Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Presentation (September 2011)
40 slides from Fletcher Building's investor presentation, Sep 1, 2011
Slide 1: Investor Presentation
INVESTOR PRESENTATION For personal use only September 2011 Bill Roest Chief Financial Officer Humes Pipelines, Auckland
Slide 2: Agenda
Investor Presentation | Fletcher Building | © September 2011 | Page 2 Agenda For personal use only • Company and Market Overview • Strategy • Divisional Performance • Financial Results • Outlook • Appendix: •Additional information
Slide 3: Company & Market Overview
Investor Presentation | Fletcher Building | © September 2011 Company & Market Overview | Page 3 Investor Presentation COMPANY & MARKET For personal use only OVERVIEW Christchurch, August 2011
Slide 4: Fletcher Building at a glance
Investor Presentation | Fletcher Building | © September 2011 Company & Market Overview | Page 4 Fletcher Building at a glance For personal use only • Revenue - year to 30 June 2011: NZ$7.4 billion • Market Capitalisation: NZ$5.2 billion • Employees: 20,000 • Shareholders: (as at 30 June 2011) Revenu
Slide 5: Fletcher Building – Key listing information
Investor Presentation | Fletcher Building | © September 2011 Company & Market Overview | Page 5 Fletcher Building – Key listing information For personal use only • Listed on the New Zealand and Australian stock exchanges New Zealand • Largest listed company by market capitalisation on the NZX Austra
Slide 6: Market leading businesses
Investor Presentation | Fletcher Building | © September 2011 Company & Market Overview | Page 6 Market leading businesses For personal use only Building Laminates Distribution Infrastructure Steel Crane Products & Panels Pipelines – Plasterboard Building Materials Construction The Laminex Coated Ste
Slide 7: Slowdown in residential consents in NZ and Australia
Investor Presentation | Fletcher Building | © September 2011 Company & Market Overview | Page 7 Slowdown in residential consents in NZ and Australia, and commercial markets remain subdued For personal use only June 2011 June 2010 June 2009 11/10 Building Consents 12 months 12 months 12 months %Mvmt
Slide 8: Strategy
Investor Presentation | Fletcher Building | © September 2011 Strategy | Page 8 Investor Presentation STRATEGY For personal use only Formica for Tinderbox, UK
Slide 9: Strategy
Investor Presentation | Fletcher Building | © September 2011 Strategy | Page 9 Strategy For personal use only Improved earnings reliability through geographic and end-market diversification Decentralised business model Portfolio approach that creates value through application of proven operating mod
Slide 10: Fletcher Building has a vertically integrated value chain
Investor Presentation | Fletcher Building | © September 2011 Strategy | Page 10 Fletcher Building has a vertically integrated value chain For personal use only Pipes & Laminates Building Other Steel Concrete Plumbing & Panels Products Manufacturers Dedicated Shared Other Construction Distribution Di
Slide 11: Financial Results
Investor Presentation | Fletcher Building | © September 2011 Financial Results | Page 11 Investor Presentation FINANCIAL For personal use only RESULTS The Cloud, Auckland waterfront
Slide 12: Continued underlying earnings growth despite economic headwinds
Investor Presentation | Fletcher Building | © September 2011 Financial Results | Page 12 Continued underlying earnings growth despite economic headwinds, helped by initial contribution from Crane Group For personal use only June 2011 June 2010 NZ$m 12 months 12 months % Change Sales 7,416 6,799 +9 E
Slide 13: Strong performances in Infrastructure and Laminates & Panels
Investor Presentation | Fletcher Building | © September 2011 Financial Results | Page 13 Strong performances in Infrastructure and Laminates & Panels divisions For personal use only EBIT NZ$million1 168 161 144 141 111 114 83 82 39 38 24 20 Building Products Distribution Infrastructure Property Lami
Slide 14: Key Ratios
Investor Presentation | Fletcher Building | © September 2011 Financial Results | Page 14 Key Ratios For personal use only Total Shareholder Return (TSR) Debt/Debt Plus Equity Percentage Percentage 40 42 40 24 37 34 14 14 31 27 22 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-06 Jun-07 Jun-08 Jun-09
Slide 15: Capital expenditure expected to remain in line with depreciation
Investor Presentation | Fletcher Building | © September 2011 Financial Results | Page 15 Capital expenditure expected to remain in line with depreciation For personal use only 307 ¹ 289 255 * 255 * Forecast excludes 211 206 205 potential 191 expenditure on: • Business acquisitions other than small “
Slide 16: Update on Key Developments
Investor Presentation | Fletcher Building | © September 2011 Key Developments | Page 16 Investor Presentation UPDATE ON KEY For personal use only DEVELOPMENTS Iplex, Adelaide
Slide 17: Overview of Crane's businesses
Investor Presentation | Fletcher Building | © September 2011 Key Developments | Page 17 Overview of Crane’s businesses For personal use only Crane Division (FY11 in A$m, to nearest million) Aust. NZ Revenue EBIT Key Brands Pipelines Manufacturer and distributor of pipes and fittings from 15mm to 2,0
Slide 18: Divisional structure following the Crane acquisition
Investor Presentation | Fletcher Building | © September 2011 Key Developments | Page 18 Divisional structure following the Crane acquisition For personal use only COMBINED GROUP Corporate leadership and functions Building Laminates Infrastructure Crane Distribution Steel Products & Panels Plasterboa
Slide 19: Canterbury update
Investor Presentation | Fletcher Building | © September 2011 Key Developments | Page 19 Canterbury update For personal use only • Fletcher appointed to act as agent for EQC • Project management of residential repairs between $10,000 and $100,000 • Current status: Scorecard – to Friday 5 August Hubs
Slide 20: Impact of post earthquake construction related activity
Investor Presentation | Fletcher Building | © September 2011 Key Developments | Page 20 Impact of post earthquake construction related activity For personal use only Nationwide construction (average quarterly real construction as a percent of potential GDP, 1995/96 prices) % 12 10 8 Non-residential
Slide 21: Weathertightness – fixing leaky homes
Investor Presentation | Fletcher Building | © September 2011 Key Developments | Page 21 Weathertightness – fixing “leaky homes” For personal use only • PWC report to government of March 2010 estimated 22,000 to 89,000 dwellings affected by weathertightness failures • Consensus forecast is 42,000 dwe
Slide 22: Outlook
Investor Presentation | Fletcher Building | © September 2011 Outlook | Page 22 Investor Presentation OUTLOOK For personal use only Dimond Claudelands, Hamilton
Slide 23: Outlook 2012
Investor Presentation | Fletcher Building | © September 2011 Outlook | Page 23 Outlook 2012 For personal use only New Zealand: • Gradual improvement in housing starts • Christchurch rebuilding to gain momentum • Commercial activity remains patchy • Infrastructure outlook underpinned by government sp
Slide 24: Appendix
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 24 Investor Presentation APPENDIX For personal use only Crane Cooper Tube, Adelaide
Slide 25: Building Products
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 25 Building Products For personal use only Plasterboard Winstone Wallboards • New Zealand’s sole manufacturer and leading supplier of gypsum plasterboard Insulation Fletcher Insulation | Tasman Insulation NZ | Forman Group
Slide 26: Building Products result
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 26 Building Products result For personal use only June 11 June 10 Plasterboard operating earnings NZ$m 12 Mths 12 Mths %∆ adversely impacted by slowdown in Sales 692 798 -13 residential housing starts and Christchurch earth
Slide 27: Distribution
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 27 Distribution For personal use only PlaceMakers The premier supplier of building materials to New Zealand’s commercial and residential construction markets • 62 outlets across New Zealand trading as PlaceMakers • 33% mark
Slide 28: Distribution result
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 28 Distribution result For personal use only June 11 June 10 • Sales down 3% due to slowdown in NZ$m 12 Mths 12 Mths %∆ residential and commercial building Sales 856 878 -3 activity in the second half, and slowdown in Chris
Slide 29: Infrastructure
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 29 Infrastructure For personal use only Concrete New Zealand Firth | Humes Pipeline Systems | Golden Bay Cement | Winstone Aggregates • 15% of NZ aggregates markets • 55% of NZ cement market • 34% of NZ readymix concrete ma
Slide 30: Infrastructure result
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 30 Infrastructure result For personal use only June 11 June 10 NZ Concrete NZ$m 12 mths 12 mths %∆ • Cement earnings up despite lower Sales 2,052 2,020 +2 domestic volumes. • Demand for concrete and related EBITDA Concrete
Slide 31: Laminates & Panels
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 31 Laminates & Panels For personal use only Laminex • Leading high pressure laminate & decorative surfaces • Estimated Australasian market positions • Decorated board – No.1 • Medium density fibreboard – No.1 • Particleboar
Slide 32: Laminates & Panels result
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 32 Laminates & Panels result For personal use only June 11 June 10 Laminex NZ$m 12 mths 12 mths %∆ • Australian revenues up strongly in Sales 1,979 1,930 +3 first half due to new housing and govt education building programm
Slide 33: Formica: continued improvement in earnings, due to Asia growth
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 33 Formica: continued improvement in earnings, due to Asia growth and cost reduction programme For personal use only EBIT NZ$m FY11 FY10 % Change Asia 34 29 +17 North America 28 15 +87 Europe 9 5 +80 Corporate -15 -15 - EBI
Slide 34: Steel
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 34 Steel For personal use only Rollforming 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 35: Steel result
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 35 Steel result For personal use only June 11 June 10 • Strong performance in coated steel NZ$m 12 Mths 12 mths %∆ despite impacts of floods and Sales 1,214 1,172 +4 earthquakes: • Operating earnings up 32% to EBITDA 106 10
Slide 36: New Zealand: Key residential indicators
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 36 New Zealand: Key residential indicators For personal use only
Slide 37: Australia: Key construction sector indicators
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 37 Australia: Key construction sector indicators For personal use only
Slide 38: Australia: Key residential indicators
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 38 Australia: Key residential indicators For personal use only
Slide 39: New Zealand Economic and Fiscal Data
Investor Presentation | Fletcher Building | © September 2011 Appendix | Page 39 New Zealand Economic and Fiscal Data¹ For personal use only 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
Slide 40: For personal use only
INVESTOR PRESENTATION For personal use only September 2011 Bill Roest Chief Financial Officer
Fletcher Building — Investor Presentation (September 2011) on 6ix