 Years of Experience Jon Campagna Mike Moses Enrico Palermo Stephen Attenborough CFO President, TSC Commercial Director President, Virgin Galactic 23 Years of Experience 24 Years of Experience 17 Years of Experience 30 Years of Expe
Slide 16: Industry-Leading Flight Team
Industry-Leading Flight Team Michael “Sooch” Beth Moses Dave Mackay Mark “Forger” Stucky Frederic “CJ” Sturckow Kelly Latimer Nicola Pecile Masucci Chief Astronaut Chief Pilot Director of Flight Test Pilot, SS2 & WK2 Pilot, SS2 & WK2 Pilot, SS2 & WK2 Pilot, SS2 & WK2 Instructor 42 Years of Experienc
Slide 17: Limited Competition and Strong Barriers to Entry
Limited Competition and Strong Barriers to Entry Operational Milestones Years in Customer Flight Takeoff / Flight Business Experience Experience Landing Crew FAA License? Flight Test? Flown Passenger? Driven by Virgin Up to 90- DNA minute Horizontal journey takeoff 3-day pre-flight 15 years 2 pilots
Slide 18: Near-Term Growth Strategy: Phase I
Virgin Galactic’s Near-Term Growth Strategy: Phase I Planned Fleet Expansion Research Payloads Additional Spaceports Five SS2s by end of 2023 Micro-gravity and suborbital space conditions research Discussions with at Spaceport America governments underway Representative Customers in Italy, UAE and A
Slide 19: TAM Expansion Through Democratization and Efficiencies of Scale: Phase II
TAM Expansion Through Democratization and Efficiencies of Scale: Phase II (1) Lower Prices Open the Market to More Individuals Levers to Reduce VG’s Cost Profile Estimated # of individuals 37,087,950 Economies of Scale Manufacturing Efficiencies Labor Efficiencies 3,286,000 1,781,000 Advances in Tec
Slide 20: Hypersonic Point-to-Point Travel: Phase III
Looks weird when aligned Hypersonic Point-to-Point Travel: Phase III Could we do a map with US in the middle and more gentle curved red lines from NY to Australia, London and Dubai? The current red line, is a bit steep. New York-London Los Angeles <-> Tokyo (hours) Los Angeles-Tokyo (1) 1 hour (1) 2
Slide 21: Potential Future Applications of VG's Technology and Capabilities
Move to development Potential Future Applications of VG’s Technology and Capabilities Third Party WK2 Sales Hypersonic Testbed Electric Air Mobility High Altitude Persistent Platforms 20Move to development Potential Future Applications of VG’s Technology and Capabilities Third Party WK2 Sales Hypers
Slide 22: Virgin Galactic Investment Highlights
Virgin Galactic Investment Highlights 1 Will Be the First and Only Public Company in Commercial Human Spaceflight 2 Sizeable and Growing Market of High Net Worth Individuals 3 Attractive Business Model with Reusable, Scalable Design 4 Demonstrated Willingness to Pay 5 Strong Competitive Position, Un
Slide 23: Market and Customer Overview
Market and Customer Overview Market and Customer Overview
Slide 24: Virgin Galactic is Uniquely Positioned to Capture the Luxury Market
Virgin Galactic is Uniquely Positioned to Capture the Luxury Market Sector Appeal Industry Credibility Total Addressable Market Evolving Consumer Preferences Brand Differentiation Personal Spaceflight 23Virgin Galactic is Uniquely Positioned to Capture the Luxury Market Sector Appeal Industry Credib
Slide 25: Commercial Space Travel Coming of Age
Commercial Space Travel Coming of Age (1) Commercial Space Industry Size Significant Technological Advancements Recent Proof of Concept By 2040, the commercial space industry is expected to reach 5% of U.S. GDP $1.5tn $385bn $175bn High rates of flight for new entrants Private companies gaining cred
Slide 26: Significant Addressable Market
Title FS Significant Addressable Market Significant Addressable Market Key Drivers Cumulative % of $10m+ 0.0% 0.0% 0.1% 0.1% (1) HNW served by VG 2,378,000 n Overall growth in global 2,245,000 markets 2,119,000 2,000,000 1,887,000 1,781,000 n Growth in entrepreneurs and self-made wealth 2018A 2019E
Slide 27: Spending Preferences and Trends Favor Luxury Experiences
Spending Preferences and Trends Favor Luxury Experiences 5% 6% 7% 9% 10%
Slide 28: 600+ Future Astronauts, ~$80 Million of Deposits
Let us make the bar charts for age – with more ranges than the 2 600+ Future Astronauts, ~$80 Million of Deposits splits we have here The bullets makes it seem like young people Future Astronauts by Age Future Astronauts by Gender Future Astronauts by Nation not interested; 60+ needs to be one bucke
Slide 29: Overview of Spaceflight System and Technical Capabilities
Overview of Spaceflight System and Technical Capabilities Overview of Spaceflight System and Technical Capabilities
Slide 30: Our Spaceflight System
Our Spaceflight System Straight line and thinner line 29Our Spaceflight System Straight line and thinner line 29
Slide 31: VMS Eve: The Carrier Aircraft
VMS Eve: The Carrier Aircraft Carrier Aircraft Highlights Crew 2 pilots Length 77.7 feet (~24 meters) Wingspan 140.0 feet (~43 meters) Takeoff / Landing Max Payload Weight 30,000 pounds (Takeoff) Max Payload Weight 17,000 pounds (Landing) 9,400 feet (at sea level Min Runway and max weight) Flight Ca
Slide 32: VSS Unity: The Spaceship
VSS Unity: The Spaceship Spaceship Highlights Crew 2 pilots Length 60 feet (~18 meters) Tail Height 18 feet (~5 meters) Wingspan 42 feet (~13 meters) Capacity Max Passengers 6 Equivalent to 6 Max Payload passengers Flight Capabilities Top Speed > Mach 3 Flight Duration Up to ~90 minutes 50+, includi
Slide 33: Hybrid Rocket Motor: The Motor
Hybrid Rocket Motor: The Motor § Recognized as most powerful hybrid rocket used in manned flight” by the Guinness Book of World Records § Robust, yet simple human spaceflight rocket motor § Max thrust: 72,000 lbs § 100+ motors built to date § Easy-to-store, replaceable fuel cartridge Displayed at th
Slide 34: Feathering Re-Entry Mechanism
Feathering Re-Entry Mechanism Patented, foldable boom tail Once back in atmosphere, feather lowers and spaceship Lines glides home Shuttlecock aerodynamic profile for deceleration and stable re-entry 33Feathering Re-Entry Mechanism Patented, foldable boom tail Once back in atmosphere, feather lowers
Slide 35: Virgin Galactic's Commitment to Safety
Virgin Galactic’s Commitment to Safety Horizontal Takeoff and Landing Two Pilots Mothership Engine Reliability Hybrid Rocket Motor Takeoff and landing on regular Creates redundancy in operations Highly reliable and rigorously Robust yet simple design with runways similar to a typical airliner and in
Slide 36: Full Lifecycle Aerospace Development Expertise
Full Lifecycle Aerospace Development Expertise Design, Modeling Assembly and Systems Manufacturing Testing and Validation and Analysis Integration Capabilities cover the full range of design, manufacturing, ground testing, flight testing and post-delivery support 35Full Lifecycle Aerospace Developme
Slide 37: Fleet Build Progress and Expected Expansion Schedule
Fleet Build Progress and Expected Expansion Schedule SS2-1 SS2-2 SS2-3 WK2-1 (VSS Unity) (VMS Eve) Design Tooling / Fixtures Part Fabrication Assembly and Integration Flight Testing Est. Year of 2019 2020 2021 In Operation Build Completion Stage of readiness: Approximate progress 36Fleet Build Progr
Slide 38: Overview of Virgin Galactic's Ground Operations
Overview of Virgin Galactic’s Ground Operations § Emphasis on safety, reliability and maintainability for vehicles rooted in decades of best practices in airline / charter operations § Prudent planned maintenance assumptions during ramp-up period § Learnings from the maintenance program during ramp-
Slide 39: Illustrative 5-Day SS2 Operational Flow
Illustrative 5-Day SS2 Operational Flow T-4 Days T-3 Days T-2 Days T-1 Day Flight Day § Scheduled § Scheduled § Pre-flight prep § Pre-flight prep § Nitrous Oxide maintenance maintenance continued continued loaded (1) § Compliance-driven § Pre-flight prep § Rocket motor § SS2 and WK2 mated § Final pr
Slide 40: Shorter Launch Preparation Times Compared to Traditional Vehicles
Shorter Launch Preparation Times Compared to Traditional Vehicles Target WK2 and SS2 Operational Parameters Pre-Flight Activity Duration § Anticipated monthly flight rate: WK2 Fueling < 30 minutes 15 flights per vehicle (at scale) § Supported by 2 days of scheduled maintenance per week Rocket Motor
Slide 41: Financial Overview
Financial Overview Financial Overview
Slide 42: Key Assumptions
Key Assumptions § Financial projections assume June 2020 commencement of commercial operations, starting with Start of Commercial one vehicle in service Operations § Modest flight rates at commercial start, scaling up to an ultimate anticipated flight rate of 5 per Flight Rates month in 2022 and the
Slide 43: Highly Attractive Single Flight Unit Economics
Highly Attractive Single Flight Unit Economics (1) A§ Ticketed revenue: Assumes flight carries Contribution Analysis 5 passengers at $250,000 per passenger B § Rocket motor and fuel costs: Assumes price per rocket motor decreases over time via additional investments in $121k advanced manufacturing c
Slide 44: Key Assumed Operational Metrics and Revenue
Key Assumed Operational Metrics and Revenue Number of Vehicles by Year End Total Flights (Annual) 270 5 4 170 3 115 2 16 2020E 2021E 2022E 2023E 2020E 2021E 2022E 2023E Total Passengers Flown (Annual) Total Revenue ($m) % Growth NM 834% 93% 49% 1,565 $590 965 $398 646 $210 $31 66 2020E 2021E 2022E 2
Slide 45: Strong Profitability Highlights
Strong Profitability Highlights Strength of Business Model Gross Profit ($m) EBITDA ($m) Gross EBITDA 14.3% 62.5% 71.7% 73.1% NM 5.5% 36.7% 46.4% 4 Margin Margin $274 $431 $146 $285 $12 $131 $4 ($104) 2020E 2021E 2022E 2023E 2020E 2021E 2022E 2023E Run-rate gross and EBITDA margins are projected to
Slide 46: Estimated Capex Spend Over Time
Estimated Capex Spend Over Time Total Annual Capex ($m) Total Direct Design and Build Costs by Vehicle ($m) $133 $99 $84 $59 $60 $54 $52 $11 $11 $11 $11 Long-term expectation of $48 $49 $41 $43 ~$25m direct build costs per SS2 2020E 2021E 2022E 2023E SS2-1 SS2-2 WK2-2 (VSS Unity) Design Costs SS2 &
Slide 47: Significant Liquidity to Fund Operations
Significant Liquidity to Fund Operations EBITDA – Capex ($m) Liquidity § Strong liquidity position today as a result of cash from merger with IPOA $219 § Company has no debt on its balance sheet § Approximately $16 million current cash burn per month $86 (1) ($190 million per year) § For illustrativ
Slide 48: Projected Financial Summary
Projected Financial Summary Fiscal Year Ended CAGR ($m) 2020E 2021E 2022E 2023E '20E - '23E Ticketed Revenue $21 $195 $376 $562 Other Revenue 10 15 21 28 Total Revenue $31 $210 $398 $590 167.3% % Growth NM 580% 89% 48% Rocket Motor Costs & Fuel Costs ($5) ($24) ($36) ($41) Flight Operations & Mainte
Slide 49: Transaction Overview
Transaction Overview Transaction Overview
Slide 50: Transaction Summary
Transaction Summary § Pro forma enterprise value of $1.5 billion § 2.5x CY2023E revenue and 5.5x CY2023E EBITDA (1) § IPOA founder committed to invest $100 million at $10.00 per share in connection with the business combination § Existing Virgin Galactic shareholders receive up to $274 million in ca
Slide 51: Valuation and Sources & Uses
Valuation and Sources & Uses (3) Sources & Uses Pro Forma Valuation ($ in millions except per share values) ($ in millions except per share values) IPOA Illustrative Share Price $10.00 Sources (1) Pro Forma Shares Outstanding (millions) 195.1 Cash from IPOA $674 Total Equity Value $1,951 IPOA Founde
Slide 52: Pro Forma Ownership
(1) Pro Forma Ownership IPOA Sponsor 14% Rollover Equity 53% IPOA Public Shares 33% (1) Total shares includes 102.6 million rollover equity shares, 65.2 million IPOA public shares, 17.3 million IPOA founder shares (including 1.5 million Director RSU Awards) and 10.0 million shares from IPOA Founder’
Slide 53: Virgin Galactic Investment Highlights
Virgin Galactic Investment Highlights 1 Will Be the First and Only Public Company in Commercial Human Spaceflight 2 Sizeable and Growing Market of High Net Worth Individuals 3 Attractive Business Model with Reusable, Scalable Design 4 Demonstrated Willingness to Pay 5 Strong Competitive Position, Un
Slide 54: Appendix
3 ome Galactic Appendix
Slide 55: Who Are Our Customers?
Who Are Our Customers? The Space Enthusiast The Adventurer The Virgin Brand Lover The Entrepreneur I have wanted to go since I I’ve done it all, but this is the If Richard is doing it, and Virgin Space is the zeitgeist, and I watched those first steps on a fuzzy ultimate tick on my bucket list! is i
Slide 56: Driving Future Astronaut Engagement
Driving Future Astronaut Engagement Land Rover Partnership § Power of the brand and the community enables one-of-a-kind partnership collaborations § Astronaut Edition Range Rover is only available to signed-up Future Astronauts and embodies all that they love about VG 55Driving Future Astronaut Enga
Slide 57: Building the Most Exclusive Community in the World
Building the Most Exclusive Community in the World The World Above The Final Frontier The Finer Stuff The World Within What: A clear passion for space and What: A thirst for exploration and What: An appreciation for the finer What: Giving back, and inspiring the everything within it adrenaline thing