LEADING THE WORLD IN THE DESIGN AND CONSTRUCTION OF HIGH SPEED - - PowerPoint PPT Presentation

LEADING THE WORLD IN THE DESIGN AND CONSTRUCTION OF HIGH SPEED ALUMINUM VESSELS

AUSTRALIAN INSTITUTE OF MANAGEMENT – AUGUST 2010

Overview: AUSTAL LIMITED IS A PUBLICLY LISTED AUSTRALIAN COMPANY SPECIALISING IN THE DESIGN AND CONSTRUCTION OF ALUMINIUM COMMERCIAL AND DEFENCE VESSELS. Corporate Profile: Founded: 1988 Listed: Australian Stock Exchange 1998 (Stock Code: ASB) Revenue: 2009 $500M Total Employees: ~2300 in Australia and USA yards combined Head Office: 100 Clarence Beach Road, Henderson, Western Australia

OVERVIEW

PRODUCT OVERVIEW

Commercial Veh / Pax Defense Commercial Passenger Custom-Production Yachts

Product Hull Forms

Trimaran Catamaran Monohull

Global Market

Tahiti Greece Turkey Sydney Indonesia Malaysia Japan China Singapore Hong Kong French Caribbean Ireland Venezuela New York Miami Mexico Saudi Arabia Maldives Bahamas Spain Darwin Cairns Perth Kuwait Yemen Estonia Italy Denmark Norway UK Milwaukee Portugal Canaries Locations where Austal vessels are operating today Broome Shipyards Support offices Mobile

YARD OVERVIEW - AUSTRALIA

Austal - Ships Austal - Image Austal - Tasmania

Planning for the Future Required Looking at Our Past

Historical Performance

EBIT $M ($40) ($20) $0 $20 $40 $60

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 Forecast (Feb-09)

Other USA Australia

Large commercial vessels sales are somewhat unpredictable:

Austal’s share price performance is closely linked to sales success:

Source: Austal Finance Department

Share price ($)

Austal’s share price ASX All Ordinaries

Historical Performance

Historical Performance

$0 $1 $2 $3 $4 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 (60%) (40%) (20%) 0% 20% 40% 60% 80% Year end share price TSR

Historically, Total Shareholder Returns have been volatile:

Share price ($) TSR

• 1. Definition of TSR: Share price growth + dividend yield

Backward integration Platforms Geography Forward integration Capabilities Industries Marine products Service

= Current business = Under review

Fast ferries Patrol Private boats Steel surface combatants Submarines Structures Marine Australia USA Middle East India Europe Ali design & production Systems integration Monohulls Electrical / electronics Major equipment Austal vessels

= Not under review

Commercial

• perator

China Large freighters Non ali vessels Catamarans Trimarans Work boats Corvettes Transport Non Austal ali vessels Submarines Rail Road Aerospace Steel warship & submarine design & production Maintenance flying squad Maintenance service hubs Design & construct ali ships Steel surface combatants Composiites Resources

Austal’s Strategic Footprint

The US Opportunity

• In 2000, the US represented a huge potential market;

– Commercial ferries – Support vessels for oil and gas industry – Defense vessels – growing interest by the Navy for high speed craft

• Two barriers to entry

– The Jones Act – Security restrictions in selling to the US Navy

YARD OVERVIEW - USA

Established shipyard in 2000 in Mobile, Alabama;

2 x 45 meter Crew/Supply Boat Delivered our first vessel in January 2002 Delivered our most recent commercial vessel June 2009 113 meter Vehicle-Passenger Catamaran

Austal USA Expansion

Site aerial view 1998 Site aerial view 2004

Austal USA Expansion

Site aerial view 2007 Site aerial view 2009

Module Manufacturing Facility (MMF) Phase 1

• Designed to support the production of up to 3 vessels per year;
• 350,000 square feet of production space under roof;
• 80,000 square foot drive-through warehouse;
• Approximately 600 additional employees required;
• An $81M investment.

Module Manufacturing Facility (MMF) Phase 1

Austal USA Expansion

Littoral Combat Ship (LCS) Program

Length: 417 ft. Beam: 99 ft. Draft: < 10 ft. Hangar for (2) H-60 Flight Deck for (2) H- 60 or (1) H-53 Sprint Speed: 45 kts + Multiple mission packages

Positioning to Pursue the LCS Program

• Navy was seeking to replace 3 aging vessel classes with 1 new one,

the Littoral Combat Ship

• Capable of performing multiple missions, e.g.

anti-submarine warfare swarm boat defense mine detection and removal

• Capable of operating at high speeds and in shallow waters
• Austal saw an opportunity to adapt an existing design to address

the Navy’s needs

• Austal partnered with Bath Iron

Works (BIW) to pursue the LCS program

• BIW –

prime contractor

• Austal –

shipbuilder

• GD-AIS –

ships systems integrator

LCS PROGRAM

• LCS 2, USS Independence, departed

Austal USA on March 2010 (4 years in construction)

• Currently in Norfolk, Virginia to

to complete test and trials

• Will be permanently based in San

Diego

• LCS 4, Coronado, approximately 26%

complete (expect a 3-year build cycle)

• Delivery of LCS 4 to the Navy expected

in late 2012

LCS PROGRAM

• Austal has submitted a bid for a

10-vessel award

• Austal acquired its own security

clearances and separated from BIW

• As prime contractor, Austal is

competing against Lockheed Martin

• Navy expects to make the award

this month

• Total value of the award is circa $5B

US Navy-Army Joint High Speed Vessel

• Austal won the JHSV contract in

November 2008 with US Navy & Army

• High speed transport
• Over 330 feet in length
• ~$160M average cost/ship
• 10 ships in the program
• The first vessel will be delivered in

late 2011

• Navy’s 30-year shipbuilding plan calls

for 41 of these vessels

• Army is planning for 12 JHSV’s

JHSV PROGRAM

Austal drew from its experience in constructing Westpac Express and 2 Hawaii Superferries in winning this program.

US DEFENSE NEAR TERM PURCHASE PLAN

= vessels currently under contract = 10-vessel award if Austal wins contract = JHSV options remaining to be exercised

By year-end 2012, Austal’s total order book may exceed $2B

State and Local Support

Amount Purpose

US, Alabama and Mobile Financial Support:

US Government State of Alabama City & County of Mobile $33.7M $37.0M $10.0M $80.7M Total Stimulate economic development in the Gulf Coast post hurricane Katrina Stimulate economic development in the State and reimburse employer training costs Stimulate economic development and employment in the Mobile area Austal’s Total Investment $127.0M

A Return on Investment

A strong partnership with Alabama:

• Austal currently employs nearly 1,600 in Mobile. This number

could grow to 3,500 if we win the LCS program;

• For every $1 of Austal USA’s payroll, the surrounding area

gains $8 of economic impact, according to the Mobile Chamber

• f Commerce;
• State and local communities have provided Austal with

$80.7M of financial support;

• This coming year, Austal USA will generate $640M of

economic impact (at current employment levels).

A Bright Future for Austal USA

If successful in the LCS award, Austal will be responsible for building the vessels which ultimately represent ~40% of the Navy’s targeted fleet size of 313 ships.

QUESTIONS?