Slide 1: Celebrating Success
Celebrating Success Annual General Meeting a David Singleton, Chief Executive Officer.
Slide 2: Celebrating Success
For personal use only Good afternoon. - It is great to see many of our shareholders from Western Australia and the East Coast at this virtual meeting. - It is my fifth and last Annual General Meeting as Chief Executive Officer and ninth in total with Austal. - I will be handing over to Patrick Gregg
Slide 3: Combination of the expected and the wholly unexpected
For personal use only Combination of the expected and the wholly unexpected. What we expected was our strategy playing out. - USA continuing to develop and build on its success. - Both LCS & EPF improving. - Brilliant future ahead. - Australasia strategy to fundamentally redesign our business, impro
Slide 4: Worldwide business and order book
For personal use only - Worldwide business incorporating 7 shipyards in 5 countries and 6 separate service centres. - 6800 employees and little over half in USA. - Order book of $4.3 billion with 45 ships scheduled or under construction and 10 ships ordered (Cape, TT, Mols, SGTM). - New ships ordere
Slide 5: Financial results
For personal use only - Revenue @ $2.1 billion up 13%. - Record EBIT of $130 million (above analysts predictions & guidance). - Excellent EBITDA conversion to operating cash flow of $164 million. - USA has been the standout performer. Strength to strength. - Net cash position of $231 million includi
Slide 6: Cash and dividends
For personal use only Progressive and accelerating level of cash now at $272 million - Growth in the business has been organic to date. - Cash flow allows for additional acquisition led growth as we seek to build our support and sustainment business as previously advised. - Also as I said previously
Slide 7: Regional videos introduction
For personal use only This style of presentation – online bringing in people from the East Coast of Australia gives us the ability to give greater insights. So for USA, Australia, Vietnam and Philippines, we have put together short video’s to give you some insights. It has been complicated to put th
Slide 8: Australia: Henderson shipyard
For personal use only ₋ First is Patrick Gregg, COO Australasia talking from our Henderson shipyard in Western Australia. Australia has made the transition from a dual defence / commercial yard to a facility dedicated to RAN and others defence vessels and defence support for RAN and Border Force. I
Slide 9: Austal USA: Alabama shipyard
For personal use only Next is Craig Perciavalle, President Austal USA talking from our Alabama shipyard in USA. ₋ Craig has overseen a renaissance in the Alabama shipyard in recent years. EPF production is superb and LCS has improved so much it is now making the difference that is driving up margins
Slide 10: Austal Philippines: Cebu shipyard
For personal use only Next is Wayne Murray, President Austal Philippines talking from our Cebu shipyard in Philippines. Team has essentially been locked down for nine months, several of which they spent living in the shipyard. ₋ Decision to triple the size of the capacity of this facility 3 years ag
Slide 11: Austal Vietnam: Vung Tau shipyard
For personal use only And lastly Mark Dummett, President Austal Vietnam talking from our Vung Tau shipyard in Vietnam. ₋ About 3 year ago attempted to buy Strategic Marine in Vietnam that was on the verge of bankruptcy. ₋ Instead bought the Team and built a new facility in under 4 months. ₋ Cannot s
Slide 12: Strategic position and defence environment
For personal use only ₋ I will now turn my mind to the strategic position that we are in and the impact on Austal. ₋ Whilst much of the world is focused on COVID-19, we as a Defence business are focussed on the rapidly changing Defence environment. ₋ The post war ‘Cold War’ in Europe gave way to act
Slide 13: Support expansion and move to steel
₋ We are also developing our business to suit. Asia will be an important centre for our support business we have recently attained accreditation to support US Naval forces in Australia at our current facilities, we have just announced the acquisition of BSE shipyard in Cairns an important site for A
Slide 14: USA steel shipbuilding expansion
For personal use only ₋ Biggest step in USA since we built the shipyard. ₋ Austal is the leading Aluminium shipbuilder in USA a market we dominate and believe we will continue to. ₋ However if we want to grow and we do then we have to develop and growing in shipbuilding is a good way to do it. Stick
Slide 15: Accessible new shipbuilding programs
For personal use only ₋ This chart shows the ‘Why’. ₋ Chart shows approximate value of Austal accessibility to new ship building programs for typical year, where no incumbent exists. ₋ Austal has a great reputation, great shipbuilders, first class facilities – now a burgeoning market. 14
Slide 16: New programs coming through
For personal use only ₋ And the market appears to be significant with several new programs coming through. 15
Slide 17: Why support and sustainment matter
For personal use only I have mentioned support several times through this presentation – Why? ₋ Defence maintenance is highly complex and sophisticated. To do it you need to invest in people, processes and facilities dedicated to the process. Defence needs availability not ‘fix when it breaks’. Incl
Slide 18: Support revenue growth
For personal use only ₋ As ships deliver, get deployed more, get older, need upgrades, revenues will rise naturally over future years. ₋ That’s why it’s a key focus for us. 17
Slide 19: Australian shipbuilding outlook
For personal use only ₋ Our view on Australian shipbuilding has changed. ₋ Capes $324 million, which gives us a good 3 year runway. ₋ The RAN recently published a detailed Force Structure Plan (FSP). ₋ First time we have had a detailed 15 year insight into procurement. ₋ And first time RAN have comm
Slide 20: For personal use only
likely be affected byCOVID-19. but is relatively smallin-our business and we see a reasonable pipeline mal Slide 19 19
Slide 21: Research and development, Chief Digital Officer
For personal use only Invest progressively in Research and Development, both in the USA and Australia. Austal appointed a Chief Digital Officer (CDO). This move recognises the tangible advances that bolstering our R&D capabilities has and will continue to have, in improving both our products and our
Slide 22: Digital video: Chief Digital Officer
For personal use only We have a short video to play now - Andrew Malcolm, Chief Digital Officer from the control room of the Queen Beetle. Andrew is our first CDO. The position recognises the increasing value of Digital to our business whether its Automating Processes, in Design, Digital design opti
Slide 23: Outlook and guidance
For personal use only ₋ We started the year indicating that we did not wish to provide guidance because of the uncertainties around COVID-19 the impacts on travel affecting ship commissioning and general market turbulence. ₋ I am pleased to say that these matters whilst confronting are still being m
Slide 24: Closing summary
quality contracts with solid customers who buy over decades. Most importantly we are in a fast growing market, with high barriers to entry and we are in the exact geographies that will see the most growth. A rising tide lifts all and it will lift us. The buying intentions of the US, CoA and Asia mak
Slide 25: Disclaimer and contact
h Disclaimer AUSTAL David Singleton, Chief Executive Officer Telephone: +61 8 9410 1111 For further information visit www.austal.com Disclaimer This presentation and any oral pr ipanying it has been prepared by Austal Limited (“Austal’). It should not be considered as an offer or invitation to subsc
Slide 26: For personal use only
For personal use only 24