For personal use only. Macquarie Western Australia Forum

Transcription

1 Macquarie Western Australia Frum Andrew Bellamy, Chief Executive Officer 15 Octber 2015

2 Overview abut Austal Funded in 1988, publicly listed since 1998, and nw an ASX-200 cmpany, Austal is a leading defence prime cntractr specialising in the design, cnstructin and maintenance f high perfrmance vessels fr defence and cmmercial purpses with 250+ ships designed, built and delivered. Austal has a glbal ftprint with strategically lcated shipyards and service facilities: Australia United States Philippines Eurpe Middle East Asia Austal s fcus is n the delivery f three prduct platfrms: Ships Systems Supprt SHIPS SYSTEMS SUPPORT SHIPS SYSTEMS SUPPORT 2

3 Overview crprate snapsht Share price (2 years) $2.40 $2.20 $2.00 $1.80 $1.60 $1.40 $1.20 $1.00 Bard and management Jhn Rthwell AO Nn Executive Chairman David Singletn Independent Directr Giles Everist Independent Directr Jim McDwell Independent Directr Andrew Bellamy Chief Executive Officer Greg Jasn Chief Financial Officer $0.80 $0.60 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Crprate details ASX Cde ASB Issued Shares 347,420,634 Share Price (at 13 Octber 2015) $2.11 Market Capitalisatin $733.1m PE rati Financial verview (FY2015) Revenue EBIT NPAT Net debt Interim dividend Final dividend Order bk (at 30 Sept 2015) $1.4b $84.8m $53.2m $6.1m 1.0cps, ff 3.0cps, ff $3.0bn SHIPS SYSTEMS SUPPORT 3

4 Overview shipbuilding prgrams Order bk f $3.0 billin as at 30 September 2015 secures revenue thrugh CY2020, including: 11 Littral Cmbat Ships fr US Navy 10 funded, with 1 delivered, funding expected in FY2016 fr eleventh vessel 10 Expeditinary Fast Transprts (frmerly Jint High Speed Vessel) fr US Navy Fully funded, with 5 delivered 8 Cape Class Patrl Bats fr Australian Brder Frce Fully funded, with all 8 vessels delivered, plus thrugh-life supprt 2 High Speed Supprt Vessels fr Ryal Navy f Oman Fully funded Cmmercial vessels 2 high speed catamaran crew bats SHIPS SYSTEMS SUPPORT 4

5 Objectives fr sustained grwth Strengthen peratins and balance sheet Onging bjectives Target pprtunities Shipbuilding margin achieved Successfully applied learning frm first-inclass vessels Wn new prgrams by leveraging ff existing vessels Strng cash generatin used t strengthen balance sheet Delivered Maintain cash generatin t supprt prgrams and dividends Reduce debt Deliver n maturing prgrams and explit learning frm first in class ships Extend existing prgram pipeline Pririty Invest in R&D t grw intellectual prperty base Refresh prduct range t deliver increased capability Grw lng term supprt and engineering services business Fcus SHIPS SYSTEMS SUPPORT 5

6 Financials SHIPS SYSTEMS SUPPORT 6

7 Recrd revenue driving perfrmance Revenue (A$m) EBITDA (A$m) NPAT (A$m) FY2014 FY2015 FY2014 FY2015 FY2014 FY2015 1, , Recrd revenue, with 26.0% increase ver FY2014 driven by grwing wrk n majr navy defence and patrl bat prgrams and relative depreciatin f AUD Recrd prfit, with 66.8% increase in NPAT ver FY2014 Headline earnings include sme nn-cash benefit frm mark-t-market revaluatin n intercmpany lans t reflect currency mvements SHIPS SYSTEMS SUPPORT 7

8 Segment breakdwn USA Australia Philippines ($m) Ships Systems Supprt Other 1 Ttal Revenue ,119.7 EBIT (7.5) 58.4 EBIT Margin% Revenue EBIT (0.2) 31.8 EBIT Margin% Revenue EBIT (1.3) EBIT Margin% (14.2) USA: Schedule pressure n LCS 6 (nw delivered), and a significant grwth in prfitability f the Supprt business Australia: Significant margin imprvement frm efficiencies n Cape Class Patrl Bat prgram Philippines: Delivering cmmercial vessels at prfitable margin 1 unallcated verhead targeting grwth SHIPS SYSTEMS SUPPORT 8

9 Cash and debt Cash flw FY2015 (A$m) FY2014 (A$m) Change Operating Investing (21.8) 19.0 (40.8) Financing (24.1) (84.3) 60.2 Net increase 64.5 (23.7) 88.2 Strng perating cash flw which was enhanced by the sale f Hull 270 trimaran stck vessel Significant reductin in net debt Maintained lw sustaining capital expenditure Extensin t banking facility agreement prgressing Debt At June 2015 At June 2014 At June 2013 Net debt ($m) Leverage rati (6.1) (71.5) (137.1) SHIPS SYSTEMS SUPPORT 9

10 Operatins update SHIPS SYSTEMS SUPPORT 10

11 US Navy Littral Cmbat Ship 10 ship cntract awarded as prime cntractr, wrth US$3.5 billin and additinal 1 ship ptin Margin and schedule pressure n LCS 6, first in the blck-buy cntract. Austal implementing experience frm LCS 6 t incrementally grw margin n subsequent vessels LCS 8 preparing fr trials in late CY2015 LCS 10 launched and christened LCS 12, 14, 16 & 18 under cnstructin LCS prgram expected t be 52 ships Later ships (LCS 33 52) will be upgunned as future frigate SHIPS SYSTEMS SUPPORT 11

12 US Navy Expeditinary Fast Transprt Frmerly Jint High Speed Vessel (JHSV), renamed by US Navy t Expeditinary Fast Transprt (EPF) 10 ship award t Austal valued at US$1.6 billin (fully funded), securing wrk thrugh t CY2017 Prgram prgressing well matured int a phase f efficient prductin and predictable delivery EPF 1, 2, 3, 4 & 5 delivered EPF 6 launched & christened EPF 7, 8 & 9 under cnstructin US Navy interested in grwing size and rle f EPF fleet (strng ptential fr prgram expansin), while variants are gaining tractin in the Middle East Cnfident f extensin t prgram beynd existing blck buy EPF 11 funded by Cngress (nt yet cntracted) SHIPS SYSTEMS SUPPORT 12

13 Austal strngly psitined in US Austal-built vessels have cntinued t be funded and prgrams are maturing well US Freign Plicy remains fcused n Asia-Pacific defence strategy Winning service cntracts n LCS and investing in supprt business t best psitin Austal fr additinal wrk US Navy cmmitted t upgrading final 20 LCS as future frigates and meet 52 vessel target rate f acquisitin t be decided by Cngress Optin awarded t Austal n LCS 26 (can be exercised in CY2016), while EPF 11 apprved by Cngress (yet t be cntracted) LCS variants attractive t internatinal market thrugh US Freign Military Sales SHIPS SYSTEMS SUPPORT 13

14 Australia Cape Class Patrl Bats $330 millin cntract fr the design, cnstructin and thrugh-life supprt f 8 Cape Class Patrl Bats fr the Australian Brder Frce (frmerly Australian Custms and Brder Prtectin Service) Prgram matured significantly, delivering significant efficiency gains that drve margin expansin Final vessel delivered in August 2015 Austal nw perfrming thrugh-life supprt n cmpleted vessels Opprtunities exist fr new cntracts at hme and abrad, with Austal able t deliver efficiencies gained frm first blck cntract SHIPS SYSTEMS SUPPORT 14

15 Australia High Speed Supprt Vessels US$124.9 millin cntract fr the design, cnstructin and integrated lgistics supprt f tw 72 metre High Speed Supprt Vessels fr the Ryal Navy f Oman Cnstructin is prgressing well at Hendersn shipyard Cmpletin f keel laying fr bth vessels in December 2014 Final vessel t be delivered in late CY2016 Deplyed with a similar missin t the EPF prgram Strategy demnstrated f leveraging Austal s intellectual prperty and technlgy t new defence markets SHIPS SYSTEMS SUPPORT 15

16 Australian defence shipbuilding The Federal Gvernment's plan fr a strng and sustainable naval shipbuilding industry was annunced 4 August 2015 Initiative The Gvernment will invest ver $89 billin in ships and submarines fr the Navy ver the next 20 years. The Gvernment will implement a cntinuus build f surface warships in Australia. Impact n Austal A large, lng-term rder bk f wrk available t naval shipbuilders in Australia. Austal in a cmpetitive psitin t win a large prtin as Australia s nly glbal, prime defence cntractr. Replacement f prject-based rders with cntinuus build prgram ffers lng-term peratinal and revenue stability and efficiencies. SHIPS SYSTEMS SUPPORT 16

17 Australian defence shipbuilding Initiative Bringing frward the Future Frigate prgramme t replace the ANZAC class frigates frm 2023 t The Future Frigates will be built in Suth Australia based n a Cmpetitive Evaluatin Prcess (CEP), which will begin in Octber Bringing frward cnstructin f Offshre Patrl Vessels (SEA1180) t replace the Armidale class patrl bats by tw years, with a cntinuus nshre build cmmencing in 2018 fllwing a Cmpetitive Evaluatin Prcess. Impact n Austal Variant f Austal s LCS a ptential platfrm fr future frigate. (Upgunned LCS sn t be classed as a frigate by US Navy) Early CEP prvides early revenue ptential if successful. Pssible expansin t Suth Australia t utilise Cmmn User Facility at Techprt, Suth Australia, in respnse t Gvernment s gegraphic requirement fr the vessels cnstructin. Early CEP prvides early revenue ptential if successful plus revenue stability thrugh cntinuus build. Austal will submit a cmpetitive prpsal: It has built all f the patrl bats fr Australian Navy and Custms fr the past 17 years Cmpany s exprt cmpetitiveness demnstrates cst cmpetitiveness Capacity cnstraints in SA may limit cnstructin t ne class f vessel (future frigate) Capability requirements f Offshre Patrl Vessel expected in Gvernment Defence White Paper t be released later this year. SHIPS SYSTEMS SUPPORT 17

18 Philippines Delivered tw 45 metre high speed catamaran ferries t Abu Dhabi Natinal Oil Cmpany in August 2015 under a $30 millin design and cnstruct cntract Cmpleted custmisatin f Hull 270 and delivered wind farm vessel t Turbine Transfers Cmmenced cnstructin n tw crew bats, t be delivered in Q3 CY2016: 70 metre catamaran under US$34 millin cntract 58 metre catamaran under US$20 millin cntract Targeting new cmmercial vessel cntracts, including fielding grwing interest frm the Eurpean ferry market SHIPS SYSTEMS SUPPORT 18

19 Systems and Supprt Austal is steadily adding experience and capability t deliver a grwing prtfli f Naval sustainment cntracts US expanding activity beynd wn vessels: Prime cntractr fr Pst Shakedwn Availability (PSA) and ther pst delivery test and trial prgrams n all Independence Class LCS Teamed with GD awarded Planning Yard services cntract fr the entire LCS fleet Australia transitined Cape Class frm cnstructin phase t supprt phase, demnstrating value f Austal s integrated design, build and sustainment prducts Ftprint spanning Darwin, Hendersn, Oman and Philippines well psitined t supprt increasing reginal frward deplyment f LCS and EPF SHIPS SYSTEMS SUPPORT 19

20 Strategy and Outlk SHIPS SYSTEMS SUPPORT 20

21 Strategy Sustain the business Strengthen the business Diversify the business Scale the business Maintain current annual revenue in medium t lngterm thrugh new cntracts Additinal defence vessel cntracts in existing markets Exprt variant defence vessels Capture new pprtunities in cmmercial vessels Imprve margins by driving efficiencies / prductivity in prcurement and labur withut impacting safety and quality Grw annuity-style revenue by building n existing expertise, including sustainment wrk n Austal-built vessels Fcus n strategic partnerships, investments in infrastructure and IT, upskilling staff, and differentiating frm cmpetitrs Psitin Austal fr future Navy prgrams in Australia Organic and acquisitive grwth pprtunities Grwth strategy t be supprted by maturing vessel prgrams, significant rder bk, strng financial psitin and effective risk management SHIPS SYSTEMS SUPPORT 21

22 Pipeline fr vessel prgrams Pursuing pprtunities t deliver n strategy by grwing Austal s rder bk and securing additinal lng-term revenue Target markets US: strng ptential t extend existing LCS and EPF prgrams Australia: replacement f Navy vessels including patrl bats and future frigates under cntinuus shipbuilding prgram Middle East: pprtunity fr frigates, supprt vessels and patrl bats Eurpe and Asia Pacific: cmmercial vessels and wrk bats Vessels Future frigate evlved frm mdified Littral Cmbat Ship Expeditinary Fast Transprts fr US Navy Patrl bats develped frm experience with Bay, Armidale and Cape Class vessels Variant high speed supprt vessels develped frm Westpac Express and EPF Cmmercial vessels: ptential new market fr LNG-pwered ferries and crew transfer vessels SHIPS SYSTEMS SUPPORT 22

23 Outlk Margin imprvement at US peratins as lessns learnt frm LCS 6 are applied greatest effect t be n vessels at early stage cnstructin Gd pprtunity fr award f additinal LCS and EPF in additin t existing blck buy cntracts Best psitin Austal fr Pacific Patrl Bat replacement, Future Frigate, and OPV, and seek extensin f Cape Class Patrl Bat prgram Target exprt pprtunities frm Australia shipyard thrugh variant-style defence vessels Pursue rganic and acquisitin pprtunities t grw supprt business in US, with sustainment n vessels reaching critical mass Net cash psitin by end f FY2016 t supprt grwth pprtunities and underpin dividends SHIPS SYSTEMS SUPPORT 23

24 Disclaimer Andrew Bellamy, Chief Executive Officer Telephne: Fr further infrmatin visit Disclaimer This presentatin and any ral presentatin accmpanying it has been prepared by Austal Limited ( Austal ). It shuld nt be cnsidered as an ffer r invitatin t subscribe fr r purchase any securities in Austal r as an inducement t make an ffer r invitatin with respect t thse securities. N agreement t subscribe fr securities in Austal will be entered int n the basis f this presentatin. Our presentatin cntains frward-lking statements r prjectins based n current expectatins. These statements are nt guarantees f future perfrmance and are subject t risks and uncertainties. Actual results may differ materially due t: the availability f US gvernment funding due t budgetary r debt ceiling cnstraints; changes in custmer pririties; additinal csts r schedule revisins. Actual results may als effect the capitalizatin changes n earnings per share; the allwability f csts under gvernment cst accunting divestitures r jint ventures; the timing and availability f future impact f acquisitins; the timing and availability f future gvernment awards; ecnmic, business and regulatry cnditins and ther factrs. We disclaim any duty t update frward lking statements t reflect new develpments. Accrdingly, t the maximum extent permitted by applicable laws, Austal makes n representatin and can give n assurance, guarantee r warrant, express r implied, as t, and takes nt respnsibility and assumes n liability fr, the authenticity, validity, accuracy, suitability r cmpleteness f, r any errrs in r missin, frm any infrmatin, statement r pinin cntained in this presentatin. Yu shuld nt act r refrain frm acting in reliance n this presentatin material. This verview f Austal des nt purprt t be all inclusive r t cntain all infrmatin which its recipients may require in rder t make an infrmed assessment f Austal s prspects. Yu shuld cnduct yur wn investigatin and perfrm yur wn analysis in rder t satisfy yurself as t the accuracy and cmpleteness f the infrmatin, statements and pinins cntained in this presentatin befre making any investment decisin. SHIPS SYSTEMS SUPPORT 24