Slide 1: Cover letter to ASX: Investor Presentation
v4 O R B ITAL Orbital Engine Corporation Limited A.B.N. 32 009 344 058 ENGINE CORPORATION LIMITED 1 Whipple Street, Baicatta, 6021 Western Australia Ph +61 8 9441 2311 Fax: +61 8 9441 2111 Website: www.orbeng.com 6 June 2003 The Manager Company Announcements Office Australian Stock Exchange Limited
Slide 2: Presentation to Investors June 2003
Strictly Private & Confidential ORBITAL ENGINE CORPORATION ASX Code: OEC Presentation to Investors June 2003
Slide 3: Disclaimer
Disclaimer This presentation is provided to you, as a professional investor as defined in Chapter 6D.2 of the Corporations Act, for the purpose of providing preliminary background financial and other information to enable recipients to review the business activities of Orbital Engine Corporation Lim
Slide 4: Overview
Overview « OEC successfully executing a well articulated business strategy «+ OEC is systematically working towards profitability in FY’04 + Cash on hand reduced to $6.7m as at 31 December 2002, marginally lower at June 2003 « Global customers demand confidence in OEC’s long-term financial viability
Slide 5: Company Statistics and Performance
Company Statistics and Performance Shares on Issue 356.6m Share Price 14.0¢ Market Cap $50.0m Daily Volume (shares) 483,000 Directors Ross Kelly Chairman Peter Cook Chief Executive Officer John Marshall Non Executive Director Grahame Young Non Executive Director There are no substantial shareholders
Slide 6: Business Strategy
Business Strategy « Implementation after appointment of new Managing Director Jan 02. + Shift from R&D to commercialise and exploit « Engineering — reduce costs from >$20.0 mil to < $10.0 mil — build short and long term revenue stream (turnover growth of 10+% pa from A $8.8 m F02, E $9.7 m F03, E $1
Slide 7: Financial Summary - Profit & Loss
8 ORBITAL Financial Summary - Profit & Loss 6 Deo 00 0 Assumption cast results to 30 April 2003 and management forecast for May and June 2003 6
Slide 8: Pro forma balance sheet
Note: The proforma balance sheet at 31 Dec 02 reflects the following changes: 1. Equity Capital raised $6.0m 2. The financial effect of the Synerject restructure * * Net effect of change is nil
Slide 9: Engineering
Operational Review Engineering
Slide 10: Engineering Services
Operational Review Engineering Services * ¢ Major emphasis of restructure Cost base down from > $20m pa to < $10m pa (including non cash expenses of $1.8m pa) Personnel numbers reduced to 65 Revenue budget now $12m pa Revenues derived from: - Automotive OCP programs 36% -- Non Automotive OCP program
Slide 11: Operational Review: Automotive
@ ORBITAL Operational Review Automotive
Slide 12: Automotive
Operational Review Automotive + Orbital Combustion Process (OCP) technology is yet to pass the showroom test «+ Technology is moving towards direct injection (DI) - some benefits delivered, competing 1st generation products have problems - deliver power but not economy/emissions «+ OCP is recognised
Slide 13: Automotive
Operational Review Automotive . Currently advanced Engineering programs with two original engine manufacturers (OEM's) (N.B. A typical engine plant with a capacity 400k units pa and with royalties achieved in marine sector US$40 — $50 per unit represents US$16 - $20m pa in royalties) ’ Commercialisa
Slide 14: Marine & Recreation
Operational Review Marine & Recreation
Slide 15: Marine & Recreation
Operational Review Marine & Recreation + Models continue to grow - At April 2003 «» 19 marine DI applications « Additional 4 models by end of calendar 03 + Mercury release 115 hp model of 1.5 litre Optimax engine » 183 cylinder engine after 6 cylinder range rolled out Model uptake would suggest bett
Slide 16: Motorcycle
Operational Review Motorcycle ae “ain
Slide 17: Motorcycle
Operational Review Motorcycle . Models continue to grow ~ At April 2003 « 8 DI motor cycles « Plus 5 Pl applications « Additional 2/3 DI motorcycles by end of calendar 03 Geographic expansion - India and UCAL — Indian government have approved technology cooperation agreement — Over 4 million motorcy
Slide 18: Synerject
Operational Review Synerject vat we
Slide 19: Synerject
Operational Review Synerject «+ Refinanced and restructured + Refinancing in place until 30 September 2006 + Orbital contribute Marine & Recreation Systems business/Siemens-VDO contribute EF! Systems business + Cashflow positive for more than 12 months + Profitable in half year ended 31 Dec 2002 + H
Slide 20: Synerject Restructuring Impact
@ ORBITAL Operational Review Synerject Restructuring Impact + Substantially reduces risk profile + Reduces Orbital’s Systems Revenue to zero after FY’03 + Increase Synerject’s revenue by US$5-10 million in FY’04 (20%) + Synerject current revenue growth about 20% pa + Synerject enjoys the profit from
Slide 21: Key Points
Key Points Restructure of Business - Cost reduction - Cash neutrality - Engineering services business - Synerject restructure Customer Confidence - Generated by additional funds - Generated by reduced cash burn - long term relationship New equity capital for working capital purposes 20
Slide 22: Cash Utilisation
Cash Utilisation + Cash balance June’03 (estimated) + Capital raising (net of costs) + Total cash resource + Capital expenditure + Investment/Acquisition + Synerject + Debt repayment + Working capital/strengthening balance sheet 2 $5.5m + (-) $0.5m $5.7m $11.2m < $0.5m $0.0m $0.0m $0.2m $10.5m
Slide 23: Issue Details
Issue Details « Share Placement / Share Purchase Plan (SPP) + To be underwritten to $6.0m «+ Minimum 50,000,000 shares subject to SPP + Issue price 12.0¢ + — Issue to raise minimum $6.0m (less costs) + Proposed Timetable — Finalise firm commitments/Sub-Underwriting ~ ASX announcement - Settlement of