Boral Limited Level 3, 40 Mount Street North Sydney NSW 2060 PO Box 1228 North Sydney NSW 2059 T: +61 (02) 9220 6300 F: +61 (02) 9233 6605 15 September 2017 www.boral.com The Manager, Listings Australian Securities Exchange ASX Market Announcements Exchange Centre 20 Bridge Street Sydney NSW 2000 Dear Sir 2017 Boral Review We attach the Company's 2017 Boral Review, incorporating Boral’s 2017 Sustainability Report. We are separately forwarding to you the 2017 Annual Report. These documents are being sent to shareholders, other than those who have chosen to receive no reports, in accordance with choices made by them. Shareholders who have not made a choice will receive the Boral Review. The Boral Review and the Annual Report, together with the Notice of Meeting for the Company's 2017 Annual General Meeting, will also be posted on Boral's website www.boral.com. Yours faithfully Dominic Millgate Company Secretary Boral Limited ABN 13 008 421 761 BORAL REVIEW INCORPORATING BORAL’S 2017 SUSTAINABILITY REPORT 2017 An annual publication for Boral’s shareholders, employees and other stakeholders Transforming for performance excellence and sustainable growth Responding to a changing world – our risks and responses Delivering value creation and long- term sustainability BUILDING A TRANSFORMATIVE CULTURE To grow, innovate and be responsive Contents 01 YEAR AT A GLANCE 02 RESULTS AT A GLANCE 04 OVERVIEW FROM THE CHAIRMAN 06 MESSAGE FROM THE CEO 08 OUR PURPOSE 10 BORAL AUSTRALIA 14 USG BORAL 18 BORAL NORTH AMERICA 24 SUMMARY OF OUR RISKS AND RESPONSES 26 MANAGING SUSTAINABILITY 30 OUR PEOPLE 32 HEALTH, SAFETY & ENVIRONMENTAL MANAGEMENT 34 HEALTH & SAFETY 38 ENVIRONMENTAL COMPLIANCE & PERFORMANCE 40 ENERGY & EMISSIONS 41 COMMUNITY IMPACTS 42 MANAGING CLIMATE-RELATED IMPACTS 44 VALUE CHAIN & PRODUCT INNOVATION Boral Limited’s statutory results are reported under International Financial Reporting Standards (IFRS). Earnings before significant items is a non-IFRS measure reported to provide a greater understanding of the underlying business performance of the Group. Significant items are detailed in note 2.6 of the financial statements and relate to amounts of income and expense that are associated with significant business restructuring, business disposals, impairment or individual transactions. The Boral Review has not been subject to review or audit; however, it contains disclosures which are extracted or derived from the financial statements for the year ended 30 June 2017. All dollar amounts referred to are in Australian dollars unless otherwise specified. Boral® is a registered trademark of Boral Limited or one of its subsidiaries. © 2017 Boral Ltd. All rights reserved. © 2017 USG Boral. All rights reserved. Pictured: Boral’s new fixed concrete plant at Granville, NSW BORAL LIMITED Front cover image: Matthew Meneses, Research Technician from Boral’s Discovery ABN 13 008 421 761 Center in San Antonio, Texas, USA – part of the Boral Innovation Factory BUILDING A TRANSFORMATIVE CULTURE Our purpose is to Boral is an international building and construction materials group with three strong divisions: the high-performing, well-positioned materials Build something great business of Boral Australia; the fast-growing USG Boral1 interior linings across our international business in Asia, Australia and the Middle East; and Boral North America, geographies with high- a scaled and growing building products and fly ash business. quality, innovative, FY2017 marked the fifth year of a transformational journey for Boral, which culminated in the US$2.6 billion acquisition of Headwaters sustainable building Incorporated in the USA. products and In FY2017, Boral delivered underlying profit after tax2 of $343 million, a construction materials. significant 28% increase on the prior year. We are committed to delivering performance excellence, including Zero Harm, and we are striving for sustainable growth. We are positioning Boral to continue to transform, by Building a transformative culture to capture growth opportunities, innovate, anticipate and respond to a changing world. Year at a glance 24 AUGUST 2016 3 NOVEMBER 2016 6 FEBRUARY 2017 Boral reported underlying At the Annual General Shareholders of Headwaters profit after tax2 of Meeting, Karen Moses was approved the acquisition, $268 million for the elected as a Director of the with more than 98% of the 12 months to 30 June 2016, Board and Eileen Doyle was votes cast in favour of an 8% increase on the re-elected as a Director. The the deal. prior year. resolution to adopt the Boral agreed to form a Remuneration Report, while 15 FEBRUARY 2017 50:50 joint venture with supported by the majority of Boral reported underlying 2 Forterra Brick to combine shareholders, had 26.1% of net profit after tax of brick businesses in votes cast against it, $149 million for the six North America. constituting a “first strike”. months to 31 December 2016, up 9% on the 22 SEPTEMBER 2016 21 NOVEMBER 2016 prior year. North American bricks joint Boral announced the venture received merger US$2.6 billion acquisition 9 MAY 2017 clearance from the US of US building products Boral completed the Federal Trade Commission; manufacturer and fly ash acquisition of Headwaters, Boral Bricks President Paul marketer Headwaters, and effective 8 May 2017, Samples appointed CEO of a ~A$2 billion equity capital following receipt of all the joint venture, now known raising to support the required regulatory and as Meridian Brick. The joint acquisition. shareholder approvals. venture commenced on Boral North America was 1 November 2016. 14 DECEMBER 2016 formed as a new division, Boral completed the retail combining operations of 31 OCTOBER 2016 entitlement offer and Boral USA and Headwaters, Boral sold its 40% share of shortfall bookbuild, headed by President and Boral CSR Bricks joint following the successful CEO David Mariner. venture to CSR Limited for completion of the total cash consideration of institutional placement and entitlement offer in $133.9 million, exiting east 1. 50%-owned joint venture with coast brick manufacturing November, raising USG Corporation. in Australia. ~A$2 billion. 2. Excluding significant items. BORAL REVIEW 2017 1 RESULTS AT A GLANCE Year ended 30 June (A$ million unless stated) FY2017 FY2016 Earnings before interest and tax1 (A$m) Revenue 4,388 4,311 460 EBITDA1 720 645 398 1,2 EBITA 472 400 357 EBIT1 460 398 294 Net interest1 (51) (63) 228 Profit before tax1 409 335 Tax 1 (67) (67) Profit after tax1 343 268 Net significant items (46) (12) Net profit / (loss) after tax 297 256 FY2013 FY2014 FY2015 FY2016 FY2017 Profit after tax and before amortisation1,2 350 269 Cash flow from operating activities 413 478 Return on funds employed1,4 (%) Gross assets 9,314 5,801 Funds employed 7,774 4,399 9.0 9.2 Liabilities 3,873 2,294 8.2 7.2 Net debt / (cash) 2,333 893 Stay-in-business capital expenditure 288 281 Growth capital expenditure 52 43 4.7 Acquisition capital expenditure 3,637 - Depreciation and amortisation 260 247 Boral employees3 11,499 8,334 Total employees including in joint ventures 16,475 12,058 FY2013 FY2014 FY2015 FY2016 FY2017 Revenue per Boral employee, $ million 0.382 0.517 Net tangible asset backing, $ per share 1.90 4.40 Earnings per share1,6 (¢) EBITDA margin on revenue1, % 16.4 14.9 EBIT margin on revenue1, % 10.5 9.2 EBIT return on funds employed1,4, % 9.2 9.0 33.3 33.7 EBIT return on average funds employed1,5, % 7.6 9.1 29.7 Return on equity1,% 6.3 7.6 Gearing 20.5 Net debt/equity, % 43 25 Net debt/net debt + equity, % 30 20 12.7 Interest cover1, times 9.1 6.3 Earnings per share1,6, ¢ 33.7 33.3 Dividend per share, ¢ 24.0 22.5 Employee safety7: (per million hours worked) FY2013 FY2014 FY2015 FY2016 FY2017 Lost time injury frequency rate 1.5 1.3 Recordable injury frequency rate 8.1 8.8 Dividends per share (¢) Figures may not add due to rounding. 24.0 1. Excludes significant items. 2. Excludes amortisation of acquired intangibles. 22.5 3. On a full-time equivalent (FTE) basis. FY2017 includes 4,016 FTE employees from Headwaters. 4. FY2016 return on funds employed (ROFE) calculated as EBIT (before significant items) on funds employed at 30 June. FY2017 ROFE based on average monthly funds employed due to the impact of Headwaters only contributing eight weeks of EBIT in 18.0 FY2017 but funds employed increasing fully at 30 June 2017. Based on year end funds employed, ROFE for FY2017 would be reported as 5.9%. 15.0 5. Calculated as EBIT (before significant items) on the average of opening and closing funds employed for the year. 6. In accordance with AASB 133, historical EPS has been revised to reflect the bonus element in the equity raising completed in 11.0 December 2016. 7. Includes employees and contractors in 100%-owned businesses and 50%-owned joint venture operations. Does not include Headwaters. RIFR is made up of lost time injury frequency rate (LTIFR) and medical treatment injury frequency rate (MTIFR). 8. Includes Boral’s 50% share of revenue from the USG Boral and Meridian Brick joint ventures, which is not included in Group reported revenue. 9. Includes a full year of Headwaters proforma revenue contribution. 10. Includes joint venture sites. 11. For Boral’s 100%-owned operations and Boral’s share from 50%-owned joint venture operations. Revenue adjusted to include FY2013 FY2014 FY2015 FY2016 FY2017 50% of underlying revenues from USG Boral and Meridian Brick joint ventures, which are not included in Group reported revenue. 2 BORAL REVIEW 2017 FY2017 revenue by division8 (%) Our people3