Boral — FY2001 Earnings Presentation
18 slides from Boral's earnings presentation, Aug 22, 2001
Slide 1: Boral achieves a full year profit of $153m in difficult trading conditions
Boral achieves a full year profit of $153m in difficult trading conditions Boral’s 2000/01 Full Year Results Rod Pearse 22 August 2001 Presentation outline • Features of the year • Financial results • Segment overview ! Building Products ! Construction Materials ! USA • Perform & Grow Strategy • Out
Slide 2: Major downturn – activity down by 22%
Major downturn – activity down by 22% QUARTERLY VALUE OF WORK DONE – AUSTRALIA (trend) 12,000 10,000 $98/99 ($000) 8,000 6,000 Dwellings 4,000 Non-Dwellings 2,000 Roads, Hwys, Subdivisions 0 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 n- n- n- n- n- n- n- n- n- n- n- n- n- n- n- Ju Ju Ju Ju Ju Ju J
Slide 3: Features of the year
Features of the year • Net PAT down 9.1% to $153.4m • $26.4m profit from disposal of Timber businesses • PAT (before profit on disposal of businesses) of $127.0m • Sales revenue down 18.2% to $3,280m due to sharp downturn in Australia • EBITDA to sales margin down marginally to 13.8% • Maiden EBIT o
Slide 4: Strong cyclical downturn impacted on revenues during the period
Strong cyclical downturn impacted on revenues during the period External Revenue ($ million) 2,500 H1 H2 2,000 1,500 1,000 500 - 94/95 95/96 96/97 97/98 98/99 99/00 00/01 Results for reported building and construction materials businesses each year Financial results Margins are holding better this c
Slide 5: Improved operational performance offset significant volume and cost impacts
Improved operational performance offset significant volume and cost (fuel & energy) impacts $361 m $262 m FY00 Jun-00 Volume Price Shutdown Volume Price Shutdown costs Fuel & Fuel Energy & Other Costs Other Operation Operat’l Savings Restructured Portfolio Business X-rate FX & Jun-01 FY01 EBIT Costs
Slide 6: Sound balance sheet
Focused inventory management Finished goods for Australian businesses 200 Finished Goods $’000 150 100 50 0 96 97 98 99 00 01 6 7 8 9 0 -9 -9 -9 -9 -0 n- n- n- n- n- n- ec ec ec ec ec Ju Ju Ju Ju Ju Ju D D D D D Results for ongoing building and construction materials businesses - excludes discontinu
Slide 7: USA EBIT up 2%, while Australian EBIT down 40%
USA EBIT up 2%, while Australian EBIT down 40% reflects a 22% decline in activity Sales, A$ million FY01 FY00 % change Australia 2478 3103 (20%) USA 756 662 14% Other overseas 41 103 (60%) Other 5 144 Total 3,280 4,012 (18%) EBIT, A$ million Australia 180 299 (40%) USA 99 98 2% Other overseas 2 (14)
Slide 8: Building Products’ revenue and EBIT down due to a 27% decline in housing activity
Building Products’ revenue and EBIT down due to a 27% decline in housing activity (VWD) Share of 2001 Results: Revenue Sales down 33% to $963m Australian Bricks EBIT down 44% to $66m Plasterboard EBITDA down 37% to $111m EBITDA margin from 12.3% to 11.6% Masonry Funds employed up 8% to $983m Timber
Slide 9: Asian Plasterboard JV off to an encouraging start
Asian Plasterboard JV off to an encouraging start after first year of operation • $15.4m turnaround for Boral • JV delivered net profit of $2.8m for Boral • Improved results in South Korea and Indonesia • Stronger exports to the Philippines and Middle East • Capacity rationalisation and overhead cos
Slide 10: Construction Materials close to bottom of cycle
Construction Materials close to bottom of cycle • 17% decline in non-dwellings and roads, h’ways & subdivisions • Prices down in pre-mix concrete and scaffolding; steady in asphalt and quarries; recovering in cement • PEP and “step change” cost savings of $70m • $10m lime kiln upgrade, increasing ca
Slide 11: USA revenue steady but EBIT down due to energy costs and reduced volumes
USA revenue steady but EBIT down due to energy costs and reduced volumes Share of 2001 Results: Revenue Sales down 3% to US$402m (A$756m) Clay rooftiles Construction EBIT down 13% to US$53m (A$99m) materials EBITDA down 7% to US$76m (A$144m) EBITDA margin from 19.9% to 19.0% Funds employed up 8% to
Slide 12: Boral’s Strategic Intent
Boral’s Strategic Intent Boral intends to be a value-driven, focused building and construction materials supplier operating in Australia and increasingly offshore Financial Objectives 1. Exceed the weighted average cost of capital (WACC) on a sustainable basis through the building cycle 2. Beat the
Slide 13: Perform and grow around its leading reserve and market positions
Boral’s strategy is to perform and grow around its leading reserve and market positions ASIA Plasterboard* USA Indonesia #1 Bricks #1 Malaysia #1 Roof tiles #1 China (east) #1 Fly ash #2 Korea #1 Thailand #1 The Philippines #1 Indonesia concrete #1 AUSTRALIA Cement #1 Concrete #1 Quarries #1 Asphalt
Slide 14: Perform and grow around leading positions - Concrite and Alsafe
Perform and grow around leading reserve and market positions - CONCRITE Kulnura Peats Ridge SYDNEY Brookvale Windsor Thornleigh Concrete Seven Hills Emu Artarmon Plains Blacktown Boral St Marys Rosehill Concrite Granville Auburn Enfield Greystanes St Peters Botany Liverpool Menai Quarries Hurstville
Slide 15: Perform and grow around leading positions - USA and Asia
Perform and grow around leading reserve and market positions - USA USA BMTI (flyash) MonierLifetile Bricks #1 Clay Rooftiles Boral Bricks WA ME Roof tiles #1 MT ND VT NH Fly ash #2 OR MN ID WI NY MA SD MI WY RI IA PA CT NE OH NJ NV IL DE UT IN CO WV MD VA CA KS MO KY CLAY TILE NC upgrade OK TN AZ AR
Slide 16: Outlook – Australian housing market expected to improve
Outlook –Australian housing market expected to improve: construction materials and US to be steady • Australian markets at bottom • Signs of housing market recovery • Upturn in Australian Building Products in H2 of FY2002 • Australian Construction Materials markets - flat through FY2002 • US housing
Slide 17: Strong markets in USA; FY2002 outlook
Strong markets in USA VALUE OF WORK DONE IN USA "BRICK STATES*“ (seasonally adjusted) Forecast 100 1992 US$ million (real) 50 0 02 ) 03 ) 04 ) 05 ) ) 89 90 91 92 93 94 95 96 97 98 99 00 F Y (E FY (F FY (F FY (F (F FY FY FY FY FY FY FY FY FY FY FY FY 01 FY * Brick States: Alabama, Arkansas, Carolinas
Slide 18: Boral achieves a full year profit of $153m in difficult trading conditions
Boral achieves a full year profit of $153m in difficult trading conditions Boral’s 2000/01 Full Year Results Rod Pearse 22 August 2001