Austal Limited · ASX:ASB
Austal — Macquarie Australia Conference 2014
27 slides from Austal's conference presentation, May 7, 2014
Slide 1: Macquarie Australia Conference
Macquarie Australia Conference For personal use only Andrew Bellamy, Chief Executive Officer 9 May 2014
Slide 2: Austal overview
Austal overview For personal use only Founded in 1988 and listed on the Australian Stock Exchange in 1998, Austal is a leading defence prime contractor, specializing in the design, construction and maintenance of high performance vessels for defence and commercial purposes. Austal has a global foo
Slide 3: H1 FY2014 highlights
H1 FY2014 highlights For personal use only Revenue: $507.6m, a 30.4% increase on H1 FY13 Financial NPAT: $9.5m, a 76% uplift on H1 FY13 Net Debt: Reduced by $32.6 million in H1 FY13 to $100.3m Cash flow: Strong conversion of EBITDA to cash – $37.8m cash flow from operations Group EBIT marg
Slide 4: Delivered on record amount of work in hand
Delivered on record amount of work in hand For personal use only Revenue (A$m) EBITDA (A$m) NPAT (A$m) H1 FY13 H1 FY14 H1 FY13 H1 FY14 H1 FY13 H1 FY14 389.4 507.6 24.0 30.7 5.4 9.5 Ongoing improvement in earnings and revenue from H1 FY13 to H1 FY14 Revenue growth driven by record amount of work
Slide 5: Continuing to deliver in H2 FY2014
Continuing to deliver in H2 FY2014 For personal use only Order book: new contracts and funding in the half have supported the $2.5bn order book o US$124.9m contract for design, construction and integrated logistics support of two 72 metre High Speed Support Vessels at Austal’s Henderson shipyard i
Slide 6: Objectives for sustained growth
Objectives for sustained growth For personal use only Restructure Improve Ongoing Pursue balance operations delivery opportunities sheet • Simplified debt • Achieved targeted • Management • Build on success structure +6% EBIT margin stable and cost in winning at US operation structures opportunities
Slide 7: Financials
Financials For personal use only SHIPS SYSTEMS SUPPORT 7
Slide 8: Earnings summary
Earnings summary For personal use only Underlying EBITDA was $37.7m (H1 FY13: H1 H1 Income Change $28.4m) after removing one off impacts: FY14 FY13 statement (A$m) (A$m) (A$m) o $3.3m profit on sale of land at Henderson Revenue 536.9 405.5 +131.4 o $10.2m WIP impairment USA: EBIT margin improved
Slide 9: Gearing reduced to appropriate level
Gearing reduced to appropriate level For personal use only At 30 Jun 13 At 31 Dec 13 Cash generated from operating activities was 200 2.5 used to reduce net debt by $32.8m 2.23 Higher EBITDA and lower net debt has significantly reduced the leverage ratio 150 2.0 Proceeds from the sale of the s
Slide 10: Discipline in long-term debt reduction
Discipline in long-term debt reduction For personal use only 300 248 250 211 Gross debt ($millions) 200 154 150 135 100 50 19 9 4 1 0 Dec 2012 Jun 2013 Dec 2013 Jun 2014 (forecast) AUD Denominated (AUD) USD Denominated (USD) SHIPS SYSTEMS SUPPORT 10
Slide 11: Operations update
Operations update For personal use only SHIPS SYSTEMS SUPPORT 11
Slide 12: Progress across the business
Progress across the business For personal use only • Option to Purchase contract with European • Contract for two HSSVs for ferry operator for 102-metre Royal Navy of Oman stock boat • Funding for Austal’s • JHSV 3 completed seventh and eighth LCS acceptance trials appropriated • 16 vessels under •
Slide 13: Order book
Order book For personal use only Order book of $2.5 billion secures revenue until 2019, including: o 10 Littoral Combat Ships for US Navy x8 funded (out of 10 vessel contract) o 10 Joint High Speed Vessels for US Navy Fully funded, with x3 delivered (out of 10 vessel contract). o 8 Cape Class Patr
Slide 14: US Navy – Littoral Combat Ship
US Navy – Littoral Combat Ship For personal use only 10 ship contract awarded as prime contractor, worth US$3.5 billion o 8 fully funded 2 LCSs constructed and delivered by Austal for GD (LCS 2 and LCS 4) Program progressing well: o LCS 6 launched and christened – first vessel as prime contrac
Slide 15: US Navy – Joint High Speed Vessel
US Navy – Joint High Speed Vessel For personal use only 10 ship award to Austal valued at US$1.6 billion (fully funded), securing work through to 2017 Maturing program, largely de-risked Program progressing well: o JHSV 1, 2 & 3 – delivered o JHSV 4 – christened and preparing for sea trials o
Slide 16: Austal's position in the US remains strong
Austal’s position in the US remains strong For personal use only Additional opportunities for US Foreign Policy remains Austal-built vessels have through-life support on LCS focused on Asia-Pacific continued to be funded and JHSV (e.g. support defence strategy contract on LCS 6) US Navy examining LC
Slide 17: Australia – Cape Class
Australia – Cape Class For personal use only $330 million contract for 8 Cape Class Patrol Boats, including $50 million support work – through to H1 FY16. Significantly matured since CCPB 1 – 7 CCPBs under construction Efficiency improvement expected to increase margins in H2 FY14 Targeting
Slide 18: Australia – High Speed Support Vessels
Australia – High Speed Support Vessels For personal use only US$124.9 million contract for the design, construction and integrated logistics support of two, 72-metre High Speed Support Vessels To be designed and built at Henderson shipyard Construction to commence this year and final vessel de
Slide 19: Philippines
Philippines For personal use only Won $30 million contract from the Abu Dhabi National Oil Company to design and construct two 45 metre high speed catamaran ferries in April 2014 Follows delivery of 80 metre commercial ferry in December 2013 Delivered x3 27m wind farm support vessels since Mar
Slide 20: Service and systems
Service and systems For personal use only Austal has established a global footprint, strategic partnerships and the IP to provide through life support for vessels such as the LCS, JHSV and CCPB Integration of service division in Australia has increased efficiencies, asset utilisation and margins
Slide 21: Outlook
Outlook For personal use only SHIPS SYSTEMS SUPPORT 21
Slide 22: Strategy
Strategy For personal use only United States Australia Philippines • Progressive growth in • Further increase efficiencies • Continue to build commercial margins as vessel programs on Cape Class Patrol Boats, shipbuilding capability to mature following first-in-class vessel position Austal for marke
Slide 23: Pipeline for vessel programs
Pipeline for vessel programs For personal use only Austal pursuing opportunities to grow order book and secure long-term revenue Focus on medium term shipyard capacity Target markets US: potential to extend existing LCS and JHSV programs Australia: replacement of Pacific and Armidale class p
Slide 24: Multi-mission combatant vessel
Multi-mission combatant vessel For personal use only Rheinmetall MLG 27mm Mk 49 RAM Rheinmetall MASS-2L MM 40 Block III Exocet Terma SKWS (DL-6T) Mk 56 ESSM A244 Torpedoes Oto Melara 76mm Austal’s design of a smaller frigate-size multi-mission combatant that has significant capability and lethality
Slide 25: Cape-variant patrol boat for Australian Navy
Cape-variant patrol boat for Australian Navy For personal use only SHIPS SYSTEMS SUPPORT 25
Slide 26: Outlook
Outlook For personal use only Use strong cash flow from Continue progressive operations and complete Meet guidance of $1 billion growth in profit margins, sale of stock boat to pay revenue in FY2014 augmented by an increase down infrastructure-related in service and systems work debt Research and de
Slide 27: Disclaimer
Disclaimer For personal use only Andrew Bellamy, 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 of