For personal use only - ASX · 2014-04-09 · Detached improving after jump in multi-res Detached...
Transcript of For personal use only - ASX · 2014-04-09 · Detached improving after jump in multi-res Detached...
JP Morgan Building ForumPresentation
CSR Limited – 10 April 2014
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5,000
10,000
15,000
20,000
25,000
30,000
35,000
# Six month rolling building approvals: s adj, Feb-14
NSW/ ACT Vic/Tas Qld SA/NT WA
Building approvals – growth continues across Australia
All dwellings – six month rolling building approvals: s adj, Feb-14
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Detached improving after jump in multi-res
Detached housesSix month rolling approvals: s adj, Feb-14
Multi-residentialSix month rolling approvals: s adj, Feb-14
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2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
22,500
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NSW/ ACT Vic/Tas Qld SA/NT WA
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2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
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NSW/ ACT Vic/Tas Qld SA/NT WA
Source: ABS
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Jun-2000 Jun-2002 Jun-2004 Jun-2006 Jun-2008 Jun-2010 Jun-2012
NSW Vic Qld
0%5%
10%15%20%25%30%35%40%45%50%
Jun-2000 Jun-2002 Jun-2004 Jun-2006 Jun-2008 Jun-2010 Jun-2012
medium density high rise Total Multi res
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High rise gaining share of multi-res market
Multi-res now 44% of all dwelling approvals – historically 30%
– Consistent with international trends
Evenly split between high-rise and medium density
– Different demographic and geographic demands
High rise has been the growth segment
– Investor fuelled (both overseas and SMSF)
– >40% of all activity in NSW
– >20% of all national activity
High rise share of total approvals (MAT %, East Coast states)
Multi-res share of total approvals (MAT %, Australia)
Source: ABS
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400045005000550060006500700075008000
Co
nsu
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co
nfi
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d $
m
A&A (LHS) Consumer confidence index (RHS)
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5,000
10,000
15,000
20,000
25,000
30,000
Commercial & Industrial Social & Institutional
Commercial up 22% MAT YoY
Social only up 8% MAT YoY
A&A and non-residential segments
Non-residential – swing from social to commercial
Commercial
– NSW & QLD lead commercial recovery; Vic flat
– Accommodation and office showing the strongest growth
Social
– Residual healthcare projects still in the pipeline
– Aged care targeted as major area for growth
Non-residential – Australia (MAT, $’m)
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A&A – Australia (Quarterly, $’m)Alterations & additions market
Down from ~$8bn to ~$7bn a quarter
Yet to respond to lower interest rates and capital appreciation
Small scale renovations have held strong
Source: National accounts, Westpac MI and ABS approvals
Multi-res lag from commencement to completion is widening
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2 year lag
Lag widening
Starts accelerating
Starts accelerating
Source: ABS, CSR analysis. Data shows MAT activity
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Lag time by construction segment
Segment Market size (A$bn)
Key drivers Lag trends
Growth outlook
Detached $26bn • First home buyers (FHB)• Upgrade/knockdown• Lot size/second storey
1-2Q lag • Recovery from record lows of 80k pa
• Land releases improving
Medium density• Semi
detached• Units 1-3
storey
$7bn • FHB• Empty nesters/retirees• Infill
2Q+ lag • Long term CAGR of ~7%• Trade-off between land/scale for
location
High density • Units 4+
storey
$12bn • Investors (Aus and overseas)
• FHB, students, empty nesters
4-8Q+ lag • Similar growth rates and market size to medium density
• Bias to metro markets
A&A $30bn • Capital growth• Housing activity
1-2Q • Positive long-term growth outlook• DIY trends
Non-residential $40bn • Social (Ageing, Health)• Commercial (Office, Retail)
2-8Q+ • Social investment declining
Source: ABS Building Approvals and National Accounts
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CSR increasing exposure beyond detached housing
Gyprock Cemintel Bradford Hebel Bricks Roofing Viridian
Detached 1 to 1 High Moderate HighLow, but growing High High High Hebel, Cemintel
Medium density 2 to 1 Moderate Low Moderate Low Moderate Low Low Hebel, AFS
High density 3 - 5 to 1 Low Low Low High Nil Nil Low Hebel, AFS, Viridian
A&A n/a High High ModerateModerate,
growing Moderate Low Moderate Viridian
Non-residential n/a Moderate Moderate Low Low Moderate Low LowBradford Energy Solutions, Ceilector
Building segment OpportunitiesEquivalent house
(revenue)
Material penetration intensity
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Protect and invest in our businesses and people
Key initiative Progress
Improved margins • Price increases and cost savings delivered $11
million improvement in Building Products EBIT
for half year to Sept 13
Viridian turnaround on track
• Ingleburn glass site closed in July 2013 – with
no loss of major customers
• $5 million in lower costs following
shutdown
• Wetherill Park relocated ahead of schedule
Customer focus • CSR Connect online customer portal launched
in April last year – adding new functionality
• Progressing real time delivery updates,
improved sales force tools
Further rationalise operations
• East Coast Bricks JV with Boral announced –
ACCC review process underway
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Strategic growth priorities
Key initiative Progress
Smarter, faster and easier
• Ongoing research and testing of pre-fabricated housing
systems – investment committed
• Hebel House construction time of two weeks
• Acquisition of AFS – leader in permanent formwork in
the multi-residential market
Adapting to the changing way we live and work
• Strong growth in Hebel through investment in
installation and inspection services - strong value
proposition for developers
Improvingcomfort, quality and energy efficiency
• Bradford expanding range of products and services in
ventilation, construction fabrics
• Acquisition of Martini to expand range into polyester
insulation
• Bradford Energy Solutions – energy efficient projects
initiated across all CSR sites and external consulting
services
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ACCC review process underway
Structure reflects relative valuation of the businesses
Initial overhead savings of $7-$10m pa
Longer term, opportunities to improve operational efficiencies and release high value land assets without impacting product range
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East Coast Bricks Joint
Venture60% 40%
PGH bricks in NSW, Qld, Vic and SA
Schofields, NSW site used for the term of
an agreed lease period
Boral bricks in NSW, Qld and Vic
Scoresby, Vic site used for the term of
an agreed lease period
Retain Schofields, NSW land
title, lease to JV
Subdivide & retain
surplus land at Horsley Park, NSW and Oxley,
Qld
Retain Scoresby, Vic
land title, lease to JV
Subdivide & retain
surplus land at Bringelly,
NSW
East coast bricks JV transaction structure
Acquisition of AFS
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 systems:
– Scalable production facility at Goulburn, NSW to meet growing demand in multi-residential market
– Over 30,000 multi-residential units completed to date
– CSR Cemintel current supplier of fibre cement products
Rediwall® polymer-based (PVC) permanent formwork system
– Concrete wall system that is water resistant
– Used in basement and retaining walls in multi-residential and commercial
AFS load bearing walling system complements CSR’s non-load bearing walling products (Gyprock, Bradford and Hebel)
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