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Avio GroupCompanies

Eeffectiveness December 2006

Subsidiaries-

Regulus 60%-

ELV 70%-

Avio Inc. 100%-

Avio Polska 100%-

Secosvim 100%-

DutchAero 80%-

AvioFix

60%

-

Europropulsion 50%-

ATLA 30%-

Eurojet 21%-

Turbo Union 20%-

Arianespace 6%- Cira 5%


15%85%

Business Activities

The Company

CIVIL Modules and Componentsfor civil aviation aeroengines& aeroderivative engines

GE90-115B

Complete propulsion systemsand servicesMILITARY

EJ200

Space propulsion & LEO Launchers(solid & liquid)

SPACE

Ariane V

Civil and military aeroengineMR&O

Maintenance

MR&O


Avio Products(*) by revenuesAccessory Gearboxes

# 1 worldwide (*)

Power Transmissions

Low Pressure Turbines

Full module design(CT7-8C, EJ200, PW308, LMS100)

Combustion

Systems

SDR SaM146, Ej200


Avio Products

Sole supplier in Europe, also through its JVs, of complete solid rocket motor for launch vehicles.

Cryogenic Propulsion

Solid RocketMotor forLaunchers

Solid RocketMotor for Missiles

Light LauncherAriane

Ariane Vega

Aster


16 Locations

7 in Italy:

Turin (2), Colleferro (Rome), Brindisi, Pomigliano d’Arco (Naples),Acerra (Naples), AvioFix (Lecco)

2 in South America:

(French Guyana)

1 in North America:

(New Jersey)

1 in Poland:

(Bielsko-Biała)1 in The Netherlands:

(Eindhoven)

4 Representative Offices:

Rome (Italy), Beijing (China), Warsaw (Poland), Brussels (Belgium)



Rivalta di Torino (Turin)

Colleferro (Rome)

84.418

Pomigliano d’Arco (Naples)

Brindisi

36.309Acerra (Naples)

48.403157.918

163.000

Avio S.p.A.in Italy

Sangone (Turin)12.200

Covered Area m2

Development Testing: Engine, components

Mechanical Transmissions Rotating Parts

Space Solid Propulsion

Covered Area m2

Covered Area m2

Covered Area m2

Covered Area m2

Covered Area m2

Combustors, Structural Parts Civil MRO

Military engine ass.yMilitary MRO, Naval Package

Airfoils

Revenues by Segment

2007 Revenues (€1,551 m)


Total Employees Dec 2007 (4715)

AEROENGINES78,3%

CIVIL MRO5,8%

MILITARY28,4%

ENERGY & INDUSTRIAL

5,8%

CIVIL44,1%SPACE

15,9%

Certifications


CERTIFICATE

CERTIF. BODIES

AER-Q-2110 D.G.A.A.ISO9001:2000 RINA and UNAVIA CertEN9100 UNAVIA Cert

EASA Part 21 / POA ENACEASA Part 21 / DOA EASA

EASA Part 145 ENACFAR 145 FAACAAC 145 Civil Aviation Authority ChinaCAAS 145 Civil Aviation Auth. Singapore

NADCAP Accreditation for Special Processes: Coating, NDT, Heat Treating, Welding, Chemical, Surface Enhancement, NC machining

Continuous Improvement


Avio started the Six Sigma program yearend 1999:

Continuous Improvement


Total Projects 3961 3225Total Projects 3961 3225

Critical Business Factor

Critical Business Factor

ClosedLaunched

Cost Reduction 1548 (48,0%)1897 (47,9%)

Product Quality 601 (18,6%)699 (17,6%)

On-time Delivery 181 (5,6%)236 (6,0%)

Working Capital 136 (4,2%)150 (3,8%)

Other Processes 759 (23,6%)979 (24,7%)

Project Selection (updated yearend 2007)

Avio Suppliers

Avio manages more than 60% of its business in value through its Supply Chain :

Avio Suppliers in the world 501Suppliers with active Purchase Orders 402Suppliers EN9100 certified 254Suppliers ISO 9001:2000 certified 133Suppliers qualified by Avio 15

All the suppliers are requested to have NADCAP accreditation for Special Processes


Avio Suppliers


LOCATION OF AVIO ACTIVE SUPPLIERS

GERMANY3,1%

EUROPE (others)3,7%

CANADA1,4% ASIA

0,8%

FRANCE9,9%

UK13,8%

USA32,5%

ITALY34,7%

Avio Suppliers

Avio’s Audit System for Suppliers:

Audits at Supplier’s sites in 2007 128(quality system, product and process audits)

Quality System Auditors 5 (EN9100 qualified)

Product Auditors for Suppliers 25

Special Processes Auditors for Suppliers 15

EN 19011 guideline is the baseline for auditing Quality Management Systems


AVIO relationship with IAQG / EAQG

Key factors behind our decision to join IAQG / EAQG were :

Communication within the Aerospace Quality communityCommunication within the Aerospace Quality communityEarly analysis of new Quality StandardsEarly analysis of new Quality StandardsOpportunity to influence future policy and direction Opportunity to influence future policy and direction of Quality in Aerospaceof Quality in Aerospace

Avio current status:AS/EN9100 is the primary Quality System Standard AS/EN9100 is the primary Quality System Standard and all sites achieved a third party certificationand all sites achieved a third party certificationAvio embraced also the requirements of AS/EN9102 Avio embraced also the requirements of AS/EN9102 (First Article) and AS/EN9103 (Key Characteristics)(First Article) and AS/EN9103 (Key Characteristics)Avio also play a role in National activities Avio also play a role in National activities -- high level of high level of support to the IT Trade Association (AIAD)support to the IT Trade Association (AIAD)

Benefits from joining IAQG / EAQG

•• Very good working relationships and communication between Very good working relationships and communication between membersmembers

•• Opportunity to anticipate preparation to the new Quality Opportunity to anticipate preparation to the new Quality standardsstandards

•• To play an active role in the Italian CBMC and AABTo play an active role in the Italian CBMC and AAB

•• Reduced number of Suppliers auditsReduced number of Suppliers audits

•• Take advantage of the output of the IAQG Supply Chain Take advantage of the output of the IAQG Supply Chain Management Handbook teamsManagement Handbook teams

Future opportunities and challenges

•• Reduction of duplication of 3Reduction of duplication of 3rdrd part audit for PART 21 and part audit for PART 21 and PART145PART145

•• Development and launch of an Italian API service providerDevelopment and launch of an Italian API service provider

•• Consolidation of the ITANDTB organization (NDT 3Consolidation of the ITANDTB organization (NDT 3rdrd level level certification) and potential extension to other Special Process certification) and potential extension to other Special Process specialists specialists

•• Supply Chain development and performance improvement Supply Chain development and performance improvement together with our Supplierstogether with our Suppliers

•• AS9103 standard and process certification to be applied AS9103 standard and process certification to be applied within the whole Supply Chainwithin the whole Supply Chain

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