Eagle Materials Inc · NYSE:EXP
Eagle Materials — Stephens Inc. Fall 2008 Investment Conference
41 slides from Eagle Materials's conference presentation, Nov 19, 2008
Slide 1: Stephens Inc. Fall 2008 Investment Conference
Stephens Inc. Fall 2008 Investment Conference New York City www.eaglematerials.com NYSE: EXP Exhibit 99.1
Slide 2: Forward Looking Statement
Forward Looking Statement This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified b
Slide 3: Eagle at a Glance
1. Eagle at a Glance 2. Industry Outlook 3. Bridge Over Troubled Waters
Slide 4: Current Market Environment
New residential construction continues to weaken Non-residential construction’s near term outlook is weak Public construction remains healthy in some of our markets With these headwinds why Eagle? Why now? Eagle is the best positioned player in our industries Low-cost producer Remains profitable at
Slide 5: We Continue to Outperform the Group
We Continue to Outperform the Group * 8.7% 8.7% 10.0% 12.2% 13.2% 14.7% 15.8% 19.8% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% USG St. Gobain (1) TXI (2) CRH (1) Cemex Vulcan Eagle Martin Marietta Lafarge SA EBIT Margins (TTM as of 9/30/08) • Based on comparison of EBIT Margins (TTM) for each of the li
Slide 6: Financial Highlights
Financial Highlights ($ in millions) $429 $503 $617 $860 $922 $750 $0 $200 $400 $600 $800 $1,000 $1,200 For Fiscal Year Ending March 31 * Before Corporate G&A Revenues Operating Earnings * $102 $115 $172 $264 $330 $184 $0 $100 $200 $300 $400
Slide 7: Industry Outlook
1. Eagle at a Glance 2. Industry Outlook 3. Bridge Over Troubled Waters
Slide 8: nag
nag E77 JEagle 1Vli Materials
Slide 9: U.S. Cement Industry Update
U.S. Cement Industry Update Current Supply/Demand Dynamics Demand anticipated to decline approximately 10% in calendar Due to the decline in demand, there have been several recent announcements of plant closures and delayed expansions U.S. capacity approximately 85% foreign-owned and majority of imp
Slide 10: U.S. Cement Industry Consumption
Source: PCA Data and Company estimates U.S. Cement Industry – Consumption Calendar Year Imports 30% imports 7% imports
Slide 11: Landed price of Asian imports to U.S.
$0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 Landed price of Asian imports to U.S. Handymax - Southeast Asia to U.S. Gulf Cost of imported cement Source: Portland Cement Association; Company estimates Asian Financial Crisis (through September 2008)
Slide 12: Public Construction Spending
Public Construction Spending – Value Put in Place Source: Portland Cement Association (Projection from Fall 2008). $50 $100 $150 $200 2008E 2009E Infrastructure Bill?
Slide 13: Private Non-Residential Construction Spending
Private Non-Residential Construction Spending – Value Put in Place $0 $50 $100 $150 $200 $250 $300 $350 Source: U.S. Bureau of the Census; PCA (Projection from Fall 2008) -23%
Slide 14: Our Cement Operations
Our Cement Operations Eagle Operations Overview Approximately 3.1 million tons of capacity 3.1% market share (12th in North America) Low cost producer Exceptional customer service Eagle plans to expand its production capacity by nearly 30% to 4.0 million tons Cement Plants Cement Terminals Markets S
Slide 15: Our Cement Production and Cost
Our Cement Production and Cost 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800 3,000 3,200 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 * FY08 $0 $20 $40 $60 $80 Total Manufactured Tons Produced (L) Manufactured Cost per Equivalent Ton (R) * - Includes effect
Slide 16: Eagle
& < oe & = Eagle
Slide 17: Wallboard Industry Update
Wallboard Industry Update Wallboard demand expected to be approximately 25 billion square feet (BSF) in calendar 2008 (down 31% from the 2005 peak) We expect demand to decline another 10% - 12% in calendar 2009 Wallboard production capacity increases are essentially complete All new plants were buil
Slide 18: Residential Construction
Residential Construction Near Term Outlook Currently, very low pace of new home construction Overhang of new and existing homes continues to put downward pressure on new housing starts Access to 30-year fixed-rate traditional mortgages is limited and interest rates are elevated Foreclosures still lo
Slide 19: Single Family Housing Starts 1972-2008E
U.S Single Family Housing Starts – 1972-2008E 1,000 1,200 1,400 1,600 1,800 2,000 2,200 Source: U.S Bureau of the Census; Eagle estimates
Slide 20: Single Family Building Permits 1972-2008E
U.S Single Family Building Permits – 1972-2008E 1,000 1,200 1,400 1,600 1,800 2,000 2,200 Source: U.S Bureau of the Census; Eagle estimates
Slide 21: Home Supply
Home Supply – 1972 - 2008 (through August) 0.00% 0.50% 1.00% 1.50% 2.00% New Homes Months Supply (L) New Homes for Sale as % of Total Housing Stock (R) Source: U.S Bureau of the Census
Slide 22: Home Ownership Rates
Home Ownership Rates – 1972 - 2008 (through March) 60.00% 65.00% 70.00% Home Ownership Rates Source: U.S. Bureau of the Census 11.0 million SF homes rented 75.6 million Owner occupied 110.7 million Total occupied homes
Slide 23: Annual Housing Affordability Index
Annual Housing Affordability Index – 1975-2008 (Sept) Source: National Association of Realtors The affordability index measures whether or not a typical family could qualify for a mortgage loan on a typical home. A value of 100 means that a family with the median income has exactly enough income to
Slide 24: Materials
Materials od we ood W
Slide 25: Competitive Landscape
Competitive Landscape 38 BSF 26 BSF 24 BSF Industry Capacity Number of Companies USG National Koch (GP) St. Gobain (BPB) American Lafarge Temple Pabco USG National GP LaFarge Continental Celotex James Hardie Briar American Republic Temple Pabco USG National GP Domtar Celotex James Hardie Briar Ameri
Slide 26: Wallboard Industry Capacity Expansions
Wallboard Industry Capacity Expansions INDUSTRY CAPACITY ADDITIONS CAPACITY CLOSURES (includes 1 BSF of unspecified closures) EAGLE PLANTS Capacity Summary (in BSF) 37.8 Current (5.3) Closures 5.2 Additions 37.9 1/1/07
Slide 27: Wallboard Utilization Outlook
Wallboard Utilization Outlook (numbers in billion square feet) 66% 37.8 25.1 0.4 10.0 7.4 7.3 CY 2008E 80% 37.9 30.2 0.4 10.8 7.8 11.2 CY 94% 37.2 35.0 0.4 10.6 7.6 16.4 CY 58% 37.8 22.0 0.3 9.6 6.2 5.9 CY 2009E Average annual industry utilization Ending annual capacity Total Mfd Housing Repair & Re
Slide 28: Eagle's Wallboard Operations
Eagle’s Wallboard Operations American Gypsum Operations Overview 18-year history Nearly 4.0 billion square feet of capacity 9% market share (5th in U.S.) Lowest cost producer Exceptional customer service Premium quality Wallboard Plants Reload/Distribution Yards Core Markets Served
Slide 29: American Gypsum's Wallboard Production and Cost
American Gypsum’s Wallboard Production and Cost 0.0 0.5 1.0 1.5 2.0 2.5 3.0 $0 $15 $30 $45 $60 $75 $90 Total BSF Produced Production Cost / MSF * * Before SG&A ** Includes effect from start-up of new plant in Georgetown, South Carolina
Slide 30: Materials
Materials
Slide 31: Gypsum Paperboard Industry Update
Gypsum Paperboard Industry Update Nearly 100% vertically integrated One notable exception – CertainTeed – • 40% of Republic Paperboard’s capacity supplies 65% of CertainTeed’s U.S. paper needs Most industry capacity high cost cylinder machines producing high basis weight gypsum liner OCC costs are t
Slide 32: Materials
Materials wo e e
Slide 33: Materials
Materials
Slide 34: Concrete and Aggregates Industry Update
Concrete and Aggregates Industry Update Over 3 billion tons per year of aggregates produced annually in the U.S. Top 6 aggregates companies have 38% market share; more than double from 18% in 1980 Large multi-nationals are consolidating Over 460 million cubic yards per year of ready-mix concrete pro
Slide 35: Eagle's Operations Overview
Eagle’s Operations Overview Strong competitive position in local markets Capacity • Aggregates – 5.5 million tons • Concrete – 850,000 cubic yards Complimentary to Eagle’s Cement business Organic growth opportunities Vast aggregates reserves of over 1 billion tons in Northern California Exceptional
Slide 36: Construction Demand Drivers
Construction Demand Drivers New Residential, 37% New Non- Residential, 26% Repair and Remodel, 36% Other, 1% • Public Infrastructure • New Residential Construction • Commercial Construction • Repair and Remodel Construction Public Infrastructure, 58% New Non- Residential, 18% New Residential, 17% Ot
Slide 37: Bridge Over Troubled Waters
1. Eagle at a Glance 2. Industry Outlook 3. Bridge Over Troubled Waters
Slide 38: E 8@ cagic
E 8@ cagic Vili Materials
Slide 39: Eagle's Bridge over Troubled Waters
Eagle’s Bridge over Troubled Waters Increased infrastructure spending Strong cash flow from low-cost operations during difficult times Premium quality products Exceptional customer service Strong long-term customer relationships Low overhead Smart, hard working, technologically proficient employees
Slide 40: Question & Answer
Eagle Materials Inc. Question & Answer
Slide 41: Contact Information
Contact Information Mark Dendle, Executive Vice President and CFO Telephone: 214-432-2011 Email: mdendle@eaglematerials.com Craig Kesler, Vice President - Investor Relations and Corporate Development Telephone: 214-432-2013 Email: ckesler@eaglematerials.com Steve Rowley, President and CEO Telephone:
Eagle Materials — Stephens Inc. Fall 2008 Investment Conference on 6ix