AUSTAL LIMITED — AGM Information 2023

Oct 25, 2023

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Austal AGM 2023
October 2023
Paddy Gregg, Chief Executive Officer
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Financial Headlines FY2023
$ m FY2023 FY2022
Revenue $ 1,585 m $ 1,429 m
EBITDA $ 55.0 m $ 165.4 m
EBIT $ (4.8) m $ 120.7 m
NPAT $ (13.8) m $ 79.6 m
Total Dividends Declared 7 ¢ per share 8 ¢ per share
Operating Cash Flow $ 86.7 m $ 37.5 m
Jun 2023 Jun 2022
Net Cash $ 49.7 m $ 115.6 m
Order Book (incl. Options) $ 11.6 B $ 7.8 B
Results significantly impacted by previously announced T‐ATS onerous contract provision
Strong cash position allows dividend to be paid alongside significant investment for future growth 3
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1. What would have been a very solid set of results torpedoed by TATS

2. We have made organisational changes to focus on execution of the orderbook

3. Strong operational cash flow and net cash still healthy even with investments made

4. This has allowed us to pay a 3c FY2023 final dividend / 7 cent total dividend for the year

5. Order book of $2.3 B increases to $11.6 B when you include all of the options on OPC & TAGOS program awards

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FY2023 Full Year - Key Facts
$1,585 M $11.6 B 43 9 4,300
REVENUE ORDER BOOK SHIPS SCHEDULED OR SHIPS EMPLOYEES
(with OPC & UNDER CONSTRUCTION DELIVERED
TAGOS options)
60
VESSELS UNDER
5 SHIPYARDS SUSTAINMENT
CONTRACTS
IN 4 COUNTRIES
8 SERVICE CENTRES
IN 5 COUNTRIES 4
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1. Revenue has grown from last year and we expect this to continue based on orders won

2. T‐AGOS win adds to the record orderbook at AUSA

3. AUSA and Australasia achieved delivery of 9 ships in FY2023 (USA ‐ LCS 32 & 34 and EPF 13 whilst AUS ‐ ECCPB 12 ‐15, Mols 2 and Aremiti)

4. Our service and support business continues to grow, and San Diego floating dock has arrived

5. We are now up to 8 service centres worldwide, with 60 vessels under sustainment contracts

6. Employee headcount globally is ~4,300

7. EPF 14&15, 2 LCS, 5 TATS, AFDM, OUSV 3, 3 CCPB & 7 GCPB (21), add scheduled (22) – EPF16, 7 TAGOS, 11 Cutters, 3 LCU's = 43 vessels scheduled or under construction

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Segment breakdown

FY2023

$ m	Concept	Ships	Support	Total	USA:	USA:
	Revenue	$ 998.1	$ 226.9	$ 1,225.0		Shipbuilding revenue increase of $118 m is driven by
USA	EBIT	(9.5)	14.7	5.2		$70 m favourable FX and $48 m greater activity.
	EBIT Margin %	(1.0%)	6.5%	0.4%		Shipbuilding EBIT declined with the $(160) m YoY movement in the T-ATS onerous contract
	Revenue	$ 222.3	$ 144.1	$ 366.4		FX impact on EBIT $0.2 m
Australasia	EBIT	6.7	9.1	15.8		USA Support increased EBIT is driven by greater
	EBIT Margin %	3.0%	6.3%	4.3%		throughput (availabilities) – post COVID
FY2022					Australasia:
$ m	Concept	Ships	Support	Total		Revenue contraction with completion of commercial
	Revenue	$ 880.1	$ 175.8	$ 1,055.9		ferries
USA	EBIT	122.1	11.6	133.7		Actual shipbuilding margin declined due to the lack of
						commercial contracts
	EBIT Margin %	13.9%	6.6%	12.7%
	Revenue	$ 285.7	$ 98.3	$ 384.0		Support volume and margin increased with higher emergent work and new contracts (T&T CCPB & LUSI
Australasia	EBIT	11.9	2.8	14.6		contracts). FY2022 included reduced throughput with the Brisbane Slipway certification closure
	EBIT Margin %	4.2%	2.8%	3.8%
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Cash flow

Operating:

$ m	FY2023	FY2022	Change		Favourable timing of milestone receipts, partially offset with
Operating	$ 86.7	$ 37.5	$ 49.2		~US$(40) m of OPC supplier prepayments
Investing Sustaining Enhancing	$ (8.8) (94.0)	$ (6.3) (121.2)	$ (2.5) 27.2	Investing:  Enhancing capital expenditure on San Diego expansion and USA steel transition a key enabler for future & awarded
Financing					programs
Debt	$ -	$ -	$ -		US$32 m acquisition of land adjoining the Mobile facility for
Loan origination	-	(0.9)	0.9		future expansion.
Lease principal	(9.1)	(8.6)	(0.5)
Dividends FX differences	(29.0) (6.8)	(28.9) 21.6	(0.1) (28.3)	Financing:  $29 m of dividend payments (equiv. 8 cents per share)
Net Cash Flow	$ (60.9)	$ (106.8)	$ 45.9
				Closing	cash:
Cash	Jun 2023	Jun 2022	Change		Strong closing cash position, supports 3 cps final dividend
Cash @ bank	$ 179.2	$ 240.1	$ (60.9)		(7 cps full year dividend declared) Cash position necessary to support major programs
Net cash	$ 49.7	$ 115.6	$ (65.9)		(e.g. San Diego dry dock, OPC & TAGOS awards & future
					opportunities
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1. Cash spent on land purchase ~USD 32 m and prepayments to suppliers in order to fix future pricing of ~USD 40 m that would have otherwise improved cash

2. Dividend payments (8 cps) included the FY2022 Full Year 0.4 CPS and the FY2023 H1 Interim dividends 0.4 CPS (paid dividends)

3. Full year total 7 cent dividend declared recognising that we are still in a strong cash position

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Historical investor data
$ Austal Share Price $M Group EBIT with EBIT Margin
$5 $160 $130 $115 $121 16.0%
$4 $3.41 $3.23 $120 $93 12.0%
$3 $2.37 $80 $63 8.0%
$1.86 $2.05 $1.80 8.4%
$2 $40 6.3% 7.3% 4.0%
4.6% 5.0% $(5)
$1 $0 0.0%
(0.3%)
$0 ($40) (4.0%)
FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023
$B Group Revenue Extended $B Order Book (including Options)
$3 $14 $11.6
$2.1 $12
$2 $1.4 $1.9 $1.6 $1.4 $1.6 $10 $8 $7.8
$6 $4.9 $4.3
$1 $4 $3.0 $2.5
$2
$0 $0
FY2018 FY2020 FY2022 FY2024 FY2026 FY2028 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023
Focus has moved from needing to win work in AUSA to execution. FY23 EBIT would have been ~$166 m without T-ATS Loss
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1. The graphs show historical share price, EBIT margin and orderbook.

2. The revenue chart shows future growth based on orders (including options) that have been won.

3. FY2023 EBIT reflects the accounting treatment of the in year impact of the potential TATS loss, and shows the historic profit range of 4.6% – 8.4%

4. The Order book is shown inclusive of all of the OPC & TAGOS contracted options (including those that have not yet been exercised)

Expanding Shipbuilding USA

1. Execute & expand - LCS, EPF, EMS, T-ATS, OPC, AFDM, LCU, OUSV 3, T-AGOS

2. Continue to invest on the back of order book (up to $11.6bn including unexercised options) and future opportunities

3. New program targets - EPF VLS, FFG FY, LUSV, MUSV, NGLS, LAW, AS(X), DDG(X), S72, MAST 13

4. Team with other shipbuilders as a major subcontractor; Why?

5. Leads to new gov. funding/grant pools

6. Expands our capabilities & offerings

7. Increases % wins for new core programs

8. Adds volume lowers our cost - increasing EBIT

9. Creates Service expansion opportunities

10. Greater stability for the business

Australia

1. Continue to build and evolve the Cape Class design and capability & partner with others to be the Sovereign shipbuilder

2. DSR positively received; “enhanced sovereign defence industrial capacity”, “a national industrial base with a capacity to scale”, “It is essential to immediately accelerate the acquisition of LAND 8710 Phases 1-2 – Army Littoral Manoeuvre Vessels (Landing Craft Medium and Heavy) and expand the scope of this capability”, “Government reaffirm its commitment to continuous naval shipbuilding.”

3. Need to win work and we are awaiting outcome of surface fleet review, but we are optimistic about the future

4. We have spent the last 2 years growing the order book and bringing diversity of programmes to the business. Just won LCU as per ASX announcement

5. Not only are we looking broadly on programmes we are looking further into the future through funded design studies

6. In the past we have looked to exclusively prime shipbuilding contracts; we are now working with partners as a major subcontractor

7. We believe we are well placed for a positive, long‐term outlook in the Australian Defence Strategic review based on our delivery performance

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Support Growing in line with $500m target in FY27
AUSA grown from $175.8m FY22
to $226.9m FY23
Australia grown from $98.3m FY22 to $144.1m FY23
Support Revenue $m
$500
$400
$300
$200
New $100
'Independence' $0
Floating Dock,
San Diego USA
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1. We have a target to grow our support business to $500m by FY27. This was impacted by Covid but these results show we are on track

2. Australia support growing as we deliver more ECAPES into service

3. San Diego, USA and had a successful grand opening in February

4. The floating dock “Independence” has arrived in San Diego and is being commissioned, allowing us to increase revenue

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US Navy LUSV Design
AUKUS
• Submarine Modules
• Autonomy
• Additive manufacturing
• Training people
• Service work
• Common platforms
Saildrone Surveyor
USNS Apalachicola (EPF13) – first EPF & largest US Navy surface ship with autonomous capability
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1. Austal believed AUKUS will be a great opportunity going forward

2. Pillar 1 is all about Nuclear Submarines and we have started building modules in Mobile with opportunity to grow that work

3. We are working in Autonomy in both the US and Australia

4. We are investing in additive manufacture in the US to make submarine components

5. We have identified opportunities for future work in the UK, completing the tri party opportunities

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Strategic Outlook

1. Execute the orderbook in the US

2. Resolve T-ATS challenges

3. Successful REA would deliver future improved earnings

4. Strong operational performance as demonstrated by ship deliveries and EBITDA

5. AUKUS and Australian Defence Strategic Review to provide a clear route ahead and future opportunities for Austal

6. Support revenue improving in line with long term target

7. Significant growth opportunities through new vessel programs, expansion of existing programs, and more sub-contracts for larger build programs

8. Significant success in winning steel work with orderbook ~$11.6 billion (OPC & T-AGOS options included). Need to do the same in Australasia.

9. We continue to invest to build capability and opportunity to grow

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Disclaimer

Paddy Gregg, 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 subscribe for or purchase any securities in Austal or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in Austal will be entered into on the basis of this presentation.

Our presentation contains “forward-looking” statements or projections based on current expectations. These statements are not guarantees of future performance and are subject to risks and uncertainties. Key risks are set out in the Company’s Corporate Governance Statement and published on its website – they include – but are not limited to – impacts to US programs, the availability of US government funding due to budgetary or debt ceiling constraints; changes in customer priorities or their ability to meet contractual requirements, additional costs or schedule revisions. There are also broader risks to the enterprise such as cyber security, HSEQ incidents, product liability, unexpected impact of regulatory investigations and material unexpected changes to the Company’s financing arrangements. Austal’s expansion in Asia also naturally brings with it a number of risks that are typical when entering new jurisdictions or expanding in others. Actual results may also effect the capitalization changes on earnings Sample per share; the allowability of costs under government cost accounting divestitures or joint ventures; the timing and availability of future impact of acquisitions; the timing and availability of future government Image only awards; economic, business and regulatory conditions and other factors. We disclaim any duty to update forward looking statements to reflect new developments.

Accordingly, to the maximum extent permitted by applicable laws, Austal makes no representation and can give no assurance, guarantee or warrant, express or implied, as to, and takes no responsibility and assumes no liability for, the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omission, from any information, statement or opinion contained in this presentation.

You should not act or refrain from acting in reliance on this presentation material. This overview of Austal does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of Austal’s prospects. You should conduct your own investigation and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation before making any investment decision.

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End ASX:ASB austal.com

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Resolution 1

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“That the Remuneration Report as set out in the Annual Report for the year ended 30 June 2023 be adopted.”
Eligible proxies received :
FOR AGAINST PROXY’S DISCRETION
213,863,062 4,221,869 2,566,604
96.92% 1.91% 1.16%
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Resolution 2

“That Mr John Rothwell AO, being a Director of the Company who retires in accordance with Article 8.1(d) of the Company’s Constitution and, being eligible, is re-elected as a Director of the Company.”

Eligible proxies received :

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FOR AGAINST PROXY’S DISCRETION
186,539,249 31,848,754 35,385,162
73.51% 12.55% 13.94%
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Resolution 3

“That Mr Michael McCormack, being a Director of the Company who retires in accordance with Article 8.1(d) of the Company’s Constitution and, being eligible, is re-elected as a Director of the Company.”

Eligible proxies received :

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FOR AGAINST PROXY’S DISCRETION
242,233,541 8,811,355 2,624,470
95.49% 3.47% 1.03%
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Resolution 4

“That Mr Lee Goddard, having been appointed as a Director of the Company on a casual basis since the last Annual General Meeting and who retires in accordance with Article 8.1(b) of the Company’s Constitution and, being eligible, is re-elected as a Director of the Company.”

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Eligible proxies received :
FOR AGAINST PROXY’S DISCRETION
244,795,615 6,258,709 2,624,470
96.50% 2.47% 1.03%
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Resolution 5

“That, pursuant to and in accordance with Listing Rule 10.14 and for all other purposes, Shareholders approve the grant of up to $27,604 worth of Share Rights to Ms Sarah Adam-Gedge on the terms and conditions set out in the Explanatory Memorandum, and any issue of Shares pursuant to those Share Rights.”

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Eligible proxies received:
FOR AGAINST PROXY’S DISCRETION
211,161,825 7,051,472 2,518,228
95.66% 3.19% 1.14%
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Resolution 6

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“That, pursuant to and in accordance with Listing Rule 10.14 and for all other purposes, Shareholders approve
the grant of up to $27,604 worth of Share Rights to Mr Chris Indermaur on the terms and conditions set out in
the Explanatory Memorandum, and any issue of Shares pursuant to those Share Rights.”
Eligible proxies received:
Eligible proxies received:
FOR AGAINST PROXY’S DISCRETION
211,160,686 7,173,323 2,518,228
95.61% 3.25% 1.14%
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Resolution 7

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“That, subject to the approval of Resolution 4 above, pursuant to and in accordance with ASX Listing Rule
10.14 and for all other purposes, Shareholders approve the grant of up to $27,604 worth of Share Rights to Mr
Lee Goddard on the terms and conditions set out in the Explanatory Memorandum, and any issue of Shares
pursuant to those Share Rights.”
Eligible proxies received:
FOR AGAINST PROXY’S DISCRETION
211,179,252 7,165,873 2,518,228
95.62% 3.24% 1.14%
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Resolution 8

“That pursuant to and in accordance with Listing Rule 10.14 and for all other purposes, Shareholders approve the grant of up to 446,244 Long Term Incentive Rights under the Austal Limited Rights Plan for FY2024 to Mr Patrick Gregg on the terms and conditions set out in the Explanatory Memorandum, and any issue of Shares pursuant to those Rights.” Eligible proxies received: FOR AGAINST PROXY’S DISCRETION 221,856,679 29,259,987 2,625,148 87.43% 11.53% 1.03%

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