Boral — Shareholder Meeting (2003)
45 slides from Boral's shareholder meeting presentation, Nov 24, 2003
Slide 1: We are a value(s) & market driven company
We are a value(s) & market driven company. BORAL LIMITED ANNUAL GENERAL MEETING 2003
Slide 2: Chairman's Address
Chairman’s Address Dr Ken Moss
Slide 3: Strong financial performance
Strong financial performance • Underlying profit up 47% to $283m • Return on Equity up from 9.9% to 13.2% • Sales revenue up 10% to $3.8bn • Return on Funds Employed up 36% to 16.4% • Operating cash flow up 25% to $489m • Debt / Equity down from 45% to 36%
Slide 4: Improved shareholder returns
Improved shareholder returns • Share price up 141% since demerger* • ASX100 index up 7% over the same period $ Boral share price vs ASX 100 index 6.00 $5.50 5.00 Boral 4.00 3.00 2.00 ASX100 indexed** 1.00 Aug-00 Aug-01 Aug-02 Aug-03 Feb-00 Feb-01 Feb-02 Feb-03 * Closing share price 14 Oct 2003 = $5.
Slide 5: Increased dividends
Increased dividends • FY03 final dividend of 12 cents, up 20% from last year – Up 9% from interim dividend of 11 cents • 100% franking on final dividend, up from 75% • Dividends for FY03 totalled $133m • Dividend payout ratio for FY03 was 47%
Slide 6: Superior TSR
Superior TSR Annualised Total Shareholder Returns (TSR)* of ASX100 21 February 2000 to 30 September 2003 75th 50th 25th 315% 100% percentile percentile percentile 75% 50% 30% 25% 0% Boral -25% * Opening Price (21 Feb 00): $2.43, closing Price (30 Sep 03): $5.24; Calculation: End Price x (1+Div Reinv
Slide 7: Improving safety, quality and environmental outcomes
Improving safety, quality and environmental outcomes
Slide 8: Sustainable Development Assessment
Sustainable Development Assessment 2001 Scores 2003 Targets 1.5 1.8 Australian Construction Materials 1.6 2.0 Cement 1.6 2.0 Clay & Concrete Products 1.6 2.1 Plasterboard 1.5 1.9 Timber 1.8 USA 2.2 1.6 Boral 2.0 0 0.5 1 1.5 2 2.5 3 3.5 4 Level 1 Level 2 Level 3 Level 4 Compliance/ Proactive Industry
Slide 9: Corporate Governance
Corporate Governance • Committed to ensuring that policies and practices reflect good governance • Adopted ASX Corporate Governance guidelines - Board of Directors - Risk & Audit - Remuneration • High standards of ethical behaviour expected • Well established set of corporate Values
Slide 10: Strengthening our leading resource and market positions
Strengthening our leading resource and market positions
Slide 11: Managing Director's Comments
Managing Director’s Comments Mr Rod Pearse
Slide 12: Objectives
Objectives • Beat the weighted average cost of capital (WACC) on a sustainable basis through the building cycle • Deliver better financial returns than the competition in comparable markets • Deliver superior total shareholder returns (TSR) • Achieve superior returns in a sustainable way
Slide 13: Operating performance
Operating performance • Group EBIT up 39% to $478m • EBIT to sales margin up from 9.8% to 12.5% • Strong Australian housing market & cyclical recovery in Australian non-dwelling work; Resilience in USA; continued growth in Asia • Australian EBIT up 56% to $357m • US EBIT up 14% to US$66m (steady at
Slide 14: Australian activity is strong
Australian activity is strong Australia – Value of Work Done (Building & Construction) $97/98 (Billion). Seasonally Adjusted 55 50 45 Dwelling 40 (incl A&A) 35 30 Roads, 25 Highways, 20 Subdivisions 15 & Bridges 10 Non- 5 dwelling 0 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY04f FY05f FY06f FY96 FY97
Slide 15: US market remains robust
US market remains robust USA Brick States* – Value of Work Commenced US$92, (Billions). Seasonally Adjusted 180 160 140 Non- 120 dwelling 100 80 60 Dwelling 40 20 0 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03e FY04f FY05f FY06f FY07f Forecast * "Brick States" - Alabama
Slide 16: Improvement in earnings
Improvement in earnings Turnarounds, eg A$m • Windows • Softwoods • BMTI $478m PEP/ overheads, eg $360m • Production process improvements • Alternative fuels • Shared services Cost Asia/ Divestments / Price Escalation Growth Other EBIT Volume Operational FX EBIT FY2000 Improvement FY2003
Slide 17: Strong resource and market positions
Strong resource and market positions 12,620 employees 8 countries 583 Total operating sites (excludes distribution) 43ASIA Plasterboard* Indonesia #1 Korea #1 Thailand #1 Malaysia #1 China (east) #1 The Philippines #1 61 USA Indonesia Concrete #1 Bricks #1 479 AUSTRALIA Clay Rooftiles #1 Concrete Ro
Slide 18: Leading positions in Construction Materials
Leading positions in Construction Materials
Slide 19: Leading positions in Building Products
Leading positions in Building Products
Slide 20: Leading positions in the USA
Leading positions in the USA @ BMTIFly Ash} USA Brick (Procluction) @ USA Brick (Distribution) Y Monierlifatite Consrete RoofTiles YY USTile Clay Rooftiles
Slide 21: Leading positions in Asia
e e e e e BORAL Leading positions in Asia Loe
Slide 22: Boral's Strategic Intent
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”
Slide 23: Innovation through focused product development
Innovation through focused product development
Slide 24: Creating value and inspiration for customers
Creating value and inspiration for customers
Slide 25: Getting closer to our end markets
Getting closer to our end markets
Slide 26: Safety
Safety Lost Time Injury Frequency Rate* Hours Lost % 18 0.40 18 0.39 16 0.35 14 0.30 0.30 12 12 0.25 0.25 0.24 10 0.20 9 8 9 0.17 0.15 0.15 6 0.14 0.10 5 4 5 4 2 0.05 0 0.00 FY97 FY98 FY97 FY98 FY99 FY00 FY99 FY00 FY01 FY02 FY01 FY02 FY03 FY03 *Rate per 1 million hours worked
Slide 27: Improving safety, quality and environmental outcomes
Improving safety, quality and environmental outcomes
Slide 28: Outlook for FY2004
Outlook for FY2004 • Sep-03 quarter profit significantly ahead of Sep-02 quarter and significantly ahead of expectations • Order books for businesses supplying Australian dwellings market remain strong • Non-dwelling and infrastructure approvals in Australia are strengthening; improved pricing being
Slide 29: Resolution 1: Financial Reports
Resolution 1 Financial Reports
Slide 30: Resolution 2: Election of Directors
Resolution 2 Election of Directors
Slide 31: Resolution 2(a): Election of John Cloney
Resolution 2(a): Election of John Cloney
Slide 32: Resolution 2(b): Election of Elizabeth Alexander
Resolution 2(b): Election of Elizabeth Alexander
Slide 33: Resolution 2(c): Election of Tony D'Aloisio
Resolution 2(c): Election of Tony D’Aloisio
Slide 34: Resolution 3: Adoption of New Constitution
Resolution 3 Adoption of New Constitution & Renewal of Proportional Takeover Approval Article
Slide 35: Resolution 4: Non-Executive Directors' Remuneration
Resolution 4 Non-Executive Directors’ Remuneration
Slide 36: Non-executive Director's Remuneration
Non-executive Director’s Remuneration Current Board & 30% Gross-up for Total A$ Committee Fees Retiring Allowance Remuneration Ken Moss 150,000 45,000 195,000 (Chairman) Elizabeth Alexander (Audit 67,000 20,100 87,100 Committee Chair) Audit Committee 64,000 19,200 83,200 Member Compensation Committe
Slide 37: Resolution 5: Amendment of Non-Executive Directors' Share Plan
Resolution 5 Amendment of Non-Executive Directors’ Share Plan
Slide 38: Resolution 6: Employee Incentive Plans
Resolution 6 Employee Incentive Plans
Slide 39: Resolution 7: Grant of Options to Mr Rod Pearse
Resolution 7 Grant of Options to Mr Rod Pearse
Slide 40: Options exercise hurdle
Options exercise hurdle If at any time during the % of options which become exercise period Boral’s TSR exercisable Does not reach the 50th percentile of the TSR of the 0% ASX Top 100 Reaches the 50th percentile of the TSR of the ASX Top 100 50% Reaches the 75th percentile of the TSR of the ASX Top
Slide 41: TSR for options exercised
TSR for options exercised Annualised Total Shareholder Returns (TSR) of Reference Group From demerger to 30 June 2003 75th percentile 50th percentile 25th percentile 31% Boral • Rod Pearse exercised 750,000 options on 27 August 2003 which were granted on 1 March 2000 • 100% of these options were exe
Slide 42: Example of options
Example of options Value of Performance Increase in Share price TSR* MDs relative to market after 3 yrs achieved options ASX100 capitalisation pre-tax $5.50 4% pa Nil to 50th Nil Nil percentile $7.00 13% pa Nil to 50th Nil $869m percentile $7.50 15% pa 50th $ 0.7m $1,159m percentile (350k options ex
Slide 43: Resolution 8: Resolution proposed by Boral Green Shareholders
Resolution 8 Resolution proposed by “Boral Green Shareholders
Slide 44: Resolutions 9 to 14: Shareholder-proposed resolutions
Resolutions 9 to 14 Resolutions proposed by shareholders associated with the TWU and “Boral Ethical Shareholders”
Slide 45: We are a value(s) & market driven company
We are a value(s) & market driven company. BORAL LIMITED ANNUAL GENERAL MEETING 2003