Slide 1: Formica Corporation Analysts Presentation
For personal use only Formica Corporation Fletcher Building Limited Analysts Presentation 12 – 13 March 2008 Sydney Australia
Slide 2: Cautionary Statement
Cautionary Statement For personal use only This confidential 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’s act
Slide 3: Formica – 95 Years of History
Formica – 95 Years of History Formica Corporation For personal use only 1990s - 2008 1970s- 1960s 1980s 1950s 1930s 1940s 1920s Started in 1913 3
Slide 4: Revenue Growth Year on Year
Revenue Growth Year on Year 2003 US$m 12 months to December For personal use only • Sells Foils printed paper business • Introduces textured product design with Etchings and 850 Honed HPL 2004 803 • Sells North American Flooring business 800 • Emerges from bankruptcy with Cerberus, Oaktree and other
Slide 5: Formica Today
Formica Today • Formica operates in three major regions with key markets in North America, Europe For personal use only and Asia Revenue (a) EBITDA (a) North Asia America Asia 27% 24% 15% North America 42% Europe 43% Europe 49% (a) 12 months to December ‘07 Note: Calendar 2007 Figures 5
Slide 6: Major Markets by Country
Major Markets by Country • Formica has a diverse geographic revenue stream and commands significant share across For personal use only all countries served % of Total Formica Revenue % Market Share In Region USA USA UK UK Spain Spain Scandinavia Scandinavia Canada Canada Taiw an Taiw an China China
Slide 7: Market Segments
Market Segments For personal use only • The majority of the Company’s sales are made to the repair and remodel segment of both the commercial and residential construction markets • Formica’s exposure to the volatile residential new construction market is limited North America (a) Europe (a) Asia (a)
Slide 8: Formica Regional Focus – North America
Formica Regional Focus – North America • Geographical focus is differentiated by market maturity and competition as well as regional product For personal use only demand and application differentiation United States - Primarily HPL and Solid Surface sheet sale focus - Significant focus on Big Box re
Slide 9: Formica Regional Focus - Europe
Formica Regional Focus - Europe • Europe is structured around five commercial areas, supported by six factories with a regional For personal use only headquarters in Newcastle, U.K. U.K. / Ireland Northern (Scandinavia, Finland, Russia) • Market share leader in Scandinavia with 65%. • HPL market sha
Slide 10: Formica Regional Focus - Asia
Formica Regional Focus - Asia • Asia comprises three primary areas with regional headquarters in Taipei, Taiwan For personal use only China (China and Hong Kong) Asean (Thailand, Singapore, Malaysia, Indonesia) - China is primarily focused on the higher margin - Majority of sales from HPL and Compac
Slide 11: Going Forward – Three Strategic Focus Areas
Going Forward – Three Strategic Focus Areas For personal use only • Complete North American manufacturing consolidation and distribution optimization to maximize earnings growth through focused cost optimization • Drive top line revenue growth through innovative new product introductions and geograp
Slide 12: Cost Optimization - Project Breakthrough
Cost Optimization - Project Breakthrough (North America Manufacturing / Distribution Improvement) Original State For personal use only Industry KPI BIC Formica • Redundant 4 factory footprint Fill Rate 98% <90% • Functional batch factory flow OTD Lead Time 7 days 20+ days • Legacy adversarial manufa
Slide 13: Cost Optimization - Project Breakthrough: Restructuring Plan
Cost Optimization - Project Breakthrough (North America Manufacturing / Distribution Improvement) 3 Phase Restructuring Plan Current Status For personal use only Consolidation Consolidation • Idle Sierra Mfg. & DC • Sierra closed in March 2007 and Evendale presses started up • Open new West Coast DC
Slide 14: Revenue Growth Opportunities
Revenue Growth Opportunities • Formica has recently undertaken various initiatives that will expand the product portfolio For personal use only • Significant opportunities exist for further development Recent Initiatives Future Initiatives – Formica has entered into a Joint Venture – Expansion of th
Slide 15: Integration into Fletcher Building Laminates & Panels Division
Integration into Fletcher Building Laminates & Panels Division • The acquisition of Formica in July 2007 significantly increased the size of The Laminates & Panels For personal use only Division which previously consisted solely of The Laminex Group • Formica and The Laminex Group both manufacture H
Slide 16: Integration of Formica / Laminex Synergies
Integration of Formica / Laminex Synergies Since the Formica acquisition significant progress has been made on a number of synergies that have For personal use only been identified between Formica and Laminex. Estimated annualized synergies of US$17.6m by FY09 were identified prior to acquisition. R
Slide 17: Formica Current Performance and Outlook
Formica Current Performance and Outlook Europe For personal use only – Coming off a record year for calendar 2007, continued strong performance is seen in early 2008 – The U.K. and Spanish markets appear to be suffering some residential slow down – Nordic areas have gained momentum at the beginning
Slide 18: Product Portfolio and Applications
For personal use only Product Portfolio and Applications 18
Slide 19: Product Portfolio
Product Portfolio Major Product Lines For personal use only • High Pressure Laminates are resin-treated papers, highly resistant to abrasion and impact, that provide Product Portfolio % of Revenue design and wear benefits for countertops, cabinets and furniture Stone & Granite 1% Other • Compact and
Slide 20: Leading Product Design and Innovation
Leading Product Design and Innovation • Formica has a rich history of technological leadership and innovation in product design For personal use only • Only surfacing manufacturing company with plate design and manufacturing capability • As a part of the corporate growth strategy, the Company launch
Slide 21: Product Applications
Product Applications Commercial Applications Residential Applications For personal use only • Commercial Furniture – Bartops • Kitchen & Bath – Laboratory Tops – Salad Bars – Countertops – Game Tables – Cabinets – Cabinets – Buffet Countertops – Backsplashes – Workstations – Shower / Tub Surround •
Slide 22: Product Applications
Product Applications Luxe Collection HPL - Table Radiance Collection HPL - Countertop For personal use only Sculpted Collection HPL – Cabinets Riverwash Collection HPL - Backsplash
Slide 23: Product Applications - Commercial
Product Applications - Commercial Veneer by Formica – Walls and Closet For personal use only 23
Slide 24: Product Applications - Commercial
Product Applications - Commercial DecoMetal by Formica - Walls For personal use only 24
Slide 25: Product Applications - Commercial
Product Applications - Commercial Solid Surfacing by Formica – Table Tops For personal use only 25
Slide 26: Product Applications - Commercial
Product Applications - Commercial ColorCore 2 by Formica – Cosmetic Counter and Drawer Facings For personal use only 26
Slide 27: Product Applications - Residential
Product Applications - Residential ColorCore 2 by Formica – Cabinet Veneer by Formica – Umbrella Stand For personal use only 27
Slide 28: Product Applications - Residential
Product Applications - Residential For personal use only Solid Surfacing by Formica - Countertop 28
Slide 29: Product Applications - Residential
Product Applications - Residential Solid Surfacing by Formica - Countertop For personal use only 29
Slide 30: Product Applications - Residential
Product Applications - Residential Radiance Collection HPL - Countertop For personal use only 30
Slide 31: Appendix
Appendix • Global Manufacturing/Distribution Footprint For personal use only • Brand Awareness 31
Slide 32: Formica Global Manufacturing / Distribution Network
Formica Global Manufacturing / Distribution Network Americas Americas Region Region Europe Europe Region Region Asia Asia Region Region For personal use only Kolho, Finland Perstorp, Sweden Newcastle, U.K. Vancouver BC Aycliffe, U.K. . Poland St. Jean, Canada Quillan, Fr St. Avold, France. Evendale,
Slide 33: Worldwide Brand Awareness
Worldwide Brand Awareness • The Formica brand is one of the best known brand names in the world and the top brand in the For personal use only laminate industry • It is the most specified brand of HPL with an extremely high level of unprompted awareness COUNTERTOP MATERIAL (LAMINATE) BRAND AWARENESS