ACQUISITION OF LBGA ASIAN PLASTERBOARD JOINT VENTURE Build something - PowerPoint PPT Presentation

ACQUISITION OF LBGA ASIAN PLASTERBOARD JOINT VENTURE Build something great TM Exclusive negotiations to acquire Mark Selway , Chief Executive Lafarge share of Asia Plasterboard Joint Venture 17 August 2011 1

Investor Presentation: 17 August 2011 ACQUISITION OF LBGA Boral to expand core building materials business by acquiring Lafarge’s share of LBGA joint venture in Asia  LBGA is a joint venture between Boral and Lafarge, formed in 2000 and is the LBGA leading supplier of plasterboard and internal linings products across Asia (Lafarge Boral Gypsum Asia)  LBGA operates 20 plants in 8 countries, trades in a further 2 countries and exports to more than 30 countries  Agreement to acquire Lafarge’s 50% share in the joint venture Acquisition Lafarge Boral Gypsum Asia (“LBGA”) Overview  Consideration of €429 million (AUD $598 million (1) ) on an enterprise value basis, €380 million (AUD $530 million) on an equity value basis (2)  Finalisation of agreements subject to completion of arrangements related to Conditions / intellectual property and transitional services Timetable  Transaction expected to be complete by the end of calendar 2011 Notes: 1 Based on AUDEUR exchange rate of 0.72 2 After adjusting for net debt and minority interests 2

Investor Presentation: 17 August 2011 BORAL ASIA PLASTERBOARD History of Boral in Asia and Evolution of LBGA Revenue Revenue US$197m US$481m Current Calendar 1993 1995 1996 1997 2000 2001 2002 2003 2005 2006 2007 2008 2008 2010 revenue Year is over US$500m Global financial Asian financial crisis crisis Boral enters Construction starts Capacity Vietnam entry Capacity added Plasterboard in Asia on Shanghai plant added via investment at Khushkhera via PT Petrojaya and Indo expansion at Dangjin in HCMC (India); Chengdu Plasterboard Korea (China West) West China entered via CQ1 investment Entry into Malaysia Boral funds Capacity Capacity added at Capacity added at via acquisition of purchase of SGI added at CQ2 Dangjin (Korea) Saraburi (Thailand) Wembley Gypsum (Thailand), lifting (China West) and Baoshan Boral’s share in (Shanghai, China LBGA to 47% East) LBGA formed Boral increases Boral initial share share to 50% 27.3% 3

Investor Presentation: 17 August 2011 LBGA Product Profile and Manufacturing Footprint Plasterboard Ceiling Tiles 2006 (1) Plasterboard 2007 2008 2009 2010 2011f Board sales 196 219 235 230 265 296 (million m 2 ) Board plant capacity 289 289 337 337 413 448 (million m 2 ) Metal Studs Compounds Sales Plants (3) Operations Quarries Total Offices Korea 3 1 - 4 Thailand 5 1 1 7 China 4 2 - 6 Indonesia 3 1 - 4 CY2010 Revenue Plasters Malaysia/Singapore 1 2 - 3 Other (2) India 1 1 - 2 India 5% 6% Korea Malaysia/Singapore Other 2 3 1 - 4 28% 6% Total 20 9 1 30 Indonesia 10% Notes: 1 All figures are December year end Thailand China 2 Other includes Vietnam, Philippines, United Arab Emirates and other export countries 24% 21% 3 Plasterboard, metal components and compound plants 4

Investor Presentation: 17 August 2011 LBGA Locations and Competitive Landscape LBGA Plant Locations LBGA 2010 Estimated Market Share Gypsum Energy Capacity Country Name (M m 2 pa) Type Source Synthetic H.Oil/Steam Korea Yosu 35 Synthetic H.Oil/Gas Korea Ulsan 46 Korea Dangjin 1 Synthetic Gas 37 Synthetic Gas Korea Dangjin 2 35 Thailand Saraburi 1 Natural Gas 50 Natural Gas Thailand Saraburi 2 35 Natural Gas Thailand Songkhla 20 Synthetic Gas China Pudong (Shanghai) 30 Synthetic Gas China Chengdu 12 China Chongqing Synthetic Gas 13 Synthetic Gas 45% 55% 45% 55% 25% 50% China Baoshan (Shanghai) 35 China KYJ (Shandong) Natural Steam 35 Natural Gas Indonesia Cilegon 21 5% Natural Gas Indonesia Gresik 14 Korea Thailand China Indonesia Malaysia/ India Vietnam Natural Gas Malaysia Parit Buntar 10 Singapore Natural Gas India Khushkhera 8 Regional Vietnam Ho Chi Minh Natural Gas 12 positions with 448 >25% share in Total target segments 5 Source : LBGA Source: Management estimates

Investor Presentation: 17 August 2011 LBGA Financials Year end Year end 12 mths to Year end Revenue (USD $million) USD $million Dec 09 Dec 10 June 11 Dec 11f CAGR 10.4% Revenue 401 481 520 576 576 481 441 402 401 EBITDA 73 83 85 94 335 299 289 271 225 197 EBITDA Margin (%) 18.2% 17.3% 16.3% 16.3% EBIT 50 56 57 66 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011f Dec YE EBITDA (USD $million) Operating Cashflow 93 73 65 CAGR 7.3% Net Assets (excluding 383 422 431 1 CAGR 13.5% 94 94 minority interests) 83 83 73 73 70 70 65 65 61 61 56 56 52 50 52  AUD $598 million purchase price 2 represents 48 50 48 44 44 CY2012 EBITDA multiple of 11.1x  LBGA expected to achieve CY2012 EBITDA in the order of USD $108 million 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011f 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011f Dec YE 1 Boral’s share of LBGA net assets has a current book value of A$202 million Notes: 2 Enterprise value basis; based on AUDEUR exchange rate of 0.72, AUDUSD exchange rate of 1.00 6 Source: Management accounts and forecasts

Investor Presentation: 17 August 2011 LBGA Drivers for Organic Growth GDP % Growth by Region Plasterboard Demand/GDP per Capita 10 Canada UK 16 Australia France US South Korea Japan 14 Germany Spain 12 Russia Italy Plasterboard Demand per capita China Singapore 10 1 (m 2 per person – log scale) Thailand Mexico 8 Turkey Malaysia Vietnam 6 Indonesia Brazil 4 0.1 Philippines 2 0 India 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 -2 0.01 -4 Korea Thailand China Indonesia Malaysia India 5 10 50 GDP per capita (US2008$ thousand per person – log scale)  Strong economic growth forecast across most  Historically plasterboard use starts in important markets commercial then moves to housing  Increase public investment drives growth in  Lightweight, flexible and easy to install non-residential construction characteristics make plasterboard the interior lining product of choice  Increasing urbanisation will drive growth in  Asia is expected to become the world’s residential new build largest plasterboard market by 2014 Source: IMF Source: Freedonia, Boral estimates 7

Investor Presentation: 17 August 2011 WORLD CLASS CAPACITY Leading Products to High Growth Markets World Class Capacity Core Competitive Advantages Enhanced  Boral production system offers  Modern, well-equipped facilities in capabilities Asia Pacific plasterboard benefits seven high growth markets to improve  Sales and marketing excellence  Excellent management team with performance and commercial leverage capacity to grow provides competitive advantage  Comprehensive range of interior  Asia Pacific innovation platform lining products with reputation for extended to include LBGA quality Boral Building Products Asia Ambitions for Future Growth Market Leading Position  Potential to leverage low cost  Established brands respected for manufacturing in Asia Pacific quality and reliability region  Extensive logistics and  LBGA infrastructure provides distribution networks in 10 Expanded solid foundation for Asian growth countries in Asia geographic presence to drive  Higher proportion of Boral  Expert led marketing offers revenues revenue tied to higher growth access to 30 high growth markets countries 8

Investor Presentation: 17 August 2011 BORAL AND LBGA COMBINED A balanced portfolio with exposure to high growth markets and product areas Pro Forma Revenue by Product Line Pro Forma Revenue by Geography FY2011 FY2011 Asia Plasterboard 14% Other Building North 17% Products America 8% 8% Bricks, Tiles and 5% 8% Masonry 9% 9% 15% 16% Asia Pacific Before = 91% Before Acquisition Acquisition 67% 86% After After Acquisition Acquisition Construction Materials and Cement Australia 60% 78% 9

Investor Presentation: 17 August 2011 PRO FORMA FINANCIALS Attractive post transaction financials with headroom to grow Pro Forma FY2011 Financials  Pro forma revenue 11% higher than FY2011 FY2011 FY2011 % AUD $million Boral’s FY2011 results Boral 1 LBGA Pro Forma Increase Revenue 4,682 520 5,202 11%  Pro forma EBITDA 13% above Boral’s FY2011 results 588 2 EBITDA 520 85 13%  Underwritten dividend reinvestment 315 2 EBIT 275 57 15% plan provides further flexibility for funding headroom Pro Forma FY2011 Funding  Debt funded upfront; AUD $500 Pre Post million increase in debt facilities AUD $million Transaction (3) Transaction retains facility headroom Pro forma 505 1,359 Net Debt  Gearing and balance sheet metrics Pro forma should support existing short and long 16% 43% Gearing term investor ratings Facility Headroom ~700 ~700 Notes: 1 Results from continuing operations 2 Boral 2011 full year reported EBIT/EBITDA result includes $17 million in equity accounted income from LBGA. This has been excluded from the FY2011 Pro Forma EBIT/EBITDA amounts 3 As at 30 June 2011 assuming transaction occurred on that date. Post Transaction figures include additional net debt for LBGA acquisition, associated transaction costs and consolidation of LBGA net debt position, plus acquisition costs for previously announced Wagner and Sunshine Coast Quarries acquisitions 10