Boral Ltd.

Boral — H1 2007 Earnings Presentation

25 slides from Boral's earnings presentation, Feb 7, 2007

  1. Slide 1: Results for the half year to December 2006

    Boral Results for the half year to December 2006 CEO & Managing Director, Rod Pearse 7 February 2007 Agenda ƒ Financial Highlights and Markets Review ƒ Financial Results ƒ Divisional Performance ƒ Perform & Grow Strategy ƒ Outlook Results for the half year to December 2006 2 1

  2. Slide 2: Financial Highlights & Markets Review

    Financial Highlights & Markets Review Clay Tiles Midland Brick Engineered Trinidad Kiln #11 Flooring 1H2007 Financial results Revenue 6% to $ 2.5b EBITDA 3% to $ 383m EBIT 9% to $ 267m Net Interest 19% to $ 55m Profit after tax 15% to $ 147m EPS 16% to 24.8 cents Final dividend unchanged at 17 cents

  3. Slide 3: Market conditions mixed with significant US decline

    EBITDA impacted by decline in US & Australian building products housing related earnings EBITDA changes (A$) – 1H2007 vs 1H2006 Construction Building USA Asia Materials Products $7m (8%) $14m (13%) $1m (5%) $10m (5%) ƒ Lift in non-dwellings ƒ Depressed dwelling ƒ Significant housing ƒ Continued & ma

  4. Slide 4: NSW dwelling & non-dwelling approvals remained particularly weak

    NSW dwelling & non-dwelling approvals remained particularly weak Percentage change in dwellings approvals and non-dwellings value of work approved – 1H2007 vs 1H2006 Detached Multidwellings Non-dwellings 46.7% 22.1% 17.8% 13.2% 12.7% 12.2% 3.9% 9.1% 7.0% 5.4% 1.6% -3.5% -2.0% -5.7% -9.5% -12.2% -13.

  5. Slide 5: Concrete volumes up except in NSW

    Concrete volumes up except in NSW, underpinned by non-dwellings and RHS&B Changes in Australian readymix concrete production – 1H2007 vs 1H2006 Percentage change ‘000 cubic metre change 690 333 277 13% 13% 135 12% 6% 7% 70 -4% -140 Australia NSW VIC QLD WA SA Source: ABS Results for the half year to

  6. Slide 6: Dwellings commenced in the December half in Boral USA States were down 21%

    Dwellings commenced in the December half in “Boral USA States” were down 21% 1H2007 vs 1H2006 % change of Building Activities Value Work Commenced - US$92 Dwellings Non-Dwellings Total Activity 1.5% -2.6% -3.1% -5.4% -10.5% -16.1% -16.1% -17.7% -19.0% -21.4% -23.5% -22.6% Brick states1 Tile states2

  7. Slide 7: Profit after tax down 15% to $147m in 1H2007

    Profit after tax down 15% to $147m in 1H2007 A$m 1H2007 1H2006 %∆ Revenue 2,492 2,343 6 EBITDA 383 393 -3 EBIT 267 293 -9 Net Interest 55 46 19 Profit before tax 212 247 -14 Tax 65 74 -13 Profit after tax 147 172 -15 Results for the half year to December 2006 13 Revenue at high levels; EBITDA impact

  8. Slide 8: Margin pressure reflecting decline in US housing activity and NSW downturn

    Margin pressure reflecting decline in US housing activity and continued downturn in NSW EBIT / Sales EBITDA / Sales 20% 20% 16.8% 16% 16% 15.4% 12.5% 12% 10.7% 12% 8% 8% 4% 4% 0% 0% FY00 FY01 FY02 FY03 FY04 FY05 FY06 1H06 1H07 FY00 FY01 FY02 FY03 FY04 FY05 FY06 1H06 1H07 FY05 result onward has been

  9. Slide 9: Boral's balance sheet remains in good shape

    Boral’s balance sheet remains in good shape As at Dec-06 Dec-05 A$m Net debt 1,637 1,564 Net debt / equity 58% 60% Net debt / (net debt + equity) 37% 38% Net Interest cover 4.9 x 6.4 x Funds employed (MAT) 4,482 4,155 Return on equity (MAT) 11.9% 13.6% Results for the half year to December 2006 17 E

  10. Slide 10: Divisional Performance

    Boral’s safety performance trend is favourable but there is more to do Lost time injury frequency rate (LTIFR)1 9.0 9.0 5.0 5.0 5.1 4.5 4.2 3.1 3.1 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 1H07 1. LTIFR per million hours worked Results for the half year to December 2006 19 Divisional Performance Cons

  11. Slide 11: Australian half year EBITDA earnings steady; offshore down

    Australian half year EBITDA earnings steady; offshore down A$m 1H06 1H07 5% 205 195 13% 8% 104 86 90 79 5% 11 12 Construction Materials, Building Products, USA Asia Australia Australia Results for the half year to December 2006 21 Construction Materials: EBITDA up 5% driven by stronger volumes Sales

  12. Slide 12: Construction Materials: stronger volumes but margins weaker

    Revenues up 8% underpinned by stronger volumes but margins weaker Ext. sales A$m 1H07 1H06 %∆ volume ∆ price ∆ Cement1 251 272 -7 Quarries 170 150 13 Concrete2 514 453 13 Asphalt 260 208 25 Transport 41 53 -23 Contracting 15 20 -22 (exited business during period) QEU 19 23 -18 TOTAL 1,271 1,179 8 1.

  13. Slide 13: Building Products: effective pricing but EBITDA down 8%

    Building Products: effective pricing but EBITDA down 8% due to volume weakness Sales revenue EBITDA/sales A$b A$m 1H07 1H06 % ∆ 1H sales 2H sales 1.4 18% EBITDA/sales Sales 646 621 4 16% 1.2 EBITDA 79 86 -8 14% 1.0 12% EBIT 53 64 -17 0.8 10% Funds employed 1,058 959 10 0.6 8% EBITDA/sales % 12.2 13.

  14. Slide 14: Building Products: steady volumes except in Masonry

    Building Products: steady volumes except in Masonry and effective pricing Ext. sales A$m 1H07 1H06 %∆ volume ∆ price ∆ Bricks 154 149 3 Roofing 56 54 4 Masonry 61 68 -10 Plasterboard 177 166 6 Timber 124 113 9 Windows 74 70 6 TOTAL 646 621 4 Results for the half year to December 2006 27 Building Pro

  15. Slide 15: USA: EBITDA down 13% due to housing downturn

    USA: EBITDA down 13% due to housing downturn US$m 1H07 1H06 %∆ Sales revenue1 EBITDA/sales A$b Sales1 361 340 6 1.0 1H sales 2H sales 25% EBITDA/sales EBITDA 70 78 -11 0.8 20% A$m 1H07 1H06 %∆ Sales1 469 455 3 0.6 15% EBITDA 90 104 -13 EBIT 73 88 -17 0.4 10% Funds employed 844 829 2 EBITDA/sales % 1

  16. Slide 16: USA: EBITDA down 13% due to housing downturn

    USA: EBITDA down 13% due to housing downturn ƒ Bricks: EBITDA up despite lower sales volumes which were offset by price increases and increased direct distribution sales, together with cost savings ƒ Concrete rooftiles: profits significantly down as price increases insufficient to offset significant

  17. Slide 17: Asia: underlying plasterboard result steady

    Asia: underlying plasterboard result steady and construction materials down ƒ EBITDA of $12m (up 5%) ƒ Plasterboard JV contribution of $7m – South Korean market remains volatile – prices weaker and volumes stronger – Thailand – economic/political challenges, lower exports, continued pressure on pric

  18. Slide 18: We continue to deliver against our objectives

    We continue to deliver against our objectives Objectives Performance 1. Exceed weighted average ROFE1 of 13.1% exceeds WACC. cost of capital (WACC) Focus remains on delivery of price, PEP through the cycle & growth outcomes 2. Deliver better financial Returns from Australia, Asia and USA returns tha

  19. Slide 19: Progressively delivering increased value from growth

    Progressively delivering increased value from growth Growth project Current Status Herons Creek (Timber) ƒ Fully commissioned and operating well but production has been contained to one shift to limit inventory growth (due to weak market conditions) and log supply issues. Berrima Cement Mill #7, ƒ P

  20. Slide 20: New LBGA JV investment - Chengdu plant

    New LBGA JV investment – US$11m on new Chengdu plant CHINA ƒ Well positioned in China’s central west region ƒ 10m m2 p.a. initially, site flexibility to increase capacity ƒ Rapidly developing market - plasterboard systems now more widely known and used ƒ Complements current positions in Chongqing Ch

  21. Slide 21: Australian residential starts forecast to bottom in FY2007

    Australian residential starts forecast to bottom in FY2007 Australian Residential Starts (‘000) 200 180 Actual 160 140 120 Forecast 100 80 60 40 20 0 FY07f FY08f FY09f FY10f FY11f FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 Source: ABS, BIS Shrapnel

  22. Slide 22: BIS Shrapnel forecasting Australian non-residential mini boom

    BIS Shrapnel is forecasting an Australian non-residential “mini boom” & softening in RHSB activities Australian Non-Residential VWD Australian RHSB (1) VWD $97/98 Billion A$97/98 Billion 18 10 16 9 14 8 Actual 12 7 6 Actual Forecast 10 Forecast 5 8 4 6 3 4 2 2 1 0 0 FY08f FY10f FY88 FY90 FY92 FY94 F

  23. Slide 23: Dodge forecasts sharp fall in US single family housing starts

    Dodge forecasts a sharp fall in US single family housing starts in CY2007 with recovery thereafter USA Boral States (1) SINGLE FAMILY HOUSING STARTS NON-RESIDENTIAL VWC Thousand US$92 Value, Billions 1,400 100 Forecast Forecast 1,200 90 80 1,000 Actual Actual 70 800 60 50 600 40 400 30 20 200 10 0 0

  24. Slide 24: Asian construction demand and Outlook for FY2007

    Asian construction demand currently steady but expected to grow in future years South Korea Thailand Indonesia China Value of construction orders Gross fixed capital Value of completion. Total Building received. Trillion Won formation. Billion Bhat Trillion Rp Commencements (‘000m2) 80 900 60 900,00

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