CSR Limited Results Presentation Full Year ended 31 March 2010 Agenda 1. Overview Jeremy Sutcliffe, Managing Director, CSR Ltd 2. Group Full Year Results Shane Gannon, CFO, CSR Ltd 3. CSR (Building Products, Aluminium, Property) Rob Sindel, CEO, CSR Building Products 4. Sucrogen Ian Glasson, CEO, Sucrogen 5. Conclusion & Outlook Jeremy Sutcliffe 2 1
1. Overview Overview Quality underlying result in a busy year � Group EBIT up 14%; net profit after tax (pre significant items) up 29% Strong underlying Group result � Tight focus on capital management improved cashflow across businesses � Group financial position strengthened through equity raising � Move towards creating two independent and focused businesses, Building Products and Establish independent Sucrogen and accountable � Businesses strengthened through capital re-investment programme – better equipped to pursue businesses distinct strategic agendas and capitalise on market conditions � Streamlined corporate function focused on corporate level restructuring, governance and reporting � Board continues to pursue strategic options to create additional shareholder value: Progress strategic options – Progress Sucrogen demerger proposal—re-submit scheme booklet and schedule shareholder meeting – Continued discussions with Bright Food re non-binding conditional offer to acquire Sucrogen 4 2
2. Group Full Year Results Financial results summary Key measures 2010 2009 A$m 2010 2009 % ∆ Trading Revenue 3,754.9 Final dividend per share 6.0c 3,492.8 8% 1.5c EPS (pre sig. items) 12.7c EBITDA 522.1 474.9 10% 12.2c EBIT (pre sig. items) 364.1 Effective tax rate (pre sig. items) 20.2% 22.2% 320.1 14% Cash Flow from operations (before (101.1) Net Finance Cost (105.8) (4%) $396.3m $165.4m margin calls) Tax Expense (pre sig. items) (53.2) (47.5) 12% � Strong result in Sucrogen and improved performance in Aluminium (36.4) Non-controlling interests (32.8) 11% � Building Products maintains earnings and margins in generally slower markets Net profit (pre sig. items) 173.4 134.0 29% � � Final dividend of 6 cents per share, fully franked in line with Final dividend of 6 cents per share fully-franked in line with dividend policy and ongoing prudent approach to capital Significant Items (post tax) (285.1) (460.5) management � EPS improved slightly—impacted by higher number of shares on issue post equity raising (111.7) Net loss (after sig. items) (326.5) � Continued focus on working capital management—net cash flow from operations before margin calls more than doubles 6 3
Solid performance across most businesses � Continued focus on overhead cost control, pricing discipline A$m 2010 2009 % ∆ stabilises Building Products earnings in weaker markets – Insulation, Asian and Bricks & Roofing businesses 115.0 Building Products 117.9 (2%) report stronger earnings report stronger earnings � Very strong result in Sucrogen despite lower crop 135.7 Sucrogen 83.7 62% – substantially increased average realised raw sugar price Aluminium 123.5 110.7 12% � Increase in unhedged aluminium price towards year end drives Aluminium earnings higher Property 12.8 25.1 (49%) � Weak markets impact Property result—remain focused on solid medium term development pipeline (18.6) Corporate (17.0) 9% (4.3) Restructure and Provisions (0.3) Total EBIT (pre sig. items) 364.1 320.1 14% 7 Product liability—continued responsible approach 38.4 17.2 455.3 � 500 21.4 Continued responsible approach to managing asbestos 455.1 related claims 400 300 � Cash payments A$38.4m reduced from A$46.6m—due to 200 lower settlements in US lower settlements in US 100 � Product liability provision based on semi-annual expert 0 advice from US and Australian experts Opening balance Cash payments Unw inding of charge to Closing Balance discount* maintain � Product liability provision also includes prudential margin provision at discretion of Board (above central estimate of liabilities) to take account of current environment, material *Unwinding of discount refers to re-statement of the discounted provision to nominal dollars uncertainties and exchange rate fluctuations � Prudential margin at year end—A$96.8m—27% above aggregate of central estimate of US and Australian liabilities 8 4
Strong financial position—no near term refinancing requirements Facilities maturity portfolio (A$m) 500 � Net debt at 31 March 2010 (post equity raising) down 410 405 significantl to $767m significantly to $767m 400 400 300 � Significant headroom available 193 190 175 200 149 � No need to refinance maturities in current financial year— near term facilities provide liquidity at lower relative cost 100 - IH YEM11 2H YEM11 IH YEM12 2H YEM12 IH YEM13 2H YEM13 31 March 2010 31 March 2009 Net debt (A$m) 767 1,189 Gearing (adjusted for fair value of hedges) 29.7% 43.3% EBITDA/interest (times) 9.3 5.5 Net debt/EBITDA (times) 1.5 2.5 9 3. Building Products, Aluminium, Property 5
3a. Building Products Solid underlying earnings despite weaker market conditions � Good underlying result in continued difficult markets A$m 2010 2009 % ∆ � Weaker building markets for most of year—signs of recovery towards Trading Revenue 1,506.9 1,537.5 (2%) year end EBITDA 182.5 183.1 – – Australian residential housing starts down 17 per cent (two quarter lag) year on year; commercial value of work done down ~20 per l ) i l l f k d d 20 EBIT 115.0 117.9 (2%) cent EBIT Margin 7.6 7.7 – � Despite lower market activity, price discipline and relentless focus on cost management across portfolio protected margins � Realignment of overhead costs in each business, integration of back office and admin functions drives additional synergies EBIT versus Australian residential housing starts � Improvement in return on funds employed across portfolio � Major capex programme now complete House building materials price index 160.0 180 140.0 180 Metal roofing and guttering 170 120.0 lag Aluminium Windows & doors 160 160 Housing starts 2Q 100.0 160 Clay brick $EBITm 80.0 140 Concrete roof tiles 150 60.0 Terracotta roof tiles 120 40.0 140 Insulation 20.0 Plaster products 100 130 ‐ Fibre cement 80 2005 2006 2007 2008 2009 2010 Mirrors and other glass ‐ 20.0 120 Mar-00 Sep-00 Mar-01 Sep-01 Mar-02 Sep-02 Mar-03 Sep-03 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Building products (ex Viridian) Viridian housing starts (2Q Lag) Source: ABS 12 6
Building Products revenue held up well in tough market % ∆ � Trading Revenue A$m 2010 2009 Stronger performance from Bradford Insulation prior to sudden termination of rebate scheme—core insulation Lightweight Systems business outside retro-fit market remains solid � � S ft Softer volumes in plasterboard largely offset by pricing and l i l t b d l l ff t b i i d cost discipline � Strong contribution from Asian businesses on major 845.9 788.7 7% technical insulation projects in SE Asia � Bricks & Rooftile factories managed for cash in early part of year—improvement in profitability in second half � Glass business continues to reflect demand in residential and commercial sectors plus our challenging integration of Glass the business and new technology 379.7 451.4 (16%) Bricks and Roofing 281.3 297.4 (5%) TOTAL 1,506.9 1,537.5 (2%) 13 Viridian—improved Upstream performance; loss of market share Downstream A$m 2010 2009 % ∆ 379.7 Trading Revenue 451.4 (16) 21 9 21.9 EBITDA EBITDA 57.6 57 6 (62) (62) EBIT (1.6) 33.4 (105) Upstream (Primary Products) Downstream (Value-added Processing) � � Volumes improved slightly from previous year Slower market conditions impact volumes, particularly in core east coast markets � Recovery in market share following rebuild of Dandenong � float glass line Poor integration and implementation of new automated double glazed line at Clayton (VIC) led to loss of � Revenue and EBIT ahead of last year market share � Higher A$ continues to impact import parity price � Significant cost duplication from retaining manual � Indications that float glass prices have stabilised post GFC I di i h fl l i h bili d GFC capability to hold market share impacts earnings bili h ld k h i i and Asian excess capacity � New management team in place – getting traction � Both upstream plants running well and should benefit from � Confident we have stabilised the business incremental volume 14 7
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