Austal Limited · ASX:ASB
Austal — Macquarie Securities Australia Conference 2015
28 slides from Austal's conference presentation, May 7, 2015
Slide 1: Macquarie Securities Australia Conference
Macquarie Securities Australia Conference For personal use only Greg Jason, Chief Financial Officer 7 May 2015
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: Highlights
Highlights For personal use only FY2015 H1 Financials Revenue: $680.2 million EBIT: $45.0 million ($33.7 million underlying) Cash: $118.0 million of operating cash flow with net cash position of $15.6 million at 31 December 2014 Dividend: Interim dividend of 1.0 cent per share fully franked
Slide 4: Objectives for sustained growth
Objectives for sustained growth For personal use only Strengthen Ongoing Target operations and objectives opportunities balance sheet • Shipbuilding margin • Maintain cash • Invest in R&D to grow achieved generation to support intellectual property programs and dividends base • Successfully applied
Slide 5: Revenue and earnings growth
Revenue and earnings growth For personal use only Revenue (A$m) EBITDA (A$m) NPAT (A$m) H1 H1 H1 H1 H1 H1 H1 H1 H1 FY2013 FY2014 FY2015 FY2013 FY2014 FY2015 FY2013 FY2014 FY2015 389.4 505.8 680.2 24.0 30.7 56.2 5.4 9.5 28.9 Upgraded revenue guidance from $1.2 billion to $1.35 billion FY2015 H1 e
Slide 6: Financials
Financials For personal use only SHIPS SYSTEMS SUPPORT 6
Slide 7: Earnings summary
Earnings summary For personal use only FY2015 FY2014 FY2013 Income H1 H1 H1 statement Record revenue grew 34% over Prior (A$m) (A$m) (A$m) Corresponding Period (PCP) driven by Revenue 680.2 505.8 389.4 increased production throughput and favourable foreign exchange translation of USA EBITDA 56.2 3
Slide 8: Foreign exchange considerations
Foreign exchange considerations For personal use only Hedging policy Austal hedges 100% of committed foreign currency exposures including cost inputs and contracted receipts Volatility in exchange rates has no impact on contracted projects Competitiveness Appreciation of the USD increases comp
Slide 9: Cash and debt
Cash and debt For personal use only FY2015 FY2014 FY2013 Cash flow H1 H1 H1 Operating cash flow was 170% higher than the (A$m) (A$m) (A$m) PCP Operating 118.0 43.6 (20.9) Finalisation of the sale of Hull 270 contributed $54.1 million to operating cash flow Investing (3.6) (2.0) (6.6) Significa
Slide 10: Discipline in long-term debt reduction
Discipline in long-term debt reduction For personal use only 250 211 200 Gross debt ($millions) 154 150 135 114 100 50 9 4 1 0 0 Jun 2013 Dec 2013 Jun 2014 Dec 2014 AUD Denominated (AUD) USD Denominated (USD) SHIPS SYSTEMS SUPPORT 10
Slide 11: Segment breakdown (FY2015 H1)
Segment breakdown (FY2015 H1) For personal use only ($m) Ships Systems Support Other1 Total Revenue 400.8 80.4 17.2 - 498.4 USA EBIT 31.4 1.2 (1.6) (3.6) 27.4 EBIT Margin% 7.8 1.5 (9.7) - 5.5 Revenue 87.8 - 22.2 - 110.0 Australia EBIT 11.8 - 2.9 (0.2) 14.5 EBIT Margin% 13.4 - 13.1 - 13.2 Revenue 14.
Slide 12: Operations update
Operations update For personal use only SHIPS SYSTEMS SUPPORT 12
Slide 13: Progress across the business
Progress across the business For personal use only • Cape Nelson (CCPB • Interim dividend 3) delivered to the paid Australian Customs • Dividend • Cape Leveque and Border reinvestment plan (CCPB 6) delivered Protection Service • USS Montgomery • USNS Trenton introduced to the Australian • USNS Fall
Slide 14: Order book
Order book For personal use only Order book of $3.0 billion as at 30 April 2015 secures revenue through CY2020, including: o 10 Littoral Combat Ships for US Navy 10 funded and an option for an additional ship in CY2016 o 10 Joint High Speed Vessels for US Navy Fully funded, with 5 delivered out of
Slide 15: 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 – all 10 fully funded, and an option for an additional ship in CY2016 Transition to prime contractor o LCS 6 undergoing sea trials – delivery expected in July o Schedule pressu
Slide 16: 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) Program progressing well – matured into a phase of efficient production and predictable delivery o JHSV 1 - 5 – delivered o JHSV 6 - 8 – under construction Performance is gen
Slide 17: Austal strongly positioned in US
Austal 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 best position for programs are maturing well defence strategy additional
Slide 18: Australia – Cape Class Patrol Boats
Australia – Cape Class Patrol Boats For personal use only $330 million contract for the design, construction and through-life support of 8 Cape Class Patrol Boats for the Australian Customs and Border Protection Service Program has matured significantly, with efficient productions driving margin
Slide 19: 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 for the Royal Navy of Oman Construction has commenced at Henderson shipyard o Completion of keel laying
Slide 20: Philippines
Philippines For personal use only $30 million contract from the Abu Dhabi National Oil Company to design and construct two 45 metre high speed catamaran ferries Completed contract for customisation of Hull 270 worth ~$6 million 21 metre windfarm vessel delivered to Turbine Transfers in October
Slide 21: Systems and Support
Systems and Support For personal use only Austal has established a global footprint, strategic partnerships and the IP to provide through life support for defence vessels Australian support business delivering consistent performance US support business growing but ongoing investment needed o F
Slide 22: Outlook
Outlook For personal use only SHIPS SYSTEMS SUPPORT 22
Slide 23: Strategy
Strategy For personal use only United States Australia Philippines • Leverage off learning from • Maturing of Cape Class • Build commercial shipbuilding first in class vessels Patrol Boat program capability to position Austal for market opportunities • Augment contracts with • Target construction an
Slide 24: Pipeline for vessel programs
Pipeline for vessel programs For personal use only Pursuing opportunities to grow order book and secure additional long-term revenue Target markets Vessels • US: potential to extend existing LCS and • Future frigate evolved from modified JHSV programs Littoral Combat Ship • Australia: replacement
Slide 25: 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 26: Cape-variant patrol boat for Australian Navy
Cape-variant patrol boat for Australian Navy For personal use only SHIPS SYSTEMS SUPPORT 26
Slide 27: Outlook
Outlook For personal use only Net debt projected to FY2015 Revenue guidance increase at year end due to Diversity and long-term upgraded from $1.2 billion to higher translation of nature of vessel programs $1.35 billion given USD gross debt and provides visibility on consistently lower consumption o
Slide 28: Disclaimer
Disclaimer For personal use only Greg Jason, Chief Financial 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 offer
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