Orbital Corporation Ltd · ASX:OEC
Orbital — H1 FY2006 Earnings Presentation
29 slides from Orbital's earnings presentation, Feb 27, 2006
Slide 1: Presentation by CEO and CFO, February 2006
7] ORBITAL Presentation by Dr Rodney Houston Chief Executive Officer & Keith Halliwell Chief Financial Officer February 2006
Slide 2: Contents
8 ORBITAL Contents = Orbital’s Vision = Orbital’s Business Sectors = Half Year Results = Outlook by Business Sector
Slide 3: Orbital's Vision
8 ORBITAL _Orbital’s Vision A Global force in Innovative Powertrain solutions Achieved by: * Supplying and manufacturing systems and components = Creating and applying intellectual property » Providing a unique combination of engineering services
Slide 4: Powertrain System
8 ORBITAL Powertrain System Engine Management System (EMS) Fuel System Pi - Port Injection™ DI — Direct Injection SF Air System Coolant System Combustion System 2-stroke& 4-stroke
Slide 5: Revenue Streams for Orbital
8 ORBITAL Revenue Streams for Orbital Royalties and Licensing ‘Orbital Direct Injection _ Combustion Systems Control Systems _
Slide 6: Synerject (50% JV with Siemens-VDO)
8 ORBITAL _1. Synerject (50% JV with Siemens-VDO) » Syner a globa = They — Exc ject is a supplier and manufacturer of electronic engine management systems (EMS) ectronic fuel injection systems to the non-automotive market. nave: lusive access to Siemens-VDO automotive components and know how for non
Slide 7: Synerject History
8 ORBITAL Synerject History JV with Siemens-VDO to design and manufacture Fuel Systems for OCP DI Motor Scooter and Automotive Company expanded to include Engine Management Systems for Port-Injected Two-Wheel vehicles Relocated Newport News Operation from Siemens VDO to new facility Company expanded
Slide 8: Synerject Markets and Products
8 ORBITAL _Synerject Marke 2 Stroke Direct Injection Port Injection s and Products 4 Stroke Port Injection
Slide 9: Synerject Update
8 ORBITAL Synerject Update = Synerjec has been profitable over the past has been cash flow positive over the past 4 years ($20.4m over last 4 years) = Synerjec has reduced debt by $10.5m over the last 2 years = Acquisition of BRP Delavan facility will increase annualised revenue by >50% from 1 March
Slide 10: Market driver - Legislation and Technology Solutions
8 ORBITAL Market driver - Legislation and Technology Solutions World Motorcycle Emissions Legislation Technology __ Carburetor ISSIONS Em a : Te ie | oe Ce a Naa A Le | eo oy CERI $6 . iets es ee | i ee 2 2000 «42001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Slide 11: Predicted Growth of Non Auto EMS Systems
8 ORBITAL Predicted Growth of Non Auto EMS Systems Total Annual Non Automotive Market 50 100 45 -| : 40 | 7 35 : 30 : L 50 | Al |. 40 | ” Le 1 10 + a : 5 J | | | oe i | 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 SING % Volume (million units per annum) ie ol 1 EMS Market Penetration
Slide 12: Licensing and Royalties
8 ORBITAL 2, Licensing and Royalties » Licences are lump sum payments, for access to the Orbital technology « Royalties are payments made on units actually built or sold = The Orbital technology is an advanced form of Direct Injection, where fuel is injected directly into the cylinder. « Still appea
Slide 13: Orbital Technology on the Market
8 ORBITAL Orbital Technology on the Market ERCURY wee ws. B DIE =" The Water Cails me nO Nae PR B UCTS TOHATSU PEUGEOT } Vitogle z PIAGGIO
Slide 14: Licensing and Royalties
8 ORBITAL Licensing and Royalties Licensees: GM, Ford, Fiat, Bombardier (BRP), Mercury Marine, Tohatsu, Piaggio (incl. Aprilia), Peugeot Motorcycles, Bajaj, Hirth, Kymco, Envirofit, Polaris Manufacturing Licensees: Synerject, UCAL
Slide 15: Licensing and Royalties Update
8 ORBITAL Licensing and Royalties Update Total revenue of $9.3m over the last 3 years Technology adoption driven principally by legislative change Early adoption occurred with ‘niche’ markets, eg. outboards, PWCs, 50cc scooters Automotive have resisted legislative change aggressively. Greenhouse lob
Slide 16: Engineering Services
8 ORBITAL 3. Engineering Services Orbital has a depth of powertrain engineering and market knowledge that is quite unique. Orbital has fundamental design, development and innovation to deliver: » Engine management systems = Fuel systems * Combustion systems * Catalyst technology * Fuel economy and e
Slide 17: Engineering Services
8 ORBITAL Engineering Services = Provides services to OEMs, suppliers and regulators, globally « This is a fee for service business which operates much like a general consulting business except we deliver hardware, results from test cells or new engine designs, not simply advice = 20-30% of business
Slide 18: Half Year Results
8 ORBITAL + lalf Year Results
Slide 19: Dec-05 Jun-05 Dec-04
8 ORBITAL Dec-05 Jun-05 Dec-04
Slide 20: Financial Summary - Profit & Loss
8 ORBITAL Financial Summary - Profit & Loss * Operating revenue at the same level as half year ended 31 December 2004 Increased royalties offset by decreased engineering fees *Synerject equity accounted contribution result marginally down year on year. Partly due to product mix and partly due to inc
Slide 21: Financial Summary - Balance Sheet
8 ORBITAL Financial Summary - Balance Sheet Dec 05 Notes: Sufficient cash for operating requirements Synerject is now equity accounted Other assets mainly deferred tax. AIFRS requires long term borrowings to be carried at “fair value” In prior years Orbital carried provision for guarantee of Synerje
Slide 22: Financial Summary - Cash Flow
8 ORBITAL Financial Summary — Cash Flow Halli Year - Ended Year Ended D Dec-04
Slide 23: Strategy and Outlook
8 ORBITAL Strategy and Outlook
Slide 24: Strategy
8 ORBITAL — Strategy Achieve profit growth and positive cash flows with increased emphasis on Synerject and technology value: « Growth of Synerject « increased product offerings and leveraging Siemens-VDO global network (New markets — China and India) « Growth of Royalty revenues " by extending Orbi
Slide 25: Orbital's R&D
8 ORBITAL Orbital’s R&D « Advanced combustion system development for gasoline powertrain, targeting 25% reduction in greenhouse gas (C%-Controlled Combustion Cycle) ¢ Direct injection CNG/Hydrogen injector along with gaseous fuel combustion development * Controlled Auto Ignition or HCCI with Orbital
Slide 26: Outlook - Synerject
8 ORBITAL Outlook - Synerject Acquisition of BRP Delavan facility will increase annualised revenue to >$90m from 1 March Synerject have invested in new ECU product as part of expansion plan to win new customers and further improve margins Synerject are setting up new manufacturing facility in China
Slide 27: Outlook - Royalties
8 ORBITAL Outlook - Royalties * Mercury Marine re-launching OptiMax range and introducing new flagship 300 horsepower engine * Orbital DI 4-stroke programs progressing well for motorcycles « New licensee Bajaj to enter production in early FY2007 « New licence with Polaris for various products, royal
Slide 28: Outlook - Engineering Services
8 ORBITAL Outlook - Engineering Services « Traditional markets have been under pressure e.g. GM, Ford etc., some signs of recovery « Emerging markets in India and China with growing auto and non-auto markets driven by strong emissions legislation " Secured engineering contracts of $9m since 1 July,
Slide 29: Thank You
Thank You World class Fuel Systems and Powertrain solutions Low emissions Low fuel consumption Alternative fuels High quality Cost effective Fj ORBITAL