AUSTAL LIMITED — AGM Information 2021

Nov 10, 2021

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1. Welcome to the FY 2021 AGM. I am Paddy Gregg the CEO at Austal.

2. I will be presenting in the same format with by giving a financial, then business overview and context. As always, I plan to present for no more than 20 minutes to allow time for questions.

3. It’s been a challenging year with Covid, but we have successfully kept our yards open and adhered to social distancing rules. We have been challenged with a strengthening Aussie dollar, and on the back of 5 years of record results I can only report this is the second best set of results we have announced, despite all the challenges.

4. We remain focused on opportunities for long term sustainable growth and profitability of the business and replenishing the orderbook to keep our facilities full and staff gainfully employed.

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Upon direction / cue from Paddy - Play TTCG Capes Departure (Export) Video (Video 1)

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1. Revenue in FY21 delivered inline with guidance.

2. We are also working our way though the orderbook and while replacement is a key focus for us, let’s not overlook the fact that we have 29 ships under construction or scheduled. That is still a significant volume of work ahead for the company.

3. I’m very proud of what our teams in AUSA and Australasia have achieved, to deliver 19 ships - a record for us - despite the challenges of Covid is a fantastic achievement.

4. Many businesses are suffering but with the strong orderbook we possess, and strong balance sheet, we battle Covid from a very fortunate position and that can be seen from the results we are delivering today.

5. Our service and support business has had some immediate challenges, but we still see a bright future for this division and I’m pleased to say the BSE (now Austal Cairns and Austal Brisbane) acquisition and integration has gone well. We are now up to 8 service centres worldwide, with 35 vessels under sustainment contracts, up from 33, growing opportunity as we continue to deliver defence vessels in both USA and Australia.

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1. These results demonstrate a really strong operational performance, and although revenue is reduced and impacted by FX, our earnings dropped by relatively smaller amount.

2. The one area that continues to receive maximum focus is replenishment of the orderbook and associated revenue. I plan to talk more about the opportunities available to Austal, particularly in US, later in the presentation.

3. Standouts in the half were:

4. Increased shipbuilding margins from both USA and Australasia

5. Confidence in the balance sheet to allow us pay shareholders another 4c dividend and continue to invest in both organic and inorganic opportunities.

6. Austal has maintained a very healthy net cash position of around $232 million – this enables us to deliver returns to shareholders whilst retaining the ability to self-fund investment in long-term growth opportunities.

7. We are investing for future shareholder returns, including in building steel capability in the USA, a key component in order to replace LCS revenue.

8. Finally and importantly, the results demonstrate how the nature of our business – being heavily skewed to defence – can withstand the current economic and operational challenges.

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1. Pictures of some of the major investments in this year

2. All drive growth opportunity for the future

3. Great examples of what we can do with the cash/ strong balance sheet

4. We are opportunities for growth of the support business in San Diego, and Henderson as part of the Force Structure Plan

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1. We are still in the forecast transition from LCS but we have delivered everything we said we would to ensure we make it through stronger and ready to grow in the future.

2. Steel investment is progressing to plan.

3. T-ATS steel hulled vessel directed to us by Navy

4. Strong indication that Navy giving us $50m that we will match fund to make our yard steel capable, plus the directed contract award for the T-ATS vessels means we will have a long future building steel ships for Navy.

5. Lots of future opportunities that we are well placed to execute.

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1. Lots of opportunities that we are well placed to execute, and some meaningful announcements since results

2. We are still in the forecast transition from LCS but we have delivered everything we said we would to ensure we make it through stronger and ready to grow in the future.

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1. 2050 because the life of our vessels is 25-30 years

2. Our 10 year growth rate exceeds peers but still lacks scale

3. The makeup of our business has changed significantly but needs to keep changing to meet market demands and opportunities

4. 4 meta-trends drive this: regional insecurity / supply chain localisation/ decarbonisations/ autonomy and automation

5. Expand/ enhance/ extend.

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1. Austal made a significant investment in the quality and content of our ESG report this

2. year.

3. This is an area that really matters to us and low emissions is a focus and opportunity for the future.

4. Austal has chosen to report scope 3 emissions (the emissions attributable to suppliers and customers). Many other companies are not doing this in order to keep reported emissions low.

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1. Launched in December and lots of interest. But Covid impacting commercial orders

2. Could be electric or hybrid with hydrogen or LNG

3. Could be other applications- ferry/ workboat or crew transfer/ fishing

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1. Investing in R&D to be ready for the future

2. Focused on the product for more efficient operations

3. Looking at it from both an operation and maintenance perspective in both defence and commercial markets.

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1. Great set of results with strong operational performance with challenges I’m confident we will overcome.

2. Our strong balance sheet has helped during Covid, and allows us to invest for what’s looks like an exciting future

3. We are a more diversified business now, establishing in shipbuilding, support and systems.

4. The same macro factors driving growth of the US Navy are also apparent in Australia, as seen with the award of 6 Cape vessels and a clearly defined construction runway for a whole host of vessels outlined in Australia’s Defence Force Structure Plan.

5. We also see significant opportunities in the Philippines and advanced technology autonomous vessels

6. Austal does need to generate new contracts in the next few years, but we are optimistic about the future because we have demonstrated we can deliver operationally, have the capability to deliver in steel and aluminum in shipbuilding and support, in commercial and defence, and there are a lot of opportunities out there for us to go and win.

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