mr terry stinson ceo mr keith halliwell cfo · p15 orbital copyright engineering services...

Presentation by

Mr Terry Stinson CEO

Mr Keith Halliwell CFO

September 2008

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P2 ORBITAL COPYRIGHT

Disclaimer – Forward Looking Statements

This presentation includes forward-looking statements that involve risks and uncertainties. These forward-looking statements are based upon management's expectations and beliefs concerning future events. Forward-looking statements are necessarily subject to risks, uncertainties and other factors, many of which are outside the control of the Company, that could cause actual results to differ materially from such statements. Actual results and events may differ significantly from those projected in the forward-looking statements as a result of a number of factors including, but not limited to, those detailed from time to time in the Company's Form 20-F filings with the US Securities and Exchange Commission. Orbital makes no undertaking to subsequently update or revise the forward-looking statements made in this presentation to reflect events or circumstances after the date of this release.

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Agenda

Terry Stinson Introduction

FY08 Results

Group Overview

The Future

Synerject

Summary

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• 2007 to 2008 – Vice President and General Manager, Siemens VDO, Powertrain, Gasoline

Systems, Fuel Systems– Member of Board of Directors of Synerject

• 2002 to 2007– Vice President and General Manager, Siemens VDO, Gasoline Systems, Fuel

Components– Member of Board of Directors of Synerject

• 2000 to 2002– President and CEO, Synerject LLC

• 1999 to 2001– Vice President, Outboard Marine Corporation

• 1995 to 1999– President and CEO, Meteor (Mercury Marine and Orbital JV)

• 1991 to 1995 – Director Advanced Product and Process Development, Mercury Marine

• 1985 to 1990– Project Engineering Corvette ZR-1 Engine, Mercury Marine

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FY08 results

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Highlights FY08

• Synerject manufacturing joint venture commences production of electronic control units in China

• First cash dividend payment of US$840,000 received from the Synerject manufacturing joint venture

• Polaris releases 1st production ATV using Orbital technology• Commonwealth Government provides funding of $2.8

million to establish a new test facility for heavy duty engines• Net profit after tax of $0.5 million (vs $1.3m FY07)• $1.2 million reduction in profit due to strong Australian dollar• Orbital signalling expansion into the Alternative Fuels

market with $1.9 million investment in Orbital Gas Products (OGP)

• Strong financial position with $8.8 million cash on hand at 30 June 2008.F

or p

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nal u

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nly


FY08 Results – P&L

A$'m FY08 FY07 FY06 FY05 FY04Revenue

Engineering Fees 11.7 12.5 8.6 8.3 11.5Royalties & Licences 2.7 2.3 2.4 2.2 3.2

14.4 14.8 11.0 10.5 14.7Share of Synerject profit 2.4 3.2 4.1 2.9 2.7Other Income 0.3 0.4 0.5 1.0 2.0

17.1 18.4 15.6 14.4 19.4Expenses

Employee expenses 9.8 9.4 8.3 8.8 8.6Operating expenditure 6.9 7.4 6.3 7.4 7.4

EBIT 0.4 1.6 1.0 (1.8) 3.4

Net Interest (0.3) (0.4) (0.3) 0.0 0.0Tax 0.4 0.1 (0.2) 0.1 0.0

Profit/(Loss) after taxation 0.5 1.3 0.5 (1.7) 3.4

Operating revenue

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FY08 Results – EBIT Bridge 07 - 08

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

FY07

Forei

gn Exc

hange I

mpact

Engine

ering

Serv

ices I

ncom

e

Licen

cing & R

oyalt

ies In

come

Share

of Syn

erjec

t Prof

itOthe

r Inco

me

Employe

e Exp

ense

sCML s

ettlem

ent

Other E

xpen

ses

FY08

A$'m

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FY08 Results – Balance SheetA$'m FY08 FY07 FY06 FY05 FY04Current Assets

Cash 8.8 11.3 3.3 8.0 12.3Other current assets 8.9 4.6 3.7 3.0 3.9

17.7 15.9 7.0 11.0 16.2

Non-Current AssetsEquity accounted investments 13.1 13.0 6.3 0.0 0.0Property, plant & equipment 5.6 6.1 6.4 7.4 8.4Deferred tax asset 5.5 6.0 6.4 6.3 6.5Goodwill 0.3 0.0 0.0 0.0 0.0

24.5 25.1 19.1 13.7 14.9

Total assets 42.2 41.0 26.1 24.7 31.1

Current LiabilitiesPayables 7.3 4.2 3.3 2.4 3.8Other current liabilities 3.9 1.2 1.1 1.5 1.5

Total current liabilities 11.2 5.4 4.4 3.9 5.3

Non-current liabilities

Non-interest bearing loan 14.1 18.0 12.8 19.0 19.0Other non-current liabilities 1.4 1.2 1.2 1.9 5.2

Total non-current liabilities 15.5 19.2 14.0 20.9 24.2

Total liabilities 26.7 24.6 18.4 24.8 29.5

Net assets 15.5 16.4 7.7 (0.1) 1.6

Equity 15.5 16.4 7.7 (0.1) 1.6

Total current assets

Total non-current assets

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FY08 Results – Cash Flows

A$'m FY08 FY07 FY06 FY05 FY04Operating Activities

Cash receipts 10.7 14.3 10.2 11.1 15.4Cash payments (12.2) (14.5) (12.3) (15.4) (15.0)Interest and taxes 0.6 0.1 0.2 0.5 0.3

Net operating cash flows (0.9) (0.2) (1.9) (3.8) 0.7

Investing ActivitiesSynerject equity investment 0.0 0.0 (2.7) 0.0 0.0Synerject dividends received 1.0 0.0 0.0 0.0 0.0Acquisition of business (1.9) 0.0 0.0 0.0 0.0Proceeds sale of p,p&e 0.0 0.0 0.2 0.0 0.3Payment for purchase of p,p&e (0.7) (0.6) (0.2) (0.4) (0.8)

Net investing cash flows (1.6) (0.6) (2.7) (0.4) (0.5)

Financing ActivitiesProceeds of share issues 0.0 8.8 0.0 0.0 3.5Finance lease payments 0.0 0.0 0.0 (0.2) (0.4)

Net financing activities 0.0 8.8 0.0 (0.2) 3.1

Net increase/(decrease) in cash held (2.5) 8.0 (4.6) (4.4) 3.3

Cash at the end of the year 8.8 11.3 3.3 7.9 12.3For

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Revenue

0

10

2030

40

50

6070

80

90

FY05 FY06 FY07 FY08

US$

'm

Result

0

0.5

1

1.5

22.5

3

3.5

4

4.5

FY05 FY06 FY07 FY08

US

$'m

Operating and Investing Cash Flows

0

1

2

3

4

5

6

7

FY05 FY06 FY07 FY08

US$

'm

Net Debt

0

1

2

3

4

5

6

7

8

9

10

FY05 FY06 FY07 FY08

US$

'm

FY08 Results – Synerject

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Corporate Overview

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Orbital Vision

Innovative Technology Solutions for a Cleaner World

– Clean, efficient and safe transportation; – Efficient use of energy and resources; – Use of renewable and sustainable energies; where each are

readily developable in Australia, and applicable to the world

Accumulated total tonnes of CO2 saved over the lifetime of products in the market place utilizing Orbital Direct Injection technology

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Engineering Services

Alternative Fuels

Integration, Developmentand Application Expertise

Transport MiningSmall Engines

Diesel

Gasoline Alcohol LPG CNG/LNG HCNGHydrogen

Kerosene

FlexDI -Alternative Fuels

Orbital Corporation Overview - 2008

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Licensing & Royalties

Synerject• Manufacture and supply of EMS systems to non-automotive OEM’s

Alternative Fuels• LPG• LNG• CNG

Engineering Services•Energy/emission audit to Governments and Industry•Advanced R&D•Support for Licensees


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Synerject Locations

Regional Customer Support

PerthAustralia

ChongqingChina

DelavanWisconsin USA Newport

NewsVirginia USA

Orbital Locations

ToulouseFrance

SydneyAustralia

•Synerject Toulouse

ChangchunChina


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Orbital and Synerject Customers

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The Future

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Why Alternative Fuels and Energy Management?

Oil Production Projected Availability

Projected Requirement

Source: http://www.theoildrum.com/tag/update

Orbital’sOpportunity

GlobalCrisis

“In the next ten years it is projected that electricity, liquefied petroleum gas (LPG) and natural gas (particularly in freight) will be the first fuels to expand their use, particularly if there is an abrupt decline in the availability of international oil supplies. Only these among the non-conventional fuels have the capacity to expand their availability into the transport market in a relatively short time frame due to existing production and distribution infrastructure.”

Source: CSIRO “Fuel for Thought” Report 2008 http://www.csiro.au/science/FutureFuelsForum.html.

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The Future

Alternative Fuel Solutions– LPG– LNG/CNG– E100 (Brazil)

Energy and Emissions Management– NISE II– Roadside Emission Audit– Greenhouse Inventory

License & Royalty- 3 wheeler growth- Performance vehicles- 4 stroke engines

Engineering Services– Advanced Development– Production Customer Support

Synerject- Increased service of the growing China, Taiwan and other emerging markets- Expanded product offerings

FY09

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Alternative Fuels – Customer Benefits

C15 Diesel/LNG Dual-Fuel• $50,000-$80,000 annual savings depending on application

•15% greenhouse gas savings available

LNG Application

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Retail Cost of Fuel (Sydney)

$0.00$0.20$0.40$0.60$0.80$1.00$1.20$1.40$1.60$1.80

Jul-98

Dec-99Apr-01

Sep-02Jan-04

May-05Oct-06

Feb-08Jul-09

Cos

t/Litr

e (A

U$)

ULPDieselLPG

Alternative Fuels – Customer Benefits

Source: http://www.aaa.asn.au/issues/petrol.htm

• Approx AU$1,350 annual saving

• 10% greenhouse gas savings available

• Gov’t rebate on LPG conversions. Bracks Report proposes increase OEM rebates from $1,000 to $2,000

LPG Auto Application

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• Q1 Premium supplier to Ford Australia for E-Gas systems

• Vast experience and in-field knowledge of use of LPG in Australia

• Direct access to Vialle experience, knowledge and in-field application of LPi technology

• OGP addition to Orbital group means a unique proposition of a vertically integrated gaseous fuels company

Orbital Gas Products (OGP)

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LPG Products

Current LPG Systems

Liquid Propane Injection

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Australian LPG Market

$0$50

$100$150$200$250$300$350$400

Retrofit OEM

AU$

(mill

ion)

LPG – Australia

Source: Orbital Information

Market

Orbital

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Source: IANGV

CNG Vehicles - Asia

0

500

1,000

1,500

2,000

2,500

3,000

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07

Uni

ts (1

000'

s)Asia CNG Market

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Synerject

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Synerject

Synerject EMS 2 Wheel Vehicle Systems

050

100150200250300350400

FY06 FY07 FY08 FY09(E)

Uni

ts ('

000'

s)

Synerject commences production in China

4 Stroke Port InjectionFuel Rail System

(V-Twin motorcycle engine)

M3a Scooter EMS Module

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Synerject

Non Automotive EMS Market Projection

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

FY09 (E) FY10 (E) FY11 (E) FY12 (E) FY13 (E)

AU$

mill

ion

Source: Orbital Projections

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Non

-Aut

o vo

lum

es

(mill

ion

units

)

Synerject

01020304050607080

2006 2011 2016

TotalMotorcycle Only

Asia M/cycle

The Non Automotive Market

Source: Orbital Projections

2006 2007 2008 2009 2010 2011 2012 2013 2014

China MC

Europe MC

India MC

Outboard/PWC

Snowmobile

ATV

In Place Discussion or Proposed

Emission Legislation

2006 2007 2008 2009 2010 2011 2012 2013 2014

China MC

Europe MC

India MC

Outboard/PWC

Snowmobile

ATV

In Place Discussion or Proposed

Emission Legislation

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Summary

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1. Build on existing business sectors2. Expansion into Alternative Fuels3. Support Synerject growth4. Investigate other growth opportunities

Summary

Any Questions?

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Supplementary Information

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Australian owned publicly listed company trading on ASX as OECListed on US OTC Bulletin Board (code OBTLY)Owner and developer of Orbital DIShares on issue 475 millionDebt $14.2 million (interest free loan from WA Government repayable in 2014)Cash on hand $8.8 million at June 2008Alternative Fuels business implemented late FY08

Orbital Corporation Information

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Summary – Earnings by Sector

-1

0

1

2

3

4

FY04 FY06 FY07 FY08

A$m

Engineering Royalty & Licences SynerjectFor

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Summary – Licensing and Royalties

0

0.5

1

1.5

2

2.5

3

FY05 FY06 FY07 FY08

A$'

m

Revenue ContributionFor

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Summary – Engineering Services

-2

0

2

4

6

8

10

12

14

FY05 FY06 FY07 FY08

A$'

m

Revenue ContributionFor

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mr terry stinson ceo mr keith halliwell cfo · p15 orbital copyright engineering services...

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