ASX Release 29 November 2018
Company Announcements Office
ASX Limited
Exchange Centre
Level 4, 20 Bridge Street SYDNEY NSW 2000
2018 AGM Presentations & 2019FY Outlook
Sydney, 29 November 2018 - Enclosed are copies of the Chairman's Address and CEO Presentation to be delivered today to shareholders in the 2018 Annual General Meeting of Quickstep Holdings Limited (ASX:QHL).
The CEO Presentation incorporates an update on the 2019FY outlook.
Jaime Pinto
Company Secretary
Principal address: 361 Milperra Road | Tel: (02) 9774 0300 |
Bankstown Airport NSW 2200 | Fax: (02) 9771 0256 |
www.quickstep.com.au | Email:info@quickstep.com.au |
ASX Code: QHL
QUICKSTEP - 2018 AGM Chairman's Address
Good afternoon, ladies and gentlemen. I am Tony Quick, the Chair of the Board of your Company Quickstep Holdings Limited. Welcome to our Annual General Meeting.
At the meeting today, our managing director and chief executive officer Mark Burgess and I will report on the group's progress and the outlook. This is my sixth year as Chairman and in that time your Company has grown significantly.
For comparison, in the 2013 financial year Quickstep reported sales of $2.6 million. Joint Strike Fighter production was beginning at Bankstown, and the first Lockheed Martin wing flaps production order had recently been signed. Our operations moved from a focus on research and development to production. Your Company has grown steadily as its flagship contracts ramped up and we have increased scale. The next step in our development was to ensure that this growth was reflected in earnings.
At last year's Annual General Meeting I reported that our management team led by Mark had developed a new plan that would realign our company, focus on the aerospace market to drive growth and reduce the time frame to profitability. This was the OneQuickstep change management program introduced during the first half of the 2018 financial year.
We have delivered as we promised. Our financial results reflect the program's success. Supported by Joint Strike Fighter production growth, annual sales revenue increased 14% to $59.0 million.
In the second half of the year your company achieved $0.9 million earnings before interest and tax (EBIT) and a net profit for the first time in its history.
Costs were reduced by $3.5 million. We closed our German operations, consolidated R&D at Geelong and exited non‐core programs.
Lean enterprise programs began at Bankstown and Geelong. Higher productivity helped gross margin improve 5% in the second half compared to the first half.
Improved working capital management enabled operating cash flow of $3.6 million for the second half, compared to a cash outflow of $4.3 million in the first half.
While your Company reported a net loss for the full 2018 financial year, the improvements in EBIT and cashflow will continue this financial year and beyond.
Mark leads a lean, focused leadership team with extensive aerospace and defence and broader manufacturing skills. This is a strong team with the experience, capability and a 'success‐driven' culture to further accelerate growth and profitability. They have taken our Joint Strike Fighter and C‐130J production programs to sustainable and profitable positions.
Today, we have a deeper and more robust understanding of our technology. We have improved our patented Qure process, demonstrating that we can now manufacture components using Qure to Aerospace structural standards at significantly faster cycle times. This is a significant competitive advantage which we intend to validate further on appropriate commercial opportunities.
Our plans to diversify our business achieved significant wins in the 2018 financial year. We became an approved supplier for the Boeing Company and secured two programs with Boeing Defense. We also became an approved supplier for Airbus in Australia and Asia‐ Pacific. Our association with these great aerospace industry brands increases our ability to win further work in the competitive aerospace sector.
We joined the General Atomics‐led Team Reaper Australia partnership which was one of two consortiums tendering for Australian Remotely Piloted Aircraft systems business. Minister for Defence Christopher Pyne and Minister for Defence Industry Steven Ciobo have now announced the selection of the General Atomics MQ‐9 Reaper variant as Australia's first armed remotely piloted aircraft system (RPAS) under Air 7003.
In July 2018 we were awarded a new project to make carbon fibre composite housings for Chemring Australia's F‐35 countermeasure flare. This is another opportunity that has global potential and expands our advanced manufacturing capability.
Recently Lockheed Martin has confirmed a second Memorandum of Understanding (MoU) which ensures your company will supply wing flaps for the 'Super Hercules' C‐130J and commercial LM‐100J aircraft for five more years through to 2024. This MoU together with our Joint Strike Fighter agreements provide us with strong growth over the next few years and long term business. We will use our proven track record of delivery to continue our growth.
Our focus on the aerospace sector means that we will only bid for targeted work in other sectors. One noteworthy trial project successfully used Qure to produce demonstration automotive front fenders for a European luxury car manufacturer, and we are exploring next steps. Meanwhile, a partnership with the ATR Group now provides sales and marketing support for our aerospace and automotive business in the European market.
Your Company is a very different Company to the one I joined back in 2013. We have taken our two main contracts, JSF and C‐130J, and moved them from the initial production process to reliable on‐time delivery. We have stepped up to the mark and delivered the program growth where other JSF suppliers have struggled. We have also identified where our technology can genuinely deliver a source of competitive advantage and created the data to prove that, where the technology cannot provide a genuine competitive advantage, we have ceased investment. The introduction of "OneQuickstep" has created a focus to deliver a profitable base for further growth.
The focus in the future is for greater, profitable, growth and the Board have decided that it is appropriate to commence a process of board renewal. This transition will be a planned process. We have commenced a search for directors with strong credentials that will contribute to even greater profitable growth, exceeding that which is already assured in our existing flagship contracts.
Since implementing "OneQuickstep" our progress has been extremely encouraging, and we have a positive outlook for the year ahead.
As we leverage our innovation and manufacturing achievements to accelerate new business growth your company has a tremendous export opportunity. The global aerospace and defence industry reported revenues of $728 billion in the 2017 calendar year and we plan to take a larger share of that.
Your company remains focused on delivering for our aerospace and defence clients, who are global industry leaders. As our business development program continues to win new contracts further growth will follow.
Our strong order book, patented technologies and increased competitiveness are already contributing to sales momentum that will continue in the current year.
I will now hand over to Mark Burgess who will provide more detail.
QUICKSTEP HOLDINGS LIMITED
ANNUAL GENERAL MEETING
MARK BURGESS, CEO & MANAGING DIRECTOR
29 NOVEMBER 2018
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Quickstep Holdings Limited published this content on 29 November 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 29 November 2018 03:25:03 UTC