Boral — FY2004 Earnings Presentation
21 slides from Boral's earnings presentation, Aug 17, 2004
Slide 1: Full Year Results 2004
Boral Full Year Results 2004 Managing Director, Rod Pearse 17 August 2004 Agenda Group Performance Divisional Performance Perform & Grow Strategy Outlook Full Year Results 2004 2 1
Slide 2: Group performance: Financial highlights
Group performance Full Year Results 2004 3 Financial highlights Sales 8% To $4.1bn EBIT 26% To $600m EBIT margin From 12.5% To 14.4% Net profit 31% To $370m EPS 30% To 64 cents Final dividend fully franked 33% To 16 cents Return on equity From 13.2% To 15.7% Full Year Results 2004 4 2
Slide 3: Performance highlights
Performance highlights Australian and USA volumes higher than expected Construction Materials – EBIT up 29% underpinned by volume growth and price increases Building Products – EBIT up 33% largely from strengthened prices and cost reductions USA – A$ EBIT maintained despite adverse currency
Slide 4: Net profit increased by 31% to $370m
Net profit increased by 31% to $370m Dec-03 Jun-04 FY2004 FY2003 Yoy A$m Half Half %∆ Sales revenue 2,081 2,069 4,150 3,831 8% EBITDA 392 402 794 672 18% EBIT 299 301 600 478 26% Net Interest 29 37 66 68 -3% Profit before tax 270 264 534 410 30% Tax 83 81 164 126 30% NPAT 186 184 370 283 31% Full Ye
Slide 5: EBIT variance analysis; Balance sheet remains strong
EBIT variance analysis A$m 600 478 343 Cost Price Escalation Turnarounds FX (incl. gas costs) EBIT EBIT Volume PEP1 Acquisition Other EBIT FY02 FY03 growth FY04 1. Performance Enhancement Program Full Year Results 2004 9 Balance sheet remains strong As at Jun-04 Jun-03 A$m Net debt 938 764 Net debt/
Slide 6: Returns on shareholders' funds strengthened substantially
Returns on shareholders’ funds strengthened substantially NPAT / Equity 15.7% 13.2% 9.5% 9.9% 8.7% 8.3% FY99 FY00 FY01 FY02 FY03 FY04 Full Year Results 2004 11 Earnings per share up by 30% in FY2004 Cents / share 64 Dividend Gross DPS EPS 49 43 34 30 32 26 27 24 21 18 18 30 23 18 18 18 19 FY99 FY00
Slide 7: Safety performance improved; Divisional performance
Safety performance improved LTIFR1 Hours Lost % 9 9 0.25 0.24 0.17 0.16 0.15 0.15 5 5 5.1 4.5 FY99 FY00 FY01 FY02 FY03 FY04 FY99 FY00 FY01 FY02 FY03 FY04 1. Lost Time Injury Frequency Rate per 1 million hours worked Full Year Results 2004 13 Divisional performance Full Year Results 2004 14 7
Slide 8: Divisional EBIT increased across all segments
Divisional EBIT increased across all segments A$m 29% FY2003 FY2004 307 238 33% 159 0.4% 119 111 112 21% 24 29 Construction Materials, Building Products, USA Asia Australia Australia Full Year Results 2004 15 Construction Materials: strong uplift in revenue and earnings FY04 FY03 %∆ EBIT & ROFE Sale
Slide 9: Construction Materials: revenue up 14%
Construction Materials: revenue up 14% External sales - A$m FY04 FY03 %∆ Cement1 439 386 14 Quarries 255 212 20 Concrete 811 710 14 Asphalt 367 346 6 Transport 107 111 -4 Contracting 34 41 -18 QEU 86 40 116 TOTAL 2,099 1,846 14 1. Cement division includes BCSC (external revenues), concrete placement
Slide 10: Building Products: continued improvement in performance
Building Products: continued improvement in performance FY04 FY03 %∆ EBIT Sales & ROFE EBIT/ Sales $m A$m 1,500 13.1% 14% Sales 1,217 1,156 5 12% 1,200 10.3% 9.7% EBITDA 202 165 23 10% 8.0% 900 8% EBIT 159 119 33 6% EBITDA/ Sales 16.6% 14.3% 600 4% EBIT/ Sales 13.1% 10.3% 300 2% Funds Empl. 796 804
Slide 11: Earnings growth underpinned by strengthened pricing and lower costs
Earnings growth underpinned by strengthened pricing and lower costs Bricks: significant earnings uplift underpinned by stronger pricing outcomes – improved manufacturing performance in Bricks East – Midland Brick sold out Roofing: strong profit uplift from better pricing outcomes and lower SG&A
Slide 12: USA: Revenue growth supported by higher volumes
USA: Revenue growth supported by higher volumes and Franklin Brick External sales yoy ∆ FY04 %∆ US$m prices / volume US Bricks 417 31 Clay tiles 28 20 Flyash 94 -11 TOTAL1 539 20 1. MonierLifetile JV is equity accounted – Boral’s share of revenue does not appear in consolidated accounts Full Year Re
Slide 13: Asia: profit contribution continues to improve
Asia: profit contribution continues to improve EBIT1 EBIT/ Sales1,2 A$m 29 30 15% 11.9% 24 20 9.4% 10.4% 10% 20 4.0% 5% 10 4 0% 0 -5% -10% -10 -15% -13.6% -14 -20 -20% -30 -25% -30 -25.9% -30% -40 FY99 FY00 FY01 FY02 FY03 FY04 FY99 FY00 FY01 FY02 FY03 FY04 1. Includes Plasterboard and Construction M
Slide 14: Perform & Grow Strategy
Perform & Grow Strategy Full Year Results 2004 27 Deliver against promise Objectives Performance 1. Exceed WACC through ROFE of 18.2% comfortably exceeds the cycle WACC 2. Deliver better financial Returns from Construction Materials, returns than the Asia and USA compare well against competition in
Slide 15: Perform: superior returns in a sustainable way
Perform: focus on achieving superior returns in a sustainable way Return on funds employed 25% 20.0% 20% 17.3% 17.3% 15% 1 12.2% Funding Construction charge 10% Building USA Asia materials Construction Building Products materials Products USA Asia 5% 0% Fund employed 1. The contribution from the Asi
Slide 16: Growth capital of $200m pa is sustainable
Growth capital of $200m pa is sustainable A$m ABC 700 Acquisitions 600 Growth Budget SIB capital & Stay-in-business capital ABL growth capital year 500 to date & already Depreciation 167 announced 400 245 300 255 200 191 183 52 100 167 196 100 104 119 0 FY00 FY01 FY02 FY03 FY04 FY05f Full Year Resul
Slide 17: US$45m acquisition of Thailand concrete and quarry business
US$45m acquisition of Thailand concrete and quarry business “Consistent with Boral’s strategy to grow increasingly offshore” Acquired Hanson’s ready-mixed concrete & quarry business in Thailand in July 2004 #3 player in ready-mixed concrete Thailand – Current production of 1.4mm3 p.a. Bangkok
Slide 18: Australian VWD expected to remain robust to FY06
Australian VWD expected to remain robust to FY06 Australia – Value of Work Done A$97/98 billion. Seasonally adjusted % change 55 Dwelling (incl A&A) +5.5 50 Roads, Highways, Subd & bridges +1.2 -8.8 45 Non-Dwelling 40 35 +0.1 -1.8 -15.8 30 25 20 +2.6 -10.9 +6.2 15 10 +0.8 +20.6 +2.9 5 0 FY05f FY06f
Slide 19: Asian construction demand expected to grow
Asian construction demand, except for South Korea, expected to grow South Korea Thailand Indonesia China - Shanghai Value of construction orders Gross fixed capital Value of completion. Value of construction received. Trillion Won formation. Billion bhat Trillion Rp work done by public sector. Billi
Slide 20: Benefits still to come; Outlook for FY2005
Benefits still to come from announced organic growth Expected Growth project Benefits benefits from: Galong (Lime, NSW) Additional 150,000 tpa quicklime capacity Dec-04 Q Reduce costs and emissions and add 300t Waurn Ponds Stage 2 capacity Mar-05 Q Engineered flooring Produce 1.0m m2 of en
Slide 21: Supplementary information
Supplementary information Full Year Results 2004 41 Drivers of Boral’s revenue Boral 10% 29% 6% Construction 2% 5% 36% Materials, 4% Australia 37% 15% 24% 2% 4% Building 11% Products, 18% 14% Australia Australian dwellings (including A&A) 83% Australian non-dwellings Australian engineering & constru