Fletcher Building Limited · NZX:FBU
Fletcher Building — Debt Investor Presentation (November 2008)
31 slides from Fletcher Building's debt investor presentation, Nov 25, 2008
Slide 1: Capital Notes Issue, November 2008
Fletcher Building Finance Limited For personal use only Capital Notes Issue, November 2008 Bill Roest Chief Financial Officer Sara Double Treasurer
Slide 2: Agenda
2 Agenda For personal use only Capital Notes Issue Summary Fletcher Building Finance Limited Fletcher Building Business Overview Fletcher Building Funding Strategy Capital Notes Issue Structure and Terms Timetable
Slide 3: Capital Notes Issue Summary
3 Capital Notes Issue Summary For personal use only Formica exterior façade compact structural laminate Puente de la Salve Bridge - Spain
Slide 4: Capital Notes Summary
4 Capital Notes Summary For personal use only Issuer: Fletcher Building Finance Limited Guarantor: Fletcher Building Limited Capital Notes: Fixed Rate capital notes Ranking: Unsecured, subordinated capital notes First Election Date: The Capital Notes are to be issued in two series. The Fir
Slide 5: Existing Fletcher Building Capital Notes
5 Existing Fletcher Building Capital Notes For personal use only Fletcher Building Finance Limited (as at 30 June 2008) Code Coupon Frequency Next Election On Issue (NZ$M) Date FBF020 8.85% Bi-annually 15 March 2010 $37.3M FBF030 9.00% Bi-annually 15 March 2010 $29.9M FBF040 8.90% Bi-annually 15 Mar
Slide 6: Fletcher Building Finance Limited
6 Fletcher Building Finance Limited For personal use only
Slide 7: Fletcher Building Finance Limited
7 Fletcher Building Finance Limited For personal use only Fletcher Building Finance Limited is a wholly owned subsidiary of Fletcher Building Limited, established in 2002 to partially support Fletcher Building’s financing requirements A key part of this financing has been through the issue of ca
Slide 8: Capital Notes issue structure
8 Capital Notes issue structure For personal use only Unsecured, subordinated guarantee Trustee Perpetual Trust Limited Flow of funds Trust Documents Fletcher Building Finance Limited Investors Flow of funds
Slide 9: Fletcher Building Business Overview
9 Fletcher Building Business Overview For personal use only Forman ceiling – Auckland International Airport, NZ
Slide 10: Fletcher Building's businesses
10 Fletcher Building’s businesses For personal use only Laminates Building Products Distribution Infrastructure Steel & Panels Revenue - 11%* Revenue - 16%* Revenue - 26%* Revenue - 30%* Revenue - 17%* Plasterboard Building Materials Construction The Laminex Group Rollforming Insulation Distribution
Slide 11: Underlying earnings pre-unusual items grew in FY2008
11 Fletcher Building’s underlying earnings pre-unusual items grew in FY2008 For personal use only Proforma Reported % D against 3 30 June 2008 30 June 2007 30 June 2007 NZ$m 12 months 12 months Proforma 12 months Sales 7,091 5,926 +20 5,926 1 EBITDA 966 854 +13 859 1 EBIT 768 698 +10 703 2 Net earni
Slide 12: Margins held up but a slowdown is evident in many businesses
12 In the year to 30 June 2008 Fletcher Building’s margins held up but a slowdown is now evident in many businesses For personal use only 6 Mths 6 Mths 12 Mths Division 31 December 2007 30 June 2008 30 June 2008 EBITDA/Sales % EBITDA/Sales % EBITDA/Sales % Building Products 19.6 20.3 19.9 Steel 8.6
Slide 13: Fletcher Building's summary balance sheet
13 Fletcher Building’s summary balance sheet For personal use only 30 June 2008 30 June 2007 NZ $m 12 months 12 months %D Operating Cashflow 434 483 -10 Debt 1,846 654 +182 Debt / Debt plus 40.1 22.2 +81 Book Equity (%) Interest Cover 7.1 9.8 -28 Return on Funds (%) 19.0 24.8 -23 Source: Fletcher Bu
Slide 14: Fletcher Building's key ratios
14 Fletcher Building’s key ratios For personal use only Interest Cover (times): Gearing (percentage): EBIT/Net Interest Expense as at 30 June Net Debt/(Net Debt + Book Equity) as at 30 June 10.0 9.80x 50.0% 9.60x 9.30x 44.4% 45.0% 43.1% 9.0 40.1% 40.0% 37.1% 7.80x 35.0% Percentage 8.0 Times 7.10x 30
Slide 15: Net debt movement during FY08
15 Fletcher Building’s net debt movement during FY08 For personal use only NZ$million Source: Fletcher Building Limited 2000 Annual Results Presentation 2008 27 81 1,846 1,039 195 1600 (65) 1200 NZ$ m 654 800 (633) 349 400 199 0 Minority 1 July 2007 Closing debt 30 June 2008 Opening debt Divestments
Slide 16: Market outlook in 2009
16 Market outlook in 2009 For personal use only Good infrastructure markets in New Zealand and Australia Residential NZ housing consents at 25 year low Australia weakening US remains weak Europe: UK and Spain down, other European markets likely to be softer Asia still showing growth al
Slide 17: Fletcher Building's response to the current environment
17 Fletcher Building’s response to the current environment For personal use only Reducing operating expenditure Constraining capital expenditure Working capital and cashflow management Maintaining conservative balance sheet settings Continue to look for selected opportunities to expand whe
Slide 18: Fletcher Building's Funding Strategy
18 Fletcher Building’s Funding Strategy For personal use only Central Motorway Junction – Auckland, NZ
Slide 19: Fletcher Building's financing objectives
19 Fletcher Building’s financing objectives For personal use only Extend weighted average duration of Fletcher Building’s debt maturity profile to achieve appropriate spread of maturities Fund general business activities of the Fletcher Building Group and retire debt Fletcher Building is commi
Slide 20: Fletcher Building's capital structure
20 Fletcher Building’s capital structure For personal use only A combination of capital notes, bank facilities, non-bank institutional funding and working capital lines Bank facility refinance completed in July 2008 $378 million committed, undrawn funds as at 30 June 2008 $111 million in cas
Slide 21: Fletcher Building's debt maturities
21 Fletcher Building’s debt maturities For personal use only Instrument Drawn Total Facilities Undrawn Weighted Average Maturity NZ$M (1) NZ$M NZ$M Bank Debt 753 1,131 378 2.8 years Other Loans 121 121 0 0.8 years Capital Notes (2) 357 357 0 2.6 years Non-Bank 737 737 0 9.0 years Institutional Fundi
Slide 22: Fletcher Building's sources of debt funding
22 Fletcher Building’s sources of debt funding For personal use only As at 30 June 2008 Working Capital Facilities Capital Notes 6.1% 18.2% Non-Bank Institutional Funding 37.4% Bank Loans 38.3% Source: Fletcher Building Limited Annual Report 2008
Slide 23: Fletcher Building's debt maturity profile
23 Fletcher Building’s debt maturity profile For personal use only Maturity profile of the $1,968 million of senior interest bearing debt and capital notes Funding & Maturity as at 30 June 2008, adjusted for the refinance of bank facilities in July 2008 600 500 Capital Notes Debt NZ$ millions 400 30
Slide 24: Capital Notes Issue Structure and Terms
24 Capital Notes Issue Structure and Terms For personal use only University of Auckland Business School, NZ
Slide 25: Capital Notes Terms
25 Capital Notes Terms For personal use only Issuer: Fletcher Building Finance Limited Guarantor: Fletcher Building Limited Type: Fixed Rate Capital Notes Ranking: Unsecured, subordinated Capital Notes Series: The Capital Notes are to be issued in two series: 15 May 2014 Capital Notes (a
Slide 26: Capital Notes Terms cont.
26 Capital Notes Terms cont. For personal use only Dividends: Issuer and Guarantor have covenanted not to pay any dividends on their respective ordinary shares while any interest payments on the Capital Notes remain outstanding Election Dates: On the relevant Election Date, Noteholders of the re
Slide 27: Other matters
27 Other matters For personal use only Offer closes 31 March 2009, or earlier at Fletcher Building Finance’s discretion Fletcher Building Finance can change the interest coupon at any time during the offer period in respect of Capital Notes not yet issued All brokers and NZX will be notified
Slide 28: Timetable
28 Timetable For personal use only PlaceMakers Store – Kerikeri, NZ
Slide 29: Issue timetable
29 Issue timetable For personal use only 24 November Offer opens 25, 26 November Investor presentations 31 March 2009 Offer closes, unless closed earlier at Fletcher Building’s discretion or Issue filled Within 10 days of Close Listing on NZDX
Slide 30: Thank you
For personal use only Thank you
Slide 31: Disclaimer
31 Disclaimer For personal use only This document does not constitute a recommendation by Fletcher Building Finance Limited (the "Issuer"), Fletcher Building Limited (the “Parent”), First NZ Capital Securities Limited (the “Arranger"), ANZ National Bank Limited or Goldman Sachs JBWere (the “Joint Le
Fletcher Building — Debt Investor Presentation (November 2008) on 6ix