Level 1 Telephone (08) 8223 8000 157 Grenfell Street International +618 8223 8000 Adelaide SA 5000 Facsimile (08) 8215 0030 GPO Box 2155 www.adbri.com.au Adelaide SA 5001 Adelaide Brighton Ltd ACN 007 596 018 21 April 2016 The Manager ASX Market Announcements Australian Securities Exchange Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam We attach the 2015 Adelaide Brighton Ltd Annual Report which will be dispatched to shareholders today. Yours faithfully Marcus Clayton Company Secretary Adelaide Brighton Ltd Annual Report 2015 Company profile Adelaide Brighton is a leading integrated construction materials 1 Performance summary and industrial lime producer which supplies a range of products 2 Chairman’s report into building, construction, infrastructure and mineral processing 4 Managing Director and Chief Executive Officer review markets throughout Australia. The Company’s principal activities 8 Finance report include the production, importation, distribution and marketing 10 Map of operations of clinker, cement, industrial lime, premixed concrete, construction 11 Review of operations aggregates and concrete products. Adelaide Brighton originated 12 Cement and Lime in 1882 and is now an S&P/ASX100 company with 1,400 employees 14 Concrete and Aggregates and operations in all Australian states and territories. 16 Concrete Products 18 Joint ventures Cement 19 Sustainability Adelaide Brighton is the second largest supplier of cement and 20 Sustainability report clinker products in Australia with major production facilities and 25 People, health and safety market leading positions in the resource rich states of South 28 Directors Australia and Western Australia. It is also market leader in the 30 Diversity report Northern Territory. In addition to domestic production, the 33 Financial statements index Company is the largest importer of cement, clinker and slag into 34 Directors’ report Australia with an unmatched supply network that enables efficient 41 Remuneration report introductory letter access to every mainland capital city market. This network includes 42 Remuneration report contents significant distribution joint ventures in Victoria and Queensland. 58 Income statement 59 Statement of comprehensive income Lime 60 Balance sheet Adelaide Brighton is the largest producer of industrial lime in 61 Statement of changes in equity Australia, with production assets in Western Australia, South 62 Statement of cash flows Australia and Northern Territory. Industrial lime is an important 63 Notes to the consolidated financial statements product for the mineral processing industry in resource rich 103 Directors’ declaration markets, particularly for the production of alumina and gold, 103 Auditor’s independence declaration of which Australia is a leading producer. 104 Independent auditor’s report to the members of Adelaide Brighton Limited Concrete and aggregates 105 Financial history Adelaide Brighton has a growing presence in the premixed 106 Information for shareholders concrete and aggregates industry with strong market shares in South Australia, Victoria, New South Wales and south east and northern Queensland augmented by joint venture operations. Concrete Products Adelaide Brighton holds the leading position in the Australian concrete products market, with operations in Queensland, New South Wales, Victoria, Tasmania and South Australia. Joint ventures and associates Adelaide Brighton has a number of significant investments in joint ventures and associates in construction materials production and distribution. These include major cement distribution joint ventures in Queensland (Sunstate Cement), Victoria (Independent Cement and Lime) and New South Wales; regional concrete and aggregates positions in Victoria, Queensland and New South Wales; and a 30% investment in a Malaysian white cement and clinker producer (Aalborg Portland Malaysia), which supplies the Australian market. Sustainability Adelaide Brighton’s commitment to sustainable development is Corporate Governance Statement demonstrated through a range of actions implemented across a The Company’s Corporate Governance Statement balanced program of initiatives. Adelaide Brighton believes that for the year ended 31 December 2015 may be setting and achieving sustainability objectives throughout the accessed from the Company’s website at organisation assists long term competitive business performance. www.adbri.com.au/ourresponsibilities#governance Performance summary Revenue Underlying EBIT1 $1,413.1m $300.3m 2014: $1,337.8m 5.6% 2014: $245.2m 22.5% Underlying NPAT1 Basic EPS attributable to members $209.2m 32.0c 2014: $166.5m 25.6% 2014: 26.9c 19.0% Final ordinary dividend Final special dividend 11.0 c 4.0c 2014: 9.5c 15.8% 2014: Nil 1 Underlying results have been adjusted for significant items. An explanation of the adjustments and NPAT reconciliation to statutory results is provided on page 38 c/share Dividends % Return on funds % Gearing: net $M Cash flow from Times Interest cover employed debt to equity operations EBITDA basis 35 35 35 280 35 30 30 30 240 30 25 25 25 200 25 20 20 20 160 20 15 15 15 120 15 10 10 10 80 10 5 5 5 40 5 0 0 0 0 0 11 12 13 14 15 11 12* 13 14 15 11 12* 13 14 15 11 12* 13 14 15 11 12* 13 14 15 Interim * In line with changes to accounting policies effective 1 January 2013, comparative numbers for 2012 have been restated Final Special ADELAIDE BRIGHTON LTD ANNUAL REPORT 2015 1 Chairman’s report In 2015 Adelaide Brighton achieved This strong growth in earnings was achieved The Concrete Products Division benefited significant growth in sales and on record sales revenue of $1,413.1 million, from strong residential demand and 5.6% higher than in the prior year. Earnings improving commercial demand in the earnings and substantially increased per share increased by 19% to 32.0 cents. eastern States. This, combined with the rewards to shareholders through benefits from our business improvement higher ordinary and special Year in review program undertaken in the last few years allowed EBIT from the Concrete Products A buoyant residential construction market, dividends, all fully franked. division to jump by 75.4% on 2014. especially in New South Wales, Victoria and The Company reported a 20.6% This business is now well positioned to south east Queensland led to improved efficiently supply all major markets. lift in earnings before interest and demand for the Group’s cement, clinker, concrete, aggregates and concrete products. tax (EBIT) to $298.6 million and Dividends and Balance Sheet This strong demand offset an anticipated a 20.4% rise in net profit after tax reduction in cement sales in South Australia I am very pleased to report to shareholders (NPAT) to $207.9 million. as well as lower sales to resource projects in that the final ordinary dividend of Western Australia and the Northern Territory. 11.0 cents per share and final special dividend of 4.0 cents took full year 2015 Sales volumes increased for all products dividends to 27.0 cents per share fully in 2015 and operating margins improved franked, which is a 59% increase on 2014. in concrete and aggregates and concrete Including special dividends, the full year products. Excluding property earnings, dividend payout ratio was 84%, compared underlying EBIT margins for the Group as a with 63% in 2014. whole were slightly lower, but nonetheless generated attractive returns for shareholders. Our dividend payments made to shareholders in 2015 totaled $139.5 million, The first full year of earnings from our up 12% on 2014. This was supported by successful acquisition in 2014 of concrete our strong cash flow (including property and aggregates businesses in South Australia Leslie Hosking sale proceeds) which allowed us to not only and Queensland improved Group earnings. Chairman increase dividends, but also reduce debt The purchase of Penrice Quarry & Mineral significantly over the year with net debt to and Direct Mix and Southern Quarries in equity gearing falling from 31.6% to 24.6%. South Australia and the Webb business in Queensland were immediately value We aim for efficient use of shareholder accretive and the acquired businesses added funds that ensures financial stability while an estimated 5% to 2015 Group revenue. retaining the flexibility to fund opportunities to grow. We take the carefully considered The record EBIT result, including contribution view that when we have surplus capital, we from property sales of $45.0 million, was return capital to shareholders, which may assisted by the impact of the acquisitions, include the payment of special dividends. improved efficiency and volume and price growth across the Company. Strategy Sales of cement and clinker in 2015 In 2015 Adelaide Brighton continued to continued to benefit from strong demand progress its long term growth strategy, the from the residential construction sector. success of which is clear both in our financial Infrastructure projects in South Australia, results and, importantly, in our ability to New South Wales and Queensland are improve shareholder returns while ensuring expected to contribute to demand for that our balance sheet remains sound. cement and clinker during the current year. As we have stated consistently, our growth Lime sales increased during the year as strategy has three complementary elements: demand from the gold sector improved, operational improvement in all our divisions, sales to the alumina sector remained stable increasing vertical integration through and the return to normal operations of a value-accretive acquisitions and the further customer impacted by a site disruption development of our highly efficient market in the first half of 2014. leading lime business. 2 ADELAIDE BRIGHTON LTD ANNUAL REPORT 2015 Our operational improvement program Board and governance Risk management is ongoing and will continue to improve In November 2015, Martin Brydon, Chief Adelaide Brighton’s risk management our competitive position, enabling us to Executive Officer since May 2014, was framework is a key factor in sustaining the compete more effectively in our key appointed to the Board as Managing Group’s ongoing performance. The Board’s markets.