Austin Consolidates Operations

Austin Engineering Limited (ASX: ANG, Austin or the Company) as part of the ongoing strategic review
previously announced, has determined to consolidate its two separate businesses located in Mackay,
Queensland. The Mackay businesses primarily deliver onsite and offsite repair, maintenance, and
machining/line boring services, as well as local sales support for Austin manufactured products.
The business consolidation will be focused on enhancing the sales and support of Austin’s own
manufactured product offerings into the region and in the continued provision of high-quality machining and
line boring services.
The decision has been made following a review of how Austin can best serve its customers in this region
through a stronger focus on new product delivery and support, with a reduced focus on highly competitive
and price driven repair and maintenance services which have not delivered significant earnings margins in
previous years.
Austin will continue to deliver its own product offerings to the East Coast of Australia from its manufacturing
facilities in Perth (Australia) and Batam (Indonesia). Over the last four years, Austin has sourced the
majority of new product to the East Coast market from its world-class, low cost, manufacturing facility in
Batam. This approach has enabled our customers to gain the benefits of an Australian designed and
supported product at a competitive price.
As a result of this decision, Austin will close its Austin Mackay workshop on Len Shield Street, Paget, and
consolidate to the Progress Drive, Paget site. Austin estimates the one-off cash restructuring costs from
the consolidation to be in the region of $0.6 million, primarily in redundancies and is expected to incur a
non-cash goodwill write down of $1.2 million in FY2021. It is expected that approximately $4 million in
balance sheet capital will be unlocked through sale or re-distribution of assets following this closure. The
closure of the Len Shield workshop, which is primarily focussed on repair and maintenance, is not expected
to negatively impact the future performance of the business. For FY2021, the Len Shield workshop will
contribute in the region of $9.7 million in revenue and a $0.2 million loss in EBITDA.
Austin is engaging with its clients to confirm its strengthened and more focussed commitment and support
for the provision of high-quality Austin manufactured products to the region.
In addition, the ongoing strategic review has identified a number of other potential labour efficiencies that
can be realised across the global business. The Board has elected to pursue these, which will result in
one off restructuring costs in the region of $1 million, across the broader business, over and above the
restructuring costs identified above in the closure of the Len Shield workshop. Austin expects to be able
to quantify the ongoing impact on the cost base once the strategic review is finalised. The majority of these
changes will occur over the next 3 months (i.e. within FY2022).
The overall impact of these decisions will not impact underlying FY21 results, and Austin confirms that
guidance for underlying NPAT (i.e. prior to one off costs) in excess of $9 million for FY2021 remains
unchanged.

courtesy of Bell Direct
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Austin Completes Global Strategic Review
Highlights:
 Strategic review of global operations completed, identifying significant business
optimisation and growth opportunities.
 Innovation and technology will be used to develop products and systems to meet the
needs of major miners to reduce site manning, improve productivity and safety, and meet
decarbonisation goals.
 Advanced manufacturing methods to be adopted at Austin’s major global manufacturing
facilities to boost productivity, optimise labour efficiency, and facilitate exports.
 Mining product offering to be expanded with discussions already underway on new
opportunities.
 Cost base optimisation is well advanced and expected to strengthen FY22 earnings.
Global mining equipment design and manufacturer, Austin Engineering Limited (ASX: ANG, ‘Austin’ or
‘the Company’) is pleased to advise it has completed the, previously announced, strategic review of its
global business and has already begun implementation of a multi-phase program of improvements.
Austin initiated the strategic review in May 2021 in parallel with the decision to relocate its headquarters
from Brisbane to Perth. This has been done to bring the Company’s central management closer to Austin’s
major mining customers and its largest APAC manufacturing centres in Perth and Indonesia.
The strategic review aimed to identify opportunities to improve business efficiency and to align with the
future needs of Austin’s mining industry customers. Ultimately, the review has identified what Austin needs
to do and where it needs to invest to be at the forefront of the industry, to grow earnings and thereby unlock
value for its shareholders.
Austin’s loading and hauling products are designed to meet the specific needs of its mining industry
customers around the world. Austin’s products are designed to help mining companies increase operational
efficiency, improve site safety and help meet their environmental and de-carbonisation targets. This is
crucial as the mining industry works towards dramatically reducing emissions in the coming years.
The strategic review outcomes are structured in three phases, representing short, medium and longer term
measures to create company value across Austin’s operations in Australia, North America, Indonesia and
South America.

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ASX ANNOUNCEMENT (ASX Code: ANG)
Phase 1
Business consolidation and efficiency
 Austin has already rebased the indirect support structures throughout the business and enters the
new financial year with a significantly leaner structure. By end June 2021, approximately 50% of
the people cost reductions identified in the review were completed, with 85% due for completion by
the end of August.
 In addition to the rapid closure of its previous head office in Brisbane, Queensland, Austin has
consolidated its separate businesses located in Mackay into Austin’s wholly-owned subsidiary,
AUSTBORE. The consolidation enables a stronger focus on new product delivery and support in
Queensland and reduces the focus on general repair and maintenance services, which have not
been delivering adequate earnings.
Austin will continue to deliver its own product offerings to the east coast of Australia from its
manufacturing facilities in Perth and Batam, while continuing to offer support directly in Mackay
through its existing team.
 Austin will take a charge in its unaudited FY21 accounts from continuing operations of circa:
o $1.9 million for the redundancy and re-organisation activities with the cash impact mainly
falling in Q1 of FY22;
o $6.5 million associated with net asset write-downs including goodwill totalling $3.9 million
across Austin’s Mackay businesses, together with other fixed assets and inventory items;
and
o $0.9 million associated with the closure of the Brisbane facility primarily related to
relocation packages and an onerous lease, together with costs incurred on the strategic
review.
These items are excluded from Austin’s underlying net profit after tax result. Collectively, the FY22
cash impact to these items is expected to be circa $2.2 million.
Phase 2
Manufacturing enhancements
 Austin will develop its major manufacturing sites, commencing in Perth, Australia. Austin has
identified significant manufacturing opportunities to reduce waste and improve production efficiency
and product consistency through the adoption of flow production and automation. This will provide
significant benefits for Austin’s major product ranges, in particular truck bodies, while remaining
agile in bespoke designs and delivering unique capabilities for its customers.
 It is likely that the production system will be adopted in Batam to build bodies faster, utilise less
factory space and improve product quality.
 Initial project investment for Perth is underway with a final investment decision by the Austin Board
planned within the next quarter. Implementation benefits are expected partially in the FY22 year
and to be fully in place in FY23. Investment costs will be paid for out of cashflow, sale of excess
sites, and a reallocation of other previously planned capital investments.
 In the USA, Austin is reviewing its delivery logistics to improve overall cost competitiveness. Large
truck bodies are difficult and expensive to move around the disparate mining centres of Canada,
USA and Central America. Further detail around the changes being considered for North America
will be announced when sufficient certainty has been achieved in the current review. Under
consideration is an increasing presence in western Canada to service the oil sands region more
effectively.

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ASX ANNOUNCEMENT (ASX Code: ANG)
Phase 3
Putting technology and innovation at the forefront of a significantly expanded product
range
 Out of the review, Austin has established a new customer-focused, innovation and technology
group that reports directly to the CEO. The team will interface directly with Austin’s major customers
and will use innovation and technology led solutions in an agile implementation environment to
meet customers’ needs for product capability and performance. Austin has already reviewed its
technology pipeline with some of its major customers, with new developments already underway.
Further details on these developments will be made available at the appropriate time
 In the longer term, Austin seeks to increase its product offering, through a mix of in-house design,
partnering with aligned businesses and M&A activity.
 Cost savings to the business generated in Phases 1 and 2 will provide funding for innovation and
technology development, as well as enhancing earnings.
Austin CEO and Managing Director, David Singleton said:
“The strategic review process has provided a chance for Austin to make some big decisions about what we
most need to focus on for organic and inorganic growth of the Company. Through this process, we will cut
significant costs from the business while increasing output through adopting more advanced manufacturing
techniques. Importantly, we are firmly concentrating our efforts to meet the needs of our mining customers
into the future. Austin’s products will support our clients as they target net zero emissions, improve
productivity and ensure ever safer operations.
I thank the Austin Board and team for its efforts in conducting this review and we look forward to updating
the market on the progress in executing on this strategy.”
-ENDS-

courtesy of Bell Direct
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DYOR

i hold ANG

Austin reports spike in orders at end of H122
Austin Engineering Limited (ASX: ANG, ‘Austin’ or ‘the Company’) is pleased to announce that it received
over $60 million of orders during November and December 2021, ending the first half of the financial year
with a strong order book. At the end of November 2021 Austin’s order book was 19% higher year-on-year.
The new product orders are for over 100 truck body’s, excavator buckets, water tanks, mine chutes in
addition to repairs & maintenance works and were received across Austin’s operations in Asia Pacific, and
North and South America. Delivery of new products will be to Canada, USA, Mexico, Chile, New Zealand,
Indonesia and both the West and East Coast of Australia. Such a broad delivery profile strengthens Austin’s
strategic expansion and growth in these markets.
The increased sales activity comes as Austin continues to progress a number of initiatives across its
operating regions.
Austin’s new facility at Fort McMurray in Alberta, Western Canada commenced operations on 1 December
2021. Four of seven truck body’s being manufactured on site have been completed and are ready for
delivery to customers in the region. Alberta has one of the largest concentrations of heavy haul trucks in
the world and the new facility is ideally placed to provide a much enhanced local level of customer support
to what was previously possible.
Austin will undertake a $450,000 expansion of its La Negra facility in Chile to accommodate an anticipated
increased workload in the second half of FY22. The facility has been operating at high utilisation rates for
some months now and a capacity expansion is deemed necessary. Austin expects the investment to be
fully paid back in the second half of FY22.
A recent expansion of truck body, final build and assembly locations in Eastern Australia and New Zealand
has led to a competitively won new order with global gold miner OceanaGold Corporation in New Zealand
with deliveries to commence in the second Qtr. FY22. The order for over 20 body’s uses Austin’s recently
developed modularised truck body designs developed to overcome shipping logistics issues, with final build
to be undertaken close to the mine site.
In addition, Austin’s previously announced partnership with Melter in Mexico has led to further orders for a
large drag line bucket and other equipment, further reinforcing the strength of this regional relationship
under Austin’s “hub and spoke” strategy being rolled out globally.
Austin CEO and Managing Director, David Singleton said:
“We are pleased to see increasing momentum in sales activity across the board for both new products and
repairs, and the recent uptick in orders sets Austin up for a strong sales performance in the second half of
FY22. With a strong order book, and strong commodity prices, our facilities are operating at high levels of
throughput as we start the new year. I am particularly pleased that our recent initiatives aimed at improving
cost competitiveness and driving sales, have so rapidly led to an increase in orders. It gives me confidence
in our approach and forward strategy.
In addition, we will be launching some updated products in the current half with improved efficiency and
safety features which, we believe, will further cement our leading position in the mining products industry

courtesy of Bell Direct
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DYOR

i hold ANG