Boral — H1 2024 Earnings Presentation
28 slides from Boral's earnings presentation, Feb 9, 2024
Slide 1: Boral 1H24 Results
Boral 1H24 Results Six months ended 31 December 2023 9 February 2024
Slide 2: Disclaimer
Disclaimer Forward looking statements – This presentation contains certain forward-looking statements, including with respect to the financial condition, results of operations and businesses of Boral Limited (“BLD”) and certain plans and objectives of the management of BLD. Forward-looking statement
Slide 3: Agenda
Agenda Our business Strategy update Presenters: Scale and scope 5 PEMAF progress & priorities 19 Vik Bansal Integrated network 6 Environment & sustainability 20 CEO & Managing Director Industry value drivers 7 Property 21 Belinda Shaw Chief Financial Officer Outlook 22 Performance overview Safety an
Slide 4: Our business
Our business Montrose Quarry, VIC Sea Cliff Bridge, NSW
Slide 5: Scale and scope
Scale and scope Australia’s largest integrated construction materials company with a rich legacy and significant social contribution A rich legacy founded in 1946 Large integrated network provides a competitive advantage ~360 operating sites1 Strategy focused on strictly strengthening and grow
Slide 6: Integrated network
Integrated network Valuable upstream and downstream operations with integration being the key for value creation ~50% of Upstream volumes supplied to downstream operations >90% of Downstream businesses source their raw material inputs internally Vertical integration delivers: o Secure source o
Slide 7: Industry value drivers
Industry value drivers Strengthening key value drivers will create the platform for business and earnings growth Strategy Alignment Opportunity P E M A F • Degree of vertical integration between upstream and downstream assets within a region Integrated network • Securing positions to leverage strate
Slide 8: Performance overview
Performance overview Widemere Recycling, NSW
Slide 9: Safety and people
Safety and people Good engagement driving improved safety performance Safety performance Our values, culture and engagement Total recordable injury frequency rate (TRIFR) Safety performance is improving, however Zero Harm remains our key goal 13.7 A strong organisational culture is critical to B
Slide 10: 1H24 highlights
1H24 highlights Six months ended 31 December 20231 Revenue Operational ▲9.4% Volumes in quarries and recycling up on 1H23 1H24 $1,840m Revenue up 9.4%, with volume increase in some product lines and 1H23 $1,681m price realisation across all product lines Price realisation, productivity improve
Slide 11: 1H24 financials
1H24 financials Six months ended 31 December 2023 1H24 1H23 A$m 1H24 1H23 continuing ops. continuing ops. 1H24 1H23 Underlying1 Underlying1 Change Statutory2 Statutory2 Statutory Statutory3 Net Revenue 1,839.9 1,681.1 9.4% 1,839.9 1,681.1 1,839.9 1,681.1 EBITDA 313.6 206.5 51.8% 296.9 224.7 296.9 24
Slide 12: Financial performance
Financial performance Substantial improvements across all key financial metrics Net revenue ($m) EBITDA1 ($m) EBIT1 ($m) 1,840 314 201 1,681 1,638 258 136 117 1,479 1,500 1,839 Property 229 Property 200 313 95 83 1,638 1,681 207 193 1,479 1,500 230 107 100 95 212 207 78 188 1H20 1H21 1H22 1H23 1H24
Slide 13: Market performance - volumes
Market performance - volumes Volumes flat to slightly up Boral revenue by segment Boral external volume trends FY21 – 1H24 (% of total) +2% -2% +31% Flat -3% +7% 2 2 2 2 Other 11 12 13 15 Alterations & Additions 9 000’s cubic metres 8 7 Multi-residential 8 11 11 10 000’s tonnes 000’s tonnes Detached
Slide 14: Price & costs
Price & costs Price realisation critical to offset real cost increases PRICE BORAL price trends1 Continued price realisation in 1H24, in +9% +3% +9% +5% flat +6% high cost environment Pricing discipline continues to be a high priority – critical to offset inflationary 1H22 $ / cubic metre pressu
Slide 15: Capital expenditure
Capital expenditure Capital Allocation being tightly managed Capex of $98.7m, down 5% on 1H23, includes $7.2m of lease additions. Remains below depreciation & amortisation, improving cash flows and cash conversion. Key projects include Townsville asphalt plant upgrade, completion of the Berrima
Slide 16: Berrima annual shutdown Capex
Berrima annual shutdown Capex Kiln shutdown part of annual maintenance, ~$20 million p.a. typical spend • Planning starts 3-4 months before January-February shutdown • Safety is the number one priority, given there are 300+ employees/contractors on site executing complex and specialist tasks • The k
Slide 17: Cash flow
Cash flow Continuing Operations $m 1H24 1H23 Continuing Operations Underlying EBIT1 201.0 95.3 Operating cash flow of $348.6 million, an increase of $231.2 million, driven Add: depreciation and amortisation 112.6 111.2 by increased earnings, a rigorous focus on cash conversion and working Underlyi
Slide 18: Balance Sheet
Balance Sheet A$m 31 Dec 2023 30 Jun 2023 31 Dec 2022 Assets Significant increase in cash, driven by improved Cash 888.7 658.1 525.7 earnings and working capital management Receivables 456.0 569.3 540.3 Lower receivables with focus on working capital Inventories 267.9 270.9 253.8 management init
Slide 19: Strategy update: PEMAF progress and priorities
Strategy update: PEMAF progress and priorities ‘PEMAF’ is the way we run our business every day… Our Boral Way People Environment • Ongoing, relentless focus on • Clarity on decarbonisation safety, leadership and culture pathway • Embedding operating model, • Improving environmental to leverage scal
Slide 20: Environment
Environment 10% reduction in absolute Scope 1 and 2 emissions (FY23) compared to FY19 base year Scope 1 and 2 emissions (million tonnes CO2-e)1 Renewable energy: solar Power Purchase Agreement (PPA) providing up to 60 GWh p.a. of 10% renewable electricity from FY25 0.38 0.37 0.33 0.34 Alternative fu
Slide 21: Property
Property Applying a fixed asset lifecycle approach to property and the large portfolio of surplus property Construction Materials segment Property segment Includes earnings from optimisation initiatives on land that is or Earnings from repurposing of property that will never will possibly be used fo
Slide 22: Outlook
Outlook Boral upgrades FY24 EBIT guidance to $330-350 million1 Boral’s earnings have historically been weighted towards the first half. FY23 was a recent exception to this trend with the introduction of a new operating model and strategy in 1H23. It is expected Boral’s typical seasonality (i.e. 1H
Slide 23: Questions
Questions Peppertree Quarry, NSW
Slide 24: Appendices
Appendices Cement Works, Berrima, NSW
Slide 25: Performance overview – capital structure and debt
Performance overview – capital structure and debt $m 31 Dec 2023 30 Jun 2023 Debt maturity profile, 31 December 20231 ($m) Leases 122.9 122.4 USPP Notes 25 568.2 585.9 144A/ Reg S 282.1 288.0 Undrawn Gross Debt1 973.2 996.3 Cash and cash equivalents Drawn 888.7 658.1 329 Net Debt per balance sheet 8
Slide 26: Business segments
Business segments Construction Materials1 Property1 A$m 1H24 1H23 Change A$m 1H24 1H23 Change External Revenue 1,839.3 1,680.9 9.4% External Revenue 0.8 0.2 300% EBITDA 312.6 206.6 44.5% EBITDA 1.0 (0.1) 1,000% EBIT 200.0 95.4 109.6% EBIT 1.0 (0.1) 1,000% Significant Items before Significant Items b
Slide 27: Statutory financial reconciliation
Statutory financial reconciliation Significant items – Six months ended 31 Dec. 2023 Power Purchase Agreement loss represents a mark-to-market movement in the PPA derivative contract During 1H24, Boral recognised an equity accounted loss of $16.3 million on its investment in Penrith Lakes Develo
Slide 28: BORAL
BORAL Building something great