Fr persnal use nly FY2013 results presentatin Andrew Bellamy, Chief Executive Officer 30 August 2013
Fr persnal use nly FY2013 highlights Financial Recrd revenue f $902.8 millin, a 38% increase n FY2012. Earnings cnsistent with guidance: $62.6 millin EBITDA. $35.7 millin NPAT. Balance sheet strengthened and simplified debt facility in place. Operatinal EBIT margin almst dubled at US 5.2% fr full year. Australia peratins returned t small prfit; Philippines delivering cst and perfrmance advantages t Austal and custmers. Streamlined gegraphical structure fr service divisin. Recrd rder bk f $2.6 billin, securing wrk thrugh t 2017. Peple & Strategy Management team strengthened and Bard renewal taking place. Cash management pririty t deliver n recrd wrk in hand. Ptential defence vessel exprts int Asia and Middle East. Opprtunities fr supprt wrk with the expected deplyment f US and Australian defence vessels in Asia Pacific. SHIPS SYSTEMS SUPPORT 2
Fr persnal use nly Financial grwth targets met Revenue ($m) EBITDA ($m) NPAT ($m) FY2012 FY2013 FY2012 FY2013 FY2012 FY2013 653.0 902.8 35.5 62.6 11.0 35.7 Strng imprvement in earnings and revenue: Revenue f $902.8 millin. EBITDA f $62.6 millin. NPAT f $35.7 millin. EBIT margins at USA peratins grew as efficiencies frm first-in-class vessels were implemented, frm 2.7% in FY2012 t 5.2% in FY2013. 3
Fr persnal use nly Majr milestnes in the year Funding cnfirmed fr cntracted vessels: LCS 14 and LCS 16, wrth US$681.7m. JHSV 10, wrth US$144m. Significant prgress in cnstructin f US Navy vessels: USNS Spearhead (JHSV 1) delivered. USNS Chctaw Cunty (JHSV 2) delivered. Launched JHSV 3, keel laid n JHSV 4. USS Crnad (LCS 4) builder s sea trials finished; delivery t US Navy expected in September. Keels laid n LCS 6 and LCS 8; the first LCS being built by Austal as prime cntractr. Steps taken t imprve the balance sheet, with debt psitin reduced and simplified. Strengthened management team and initiated Bard renewal: Austal USA: Rear Admiral USN (Retired) Jhn Dugan Shipway elected t Chair and Craig Perciavalle prmted t President. Finance capability: appinted Greg Jasn as CFO. Bard: resignatin f Jhn Pyntn and Michael Atkinsn, with executive search underway Philippines shipyard was prfitable, Australia shipyard delivered breakeven results, and restructured Service and Systems t drive efficiencies. SHIPS SYSTEMS SUPPORT 4
Fr persnal use nly Delivering n divisinal utlk Nvember 2012 utlk USA Status Apply learnings t imprve margins. 5.2% EBIT margin fr FY2013; $39.2m EBIT. JHSV 10, LCS 14 & LCS 16 cntracts t be funded. All three cntracts funded, with LCS cntracts funded pst-sequestratin. Revenue in excess f $700m fr FY2013. Strng revenue grwth t $749.4m fr the year. Australia Hendersn Shipyard Execute Cape Class cntract. Cape St Gerge (CCPB 1) delivered; phased increase in cnstructin activity n subsequent CCPB. Pursue defence exprt pprtunities. Pipeline develpment cntinuing. Operate at break-even fr FY2013. $0.5m EBIT in FY2013. Philippines Shipyard Cmplete mbilisatin and ramp up. First ship delivered; staff mbilised t deliver n cntracts. Cntinue full capacity peratins. Wn additinal wind farm vessel cntract frm repeat custmer; cntinuing cnstructin f 80 metre catamaran. Operate prfitably fr FY2013. $5.0m EBIT in FY2013. Service Cntinue grwth, and psitin t benefit frm US Navy frward deplyment. Restructured divisin t best service deplyment f US and Australian Navy vessels in Asia-Pacific. SHIPS SYSTEMS SUPPORT 5
Fr persnal use nly Objectives fr sustained grwth Restructure balance sheet Imprve peratins Onging delivery Pursue pprtunities Reduced net debt thrugh $77.9m capital raising. Simplified debt structure thrugh a syndicated banking facility, replacing club facility. Achieved targeted +5% EBIT margin at US peratins. Prfitable Australian and Philippines shipyards. Restructured service divisin t drive efficiencies. Cash management initiatives t prfit frm delivery f recrd amunt f wrk in hand. Prgressive grwth in prfit margins n US Navy cntracts. Cntinue t target pprtunities fr additinal variantstyle defence vessels and cmmercial ships. Scpe fr service wrk with deplyment f vessels in Asia- Pacific. DELIVERED FOCUS UPSIDE 6
Fr persnal use nly Financials SHIPS SYSTEMS SUPPORT 7
Fr persnal use nly Earnings summary Incme statement FY2013 ($m) FY2012 ($m) Increase ($m) Revenue 902.8 653.0 249.8 EBITDA 62.6 35.5 27.1 EBIT 38.1 16.6 21.5 NPAT 35.7 11.0 24.7 EPS 12.97 4.62 8.35 Met riginal guidance NPAT ($m) EBITDA ($m) Reprted 35.7 62.6 R&D tax benefit (11.0) - Lss n stck yacht 3.1 4.4 * Restated after capital raising FY2013 results: Met stated guidance fr the year. Margin imprvement in the USA, with EBIT margin at 5.2% in FY2013 vs 2.7% in FY2012. USA imprvement lifted verall grup EBIT margins t 4.2% vs 2.5% in FY2012. Australian peratins returned t prfit, with $330m Custms cntract prviding sustainable wrklad thrugh t H1 FY2016. Philippines shipyard prfitable in its first full year f peratins. Delivered 27.8 67.0 Nv 2012 frecast 23 26 65 71 SHIPS SYSTEMS SUPPORT 8
Fr persnal use nly Segment breakdwn USA FY2013 ($m) FY2012 ($m) Revenue 749.4 570.3 EBIT 39.2 15.8 EBIT margin (%) 5.2 2.7 Delivered margin grwth. JHSV 1 delivered and prductivity lessns implemented, de-risking the prgram. LCS 14, LCS 16, and JHSV 10 cntracts all funded by US Navy within expected timeline. Australia (HSO) FY2013 ($m) FY2012 ($m) Revenue 90.6 63.7 EBIT 0.5 (13.6) EBIT margin (%) 0.6 n/a Small prfit in FY2013 and frecast t remain prfitable in FY2014, with imprving efficiencies n Cape Class vessel. Custms Cape Class Patrl Bat wrk until H1 FY2016, underpinning peratins. USD-AUD exchange rate imprving exprt cmpetitiveness. Philippines (PSO) FY2013 ($m) FY2012 ($m) Revenue 40.0 1.9 EBIT 5.0 (0.8) EBIT margin (%) 12.6 n/a Prfitable in its first full year. Prgressing with cnstructin f wind farm and cmmercial ferry in the year. Technlgical capabilities transferred t deliver n cntracts. Service & Systems FY2013 ($m) FY2012 ($m) Revenue 59.0 19.4 EBIT (0.5) 1.6 EBIT margin (%) n/a 8.2 Revenue grwth thrugh service wrk in Australia and US. Renewed charter f WestPac Express. Restructure impacted earnings expected t imprve efficiencies and align with pprtunities. SHIPS SYSTEMS SUPPORT 9
Fr persnal use nly Balance Sheet Balance sheet 30 Jun 2013 ($m) 30 Jun 2012 ($m) Ttal assets 946.5 826.0 Cash 38.0 51.8 Restricted cash 69.7 52.9 Receivables 102.7 96.2 Inventries 277.9 193.5 Prperty, plant & equipment 399.9 370.4 Other 58.3 61.2 Ttal liabilities 539.3 548.9 Trade creditrs 133.8 128.6 G Zne Bnds 205.0 219.4 Other interest bearing debt 39.8 46.0 Gvernment grants 57.0 52.3 Other 103.7 102.6 Net assets 407.2 277.0 Balance sheet summary: Grwth in asset base, reflecting increasing scale f USA business. Balance sheet strengthened by successful $77.9m capital raising. Net debt reduced by $54.8m since 30 Sept 2012, with gearing dwn frm 38.7% t 25.1% ver the same perid. One f tw stck vessels remved frm balance sheet. Funds frm selling the remaining stck vessel wuld be used t reduce debt. Reduced capital expenditure n prperty, plant and equipment ttalling $21.3m FY2014 capex at similar levels. SHIPS SYSTEMS SUPPORT 10
Fr persnal use nly $m Gearing Debt psitin Significant steps taken t reduce net debt and gearing, and simplify the cmpany s debt prfile. Net Debt/EBITDA at 2.12x, within target range. US$35 millin f untilised G Zne Bnds retired in Feb 2013. Cmpleted $77.9 millin capital raising: Bard has elected t use remaining US$55 millin f restricted cash t pay dwn further G Zne debt n 3 September 2013, simplifying debt structure and reducing interest payments fr guarantees. New syndicated facility agreed with banks in Dec 2012 t replace club facility with simplified, cmmn terms and extended maturity prfile t Dec 2015. This term sheet was ultimately executed after the balance date, n 17 July 2013, fllwing nging negtiatins and in line with new terms Austal was perating under. 38.7% 25.1% $187.7 $132.9 Nte: Includes restricted cash cmpnents. The majrity f debt was classified as a current liability at 30 June because new facility agreement had 1 1 nt been clsed at year end. Syndicated agreement includes $50 millin, 3-year revlving credit facility fr wrking capital. 250 200 150 100 50 0 Pre-capital raising At 30 Jun 13 Net debt Gearing 50% 40% 30% 20% 10% 0% SHIPS SYSTEMS SUPPORT 11
Fr persnal use nly Operatins Update SHIPS SYSTEMS SUPPORT 12
Fr persnal use nly Order bk Current rder bk f $2.6 billin secures revenue until 2017, including: Littral Cmbat Ships fr US Navy x6 funded (ut f 10 vessel cntract), plus x1 frm General Dynamics (GD) and x1 delivered t GD (ut f 2 vessel cntract). Jint High Speed Vessels fr US Navy x10 funded, x2 delivered (ut f 10 vessel cntract). Cape Class Patrl Bats fr Australian Custms and Brder Prtectin x8 funded and x1 delivered (ut f 8 vessel cntract), plus thrugh-life supprt. Cmmercial vessels x3 27 metre wind farm supprt catamarans. x1 21 metre wind farm supprt catamaran. x1 80 metre vehicle-passenger catamaran. SHIPS SYSTEMS SUPPORT 13
Fr persnal use nly Littral Cmbat Ship 10 ship cntract awarded as prime cntractr, wrth US$3.5 billin: 2 ships ut f Austal s 10 cntract award have been funded by US Navy each year, with the final 4 ships cntracted t be funded in FY2014 and FY2015. 2 additinal vessels cnstructed by Austal fr General Dynamics (LCS 2 and LCS 4). 8 ships are fully funded, securing wrk until 2017: LCS 2 Delivered; underging peratinal testing. LCS 4 Acceptance trials cmmenced in August; delivery expected in September. LCS 6 70% cmplete. LCS 8 Keel laid in June 2013; 40% cmplete. LCS 10 Cmmenced cnstructin; 10% cmplete. LCS 12 Funded in March 2012. LCS 14 & LCS 16 Funded in March 2013. Opprtunities exist beynd 10-ship award, including further LCS vessels in US and variants in Middle East. The LCS is the weapn system that will clse ur littral shrtfalls and bridge the gap frm cnventinal naval tactics t the future cnflict. Cdr Dale Heiken and Cdr Jeff Miller Authrs f article The Right Ship at the Right Time, in well-knwn independent US Naval Institute magazine Prceedings June 2013 SHIPS SYSTEMS SUPPORT 14
Fr persnal use nly Jint High Speed Vessel 10 ship cntract awarded valued at US$1.6 billin. US Navy has funded cnstructin f all 10 ships wrk secured thrugh t 2017. Prgram has been cnsiderably de-risked, fllwing lessns learnt in cnstructin and delivery f JHSV 1. Prgress: JHSV 1 Delivered in December 2012. JHSV 2 Delivered in June 2013. JHSV 3 Vessel launched in June 2013, with main equipment cmmissining underway. JHSV 4 Keel laid in May 2013; 70% cmplete. JHSV 5 Prductin cmmenced; 15% cmplete. JHSV 6 & JHSV 7 funded in February 2011. JHSV 8 & JHSV 9 funded in February 2012. JHSV 10 funded in December 2012. Austal well placed t secure a significant rle in servicing the JHSV vessels thrugh their life. Flexible. That s prbably the wrd I ve heard mre than anything. We can d a lt f things t it. Mark Deskins Deputy Prgram Manager, Naval Sea Systems Cmmand, as quted in Navy League f the United States publicatin Seapwer Magazine August 2013 Ptential fr prgram t be extended and technlgy adptin t penetrate new markets. SHIPS SYSTEMS SUPPORT 15
Fr persnal use nly Austal well psitined in US Austal-built vessels have cntinued t be funded LCS 14 & LCS 16 funded in March 2013 after budget sequestratin. JHSV 10 funded in December 2012. Funded vessels and assciated revenue is lcked in. Funding f vessels LCS 18 & 20 expected in FY2014 and LCS 22 & 24 in FY2015, as per the cntract. US fcused n Asia-Pacific defence strategy US Navy cmmitted t maintaining a naval fleet f apprximately 300 ships, with littral vessel prgrams supprting that bjective. Maiden deplyment f Freedm-variant LCS 1 in Sutheast Asia prvides a further indicatin that the US is cmmitted t its Asia-Pacific strategy. LCS and JHSV are especially designed fr the littrals. Austal has a strng presence in Asia-Pacific. Additinal pprtunities US Navy cntinuing t develp thrugh-life supprt strategy fr LCS & JHSV. Austal well placed fr significant supprt rle, prviding annuity-style revenue. Future blck-buy cntracts beynd LCS 24 cntinue t be expected. SHIPS SYSTEMS SUPPORT 16
Fr persnal use nly Cape Class Patrl Bat $330 millin cntract t design, manufacture and supprt 8 new Cape Class Patrl Bats. Vessels are fully funded and underwrite activity at Hendersn shipyard until H1 FY2016. Prgress: CCPB 1 Delivered in April 2013. CCPB 2 70% per cent cmplete. CCPB 3 Keel laid in August 2013; 20% cmplete. CCPB 4 t CCPB 8 Delivered by end 2015. Imprtantly awarded $50m supprt wrk as part f $330m cntract. Efficiencies and margins t imprve in FY2014 fllwing delivery f the first-in-class vessel. Australian defence requirement fr Cape Classstyle vessel, with further pprtunities fr varianttype vessels existing ffshre. [Cape] is a highly advanced, sphisticated patrl bat that blsters the current maritime surveillance and respnse prgram, setting a new benchmark in marine standards. Jasn Clare Minister fr Hme Affairs 15 March 2013 SHIPS SYSTEMS SUPPORT 17
Fr persnal use nly Philippines Enables Austal t cmpete in the glbal cmmercial market (e.g. ferries, wind farm supprt vessels) delivering cst and perfrmance advantages t Austal and custmers. Delivered a prfit in its first full year f peratins. First ship delivered December 2012; grwth t 500 emplyees achieved as planned and technlgy transfer t imprve cmpetitive psitin. Full rder bk: x3 27 metre wind farm vessels. x1 21 metre wind farm vessel. x1 80 metre vehicle-passenger catamaran. The 80m Aremiti ferry catamaran is scheduled fr delivery in Q2 FY2014. Onging pprtunities in wind farm vessel market Award f eighth wind farm vessel under furth cntract frm repeat custmer shws ur ability t build vessels that meet custmers needs. SHIPS SYSTEMS SUPPORT 18
Fr persnal use nly Service and Systems Prvides lng-term pprtunity and stability fr Austal thrugh annuity-style wrk. Ptential fr high margin cntracts. Lw capital intensity. Recurring revenue. Austal has been building its glbal ftprint, especially in the Asia Pacific regin, thrugh shipyards, strategic partnerships and develping IP t prvide thrugh-lifesupprt fr vessels such as the LCS and JHSV. Ships designed fr 20 t 30 year life. Supprt cntracts expected t begin t be awarded in this financial year. Streamlined gegraphical structure t imprve efficiencies, drive margins, and create better alignment with expected wrk. Strategic partnerships established in Asia and USA, and blt-n acquisitin in Darwin, ensuring alignment with supprting vessels in Asia-Pacific regin. The JHSV culd prve especially valuable in the Asia-Pacific regin, where the distances make range and the ability t maintain gd high speed key cnsideratins in terms f deplying assets. Daniel Taylr Special Crrespndent fr Navy League f the United States publicatin Seapwer Magazine August 2013 The LCS is pised t engage with ur allies and friends in the Western Pacific at a level nt experienced since Wrld War II. Cdr Dale Heiken and Cdr Jeff Miller Authrs f article The Right Ship at the Right Time, in well-knwn independent US Naval Institute magazine Prceedings June 2013 SHIPS SYSTEMS SUPPORT 19
Fr persnal use nly Outlk SHIPS SYSTEMS SUPPORT 20
Fr persnal use nly Objectives United States Hendersn Philippines Supprt Prgressive grwth in prfit margins as vessel prgrams mature. Augment cntracts with service and maintenance wrk. Extend pipeline beynd existing cntract awards. Increase efficiencies n Cape Class Patrl Bats, fllwing first-inclass Cape St Gerge. Target cnstructin and supprt pprtunities in defence vessels t sustain the shipyard. Cntinue building technlgical capabilities at the Philippines shipyard fr cmmercial shipbuilding. Expand vessel cnstructin capacity accrding t market ptential. Utilise service netwrk t target service wrk in Asia Pacific in anticipatin f US Navy and Australian Custms deplyment. Leverage existing defence systems capabilities t pursue new pprtunities. Strengthened balance sheet, simplified debt structure and prudent cash management practices in place t supprt recrd amunt f wrk in prgress SHIPS SYSTEMS SUPPORT 21
Fr persnal use nly Outlk Lng term defence cntracts prvide visibility f revenue expect revenue f apprximately $1 billin in FY2014. Prgressive grwth in prfit margins as vessel prgrams mature in the US. Australian margins t grw as prductivity imprves n Cape Class cntract. Prudent cash management in place t allw delivery n recrd amunt f wrk in hand n dividend in shrt-term. Funds frm ptential sale f remaining stck vessel wuld be used t reduce debt. Weaker Australian dllar imprving translatin f prfits frm US peratins and exprt cmpetitiveness frm Australian peratins. Pursuing pprtunities fr variant-style defence vessel cntracts in existing and new markets, such as in Asia and Middle East, and nging scpe t win higher-margin supprt wrk. SHIPS SYSTEMS SUPPORT 22
Fr persnal use nly Appendix Austal verview Funded in 1988 and listed n the Australian Stck Exchange in 1998, Austal is a leading defence prime cntractr, specializing in the design, cnstructin and maintenance f high perfrmance vessels fr defence and cmmercial purpses. Austal has a glbal ftprint with strategically lcated shipyards and service facilities: Australia United States Eurpe Caribbean Middle East Asia Austal cmprises three business segments: Ships Systems Supprt Ships Systems Supprt SHIPS SYSTEMS SUPPORT 23
Fr persnal use nly Ships Advanced design, cnstructin, engineering and supprt are Austal s cre cmpetency. 249 vessels cnstructed. Delivered glbally. Defence Glbal defence prime cntractr with significant prgrams in place. US Navy s Littral Cmbat Ship (LCS). US Navy s Jint High Speed Vessel (JHSV). Australian Custms and Brder Prtectin Service s Cape Class Patrl Bat. Patrl and auxiliary vessels fr the US Navy, Ryal Australian Navy and ther defence frces and gvernment agencies. Cmmercial 25 year recrd in vessels fr cmmercial market. Wrld leader in the design, cnstructin and supprt f high perfrmance aluminium vessels. Warships and Multi Rle Vessels Patrl Vessels High Perfrmance Vessels SHIPS SYSTEMS SUPPORT 24
Fr persnal use nly Systems Austal s Systems divisin prvides advanced integratin, maintenance and cmmand and cntrl systems fr defence and cmmercial applicatins. Advanced Integratin: Radars, cmmunicatins, cmmand and cntrl systems and userinterfaces. Maintenance: Thrugh Life Supprt f machinery, radars, cmmunicatins and ther nbard systems thrugh remte mnitring and Cmputerised Maintenance Management Systems. Cmmand and Cntrl: Prprietary, scalable, netwrk slutins with cmmn perating picture fr glbal and lcal crdinatin f assets in a maritime and land envirnment. Advanced Integratin Maintenance Cmmand and Cntrl SHIPS SYSTEMS SUPPORT 25
Fr persnal use nly Supprt Austal has a large supprt ffering thrugh its reginal centres: Washingtn Lndn Mbile Trinidad Dubai Muscat Philippines Singapre Darwin Perth Canberra Service prducts are tailred t address custmer requirements: Vessel and Fleet Maintenance. Refit and Repair. Ship Management. Training. Cnsultancy. SHIPS SYSTEMS SUPPORT 26
Fr persnal use nly Disclaimer Andrew Bellamy, Chief Executive Officer Telephne: +61 8 9410 1111 Fr further infrmatin visit www.austal.cm Disclaimer This presentatin and any ral presentatin accmpanying it has been prepared by Austal Limited ( Austal ). It shuld nt be cnsidered as an ffer r invitatin t subscribe fr r purchase any securities in Austal r as an inducement t make an ffer r invitatin with respect t thse securities. N agreement t subscribe fr securities in Austal will be entered int n the basis f this presentatin. Our presentatin cntains frward-lking statements r prjectins based n current expectatins. These statements are nt guarantees f future perfrmance and are subject t risks and uncertainties. Actual results may differ materially due t: the availability f US gvernment funding due t budgetary r debt ceiling cnstraints; changes in custmer pririties; additinal csts r schedule revisins. Actual results may als effect the capitalizatin changes n earnings per share; the allwability f csts under gvernment cst accunting divestitures r jint ventures; the timing and availability f future impact f acquisitins; the timing and availability f future gvernment awards; ecnmic, business and regulatry cnditins and ther factrs. We disclaim any duty t update frward lking statements t reflect new develpments. Accrdingly, t the maximum extent permitted by applicable laws, Austal makes n representatin and can give n assurance, guarantee r warrant, express r implied, as t, and takes nt respnsibility and assumes n liability fr, the authenticity, validity, accuracy, suitability r cmpleteness f, r any errrs in r missin, frm any infrmatin, statement r pinin cntained in this presentatin. Yu shuld nt act r refrain frm acting in reliance n this presentatin material. This verview f Austal des nt purprt t be all inclusive r t cntain all infrmatin which its recipients may require in rder t make an infrmed assessment f Austal s prspects. Yu shuld cnduct yur wn investigatin and perfrm yur wn analysis in rder t satisfy yurself as t the accuracy and cmpleteness f the infrmatin, statements and pinins cntained in this presentatin befre making any investment decisin. SHIPS SYSTEMS SUPPORT 27