Orbital Corporation Ltd · ASX:OEC
Orbital — Investor Presentation (June 2009)
36 slides from Orbital's investor presentation, Jun 10, 2009
Slide 1: Orbital Corporation Limited Investor Presentation June 2009
For personal use only Orbital Corporation Limited Investor Presentation June 2009
Slide 2: Orbital Corporation Overview
Orbital Corporation Overview For personal use only Corporate Leader in Engine ASX Code OEC Management Systems for Shares on issue 479M Specialised Markets ed Share Price* eck A$0.09 ch Market Capitalisation* A$43M be Orbital provides fuel systems and Top 20 Shareholders* to 52% nfo engineering consu
Slide 3: Overview - Orbital Business Sectors
Overview - Orbital Business Sectors For personal use only • Alternative Fuels – • Engine Management Systems – • Orbital Consulting Services (OCS) • Licensing and Royalties 3
Slide 4: Overview - Orbital & Synerject Locations
Overview - Orbital & Synerject Locations For personal use only Delavan Wisconsin USA •Synerject Toulouse Changchun Toulouse China France Newport Chongqing China News Virginia USA Sydney Perth Australia Australia Orbital Locations Regional Customer Support Synerject Locations 4
Slide 5: Overview - Orbital & Synerject Customers
Overview - Orbital & Synerject Customers For personal use only 5
Slide 6: Strategy
For personal use only Strategy
Slide 7: Strategy
Strategy For personal use only Leader in Engine Management Systems for Specialised Markets Strategic Priorities – Expand into aligned markets focusing on alternative fuels • OGP (Orbital Gas Products) is the first step in this process – Replicate the successful Synerject model. • Build system supply
Slide 8: Why Alternative Fuels?
Why Alternative Fuels? For personal use only • Emissions reduction – Up to 11% Greenhouse Gas emission reduction with Liquid Petroleum Gas (LPG) automotive systems vs gasoline, up to 15% reduction with Liquid Natural Gas (LNG) in transport application – Up to 80% Hydrocarbon reduction on 2 stroke Gr
Slide 9: Why Alternative Fuels?
Why Alternative Fuels? For personal use only Projected Oil Consumption Orbital’s Opportunity Oil Production Projected Oil Availability Source: http://www.theoildrum.com/tag/update “In the next ten years it is projected that electricity, liquefied petroleum gas (LPG) and natural gas (particularly in
Slide 10: Recent Strategic Achievements
Recent Strategic Achievements For personal use only • Sygma, Brazil, - Spark Ignition of E100 fuels • Changan, China, - demonstration FlexDITM application to auto engine • Ford, Australia, - Supply Agreement for next generation LPG 10
Slide 11: Business Sector Review
For personal use only Business Sector Review
Slide 12: Alternative Fuels – The Business
Alternative Fuels – The Business Fuel and Control Systems for Clean Alternative Fuels For personal use only • LPG (Liquid Propane Gas) – Tier 1 supplier of LPG systems to Ford Australia and to the aftermarket • Purchased June 2008 - trading as Orbital Gas Products (OGP) – Revenue - approximately $6
Slide 13: Alternative Fuels – Markets and Opportunities
Alternative Fuels – Markets and Opportunities Potential Australian Heavy Duty Transport LNG System Market For personal use only $60 Potential Value of Australian Automotive LPG System Market $50 $350 $40 AU$(million) $300 $30 $250 FY09(e) $20 AU$(million) FY10(e) $200 FY11(e) $10 FY12(e) $150 $0 FY1
Slide 14: Alternative Fuels – Year in Brief
Alternative Fuels – Year in Brief For personal use only • OGP generated profit in first ½ year since acquisition • Investment in next generation LPG • Awarded Supply Contract from Ford Australia from 2010 • Installed new heavy duty engine test facilities • Negotiated Continental supply agreement – E
Slide 15: Alternative Fuels – Outlook
Alternative Fuels – Outlook For personal use only • Commence supply of next generation LPG systems to retrofit market • Fuel cost saving • Improves torque, power and cold starting • Emissions – 11% reduction in CO2 emissions versus gasoline vehicle • Continue to explore opportunities in the CNG/LPG
Slide 16: Synerject – The Business
Synerject – The Business For personal use only • 42%:58% Orbital/Continental joint venture established in 1997 • Global manufacturer and supplier of Engine Management Systems (EMS) and electronic fuel injection systems for non-automotive market • Synerject has access to Continental automotive compon
Slide 17: Synerject – Markets and Opportunities
Synerject – Markets and Opportunities For personal use only Total 2006 2007 2008 2009 2010 2011 2012 2013 2014 Motorcycle non auto volume (million units) 80 Asia Motorcycle 70 China Motorcycle 60 Europe Motorcycle 50 40 India Motorcycle 30 Outboard/PWC 20 10 Snowmobile 0 ATV 2004 2007 2010 2013 2016
Slide 18: Synerject – Year in Brief
Synerject – Year in Brief For personal use only • Continental takes an additional 8% controlling interest in Synerject in exchange for US$4 million Orbital top up option – Synerject owned 42%, 58% Orbital and Continental respectively – Orbital and Continental expand the scope of Synerject’s business
Slide 19: Synerject – Outlook
Synerject – Outlook For personal use only • Motorcycle market – introduction of emission legislation in Asia is key driver for EMS in these markets • China introduced Euro III in 2008 • Taiwan introduced infield emission ECU Manufacturing - Delevan – manufacturing and customer support in China in pl
Slide 20: OCS (Orbital Consulting Services) - The Business
OCS (Orbital Consulting Services) - The Business Specialist engineering consulting service based in Perth, For personal use only Western Australia, employing approximately 65 staff with revenue FY08: $11.7 million. • Engine design and development • Combustion systems • Fuel systems • Engine manageme
Slide 21: OCS – Markets and Opportunities
OCS – Markets and Opportunities For personal use only • China – engine and powertrain design to meet new emission and China CO2 compliance • Brazil – leaders in ethanol and CNG system development for Brazil generators and heavy duty transport • Government – fleet and air quality Australia control. 2
Slide 22: OCS – Year in Brief
OCS – Year in Brief For personal use only • FlexDITM for Brazil – Orbital’s FlexDITM has been selected as the most promising technology for a new family of high efficiency heavy duty Flex Fuel engines currently being developed by Sygma Motors. Applications include ethanol and CNG flex-fuelled intern
Slide 23: OCS – Outlook
OCS – Outlook For personal use only • Sales intake improved – order book at 31 May 2009 at $5.4 million • Continuing to explore opportunities in China • Heavy Duty Engine Test facility – New 600 kW test facility – Capable of operating conventional and alternative fuel engines such as Natural Gas, LP
Slide 24: Licensing & Royalties – The Business
Licensing & Royalties – The Business • Patented Orbital Technologies For personal use only • Revenue in FY08 $2.7 million Over 595,000 Orbital DI (Direct Injection) engines in the market 24
Slide 25: Licensing & Royalties – Markets & Opportunities
Licensing & Royalties – Markets & Opportunities For personal use only HEAVY FUEL ETHANOL Kerosene & Diesel E85 & E100 GASOLINE HYDROGEN CNG / LPG HCNG Blend 25
Slide 26: Licensing & Royalties – Year in Brief
Licensing & Royalties – Year in Brief For personal use only Royalties are significantly lower than in previous years • The year has been impacted by the global downturn in particular the marine market – US market declined by 50% • The Indian autorickshaw market has not taken up the direct injection
Slide 27: Licensing & Royalties – Outlook
Licensing & Royalties – Outlook For personal use only • We expect the marine market to be subdued for this calendar year • Bajaj continues roll out DI autorickshaw to Varanasi • More stringent 50 cc scooter emissions introduction in Europe. 27
Slide 28: Short/Medium/Long term Vision
For personal use only Short/Medium/Long term Vision
Slide 29: Short/Medium/Long Term Vision
Short/Medium/Long Term Vision Short Term Medium Term Longer Term Business Visions For personal use only 6 months 1 - 3 years 3 – 5 yr LPG Growth: OGP • After market & • Australia - OE • #1 LPG system supplier after OE - next next generation in Australia generation LPG Establish Initial Alternative L
Slide 30: Financial Performance
For personal use only Financial Performance
Slide 31: Financial Performance – Profit & Loss
Financial Performance – Profit &Loss For personal use only H1'07 H2'07 FY'07 H1'08 H2'08 FY'08 H1'09 $'m $'m $'m $'m $'m $'m $'m Total Revenue 8.2 7.0 15.2 7.8 7.1 14.9 9.2 Total Expenses (8.8) (8.0) (16.8) (8.4) (8.5) (16.9) (11.8) Share of Synerject Profit 0.8 2.4 3.2 0.4 2.0 2.4 0.7 EBIT 0.2 1.4
Slide 32: Financial Performance – Cash Flow
Financial Performance – Cash Flow For personal use only H1'07 H2'07 FY'07 H1'08 H2'08 FY'08 H1'09 $'m $'m $'m $'m $'m $'m $'m Net operating cash flows - (0.2) (0.2) (2.7) 1.8 (0.9) (2.2) Synerject dividend received - - - 1.0 - 1.0 0.8 Acquisition of OGP business (1.9) (1.9) - Government grants recei
Slide 33: Financial Performance – Balance Sheet
Financial Performance – Balance Sheet For personal use only Jun-07 Dec-07 Jun-08 Dec-08 $'m $'m $'m $'m Cash 11.3 9.4 8.8 10.6 Receivables 4.5 6.4 7.2 6.1 Inventory - - 1.7 1.5 Current Assets 15.8 15.8 17.7 18.2 Synerject Investment 13.0 12.2 13.1 17.7 PP&E 6.1 5.7 5.6 6.1 Other non current assets 6
Slide 34: Summary
For personal use only Summary
Slide 35: Summary
Summary For personal use only • Growth initiatives being pursued in the alternative fuels market. • Synerject strengthening presence in the important Asian market. • OGP profitable and investing in next generation LPG system. • China and Brazil continue to be active markets for engineering services.
Slide 36: Forward looking Statements
Forward looking Statements For personal use only This presentation includes forward-looking statements that involve risks and uncertainties. These forward-looking statements are based upon management's expectations and beliefs concerning future events. Forward-looking statements are necessarily subj