Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Day (June 2025)
81 slides from Fletcher Building's investor day presentation, Jun 24, 2025
Slide 1: Fletcher Building Investor Day (ASX announcement)
24 June 2025 Fletcher Building Investor Day Fletcher Building is hosting its Investor Day 2025 in Auckland today, starting at 9.00am NZT. Fletcher Building management will outline the strategy and outlook for the Company. Key topics to be covered will include the strategic review outcomes and immedi
Slide 2: ASX announcement continued and contacts
goodwill and brand impairments, closure costs and the write off and provision for onerous contracts associated with ERP projects. Altogether the total Significant Items to be announced as part of the FY25 results are expected to be between ~$573m and ~$781m. The presentation materials are attached a
Slide 3: Investor Day June 2025
INSERT TEXT HERE For personal use only Investor Day June 2025
Slide 4: Agenda
Agenda 24 June 2025 NZT Section Presenter Duration (mins) For personal use only 9:00am Overview Peter Crowley 10 Strategic review outcomes and immediate 9:10 Andrew Reding 30 priorities 9:35 Balance sheet settings and capital allocation Will Wright 20 10:00 Trading conditions & FY25 update Andrew Re
Slide 5: Overview
Overview For personal use only Peter Crowley, Chair
Slide 6: Medium term focus on manufacturing and distribution of building products and materials
Medium term focus on manufacturing and distribution of For personal use only building products and materials 4 | Investor Day | 24 June 2025 | Fletcher Building Limited
Slide 7: Board of Directors
Board of Directors Chair appointed, refresh is now complete For personal use only PETER CROWLEY SANDRA DODDS CATHY QUINN TONY DRAGICEVICH JACQUI COOMBES Chair and Independent Non- Independent Non-Executive Director / Independent Non-Executive Independent Non-Executive Independent Non-Executive Execu
Slide 8: Executive Leadership Team
Executive Leadership Team Refresh is complete now complete with six new appointments occurring throughout 2024 For personal use only ANDREW REDING HAMISH MCBEATH HAYDN WONG JAMES PETERS KYLIE EAGLE Group Chief Executive Officer & Chief Executive Light Group General Counsel and Company Chief Executiv
Slide 9: Reflections from the Chair
Reflections from the Chair We acknowledge past unacceptable performance and lessons have been learnt. A major turnaround is underway $700m capital raising and sale of Tradelink for ~A$170m both helped to reduce debt, improve financial For personal use only 1 Balance Sheet reset resilience and also
Slide 10: Where are we heading?
Where are we heading? A simplified business, operating with capital and operational discipline For personal use only Medium term (3-5 year) focus on manufacturing and distribution of building products and materials Business unit returns meeting or exceeding cost of capital Simple and de-centralised
Slide 11: Introduction
Introduction For personal use only Andrew Reding, Managing Director & CEO
Slide 12: Why I took the role
Why I took the role Energised by the opportunity to realise the value of the great businesses within our Group Under-appreciated assets with portfolio For personal use only • There is a significant opportunity to help rejuvenate a business with substantial latent potential • The core businesses cont
Slide 13: Our medium term strategy
Our medium term strategy Four internal levers together with external market dynamics will drive our performance Medium term focus on manufacturing and distribution of building products and materials For personal use only Focus on high Empower our Resilient Capital 1 Urgent action 2 3 4 performance l
Slide 14: How our strategy will deliver
How our strategy will deliver We have the ingredients to build on strong competitive positions with a leaner cohort of BUs, lead by focussed GMs For personal use only • High performing strategic business units • Market position, operational and capital discipline and high calibre leadership A perfor
Slide 15: Immediate actions
Immediate actions For personal use only Andrew Reding, Managing Director & CEO
Slide 16: Urgently moving forward with the turnaround
Urgently moving forward with the turnaround The strategic review identified immediate priorities that we are already executing on • Completed a comprehensive, in-depth review of all business unit’s performance through the cycle, and their strategic fit For personal use only Strategic review • Identi
Slide 17: Disestablishment of Australian Division
Disestablishment of Australian Division Organising in verticals has created significant cost synergies and will improve coordination AUSTRALIAN DIVISION EBIT MARGIN & DIVISIONAL COST FY19 – FY25, (incl. Sig Items, ex associate income), LHS % EBIT Margin, RHS $M Divisional costs, For personal use onl
Slide 18: Turnaround plan
Turnaround plan Urgent priorities have been actioned decisively and there is a clear path of continuous improvement ahead Implemented Short term Medium term For personal use only Australia, Steel & Corporate Finalise and implement Fully implement new restructure (~$15m saving) divisional restr
Slide 19: Focus on high performance
Focus on high performance For personal use only Andrew Reding, Managing Director & CEO
Slide 20: The current portfolio
The current portfolio Our operations span multiple verticals and a wide set of management skills are required to manage business units with differing markets and operational risks Sector / skill set Business Unit For personal use only Concrete Steel Primary & Secondary Processing Wood & Panels Water
Slide 21: A focus on high performing businesses
A focus on high performing businesses The objective of divisional and operating changes is to make our business units leaner, closer to their customers and unencumbered by corporate overhead For personal use only Low Medium term earnings risk Medium term performance High 19 | Investor Day | 24 June
Slide 22: Building a simpler and more focused business
Building a simpler and more focused business The first step to simplifying our portfolio is reducing it to five Divisions For personal use only Light Building Products Heavy Building Materials Wood & Panels Water Insulation Construction Materials Steel Distribution Residential & Development Construc
Slide 23: Light Building Products
Light Building Products Privileged positions, with efficient low-cost manufacturing facilities DIVISIONAL VERTICAL AVERAGE EBIT CONTRIBUTION FY19 – FY24, $M (ex. Sig Items, pre divisional costs) For personal use only 225 A world class plasterboard business 200 Average Max Min 175 150 Unique insu
Slide 24: Heavy Building Materials
Heavy Building Materials A leader in New Zealand aggregates, cement, concrete and steel, with strong brands and a unique footprint DIVISIONAL VERTICAL AVERAGE EBIT CONTRIBUTION FY19 – FY24, $M (ex. Sig Items, pre divisional costs) For personal use only 120.0 Network of highly profitable, strategic
Slide 25: Distribution
Distribution A leading national distributor of building and plumbing supplies via trusted and respected brands BUSINESS UNIT AVERAGE EBIT CONTRIBUTION FY19 – FY24, $M (ex. Sig Items, pre divisional costs) For personal use only 140.0 Iconic brands with strong connection to the Average Max Min build
Slide 26: Residential and Development
Residential and Development The Residential and Development Division is one of the largest private sector developers of residential homes and communities in Auckland and Christchurch R&D BUSINESS UNIT AVERAGE EBIT CONTRIBUTION FY19 – FY24, $M (ex. Sig Items, pre divisional costs) For personal use on
Slide 27: Construction
Construction A leading engineering & construction platform in New Zealand with embedded sector expertise, credentials and relationships CONSTRUCTION BUSINESS UNIT AVERAGE EBIT CONTRIBUTION FY19 – FY24, $M (ex. Sig Items, pre divisional costs) For personal use only Has been re-orientated towards in
Slide 28: Expected benefits
Expected benefits The new divisional model reduces cost and improves integration by bringing similar business units together For personal use only • Removes duplication and enable greater integration across similar skill sets/markets • Unifies ‘affiliate’ businesses in New Zealand and Australia (Lam
Slide 29: Empowering our operational leaders
Empowering our operational leaders For personal use only Andrew Reding, Managing Director & CEO
Slide 30: Issues with a centralised operating model
Issues with a centralised operating model A centralised approach did not deliver anticipated gains and decreased the agility of business unit management For personal use only • The concentration of decision-making power at the centre has resulted in less agility when Slower decision making respondin
Slide 31: New decentralised model
New decentralised model Accountability shifts towards business units. Each management layer has designated roles and distinct capabilities Business Units Divisions Holding co. For personal use only “We know our customers, own our value “We know our markets, and manage & “We provide strategic directi
Slide 32: A leaner operating model
A leaner operating model The move to a decentralised model has significant financial and operational benefits CENTRAL COSTS Exit FY25F1, $m For personal use only (15) (10) (15) 107 229 53 189 Overheads have been reduced by c.$30m in phase one, with further reductions in line with divestments 69 30 |
Slide 33: Expected benefits
Expected benefits The new organisational model allows for faster decision making, customer centricity, role clarity and cost efficiencies For personal use only • Stronger focus on core capabilities • Faster response to market opportunities • Accountability where it counts • Empowering business units
Slide 34: Building a resilient capital structure
Building a resilient capital structure For personal use only Will Wright, CFO
Slide 35: A clearly defined financial framework
A clearly defined financial framework Strong focus on driving financial performance and disciplined allocation of capital • Targeting a ROIC greater than WACC through the cycle For personal use only Focus on Shareholder • Ensure all businesses have ROIC targets reflective of the sectors in which the
Slide 36: Focus on Shareholder Returns
Focus on Shareholder Returns Targeting returns above cost of capital through the cycle and improved disclosure to drive accountability FY19 - FY24 Group ROIC(1) For personal use only ROIC (%) and average invested capital(2) ($m) 5,425 5,305 5,127 5,748 6,220 6,440 • Business units to be assessed aga
Slide 37: Capital structure through the cycle
Capital structure through the cycle Medium term Net Debt target adjusted to $400m - $900m providing the business with a foundation to deliver long term growth, while also maintaining sufficient headroom to absorb potential market volatility NET DEBT / (CASH): FY15 TO FY25F For personal use only Pre
Slide 38: Net Debt through time
Net Debt through time A number of items have been a drag on Fletcher Building’s balance sheet over the past 5 years but, looking forward, greater discipline, a simplified portfolio and improved operational performance should result in greater cash generation NET DEBT MOVEMENTS FY20 TO FY25F For pers
Slide 39: Balance Sheet levers
Balance Sheet levers Achieving and then maintaining Net Debt within the target range will require a combination of “one-off” capital releases and longer term capital allocation and dividend discipline For personal use only • Dividend will remain suspended until net debt reaches the middle-lower end
Slide 40: Funding mix
Funding mix The current debt profile is overly complex and expensive for our current and future needs DEBT MATURITY PROFILE FUTURE TARGET STATE For personal use only As at 31 December 2024, $M 997 • Lower Net Debt levels of $400m - $900m (pre IFRS-16) 562 • Investment grade credit metrics 957 452 32
Slide 41: Disciplined Capital Allocation
Disciplined Capital Allocation Capital expenditure is crucial to ongoing sustainment of earnings and growth, but is subject to well defined controls both prior to commitment and during project execution TARGET FUNDING MIX For personal use only • Stay in business and growth capex (organic or Operatin
Slide 42: Disciplined Capital Allocation
Disciplined Capital Allocation Target SIB capex equal to depreciation, with major upcoming growth projects focused on key Light Building Product and Heavy Building Material assets CAPEX SPENDING AND FORECAST • Where SIB investment is required to For personal use only FY19-FY24,FY25F; $m support busi
Slide 43: Working Capital Strategy
Working Capital Strategy Close management of working capital will remain a key part of the overall financial strategy CUMULATIVE AVERAGE MONTHLY ∆TRADING CASH1 For personal use only (FY19 – FY24); $m • Fletcher Building operates large 50 working capital balances and over the Cumulative average (Manu
Slide 44: Key messages
Key messages Strong focus on driving financial performance and disciplined allocation of capital For personal use only • Targeting ROIC greater than WACC across all business units • Transparent and consistent financials • Net Debt target - $400m to $900m • Reduce working capital cyclicality • Discip
Slide 45: Macro trends & outlook
Macro trends & outlook For personal use only Andrew Reding, Managing Director & CEO
Slide 46: Where in the New Zealand cycle are we?
Where in the New Zealand cycle are we? Sales volumes of key products across the portfolio provide a view of market conditions and potential outlook PRODUCT VOLUMES For personal use only Rolling 12m average quarterly volumes, Q4 FY19 = 100 140 Winstone Wallboards Winstone Aggregates Golden Bay Humes
Slide 47: Where in the Australian cycle are we?
Where in the Australian cycle are we? Sales volumes of key products across the portfolio provide a view of market conditions and potential outlook PRODUCT VOLUMES For personal use only Rolling 12m average quarterly volumes, Q4 FY19 = 100 120 Laminex AU Fletcher Insulation Iplex AU Stramit 110 100 90
Slide 48: Market fundamentals
Market fundamentals We operate in structurally attractive markets, with higher population growth and infrastructure deficits driving demand for infrastructure and the materials required to construct it POPULATION GROWTH INFRASTRUCTURE QUALITY INDEX For personal use only 1995 = 100 2021 160 New Zeala
Slide 49: FY25F update
FY25F update Operating volumes continue to subdued, impacting operating leverage and profitability FY25F EBIT Outlook For personal use only • FY25F EBIT (pre Significant Items) expected to be between $370m and $375m inclusive of the $16.4m loss incurred as a consequence of the settlement reached wit
Slide 50: Closing remarks
Closing remarks For personal use only Andrew Reding, Managing Director & CEO
Slide 51: What does this mean for shareholders?
What does this mean for shareholders? Fletcher Building’s new strategic direction will lead to a leaner more focused organisation • Heavy Building Materials – a leader in New Zealand aggregates, cement, concrete and steel, with strong brands and footprint Strong core For personal use only ❶ portfoli
Slide 52: Appendix
For personal use only Appendix
Slide 53: ROIC framework
ROIC framework A disciplined capital allocation framework driving investment decisions, performance accountability and sustainable value creation across business units Invested For personal use only ROIC framework NOPAT (trailing 12-months) ÷ capital (Average month end = ROIC • ROIC serves as the pr
Slide 54: Additional financial information
Additional financial information Further financial information including: For personal use only • Re-stated divisional metrics; and • Indexed volume data Is available in excel form via the Fletcher Building Investor relations website: https://fletcherbuilding.com/investor-centre/financial-results-an
Slide 55: Nail the basics
For personal use only NAIL THE BASICS
Slide 56: PlaceMakers at a glance
c.$1.3bn c.25% For personal use only FY25 Revenue FY25 Market Share PlaceMakers stores Frame & Truss plants PlaceMakers Frame & Truss Mico 2 | Investor Day | 24 June 2025 | Fletcher Building Limited
Slide 57: Financial performance FY19 to FY25F
Financial performance FY19 to FY25F COST OF GOODS SOLD, COST, EBIT AS % REVENUE REVENUE LOSS FROM MARKET SHARE DECLINE 1800 Building activity peaked in FY23 35.0% For personal use only with significant drop in FY24 1600 30.0% 1400 25.0% 1200 1000 20.0% 800 15.0% 600 10.0% 400 5.0% 200 EBIT LOSS FROM
Slide 58: PlaceMakers has been losing market share since 2019
For personal use only Jul-19 4 Aug-19 Sept-19 Oct-19 Nov-19 32.2% Dec-19 Jan-20 Feb-20 End FY19 Market Share Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Market Share Sept-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 | Investor Day | 24 June 2025 | Fletcher Building Limited Apr-21 May-21 Jun-21 Jul-21
Slide 59: Nail the basics: why it matters
For personal use only NAIL THE Why it matters? BASICS Customer Trust, Cost Discipline, Execution Excellence Great builds start with SOLID FOUNDATIONS - both in construction and in business. Nail the basics, and everything else falls into place 5 | Investor Day | 24 June 2025 | Fletcher Building Limi
Slide 60: Nailing the basics: customer
Nailing the basics Getting us back on track ISSUE ACTION For personal use only We are 100% refocused on growing our Trade and Commercial Customer base We focused brand on the wider market We have removed two layers and 200+ roles where our including DIY and Retail Customers instead of team wer
Slide 61: Nailing the basics: manufacturing and supply chain
Nailing the basics Getting us back on track ISSUE ACTION For personal use only Our team has been refreshed with the expertise needed We stopped the Felix Street Frame & Truss project and We did not have the manufacturing expertise opted to repurpose the Clever Core Cavendish Drive site needed
Slide 62: Competitive advantages
Competitive advantages Set up to Win For personal use only PEOPLE STORE NETWORK BRAND MANUFACTURING & & RANGE SUPPLY CHAIN Knowledge ‘Know How, Can Do’ 66 Stores providing coverage Iconic and trusted brand 8 Frame & Truss Plants with a 100% Commitment to our across the country Known and
Slide 63: Heavy Building Materials Division: Construction Materials Vertical
INSERT TEXT HERE For personal use only Heavy Building Materials Division Construction Materials Vertical
Slide 64: NZ's leading construction materials business
The Construction Materials vertical is NZ’s leading construction materials business with a foundation in circularity and low-carbon Leading market positions - Leader in aggregates & recycling, NZ’s only domestic manufacturer of cement, ready-mix concrete, masonry & Dricon (bagged dry concrete) and
Slide 65: Vertically integrated, aggregate-led business model
Our vertically integrated business model is aggregate-led, with downstream presence to deliver value-added solutions and drive pull- through For personal use only ~8 million tonnes aggregates p.a. ~1m tonnes cement p.a. Upstream ~470k tonnes recycling/cleanfill p.a. ~100k tonnes waste diverted p.a.
Slide 66: Golden Bay is NZ's only integrated cement manufacturer
Golden Bay is NZ’s only integrated cement manufacturer The Portland plant in Whangārei has been producing cement since 1913 providing critical supply chain resilience to the construction For personal use only industry Strategically located near two limestone quarries which provide supply of nece
Slide 67: Cement manufacturing in two stages
Cement manufacturing occurs in two stages: production of clinker from raw materials; and grinding of clinker to produce cement for distribution Clinker production is an emissions intensive process: 1. Thermal energy: ~35% of current process emissions (addressable by Golden Bay) For personal use only
Slide 68: Golden Bay's use of waste-derived alternative fuels
Golden Bay’s use of waste-derived alternative fuels is industry leading and we play a significant role in waste diversion for NZ XX For personal use only 2003: bio-fuel (Woodwaste) 2021: installation of feed system to 2025: Front-end firing project to introduce hard- introduced as a partial replacem
Slide 69: Decarbonisation of cement and net-zero by 2050
Decarbonisation of cement is playing a key role in the NZ concrete industry achieving net-zero emissions by 2050 What Golden Bay is doing: What Golden Bay is doing: • Increasing the use of supplementary cementitious What Firth is doing: • Supporting small-scale carbon capture materials to reduce cli
Slide 70: Emissions Trading Scheme settings are uncertain
Current Emissions Trading Scheme settings are uncertain, preventing significant investments in decarbonisation Manufacturing of clinker and cement are qualifying activities under the Emissions Trading Scheme (‘ETS’), therefore Golden Bay has historically For personal use only received Industrial A
Slide 71: Committed to decarbonising cement and concrete
We are committed to decarbonising cement & concrete, and we want to remain manufacturing in NZ, but we cannot deploy significant capital with regulatory uncertainty Supplementary Cementitious Materials (‘SCMs’) For personal use only Positive Government engagement to date – decarbonisation without
Slide 72: Questions?
For personal use only Questions?
Slide 73: OSB and FOSB: The future of engineered wood products
For personal use only OSB and FOSB The future of engineered wood products JUNE 2025
Slide 74: What is OSB and FOSB?
What is OSB and FOSB? Oriented strand board (OSB) For personal use only OSB is a reconstituted wood panel formed by layering wood strands together at specific orientations to achieve structural properties of plywood at a reduced manufacturing cost Fine OSB (FOSB) FOSB is a wood panel with an OSB cor
Slide 75: Why OSB?
Why OSB? OSB is a ubiquitous building product in North America and Europe, on par with structural plywood. In Asia, OSB consumption is rapidly growing (10yr CAGR: 28%) and displacing structural plywood as observed in other geographies For personal use only North America Europe Asia 30 12 100 20 90 1
Slide 76: Why FOSB?
Why FOSB? FOSB is intrinsically superior to PB and MDF in most properties Material Particleboard FOSB MDF FOSB advantages over PB Prone to edge FOSB & MDF FOSB & MDF For personal use only Processing Machine impact Strength, stiffness and moisture resistance breakout Similar Similar Fabricator | Jo
Slide 77: Supportive macro construction trends
Supportive macro construction trends Key construction sector trends are driving increased demand and intensity of construction wood panels For personal use only New Zealand Residential Construction by Typology 100% Insights: 8% 90% 20% Increasing demand of multi-unit residential construction 80% l
Slide 78: Plant overview – Laminex Taupō
Plant overview – Laminex Taupō Leading investment in the New Zealand wood panels manufacturing industry New plant will utilise advanced technology to produce a wide range of quality, cost competitive and superior For personal use only products with diverse applications in furniture, joinery and th
Slide 79: Manufacturing process
Manufacturing process Raw Wood Gluing Forming & Finished Process Materials Processing Drying Pressing Finishing Product For personal use only MDF Fibre Distribution Density is important Fibre Pulp log & Residues Refine Flaking PB Milling Residues Mill Particle Classification FOSB OSB Stranding Pulp
Slide 80: Product innovation pipeline
Product innovation pipeline The new plant will enable the development of a wide range of engineered wood products Expanded flooring Rigid Air Barrier, Roof High Performance & For personal use only Wall systems / SIPs and structural range Strand lumber Sheathing Solid Core Doors Up to 40mm thicknes
Slide 81: Delivery programme
Delivery programme Plant nearing completion, 1st board targeted in early FY27 For personal use only FY26 FY27 FY28 Construction completion Plant commissioning Core product range development Sales opportunities & development for domestic / export markets BRANZ / Codemark accreditation Development of