#1DuluxGroup 2011 Half Year Results Announcement 16 May 2011 Imagine a better place DuluxGroup WELLEYS#2Important Note: Impact of floods and demerger on DuluxGroup's HY11 Results Queensland Flood Supply Disruption The 2011 first half result has been impacted by the supply disruption at our Rocklea decorative paint factory due to the Queensland Floods in January 2011. Please refer to the Appendix in the Profit Report and the Appendix 4D Half Year Report for further information. Prior Year Statutory Figures impacted by Demerger restructuring The results for the prior period (2010) as outlined in the Half Year Report are impacted by the restructuring activities in preparation for the demerger from Orica. In general, the prior year figures presented in this presentation are "pro forma" to represent a full six months' performance. Please refer to the Appendix and the Appendix 4D Half Year Report for further information. Please note also that figures in this presentation may not add due to rounding DuluxGroup Imagine a better place 1#3Result Overview DuluxGroup Imagine a better place 1 2#4Key achievements Strong operating result overall given supply disruption at Rocklea (Queensland flood) and market softness in New Zealand Rapid supply recovery post-Rocklea flooding Quantum of lost sales well-contained, and we expect no long term adverse market share impact Australian market leadership position enhanced Success in retail range reviews Strong momentum continued in trade paint The $38M investment in two new factories (New Zealand paint and Melbourne protective coatings) is near to completion, in line with budget Progress in terms of capability transfer and range expansion in China, despite softer result DuluxGroup Imagine a better place 3#5DuluxGroup financial performance Half year ended 31 March (A$M) Sales Other Income 2011 2010 % ↑ Actual Pro forma 491.2 490.2 0.2 ↑ 26.6 1.0 nm ↑ Total Business EBIT 75.2 70.9 6.1 ↑ EBIT (before standalone costs) 71.8 65.0 10.5 ↑ Net profit after tax 48.7 * * NPAT pre taxation consolidation adjustment 39.3 * * Operating cashflow 75.2 76.0 (1.2)↓ Net debt 190.6 204.9 (7.0) ↑ Rocklea flood impacted the “shape” of the result: • - Sales impacted (~3%) plus extra costs (e.g. repairs, tolling, asset write-off); – Other income growth relates to income booked for flood insurance recoveries; Net EBIT impact due to Rocklea flood (including some deferred costs) not material Cash flow remains strong despite some adverse flood-related impacts. * Not calculated for 2010. Refer to Appendix for definitions. Please note that the 2010 comparative net debt figure shown is as at September 2010. DuluxGroup Imagine a better place 4#6EBIT growth - consistency continues EBIT (A$M) 160 140 +5.9% +5.1% +10.3% 120 100 80 60 60 40 40 20 EBIT Margin (%) 17.0% 15.0% 13.0% +10.5% 11.0% 9.0% 7.0% 0 5.0% 2007 2008 2009 1 1st Half EBIT 1 2nd Half EBIT 2010 Full Year EBIT Margin 2011 1 Excludes impact of Yates restructuring costs ($9.5M). 2 To facilitate a like-for-like comparison, EBIT and EBIT margin are based on EBIT excluding standalone costs. DuluxGroup Imagine a better place 5#7Safety & Sustainability - "A Future Without Harm" 2011 2010 2.18 1.49 X Recordable Injury Rate Near Miss (Hazard) Reporting +64% +120% Waste Generation (% change) -12% -23% ✔ Water Consumption (% change) -17% +46% Product Distribution Incidents 1 2 Recordable Injury performance disappointing; further actions taken to address. ⚫ Other metrics positive. Focus remains on key improvement strategies: Personal Safety; Process Safety; Fatality Prevention; and Sustainability Refer to Appendix for definitions. DuluxGroup Imagine a better place 6#8Segment Performance DuluxGroup Imagine a better place 2 7#9Segment EBIT Half year ended 31 March (A$M) 2011 2010 % ↑ Actual Pro forma Paints Australia 51.4 49.0 4.9 ↑ Paints New Zealand 7.8 7.0 11.4 ↑ Selleys Yates 12.9 11.1 16.2 ↑ Offshore and Other 3.1 3.8 (18.4) Total Business EBIT 75.2 70.9 6.1 ↑ Corporate costs (3.4) (6.0) 43.3 1 EBIT excluding standalone costs 71.8 65.0 10.5 1 Standalone costs EBIT including standalone costs (4.9) 67.0 * * * * Excluding adverse FX translation impact, Total Business EBIT growth was 6.8% *Not calculated for 2010. DuluxGroup Imagine a better place 8#10Paints Australia Half year ended 31 March (A$M) 2011 2010 % + Actual Pro forma Sales 284.6 287.7 (1.1) EBITDA 56.2 53.8 4.5 EBITDA margin (%) 19.7% 18.7% 1.0 pts →→ EBIT 51.4 49.0 4.9 ↑ EBIT margin (%) 18.1% 17.0% 1.0 pts ↑ Strong underlying revenue and EBIT result given flood disruption at Rocklea - - – Continued momentum in trade-facing businesses Retail demand solid following weak Oct/Nov. However, revenue adversely impacted by the flood-related supply disruption • Excellent range review outcomes in retail channels • Some cost savings plus marketing deferral due to Easter timing and floods DuluxGroup Imagine a better place 9#11Paints New Zealand THE Excluding Australian Flood Production (NZ$) Half year ended 2011 2010 % I % 31 March (A$M) Actual Pro forma Sales 48.8 45.5 7.3 ↑ (3.5) EBITDA 8.8 8.2 7.3 ↑ EBITDA margin (%) 18.0% 18.0% 0.0 pts ↑ EBIT 7.8 7.0 11.4 ↑ (8.8) EBIT margin (%) 16.0% 15.4% 0.6 pts ↑ (0.9) pts • Softer result for the local business in a weaker market. Operating costs well contained and margins still strong Headline revenue and profit includes benefits from production to support Australia post the flood disruption at Rocklea DuluxGroup Imagine a better place 10#12Selleys Yates Half year ended 31 March (A$M) 2011 2010 % I Actual Pro forma Sales 122.0 113.2 7.8 ↑ EBITDA 14.8 12.9 14.7 ↑ EBITDA margin (%) 12.1% 11.4% 0.7 pts ↑ EBIT 12.9 11.1 16.2 个 EBIT margin (%) 10.6% 9.8% 0.8 pts ↑ Market share gains for Selleys with range review success Yates growth following easing of water restrictions. Growth rates helped by poor spring in prior year (stock overhang) EBIT margin improvement due to Yates leveraging cost base DuluxGroup Imagine a better place 11#13Offshore and Other Half year ended 31 March (A$M) 2011 2010 % I Actual Pro forma Sales 53.7 58.3 (7.9) ↓ EBITDA 5.0 5.6 (10.7) ↓ EBITDA margin (%) 9.3% 9.6% (0.3) pts ↓ EBIT 3.1 3.8 (18.4) ↓ EBIT margin (%) 5.8% 6.5% (0.7) pts ↓ Challenging market conditions in core Shanghai woodcare market, but continued strategic progress PNG revenue growth but profit impacted by margin pressure and FX Modest Powder Coatings growth with small flood impact DuluxGroup Imagine a better place 12#14Other Financial Information DuluxGroup Imagine a better place 3 13#15Corporate and standalone costs Half year ended 31 March (A$M) 2011 2010 % t Actual Pro forma Corporate costs 3.4 6.0 43.3 1 Standalone costs 4.9 N/A Total Corporate costs 8.3 • Corporate costs (excluding standalone costs) in line with expectations – Prior year figure included a number of timing-related items, many of which reversed in the second half of the year. Standalone costs reflect "ramp up" and some savings (relative to $13M demerger estimate) Full year total Corporate costs (including standalone costs) expected to be ~$18M DuluxGroup Imagine a better place 14#16Capital management - key measures Balance Sheet Mar-11 Sept-10 (A$M) Actual Actual Net debt 190.6 204.9 Strong cash flow, despite investment ↑ Rolling TWC to sales 12.1% 12.3% - TWC focus now at target level Net Debt: EBITDA (times) 1.2 1.4 Interest cover (times) 6.1 5.6 Cash flow and P&L Mar-11 Mar-10 (A$M) Actual Pro forma Operating cash 75.2 76.0 Flood items adverse Cash conversion 85.8% 94.7% Other key metrics positive Cash conversion (excl. movt in NTWC and other cash) 103.1% 98.2% Excludes line items impacted by flood Net interest expense 10.9 * Average net interest rate 9.0% * • Not calculated for 2010. TWC = Trade working capital; NTWC = Non-trade working capital. Refer to Appendix for definitions of ratios. DuluxGroup Imagine a better place 15#17Cashflow 2010 $ ↑ Half year ended 31 March (A$M) 2011 Actual Pro forma EBITDA Trade working capital movement Non-trade working capital movement Other non cash Operating cash flows (before tax and interest) Standalone costs Income tax paid Interest paid Net operating cash flows Capital expenditure Acquisitions Net investing cash flows Proceeds from issue of ordinary shares Dividends paid Financing cash flows before debt movements Net debt decrease/ (increase) 81.5 74.6 6.9 ↑ 7.7 4.0 3.7 T (20.9) (2.6) (18.2) 6.8 0.1 6.7 ↑ 75.2 76.0 (0.9) ↓ (4.9) * (12.4) * * (9.9) * * 48.0 ** (19.0) (9.3) (9.7) (4.5) (4.5) (23.5) (9.3) (14.2) 1.3 * * (11.0) * (9.7) * * 14.7 * Not calculated for 2010. The 2010 pro forma figures exclude interest, tax and all financing items such as dividends and debt movements. * * ↑ 16 DuluxGroup Imagine a better place#18Capital expenditure Half Year Full Year Capital expenditure (A$M) 2011 2010 2011 2010 Actual Pro forma Outlook Pro forma Sustenance capital expenditure 5.2 5.3 17.3 Renewal/growth capital expenditure 13.8 3.9 16.3 Total capital expenditure 19.0 9.3 ~40 33.7 Depreciation and amortisation 9.7 9.6 19.5 • The New Zealand paint factory upgrade and the new Protective Coatings factory in Australia are on track for completion this year, in line with the total $38M budget • Sustenance expenditure is expected to remain below depreciation and amortisation • Full year estimate excludes Rocklea reinstatement capital expenditure (expected to be covered by insurance) DuluxGroup Imagine a better place 17#19Tax expense - current year impacted by entry into tax consolidation and (to a lesser extent) floods Income tax expense $9.4M lower due to one-off benefit as a result of entry into Australian tax consolidation regime post-demerger Tax rate excluding this adjustment was 29.8% Deferred tax balances also impacted by insurance income (which is assessable when received in cash) DuluxGroup Imagine a better place 18#20P&L comparison between statutory (Appendix 4D) and pro forma in 2010 (prior year) Half year ended 31 March (A$M) Revenue EBIT Net interest Tax expense NPAT 2010 Appendix 4D 308.4 2010 Pro forma 36.5 490.2 65.0 2.9 * 10.0 EX 23.7 * The key difference relates to the progressive transfer of operations into DuluxGroup during 2010. DuluxGroup Imagine a better place 19#21Cash Flow comparison between statutory (Appendix 4D) and pro forma in 2010 (prior year) Half year ended 31 March (A$M) EBITDA Movt in trade working capital Movt in non trade working capital Net interest paid Income taxes paid Other 2010 Appendix 4D 2010 Pro forma 43.0 74.6 (96.5) 4.0 25.6 (2.6) (2.9) ** (5.8) * (0.3) 0.1 (36.9) 76.0 (6.9) (9.3) (305.9) Net cash inflow from operating activities Payments for property, plant and equipment Purchase of businesses and controlled entities Proceeds from joint venture distributions Net cash outflow from investing activities Net cash inflow from financing activities Key differences relate to the progressive transfer of operations into DuluxGroup during 2010 * * 0.5 (9.3) *k (312.2) 426.9 Investing and financing cash flows also include the payments for and funding of the transfer of operations from Orica into DuluxGroup. DuluxGroup Imagine a better place 20#22Strategic Growth Priorities DuluxGroup Imagine a better place 4 21#23Our result continues to be underpinned by our well- established business fundamentals Iconic Brands Products & Innovation Customer Portfolio of strong brands with leading awareness, supported by marketing investment & effectiveness Quality products supported by innovation and new product development Industry leading supply chain performance and sales force capability & scale Service Broad Distribution Financial Discipline People & Culture Breadth of distribution across retail and trade channels Driving fixed cost productivity and working capital effectiveness Extensive industry experience and culture of consistent delivery DuluxGroup Imagine a better place 22 22#24Our growth strategy Build on Aust, NZ and PNG market- leading positions + Logical Aust, NZ Additions Further market share growth opportunities across all businesses Maintain margins through appropriate pricing discipline and cost control Build on track record of resilient growth Supported by iconic brands, innovation and customer service Bolt-ons to our existing core businesses Category expansion opportunities, leveraging existing channels (retail and trade), relationships and internal capabilities + Asia for medium to long term growth Building on our foothold position in China Also seeking to build upon Selleys' position in SE Asia Measured approach DuluxGroup aims to continue to deliver low risk, solid growth and strong cash flows from the existing businesses and develop and action further options for growth, in a measured low risk manner DuluxGroup Imagine a better place 23#25Outlook We aim to continue to outperform in modestly growing markets in Australia Investment into the Australian retail hardware sector a positive Some modest further sales impact in relation to floods, plus continued tolling costs and further insurance recoveries The New Zealand market continues to look challenging In China we will continue to balance investment in capability transfer and growth with operating performance Pressure on paint input costs is likely to increase in second half (titanium dioxide and latex resin in particular) Subject to economic conditions and insurance recoveries, we expect 2011 DuluxGroup net profit after tax to be higher than $71.5 million (being the 2010 pro forma net profit after tax before one-off demerger costs). DuluxGroup Imagine a better place 24#26Appendix - Additional Information DuluxGroup Imagine a better place 25 25#27Definitions Operating cash flow is calculated as EBITDA (before standalone costs), add/less movements in working capital and other non cash items, and is prior to income tax, interest paid and standalone costs in 2011 to enable a like-for-like comparison. Recordable Injury Rate is calculated as the number of injuries and illnesses per 200,000 hours worked. Rolling TWC to sales is calculated as a 12 month rolling average trade working capital, as a percentage of annual sales. Net Debt: EBITDA is calculated by using period end net debt, as a percentage of annual EBITDA. Interest cover is calculated using EBIT, as a percentage of net interest expense. Cash conversion is calculated as EBITDA (before standalone costs) add/less movement in working capital and other non cash items, less sustenance capital spend, as a percentage of EBITDA (before standalone costs). DuluxGroup Imagine a better place 26#28Resilience and earnings quality underpinned by strategic positions Mainly Australia / NZ New Zealand 13% Sales by geography Asia / PNG 7% Note: Based on 2010 revenue Australia 80% Coatings approximately 75% of sales Sales by business sectors Preparation & Garden Care 10% Home Care 15% Other Coatings Retail Paints 30% 15% Trade Paints 30% Coatings 75% Mainly maintenance and home improvement Sales by end-market Building & Construction 20% Industrial 5% Construction 10% Commercial New Housing 10% Maintenance & Home Improvement 75% DuluxGroup Imagine a better place 27