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**Cost Base Material inputs, payroll and logistics make up -75-80% of our cost base Boral Australia's ~$2.9b cost base • Energy & fuel Repairs & Raw materials maintenance 7% 8% Other costs 7% 30% 24% Logistics 24% Payroll Source: Management accounts BORAL • • Materials costs: internationally traded clinker and bitumen prices increasing in line with Asian markets and exchange rate Payroll: average wage inflation of ~3% Logistics: higher subcontractor cartage costs in east coast markets due to higher demand to move tunnel material and supply underlying markets Energy and fuel: electricity & gas ~$20m higher in FY2018 (to be $110-$120m) and diesel usage ~100m litres p.a. East coast quarry capacity being supplemented with mobile contract crushing plants and sourcing materials from quarries outside metropolitan areas and external purchases Key quarry, concrete and asphalt investments will reduce future operating costs *Operational Excellence Continued success from Operational Excellence initiatives BORAL Cost improvement focus areas for FY2018 Procurement Raw materials 14% 15% Productivity 18% • 12% Payroll • Operational Excellence Cost improvement programs delivered around average $60-70m p.a. (~$250m since FY2015¹) Productivity based improvements from OEE², plant configuration and waste reduction Restructuring and labour right-sizing Other costs 21% . 20% Logistics Source: Internal estimates • Procurement initiatives . Ongoing supply chain optimisation Strategic and operational capital allocation Contributing to growing margins and offset cost increases 1. Cumulative benefits as presented at results from FY2015-1HFY2018, including restructuring, diesel, energy, procurement savings 2. Overall Equipment Effectiveness 21 22

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