Austal Limited · ASX:ASB
Austal — Investor Presentation (November 2012)
32 slides from Austal's investor presentation, Nov 22, 2012
Slide 1: Austal Capital Raising Presentation
Agenda For personal use only Page Austal Capital Raising Presentation 22 November 2012 Andrew Bellamy, CEO Mike Atkinson, Interim CFO Not for distribution or release in the United States
Slide 2: Important notice and Disclaimer
Important notice and Disclaimer This presentation and any oral presentation accompanying it has been prepared by Austal Limited (“Austal” or “the Company”) in relation to a pro-rata non-renounceable entitlement offer (the “Entitlement Offer") of new shares in Austal ("New Shares"). Summary informati
Slide 3: Executive summary
Executive summary ► Austal is undertaking a 9 for 10 equity offering to raise up to approximately A$86mm at A$0.50 per share For personal use only ▬ Conducted via an accelerated pro-rata non-renounceable entitlement offer (“Entitlement Offer”) ▬ Institutional component fully underwritten, representi
Slide 4: Details of the Entitlement Offer
Details of the Entitlement Offer ► 9 for 10 accelerated pro-rata non-renounceable entitlement offer to eligible shareholders to raise up to approximately A$86mm For personal use only Entitlement Offer ▬ Institutional component fully underwritten, representing proceeds to Austal of approximately A$61
Slide 5: Indicative offer timetable
Indicative offer timetable For personal use only Indicative offer timetable EVENT DATE Announcement of Entitlement Offer Thursday, 22 November 2012 Institutional Entitlement Offer opens Thursday, 22 November 2012 Institutional Entitlement Offer and Institutional Shortfall Bookbuild closes (Australia
Slide 6: Key investment highlights
Key investment highlights 1 For personal use only ► 25 year track record, with approximately 220 vessels delivered globally Global market ► Technology leadership, with strong IP portfolio – unique integrated in-house design, engineering and build capability leader ► Worldwide network of strategicall
Slide 7: A global leader in aluminium shipbuilding
A global leader in aluminium shipbuilding ► Established: 1988 For personal use only ► Listed on the ASX : 1998 (ASX: ASB) ► Headquartered: Henderson, WA Ships Systems Support ► 25 year history; approximately 220 ships ► Specialised capability in integration, maintenance and ► Network of 10 regional
Slide 8: World class network of shipyards and support facilities
World class network of shipyards and support facilities For personal use only Balamban, Philippines Established: 2011 Employees: ~225 Primary market: Commercial Capital invested: c.A$20mm Contracted order book: c.A$50mm1 Key customer: Export markets UK Washington Spain Mobile United Arab Emirates Om
Slide 9: Prime contractor on two key U.S. naval programs...
Prime contractor on two key U.S. naval programs... For personal use only Joint High Speed Vessel (“JHSV”) Outlook ► U.S. Budget Control Act (2011) not expected to affect Austal’s current U.S. contracted work of c.A$2.0bn1 and therefore pressure on U.S. defence budget is not expected to affect near t
Slide 10: ...with significant upside and export potential
...with significant upside and export potential For personal use only Numbers of vessels Value: US$1.6bn ► Initial 10 ship award – value: US$1.6bn 1 10 9 ► 9 currently contracted; next contract expected 1Q20131 ► First vessel is expected be delivered in November 2012 JHSV ► Balance expected to be de
Slide 11: Austal secured the A$330mm Cape Class contract in 2011
Austal secured the A$330mm Cape Class contract in 2011 For personal use only Overview Services & Systems ► In August 2011, Austal was awarded the contract for the design, ► Secured initial 5 year maintenance contract for the Cape Class construction and through life support of 8 new Cape Class Patrol
Slide 12: Existing ship awards and contract wins have delivered a record order book
Existing ship awards and contract wins have delivered a record order book for Austal For personal use only Order book (A$mm) c.2,250 c.4,590 2,342 1,870 Other 1,490 Customs 1,200 JHSV 923 777 LCS Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Sep-12 Awarded, not yet Total contracted contracted 1 and awarded Cur
Slide 13: Service represents a significant long-term opportunity for Austal
Service represents a significant long-term opportunity for Austal For personal use only ► Installed value of currently contracted and awarded U.S. naval ships expected to be in the order of c.A$6.5bn once completed ► Annual maintenance / support expense in order of 10% of installed value, per ship p
Slide 14: Profitability improvement initiatives being successfully implemented
Profitability improvement initiatives being successfully implemented For personal use only ► First in class issues associated with JHSV have been addressed ► Learnings being applied, with positive effect ► Revenue and EBIT in 2HFY12 vs 1HFY12 up 49% and 136%, respectively Austal USA ► Labour cost pe
Slide 15: Debt refinancing
Debt refinancing For personal use only ► Concurrently with the Offer, Austal has received credit approved commitments from its lenders for new three-year syndicated term facilities ► The new facilities replace Austal’s existing short-term (18 month) banking arrangements and ensure the company has no
Slide 16: Sources and uses
Sources and uses For personal use only Overview Illustrative Offer Proceeds and Uses (A$mm) ► Entitlement Offer of A$61mm up to A$86mm, with net proceeds of Sources Uses up to approximately A$82mm to be exclusively used to reduce net indebtedness Underwritten institutional 61 Reduction in WC facilit
Slide 17: Proceeds significantly strengthen Austal's balance sheet
Proceeds significantly strengthen Austal’s balance sheet For personal use only Overview Pro forma capitalisation ► Post the capital raising, Austal’s financial position will be significantly Underwritten Fully Amount Subscribed strengthened assuming minimum proceeds raised of A$61mm 2 4 Jun-12A Sep-
Slide 18: New committed bank facilities will extend Austal's debt maturity profile
New committed bank facilities will extend Austal’s debt maturity profile For personal use only Pro forma debt maturity profile (A$mm unless otherwise stated) 1 2 Equipment Line facility (US$mm) Hermes facility Revolving Credit facility Go-Zone Bonds facility 182 50.0 14.3 8.8 16.3 3.8 5.0 5.0 FY13 F
Slide 19: Group outlook
Group outlook For personal use only ► FY13 EBITDA and NPAT guidance in the range of A$A65-71mm1 and A$23-26mm1 respectively2 ► Austal USA ▬ Successfully applying learnings from “first in class” issues with the JHSV program and seeing sustained improvement in margins ▬ Further contracts expected for
Slide 20: Agenda
Agenda For personal use only Page Risk factors and foreign selling restrictions 19
Slide 21: Risk Factors
Risk Factors For personal use only Contract nature of the business ► The ship manufacturing industry, by its nature, is dependent on large orders, the timing of which does not always ensure an even work flow. As for all participants in the ship manufacturing industry, the economic performance of the
Slide 22: Risk Factors
Risk Factors For personal use only Large reliance on single customer - the U.S. Navy ► Almost 90% of Austal’s FY12A revenue was generated in the United States, derived from contracts with the U.S. Navy. Austal faces significant risk in earnings if the programs with the U.S. Navy are cancelled or sca
Slide 23: Risk Factors
Risk Factors For personal use only Reliance on success of LCS contract ► The LCS program with the U.S. Navy represents the majority of Austal’s current awarded work. Although no material issues with the LCS have been encountered to date (Austal has delivered the first LCS and anticipates delivering
Slide 24: Risk Factors
Risk Factors For personal use only Competition in the U.S. shipbuilding market ► The reduced level of shipbuilding activity by the U.S. Navy, evidenced by the reduction in fleet size from 566 ships in 1989 to 285 ships as of June 2011, has resulted in workforce reductions in the industry but with li
Slide 25: Risk Factors
Risk Factors For personal use only Stock vessels and large ferry contracts ► Austal has, on occasion, commenced the construction of a vessel without a firm order so as to maintain efficient utilization of its production facilities and labour force, and may do so in the future. All stock vessels are
Slide 26: Risk Factors
Risk Factors For personal use only Foreign exchange rate risks ► Austal is an Australian company that reports in Australian dollars. It derives revenue from business activities in Australia and foreign countries, including the Philippines and the U.S, where its costs may be incurred and revenue may
Slide 27: Foreign selling restrictions
Foreign selling restrictions For personal use only This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. New Shares may not be offered or sold in any country outside Australia except to the extent permitted
Slide 28: Foreign selling restrictions
Foreign selling restrictions For personal use only Guernsey ► The New Shares may only be offered or sold in or from within the Bailiwick of Guernsey either (i) by persons licensed to do so under the Protection of Investors (Bailiwick of Guernsey) Law, 1987 (as amended) (the “POI Law”); or (ii) to pe
Slide 29: Foreign selling restrictions
Foreign selling restrictions For personal use only Japan ► The New Shares have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948), as amended (the "FIEL") pursuant to an exemption from the registration requirem
Slide 30: Foreign selling restrictions
Foreign selling restrictions For personal use only Qatar ► By receiving this document, the person or entity to whom it has been issued understands, acknowledges and agrees that this document has not been approved, disapproved or passed on in any way by the Central Bank of Qatar, Qatar Exchange or an
Slide 31: Foreign selling restrictions
Foreign selling restrictions For personal use only Switzerland ► The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("SIX") or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without reg
Slide 32: Foreign selling restrictions
Foreign selling restrictions For personal use only United Kingdom ► Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of t