Slide 1: FY2018 Full Year Results
FY2018 Full Year Results 30 August 2018 David Singleton, Chief Executive Officer Greg Jason, Chief Financial Officer
Slide 2: Financial Headlines
Financial Headlines YEAR ON YEAR CHANGE • EBIT $65 m 43% • NPAT $39 m 154% • Dividend 3 ¢ per share 50% • Operating Cash Flow $66 m up $104 m 1 • Net Cash $34 m up $15 m 1. Excludes Capes 9 & 10 operating lease
Slide 3: 2018 Key Facts
2018 Key Facts $1.39B ~ $3.0 B 16 48 5 5,250 ORDER BOOK NEW SHIPS SHIPS UNDER SHIPS EMPLOYEES REVENUE ORDERED CONSTRUCTION DELIVERED OR SCHEDULED 4 32 SERVICE CENTRES VESSELS UNDER SUSTAINMENT OR REFURBISHMENT 5 SHIPYARDS
Slide 4: Operational Highlights
Operational Highlights • USA Business performing ahead of expectations: • Shipbuilding margin increased from 6.8% to 8.6%. • 4 Vessels delivered in year. • 3 LCS and 1 EPF in US 2018 Federal defense budget. • Commercial Ferry Market growing fast: • $420 million new orders (Total order book $444 mill
Slide 5: FY2018 Financials
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Slide 6: Earnings
Earnings Operating Revenue increased across all shipyards (pre FX $m FY2018 FY2017 Change impact). Revenue $ 1,392.0 $ 1,310.1 $ 81.9 Significant increase across all profit measures, driven by strength of USA earnings. EBITDA 102.3 77.1 25.2 USA shipbuilding results exceeded guidance. EBIT 65.
Slide 7: Segment breakdown
Segment breakdown $m Concept Ships Systems Support Other Total Revenue $ 855.1 $ 173.0 $ 134.6 $ - $ 1,162.6 USA EBIT 72.4 4.9 8.7 (3.0) 83.0 EBIT Margin % 8.5% 2.9% 6.4% - 7.1% Revenue $ 123.5 $ - $ 75.0 $ - $ 198.5 Australia EBIT (10.9) - 4.3 - (6.7) EBIT Margin % (8.8%) - 5.7% - (3.4%) Revenue $
Slide 8: USA shipbuilding margin reporting
USA shipbuilding margin reporting FY2019 Accounting changes required under AASB 15 will result in the Ships and Systems components being combined. FY2018 & FY2017 results have been recalculated to provide a comparative for future reporting periods. FY2018 7.5% is a weighted average of Ships (8
Slide 9: Cash flow
Cash flow $m FY2018 FY2017 Change Operating: Operating $ 65.6 $ (37.9) $ 103.5 Significant operating cash flow. Investing Strong EBITDA conversion. Sustaining $ (15.0) $ (10.7) $ (4.3) Investing: Enhancing (15.9) - (15.9) Sustaining capex in typical range of $(10) – (15) CCPB 9 & 10 (3.0) (42.
Slide 10: Net Cash / (Debt)
Net Cash / (Debt) $m June 2018 Net Cash $34 m excluding $100 CCPB 9 & 10 residual buyback guarantee $50 Cash $0 ($50) (Debt) ($100) ($150) ($200) Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017 2017 2018
Slide 11: Business Priorities 2019
Business Priorities 2019 Develop US market Complete Philippines expansion and Vietnam set up Group wide cost efficiency Harness productivity gains across business Continued investment in product development Auto Express 94 & 109 and MARINELINK-Smart
Slide 12: FY2019 Guidance
FY2019 Guidance Revenue of $1.3 – 1.4 billion USA Margin (new combined method) 7-8% Defence Commercial • 1 or 2 LCS from 2018 US fiscal budget. • Commercial vessel order pipeline continues to • 1 EPF from 2018 US fiscal budget. be strong. Capacity expansion in Asia will be • Trinidad have announced
Slide 13: Business Overview
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Slide 14: Ships in Construction
50m Passenger Ferry Seaspovill Hull 416 Delivered 42m Passenger Ferry Blue Sea Jet Hull 880 Delivered 1x Scheduled Ships in Construction Littoral Combat Ship (LCS) US Navy LCS 12 Commissioned LCS 14 Delivered LCS 16 Delivered LCS 18, 20 Launched LCS 22, 24, 26, 28 Under Construction 56m Passenger Fe
Slide 15: Support
; Turnover LCS and EPF Turnover support support contracts contracts FY2018 Fy2018 Cape Class Patrol Boat 1 Oo Armidale Class Patrol Boat 6 Littoral Combat Ship 7 Expeditionary Fast Transport g 100+ Active MARINELINK installations on in-service vessels in FY2018
Slide 16: Shipyards
Shipyards Only foreign Prime Contractor designing, building and sustaining < ships for the US Navy 5th Largest shipyard in the USA Largest employer in Mobile, Alabama One of only 5 shipbuilders selected by the US Government to develop a Guided Missile Frigate FFG([X) Concept Design
Slide 17: Australia operations
VV AK ASV IWAVNY =NOSWSUNSH + a Molslinjen = High Speed Ferry <4 as — 28% Improvement in production efficiency compared to CY2017 Increase in design resources in FY2018 wv — | Suppliers core Australia-wide 21 Guardian Class Patrol Boats (GCPBs) ii wy New steel construction facility for Pacific Patro
Slide 18: Philippines operations
RRARAR) 1S. fe, 0 0 delivered to vest Workers in 2018 S oo 2018 shipbuilding capacity 1 0 0 0 customers when shipyard expansion ; : a : Estimated by 2020 worldwide since ne a complete in 2019 Tak - 2012 Pe,
Slide 19: Vietnam operations
< Cc Fad G) = > Cc New Austal Vietnam shipyard announced for Vung Tau, providing additional shipbuilding Capacity to meet growing international order book RARRRA 72 Workers in 2018 Estimated by 2020
Slide 20: China operations
Ragen! to Chinese operator Nantong High Speed Ship Company. Vessels in build in 2018 42 metre catamaran history as the Aulong - Austal delivered in FY2018 Joint Venture, recognising the strong demand in the Chinese fast ferry market. In 1990 Austal delivered the fast ferry Dokdo Sarang Ho INO INV In
Slide 21: Strategy and Outlook
Strategy and Outlook
Slide 22: Commercial Ferry Market Overview
Commercial Ferry Market Overview 1. Austal’s core market of commercial ferries has entered a period of likely sustained growth based on the need to replace old vessels and the growth of new routes. 2. Austal has invested in major capacity expansion and new modern vessel designs early in the cycle an
Slide 23: Global passenger transport sector is strong
Global passenger transport sector is strong. Intra-European travel a leading indicator of ROPAX ferry demand. Growth in global air-travel is accelerating year on year, In Europe, local Europeans make up more than 90% of all with negligible impact from high oil prices or recessions tourist destinatio
Slide 24: Conventional large ferry construction market at record levels
Conventional large ferry construction market is running at record levels of activity, globally. New build orders per year [ Vessels >70m ] 80 30 year historic peak 70 60 50 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 25: Global high speed ferry replacement market is now underway
Global high speed ferry replacement market is now underway, but yet to hit its peak Age of global high speed ferry fleet (vessels >70 metres) 16 Expected Life = 25 years 14 12 Number of vessels 10 8 6 4 2 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Vessel Age S
Slide 26: New build market exceeding Austal projections
New build market for large high speed ferries is exceeding Austal projections, due to operators adding new capacity and routes. New build orders per year [ Vessels >70m] • Projected renewal orders 6 • Actual renewal orders • Actual new capacity orders 5 4 3 2 1 0 2017 2018 2019 2020 2021 2022 2023 2
Slide 27: Austal's technology differentiation in new vessel sales
Austal’s technology differentiation is evident in new vessel sales; unique trimaran hull-forms paired with next generation Marinelink
Slide 28: Austal has rapidly expanded yard capacity and design capacity
Austal has rapidly expanded yard capacity ( X4 ) and in house design capacity at Henderson has grown to match. Design Team (FTE) Vietnam 200 Philippines Australia Sub-Contractors 2019 plan 150 2017 100 50 In-House Design Team 0 Build Capacity : Approximate tonnes of Aluminium per annum* * circle siz
Slide 29: Defence Market Overview
Defence Market Overview 1. The core LCS and EPF programs in the US continue to improve in productivity and delivery velocity, providing healthy foundation for Group profitability. 2. Austal’s performance is reflected in the strengthening order book and naval opportunity pipeline, both in the US and
Slide 30: USA build efficiency has improved dramatically
USA build efficiency has improved dramatically on both LCS & EPF and led to a step change in delivery velocity Labour hours per vessel Deliveries by Year, LCS & EPF LCS EPF 4 3 35% 2 1 0 FY13 FY14 FY15 FY16 FY17 FY18
Slide 31: US shipbuilding margin improving, orders are strong
US shipbuilding margin improving, orders are strong. US shipbuilding margin, % Orders by year, EPF & LCS LCS EPF 10% 4 9% 3 8% 2 7% 6% 1 5% FY2017 H1 FY2017 H2 FY2018 H1 FY2018 H2 0 FY13 FY14 FY15 FY16 FY17 FY18
Slide 32: Sustainment Revenue linked to vessels under management
Sustainment Revenue linked to growth of OEM vessels under management 9 x LCS 10 x CCPB 9 x EPF 21 x GCPB
Slide 33: Sustainment growing in line with naval vessel deliveries
Sustainment has been growing in line with naval vessel deliveries, Vessels under management set to grow. Group Sustainment Revenue Vessels under Management $250 75 70 Other 65 $200 AUSA 60 55 Australia $150 50 45 40 $100 35 30 $50 CAGR 30% 25 20 15 $0 10 FY2015 FY2016 FY2017 FY2018 5 0 FY14 FY15 FY1
Slide 34: FY2018 Operational Overview
FY2018 Operational Overview
Slide 35: USA operations
USA operations Change since FY2017 Shipbuilding margin improvement to 8.6% (FY2017 margin 6.8%). VESSEL PROGRAMS: Littoral Combat Ship (~US$5.9 billion program). Margin improving ship to ship. LCS 12, 14 & 16 delivered in the year. Awarded LCS 30 through a competitive tender. US Federal
Slide 36: Australia operations
Australia operations Change since FY2017 Shipbuilding programs (Mols and PPB) on schedule and cost. but construction volume to increase in FY2018. Construction volume flat in FY2019. Major cost reduction drive underway. Achieved 25% labour reduction. Significant technology investment underwa
Slide 37: Philippines operations
Philippines operations Change since FY2017 $22 million investment to increase ship building capacity 3 fold. New facilities complete by year end. Yard at full capacity to end CY2019. CY2019 revenue will be twice historic peak and ~ 3 times historic average. Investment in facilities unlocks c
Slide 38: Vietnam operations (new facility)
Vietnam operations (new facility) New leased facility in build, capable of building medium to large vessels. Lease is for minimum 2 years plus extensions at Austal option. Expatriate management team in place who have built multiple catamarans and operations have commenced supporting Philippines.
Slide 39: China operations (Aulong Shipbuilding)
China operations (Aulong Shipbuilding) 40: 60 Joint Venture with Guandong Jianglong Shipbuilding, formed 2016. Growth expected into FY2019. VESSEL PROGRAMS: Blue Sea Jet A$10 m, 42 m high speed ferry DELIVERED January 2018. Blue Sea Jet A$5.6 m, 35 m high speed catamaran under construction.
Slide 40: Disclaimer
Disclaimer 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 offer or invitation to
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