4 May 2012 The Manager, Listings Australian Securities Exchange ASX Market Announcements Level 14, Exchange Centre 20 Bridge Street Sydney NSW 2000 Dear Sir Boral Plasterboard Presentation We attach a presentation which is being given today at Boral’s Plasterboard site at Pinkenba, Queensland during a briefing for analysts and investors. Yours faithfully Margaret Taylor Company Secretary
Boral Limited ABN 13 008 421 761
Boral Limited Level 39, AMP Centre 50 Bridge Street Sydney NSW 2000 GPO Box 910 Sydney NSW 2001
T: +61 (02) 9220 6300 F: +61 (02) 9232 5195
www.boral.com.au
For
per
sona
l use
onl
y
BORAL PLASTERBOARD AUSTRALIA Pinkenba Analyst and Investor Visit, May 2012
Mark Selway, Chief Executive, 4 May 2012
For
per
sona
l use
onl
y
Boral Plasterboard Australia
AGENDA – FRIDAY 4 MAY 2012
2
Welcome Mark Selway
Plasterboard Australia Overview Ross Batstone
Safety Briefing, Plant and LEAN overview Andrew Pittle
Tour of production facilities
Lunch and discussion
For
per
sona
l use
onl
y
BORAL PLASTERBOARD AUSTRALIAPinkenba Analyst and Investor Visit, May 2012
Ross Batstone, Divisional Managing Director, Boral Building Products, 4 May 2012
For
per
sona
l use
onl
y
Boral Building Products Australia
BORAL BUILDING PRODUCTS AUSTRALIA BUSINESS IS HIGHLY LEVERAGED TO NEW HOUSING CONSTRUCTION
(A$m) 1H FY10 2H FY10 1H FY11 2H FY11 1H FY12
Revenue 608 598 624 526 530
EBITDA 67 74 73 49 49
EBIT 37 46 46 22 22
Boral Building Products relies primarily on new housing construction in Australia, including alterations and additions
Declines in residential construction and reduced government stimulus work has impacted volumes particularly since 2H FY2011
A streamlined organisational structure has been implemented to maximise the potential of all businesses, particularly Clay & Concrete Products
The right-sizing of installed brick capacity, improvements in operating efficiency and reduction in overhead costs will provide cost benefits
Further residential activity declines impacting Building Products performance in 2H FY2012
Boral Building Products – Australian businesses
Revenue (A$m) 1H FY12 1H FY11 Var %
Plasterboard 192 210 (8%)
Clay & Concrete 229 271 (16%)
Timber 109 143 (24%)
4
For
per
sona
l use
onl
y
11
19
29
-
10
20
30
40
50
EB
IT (
$m
)
EBIT - current EBIT - reshaped EBIT - reshaped with o/head savings
Results for the half year ended 31 December 2011
BORAL BUILDING PRODUCTS Clay & Concrete Restructuring as announced to the market in February 2012
We will exit the QLD Roofing business and close the Carole Park plant
East Coast Masonry has been loss making for the past 5 years
We will market test the sale of the East Coast Masonry business
EBIT losses from QLD Masonry and Roofing were $8m in FY11 and a further $10m in overhead savings will result from the restructuring
The Cairns and Mackay operations were successfully divested in early 2012
Reorganisation Footprint
Carole Park
Cairns
Mackay
Deer Park
Labrador
Prospect
Wacol
Exited Operations
FY11 Revenue $106m
FY11 EBIT loss ($8m)
RoofingMasonry
6 East Coast Masonry sites : 266 employees
QLD Roofing : 32 employees
499
393
-
100
200
300
400
500
600
Rev
enue
($m
)
Revenue - current Revenue - reshaped
FY07 FY08 FY09 FY10 FY11
Revenue ComparisonsClay & Concrete Products
5
FY07 FY08 FY09 FY10 FY11
Profit ComparisonsClay & Concrete Products
For
per
sona
l use
onl
y
Boral Building Products Australia
THE AUSTRALIAN BUILDING PRODUCTS PORTFOLIO IS UNDERGOING SIGNIFICANT CHANGE
6
In June 2011, we closed our Plywood business based at Ipswich (QLD) and our Masonry plant located at Somersby (NSW)
We have reduced operating brick capacity from 620 to 390 million SBE (37%) over the last 12 months through permanent plant closure or temporary mothballing:
- 60 million SBE permanently closed in QLD at Darra (completed June 2011), 65 million SBE mothballed in NSW at Badgerys Creek (completed April 2012) and 105 million SBE mothballed in WA at Middle Swan (completed April 2012)
- Sales volumes are now greater than operating capacity, to help inventory reduction with LEAN
We are closing our Roof Tile business in QLD (to be complete June 2012)
We have sold our Cairns/Mackay based Masonry businesses (completed April 2012)
We are market testing the sale of our remaining Masonry businesses in QLD, NSW and Victoria (targeting June 2012 for resolution)
We are streamlining Overhead structures in Clay & Concrete and in Building Products
When complete these measures are expected to reduce the number of Building Products’ employees (excludes Asia) by 800 (28%) from a total of 2,880 in January 2011
For
per
sona
l use
onl
y
7
Masonry plantSite closed
Site sold / held for sale
Wacol
Prospect
Deer Park
Mackay
Cairns
Labrador
Byron Bay
Somersby
PoorakaCanningtonJandakot
Midland
Capacity(‘000 tonnes)
PreviousPost sale / closures
NSW 252 0
VIC 120 0
QLD 315 0
SA 122 122
WA 170 170
Total 979 292
Boral Building Products Australia
BORAL MASONRY – CAPACITY TO BE REDUCED BY 70%
(A$m) FY07 FY08 FY09 FY10 FY11
Revenue 119 122 114 121 124
For
per
sona
l use
onl
y
8
Scoresby
Thomastown
Albury BringellyBadgerys Ck
Kempsey
Darra – 1 line closed
Midland
Brick manufacturing siteSite mothballed
Site closed
Boral Building Products Australia
BORAL BRICKS – CAPACITY REDUCED BY 37%
(A$m) FY07 FY08 FY09 FY10 FY11
Revenue 305 307 277 292 260
Capacity(million SBEs)
PreviousPost closures /
mothballing
NSW 127 62
VIC 118 118
QLD 105 45
WA 270 165
Total 620 390
For
per
sona
l use
onl
y
9
Carole Park
Springvale
Emu Plains
Pooraka Wyee
Concrete roof tile plant
Terracotta roof tile plant
Site closed Wyee Terracotta Plant
Boral Building Products Australia
BORAL ROOFING – CAPACITY REDUCED BY 21%
(A$m) FY07 FY08 FY09 FY10 FY11
Revenue 108 120 119 124 115
Capacity(million tiles)
PreviousPost
closure
NSW – Terracotta 17.2 17.2
NSW – Concrete 26.0 26.0
VIC – Concrete 21.0 21.0
QLD – Concrete 22.0 0
SA – Concrete 16.6 16.6
Total 102.8 80.8
For
per
sona
l use
onl
y
56,2
01
51,0
68
49,0
25
42,9
27 57,9
15
54,2
26
52,3
52
44,7
47
47,1
57
25,5
62
24,0
30
22,5
68
16,1
00
21,0
41
31,5
64
29,4
40
29,8
71
25,3
50
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
1H 2H 1H 2H 1H 2H 1H 2H 1H 2H
2008 2008 2009 2009 2010 2010 2011 2011 2012 2012
Housing Other Dwellings
Boral Plasterboard Australia
WE HAD FORECAST 136,000 COMMENCEMENTS FOR THE YEAR ENDING JUNE 2012 – BEFORE Q3 RAIN IMPACTED
10Source: ABS 8752.0 Table 33 to 1H 2012, Boral forecast for 2H 2012
26% below 2H FY10
15% below 2H FY11
4th lowest 2H in 30 years
Rain has impacted actual east coast starts and the timing of materials usage
WA and SA are weaker than we had expected
Equates to 63.5k 2H starts which is:
Australian Dwelling Commencements
For
per
sona
l use
onl
y
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
Jan-0
7
Mar-
07
May-0
7
Jul-07
Sep-0
7
Nov-0
7
Jan-0
8
Mar-
08
May-0
8
Jul-08
Sep-0
8
Nov-0
8
Jan-0
9
Mar-
09
May-0
9
Jul-09
Sep-0
9
Nov-0
9
Jan-1
0
Mar-
10
May-1
0
Jul-10
Sep-1
0
Nov-1
0
Jan-1
1
Mar-
11
May-1
1
Jul-11
Sep-1
1
Nov-1
1
Jan-1
2
Mar-
12
May-1
2
Domestic Framing Sales Volume¹
Structural Imports²
Total Australian Softwood Framing Sales Volumes
FY2008156,861 Starts
FY2010164,746 Starts
FY2011156,410 Starts
FY2012136,000 Starts
¹ Source: Domestic Framing Sales from Industry sales data compiled by the Australian Forests Products Association using untreated Structural softwood productsless than 120mm in width and Treated H2F Structural Sales
² Source: ABS import statistics for structural softwood imports from Europe and USA
Boral Plasterboard Australia
THE LOW LEVEL OF STRUCTURAL SOFTWOOD FRAMING SALES EVIDENCES WEAK NEW HOUSE CONSTRUCTION
11
JanFebMar
Australian Softwood Framing Timber Sales Volumes by Source (Rolling Three Months Average)
FY2009130,620 Starts
For
per
sona
l use
onl
y
Supply Issues
Supply of adequate affordable land (where people want to live)
Government charges and infrastructure levies that are biased against new developments
Tight funding, particularly for Developers
Skilled trades shortages and higher costs with new regulations and the carbon tax
12
Boral Plasterboard Australia
TODAY MOST DRIVERS OF NEW DWELLING VOLUMES LOOK TO BE UNFAVOURABLE
Short Term Demand
Long Term (Underlying) Demand
A range of factors, including Europe, rising energy costs, employment prospects outside of resources, interest rates and uncertainty with the carbon tax, seem to be weighing against confidence to spend
Purchasing power of “gen Y”
Broad Economic Impacts
Affordability and the confidence to buy a new dwelling or to renovate
Relative price point of new and existing dwellings and the perception prices may fall
Withdrawal of stimulus programs
Continued strong population growth
Dwelling stock deficiency levels (NSW the main area of undersupply, but also QLD and WA)
Impact of “fly in, fly out” workforces?
Positive for dwelling construction
Negative for dwelling construction
KEY:
For
per
sona
l use
onl
y
Boral Plasterboard Australia
NEW DWELLINGS CONSTRUCTION IS A KEY DRIVER OF AUSTRALIAN PLASTERBOARD DEMAND
13
FY2011 Australian PlasterboardDemand by Region and Market Segment2
¹ Source: ABS 8301.0² Source: Boral estimate
VIC / TAS
NSW / ACT
QLD / NT
WA
SA
Detached Houses
Other Dwellings
A&A
Non-Residential
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
By State By Segment
156
147
159
149
140142144146148150152154156158160
Jul-08
Sep-08Nov-0
8Jan-0
9Mar-09May-0
9Jul-09Sep-09Nov-0
9Jan
-10Mar-1
0May-1
0Jul
-10Sep-10Nov-1
0Jan-1
1Mar-11May-1
1Jul
-11Sep-1
1Nov-1
1Jan
-12Mar-1
2
132
114
123
139
149 148143
148 149
157153 153
110115120125130135140145150155160165170
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Australian Plasterboard ProductionYear ended June (millions of m²)¹
Australian Plasterboard ProductionMoving annual total (millions of m²)¹
For
per
sona
l use
onl
y
14
Boral Plasterboard Australia
PRICING HAS IMPROVED CONSISTENTLY SINCE 2007, DESPITE FLAT VOLUMES AND CAPACITY INCREASES
14
0
20
40
60
80
100
120
140
160
180
200
Sep-1
990
Sep-1
991
Sep-1
992
Sep-1
993
Sep-1
994
Sep-1
995
Sep-1
996
Sep-1
997
Sep-1
998
Sep-1
999
Sep-2
000
Sep-2
001
Sep-2
002
Sep-2
003
Sep-2
004
Sep-2
005
Sep-2
006
Sep-2
007
Sep-2
008
Sep-2
009
Sep-2
010
Sep-2
011
Plasterboard Producer Price Index1
¹ ABS 6427.0 Table 11² Production: ABS 8301.0; Capacity: Boral estimates
QLD NSW VIC WA Total
Boral 40 18 28 86
CSR 20 21 28 7 76
Knauf 18 17 35
BGC 13 13
Total 60 57 73 20 210
Current Industry Plasterboard Capacity (millions of m2)
176 176
196 196 203
152.8 149.4 157152.9148.3
0
50
100
150
200
250
2007 2008 2009 2010 2011
Capacity ABS Production
Plasterboard Production Versus Industry Capacity2
Year ended June (millions of m²)
For
per
sona
l use
onl
y
15
Boral Plasterboard Australia
UNIT PRODUCTION COSTS ARE ADVERSELY IMPACTED AS OUTPUT FALLS, BECAUSE OF THE IMPACT OF FIXED COSTS
15
Typical Unit Production Cost Breakdown Index10mm Recessed Edge Plasterboard Product
48 weeks p.a., 7 days per week, 24 hours per day
48 weeks p.a., 5 days per week, 24 hours per day
48 weeks p.a., 5 days per week, 16 hours per day
Materials 51 51 51
Energy 11 11 11
Total Variable Cost 62 62 62
People 18 17 18
Other Cash 12 18 25
Depreciation 8 10 15
Total Fixed Cost 38 45 58
Total Cost 100 107 120For
per
sona
l use
onl
y
1616
Boral Plasterboard Australia
BORAL IS THE LEADING INTEGRATED PLASTERBOARD SUPPLIER
Plasterboard production
Plasterboard distribution
GRA Gypsum mine (Boral/CSR JV)
Rondo Building Systems (Boral/CSR JV) production
Rondo Building Systems distribution
Boral supplies from Pinkenba & Port Melbourne plants by sea
Boral supplies from its east coast plants
Boral capacity is 40 million m2
at Pinkenba
Boral capacity is 28 million m2
at Port Melbourne
Boral capacity is 18 million m2
at Camellia
For
per
sona
l use
onl
y
1717
Boral Plasterboard Australia
PINKENBA PLANT, QUEENSLAND – RECEIVES GYPSUM DIRECTLY FROM SHIP – CLOSE TO MAJOR ROADS
For
per
sona
l use
onl
y
1818
Boral Plasterboard Australia
CAMELLIA PLANT, NSW – WELL LOCATED TO SERVICE NSW AND ACT MARKETS
For
per
sona
l use
onl
y
1919
Boral Plasterboard Australia
PORT MELBOURNE PLANT, VICTORIA – RECEIVES GYPSUM DIRECTLY FROM SHIP – CLOSE TO MAJOR ROADS
For
per
sona
l use
onl
y
20
Boral Plasterboard Australia
PORT MELBOURNE PLANT - WET COMMISSIONING IS WELL UNDERWAY – WILL RAMP TO RATED CAPACITY QUICKLY
20
Port Melbourne upgrade status
Wet commissioning underway
Experienced team from Pinkenba assisting with start-up
The new 40,000 tonnes gypsum store
The new gypsum receiving system hopper at Wharf 26
The new gypsum receiving/conveying system over Lorimer Street
For
per
sona
l use
onl
y
21
Boral Plasterboard Australia
NEW PLANTS IN QLD AND VICTORIA GIVE BORAL LOW PRODUCTION COSTS
21
Major Cost Advantages at New Plants
Gypsum
Direct gypsum delivery to wharf eliminates cartage costs
Self-unloading ships reduce discharge time
Energy New mills and dryers reduce energy
use
Sustainability
No gypsum trucks on-road
Enclosed gypsum storage
Low processing energy
Water harvesting (Pinkenba only)
21
For
per
sona
l use
onl
y
2222
Boral Plasterboard Australia
BORAL OPERATES THROUGHOUT THE PLASTERBOARD SUPPLY CHAIN AND SERVICES ALL END USER SEGMENTS
End Use
Installers
Distributors
Manufacturers
Housing Other Dwellings A & A Non -Residential
Builders Others
Manufacturer owned Independently ownedSpecialist plasterboard distributors
Hardware/Merchants
Plasterboard contractorsIndependently ownedBoral Interior Linings
Raw Materials
Boral CSR Knauf
Imports
ImportBGC
CSR
Boral Knauf BGC Unbranded CSR BGCKnaufPM
BoralDirect
50% of Gypsum Resources Australia (GRA) Others
CSR
BGC (WA only)
For
per
sona
l use
onl
y
23
Boral Plasterboard Australia
A KEY FOCUS IS THE DESIGN/SUPPLY OF SUSTAINABLE, APPLICATION SPECIFIC BUILDING SYSTEMS
23
Partiwall®
Separating walls for attached dwellings
IntRwall®
Separating walls for high rise apartment buildings
Multiframe™Complete Timber framed solution for low rise apartment buildings
OutRwall®
Fire rated external walls for residential and commercial buildings
Firewall®
Separating walls for industrial buildings
Fireclad®
Fire rated external walls for industrial buildings
For
per
sona
l use
onl
y
24
Boral Plasterboard Australia
WE ALSO PACKAGE OUR OFFERS FOR SPECIFIC MARKET SEGMENTS
24
For
per
sona
l use
onl
y
25
Boral Plasterboard Australia
THE OUTLOOK FOR PLASTERBOARD GROWTH IS POSITIVE
Low substitution risk
Low material cost
Short installation times
Ease of fixing (lower skilled trade)
Innovative solutions
High performance boards for speciality needs
- Fire, acoustic, impact
Systems solutions have created new categories
- Multi-residential partitions
Continued global demand growth
Demand in emerging markets increases with adoption of modern building methods
Continued innovation should increase penetration in existing markets
Attractive characteristics
Flexibility in design
Lightweight
Strong environmental credentials
Naturally fire resistant
For
per
sona
l use
onl
y
26
Boral Plasterboard Australia
PLASTERBOARD LINING SYSTEMS HAVE UNIQUE BENEFITS WHICH HAVE HELPED TO DRIVE ADOPTION
Increased AdoptionIncreased Adoption
Environment
Low embodied and lifecycle energy
Recyclable
Can be manufactured from recycled inputs
Proven safe to use
Flexibility and Performance
Ease of reconfiguration and repair
Naturally fire resistant
Various design solutions for specific requirements (fire, acoustic, wet area, impact etc.)
Lightweight
Reduced building mass –reduced foundation costs
Lower thermal mass
Education systems EchoSTOP ceiling panelsEnviro board
For
per
sona
l use
onl
y
27
Boral Plasterboard Australia
THE INTEGRATION OF BORAL GYPSUM ASIA (BGA) IS PROCEEDING TO PLAN – SYNERGIES ARE SUBSTANTIAL
27
Best Practices Working actively with our Asian operations to share manufacturing,
engineering, product range/quality and customer service best practices
Procurement Leveraging increased scale for purchasing raw materials
Working to increase lower cost Asian sourcing
Network Investigating potential to leverage regional manufacturing footprint and
to grow innovation and system penetration
Boral is now the leading Asia Pacific plasterboard wall and ceilings solution supplier (and a leading global player) with:
- Plasterboard plants in Australia, China, India, Indonesia, Malaysia, South Korea, Thailand, and Vietnam (533 million m2 of capacity with a further 120 million m2 either under construction or planned)
- Plasterboard ceiling tile plants in China, Indonesia, Malaysia, South Korea, Thailand and Vietnam
- Metal stud and track plants in China, India, Indonesia, Philippines, Thailand and Vietnam
- Jointing compounds and building plaster plants in Australia, China, Indonesia, Malaysia, South Korea and Thailand
For
per
sona
l use
onl
y
2828
END
For
per
sona
l use
onl
y
Top Related