AUSTAL LIMITED — AGM Information 2009

Oct 22, 2009

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Austal Limited Annual General Meeting October 23, 2009

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Financial Results 2005 - 2009 (Excluding Abnormal Items)

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Revenue ($M) Profit After ax T ($M)

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700 60
600
50
500
40
Normalised
400
30
300
20
200
100 10 Reported
0 0
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
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• Global economic crisis impacted FY09 result

• Delays in commercial vessel contracting created a trough in the order book – O ne-o ff wr te owns mpacte i d i d fi na resu t t l l hi s year

• Several events and activities in FY09 have positioned Austal well for the coming years – Joint High Speed Vessel program award

• US government/military commitment to LCS and JHSV programs

• Continued growth in the Service business

• 5 new-build orders this calendar year

• Completion of Modular Manufacturing Facility, Phase 1 in the US

Annual General Meeting

Slide 2

One-Off Write Downs’ Impact in FY09

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• Hawaii Superferry write down of sub-debt

• $30M full year write off

• US Maritime Administration took possession of vessels

• Any sale of vessels above $135M could mean some return of capital to Austal

• This investment 5 years ago had big benefits

• Austal USA constructed 2, 100metre car/passenger ferries

• Allowed our US workforce to grow in number and skills

• US Navy was able to see a tangible product that closely resembles the Joint High Speed Vessel

• Joint High Speed Vessel program worth $1.8 billion

Annual General Meeting

Slide 3

One-Off Write Downs’ Impact in FY09

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• D er vat ve account ng treatment i i i – $15M full year, non-cash write-off

• Hedging put in place for a multi vessel program

• Required mark-to-market treatment of premium costs with no recognition of savings in foreign exchange

• This investment will deliver material benefit to the JHSV program profitability

• Guaranteed upside in excess of the write-down over the life of the 10-vessel JHSV program

• Will be discretely accounted for in future years , separately from vessel profitability

Slide 4

Annual General Meeting

Other Financial Key Indicators

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• Cash on hand of approximately $90M

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• Gearing at zero

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• EBIT margins for US military vessels expected to be 8 - 10%

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• EBIT margins for commercial vessels between 12 - 15%

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Slide 5
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Annual General Meeting

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Vessels Completed in 2009

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• 2 x 88 metre vessels for Kingdom of Saudi Arabia

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• 2 x 69 metre vessels for Kingdom of Saudi Arabia

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• 1 X 65 metre vessel for Sultanate of Oman

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• 7 x 48 metre vessels for Cotai Strip (Macau)

• 2 x 48 metre vessels for New World Fast Ferries

Above: One of two 69m vehicle ferries delivered to the Kingdom of Saudi Arabia

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• 3 x 22 metre police boats for Queensland Police Force

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• 1 X 107 metre vessel for Hawaii Superferry

Above: two of three 22m catamarans delivered to the Q ueensland Police ervice S

Annual General Meeting

Slide 6

US Infrastructure Expansion

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• Phase One completed on time and on budget

• Test module construction began in September

• 35,000 sq metres under roof

• Automated router cutters , pipe-benders and plate benders

• Capacity to produce 3, 100M+ vessels per year

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Annual General Meeting

Slide 7

Planned US Expansion

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Addit ona assemi l bly ayb
MMF Phase Two
may be required subject Additional
will be initiated subject
to pace of JHSV awards office facilities
to LCS outcome
and LCS outcome planned this
fiscal year
Annual General Meeting Slide 8
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Strategic Overview

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Investor Information Package

Slide 9

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Strategic Overview

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Strive to minimise order book “lumpiness”:

• Multiple hull orders o Patrol boats o US military contracts

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• • = greater efficiency and profitability

• Passenger ferry orders

• Service and Through-Life-Support contracts o Joint High Speed Vessel

• o Multi-year service contracts associated with new build orders

• Regional service hubs

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Annual General Meeting

Slide 10

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Strategic Overview

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• Maximise construction efficiency

• Waste Elimination Program

• Yielding cycle time reductions in excess of 30%

• Increasing throughput with no additional infrastructure requirements

• Improved productivity means lower construction costs

• Lower construction costs means greater market competitiveness

• Modular Manufacturing

• High degree of vessel completion before launch

• Greater utilisation of assembly bays

• Simpler, repetitive work packages yields higher quality and greater productivity

Greater productivity means greater market competitiveness

Slide 11

Investor Information Package

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A Look Ahead

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Investor Information Package

Slide 12

LCS 2 (USS Independence) Update

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• Builders trials complete – attained max s eed of 45.8kts p

• Acceptance trials to begin in November

• Expect to hand vessel over in December 2009

• LCS 2 will remain at Austal USA until early next calendar year for crew training and commissioning

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Annual General Meeting

Slide 13

Littoral Combat Ship Program Update

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• Navy awarded LCS 4 , USS Coronado , in April 2009

• Ten modules are under or have completed construction

• Full construction will begin next month

• Bid submitted in July 2009 for up to 3 additional LCSs to be awarded in FY10

• However, the Nav y announced a new acquisition strate gy 16 September and discarded the July bids

• New strategy is as follows:

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2010 2011 2012 2013 2014
10-ship award to either GD
2 2 2 2 2
Team or LM team
5-ship award of winning 2 2 1
design to a different shipyard
Annual General Meeting Slide 14
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Littoral Combat Ship Program Update

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• Opportunity exists to influence the RFP development between now an d N ovem b er

• Focus will be on:

• Removal of consideration of who can build our design other than Austal

• Selection criteria should include -

• th roug h lif e opera ti ona cos s l t

• – Selection criteria should include vessel capability

• N avy awar d d ec s on w i i ill b e on or before 30 June 2010

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GD-Austal LCS 2
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Lockheed Martin LCS 1

Annual General Meeting

Slide 15

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Joint High Speed Vessel

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• JH S V 1 will commence ull f within 4-6 weeks

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• $1 . 3M test module was funded for Modular Manufacturing Facility construction in September

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• Long lead time materials have been ordered by Navy for vessels 2 and 3

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• Expect 2 additional vessels to be ordered in FY10

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• Navy assures us of no risk of cuts to this program

Annual General Meeting

Slide 16

Current Commercial Order Book

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• 1 X 11 3 m ferr for Nordic Ferr S ervices y y

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• 1 X 107m ferry for Virtu Ferries

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• 4 X 41m water taxis for Trinidad & Tobago

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Annual General Meeting

Slide 17

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Current Defense Order Book

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• 6 X 30m patrol boats for Trinidad & Tobago

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• 4 X 21m patrol boats for Maltese Coast Guard

• 1 X 103m JHSV for US Navy

• • 2 X long lead-time materials for JHSV vessels 2 and 3

• 1 X 127 m USS I n d d ence LCS #2 ( epen )

• • 1 X 127m LCS #4 ( USS Coronado )

Annual General Meeting

Slide 18

continued Growth Strategy Military Capability

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• Australian Defence White Paper seeking 20 “multi-role vessels;

• International market demand for defence capability

• Intend to exploit US LCS and JHSV i d l exper ence an app y

• Australian commercial skills

• Developing a new product line to meet emerging markets

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Annual General Meeting

Slide 19

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Outlook

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• C ontracts on hand by this time next year expected to be valued at approximately $1.5B

• Potential for up to $6M in further derivative write down in FY10

• Expect to have at least 6 US Navy vessels in the order book at Austal USA before this time next year

• Manpower expected to grow significantly in US to support contracts in hand

• Watch for updates to the LCS acquisition strategy and process

Annual General Meeting

Slide 20

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AUSTAL LTD . ANNUAL GENERAL MEETING

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