Boral — FY2009 Earnings Presentation
24 slides from Boral's earnings presentation, Aug 19, 2009
Slide 1: Boral Limited Results for the year to 30 June 2009
Boral Limited Results for the year to 30 June 2009 RESULTS FOR THE HALF YEAR TO 19 August 2009 31 DECEMBER 2008 Rod Pearse, CEO and ManagingCEO Director & MANAGING DIRECTOR, ROD PEARSE 11 FEBRUARY 2009 Agenda Financial and market overview Financial results Divisional performance Responding t
Slide 2: Financial & market overview
Financial & market overview FY2009 financial results Revenue 6% to $ 4.9b EBITDA1 22% to $ 539m EBIT1 38% to $ 276m Net interest1 14% to $ 127m Underlying profit after tax1 47% to $ 131m Profit after tax 42% to $ 142m Underlying EPS1 46% to 22.2 cents Final dividend (100% franked) 68% to 5.5 cents R
Slide 3: Significant decline in Australia and the US; Asian earnings up
Significant decline in Australia (EBITDA $84m) and in the US (EBITDA $72m); Asian earnings up EBITDA (A$m) FY2008 FY2009 Construction Building Materials Products USA Asia1 $14m (3%) $70m (41%) $72m (640%) $14m (87%) 489 475 168 98 11 -61 16 30 High levels of Decline in dwelling 42% reduction i
Slide 4: Australian dwelling starts and non-dwelling approvals declined and US dwelling starts deteriorated further
Australian dwelling starts and non-dwelling approvals declined and US dwelling starts deteriorated further Market changes – FY2009 vs FY2008 Australia USA – Boral’s US States1 25% -18% -21% -25% -43% Dwelling Non-dwelling RHSB Dwelling Non-dwelling Starts2 VWA3 VWD4 Starts5 VWC6 1. Alabama, Arizona,
Slide 5: Concrete demand declined in all States
Concrete demand declined in all States because of lower demand in dwellings and non-dwellings Readymix concrete production1 Changes in Australian readymix concrete (MAT, January 1999 to June 2009, ‘000) production1 – FY2009 vs FY2008 ‘000 cubic metre change Percentage change 9,000 8,000 Qld -1,100 7
Slide 6: Housing starts in Brick states fell by 40% in FY09
Housing starts in Brick states fell by 40% in FY09, following a decline of 29% in FY08 and 19% in FY07 % Change in Dwellings Starts FY2009 vs FY2008 MI IA 0 to -9% IL IN OH MD -10 to -14% KS MO WV DE -15 to -19% KY VA -20 to -24% OK TN NC AR -25 to -29% SC -30 to -34% MS GA TX LA AL -35 to -44% -45
Slide 7: Financial results
Dwelling (and non-dwelling) activity in Colorado and Oklahoma was well down % Change in Non-dwellings VWC FY2009 vs FY2008 1 to 20% 0 to -9% CO -10 to -14% VA -15 to -19% OK AZ -20 to -24% GA -25 to -29% TX -30 to -34% FL -35 to -44% -45 to -54% BMTI key market Construction Materials operations Sour
Slide 8: Underlying profit after tax down 47% for the full year
Underlying profit after tax down 47% for the full year Dec-08 Jun-09 A$m FY2009 FY2008 %Δ half half Revenue 2,594 2,281 4,875 5,199 (6) EBITDA1 285 254 539 688 (22) EBIT1 155 121 276 448 (38) Net interest1 (69) (58) (127) (112) 14 Profit before tax1 86 63 149 336 (56) Tax1 (11) (6) (17) (90) (81) Un
Slide 9: Sales and EBITDA impacted by significantly weaker housing markets
Sales and EBITDA impacted by significantly weaker housing markets in both the USA and Australia Sales revenue EBITDA1 A$m A$m 900 5,500 4,875 5,000 800 4,500 700 4,000 600 539 3,500 3,000 500 2,500 400 2,000 300 1,500 200 1,000 500 100 0 0 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY00 FY01
Slide 10: EBITDA decreased by $149m to $539m; balance sheet in good shape
EBITDA decreased by $149m to $539m A$m 688 539 Cost Plant Volume Escalation QEU One-offs Other EBITDA 1 EBITDA1 Price PEP2 Growth FY08 (Incl. FX) FY09 1. Excluding significant items 2. Performance Enhancement Program Results for the full year to June 2009 19 Boral’s balance sheet is in good shape As
Slide 11: Balance sheet well positioned and within debt covenants
Boral’s balance sheet is well positioned and we are comfortably within debt covenants Debt Maturity Profile at 30 June 2009 (Total Debt A$1.6b) 400 Bank debt (AUD) 350 Commercial paper (AUD) 300 Senior notes (USD) Debt A$m 250 200 150 100 50 0 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20
Slide 12: Divisional performance: Construction Materials
Divisional performance Construction Materials: EBITDA down 3% driven by weaker dwelling and non-dwelling volumes EBITDA A$m EBITDA / sales A$m FY09 FY08 %∆ 500 24% Sales 2,817 2,960 (5) 450 20% EBITDA 475 489 (3) 400 350 16% EBIT 330 351 (6) 300 Funds employed 2,240 2,310 (3) 250 12% 200 EBITDA/sale
Slide 13: Construction Materials revenues down 5%
Construction Materials revenues down 5% largely reflecting lower QEU revenues offsetting benefits from pricing gains and increased asphalt volumes Ext. sales FY09 FY08 %Δ volume Δ price Δ EBITDA Δ A$m Cement1 503 566 (11) Concrete & 1,438 1,512 (5) Quarries Asphalt 719 648 11 QEU 118 181 (34) Other2
Slide 14: Building Product revenues down 6%
Building Product revenues down 6%; stronger pricing outcomes across all products offset by lower volumes Ext. sales FY09 FY08 %Δ volume Δ price Δ EBITDA Δ A$m Bricks 277 307 (10) Roofing 119 120 - Masonry 114 122 (7) Plasterboard 371 376 (1) Timber 256 273 (6) Windows 140 159 (12) TOTAL 1,277 1,357
Slide 15: USA: revenues down due to continued deterioration in housing
USA: revenues down due to continued deterioration in housing, in addition to weakness in non-dwellings and major project construction Ext. sales FY09 FY08 %Δ volume Δ price Δ EBITDA Δ US$m US Bricks 202 346 (42) Clay Tiles 16 25 (34) Concrete Tiles1 Fly Ash 92 111 (17) Construction 96 125 (23) Mater
Slide 16: Responding to the market downturn
Responding to the market downturn Effective pricing and tight capital management are key priorities across the business Price Price Strong pricing outcomes across the group management management Further price increases required to cover input cost increases 1 April 09 Concrete, Quarry and Ceme
Slide 17: Capacity management and cost reduction initiatives
Responding to the market downturn with capacity management and cost reduction initiatives Managing Managing USA capacity capacity 14 out of 23 US brick kilns mothballed or shut FY09 capacity utilisation: bricks 30%, concrete roof tiles 16% Australia Grafton Parquetry closed (Jul 08) Walc
Slide 18: Capacity planning and PEP cost initiatives
…however, inventory reduction efforts have had a significant impact on profits Capacity planning US Bricks FY06 FY07 FY08 FY09 Aug us ta P lant 013 Aug us ta P avers 014 Aug us ta P lant 015 Aug us ta P lant 016 S alis bury P lant 081 S alis bury P lant 082 P henix C ity P lant 143 P henix C ity W/M
Slide 19: US step change programs and sustainability focus
US accelerated step change programs and PEP delivered incremental benefits of US$49m in FY2009 US$11m US$94m Bricks US$11m US$24m MonierLifetile (50% share) US$7m US$23m US Construction Materials US$9m (flyash, concrete & aggregates) US$49m US$6m Other (US Tile & Corporate) US$4m US$48m US$32m US$7m
Slide 20: Outlook: Australian affordability significantly improved
Outlook Australian affordability is significantly improved (mortgage repayments down from 31% to 20% of household income) Repayment of mortgage as percentage of household income (June 2009) 40% Mortgage stress 35% 30% Affordable1 Sydney (22%) 25% Perth (22%) 20% Brisbane (21%) Australia (20%) Melbou
Slide 21: Australian residential starts expected around bottom of cycle
Australian residential starts are expected to be around the bottom of the cycle in FY2009 Australia Dwelling Starts (‘000) 1 NSW Victoria 50 50 40 40 180 30 30 BIS 160 20 20 HIA 10 10 140 0 0 120 FY10f FY11f FY12f FY04 FY05 FY06 FY07 FY08 FY09 FY04 FY05 FY06 FY07 FY08 FY09 FY10f FY11f FY12f 100 80 Q
Slide 22: Australian markets forecast to decline in FY2010
Australian markets forecast to decline in FY2010 despite a lift in housing, with growth thereafter Australian building activities – value of work done1 % change $97/98 billion 65 6.5 (0.7) 60 4.5 2.7 RHS&B (3.0) 8.2 - 55 (0.4) (0.8) 50 (7.7) 45 Non-dwelling 40 3.5 (2.8) 2.8 (11.1) (4.2) 35 30 25 20
Slide 23: US house prices may be close to the bottom of the cycle
US house prices may be close to the bottom of the cycle; sales of existing houses have stopped falling S&P/Case-Shiller® Home Price Index – Houses Sold During Month May 2009 (Annualised count, millions) 1.6 8 Existing dwelling sales (RHS) 350 1.4 7 Roof Tile States 300 1.2 6 250 1.0 5 200 0.8 4 150
Slide 24: Asian construction activity and outlook for FY2010
Asian construction activity remains sensitive to the effect of the global financial crisis SOUTH KOREA THAILAND INDONESIA CHINA - EASTERN Value of construction orders Gross fixed capital Value of completion. Total building received. Trillion Won1 formation. Billion baht1 Trillion Rp1 commencements.