Boral — Shareholder Meeting (2004)
27 slides from Boral's shareholder meeting presentation, 2004
Slide 1: Annual General Meeting 2004 – Chairman's Address
Boral Limited Annual General Meeting 2004 1 Chairman’s Address Ken Moss 2 1
Slide 2: Strong financial performance
Strong financial performance Sales 8% To $4.1bn Net profit 31% To $370m Return on equity From 13.2% To 15.7% Return on funds employed From 16.4% To 18.2% Operating cash flow 11% To $543m Gearing (debt / equity) From 36% To 40% 3 Relative share price performance index Indexed 350 Boral 300 250 200 15
Slide 3: Increased dividends and strong growth in EPS
Increased dividends - FY2004 vs FY2003 Final dividend 33% To 16 cents Interim dividend 27% To 14 cents Total dividend 30% To 30 cents Franking level From 88% To 100% Gross-up dividend 35% To 42.9 cents Dividend payout ratio 47% To 47% 5 Strong growth in EPS and dividends Cents / share 64 Gross divid
Slide 4: Superior total shareholder return since demerger
Superior total shareholder return since demerger Annualised Total Shareholder Returns (TSR) of ASX100 companies 21 February 2000 to 30 September 2004 100% 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile 75% Companies listed post Boral’s demerger 50% 32% 25% 0% -25% Source: Bloomberg 7 Superior p
Slide 5: Sustainable development assessment and safety performance
Sustainable development assessment 2001 2003 Australian Construction Materials Cement 2005 target Clay & Concrete Products Plasterboard Timber USA Boral 0 0.5 1 1.5 2 2.5 3 3.5 4 Level 1 Level 2 Level 3 Level 4 Compliance/ Proactive Industry best World best practice Reactive practice 9 Safety perfor
Slide 6: The Board & Corporate Governance, New CEO contract
The Board & Corporate Governance 11 New CEO contract 12 6
Slide 7: Creating shareholder value and CEO remuneration structure
Creating shareholder value 30 Sep 2004 A$ Shares worth 4,000 $3,6431 3,500 3,000 2,500 2,000 21 Feb 2000 $1,000 invested in 1,500 Boral 1,000 500 0 'Feb-00 Oct-04 1. Assumes net dividends have been reinvested on ex-dividend date 13 CEO remuneration structure Structure Form Conditions Fixed • None Ma
Slide 8: Managing Director's Address – Boral's Strategic Intent
Managing Director’s Address Rod Pearse 15 Boral’s Strategic Intent “Boral intends to be a value(s) and market driven, focused building and construction materials supplier operating in Australia and increasingly offshore” 16 8
Slide 9: Delivering against promise; EBIT increased across all segments
Delivering against promise Objectives Performance 1. Exceed WACC through ROFE of 18.2% comfortably exceeds the cycle weighted average cost of capital (WACC) 2. Deliver better financial Returns from Construction Materials, returns than the Asia and USA compare well against competition in competitors.
Slide 10: Construction Materials and Building Products, Australia
Construction Materials, Australia 51% A$m EBIT contribution 29% 307 238 Construction Materials, Australia 19 Building Products, Australia 26% A$m EBIT contribution 33% 159 119 Building Products, Australia 20 10
Slide 11: USA and Asia
USA 18% A$m EBIT contribution 0.4% 111 112 USA 21 5% Asia A$m EBIT contribution 21% 29 24 Asia 22 11
Slide 12: Growth focused on building and construction materials
Growth focused on building and construction materials in Australia and increasingly offshore 8 countries 666 Total operating sites (excludes distribution) 85 ASIA Plasterboard1 Korea #2 Thailand #1 China (east) #1 Indonesia #1 Malaysia #1 77 USA The Philippines #1 Bricks #1 Clay Rooftiles #1 504 AUS
Slide 13: Outlook
Outlook Australia, 1Q2005: – residential approvals and activity softening, particularly NSW – yet to experience anticipated strengthening in non-dwelling activity – engineering value of work commenced continues to show strength – revenues flat year on year but below expectations – Pricing above la
Slide 14: Ordinary Business – Financial Statements, Election of Directors
Resolution 1 Financial Statements 27 Resolutions 2 to 4 Election of Directors 28 14
Slide 15: Ken Moss – Resolution 2 proxy votes
Ken Moss 29 Resolution 2 – proxy votes To re-elect Ken Moss For 251,862,026 Open 25,623,652 Against 8,210,529 % to be cast FOR the resolution* 96.7% * On basis open proxies in favour of Board are voted FOR 30 15
Slide 16: Mark Rayner – Resolution 3 proxy votes
Mark Rayner 31 Resolution 3 – proxy votes To re-elect Mark Rayner For 235,693,554 Open 25,640,671 Against 26,265,144 % to be cast FOR the resolution* 90.5% * On basis open proxies in favour of Board are voted FOR 32 16
Slide 17: Richard Longes – Resolution 4 proxy votes
Richard Longes 33 Resolution 4 – proxy votes To elect Richard Longes For 259,515,439 Open 25,710,085 Against 1,073,920 % to be cast FOR the resolution* 99.2% * On basis open proxies in favour of Board are voted FOR 34 17
Slide 18: Special Business
Special Business 35 Resolution 5 Grant of options and offer of rights to shares to Rod Pearse in respect of FY2004 36 18
Slide 19: Resolution 5 – options and rights to Rod Pearse
Resolution 5 “That: (a) the grant by the Company to Rod Pearse of options to subscribe for up to 350,000 fully paid ordinary shares in the Company under the Boral Senior Executive Option Plan and on the terms described in the explanatory note to this resolution and the allotment to Mr Pearse of ordi
Slide 20: Long term exercise hurdle and worked example
Long term exercise hurdle must first be satisfied If at any time during the 3 to 7 year % of options and shares which period from date of grant/offer Boral’s become exercisable Total Shareholder Return (“TSR”) Does not reach the 50th percentile of the TSR of the ASX Top 100 0% Reaches the 50th perce
Slide 21: Resolution 5 proxy votes; Resolution 6 termination payments
Resolution 5 – proxy votes Grant of options and offer of rights to shares to Rod Pearse in respect of FY2004 For 235,519,266 Open 21,338,728 Against 26,425,610 % to be cast FOR the resolution* 90.3% * On basis open proxies in favour of Board are voted FOR 41 Resolution 6 Approval of termination paym
Slide 22: Resolution 6 – termination events and payments
Resolution 6 “That the termination payments described in the explanatory note to this resolution which may become payable to Rod Pearse under the terms of an executive service contract entered into on 15 September 2004 between Mr Pearse and the Company be approved for the purposes of section 200E of
Slide 23: Termination payments and Resolution 6 proxy votes
Termination events and calculation of payments Payment Condition Termination by Base remuneration in the year of Company for poor na termination performance Termination for breach by the 200% x Total Annual Reward* in the Company or na year of termination fundamental change 1. 50% x Total Annual Rew
Slide 24: Resolution 7 – grants of options and rights
Resolution 7 Grants of options and offer of rights to shares to Rod Pearse under his new executive service contract 47 Resolution 7 “That, conditional upon resolution 6 set out in the notice of meeting of the Company dated 17 September 2004 being passed: (a) the grant by the Company to Rod Pearse of
Slide 25: Structure of long-term incentives over 5 year term
Structure of long-term incentives over 5 year term Total fair market value of options and/or share acquisition rights = Nov- 05: 125% x base remuneration in year 1 Will be achieved by: Nov-06: 125% x base 75% x aggregate base remuneration in year 2 3 long term remuneration over 5 incentive Nov-07: 1
Slide 26: Long-term incentives and Resolution 7 proxy votes
Structure of long-term incentives over 5 year term If contract terminated within 5 years1, a proportion of the options/ share rights will be cancelled in line with proportion of contract not worked Example – if contract terminated after 3 years1 Value of long-term incentives as a % of base remuner
Slide 27: Boral Limited – Annual General Meeting 2004
Boral Limited Annual General Meeting 2004 53 27