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19 June 2008
OPEN BRIEFING
NEW CEO STINSON ON STRATEGY
corporatefile.com.au
Orbital Corporation
Limited recently appointed you as Orbital's new CEO and MD effective
21 June, 2008. What experience and expertise do you bring to the
role at Orbital, whose core activities are technology development
and commercialisation?
CEO Terry Stinson
I have technology development and commercialisation
experience from previous roles with Mercury Marine, joint venture
activities with companies in Japan and China, and joint venture
activities with automotive manufacturers. With relation to Orbital,
the closest alignment of experience is from forming and leading
Meteor in Perth, which became Synerject.
In my experience, many innovative products
struggle as they move from R&D to commercialisation and many
products with great potential fail through this transition. My successes
have been in taking good ideas and getting them into profitable
production. I plan to use the knowledge acquired from my experience
to make sure that new Orbital ventures are successful and profitable
and ensure a good return to shareholders.
My technology development and commercialisation
experience is complimented by my manufacturing experience. If you
know how things are made, you have a better chance of making sure
that what you're designing can be built in production. I've also
retained customer and industry contacts from the fuel systems business,
which we can use as we identify opportunities to expand.
I have a lot of recognition and admiration
for what Rod Houston has accomplished. What I bring to the business
are traditional CEO skills and a clear focus on creating shareholder
wealth. My experience lies in creating companies, company turn-arounds,
and getting companies on the right path for growth and profits.
corporatefile.com.au
Without talking specifics about your intended
strategy, what do you think needs to change at Orbital? Might the
structure of Orbital's earnings change over the next three to five
years?
CEO Terry Stinson
Orbital needs to grow and this will require
change. The level of change will depend on where we take Orbital
in the future. My plan over the next three to four months is to
develop a strategy that will facilitate much stronger profitable
growth and to secure future shareholder returns. The strategy we
develop as a team will focus on customer needs and work to provide
products and services that fill gaps in the market. This new strategy
will require diversification and that will require additional investment
and time.
corporatefile.com.au
Orbital recently announced the $1.6 million
acquisition of Boral Alternative Fuel Systems (BAFS). What is the
strategic rationale for this acquisition and is it indicative of
where the company might head?
CEO Terry Stinson
The strategic rationale is to fill a gap in
the market that fits with Orbital's core competencies, which are
developing engines, engine management systems and fuel systems for
cleaner engines. We're now well placed strategically to provide
a product to the market that can bring real cost savings and reduce
greenhouse gas emissions. Australian car producers and consumers
are looking for ways of reducing fuel costs and LPG is one of the
best near term solutions available. Utilising the strengths of Orbital
and our new partner Vialle, we can deliver the next generation LPG
fuel system for both the car producers and the aftermarket sector.
corporatefile.com.au
BAFS is currently generating annual revenue
of approximately $6 million and is expected to be earnings per share
accretive for Orbital. Can this acquisition have a genuine impact
on shareholder value?
CEO Terry Stinson
The acquisition of BAFS is the first step in
an expansion into the alternative fuels market. It provides a springboard
into the original equipment manufacturers (OEM's) with Ford as an
existing customer and the opportunity to expand into the LPG aftermarket
sector which is a large opportunity in Australia.
With the BAFS acquisition, to be renamed Orbital
Gas Products, we can create new systems and a series of gas products
that can be applied to a broad range of vehicles.
Once we establish ourselves in the Australian
market, we can take the new products and expand into more international
markets. We believe this expansion through our new business will
have a positive impact on shareholder value.
corporatefile.com.au
What are your priorities at Orbital and is
a change in strategic direction likely in the near term?
CEO Terry Stinson
My first priority as a new CEO is to get involved
and learn about Orbital's customers, what programs we have underway,
assess the staff and their potential, and whether we're organised
correctly to be able to deliver on shareholder expectations.
I'm going to build on Rod's strategy of looking
outside our core businesses and expanding Orbital's business scope.
I also want to stabilise the engineering business, the license and
royalty segment, and the revenues will continue to follow product
sales.
My goal is to take what is here as a foundation
and use that to reinvent Orbital at the periphery as a larger and
more profitable company.
In terms of product, we want to focus on energy
savings and positive environmental impact, not just with engine
and power train, but to look at expanding into other markets while
still using our skill set.
corporatefile.com.au
Thank you Terry.
Forward Looking Statements
This release 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 release to reflect events or circumstances after the
date of this release.
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