Austal Limited · ASX:ASB
Austal — Macquarie WA Forum 2013
28 slides from Austal's conference presentation, Oct 16, 2013
Slide 1: Macquarie WA Forum Presentation
Macquarie WA Forum Presentation For personal use only Andrew Bellamy, Chief Executive Officer 17 October 2013
Slide 2: Austal overview
Austal overview For personal use only Austal is a leading prime defence contractor. Founded in 1988 and listed on the Australian Stock Exchange in 1998, Austal specialises in the design, construction and maintenance of revolutionary vessels for the United States Navy, as well as an extensive range o
Slide 3: Ships
Ships For personal use only Advanced design, construction, engineering and Warships and Multi Role Vessels support are Austal’s core competencies. 249 vessels constructed. Delivered globally. Defence Global defence prime contractor with significant Patrol Vessels programs in place. o US Navy’s
Slide 4: Systems
Systems For personal use only Austal’s Systems division provides advanced integration, maintenance and command and control systems for defence and commercial applications. Advanced Integration: Radars, communications, command and control systems and user- interfaces. Maintenance: Through Life Su
Slide 5: Support
Support For personal use only Austal has a large support offering through its regional centres: London Washington Mobile Dubai Muscat Philippines Trinidad Singapore Darwin Perth Canberra Service products are tailored to address customer requirements, including: o Through life support, logistics su
Slide 6: 2013 results
2013 results For personal use only SHIPS SYSTEMS SUPPORT 6
Slide 7: Highlights
Highlights For personal use only Record revenue of $902.8 million, a 38% increase on FY2012. Financial Earnings consistent with guidance: o $62.6 million EBITDA. o $35.7 million statutory NPAT. Balance sheet strengthened and simplified debt facility in place. EBIT margin almost doubled at US
Slide 8: Financial growth targets met
Financial growth targets met For personal use only Revenue (A$m) EBITDA (A$m) NPAT (A$m) FY2012 FY2013 FY2012 FY2013 FY2012 FY2013 653.0 902.8 35.5 62.6 11.0 35.7 Strong improvement in earnings and revenue: o Revenue of $902.8 million. o EBITDA of $62.6 million. o NPAT of $35.7 million. EBIT mar
Slide 9: Delivered on divisional outlook
Delivered on divisional outlook For personal use only November 2012 outlook End FY2013 USA • Apply learnings to improve margins. • 5.2% EBIT margin for FY2013; $39.2m EBIT. • JHSV 10, LCS 14 & LCS 16 contracts to be funded. • All three contracts funded, with LCS contracts funded post-sequestration.
Slide 10: Objectives for sustained growth
Objectives for sustained growth For personal use only Restructure Improve Ongoing Pursue balance operations delivery opportunities sheet • Reduced net debt • Achieved targeted • Cash • Continue to target through $77.9m +5% EBIT margin management opportunities for capital raising. at US operations. i
Slide 11: Financials
Financials For personal use only SHIPS SYSTEMS SUPPORT 11
Slide 12: Earnings summary
Earnings summary For personal use only FY2013 FY2012 Increase FY2013 results: Income statement (A$m) (A$m) (A$m) Met stated guidance for the year. Revenue 902.8 653.0 249.8 Margin improvement in the USA, with EBITDA 62.6 35.5 27.1 EBIT margin at 5.2% in FY2013 vs EBIT 38.1 16.6 21.5 2.7% in FY20
Slide 13: Segment breakdown
Segment breakdown For personal use only USA FY2013 (A$m) FY2012 (A$m) Australia (HSO) FY2013 (A$m) FY2012 (A$m) Revenue 749.4 570.3 Revenue 90.6 63.7 EBIT 39.2 15.8 EBIT 0.5 (13.6) EBIT margin (%) 5.2 2.7 EBIT margin (%) 0.6 n/a Delivered margin growth. Small profit in FY2013 and forecast to rem
Slide 14: Balance sheet
Balance sheet For personal use only Balance sheet At 30 Jun 2013 At 30 Jun 2012 Balance sheet summary: (A$m) (A$m) Growth in asset base, reflecting Total assets 946.5 826.0 increasing scale of USA business. Cash 38.0 51.8 Balanced sheet strengthened by Restricted cash 69.7 52.9 successful $77.9m
Slide 15: Debt position
Debt position For personal use only Significant steps taken to reduce net debt and gearing, and simplify Pre-capital raising At 30 Jun 13 the company’s debt profile. 250 50% Net Debt/EBITDA at 2.12x, within Board’s target range (1.5x-2.5x) 38.7% o Ongoing debt reduction through disposal of exces
Slide 16: Operations update
Operations update For personal use only SHIPS SYSTEMS SUPPORT 16
Slide 17: Major progress across the business
Major progress across the business For personal use only • Commenced • Joey Turano • CCPB 1 steps to • JHSV 1 appointed delivered. improve the delivered President at • Initiated • JHSV 2 balance • Craig Philippines efficiency delivered. • USS sheet – debt Perciavalle Shipyard. changes to • JHSV 3 Co
Slide 18: Order book
Order book For personal use only Order book of $2.2 billion secures revenue until 2017, including: o Littoral Combat Ships for US Navy x6 funded (out of 10 vessel contract) x2 delivered under 2 vessel contract from General Dynamics. o Joint High Speed Vessels for US Navy Fully funded, with x2 deli
Slide 19: Littoral Combat Ship
Littoral Combat Ship For personal use only 10 ship contract awarded as prime contractor, worth US$3.5 billion: o 2 ships out of Austal’s 10 contract award have been funded by US Navy each year, with the final 4 ships contracted to be funded in FY2014 and FY2015. 2 additional vessels constructed
Slide 20: Joint High Speed Vessel
Joint High Speed Vessel For personal use only 10 ship award to Austal valued at US$1.6 billion, with all vessels funded, securing work through to 2017. Program has been considerably de-risked, following lessons learnt in construction and delivery of JHSV 1. Progress: o JHSV 1 – Delivered in De
Slide 21: Austal well positioned in US
Austal well positioned in US For personal use only Austal-built vessels have continued to be funded • LCS 14 & LCS 16 funded in March 2013 – after budget sequestration. • JHSV 10 funded in December 2012. • Funded vessels and associated revenue is locked in – not affected by US government shutdown. •
Slide 22: Cape Class Patrol Boat
Cape Class Patrol Boat For personal use only $330 million contract to design, manufacture and support 8 new Cape Class Patrol Boats, including $50 million support work. Vessels are fully funded and underwrite activity at Henderson shipyard until H1 FY2016. Progress: o CCPB 1 – Delivered in Apr
Slide 23: Philippines
Philippines For personal use only Enables Austal to compete in the global commercial market (e.g. ferries, wind farm support vessels) – delivering cost and performance advantages to Austal and customers. Delivered a profit in its first full year of operations. First ship delivered December 201
Slide 24: Service and systems
Service and systems For personal use only Provides long-term opportunity and stability for Austal “The JHSV could prove especially through annuity-style work. valuable in the Asia-Pacific region, where the distances make range and the ability o Potential for high margin contracts. to maintain good
Slide 25: Outlook
Outlook For personal use only SHIPS SYSTEMS SUPPORT 25
Slide 26: Strategy
Strategy For personal use only United States Henderson Philippines Support • Progressive growth • Increase efficiencies • Continue building • Utilise our service in margins as vessel on Cape Class technological network to target programs mature – Patrol Boats, capabilities at the service work in Asi
Slide 27: Outlook
Outlook For personal use only Targeting eight per cent EBIT margin in three years. Long term defence contracts Progressive growth in profit Prudent cash management in provide visibility of revenue – margins as vessel programs place to allow delivery on record expect revenue of approximately mature i
Slide 28: Disclaimer
Disclaimer For personal use only Andrew Bellamy, Chief Executive Officer Telephone: +61 8 9410 1111 For further information visit www.austal.com Disclaimer This presentation and any oral presentation accompanying it has been prepared by Austal Limited (“Austal”). It should not be considered as an of