Business SummaryBoral Limited (BLD) is an international building and construction materialscompany headquartered in Sydney, Australia. Boral's core businesses areCement and Constructions Materials in Australia, Plasterboard in Australiaand Asia, and Bricks and Roof tiles in Australia and USA.

Construction Materials & Cement: Boral Construction Materials is anintegrated business supplying cement, concrete, quarry materials, asphalt,and concrete placing services to the Australian building and constructionindustry. The division also manages a property operation, a landfill businessand an integrated transport business

Building Products: The division manufactures and supplies bricks, roof tiles,timber and windows to the residential and non-residential constructionsectors. In Western Australia and South Australia, Boral also continues tomanufacture concrete masonry products which are integrated with the localBricks and Roofing operations.

Boral Gypsum: The division is a supplier of plasterboard and interior liningproducts across Asia, where it has manufacturing positions in eight countries.Boral also has manufacturing operations in Queensland, New South Walesand Victoria and a 50% interest in both a gypsum mining operation in SouthAustralia and a metal wall and ceiling framing business, Rondo.

Boral USA: Boral supplies clay bricks and manufactured stone veneer(Cladding), and in clay and concrete roof tiles (Roofing) in the USA. Thedivision also operates fly ash, concrete and quarries business and hasconstruction materials interests in Colorado and Oklahoma.

Acquisition In May 2017, Boral Limited completed the acquisition ofHeadwaters Incorporation, a leading building products manufacturer and flyash marketer in North America.

Latest ResearchInvestor day highlights solid Australasian outlook

Driven largely by a disappointing March quarter update, Boral shares(-14% YTD) have underperformed the broader market (+1% YTD) so farthis year. However, today's investor day highlights a solid outlook for itsAustralian operations on the back of key organic growth initiatives and anextended construction cycle. While

concerns remain on BLD's lack of operating leverage thus far and fly ashsupply, we believe any resolution will likely act as a re-rating catalyst. StayNeutral rated.

For more information see research 17 May 2018.

GICS - Materials

Boral Limited

ASX Code: BLD Price: $6.47 12 Mth Target Price: $7.23 Rating: Neutral

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Snapshot

DateMarket Cap.Shares on issue12 Month High12 Month Low

14 July 2018$7,585m1,172.3m$8.22$6.17

RatingRating12 Mth Target Price

Capital GainGross Yield

Implied Total Return

Neutral$7.2311.9%5.8%17.8%

Investment FundamentalsFYE 30 Jun 2017A 2018F 2019F 2020F

Profit $m 343.0 455.0 513.0 581.0Profit (norm)* $m 343.0 455.0 513.0 581.0

EPS* ¢ 33.0 39.0 43.0 49.0EPS Growth % 0.0 18.2 10.3 13.9P/E* x 19.6 16.6 15.0 13.2P/E Relative % 0.0 0.0 0.0 0.0

DPS ¢ 24.0 28.0 32.0 34.0Yield % 3.7 4.3 5.0 5.3Franking % 75.0 50.0 50.0 50.0* Adjusted for goodwill and unusual itemsSource: Based on Citi estimates

Share Price Chart

Total Return on $10,000 Investment

Profit & Loss ($M)2013A 2014A 2015A 2016A 2017A

Sales Revenue 5,209 4,455 4,298 4,311 4,258Total Revenue ex. Int. 5,260 4,476 4,464 4,356 4,333EBITDA 528 473 599 644 715Depreciation & Amort. -291 -261 -249 -247 -260Goodwill Amortisation -- -- -- -- --EBIT 237 212 350 398 455Net Interest -96 -65 -64 -63 -51Profit Before Tax 141 147 287 335 405Income Tax -20 -16 -51 -38 -51Outside Equity Int. -6 -3 -- -- --Profit after Tax 116 198 249 301 401Significant Items after Tax -328 -25 8 -45 -104Reported Profit after Tax -212 173 257 256 297Preferred Dividends -- -- -- -- --

Cash Flow ($M)2013A 2014A 2015A 2016A 2017A

Receipts from Customers 5,644 5,580 4,847 4,636 4,583Funds from Operations 441 588 530 566 534Net Operating Cashflow 294 507 418 478 413Capex -358 -268 -250 -324 -340Acquisitions & Investments -- -48 -- -- -3,562Sale of Invest. & Subsid. 88 547 149 -- 122Net Investing Cashflow -183 267 -56 -260 -3,731Proceeds from Issues 36 -- -- -- 2,019Dividends Paid -42 -64 -129 -154 -226Net Financing Cashflow -166 -525 -252 -273 3,107Net Increase Cash -55 250 111 -55 -211Cash at Beginning 182 136 383 506 452Exchange Rate Adjust. 9 -2 12 2 -3Cash at End 136 383 506 452 238

Ratios and Substantial Shareholders2013A 2014A 2015A 2016A 2017A

Profitability RatiosEBITDA Margin % 10.13 10.62 13.94 14.95 16.80EBIT Margin % 4.54 4.75 8.15 9.23 10.70Net Profit Margin % 2.20 2.87 5.48 6.89 8.30Return on Equity % 3.47 3.82 6.69 8.47 6.49Return on Assets % 3.01 3.38 4.93 5.97 4.36

Debt/Safety RatiosNet Debt/Equity % 42.61 21.45 23.18 26.22 43.37Interest Cover x 2.46 3.25 5.50 6.30 8.98

Top 5 Substantial ShareholdersThe Capital Group Companies, Inc. 5.3%BlackRock Group 5.0%

Balance Sheet ($M)2013A 2014A 2015A 2016A 2017A

Cash & Equivalent 220 383 506 452 238Receivables 888 709 660 624 874Inventories 680 528 538 557 607Other Current Assets 54 44 38 51 46Current Assets 1,843 1,664 1,741 1,684 1,764Prop. Plant & Equipment 3,347 2,562 2,448 2,518 2,756Intangibles 850 196 227 235 3,209Other Non-Current Assets 71 99 113 67 76Non-Current Assets 4,474 3,895 4,124 4,116 7,550Total Assets 6,316 5,559 5,865 5,800 9,314Interest Bearing Debt 1,666 1,102 1,323 1,372 2,597Other Liabilities 1,256 1,110 1,019 923 1,276Total Liabilities 2,923 2,211 2,341 2,294 3,873Net Assets 3,394 3,348 3,524 3,506 5,440Share Capital 2,434 2,478 2,362 2,246 4,265Reserves 74 2 166 162 19Retained Earnings 796 868 996 1,098 1,156Outside Equity Int. 89 -- -- -- --Total Shareholders Equity 3,394 3,348 3,524 3,506 5,440

Current Analyst Recommendations *

* Source: Morningstar. This chart shows the spread of recommendations from thosebroker analyst's in Australia with research coverage of this stock.

Principals & DirectorsPrincipals

Company Secretary Mr Dominic Millgate

Directors

Dr Eileen Joy Doyle(Non-Executive Director)Ms Karen Anne Moses(Non-Executive Director)Ms Kathryn Joy Fagg(Non-Executive Director,Non-ExecutiveChairman)Mr John Marlay(Non-Executive Director)Ms Catherine Michelle Brenner(Non-Executive Director)Mr Paul Ashley Rayner(Non-Executive Director)Mr Michael Patrick Kane(Chief Executive Officer,Managing Director)

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Boral Limited

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