Fletcher Building Limited · NZX:FBU
Fletcher Building — Citi Australasian Investment Conference 2010
38 slides from Fletcher Building's conference presentation, Oct 26, 2010
Slide 1: Presentation to Citi Australasian Investment Conference
1 For personal use only Presentation to Citi Australasian Investment Conference Jonathan Ling - Chief Executive Officer 26 October 2010 Investor Presentation| Fletcher Building | © October 2010
Slide 2: Disclaimer
2 For personal use only 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 result
Slide 3: Agenda
3 For personal use only Agenda • Company and Market Overview • Strategy • Financial Results • New Zealand Market Update •Outlook • Appendix: ‒ additional information Investor Presentation| Fletcher Building | © October 2010
Slide 4: Company and Market Overview
4 For personal use only Company and Market Overview Investor Presentation| Fletcher Building | © October 2010
Slide 5: Fletcher Building at a glance
5 Fletcher Building at a glance For personal use only • Revenue - year to 30 June 2010: NZ$6,799 million • Market Capitalisation NZ$5.1 billion Ranked # 1 on NZX # 62 on ASX • Employees: 16,000 • Listed on NZ and Australian Stock Exchanges • Shareholders: Revenues: Retail New 19% Zealand 23% Asia 5%
Slide 6: Market leading businesses
6 Market leading businesses For personal use only Building Distribution Infrastructure Laminates Steel Products & Panels Steel Plasterboard Building Materials Construction The Laminex Group Coated Steel Insulation Distribution MDF Roof oo Tiles es 62 PlaceMakers Co c ete: Concrete: Particleboa
Slide 7: Geographic exposure to end markets
7 For personal use only Geographic exposure to end markets Summary Residential Commercial Infrastructure Total 51% 25% 24% 100% New Zealand 57% 30% 13% 100% Australia 49% 51% 0 100% Rest of World Total Group 53% 29% 18% 100% Based on 2010 EBIT Investor Presentation| Fletcher Building | © October 201
Slide 8: Strategy
8 For personal use only Strategy Investor Presentation| Fletcher Building | © October 2010
Slide 9: Strategy
9 For personal use only Strategy Longer term strategy continues to be: • improve earnings reliability • maintain and improve internal capabilities - increased i d focus f on growth h oriented i d capex - business transformation initiatives • pursue acquisition opportunities where these meet key inve
Slide 10: Fletcher Building has a vertically integrated value chain
10 Fletcher Building has a vertically integrated value chain For personal use only Laminates Building Other Steel Concrete Manufacturers & Panels Products Dedicated Shared Other Construction Distribution Distribution Distribution Markets Investor Presentation| Fletcher Building | © October 2010
Slide 11: Financial Results
11 For personal use only Financial Results Investor Presentation| Fletcher Building | © October 2010
Slide 12: 2010 annual results summary
12 For personal use only 2010 annual results summary June 2010 June 2009 NZ$m 12 months 12 months % Change Sales 6,799 7,103 -4 EBITDA¹ 727 769 -5 EBIT¹ 521 558 -7 7 Net earnings1 301 314 -4 Unusual items after tax -29 -360 Net earnings 272 -46 EPS – cps1 49.7 59.7 -17 Dividend - cps 29 38 -24 24 1.
Slide 13: Strong earnings recovery in Laminates & Panels, lower volumes in Infrastructure and Steel
13 Strong earnings recovery in Laminates & Panels, lower For personal use only volumes in Infrastructure and Steel impacted earnings EBIT NZ$million1 1. Earnings before interest, tax, and unusual items Investor Presentation| Fletcher Building | © October 2010
Slide 14: Net debt levels reduced in FY2010
14 For personal use only Net debt levels reduced in FY2010 1800 1500 1,356 1,107 151 13 1200 191 900 (42) (2) (38) (512) (10) 600 300 0 Divideends Distributtion Divestmeents quity king apex Cash from ops Opening Net Debt Closing Net capiital Minoriity Work FX on D Debtt Ca Eq Debt Investor Presentat
Slide 15: Key Ratios
15 For personal use only Key Ratios Total T t l Sh Shareholder h ld R Return t (TSR) D bt/D bt Plus Debt/Debt Pl Equity E it Percentage Percentage 61 40 42 24 14 Jun 05 Jun‐06 Jun‐07 Jun‐08 Jun‐09 Jun‐10 ‐43 Return on Average Equity Return on Average Funds Percentage1 Percentage2 1. Net earnings / a
Slide 16: Capital expenditure – focus shifting to growth-orientated initiatives
16 Capital expenditure – focus shifting to growth-orientated For personal use only initiatives Capital Expenditure versus • Stay-in-business capex approx Depreciation NZ$M 350 60% of depreciation. p 322 289 * • Growth capex includes 300 acquisitions: 250 211 206 213 * - ACP acquisition already 191 2
Slide 17: New Zealand Market Update
17 For personal use only New Zealand Market Update Investor Presentation| Fletcher Building | © October 2010
Slide 18: NZ Update: Residential market
18 NZ Update: Residential market For personal use only • Approvals pp currentlyy running g at approx. pp 16,000 , p per annum vs. 15 5 year average of 23,700 ‒ Apartment consents are running at 15 year lows, down 45% ‒ Single dwelling consents are up 28% 28%* • Alterations and additions are up 2.8%
Slide 19: NZ Update: Impact of Christchurch earthquake
19 NZ Update: Impact of Christchurch earthquake For personal use only • All FBU Christchurch based businesses are back up p and running g • Trading in Christchurch has been quiet while repairs are assessed and insurance claims are lodged • No significant impact on trading result is expected in the f
Slide 20: NZ Update: Watertightness – fixing leaky homes
20 NZ Update: Watertightness – fixing “leaky homes” For personal use only • PWC report p to g government of March 2010 estimated 22,000 , to 89,000 dwellings affected • Consensus forecast is 42,000 dwellings require repair, at a total cost of $11.3 billion ‒ 10 years for complete remediation • New s
Slide 21: NZ Update: Commercial Activity
21 NZ Update: Commercial Activity For personal use only • Activityy levels in the non-residential sector are at their lowest levels since early 2004* • Value of non non-residential residential consents to August 2010 $3.97 billion, down 21.8% on prior year • Shortage of development finance is hamper
Slide 22: NZ Update: Infrastructure Outlook
22 NZ Update: Infrastructure Outlook For personal use only National Infrastructure Plan: CY10 to CY16 NZ$M Source: National Infrastructure Plan March 2010 Investor Presentation| Fletcher Building | © October 2010
Slide 23: Outlook
23 For personal use only Outlook Investor Presentation| Fletcher Building | © October 2010
Slide 24: Outlook 2011
24 For personal use only Outlook 2011 Caution required in formulating outlook for 2011: New Zealand: • Slow and gradual continuing recovery in residential building activity. • Commercial construction activity expected to remain at very low levels. p g likelyy to dip • Infrastructure spending p in 20
Slide 25: Appendix: Additional Information
25 For personal use only Appendix: Additional Information Investor Presentation| Fletcher Building | © October 2010
Slide 26: Summary of activity data
26 For personal use only Summary of activity data June 2010 June 2009 June 2008 10/09 Building Consents 12 months 12 months 12 months %Mvmt New Zealand - Residential Consents 16,022 14,175 23,261 +13 - Non Res WPIP ($m) 4,587 5,314 5,067 -14 - Infrastructure WPIP ($m) 6 303 6,303 6 224 6,224 5 620 5
Slide 27: New Zealand emissions trading scheme
27 For personal use only New Zealand emissions trading scheme • New Zealand’s emissions trading scheme (ETS) extended coverage to industrial and transport emissions on 1 July, 2010. • Most of our operations that emit CO2 from fossil fuel combustion do not directly participate in the ETS, but are sub
Slide 28: Building Products
28 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|Home&Dry • No.1 No 1 in Australasia with approx 35% of bulk glasswool insulation
Slide 29: Building Products result
29 Building Products result For personal use only June 10 June 09 • Plasterboard benefited from NZ$m 12 Mths 12 mths %∆ improved NZ housing starts in Sales 798 79 771 77 +4 4 second half and from cost-out i ii i initiatives EBITDA1 140 131 +7 • Insulation earnings EBIT1 114 106 6 +8 8 i impacted t d
Slide 30: Distribution
30 Distribution For personal use only Pl PlaceMakers M k The premier suppliers of building materials to New Zealand’s commercial and residential construction markets • 62 outlets across New Zealand trading as PlaceMakers • 34% market share of the core building materials sectors • No.1 in key buildin
Slide 31: Distribution result
31 For personal use only Distribution result June 10 June 09 • Sales stable year over year NZ$m 12 Mths 12 mths %∆ with a pick-up in activity seen Sales l 878 883 -1 in second half from increase in residential house building. EBITDA1 47 40 +18 EBIT1 38 30 +27 • Forward indicators for commercial buil
Slide 32: Infrastructure
32 For personal use only Infrastructure Concrete New Zealand Firth|Humes Pipeline Systems|Golden Bay Cement|Winstone Aggregates • 15% of NZ aggregates markets • 55% of NZ cement market • 34% off NZ readymix d i concretet market k t • 50% of NZ pre-cast and concrete pipe market Concrete Australia Roc
Slide 33: Infrastructure result
33 For personal use only Infrastructure result NZ Concrete • Lower volumes in cement, cement June 10 June 09 aggregates, readymix and NZ$m 12 mths 12 mths %∆ concrete pipe. Sales 2,020 2,052 -2 • Continued softness in commerciall construction activity EBITDA only partly offset by increase in - Concr
Slide 34: Laminates & Panels
34 For personal use only Laminates & Panels Laminex • Leading high pressure laminate & decorative surfaces • Estimated Australasian market shares – Decorated board – No.1 – Medium d d density ffibreboard b b d – No.1 – Particleboard – No.2 • Over 50 distribution outlets owned across Australasia Form
Slide 35: Laminates & Panels result
35 For personal use only Laminates & Panels result Laminex June 10 June 09 • Australian domestic volumes NZ$m 12 mths 12 mths %∆ higher due to improved Sales 1,930 2,076 -7 residential, export volumes EBITDA declined with plant closure. • NZ volumes down due to - Laminex 148 99 +49 slowdown in comme
Slide 36: Steel
36 Steel For personal use only 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 Pacific Steel Group|Sims Pacific Metals (50%) • No.1 No 1 in New Zealand ma
Slide 37: Steel result
37 For personal use only Steel result June 10 June 09 NZ$m 12 Mths 12 mths %∆ • Volatile operating Sales 1,172 , 7 1,321 ,3 -11 environment with uncertain demand and declining prices. EBITDA1 107 175 -39 • Long steel prices down 30% EBIT1 8 82 154 -47 but volumes 5% higher driven by exports. Funds E
Slide 38: Presentation to Citi Australasian Investment Conference
38 For personal use only Presentation to Citi Australasian Investment Conference Jonathan Ling - Chief Executive Officer 26 October 2010 Investor Presentation| Fletcher Building | © October 2010
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