Orbital Corporation Ltd · ASX:OEC
Orbital — Investor Presentation (October 2021)
28 slides from Orbital's investor presentation, Oct 19, 2021
Slide 1: Investor Presentation
Investor Presentation 19 October 2021 Not for release to US wire services or distribution in the United States
Slide 2: Disclaimer
Disclaimer You must read the following notices before reading or making any use of this document or any information contained in this document. By continuing to read, use or otherwise act on this document, you agree to be bound by the following terms and conditions, including any modifications to th
Slide 3: Disclaimer
Disclaimer Investment Risk: An investment in OEC is subject to known and unknown risks, some of which are beyond the control of OEC, including possible loss of principal invested. OEC does not guarantee any return on investment, any particular rate of return or the performance of OEC, nor does it gu
Slide 4: World leader in the design and manufacture of integrated engine systems
World leader in the design and manufacture of integrated engine systems for military drones* (* Tactical Unmanned Aerial Vehicles ‘UAVs’) © 2021 Orbital Australia Pty Ltd 4
Slide 5: Textron Systems: Additional engine program awarded
Textron Systems Additional engine program awarded New contract announced on Second engine program with Textron Systems 18 October 20211 with Textron Systems, a subsidiary of Textron Inc. and Development of Orbital UAV upgrades to Textron one of the world’s largest Systems’ current UAV engines suppli
Slide 6: At a glance
At a glance FY21 revenue $31.2M Additional contract with Textron Systems adds to existing engine development programs Orbital UAV’s production profile opportunity expands from two to six engine production lines over the next 24 months Tracking UAV market opportunities both globally and domestically
Slide 7: Tactical UAV market
Tactical UAV market Dominated by Defence prime contractors Worldwide tactical UAV production 2020 – 20291 US$15.7B Addressable Propulsion System Market estimated at ~15% Worldwide tactical UAV production US$210M p.a. in 20201 US$1.4B 1 Source: World Military UAV Profile & Forecast 2020-21, Teal Grou
Slide 8: What is a tactical UAV?
What is a tactical UAV? Intelligence, Surveillance, Reconnaissance Tactical UAVs are used by global defence forces for intelligence, surveillance and reconnaissance (ISR) missions and have increasing strategic and commercial significance • Field operated by military units • US$1.5 - US$4 million per
Slide 9: Our unique product offering
Our unique product offering Industry leading performance Orbital UAV’s heavy fuel propulsion systems have the world’s best performance and meet the U.S. Dept. of Defense’s ‘one fuel’ policy Orbital UAV Others Time between overhaul 500 hrs ~50 hrs Cold start to launch 2 min >20 min x3 U.S. FAR33.49 e
Slide 10: Increasing customer diversification
Increasing customer diversification New contracts and customers Tier 1 Defence Prime Contractors SINGAPORE DEFENCE COMPANY Engine development Primary engine program and supply Engine design and R&D contract to supplier to power agreement for up to development contract design and develop a Insitu’s e
Slide 11: Boeing-Insitu
Boeing-Insitu Outlook for Boeing-Insitu’s engine demand Market Status of Boeing-Insitu LTA 1. Increasing competition within tactical UAV market 1. 2. Production volumes Production transferred to downgraded in February 2021 Australia to drive efficiencies 2. U.S. military withdrawal from Afghanistan
Slide 12: Textron Systems: Two engine programs awarded
Textron Systems Two engine programs awarded 1. Engine development program & supply agreement1 2. Program to develop upgrades for existing fleet of UAV engines • Integration of the Orbital UAV 150cc engine and • Upgraded engines are targeting increased engine control system into Textron Systems’ take
Slide 13: Singapore & Northrop Grumman
Singapore & Northrop Grumman Progressing additional development programs SINGAPORE DEFENCE COMPANY R&D contract to design and develop a Design, development & initial low rate hybrid propulsion system for vertical production of multi-fuel engine1 take-off & landing application2 • Multi-phase program
Slide 14: Production line investment
Production line investment Contracted development programs SINGAPORE DEFENCE COMPANY * * FY21 FY22 FY23 New Textron Systems contract adds to existing engine development programs, expanding the Company’s production profile opportunity from two to six engine production lines over the next 24 months ©
Slide 15: Future market opportunities
Future market opportunities Major tactical UAV programs United States Army • FTUAS requirements approved US Navy Future Tactical UAS Program1 by Army Oversight Council in Mi2 Technology Demonstration2 August 2021 • Increment 1 white papers submitted in September 2021 • Industry product pitches due b
Slide 16: Defence & UAV market
Defence & UAV market Rising budgets Rising global Defence budgets • Global defence spending reached US$1.83 trillion in 2020 – a 3.9% annual uplift in real terms1 • North America is the largest contributor, accounting for ~41% of the total spend and growing by 6.3% in 2020 real terms1 Increased UAV
Slide 17: Corporate overview
Corporate overview Share Capital As at 14 October 2021 (Trading Halt Announced) Our FY22 Objectives • Return to profitability Fully Paid Ordinary Shares 77.9M • Investment in new production lines Closing share price $0.65 • Generating positive operational cash flows • Deliver shareholder value Marke
Slide 18: Entitlement Offer Details
Entitlement Offer Details A one for six renounceable pro rata entitlement offer of New Shares at an issue price of A$0.50 per New Share to raise gross proceeds of Entitlement Offer Structure up to approximately A$6.5 million (before costs). The Entitlement Offer is not underwritten and is available
Slide 19: Appendices
Appendices (* Tactical Unmanned Aerial Vehicles ‘UAVs’) © 2021 Orbital Australia Pty Ltd 19
Slide 20: Appendix A: Key Risks (1 of 7)
Appendix A: Key Risks (1 of 7) INTRODUCTION This section discusses some of the risks associated with an investment in Orbital. Orbital's business is subject to a number of risk factors both specific to its business and of a general nature which may impact on its future performance. Before subscribin
Slide 21: Appendix A: Key Risks (2 of 7)
Appendix A: Key Risks (2 of 7) Further to this, there is a risk that, if any of the Company’s key suppliers increase prices, this could cause a disruption to the Company’s ability to deliver its products or adversely impact on the Company's financial results. For example, a key risk to the Company i
Slide 22: Appendix A: Key Risks (3 of 7)
Appendix A: Key Risks (3 of 7) Product faults and research and development: There is a risk of the engines and engine management systems sold by the Company being faulty or otherwise breaching product specification requirements and contractual obligations. These matters could adversely affect the Co
Slide 23: Appendix A: Key Risks (4 of 7)
Appendix A: Key Risks (4 of 7) Government regulation: The Company develops products for use in the aerospace and defence sectors, which are subject to extensive regulation. Products manufactured using the Company’s technology may also be subject to government regulation, including regulations govern
Slide 24: Appendix A: Key Risks (5 of 7)
Appendix A: Key Risks (5 of 7) Liquidity risk management: Liquidity risk arises from the financial liabilities of the Company and the Company's subsequent ability to meet its obligations to repay financial liabilities as and when they fall due. The liquidity position of the Company is managed to see
Slide 25: Appendix A: Key Risks (6 of 7)
Appendix A: Key Risks (6 of 7) Climate change risk: Climate change is a risk the Company has considered, particularly related to its operations in the aerospace industry. The emergence of new or expanded regulations associated with the transitioning to a lower-carbon economy and market changes relat
Slide 26: Appendix A: Key Risks (7 of 7)
Appendix A: Key Risks (7 of 7) • changes in government policies, taxation and other laws (including variations to existing taxes and the introduction of new taxes; • the strength of, and fluctuations in, the equity and share markets in Australia and throughout the world; • movement in, or outlook on
Slide 27: Appendix B: International Offer Restrictions
Appendix B: International Offer Restrictions (1 of 1) This document does not constitute an offer of New Shares in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any country outside A
Slide 28: Todd Alder / Ian Donabie contact details
Todd Alder Ian Donabie Managing Director / CEO www.orbitaluav.com Corporate Communications Manager +61 8 9441 2311 +61 8 9441 2165 contact@orbitalcorp.com.au idonabie@orbitalcorp.com.au