Thank you for standing by, and welcome to the Austin Engineering FY 2023 results briefing. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr. David Singleton, CEO and MD. Please go ahead.
Good morning, everybody, and thank you for taking the time to dial in this morning. I know it's a busy time at this time of the year. It's a beautiful, sunny day here in Sydney. Feels like a good backdrop for the presentation this morning. The format will be, I'll just open up with some opening remarks on the major results of the FY23 year. I'll then hand over to David Bonomini, who's the CFO. David will dive into those results in a little bit more detail. And then David will hand back to me.
I've got a few things that I'd like to go through with you, which I think will be interesting. I'm sure we'll talk about over the next two or three days as we come around and see investors. But that overview will include a market overview, how we see the market at the moment in our sector. We'll talk a little bit about our competitive advantage and how that is playing out. I'm gonna talk a little bit about where we sit on the risk curve, 'cause that's in everybody's minds at the moment, the risk that sits in the market. I'll talk then a little bit about... I'll make some sector comments on different parts of the business around the world.
And then finally, we'll end up with the bit that I know you're all interested in, which is the guidance for FY 2024. Okay, so I'll start on the next slide. So we have, you can see from this group, revenue is just over AUD 258 million. That's up AUD 55 million on last year, and 20%-27% by revenue. That is a combination, of course, of the acquisition we made of Mainetec, which contributed about AUD 30 million in the part year that they were involved, and in the 11.3% increase in revenue on a like-for-like basis.
But having had several years of revenue at about AUD 200 million, you know, I think, FY 2023 was really a breakout year for us in terms of increasing revenue at all of our locations around the world. I think a particular note, though, in that revenue slide, is the quality of that income, and 89% of our revenue in FY 2023 was recurring revenue from clients who either buy from us every year or buy from us very regularly. So really good quality of revenue on that basis. Normalized EBITDA was up 11% to AUD 31.3 million. We have normalized the result this year, and you'll see in the ASX announcement when you get to read that, what those key subjects were about.
But we've written off some IT costs from a few years ago. We have also made a provision against a warranty cost, which I'll talk about a little bit later in this presentation. We've got some costs associated with some discontinuing activities and some FX costs as well. And that's why we've normalized that, because we feel that all of those are either historical or one-off costs that we won't see in FY 2024. We put out NPAT, revised NPAT guidance of AUD 17 million-AUD 19 million and came out pretty well smack in the middle of that. AUD 18.1 million of NPAT, which is up 8.4% on the FY 2022 figure.
That relates because of the write-offs that I talked about previously, relates to a statutory NPAT of AUD 7.1 million. I think a particular note, and I think will be a feature of FY 2024 as well, has been a much stronger operating cash flow, up 15, up to AUD 15.8 million, which is over three times what it was in FY 2022. But a particular note of that is that that AUD 15.8 million of operating cash flow is despite the fact that we increased inventory steel stocks during the year by AUD 28.3 million. Which means that absent of that, the result would have been dramatically stronger, and we feel that that increase in stock will unwind during FY 2024.
So we'll turn into cash essentially during FY 2024. Again, order book is up, and it has been up strongly in the last couple of years, up 35% to AUD 143.7 million. That's our biggest opening order book, I, I think ever, certainly in the last several years, and puts us in a very strong position, of course, as we move into FY 2024. I'll just move on just quickly to the next slide, and you can see a couple of graphs that I plucked out just to show the impact of all of that on the results of the business over the last couple of years.
Since we put the Austin 2.0 strategy in together, we've seen our return on equity rise to about 16%, fairly consistently, in FY 2022 and FY 2023. And you can see a much stronger EBITDA performance, year-on-year from what was the previous norm. And I'll hand over now to David Bonomini, and David will now take you through the financial results in a bit more detail.
Thanks, David, and good morning, everyone. It's great to be here with you today. I'm just looking at slide 17, which is, that is the financial performance from continuing operation. As Dave mentioned, group revenue for FY 2023 year was AUD 258 million, 27% increase to the prior year. This is driven with the addition of Mainetec. Mainetec contributed about AUD 32 million of that increase, but we're also seeing strong sales performance across the US, Chile, and Indonesia through recurring customers and new product sales. The normalized group EBITDA for FY 2023 grew to AUD 31.3 million, with a 10% rise to AUD 29 million in FY 2022.
US, Indonesia, Chile, particularly in the second half, have increased their EBITDA margins to the Austin's target, target levels. There's a strong focus on cost reduction. There's also a very strong focus on improving the manufacturing systems and technology. And we've also seen an increase or a slight shift in terms of new product sales, particularly around the bucket, chutes, and tyre handlers throughout the business. All targeted under the 2.0 Austin 2.0 strategy. D&A and interest expense, you'll note that it's increased slightly. Part of this is due to the Mainetec alignment to the Austin depreciation guideline, and also we incurred with the debt increase in interest rates.
The group normalized net, net profit after tax is adjusted for one-off legacy costs, but it also includes about AUD 2 million worth of the Mainetec integration costs. And on a normalized basis, was up 8.4% to AUD 18.1 million. Turning to the operating cash flow, slide 18. Cash flow increased significantly during the course of the year to AUD 15.8 million, compared to AUD 4.7 million the prior year. The cash flow increase was driven by strong profit conversions from the U.S. and Indonesia, offset partially, as Dave mentioned, by the increase in working capital. The working capital increase was primarily due to the buildup of steel and plate, due to the higher revenue, 27%, obviously driving some increase in inventory. But primarily through managing supply chain side risks.
The Rio order delay had a slight impact, and the introduction of the company's bulk procurement program, Ausbuy. Ausbuy's driving cost reduction, so it's really adding some great value through increasing purchasing power, but it's also contributed to increasing inventory amounts. This is anticipated, as Dave mentioned, to reverse in FY 2024, as we take a less conservative view on stock, and the improvement in Ausbuy stock turns across the region. Cash flow from investing activities was a net outflow of about AUD 21 million, due to the Mainetec acquisition, which contributed about AUD 11 million of that. But we're also invested heavily during the last 12 months in terms of new plant and equipment.
Included in that was investment in advance manufacturing technology, but also the expansion of Indonesia and Chile, which we're seeing some strong benefits during the latter part of the FY 2023 year. Borrowings increased from the debt funding of Mainetec, and we saw cash hold at AUD 20.1 million against the prior year. As Dave also mentioned, cash is anticipated to improve in FY 2023. We're very confident of the inventory levels reversing as we consume that stock during the first half of FY 2024. And the continual operational improvement across the business will continue to drive and increase the operating cash flow of the business. Then into slide 19, which is working capital.
It's pleasing to see that our strategies under working capital, particularly around the customer advance payment, the work in progress was maintained. Customer advance payments increased to AUD 19.2 million, which is really offsetting all the work in progress we have of about AUD 20 million. This indicates to us that we've got strong cash flow to support the future business growth. Even though the business is growing, we're still kind of neutralized around that work in progress. The buildup in the inventory I mentioned, 26 million in inventory, anticipated to reduce during the course of FY 2024, and we see cash position strengthening. We continue to also see a shift in customer trading terms to ex-works.
There's been a strong focus from the business to hold, which has seen, if, settled at prior year levels, even though the revenue has grown to 27%. Turning to the next slide, net debt. Total assets in the business was about AUD 47 million. Inventory contributed to that, also the investment I mentioned earlier, but also the Mainetec acquisition increased intangible assets as well. Pleasing is that gross net debt, AUD 14.1 million, really only increased as a result of the debt funding of AUD 11 million for Mainetec. We are paying down that debt over the course of the next, we've got two years remaining on a three-year term loan, and that's progressing well.
Our debt-to-equity ratio of 11% is anticipated to decrease in, during the FY 2024, and the continuous business growth, improved operational performance will continue. We also are factoring in the reduction in inventory, and we really anticipate to see that net debt move to a net cash position during the course of FY 2024. I'll now pass you back to David.
Okay. I'd like, as I said at the beginning, I'd like to make some comments on a number of things as in this last stage of the presentation. I'd like to start with talking about a market overview. I know there are lots of different views on the commodity market at the moment. But I want to really go through how we are seeing it in Austin. What we see is what continues to be an extremely strong market across the world. Doesn't matter whether we look in Chile, the United States, in Asia, Europe, or here in Australia, a very strong market with very limited competition around the world.
Indeed, there is no single international market competitor that competes with us in those markets. But I want to emphasize one thing, and I heard a similar comment being made recently by Seven Group, and that is that our market is very much a production-driven market. It's not directly linked to commodity prices or the investment cycle in those commodities. It's really a business. We produce wear products that, by their very nature, do wear out. And therefore, our business is very much linked to production and the number of hours of those products in production. Indeed, you know, many of our products are designed around a usage level, a number of hours of use in production. And that market is driven by, really by two things.
As a customized, engineered, designer and builder of products, it's driven by the performance advantages that we can give our customers. Often that's increased payload or digging efficiency that we can get from the bucket. So it's a performance advantage and the capacity to deliver into the market in the timeframes that are required. It's absolutely not a price-driven or commoditized market. And what we really see is, who can deliver on those two things? That's the performance advantage and the ability to deliver on time. Who delivers on those things wins the market share.
The other point I was going to make to you is that you will be very aware, which you've seen in the miners' operating costs, that we are currently operating in an inflationary market environment, driven by both wages and raw material input costs. However, for Austin, as a business, our cost base is in a deflationary cycle. It's in a deflationary cycle for two reasons. One is that our Ausbuy program that delivers steel into our different units has brought down the cost of our materials extensively over the last couple of years and still has some way to go.
We've seen a 2% reduction in the average labor content of our products across all of those markets, primarily as a result of the fact that we're producing more product these days in our Asian facility than we have ever done before. As a result of this, we've been able to increase pricing steadily in all regions around the world even though our cost base has been reducing. The next thing I want to talk about was competitive advantage of the Austin business around the world. What we're seeing at the moment is that the market, particularly in the United States and Australia, is very much capacity constrained by access to labor and access to production facilities as well.
Now, this actually turns out to be a very good position for Austin, because unlike our competition, like any of our competition, we have access to Asia and manufacturing capacity in Asia. And that has meant that in a constrained market, we have been able to deliver effectively into that market. Which we are today, delivering equipment into the United States and into Australia that we simply couldn't do without our Asian facilities. And really, Asia is very much our ace in this currently constrained market environment. And we haven't seen anybody else who we compete with doing this. Nobody else in either the United States or here, or anywhere else around the world, has access to this type of capacity. And you can see that in our numbers.
So our Indonesian business, revenue is up 2.5 times now, over the last two years, and is projected to have another sharp increase in FY 2024. Indeed, we're now moving to what we call the P-30 project in Indonesia, which is to increase tray production there to 30 trays per month by the end of this calendar year. And I would just compare that to two years ago, when we were typically producing less than 10 trays a month in that facility. It just shows you what a sharp increase we are seeing, and how important those Asian facilities are to the group and the cost effectiveness of this business.
We've implemented a 70% increase in the productive capacity in Chile, and we're seeing that in a significant increase in the revenue base in South America as well, and that's been very pleasing to see. Now, we are leasing additional production space in the United States, which we've just done. The US is increasingly using Batam as a facility, which can help them to deliver the very high revenue opportunities that they've got in front of them as well. The other part of that competitive advantage is that we have been investing now for 2 years in advanced manufacturing activities, and that's driven greater efficiency in our operations where we've deployed it, and greater quality of our products as well.
That's been very satisfying to see, that at a time that we're growing, growing market share, we're growing revenue, but we're also improving quality across the group. That's all going to be augmented in Australia by an AUD 5 million grant that we just received from the WA government to invest in advanced manufacturing. As I've said, we have, outside of the OEMs, the Caterpillar, Komatsu, Hitachi-type OEMs, we have very limited competitors who are engineering-led. That is to say, that they are design and engineering-led in the market. Indeed, when you look around us, we have two competitors here in Australia, one on the West Coast and one on the East Coast, both privately owned.
We have no real, cross-US competitors, in that market, or really any competitors these days in Asia, and we have two, competitors in Chile. So very limited, competition base around the world. And that, of course, is helping us, significantly improve our market share in those, in those areas. One of our biggest competitive advantages now, and will be even more so in the future, is the Ausb uy program, which, David, mentioned before. This is a program that is leveraging the scale of our operations around the world, to reduce the price of steel. We buy about $100 million worth of high-grade, specialized, high-hard steel, for our operations, and we're now doing that centrally out of Australia, and then distributing that material through, through the rest of the world.
The price advantage that that's given us on our single biggest input cost after labor is quite dramatic. It's having a big impact on both our competitiveness and also on our ability to drive increased margins. In fact, in some markets like Asia, for instance, where the cost of materials is by far the highest input cost, and this is giving us an advantage which is really hard to beat from any competition that we do see in those areas. All of this, of course, is continuing to drive pricing benefits. The outcome of that is we are winning more, which you can see in the revenue side, and we are improving margins across the board. That was really what I wanted to talk about on competitive advantage.
I want to talk a little bit now about risk and risk management, and I know—'cause I know that's a hot topic in the market at the moment. You know, we recognize that investors are very risk-focused at the moment, so this is something that we should just sort of talk about where Austin sits in that process. I wanna just emphasize again at this point that we are very much production-focused rather than commodity pricing focused. And although, you know, there seems to be a lot of discussion about commodity prices softening, they really still are relatively elevated levels compared to the long-term averages. But again, our business is very much linked to production tons moved, not to commodity prices.
So the likes of Rio Tinto and BHP and those sorts of companies who are digging and moving vast quantities of material, that's where our business is linked. You can see that in our 89% repeat business slide, which is number, sorry, number 26 in your pack, number 11 in ours. You can see that we have 89% of our revenue from repeat customers, of which 56% of that is customers who buy from us annually, every year, a buy of buckets and grates and other machinery. And then about 33% of that is made up from repeat customers who don't necessarily have an annual buy, but we see them on a continuous basis.
That gives us a great deal of confidence in the business going forward. The other feature of the results this time has been the increase in the product diversity. This has been something that I've been interested in for the last couple of years. The addition of Mainetec, and also our focus on the bucket business, has seen us increase the buckets and other products in our portfolio from 16% of our revenue to 29% of our revenue in FY 2023, and probably going to increase further into FY 2024 as well. That's particularly important because buckets in particular are of interest, because that's a recurring revenue stream where we sell a bucket, and then it comes in for a rebuild every 12 months thereafter.
We've been reorienting our Australian business around that opportunity, which is selling a bucket and then being available to do the rebuilds that occur on an annual basis. The other part about risk management is that our customer base covers pretty well all commodity types. So whether it's iron ore, whether it's copper, nickel, gold, lithium, oil sands in Canada, pretty well every commodity base is represented in our business. Also, we have a very wide diversity of customers. We pretty well sell to just about every major customer and OEM that you can think of around the world. So whether that's BHP, Rio Tinto, Glencore, Thiess here in Australia, Komatsu, Caterpillar, and so on, so forth, but very wide range of customers and pretty well all of the blue chip customers around the world.
That also gives us good risk management as we move forward. Okay, I'm going to move on now to some sector comments. Probably the only disappointing part of FY 2023 for us has been the performance of our Perth- based operations. And that's something obviously that we've been very focused on in the last period of time as we move into FY 2024. FY 2024, however, is gonna be quite a different market for Australia as we have moved our tray manufacturing capacity out of Australia and up into Indonesia. That means our Australian business will recognize about half of its income, profit income this year from activity which actually is carried out very well in Indonesia.
So what I mean by that is, the win orders here in Australia for trays, they'll build those. They will then be built and delivered out of our Indonesian operation, which has hardly missed a beat over the last couple of years. We still see this market in Australia as extremely strong and characterized, as I said previously, by the ability. If you have the ability to deliver capacity and quality into the Australian market, then you're gonna be very successful. And we're seeing that as we've converted our Australian Perth and facility in Mackay on the East Coast over to bucket production. We've seen both of those facilities at very high capacity levels.
In fact, both in Perth and in Queensland, we're pretty well full now until the end of this calendar year and into the early part of next year. And indeed, are now working on some opportunities to increase that capacity. In Australia, we've just received our first 15 migrant workers out of the Philippines to increase capacity on the West Coast. And we have another 30 more out of the Philippines lined up to arrive in September and slightly later in the year as well. And that, you know, that will be a really positive input into FY 2023.
Then I just wanted to make a comment on a warranty disclosure that we made about, well, several months ago to the market, and I know there's been some discussion about that on the market side. This is essentially an isolated incident, involves 26 trays which were made from 2020 into 2021, so up to 3 years ago. These trays are now under repair at the operator's site. The evidence I can give from you that this is not causing us any real concerns is the fact the customer that's involved in this has continued to buy substantial numbers of trays since this warranty issue was identified.
The reason for that is typically my experience over many years in manufacturing with warranty claims is it's not so much the warranty issue that causes you know problems. It's the way that you deal with that warranty issue when it arrives. And if you deal with that in a professional and effective fashion usually the customer can deal with that themselves quite effectively. And that's what we've seen in this case. So very much an isolated incident. The total cost of this represents less than 1% of our revenue stream from this product category in FY 2024. Our warranty costs historically if you go back over the last few years have been very low by any standards frankly.
Our prediction is that warranty costs in FY 2024 and forward will go back down to that, that low level in the future. I'll move on now to the United States. US has been an outstanding success over the last two or three years, with good, very solid growth in their business through that period of time. It's another story, very similar in many ways to Australia, where a labor limitation for the mining companies has led them to move away from repairing truck trays, taking big, heavy truck trays and repairing those on an annual basis on their own sites. And because of those labor restrictions, now moving to lightweight trays, which give them huge benefits in, in payload, financial benefits that come from increased payload.
But also means that they don't repair those, truck bodies on site. They replace them at the end of their life, be that somewhere between 3-5 years, typically. The result of that has been, we've seen a market shift in the U.S. to much closer to the Australian, type of, of market, where more of the miners are now building or using, customized, engineered, lightweight truck bodies rather than OEM truck bodies. It's been a very solid, period of growth, in that country. And as I said to you, because of that, we've had to, produce more product in Batam, in Indonesia, ship that into the U.S., which makes very good, cost benefits as well as, delivering more capacity.
And we have just signed a lease on a small new facility very close to our facility in Casper, to help them improve their manufacturing capacity as well. Now, Chile, which is probably our single most competitive market, because we have two active competitors in that market, has also been strong. The Chilean business has done a fantastic job over the last two years of going from a business that was perennially losing money up until two years ago, and has performed very strongly in both FY 2022 and FY 2023. And we're seeing Chile, like the USA, like Indonesia, now well inside our target EBITDA margin at the business unit level of 18%-20%, and we expect that to continue into FY 2024.
So if I just think about that in the Chilean context, we were below that earnings target in the first half of the year, as we're going through a restructuring in Chile and an improvement of their operational base, fundamentally increasing capacity in Chile in the first half, and that created some costs. But a very strong recovery in the second half and into FY 2024. So great business down there in Chile. And I think the future is strong because, ranged against our competitors, we are a company that is very much an engineering, customized-led producer of these products, rather than a builder of cookie-cutter style products. Lastly, I'm just gonna talk about Indonesia quickly.
This business, and I've mentioned it a few times, it's been an absolute revelation for us over the last couple of years. It's gone from being a minor business in our organization, to second only in revenue to the United States, and growing extremely quick, quickly. We are seeing it move to, as I said, production of 30 trays a month by the end of this year, and we are considering a further lift in production to 40 trays a year later on in FY 2024. This business has, by far, the lowest operating cost base of any of our businesses in the group. Both from an overhead point of view and also from a direct operating cost point of view, and is very much becoming the showpiece manufacturing facility, you know, across the company.
And I will say that from my perspective, the Indonesian business is very much part of the special source, if you like, of the company, key and germane to our ability to increase capacity, but also to drive up the quality of product that we are producing. I'll finish now on guidance. And this is our FY 2024 guidance. We see another increase in revenue as we go into FY 2024. The revenue guidance for the first half of FY 2024 is between AUD 120 million-AUD 140 million, which is now 90% covered, more than 90% covered by firm order book. That's up 60% on what we achieved in FY 2023, which in itself was a record year.
So very strong revenue outlook in the first half. And I'll just, I'll just mention why we give first half revenue rather than full year revenue. As you know, our business is a fast turnover, consumer goods type of business. We have large goods, but nonetheless, essentially consumer goods business. And we kind of have that supermarket type model where, when they wake up on a Monday morning, they've actually got no revenue whatsoever until somebody walks in the door during the day on Monday and buys a can of baked beans. Our own business is very similar to that in that we've got a fast turnover type of business. We win orders pretty well every day of the week, and we pretty well deliver those 2-3 months later.
So our focus is very much on the next path, but a very strong path underpinned by a strong order book. Our first half impact is in the range AUD 10 million-AUD 12 million. And again, about roughly double from the first half of FY 2023, as we start to see all of those cost benefits and competitiveness type issues that I've talked about come through into the financial performance of the business. Opening order book, as I said, is up strongly. It's up to 50% of the full year forecast revenue. At this time last year, or at the beginning of July last year, we were at 42%. So the order book is not only up significantly, but much stronger than even we were as we went into FY 2023.
So a very pleasing position on the order book as well. And then cash flow, we see cash flow as being very strong in FY 2024. As we said earlier, it was nearly sixteen million dollars of operating cash flow last year, but that was despite a big wind-up in steel inventories, which we'll see reduce significantly through this year as we consume that into sales. Therefore, you know, good operating cash flow coming out of EBITDA and cash being liberated out of that inventory build as well. So, good year into cash flow as well. And that's the end of the comments that I wanted to make. Okay, so we'll move over to Q&A.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Philip Pepe, from Shaw and Partners. Please go ahead.
Hi, guys. Congratulations on a, on a solid result, especially that cash flow, and, and thanks for taking the question. Just on the, the Batam operations, Indonesian operations, a couple of announcements you put out early in the year suggest that some of your customers are happy to pick up, from the region, instead of you having to transfer the, the trays, to them. So what does that mean for your ability to not only source Australia or service Australia out of Batam, but other countries as well?
Hi, Philip. Thank you for the question. We've worked very hard over the last two years to improve the inherent underlying cash flow in the business, and the way that we've done that is, one, to push much more strongly for deposits up front. So we typically now achieve a 30% deposit on placement of order. And the second thing that we've pushed for is the ability to be able to invoice ex-works. And that's very important to cash flow, because the transport time to site, the commissioning time, can delay two or three months to that final payment, if you're not careful. So going to an ex-works type of payment means that we get cash into the business much faster. So that, that's really been what that's about.
And then we invoice separately if the customer wishes us to transport overseas. Now, we really see two types of customers. We see big customers like Rio Tinto, for instance, Mineral Resources, those types of people. They've got their own logistics chain, and they're very happy to organize shipment from an ex-works location in Indonesia into Australia. And in fact, we said earlier this year that for the very first time, we were delivering product out of Indonesia directly into the Pilbara. We've never done that before, and then we've been delivering into Port Hedland and Dampier through that process. But a lot of that actually organized by the miners themselves. So that's one type of customer.
The other type of customer is somebody who's perhaps smaller or doesn't want to deal with the logistics issues, and therefore we arrange transport into Africa, into Europe, sometimes into North America, and sometimes into Australia ourselves. We've set up a much stronger logistics business inside our own organization to make sure that we do that effectively and as cheaply as we possibly can, particularly as we're delivering out of Indonesia. So all of that really has been about tightening up cash flow. That's why you see our cash on customer advances roughly equal to work in progress, and you've seen a match held up in terms of cash flow improving over the last couple of years.
Excellent. Thank you.
Thanks, Philip.
Thank you. Once again, if you wish to ask a question, please press star one. Your next question comes from James Lennon from Petra Capital. Please go ahead.
Oh, good day, guys. Well done on the results. Two questions if I can. First one, just on the guidance. Your order book implies you're sort of looking at around AUD 290 million revenue for the year. And if you back out the Mainetec, which is probably about AUD 40 million annualized, if you assume no growth from acquisition, the guidance kind of... I'm just a bit confused, because I thought you were sort of saying that the delayed orders you had, second half 2023, would flow into first half 2024. But looking at the guidance you're giving for the full year versus the guidance you're giving for the first half, it sort of implies a fairly even split.
I just wanted to sort of understand how you've come about with that guidance.
So if you back out the impact of Mainetec in FY 2023, the underlying revenue was around AUD 223 million. And as you point out there, when you back out that Mainetec in FY 2024, we go from about AUD 220 million to about AUD 250 million, using your numbers. So that's a pretty substantial, about a 15% underlying increase in revenue. We do see that there are some opportunities as well around that. I think you've asked me a couple of times about, we had a delayed order in FY 2023, would that double up in FY 2024? The recent news is that that does appear to be the situation.
That is, that the delayed order has been won, as you know, and we've announced, and is being produced at the moment up in Indonesia. That customer has indicated to us that their FY 2024 order will also serve this year. Therefore, we're essentially going to see an FY 2023 and an FY 2024 order for that, for that big customer, in this financial year. So that will, that will help to drive sales in the second half. How that plays out, of course, depends on how we see the order build through the next six months or so. But I think underlying, is a really strong trend. So 15% underlying, inferred, revenue increase, plus there's opportunity around the doubling up of, of income from one of our biggest, single customers.
Great. The second one was, you mentioned, I think the Chile margin, you know, was sort of below what you expected in 2023, but you're pretty confident that that's gonna amend itself in 2024. Is that right? You're looking at sort of 8%-20%?
No.
No?
Not quite right, and I'm sorry if I led you to misunderstanding, James. What I said was that in the first half of FY 2023, and you can see that in the sector results that we provided at the end of that first half, it was a sort of muted financial performance in Chile as we went through the big program of increasing production capacity in Chile. But they came back extremely strongly in the second half, and the result was that under the rule, they hit our target margin at the BU level, which is the 18%-20% EBITDA margin for the full year. Which, given that they were under that the first half, suggests that they had a very strong second half.
The reason I say that is, no reason not to believe that that strength in the second half of FY 2023 will then flow into FY 2024. We see the order book for that, we see the work coming through, so I think Chile will have another, has all the makings of having another, positive and strong year in FY 2024.
Okay, so just with the segment reporting in the annual report, why is the margin there about 7% for the year? Is that, there's another cost there that you're not referring to, is that the case?
Yeah, James, in terms of Dave there, in terms of the, we allocate the corporate charges out. So when you look at the, so that's kind of masking the true underlying performance of the individual sectors. So if you peeled back that corporate cost allocation that we, that we apply, yeah, that's where we get back to that 18%-20% margin. And, and that's the same with the US. When you look at the US, and you, you know, it looks somewhat distorted. We're gonna going forward, we're gonna look to tidy that up to give a bit more transparency and maybe pull out the... We allocate everything.
So we allocated, for example, the Mainetec acquisition, all the one-off cost write-offs, et cetera, and stuff like that, which is really not probably a fair, true representation of the actual business. So we'll look to tidy that up in the half, and then going forward, to make it a bit more clearer, and then get a, maybe a bucket where we have unallocated overhead costs that really aren't supporting those businesses.
Okay, great. And just one last one, just on Perth. Can you give a comment? I may have missed. I may not have heard if you, if you did mention it, but just in terms of the run rates, Perth, how's the margin looking there? You know, I guess across the in, you know, the Asia Pacific more generally, but in Perth, I think you, you-
Yeah, much stronger.
-mentioned it in the last result, but, yeah.
Yeah, much stronger. I mean, many of the issues that we had with Perth in the FY 2023 year were related to manufacturing of truck trays. And as I said, that's been shifted now to Indonesia. They're just finishing off their very last trays actually, at the moment, probably running slightly into September. But we've converted over the Perth facility to a bucket facility. And the reason that we've done that is that the bucket rebuilds, in particular, which is a sizable part of the overall business in Australia, is work that can only be done in Australia. So we continue with that here, and some new buckets being built in Perth as well.
So if I look at Queensland, for instance, the majority of what we're doing there is the rebuilds of buckets that we would have previously delivered into the market, come back to their annual rebuild. And that, that's a cycle that we're expecting to see more of in Perth. In fact, one of the interesting things has been that when we moved the truck trays, all that capacity up to Indonesia, that of course left a big capacity in Perth. And that capacity, almost like a vacuum, what that capacity has done is sucked in a whole load of rebuild work for buckets and new buckets as well. So we're still expanding the capacity, even though based on last year's production, most of their hours that they would have performed last year have been moved up to Indonesia.
Great. Thank you.
Thank you. There are no further questions at this time. I'll now hand back to Mr. Singleton for closing remarks.
Okay, thank you for taking the time. I know it's a busy time of the year, and we're going to see many of you over the next three days or so. If you've got any comments that you want to ask on the call and you want to call me, then please feel free to do so. I still think that we have a long way to go in the advantages that we're getting out of the Austin 2.0 strategy. There is, unquestionably, has increased our competitiveness around the world, and that's what's driving our sales increase. And it has increased our margins, which you can see in the returns.
And that will only get greater this year as Ausbuy is more broadly implemented around the company, and as the Indonesian business continues to grow and deliver highly competitive product into the rest of the organization. So it's been a very strong year. Interestingly, one of the things that we will be doing this year is investing more in our sales operations around the world. So in the United States, Chile, Australia, and through Asia, we have been and will continue to increase our sales functions.
So that's, you know, it's almost in spite of the fact that we haven't made that investment last year, we've seen a good growth in, in sales, and we're leveraging up our, our, sales force now because we, we know that we have the capacity delivering to, into this strong market. So, I'm, you know, we're all very much looking forward to FY 2024 as well, as we're went, we're went into it. So thank you for your time, and, and, look forward to seeing some of you over the next two or three days.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.