Fletcher Building Limited · NZX:FBU
Fletcher Building — Non-Deal Roadshow (June 2011)
46 slides from Fletcher Building's roadshow presentation, June 2011
Slide 1: Investor Roadshow Presentation June 2011
1 Investor Roadshow Presentation June 2011 Bill Roest Chief Financial Officer Investor Presentation| Fletcher Building | © June 2011
Slide 2: Disclaimer
2 Disclaimer This presentation contains not only a review of operations, but also some forward looking statements about Fletcher Building and the environment in which the company operates. Because these statements are forward looking, Fletcher Building Building’ss actual results could differ materia
Slide 3: Agenda
3 Agenda • Company and Market Overview • Strategy • Financial Results • Update on Key Developments • Outlook • Appendix: −Additional information Investor Presentation| Fletcher Building | © June 2011
Slide 4: Company and Market Overview
4 Company and Market Overview Investor Presentation| Fletcher Building | © June 2011
Slide 5: Fletcher Building at a glance
5 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook| Appendix Fletcher Building at a glance • Revenue - year to 30 June 2010: NZ$9.8 billion¹ • Market Capitalisation NZ$6.2 billion • Employees: 20,000 • Shareholders: (as at 31 March 2011) Revenues 2010²: Rest of A
Slide 6: Fletcher Building – Key listing information
6 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook| Appendix Fletcher Building – Key listing information • Listed on the New Zealand and Australian stock exchanges g New Zealand • Largest listed company by market capitalisation on the NZX Australia • Ranked #54 o
Slide 7: Market leading businesses
7 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook| Appendix Market leading businesses Building Laminates Distribution Infrastructure Steel Crane Products & Panels Pipelines – Plasterboard Building Materials Construction The Laminex Coated Steel Manufacture & Ins
Slide 8: Strategy
8 Strategy Investor Presentation| Fletcher Building | © June 2011
Slide 9: Strategy
9 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Strategy Longer term strategy continues to be: • improve earnings reliability • maintain and improve internal capabilities - increased i d focus f on growth h oriented i d capex - business transformati
Slide 10: Fletcher Building has a vertically integrated value chain
10 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Fletcher Building has a vertically integrated value chain Pipes & Laminates Building Other Steel Concrete Plumbing & Panels Products Manufacturers Dedicated Shared Other Construction Distribution Dist
Slide 11: Financial Results
11 Financial Results Investor Presentation| Fletcher Building | © June 2011
Slide 12: Half Year 2011 results summary
12 Company & Market Overview | Strategy | Financial Results | Key Developments| Outlook | Appendix Half Year 2011 results summary Dec 2010 Dec 2009 NZ$m 6 months 6 months % Change Sales 3,468 3,393 +2 EBITDA 381 372 +2 EBIT 285 271 +5 Net earnings 166 154 +8 EPS – cps 27.3 25.5 +7 Dividend - cps 16
Slide 13: Half year earnings ahead in all divisions except Building Products
13 Company & Market Overview | Strategy | Financial Results | Key Developments| Outlook | Appendix Half year earnings ahead in all divisions except Building Products EBIT NZ$million1 1. Earnings before interest and tax Investor Presentation| Fletcher Building | © June 2011
Slide 14: Key Ratios
14 Company & Market Overview | Strategy | Financial Results | Key Developments| Outlook | Appendix Key Ratios Total T t l Sh Shareholder h ld R Return t (TSR) D bt/D bt Plus Debt/Debt Pl Equity E it Percentage Percentage Jun-06 Jun-07 Jun-09 Jun-10 Dec-10 Return on Average Equity Return on Average F
Slide 15: Capital expenditure – focus shifting to growth-orientated initiatives
15 Company & Market Overview | Strategy | Financial Results | Key Developments| Outlook | Appendix Capital expenditure – focus shifting to growth‐orientated initiatives Capital Expenditure versus • Stay-in-business capex approx Depreciation NZ$M 350 60% of depreciation. p 322 ¹ * 289 • Growth capex
Slide 16: Update on Key Developments
16 Update on Key Developments Investor Presentation| Fletcher Building | © June 2011
Slide 17: Overview of Crane's businesses
17 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Overview of Crane’s businesses Crane Division (FY10 in A$m, to nearest million) Aust. NZ Revenue EBIT1 Key Brands Pi li Pipelines Manufacturer and distributor of pipes and fittings from 15mm to 2,000m
Slide 18: Divisional structure of the Combined Group
18 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Divisional structure of the Combined Group Crane will form a new division within the Combined Group, with its complementary businesses representing strategic extensions of existing Fletcher Building o
Slide 19: Summary of transaction metrics
19 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Summary of transaction metrics • Total implied value received by Crane Metrics A$ shareholders of A$10.071 represented an Total Implied Value per share $10.07 enterprise value for Crane of A$939m Tota
Slide 20: Canterbury earthquake update
20 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Canterbury earthquake update • Government estimate of total cost to rebuild Canterburyy region g and Christchurch City is $15 billion¹ • Fletcher Construction was selected to undertake project managem
Slide 21: Impact of post earthquake construction related activity
21 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Impact of post earthquake construction related activity Nationwide construction (average quarterly real construction as a percent of potential GDP, GDP 1995/96 prices) % 12 10 8 Non‐residential earthq
Slide 22: Weathertightness – fixing leaky homes
22 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Weathertightness – fixing “leaky homes” • PWC report p to g government of March 2010 estimated 22,000, to 89,000 dwellings affected by weathertightness failures • Consensus forecast is 42,000 dwelling
Slide 23: NZ Infrastructure outlook is strong
23 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix NZ Infrastructure outlook is strong National Infrastructure Plan: CY10 to CY16 NZ$M Source: National Infrastructure Plan March 2010 Investor Presentation| Fletcher Building | © June 2011
Slide 24: Fletcher Building Tax Crediting Policy on Dividends
24 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Fletcher Building Tax Crediting Policy on Dividends • Fletcher Building announced on 9 February 2011 a new tax crediting policy for its dividends whereby: − all interim dividends will be fully franked
Slide 25: Outlook
25 Outlook Investor Presentation| Fletcher Building | © June 2011
Slide 26: Outlook 2011
26 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Outlook 2011 Outlook for 2011 financial year continues to be mixed as to the pace of economic recovery, and the impact of the Canterbury earthquakes New Zealand: • Residential R id ti l b building ild
Slide 27: Appendix
27 Appendix Investor Presentation| Fletcher Building | © June 2011
Slide 28: Building Products
28 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Building Products Plasterboard Winstone Wallboards • New Zealand’s sole manufacturer and leading supplier of gypsum plasterboard Insulation Fletcher Insulation|Tasman Insulation NZ|Forman Group|Home&D
Slide 29: Building Products result
29 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Building Products result Dec 10 Dec 09 • Insulation earnings down NZ$m 6 Mths 6 mths %∆ 51% due to impact of stimulus Sales 371 37 436 43 -15 5 package withdrawal in A Australia. li EBITDA 69 89 -22 •
Slide 30: Distribution – PlaceMakers
30 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Distribution Pl PlaceMakers M k The premier supplier of building materials to New Zealand’s commercial and residential construction markets • 62 outlets across New Zealand trading as PlaceMakers • 34%
Slide 31: Distribution result
31 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Distribution result Dec 10 Dec 09 • Sales ahead due to prior year NZ$m 6 Mths 6 mths %∆ improvement in new housing Sales l 446 435 +3 construction activity EBITDA 29 22 +32 • Continued focus on cost E
Slide 32: Infrastructure
32 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Infrastructure Concrete New Zealand Firth | Humes Pipeline Systems | Golden Bay Cement | Winstone Aggregates • 15% of NZ aggregates markets • 55% of NZ cement market • 34 34% of NZ readymix y concrete
Slide 33: Infrastructure result
33 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Infrastructure result NZ Concrete • Cement volumes steady Dec 10 Dec 09 • Softer demand for readymix and NZ$m 6 mths 6 mths %∆ masonry products Sales 1,034 974 +6 • Aggregate and pipe volumes up, d dr
Slide 34: Laminates & Panels
34 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Laminates & Panels Laminex • Leading high pressure laminate & decorative surfaces • Estimated Australasian market shares – Decorated board – No.1 – Medium d d density ffibreboard b b d – No.1 – Partic
Slide 35: Laminates & Panels result
35 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Laminates & Panels result Laminex Dec 10 Dec 09 • Australian volumes higher on NZ$m 6 mths 6 mths %∆ new house completions and Sales 1,001 965 +4 government-funded schools EBITDA programme. • NZ volum
Slide 36: Formica: continued improvement in earnings, due to Asia growth and cost reduction
36 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Formica: continued improvement in earnings, due to Asia growth and cost reduction programme EBIT US$m 1H11 1H10 Asia 14 12 North America 8 3 E Europe 1 -3 3 Corporate -6 -5 EBIT $US 17 7 EBIT (NZ$) 23
Slide 37: Steel
37 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Steel Rollforming g and Coated Steel Pacific CoilCoaters|Stramit Building Products|Dimond • Approx. 24% of Australian market (Stramit) • Major player in New Zealand roofing market (Dimond) Long Steel
Slide 38: Steel result
38 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Steel result Dec 10 Dec 09 NZ$m 6 Mths 6 mths %∆ • Long steel earnings impacted Sales 616 583 5 3 +6 by competitive pricing pressures and higher scrap EBITDA 54 54 - (input) costs. EBIT 43 42 +2 • Rol
Slide 39: Geographic exposure to end markets
39 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Geographic exposure to end markets¹ Summary Residential Commercial Infrastructure Total 51% 25% 24% 100% New Zealand 57% 30% 13% 100% Australia 49% 51% 0 100% Rest of World Total Group 53% 29% 18% 100
Slide 40: Key construction activity metrics
40 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Key construction activity metrics Dec 2010 Dec 2009 Dec 2008 10/09 Building Consents 12 months 12 months 12 months %Mvmt New Zealand - Residential Consents 15 602 15,602 14 425 14,425 18 456 18,456 +8
Slide 41: New Zealand: Key residential indicators
41 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix New Zealand: Key residential indicators Investor Presentation| Fletcher Building | © June 2011
Slide 42: Australia: Key construction sector indicators
42 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Australia: Key construction sector indicators Investor Presentation| Fletcher Building | © June 2011
Slide 43: Australia: Key residential indicators
43 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix Australia: Key residential indicators Investor Presentation| Fletcher Building | © June 2011
Slide 44: New Zealand Economic and Fiscal Data
44 Company & Market Overview | Strategy | Financial Results | Key Developments | Outlook | Appendix New Zealand Economic and Fiscal Data¹ Economic data March years 2011 2012 2013 2014 2015 Real GDP growth (annual average % change) 1.0 1.8 4.0 3.0 2.7 Inflation (annual % change March quarter) 4.5 3.1
Slide 45: Important notice
45 Important notice NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE U.S. OR TO U.S. PERSONS This presentation does not constitute an offer of any securities for sale in the United States or in any other jurisdiction. The securities offered have not been, and will not
Slide 46: Investor Roadshow Presentation June 2011
46 Investor Roadshow Presentation June 2011 Bill Roest Chief Financial Officer Investor Presentation| Fletcher Building | © June 2011