Austal Limited · ASX:ASB
Austal — Macquarie Australia Conference 2013
28 slides from Austal's conference presentation, May 2, 2013
Slide 1: Macquarie Australia Conference Presentation
Macquarie Australia Conference Presentation For personal use only Andrew Bellamy, Chief Executive Officer 3 May 2013
Slide 2: Austal
Austal For personal use only Founded in 1988 and listed on the Australian Stock Exchange in 1998, Austal is a leading defence prime contractor, specializing in the design, construction and maintenance of high performance vessels for defence and commercial purposes. Austal has a global footprint wi
Slide 3: Ships
Ships For personal use only Advanced design, construction, engineering and Warships and Multi Role Vessels support are Austal’s core competency. 248 vessels constructed. Delivered globally. Defence Global defence prime contractor with significant Patrol Vessels programs in place. o US Navy’s L
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 Sup
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: o Vessel and Fleet Maintenance. o Refit and Rep
Slide 6: Delivering on growth strategy
Delivering on growth strategy For personal use only SHIPS SYSTEMS SUPPORT 6
Slide 7: Improving margins are driving performance
Improving margins are driving performance For personal use only Revenue (A$m) Underlying EBITDA (A$m) Underlying NPAT (A$m) H1FY12 H1FY13 H1FY12 H1FY13 H1FY12 H1FY13 4.4 3.1 Underlying Underlying NPAT A$8.5m EBITDA 5.4 389.4 A$28.4m 267.4 2.7 24.0 -3.0 Reported EBITDA Stock Yacht Reported NPAT Stock
Slide 8: Recent major achievements
Recent major achievements For personal use only Major new contract confirmed: o LCS 14 and LCS 16, worth US$681.7m. o JHSV 10, worth US$144m. USNS Spearhead (JHSV 1) delivered. USNS Choctaw County (JHSV 2) completed builders sea trials. New commercial vessel manufacturing facility in the Phi
Slide 9: Performing to previous outlook
Performing to previous outlook For personal use only November 2012 Outlook Current Status USA • Apply learning to improve margins • EBIT margin up to 5.2% • JHSV 10, LCS 14 & LCS 16 contracts to be funded • All three contracts funded, with LCS contracts funded post-sequestration • Revenue in excess
Slide 10: Financials
Financials For personal use only SHIPS SYSTEMS SUPPORT 10
Slide 11: Profit and Loss Summary
Profit and Loss Summary For personal use only H1FY13 H1FY12 Increase H1FY13 results Income statement (A$m) (A$m) (A$m) Margin improvement in the USA, with Revenue 389.4 267.4 122.0 EBIT margin at 5.2% vs 1.2% in H1 FY12. Underlying EBITDA 28.4 2.7 25.7 o Opportunity for further US margin growth as
Slide 12: Segment breakdown
Segment breakdown For personal use only USA H1FY13 (A$m) H1FY12 (A$m) Australia (HSO) H1FY13 (A$m) H1FY12 (A$m) Revenue 323.4 227.0 Revenue 46.5 32.5 EBIT* 16.7 2.6 EBIT (1.3) (7.8) EBIT margin (%)* 5.2 1.2 EBIT margin (%) (2.9) (24.1) Margin improvement continues. Forecast to break even in FY13
Slide 13: Balance Sheet
Balance Sheet For personal use only Balance sheet At 31 Dec 2012 At 30 Jun 2012 Balance sheet summary: (A$m) (A$m) Growth in asset base, reflecting Total assets 839.0 826.0 increasing scale of USA business. Cash 78.4 51.8 Balanced sheet strengthened by Restricted cash 84.3 52.9 successful A$77.9
Slide 14: Debt position
Debt position For personal use only Pre cap raise Post cap raise Initiatives taken in capital raising to reduce (30 Sep 12) (31 Dec 12) 500 50% gearing and increase headroom. Go-Zone bonds: o US$190m facility drawn down. US$35 400 40% million repaid February 2013. 38.7% o Low interest rate (aver
Slide 15: Capital expenditure
Capital expenditure For personal use only Segment (A$m) H1FY13 H2FY13(f) FY13(f) FY12 USA 9.5 12.8 22.3 107.5 HSO Australia 0.1 - 0.1 0.3 PSO Philippines 1.0 5.4 6.4 10.1 Service & Systems - 0.2 0.2 - Other - 0.8 0.8 - TOTAL 10.6 19.3 29.8 117.9 Major capital expenditure program completed in FY12
Slide 16: Operations Update
Operations Update For personal use only SHIPS SYSTEMS SUPPORT 16
Slide 17: Order book
Order book For personal use only Order book of A$2.6 billion secures revenue until 2017, including: o Littoral Combat Ships for US Navy x6 contracted (out of 10 vessel award), plus x1 from General Dynamics (GD). x1 delivered to GD. o Joint High Speed Vessels for US Navy x9 contracted, x1 delivered
Slide 18: Littoral Combat Ship
Littoral Combat Ship For personal use only 10 ship block buy award to Austal worth US$3.5 billion: o 2 earlier additional vessels constructed for GD, as prime contractor. o Options to fund 2 ships out of Austal’s 10 contract award have been exercised by US Navy each year. 6 ships, and the 2 from
Slide 19: Joint High Speed Vessel
Joint High Speed Vessel For personal use only 10 ship award to Austal valued at US$1.6 billion. Options to fund construction of all 10 ships have been exercised by the US Navy – work secured through to 2017. Potential for program to be extended as JHSV capability aligns with US foreign policy.
Slide 20: US sequestration has not impacted Austal
US sequestration has not impacted Austal For personal use only Austal-built vessels have continued to be funded • LCS 14 & LCS 16 funded in March 2013 – after sequestration commenced. • JHSV 10 funded in December 2012. • Funded vessels are locked in and revenue is unaffected. US focused on Asia-Paci
Slide 21: Cape Class Patrol Boat
Cape Class Patrol Boat For personal use only A$330 million contract to design, manufacture and support 8 new Cape Class Patrol Boats. Vessels are fully funded and underwrite activity at Henderson shipyard until H1FY16. Progress: o CCPB 1 – Delivered in April 2013. o CCPB 2 – Keel laid in Janua
Slide 22: Philippines
Philippines For personal use only Enables Austal to compete in the global commercial market (e.g. ferries, wind farm support vessels). Started operations in February 2012, with maiden profit reached this half. Facility opened by Philippines President Benigno S. Aquino III. First ship deliver
Slide 23: Service and systems
Service and systems For personal use only Provides long-term opportunity and stability for Austal through annuity-style work. o Potential for high margin contracts. o Low capital intensity. o Recurring revenue. Austal has been building its global footprint, strategic partnerships and developing
Slide 24: Strategy and Outlook
Strategy and Outlook For personal use only SHIPS SYSTEMS SUPPORT 24
Slide 25: Strategy
Strategy For personal use only United States Henderson Philippines Support • Increase profit • Focus • Transfer • Build a capable margin through Henderson technological service network utilising lessons operations on capabilities on in preparation for learnt on first-in- manufacturing commercial US
Slide 26: Outlook
Outlook For personal use only Lessons learnt from a FY13 guidance for Strengthened balance sheet to challenging period to deliver A$65-71m EBITDA and A$23- deliver on A$2.6 billion order stronger earnings from US 26m in NPAT. book. operations. Long lead items in defence Opportunities to win variant-
Slide 27: Appendix - Austal Overview
Appendix - Austal Overview For personal use only Austal is a global defence prime contractor. The Company designs, constructs and maintains revolutionary platforms such as the Littoral Combat Ship (LCS) and the Joint High Speed Vessel (JHSV) for the United States Navy, as well as an extensive ra
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