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ANNUAL GENERALMEETING14 JULY 2015
CSR LIMITED
CHAIRMAN’SADDRESS
CSR LIMITED PRESENTATION 20151
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Improving returns
1. YEM11 interim dividend restated for the 3:1 share consolidation completed on 3 March 2011 and excludes special dividend of 9.1 cents.2. ROFE is calculated as EBIT before significant items for the 12 months to 31 March divided by average funds employed which excludes
cash, tax balances and certain other non-trading assets and liabilities as at 31 March.3
Net profit before sig items (A$m)
Return on funds employed (%)
EPS before sig items (cents)
Dividends (cents)
20.4 20.6
8.2
16.0
29.1
YEM11 YEM12 YEM13 YEM14 YEM15
14.313.0
5.1
10.0
20.0
YEM11 YEM12 YEM13 YEM14 YEM15
13.5
10.4
5.0
9.9
18.4
YEM11 YEM12 YEM13 YEM14 YEM15
1
2
103.4 104.1
41.4
80.5
146.4
YEM11 YEM12 YEM13 YEM14 YEM15
CSR LIMITED PRESENTATION 2015
2MANAGING DIRECTOR’SREPORT
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Strong performance across the group
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REVENUE $2.0bn
16%
EBIT1
$235.4m
87%
NPAT1
$146.5m
82%
STATUTORY NET PROFIT $125.5m
43% 82%
FULL YEAR DIVIDEND 20c
100%
EARNINGS PER SHARE1 29.1c
1 EBIT, net profit and earnings per share are all before significant items. They are non-IFRS measures and are used internally by management to assess the performance of the business and have been extracted or derived from CSR’s financial statements for the year ended 31 March 2015. All comparisons are to the year ended 31 March 2014 unless otherwise stated.
6
92.6
120.9EBIT A$M
YEM14 YEM15
51.9
104.3EBIT A$m
YEM14 YEM15
17.3
30.2
EBIT A$m
YEM14 YEM15
EBIT1 improved across all divisions
Building Products
EBIT up 31%
Earnings growth across all businesses
Volume, pricing and product mix improving margins
Viridian
Aluminium Property
Earnings ahead of expectations following pricing initiatives and higher volumes
Operating efficiencies drove profit improvement
13% increase in realised aluminium price
Volume up 3.5% following improved smelter performance
Settlement of three major transactions
31%
101% 75%
(14.9)
3.1EBIT A$m
YEM14 YEM15
1. EBIT before significant items.
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0
1
2
3
4
5
6
YEM11 YEM12 YEM13 YEM14 YEM15
Per million work hours
43% improvement
0
5
10
15
20
25
30
YEM11 YEM12 YEM13 YEM14 YEM15
Per million work hours
0
200000
400000
600000
800000
1000000
1200000
YEM11 YEM12 YEM13 YEM14 YEM15
Kilo
litres
25% improvement
Improving safety and environmental performance
50% improvement
Environmental data reported for the period of 1 July to 30 June for the respective years to be consistent with the National Greenhouse and Energy Reporting Scheme. 7
0
200,000
400,000
600,000
800,000
YEM11 YEM12 YEM13 YEM14 YEM15
Per To
nnes of CO2‐e
27% improvement
Lost time injury frequency rate Total recordable injury frequency rate
Greenhouse gas emissionsWater use
Delivering on our strategy
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• Expanded leadership development programs
• Viridian returned to profitability
• Launched Boral CSR Bricks JV
Strengthen and invest
• Launched Gyprock Optimised Core
• Production facility for CSR Velocity pre-fabricated walling system underway
Smarter, faster, easier
• Expanding AFS Rediwall production capacity
• Hebel product development to increase use in walls, flooring and other structural elements
Adapting to changing lifestyles
• Expansion of Bradford offering (Martini polyester, acoustic, ventilation, PIR foams and construction fabric)
Comfort and energy efficiency
• CSR Connect online portal upgrade
• Accelerated investment in digital services for customers
Customers
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JV Sites –capacity by state (million SBE)
• Combined annual revenue of ~$270 m (as of December 2014)
– 12 manufacturing operations (including mothballed sites)
– Around 570 employees
• Integration on track
• Initial overhead savings of $7-$10m following integration
• Longer term, opportunities to improve operational efficiencies and release high value land assets without impacting product range
South Australia
SiteOperating capacity
Mothball.
Golden Grove 40 ‐‐‐
Queensland
SiteOperating capacity
Mothball.
DarraOxley
5690
‐‐‐‐‐‐
`
New South Wales
SiteOperating capacity
Mothball.
BringellyBadgery’s CreekCecil ParkSchofieldsHorsley ParkBathurst
65‐‐‐904715‐‐‐
‐‐‐63‐‐‐‐‐‐‐‐‐25
Victoria
SiteOperating capacity
Mothball.
ScoresbyThomastownAlbury
315529
‐‐‐‐‐‐‐‐‐
Launched Boral CSR Bricks JV
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• Stronger - more robust with better breaking strength for improved handling and installed performance
• Lighter- easier to lift for better sheet manoeuvrability and improved flex
• Improved face appearance - for a more uniform and professional finish
• Improved overall workability – crisper score and snap
• Designed with glass fibre reinforcement – to span 600mm centres
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Gyprock Optimised Core Product Innovation
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AFS walling systems capturing growing demand
• A leader in load bearing permanent formwork walling solutions
• Faster and less complex building solutions
– Increased speed of construction
– Lower labour costs and crane requirements
• Logicwall® fibre cement based permanent formwork system:
– Scalable production facility at Goulburn, NSW to meet growing demand in multi-residential market
– Over 1,500 projects completed to date
– CSR Cemintel current supplier of fibre cement products
• Rediwall® polymer-based (PVC) permanent formwork system
– Concrete walling system that is water resistant
– Used in basement and retaining walls in multi-residential and commercial applications
OUTLOOKCSR LIMITED PRESENTATION 2015
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20,000
40,000
60,000
80,000
100,000
120,000
140,000
pipeline Housing approvals Housing starts Housing completions
20,000
40,000
60,000
80,000
100,000
120,000
140,000
pipeline Other res approvals Other res starts Other res completions
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Multi-residential (MAT) Detached (MAT)
Pipeline remains strong in residential construction
Source: ABS - Pipeline includes dwellings approved and under construction, but not yet completed (ABS cat 8752)
Detached starts running ahead of completions
Multi-res pipeline continues to grow as NSW and QLD add to significant backlog in VIC
1500
1700
1900
2100
2300
2500
2700
2900
3100
1500
1700
1900
2100
2300
2500
2700
2900
3100
A$ per tonee
(green line)
US$ per tonne (shaded
lines)
LME aluminium price Ingot premium A$ all in price
Aluminium market – decline in ingot premiums
14
GAF aluminium hedge book (as of 30 June 2015)
Aluminium (all in) price under pressure
Source: Bloomberg
YEM16
Average hedged aluminium price A$ per tonne (excludes premiums)
A$2,311
% of net aluminium exposure hedged 59%
YEM17
Average hedged aluminium price A$ per tonne (excludes premiums)
A$2,499
% of net aluminium exposure hedged 21%
A$ All‐in price1‐Jul‐14 A$2,413 p/t
1‐Jul‐15 A$2,364 p/t
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Outlook for year ending 31 March 2016 (YEM16)
Building approvals for both detached and multi‐residential housing remain strong
Expected to lead to increased demand for CSR products
From 1 May 2015, results will include the consolidated earnings from Bricks JV
Building Products
Aluminium
Earnings are always subject to timing of transactions
Boral CSR Bricks JV provides additional development opportunities of selected high value land assets over the next 5‐10 years.
Property
59% of net sales for YEM16 currently hedged at an average price of A$2,311 per tonne (before premiums).
Q2 YEM16 Platts Main Japanese Port premiums down to ~US$100 per tonne
Viridian Targeting new opportunities for revenue growth – particularly in residential performance and commercial and architectural design markets
Modest levels of capital and customer service initiatives should be more than offset by improved market activity and growth in higher margin products.
Progressing strategy to invest in growth opportunities that accelerate the construction process while improving the comfort and performance of homes and buildings
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