Boral — FY2002 Earnings Presentation
16 slides from Boral's earnings presentation, Aug 21, 2002
Slide 1: 2002 Full Year Results
2002 Full Year RESULTS 21 August 2002 Boral’s underlying profit increases by 51% to $192 million Rod Pearse Overview of Results Presentation • Financial results • Segment overview Building Products, Australia Construction Materials, Australia USA Asia • Perform & grow strategy • Outlook FY20
Slide 2: Financial highlights
Financial highlights • Underlying PAT (before disposal of businesses) up 51% to $192.4m • Final dividend increased to 10 cents & 75% franked • EPS up 25% to 34 cents • Result driven by cyclical recovery in Australian housing, resilience in USA and continued growth in Asia • Sales Revenue up 6% to $3
Slide 3: Australian building and construction activity is recovering from cyclical low levels
Australian building and construction activity is recovering from cyclical low levels AUSTRALIA – TOTAL BUILDING & CONSTRUCTION ACTIVITY $50 $97/98 billion Value of Work Done $40 Roads, H’ways, Subs & Bridges $30 Non-dwellings $20 Dwellings $10 $0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 199
Slide 4: Residential and non-residential construction demand in the US has been more resilient than expected
Residential and non-residential construction demand in the US has been more resilient than expected US RESIDENTIAL & NON-RESIDENTIAL SPENDING IN BORAL “BRICK STATES”* $200 Dodge Q1 2002 Forecast Value of Work Commenced $160 $120 Actual (US$ Billion 1992) $80 $40 $0 2000 2001 1994 1998 1990 1991 1992
Slide 5: Underlying profit increases by 51% to $192m
Underlying profit increases by 51% to $192m A$ million FY2002 FY2001 % change Sales revenue 3,489 3,280 6 EBITDA* 531 451 18 EBIT* 343 262 31 Interest 63 70 (9) Profit before tax* 280 192 45 Profit on disposal of businesses - 39 - Tax 87 78 12 Profit after tax 192 153 25 Profit after tax (underlying
Slide 6: EBIT has been driven by volumes, growth projects and operational improvements
EBIT has been driven by volumes, growth projects and operational improvements $343 m $262 m POSA & divestments Volume PEP Other FY2001 FY2001 POSA/divest Price Price Volume Cost increases Cost escalation Growth Grow th/AsiaQEUFY2002 PEP/Overheads/Turnaround Turnarounds FY2002 Financial Results Stron
Slide 7: All business segments are up
All business segments are up Revenue A$ million FY2002 FY2001 % change Building Products, Australia 999 955 5 Construction Materials, Australia 1,640 1,523 8 USA 793 756 5 Asia 53 38 39 Discontinued 4 8 Total 3,489 3,280 6 EBIT A$ million FY2002 FY2001 % change Building Products, Australia 85 66 30
Slide 8: Building Products, Australia
Building Products, Australia Revenue EBIT EBIT / Revenue A$ Million A$ Million $1,400 $140 10% $1,200 $120 8% $1,000 $100 6% $800 $80 $600 $60 4% $400 $40 2% $200 $20 $0 $0 0% FY1997 FY1998 FY1999 FY2001 FY1997 FY1999 FY2000 FY2001 FY2000 FY2002 FY1997 FY1998 FY1999 FY2000 FY2001 FY2002 FY1998 FY200
Slide 9: Construction Materials, Australia
Construction Materials, Australia Share of 2002 Revenue • Sales up 8% to $1.64 billion Quarries Cement • EBIT up 25% to $143m division* • EBIT/Sales margin up from 7.5% Contracting to 8.7% QEU • EBITDA/Sales margin up from Transport 13.7% to 14.4% • Funds employed up 4% to Asphalt Concrete $1,400m •
Slide 10: Construction Materials, Australia
Construction Materials, Australia • Underlying concrete and quarry volumes up • Concrete and quarry EBIT up around 30% • Good result from Concrite & Alsafe acquisitions • Improved cement, quarry and concrete pricing • QEU contributed $28m profit • Blue Circle benefited from growth in dwellings/lime
Slide 11: United States
United States • Sales up 3% to US$416m (excluding MonierLifetile JV) Share of 2002 Revenue • EBIT up 9% to US$57m Bricks • EBIT/Sales margin up from 13.1% to 13.8% • EBITDA/Sales margin up from 19.0% to 19.6% Clay Flyash & rooftiles • Funds employed up 4% to admixtures US$404m Concrete rooftiles* •
Slide 12: United States and Asia
United States • Market resilient despite uncertainty • Price improvement in bricks, tiles, flyash • Improved results in bricks • Turnaround of BMTI business • Concrete tiles flat – restructuring costs • Clay tiles down 5% - plant upgrades • Ongoing growth focus Segment Overview Asia Revenue * EBIT E
Slide 13: Boral's strategy is to perform & grow around its leading positions
Asia Asian Plasterboard JV: • Underlying volumes up 12% • Strong returns from South Korea • Full year contribution Siam Gypsum Industries • Elimination of EBITDA losses in China • Stronger prices/volumes in Indonesia • 30m m2 plant in Seoul; commissioning in August 2002 • Boral’s interest increased
Slide 14: Strong capacity to fund growth
Strong capacity to fund growth $180 Capital Expenditure (A$m) 90% Net Debt / Equity (%) 80% Net Debt/Equity $150 70% $120 Target Gearing Range 60% $90 50% $60 40% $30 30% $0 Dec June Dec June Dec June 1999 2000 2000 2001 2001 2002 Growth capex SIB capex Perform & Grow Over $400m allocated to growth
Slide 15: Australian building and construction activity is recovering from historically low levels
Australian building and construction activity is recovering from historically low levels AUSTRALIA – TOTAL BUILDING & CONSTRUCTION ACTIVITY $50 $97/98 billion seasonally adjusted Roads, H'ways, $40 Subs & Bridges $30 Non-Dwelling Value of Work done $20 $10 Dwelling $0 Forecast 1989 1990 1993 1995 19
Slide 16: Outlook for FY2003
Outlook for FY2003 • Aust. residential demand solid for H1; turn down in H2 • Aust. non-residential major projects stronger H2 • Uncertainty in US markets; weaker economy / confidence • Impact of changes in US exchange rate • Continued Asian growth; Korean uncertainties • Recent Australian construct