Boral Strategic Update and Developments

BORAL Operational Excellence Continued program success driving annual savings, which is critically important to support margins and optimise costs With a strong history of increasing efficiencies of assets, people and processes, Boral Australia is redoubling efforts to lower costs and improve efficiencies in response to input cost increases and volume changes Operational Improvements • Supply Chain Optimisation Admin & Procurement Efficiency • • • • • Objectives Improve output from physical assets including lifting Operating Equipment Effectiveness (OEE) Deliver material, energy, R&M, labour savings Ensure operations /resources match demand Reduce costs to transport' and increase customer reliability / fleet to asset connectivity Standardise / automate processes Target 5-10% reduction in costs Optimise overhead costs through Organisational Effectiveness (OE) program Savings from long 'tail' of procurement contracts Eliminate legacy back office processes Progress ✓ OEE lift via plant configuration & waste reduction ✓ Capital projects tracking to plan - eg. Quarry upgrades, Berrima alternate fuels delivering savings ✓ Ongoing rightsizing¹ of business ✓ Benchmarking and reporting systems setup, and Commercial contracts under review ✓ 5-10% cost opportunities identified ✓ Expecting ~$15m to contribute to cost savings in FY2019 and -$25m in FY2020 ✓ Through OE-150 FTE reduction¹ by 30-Jun-19, delivering modest savings in FY2019; with further savings targeting to deliver $20m in FY2020 ✓ Second tier procurement review underway 1. OE and rightsizing restructuring costs to be reported as a significant item in FY2019 RHS&B2,3, VWD A$b Boral Australia's revenue derived from various markets Australian residential markets continue to soften while infrastructure is strong 12505 Other engineering², VWD A$b 125 100 75 50 25 Detached dwellings4, # starts 120,000 80,000 1H FY2019 External revenue by end-market¹, % 40,000 Other Detached dwellings 3 15 Multi-dwellings4, # starts 120,000 10 Multi- dwellings 80,000 RHS&B3 38 40,000 12 Alterations & additions 8 14 Non-residential², VWD A$b 50 Other engineering Non-residential 40 30 20 10 10.0 7.5 5.0 2.5 Alterations & additions2, VWD A$b 1. Based on split of 1H FY2019 Boral Australia external revenues 3. Roads, highways, subdivisions and bridges 2. BS historical data, BIS Oxford Economics and Macromonitor forecasts, constant 2016/17 dollars 4. ABS historical data, BIS Oxford Economics, Macromonitor and HIA forecasts FY15 FY17 FY19F FY21F FY23F 18 BORAL 17

View entire presentation