Slide 1: 2016 full year results
2016 full year results For personal use only David Singleton, Chief Executive Officer 29 August 2016 Greg Jason, Chief Financial Officer
Slide 2: 2016 highlights
2016 highlights For personal use only Revenue: $1.34 billion Financial EBIT: $(120.9) million NPAT: $(84.2) million Net cash: $51.7 million Final dividend: 2.0 cents per share fully franked US GZB Debt reduction: US$7.2 million Order book: $3.4 billion, securing work through CY2021 SHI
Slide 3: 2017 Outlook
2017 Outlook For personal use only Maturing major programs: Operational o Drive LCS program down the learning curve o Cape Class Patrol Boats 9 & 10 in production at Henderson for Royal Australian Navy, delivery in FY2017 H2 o HSSV for Royal Navy of Oman nearing completion following delivery of fi
Slide 4: FY2017 Outlook
FY2017 Outlook For personal use only Orders Pipeline: o Extension of US Navy programs (LCS & EPF) o Defence vessels to Middle East o Australian OPV contract to be bid with potential down selection in FY2017 o Commercial ferry market strengthening with 5 ferries so far signed in CY2016 and more bei
Slide 5: LCS program update
LCS program update For personal use only USS Jackson (LCS 6) successfully completed Full Ship Shock Shock trials Trials in July 2016 completed USS Jackson is due to re-join the US Navy in September Final data analysis by the US Navy may take several months Modification program to ships under
Slide 6: Financials
Financials For personal use only SHIPS SYSTEMS SUPPORT 6
Slide 7: Earnings in line with guidance
Earnings in line with guidance For personal use only Income FY2016 FY2015 Revenue decrease driven by write down of Change LCS work in progress (WIP) with FX offset statement (A$m)* (A$m)^ Primary drivers of EBIT reduction: Revenue 1,339.9 1,414.9 (5)% LCS WIP write down ($156 million in EBITDA
Slide 8: Segment breakdown
Segment breakdown For personal use only ($m) Ships Systems Support Other1 Total Revenue 821.4 213.9 97.8 - 1,133.0 USA EBIT (90.8) 2.2 6.0 (8.0) (90.5) EBIT Margin % (11.1) 1.0 6.2 - (8.0) Revenue 139.0 - 48.0 - 187.1 Australia EBIT 5.6 - 2.1 (1.0) 6.8 EBIT Margin % 4.0 - 4.4 - 3.6 Revenue 31.9 - 2.
Slide 9: Cash and debt
Cash and debt For personal use only Strong Operating cash flow – driven by FY2016 FY2015 USA and Australia Cash flow Change (A$m) (A$m) Sustaining capital of ~ $14 million plus Operating 102.1 110.4 (8.4) capitalisation of $18 million of CCPB 9 & 10 under financing accounting Investing (25.0) (2
Slide 10: Discipline in long-term debt reduction
Discipline in long-term debt reduction For personal use only 120 114 112 105 105 Forecast 100 97 Gross debt ($millions) 80 60 45 40 26 20 - - - 0 Dec 2014 June 2015 Dec 2015 June 2016 Dec 2016 USD US Infrastructure AUD CCPB 9 & 10 SHIPS SYSTEMS SUPPORT 10
Slide 11: Operations update
Operations update For personal use only SHIPS SYSTEMS SUPPORT 11
Slide 12: Overview – shipbuilding programs
Overview – shipbuilding programs For personal use only Order book of $3.4 billion at 30 June 2016 secures revenue through CY2021, including: o 11 Littoral Combat Ships for US Navy 11 funded, with 2 delivered o 10 Expeditionary Fast Transports (formerly Joint High Speed Vessel) for US Navy Fully fu
Slide 13: LCS test programs largely complete
LCS test programs largely complete For personal use only Naval vessel rules modifications incorporated Physical shock trials complete. Analysis by US Navy will continue. Modification requirement has dropped dramatically Financial impacts understood Expect residual risks reducing SHIPS SY
Slide 14: Progress across the business
Progress across the business For personal use only • Awarded PPBR contract • Awarded EPF procurement contract • Awarded support • Awarded additional LCS contract for LCS 8 • Awarded contract sustainment orders • USS Montgomery (LCS modification for LCS 6 • Awarded LCS services 8) completes acceptanc
Slide 15: US Navy – Littoral Combat Ship
US Navy – Littoral Combat Ship For personal use only 11 ship contract awarded as prime contractor, worth approximately US$4 billion o LCS 6 & 8 delivered o LCS 10, 12 & 14 preparing for sea trials o LCS 16, 18 & 20 under construction o LCS 26 funded Additional 2 LCS constructed and previously de
Slide 16: US Navy – Expeditionary Fast Transport
US Navy – Expeditionary Fast Transport For personal use only 10 ship award to Austal valued at US$1.6 billion (fully funded), securing work through to CY2019 Program progressing well – matured into a phase of efficient production and predictable delivery o EPF 6 & 7 – delivered in FY2016 o EPF 8
Slide 17: Austal remains strongly positioned in US
Austal remains strongly positioned in US For personal use only Winning service contracts on Austal-built vessels have US Foreign Policy remains LCS and investing in support continued to be funded and focused on Asia-Pacific business to enhance programs are maturing defence strategy prospects for add
Slide 18: Australia & Export Defence Contracts
Australia & Export Defence Contracts For personal use only SHIPS SYSTEMS SUPPORT 18
Slide 19: Transition period in Australia
Transition period in Australia For personal use only HSSV 1 HSSV 2 CCPB 9 & 10 Charter CCPB 9 CCPB 10 Mols PPB 1 PPB 2 PPB 3 PPB 4 OPV 1 Design OPV 2 OPV 3 OPV 4 CCPB ISS ACPB Rem 2016 2017 2018 2019 2020 2021 HSSV High speed support vessels for Oman CCPB Cape class patrol boats for Royal Australian
Slide 20: Design work load Australia and Philippines
Design work load Australia and Philippines For personal use only Full Time Equivalent Design personnel 120 100 80 Potential Order Intake 60 Current Design Load Current Manpower 40 20 0 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 SHIPS SYSTEMS SUPPORT 20
Slide 21: Once in a generation opportunity – Continuous Shipbuilding in Australia
Once in a generation opportunity – “Continuous Shipbuilding” in Australia For personal use only Designer Build location Adelaide Submarine Adelaide Future Frigate Adelaide initial 2 vessels Henderson next 10 vessels Offshore Patrol Vessel SHIPS SYSTEMS SUPPORT 21
Slide 22: Austal today is by far Australia's largest shipbuilder
Austal today is by far Australia’s largest shipbuilder For personal use only all vessels to Austal vessels currently under construction in Alabama approximate scale ×7 ×3 127m LCS 102m EPF Austal vessels currently under construction in Henderson ×1 Upcoming Australian vessels 72m HSSV ×1 ×1 70m Oil
Slide 23: Austal is Australia's leading shipbuilding exporter
Austal is Australia’s leading shipbuilding exporter For personal use only Australian OPV CCPB PPB-R Defence Frigate Defence Export CCPB Additional Oman HSSV exports and other Patrol HSSV Commercial New fast ferry O&G O&G fast crew boats market cat & trimarans crew boats SHIPS SYSTEMS SUPPORT 23
Slide 24: High Speed Support Vessels
High Speed Support Vessels For personal use only US$125 million contract for the design, construction and integrated logistics support of two 72 metre High Speed Support Vessels for the Royal Navy of Oman Construction is nearing completion at the Henderson shipyard o HSSV 1 delivered and undergo
Slide 25: Commercial Exports
Commercial Exports For personal use only Renewed confidence and growing opportunity in the international commercial ferry market Approximately $130million in new contracts secured during CY2016: o 109 m vehicle passenger ferry for Mols Linien to be built in Henderson o 2 contracts for three comm
Slide 26: Systems and Support
Systems and Support For personal use only Austal investing extensively in sustainment capability with new people, facilities and software USA: o LCS support has commenced o EPF may transition into OEM support Australia: o CCPB sustainment for Border Force o PPB sustainment for Navy o Armidale
Slide 27: Strategy and Outlook
Strategy and Outlook For personal use only SHIPS SYSTEMS SUPPORT 27
Slide 28: Strategy
Strategy For personal use only Sustain the Strengthen the Diversify the Scale the business business business business • Deliver our current • Improve margins • Grow annuity-style • Position Austal for a programs to the high through procurement revenue by leading role in quality our and production ex
Slide 29: Pipeline
Pipeline For personal use only • Strong potential to continue 1 United States extending the LCS and EPF Defence programs • Exports from Austal’s portfolio 2 Middle East of aluminium high performance Defence naval vessels including HSSV and CCPB variants • Steel vessels for the RAN’s 3 Australia flee
Slide 30: Outlook
Outlook For personal use only Good opportunity for award LCS program to stabilise of additional LCS and EPF Position Austal for Future and mature in addition to existing block Frigate and OPV programs buy contracts Maintain a strong cash Export opportunities from Opportunities to continue to positio
Slide 31: Disclaimer
Disclaimer For personal use only David Singleton, 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 o