Boral — Investor Presentation (May 2012)
28 slides from Boral's investor presentation, May 4, 2012
Slide 1: Boral Plasterboard Australia – Pinkenba Analyst and Investor Visit
BORAL PLASTERBOARD AUSTRALIA Pinkenba Analyst and Investor Visit, May 2012 Mark Selway, Chief Executive, 4 May 2012
Slide 2: Agenda – Friday 4 May 2012
Boral Plasterboard Australia AGENDA – FRIDAY 4 MAY 2012 Welcome Mark Selway Plasterboard Australia Overview Ross Batstone Safety Briefing, Plant and LEAN overview Andrew Pittle Tour of production facilities Lunch and discussion 2
Slide 3: Boral Plasterboard Australia
BORAL PLASTERBOARD AUSTRALIA Pinkenba Analyst and Investor Visit, May 2012 Ross Batstone, Divisional Managing Director, Boral Building Products, 4 May 2012
Slide 4: Boral Building Products Australia business is highly leveraged to new housing construction
Boral Building Products Australia BORAL BUILDING PRODUCTS AUSTRALIA BUSINESS IS HIGHLY LEVERAGED TO NEW HOUSING CONSTRUCTION Boral Building Products – Australian businesses (A$m) 1H FY10 2H FY10 1H FY11 2H FY11 1H FY12 Revenue (A$m) 1H FY12 1H FY11 Var % Revenue 608 598 624 526 530 Plasterboard 192
Slide 5: Clay & Concrete restructuring as announced in February 2012
Results for the half year ended 31 December 2011 BORAL BUILDING PRODUCTS Clay & Concrete Restructuring as announced to the market in February 2012 We will exit the QLD Roofing business and close the Carole Revenue Comparisons Park plant Clay & Concrete Products East Coast Masonry has been loss m
Slide 6: The Australian building products portfolio is undergoing significant change
Boral Building Products Australia THE AUSTRALIAN BUILDING PRODUCTS PORTFOLIO IS UNDERGOING SIGNIFICANT CHANGE In June 2011, we closed our Plywood business based at Ipswich (QLD) and our Masonry plant located at Somersby (NSW) We have reduced operating brick capacity from 620 to 390 million SBE (
Slide 7: Boral Masonry – capacity to be reduced by 70%
Boral Building Products Australia BORAL MASONRY – CAPACITY TO BE REDUCED BY 70% (A$m) FY07 FY08 FY09 FY10 FY11 Revenue 119 122 114 121 124 Capacity Post sale / Previous (‘000 tonnes) closures Cairns NSW 252 0 VIC 120 0 Mackay QLD 315 0 SA 122 122 WA 170 170 Wacol Labrador Total 979 292 Midland Byron
Slide 8: Boral Bricks – capacity reduced by 37%
Boral Building Products Australia BORAL BRICKS – CAPACITY REDUCED BY 37% (A$m) FY07 FY08 FY09 FY10 FY11 Revenue 305 307 277 292 260 Capacity Post closures / Previous (million SBEs) mothballing NSW 127 62 VIC 118 118 QLD 105 45 WA 270 165 Total 620 390 Darra – 1 line closed Kempsey Midland Badgerys C
Slide 9: Boral Roofing – capacity reduced by 21%
Boral Building Products Australia BORAL ROOFING – CAPACITY REDUCED BY 21% (A$m) FY07 FY08 FY09 FY10 FY11 Revenue 108 120 119 124 115 Capacity Post Previous (million tiles) closure NSW – Terracotta 17.2 17.2 NSW – Concrete 26.0 26.0 VIC – Concrete 21.0 21.0 Carole Park QLD – Concrete 22.0 0 SA – Conc
Slide 10: We had forecast 136,000 commencements for year ending June 2012
Boral Plasterboard Australia WE HAD FORECAST 136,000 COMMENCEMENTS FOR THE YEAR ENDING JUNE 2012 – BEFORE Q3 RAIN IMPACTED Australian Dwelling Commencements 100,000 90,000 Equates to 63.5k 80,000 2H starts which is: 31,564 25,562 21,041 29,440 70,000 24,030 22,568 29,871 25,350 60,000 16,100 26% b
Slide 11: Low level of structural softwood framing sales evidences weak new house construction
Boral Plasterboard Australia THE LOW LEVEL OF STRUCTURAL SOFTWOOD FRAMING SALES EVIDENCES WEAK NEW HOUSE CONSTRUCTION Australian Softwood Framing Timber Sales Volumes by Source (Rolling Three Months Average) FY2008 FY2009 FY2010 FY2011 FY2012 156,861 Starts 130,620 Starts 164,746 Starts 156,410 Star
Slide 12: Today most drivers of new dwelling volumes look to be unfavourable
Boral Plasterboard Australia TODAY MOST DRIVERS OF NEW DWELLING VOLUMES LOOK TO BE UNFAVOURABLE Broad Economic Impacts Short Term Demand A range of factors, including Europe, rising Affordability and the confidence to buy a new energy costs, employment prospects dwelling or to renovate outside o
Slide 13: New dwellings construction is a key driver of Australian plasterboard demand
Boral Plasterboard Australia NEW DWELLINGS CONSTRUCTION IS A KEY DRIVER OF AUSTRALIAN PLASTERBOARD DEMAND Australian Plasterboard Production FY2011 Australian Plasterboard Year ended June (millions of m²)¹ Demand by Region and Market Segment2 170 165 160 157 155 153 153 100% 150 149 148 149 SA 148 1
Slide 14: Pricing has improved consistently since 2007 despite flat volumes
Boral Plasterboard Australia PRICING HAS IMPROVED CONSISTENTLY SINCE 2007, DESPITE FLAT VOLUMES AND CAPACITY INCREASES Plasterboard Producer Price Index1 Plasterboard Production Versus Industry Capacity2 Year ended June (millions of m²) 200 250 180 196 196 203 160 200 176 176 140 120 150 152.9 152.8
Slide 15: Unit production costs are adversely impacted as output falls
Boral Plasterboard Australia UNIT PRODUCTION COSTS ARE ADVERSELY IMPACTED AS OUTPUT FALLS, BECAUSE OF THE IMPACT OF FIXED COSTS Typical Unit Production Cost Breakdown Index 10mm Recessed Edge Plasterboard Product 48 weeks p.a., 48 weeks p.a., 48 weeks p.a., 7 days per week, 5 days per week, 5 days p
Slide 16: Boral is the leading integrated plasterboard supplier
Boral Plasterboard Australia BORAL IS THE LEADING INTEGRATED PLASTERBOARD SUPPLIER Boral supplies from Pinkenba & Port Melbourne plants by sea Boral capacity is 40 million m2 at Pinkenba Boral supplies Boral capacity is 18 million m2 from its east at Camellia Plasterboard production coast plants Pla
Slide 17: Pinkenba plant, Queensland
Boral Plasterboard Australia PINKENBA PLANT, QUEENSLAND – RECEIVES GYPSUM DIRECTLY FROM SHIP – CLOSE TO MAJOR ROADS 17
Slide 18: Camellia plant, NSW
Boral Plasterboard Australia CAMELLIA PLANT, NSW – WELL LOCATED TO SERVICE NSW AND ACT MARKETS 18
Slide 19: Port Melbourne plant, Victoria
Boral Plasterboard Australia PORT MELBOURNE PLANT, VICTORIA – RECEIVES GYPSUM DIRECTLY FROM SHIP – CLOSE TO MAJOR ROADS 19
Slide 20: Port Melbourne plant – wet commissioning well underway
Boral Plasterboard Australia PORT MELBOURNE PLANT - WET COMMISSIONING IS WELL UNDERWAY – WILL RAMP TO RATED CAPACITY QUICKLY Port Melbourne upgrade status Wet commissioning underway Experienced team from Pinkenba assisting with start-up The new 40,000 tonnes gypsum store The new gypsum receiving
Slide 21: New plants in QLD and Victoria give Boral low production costs
Boral Plasterboard Australia NEW PLANTS IN QLD AND VICTORIA GIVE BORAL LOW PRODUCTION COSTS Major Cost Advantages at New Plants Direct gypsum delivery to wharf eliminates cartage costs Gypsum Self-unloading ships reduce discharge time New mills and dryers reduce energy Energy use No gypsum t
Slide 22: Boral operates throughout the plasterboard supply chain
Boral Plasterboard Australia BORAL OPERATES THROUGHOUT THE PLASTERBOARD SUPPLY CHAIN AND SERVICES ALL END USER SEGMENTS End Use Housing Other Dwellings A&A Non -Residential Builders Others Installers Boral Interior Linings CSR BGC (WA only) Independently owned Imports Plasterboard contractors Boral
Slide 23: Design/supply of sustainable, application specific building systems
Boral Plasterboard Australia A KEY FOCUS IS THE DESIGN/SUPPLY OF SUSTAINABLE, APPLICATION SPECIFIC BUILDING SYSTEMS Partiwall® Multiframe™ IntRwall® Separating walls for Complete Timber framed solution Separating walls for high rise attached dwellings for low rise apartment buildings apartment build
Slide 24: We also package our offers for specific market segments
Boral Plasterboard Australia WE ALSO PACKAGE OUR OFFERS FOR SPECIFIC MARKET SEGMENTS 24
Slide 25: The outlook for plasterboard growth is positive
Boral Plasterboard Australia THE OUTLOOK FOR PLASTERBOARD GROWTH IS POSITIVE Attractive characteristics Low substitution risk Innovative solutions Flexibility in design Low material cost High performance boards for speciality Lightweight Short installation times needs Strong environmenta
Slide 26: Plasterboard lining systems have unique benefits
Boral Plasterboard Australia PLASTERBOARD LINING SYSTEMS HAVE UNIQUE BENEFITS WHICH HAVE HELPED TO DRIVE ADOPTION Lightweight Reduced building mass – reduced foundation costs Lower thermal mass Flexibility and Performance Environment Ease of reconfiguration and Low embodied and lifecycle rep
Slide 27: Integration of Boral Gypsum Asia proceeding to plan
Boral Plasterboard Australia THE INTEGRATION OF BORAL GYPSUM ASIA (BGA) IS PROCEEDING TO PLAN – SYNERGIES ARE SUBSTANTIAL Boral is now the leading Asia Pacific plasterboard wall and ceilings solution supplier (and a leading global player) with: - Plasterboard plants in Australia, China, India, Ind
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