Boral — H1 2023 Earnings Presentation
35 slides from Boral's earnings presentation, Feb 8, 2023
Slide 1: Boral 1H FY23 Results
Boral 1H FY23 Results 8 February 2023 Six months ended 31 December 2022 Peppertree Quarry. NSW
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 4 Our Network 15 Performance Overview Presenters Cement 16 Quarries 17 Vik Bansal People & Culture 5 Recycling CEO and Managing Director 18 Highlights 6 Concrete 19 Jared Gashel Financials & Trends 7-8 Asphalt 20 Acting CFO Pricing, Volume & Costs 9 Infrastructure & Footprint Opt
Slide 4: Our Business
Our Business Largest integrated construction materials company in Australia Construction materials: Property: Leading integrated network 4,723 Maximising value creation from our surplus property assets 361 employees2 operating sites1 NT QLD ~30 WA 1 1 59 19 15 1 1 ~4,300 surplus property assets 11 8
Slide 5: Performance Overview - People & Culture
Performance Overview - People & Culture Zero Harm is our goal Total Recordable Injury Frequency Rate (TRIFR) Zero Harm is our goal. TRIFR for the six months ended 31 December 2022 was 7.4 11.8 11.5 9.8 9.8 The safety of our people is our highest priority. Safety performance remains a key perform
Slide 6: Performance Overview - 1H FY23 Highlights
Performance Overview - 1H FY23 Highlights Six months ended 31 December 2022 Financial Strategic Revenue1 Embedding the new operating model within and EBITDA1 throughout the business $1,681.1m $206.5m Standardisation and Simplification through PEMAF2 framework in progress up 12% up 7% Executive
Slide 7: Performance Overview - Financials
Performance Overview - Financials Results for the six months ended 31 December 2022 1H FY23 1H FY22 1H FY23 1H FY22 Continuing Ops. Continuing Ops. 1H FY23 1H FY22 A$m Change Underlying1 Underlying1 Statutory Statutory Statutory Statutory4 Net Revenue 1,681.1 1,500.4 12.0% 1,681.1 1,500.4 1,681.1 2,
Slide 8: Performance Overview - Trends
Performance Overview - Trends Improved earnings Net Revenue ($m) EBITDA1 ($m) EBIT1 ($m) and EBIT1 margin (%), EBIT1 margin ex-property (%) 9.0% CAGR 7% 1H FY21 – 1H FY23 7.9% 8.0% 5.7% 6.8% 7.0% 5.7% 4.4% 5.5% 6.0% 117 3.9% 5.2% 5.0% 2.0% 1,681 83 4.0% 1,479 1,445 1,500 1,456 229 2.0% 207 100 95 19
Slide 9: Performance Overview: Pricing, Volume & Costs
Performance Overview: Pricing, Volume & Costs Inflation remains a key challenge Energy Costs $m (unhedged) Average sales price1 higher across all regions and products with varying degrees of traction 122 119 18 21 Growth in volume2, up by more than 4% 11 81 12 Energy costs up $40 million compa
Slide 10: Capital Expenditure Update
Capital Expenditure Update Continuing Operations Capex of $104.2m, up 9% including $97.4m of capital spend and $6.8m of lease additions - aim is to keep cash capex spend below or close to D&A for FY23 Includes: completion of the Geelong cement facility and progress on the Berrima chlorine bypass
Slide 11: Balance Sheet
Balance Sheet A$m 31 Dec 2022 30 Jun 2022 31 Dec 2021 Assets Cash 525.7 1,107.1 3,625.3 Reduction in cash and debt liabilities in 1H FY23 driven by the debt reduction measures taken in Receivables 540.3 537.0 447.8 1H FY23, which resulted in the repayment of Inventories 253.8 235.4 240.0 $629 mill
Slide 12: Capital Structure - Debt
Capital Structure - Debt Strong balance sheet $m 31 Dec 2022 30 Jun 2022 Leases 125.8 119.7 Debt maturity profile, 31 Dec-22 $m USPP Notes 573.0 563.2 144A/ Reg S 282.3 900.6 75 Gross Debt1 981.1 1,583.5 Cash and cash equivalents 525.7 1,107.1 332 282 Net Debt per balance sheet 455.4 476.4 206 1003
Slide 13: Cash Flow
Cash Flow Continuing Operations $m 1H FY23 1H FY22 Continuing Operations Underlying EBIT1 95.3 82.9 Operating cash flow from continuing operations of $117.4 million, an increase of $31.7 million primarily driven by improved Add: depreciation and amortisation 111.2 109.7 EBIT performance and lower
Slide 14: Initiative Update: PEMAF
Initiative Update: PEMAF Boral will benefit from focus and discipline across People, Environment, Markets, Assets & Financials People Environment 0% 50% 100% 0% 50% 100% Zero Harm journey continues Emission target 18% reduction by FY25 on track Organisational culture - a commitment to getting
Slide 15: Our Network
Our Network Valuable upstream and downstream operations with market leadership position Cement Quarries Bitumen Manufacture and import clinker, Supply about 30 million tonnes of materials JV supplies about 40% of Asphalt’s bitumen grind clinker into cement, and supply annually to our Concrete and As
Slide 16: Our Network - Cement
Our Network - Cement Cement Quarries Recycling Concrete Asphalt Boral’s upstream Cement operations manufacture clinker using its own limestone, import clinker to grind into cement and supply supplementary cementitious materials including fly ash and slag Cement is a critical element in Boral’s int
Slide 17: Our Network - Quarries
Our Network - Quarries Cement Quarries Recycling Concrete Asphalt Boral’s upstream Quarries include hard rock and sand operations which supply ~30 million tonnes of product annually to our downstream Concrete and Asphalt operations and customers Significant supply capacity across key market segmen
Slide 18: Our Network - Recycling
Our Network - Recycling Cement Quarries Recycling Concrete Asphalt Boral’s Recycling operations receive and recycle over 2.2 million tonnes of C&D and excavation materials for re-use in construction One of the largest C&D recyclers in Australia Broad range of inbound materials acceptance, includ
Slide 19: Our Network - Concrete
Our Network - Concrete Cement Quarries Recycling Concrete Asphalt Boral’s downstream concrete and placing operations deliver sophisticated solutions for customers through its extensive network. Customer proximity is key Proven deep technical capability, high strength and speciality mixes to custom
Slide 20: Our Network - Asphalt
Our Network - Asphalt Cement Quarries Recycling Concrete Asphalt Boral’s downstream asphalt services produce and supply around 2.3 million tonnes per annum, and supply spray seal and technical materials solutions Operational reach spanning 44 sites with 27 key production sites Significant supply
Slide 21: Commitment to optimising upstream infrastructure
Commitment to optimising upstream infrastructure Strategic priority to invest in our prized assets Cement Quarries Geelong cement facility Vic is now able to supply slag products to Vic, SA & Tas Acquired Dunmore hard rock reserves NSW Tarong fly ash facility Qld has the capability to supply central
Slide 22: Building close-to-customer downstream footprint
Building close-to-customer downstream footprint Valuable upstream and downstream operations Cement Quarries Bitumen Recycling Downstream Property Concrete and Placing Asphalt Acquired Badgerys Creek land NSW Deer Park RAP upgrade Vic West Gosford plant upgrade NSW Moolap hot bin upgrade Vic Upgraded
Slide 23: Commitment to Environment & Sustainability
Commitment to Environment & Sustainability Decarbonisation progressing with solar PPA contracted and lower carbon concrete uptake increasing Boral’s FY25 & FY30 Decarbonisation progress Lower carbon concrete targets from a FY19 base year ENVISIA® Alternative fuels Renewable energy Boral’s superior C
Slide 24: Commitment to Environment & Sustainability
Commitment to Environment & Sustainability Concrete absorbs CO2 throughout its lifecycle a process known as recarbonation As confirmed by the Sixth Assessment Report of United Nation’s With a conservative assumption of 20% recarbonation potential, Boral cement Intergovernmental Panel on Climate Chan
Slide 25: Fixed Assets: Maximise value through the lifecycle
Fixed Assets: Maximise value through the lifecycle Applying a fixed asset lifecycle approach to property With our ongoing commitment Secure & Operate & to investing in our strategic network and operational Approve Optimise footprint, the surplus property utilisation of operating leading integrated n
Slide 26: Repurpose: maximise surplus property value
Repurpose: maximise surplus property value Current portfolio of ∼30 surplus properties – totalling ∼3,800ha – valued at >$1.0b1 Current surplus property assets $m Uncontracted > $600m >25 Boral's surplus properties include only properties where there is no longer an operational need >550 As prop
Slide 27: Major surplus properties
Major surplus properties Contracted 20 year development agreement with Mirvac Site rezoned for 338 ha of land signed in 2018 Development underway and sales Boral retains ownership of land which will occurring support ~3,000 dwellings on Boral’s land, and >4,000 dwellings in total ~$10 mill
Slide 28: Major surplus properties
Major surplus properties Uncontracted Waurn Ponds Western Sydney Lakes Bombo 12 km south west of Geelong 52km west of Sydney’s CBD 2 km north of Kiama NSW South Coast Cement operations ceased in Mar-22 40% owned, in JV with Holcim and 46 ha former hard rock quarry with strong Rehabilitation
Slide 29: Outlook
Outlook 29
Slide 30: FY23 Priorities and Outlook
FY23 Priorities and Outlook Standardisation and simplification initiatives underway FY23 Priorities: • Safety and Zero Harm initiatives with ongoing improved organisational health and culture • Embedding the new operating model within and throughout the business • Continued roll-out of standardisati
Slide 31: Questions
Questions 31
Slide 32: Appendices
Appendices 32
Slide 33: Statutory Financial Reconciliation
Statutory Financial Reconciliation 1H FY23 1H FY22 Before After Before After Significant Significant significant Significant significant significant items items A$m items items items items Sales revenue Continuing operations 1,681.1 - 1,681.1 1,500.4 - 1,500.4 Discontinued operations - - - 883.3 - 8
Slide 34: Significant Items
Significant Items Six months ended 31 December 2022 A$m 1H FY23 Divestment related matters 18.9 Divestment related matters primarily relates to additional Restructure and onerous contracts 6.8 proceeds from completion settlements and earn-outs US senior notes tender offer 11.4 Restructure and on
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