Adelaide Brighton : Investor Newsletter - correction

16 October 2017

The Manager

Market Announcements

Australian Securities Exchange Limited 20 Bridge Street

SYDNEY NSW 2000

Adelaide Brighton refers to the market release of the Company's investor newsletter made earlier today.

The original investor newsletter released contained a typographical error. The revenue for the half year to June 2017 was correctly stated in the body of the newsletter as $718.4 million.

However, in the summary points on the right hand side of page one, the revenue was stated as

$178.4 million. This is incorrect and should be $718.4 million. Attached is a copy of the corrected newsletter.

FOR FURTHER INFORMATION: MS LUBA ALEXANDER

GROUP CORPORATE AFFAIRS ADVISER TELEPHONE 02 8248 9911 OR 0418 535 636

Visit our website‌

adbri.com.au

October 2017

From the CEO and Managing Director

I am pleased to report that, while Adelaide Brighton faced a number of operational challenges in the first half of 2017, the Company achieved record revenues and maintained the ordinary dividend at 8.5 cents per share (fully franked). Our balance sheet remained strong and we continued to make strategic investments to underpin our future growth.

Our interim results reflect the resilience of the Group's diversified business model and the success of our long term business strategy.

Group revenue of $718.4 million for the half year was 4.7% higher than in the prior corresponding period, underlining the continuing strength of the Victorian, NSW and Queensland construction and infrastructure sectors and an improvement in the South Australian (SA) market.

However, lower cement demand in Western Australia (WA) and the Northern Territory (NT), due to weak residential and non-residential activity, partly offset growth in demand in other States. Demand for lime in WA and in the NT remained stable.

Earnings and margins were higher in the concrete and aggregates business, underpinned by strong volume growth and rising prices.

We have a geographically balanced business that is now more resilient to cyclical swings in demand in any one market and our greater

vertical integration has enhanced value through cost synergies, logistics benefits and raw materials pull through.

Adelaide Brighton's long term growth strategy has remained consistent over several years and, because it accommodates fluctuations in demand by sector and by geography, the Group is well-positioned to absorb variations

in State-by-State performance while continuing to meet shareholders' expectations.

In the past five years we have invested

$300 million in productive acquisitions, including $85.5 million invested in bolt-on acquisitions in 2017. Since the beginning of the year we have acquired three downstream premixed concrete and upstream aggregate businesses that have added strategic positions and scale to the Company's existing operations, on attractive financial metrics.

The immediate and longer term benefits

of the acquisitions are reviewed in detail on pages 2 and 3 of this newsletter.

Outlook

The Company expects sales volumes of cement and clinker to be higher than in 2016 and sales volumes of premixed concrete and aggregates are projected to increase this year due to infrastructure projects on the east coast and in SA. The recent business acquisitions will add further sales in Victoria, SA and the NT.

We had a strong finish to the first half and are looking forward to improved earnings in the second half, with strong demand anticipated on the east coast as well as favourable pricing and further efficiency benefits.

Martin Brydon

The Company's growth strategy has three principal elements:

£ Continuing Group-wide cost reduction and operational improvement

£ Growth in our lime business to supply the resources sector

£ Focussed, relevant and value-adding vertical integration

£ Half year Group revenue of

$718.4m, up 4.7%

£ Statutory net profit after tax was $68.7 million for the half

£ Underlying net profit after tax, which excludes restructuring and transaction costs, was

$74.5 million, down 2.7%

£ Underlying earnings before interest and tax was $108.5 million

8.5cps

Fully franked,

paid on 5 October 2017

Adelaide Brighton's 2017 Acquisitions p2/3

Adelaide Brighton's 2017 Acquisitions:

A continuing strategy of vertical integration

On our website, we describe Adelaide Brighton as

"a leading Australian integrated construction materials and lime producing group of companies." There's a key word in that sentence - integrated - and it goes to the heart

of our growth strategy.

Central Campbellfield site

To date in calendar year 2017, Adelaide Brighton has acquired three businesses at a total cost of $85.5 million:

» Central Pre-Mix Concrete in Victoria,

» Davalan Concrete in South Australia and

» Holcim's concrete and aggregates operations in the Northern Territory.

As Executive General Manager of the Concrete and Aggregates Division, George Agriogiannis puts it: "each of those businesses is a strategic fit with our existing operations. Central Pre-Mix offers us an

improved concrete position in Victoria and, importantly, our first foray into aggregates in Melbourne; Davalan complements our existing concrete operations in South Australia which are highly complementary to existing South Australia hard rock

and sand operations, while Holcim NT, a strong, integrated business with four

concrete plants and two quarries provided a downstream customer for our cement position in the Territory."

Mr Agriogiannis says that at Adelaide Brighton, an acquisition that 'fits' may offer various benefits: additional scope to supply a market; opening up a new market; creating a new customer or supplier or reinforcing our presence or competitiveness in a particular market.

"For example, the Holcim NT business - rebranded Hy-Tec - gives Adelaide Brighton access to a number of tenements where, in the future, we can open up new quarries.

It also shores up a cement customer in the Territory and is the first footprint by Concrete and Aggregates there. Central Pre-Mix gives us an important quarry asset, while Davalan directly complements the acquisition of Direct Mix in South Australia in 2014. As a result, Adelaide Brighton is now number one in Concrete and Aggregates in South Australia.

"Very often, the integration process is a two-way street - both companies benefit."

George Agriogiannis

Adelaide Brighton Operations

Concrete and Aggregates

All of our acquisitions have an eye,

not just on today, but on what we might need to do at some point in the future.

"It should be noted that, along with the business opportunity that each acquisition presents, there are also significant challenges. For instance, it's critical that the acquired businesses are value-adding and to do that requires more than simply understanding

how the new operations 'fit' with what we have already.

"Integrating a new business and settling in a new group of employees is as much an art as a science," according to Mr Agriogiannis, "and it doesn't happen by chance. We appoint an

integration team, headed by a project manager, it is their task to look at every aspect of the newly-acquired business and how things are done there. Then, in an intensive period, we drive a consistency of approach.

"Nevertheless, we also learn much from the businesses we acquire. They are well run, innovative and dynamic and they can

often demonstrate proficiency that we then adopt. Very often, the integration process is a two-way street - both companies benefit.

"We pay particular attention to introducing new staff to the Adelaide Brighton Group. Once they join us, we want them to stay with us and we work hard to ensure this happens," said Mr Agriogiannis.

One area of particular focus is on occupational health and safety (OH&S). It is, at times, Adelaide Brighton's biggest challenge.

"Company cultures differ and there are privately- owned companies that may see OH&S costs as overheads - to the contrary, we see them as an investment both in the business and in our staff. Our insistence on this critically important area is non-negotiable.

So, how important is it for this conglomeration of businesses - many of them with quite different cultures - to become a part of a single Adelaide Brighton Group?

It is vitally important, says Mr Agriogiannis, but there is merit in allowing some differences in approach for those businesses that operate under a different brand, especially in the front- end transactional space.

"In Melbourne for example, Hy-Tec and Central Pre-Mix are clearly members of the Adelaide Brighton Group, but if they go about aspects of their business somewhat differently from one another, we see that as a positive in market awareness."

Mr Agriogiannis, a civil engineer by profession who has been with Adelaide Brighton for six years but has over 20 years' experience in concrete and aggregates, sees the acquisitions as a means of reinforcing and diversifying the company's operations in Australia.