Slide 1: Presentation by CEO and CFO, September 2006
7] ORBITAL Presentation by Dr Rodney Houston Chief Executive Officer & Keith Halliwell Chief Financial Officer September 2006
Slide 2: Contents
8 ORBITAL Contents » Introduction = Group Overview » FY06 Results = Business Segments = Outlook
Slide 3: Introduction
8 ORBITAL _Introduction = Australian owned publicly listed company trading on ASX as OEC = Listed on US OTC Bulletin Board (code OBTLY) = Owner and developer of Orbital DI = Shares on issue 411 million = Market capitalisation A$40 million « Net debt $12.8million (interest free loan from Western Aust
Slide 4: Group Overview — Orbital's Vision
8 ORBITAL _Group Overview — Orbital’s Vision Building shareholder value through leadership in innovative powertrain solutions Focus on: = Supply and manufacture of powertrain systems and components - Synerject = Development and application of powertrain IP — Licensing and Royalties = Provision of un
Slide 5: Group Overview — Growth Drivers
8 ORBITAL _Group Overview — Growth Drivers « Emissions reduction (toxic and greenhouse) = Lower fuel consumption (greenhouse and oil price) = Alternative fuels (greenhouse and renewable) " Cost effective powertrain solutions
Slide 6: FY06 Strategic achievements
8 ORBITAL FY06 Strategic achievements « Synerject purchases manufacturing facility in Delavan « Polaris enters into a license to manufacture products utilising Orbital DI « Synerject negotiates long term financing arrangements supported by additional capital from Orbital « Engineering services order
Slide 7: FY06 Results
@ ORBITAL _FY06 Results FY06 financial highlights: AS'm Revenue (including Synerject) 16.0 14.4 11% Expenses 15.3 16.2 6% EBIT 1.0 (2.3) NUA Profit/(Loss) after taxation 0.5 (1.7) NIA EPS (cents) 0.125 (0.415) RUA NTA (cents) 1.880 (0.030) NIA, + Profit of $1.9 m in the 2"4 half year compared to los
Slide 8: FY06 Results — EBIT Analysis
8 ORBITAL _FY06 Results — EBIT Analysis FY05 Engineering Licencing& Share of Services Royalties Synerject Profit Other Employee Income Expenses Other Expenses FY06
Slide 9: FY Results
8 ORBITAL FY 06 Results Balance Sheet « Net Tangible Assets of $7.7 million (June 2005:$(0.1)M) ® Cash at bank of $3.3 million = Synerject equity accounted investment of $6.3m = Non current borrowing represents NPV of interest free long term loan (repayable in 2014) Cash Flow * $2.7 million investme
Slide 10: Business Segments
8 ORBITAL Business Segments 1. Synerject 2. Licensing and Royalties 3. Engineering Services
Slide 11: Orbital Corporation Engineering Services
8 ORBITAL Orbital Corporation Engineering Services - Analysis& Design - EMS Design & Devt. - Calibration & Testing - Powertrain Devt.
Slide 12: FY06 Results — Contribution by Segment
8 ORBITAL _FY06 Results — Contribution by Segment FY03 FY04 FY05 FYO6 gw Engineering @ Royalty & Licences @ Synerject = All business segments are now profitable # Synerject provided steady improvement over 4 years
Slide 13: Revenue Result
Revenue Result rl 45 60 4 50 35 3 & 404 £25 3 3 2304 B2 24 15 18 1 1 08 8 ° FYO3 FYO4 FYO5 FOG FYO3 FYo4 FYOS YO Operating and Investing Cash Flows Net Debt 7 25 6 20 5 ‘8 £4 E & B $3 Sy 2 5 : I || o o FYO3 Fyod FYOS FYO6 Fyo3 FYO4 FYOS FYO6
Slide 14: Synerject
89 ORBITAL _Synerject = Supplies and manufactures EMS and electronic fuel injection systems for global non- automotive market = Exclusive access to Siemens-VDO automotive components and know how for non-automotive applications «= Exclusive manufacturing rights to Orbital Dl air/fuel injector = Major
Slide 15: Synerject — Products and Markets
8 ORBITAL _Synerject — Products and Markets 4 Stroke Port Injection Direct Injection 2 Stroke Direct Injection Port Injection
Slide 16: Synerject Locations
89 ORBITAL Ci angchun hina (Oct, 2006) a (Dec. 2" sv Synerject Locations © Regional Customer Support
Slide 17: Synerject M3 ECU Development
8 ORBITAL _Synerject M3 ECU Development Same ECU for all engine displacements 50cc to 250cc Plastic rousieg Throttle Body ECU | Include : - § Pressure sensor Air temperature sensor Throttle position sensor Throttle position sensor magnet
Slide 18: Synerject Market Drivers - Legislation & Technology Solutions
8 ORBITAL Synerject Market Drivers - Legislation & Technology Solutions World Motorcycle Emissions Legislation Technology Emissions 2000 «2001 20602 2003 2004 2005 2006 2007 2008 2009 2010
Slide 19: Synerject - Outlook
8 ORBITAL _Synerject - Outlook mplement cost reductions and efficiencies at Delavan facility for improved margins nvestment in new products to help win new customers and further improve margins nvestment in new manufacturing facility and engineering centre in China in 2007 to support future growth R
Slide 20: 2. Licensing and Royalties
8 ORBITAL _2. Licensing and Royalties 4.5 4 3.5 3 2.5 2 1.5 4 0.5 4 0 ASm FYO! FYO FYOG6 FYO. f Revenue m Contribution # Costs include patent expenses and R&D » Royalty revenue increased in FY06 due to increased marine volume (up 20%) » FYOQ3 and FY04 include licence fees which do not recur each fin
Slide 21: Licensing and Royalties - Markets
8 ORBITAL _Licensing and Royalties - Markets Licensees: GM, Ford, Fiat, Bombardier (BRP), Mercury Marine, Tohatsu, Piaggio (incl. Aprilia), Peugeot Motorcycles, Bajaj, Hirth, Kymco, Envirofit, Polaris Manufacturing Licensees: Synerject & UCAL
Slide 22: 8 ORBITAL
8 ORBITAL
Slide 23: Licensing & Royalties R&D Overview
8 ORBITAL Licensing & Royalties R&D Overview Orbital continue to place a high importance on internal R&D investment to support future growth * Advanced Development — Advanced gasoline combustion systems targeting 25% reduction in fuel economy — Advanced CNG & Hydrogen combustion systems — CNG/LPG Fu
Slide 24: Licensing and Royalties — Market Drivers
89 ORBITAL _Licensing and Royalties — Market Drivers « Legislative change for improved fuel efficiency and emissions « Early adoption in ‘niche’ markets, e.g. outboards, PWCs, 50cc scooters « Greenhouse lobby and oil prices driving change in previously resistant markets = Near term growth in new mar
Slide 25: Licensing & Royalties — Market Drivers
89 ORBITAL _Licensing & Royalties — Market Drivers Internal Combustion Engine (ICE) vs Hybrid/Fuel Cell 120 a i ne = Q Oo iin § $ 80 m Fuel Cell ie ICE + Hybrid $e _|MICE Gaseous = Ss ICE Diesel ES MICE Gasoline* * Includes Bio-fuel + Large growth in alternative energy sources * Dominant demand for
Slide 26: Licensing and Royalties - Outlook
8 ORBITAL _Licensing and Royalties - Outlook Extension of Orbital DI applications into growth markets e.g. motorcycles, ATV and gaseous fuels Mercury Marine re-launch of Optimax range with positive market feedback Progressing Orbital DI 4-stroke programs for motorcycles Bajaj to enter production wit
Slide 27: 3. Engineering Services
8 ORBITAL 3. Engineering Services AS#039;m FY03 FY04 FY0S FY06 G@ Revenue @ Contribution « Engineering activity increased significantly in the 2°4 half year « Order book of $8m at June 2006 — almost double June 2005 * Orbital has facility capacity to increase engineering revenue without significant inc
Slide 28: Engineering Services - Markets
8 ORBITAL _Engineering Services - Markets = Provides services to OEMs, suppliers and regulators, globally = 40-50% of business involves application of Orbital DI for new products or customers «= Emerging markets for gaseous fuels and alternative fuels (LPG,CNG, Kerosene and diesel) » Emerging market
Slide 29: Engineering Services - Outlook
8 ORBITAL _Engineering Services - Outlook » Focus on new markets in Asia and alternative fuels = Focus on building long term strategic alliances with key customers to enable more long term contracts for Engineering services = Potential to grow to $15-20m/year in 2-5 years without major investment in
Slide 30: Outlook
8 ORBITAL Outlook Strategic focus: * Achieve profit growth and positive cash flows with increased emphasis on Synerject and technology value * R&D and Patent activity to focus on exploiting key growth markets for alternative fuels and wide spread use of Engine management systems (EMS) « Suitable acq