Slide 1: Investor Presentation
INVESTOR PRESENTATION March 2012 Humes Pipelines, Auckland
Slide 2: Disclaimer
Investor Presentation | Fletcher Building | © March 2012 | Page 2 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, F
Slide 3: Company & Market Overview
Investor Presentation | Fletcher Building | © March 2012 Company & Market Overview | Page 3 Investor Presentation COMPANY & MARKET OVERVIEW Christchurch, August 2011
Slide 4: Fletcher Building at a glance
Investor Presentation | Fletcher Building | © March 2012 Company & Market Overview | Page 4 Fletcher Building at a glance • Revenue – 6 months to 31 December: NZ$4.5 billion • Market Capitalisation: NZ$4.4 billion • Employees: 20,000 • Shareholders: (as at 31 December 2011) Revenues: (as at 31 Decem
Slide 5: Fletcher Building – key listing information
Investor Presentation | Fletcher Building | © March 2012 Company & Market Overview | Page 5 Fletcher Building – key listing information • Listed on the New Zealand and Australian stock exchanges New Zealand • Second largest listed company by market capitalisation on the NZX Australia • Ranked #56 on
Slide 6: Market leading businesses
Investor Presentation | Fletcher Building | © March 2012 Company & Market Overview | Page 6 Market leading businesses Building Laminates Concrete Construction Crane Distribution Steel Products & Panels Plasterboard Cement Construction Pipelines – Building The Laminex Coated Steel Insulation Read
Slide 7: Strategy
Investor Presentation | Fletcher Building | © March 2012 Strategy | Page 7 Investor Presentation STRATEGY Formica for Tinderbox, UK
Slide 8: Strategy
Investor Presentation | Fletcher Building | © March 2012 Strategy | Page 8 Strategy Improved earnings reliability through geographic and end-market diversification Decentralised business model Portfolio approach that creates value through application of proven operating model Target attractive indus
Slide 9: Fletcher Building has a vertically integrated value chain
Investor Presentation | Fletcher Building | © March 2012 Strategy | Page 9 Fletcher Building has a vertically integrated value chain Pipes & Laminates Building Other Steel Concrete Plumbing & Panels Products Manufacturers Dedicated Shared Other Construction Distribution Distribution Distribution Mar
Slide 10: Record lows for new residential consents in New Zealand, and significant residential slowdown in Australia
Investor Presentation | Fletcher Building | © March 2012 Strategy | Page 10 Record lows for new residential consents in New Zealand, and significant residential slowdown in Australia Dec 2011 Dec 2010 Dec 2009 11/10 Building Consents 12 months 12 months 12 months %Mvmt New Zealand Residential Consen
Slide 11: New Zealand construction activity levels 2005-2011
Investor Presentation | Fletcher Building | © March 2012 Strategy | Page 11 New Zealand construction activity levels 2005-2011 Residential Consents NZ Total Construction NZ – NZ$m Years to December Years to December 18,794 26,023 25,952 25,590 18,525 17,740 17,668 18,456 17,331 15,602 17,079 14,425
Slide 12: Australian construction activity levels 2005-2011
Investor Presentation | Fletcher Building | © March 2012 Strategy | Page 12 Australian construction activity levels 2005-2011 Residential Consents AUS Years to December 176,564 157,505 159,590 153,949 148,155 146,492 149,076 2005 2006 2007 2008 2009 2010 2011
Slide 13: Half Year 2012 Financial Results
Investor Presentation | Fletcher Building | © March 2012 Half Year 2012 Financial Results | Page 13 Investor Presentation HALF YEAR 2012 FINANCIAL RESULTS The Cloud, Auckland waterfront
Slide 14: Weak residential construction markets in New Zealand and Australia impacted earnings
Investor Presentation | Fletcher Building | © March 2012 Half Year 2012 Financial Results | Page 14 Weak residential construction markets in New Zealand and Australia impacted earnings Dec 2011 Dec 2010 NZ$m 6 months 6 months % Change Sales 4,509 3,468 +30 EBIT 256 285 -10 EBITDA before unusual item
Slide 15: Weaker market conditions impacted all divisions
Investor Presentation | Fletcher Building | © March 2012 Half Year 2012 Financial Results | Page 15 Weaker market conditions impacted all divisions EBIT before unusuals NZ$million1 80 63 60 56 57 53 43 43 33 25 25 24 15 0 Building Products Crane Distribution Concrete Construction Laminates & Steel P
Slide 16: Cashflow from operations impacted by working capital movements, higher funding costs and cash tax payments
Investor Presentation | Fletcher Building | © March 2012 Half Year 2012 Financial Results | Page 16 Cashflow from operations impacted by working capital movements, higher funding costs and cash tax payments Dec 2011 Dec 2010 6 months 6 months % Change EBITDA 372 381 -2 Funding costs (73) (51) +43 Ca
Slide 17: Key ratios
Investor Presentation | Fletcher Building | © March 2012 Half Year 2012 Financial Results | Page 17 Key ratios Total Shareholder Return (TSR) Debt/Debt Plus Equity Percentage Percentage 42 40 24 35 34 14 14 31 27 22 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Dec-11 -26 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Dec
Slide 18: Full year forecast capital expenditure includes $100m in acquisitions
Investor Presentation | Fletcher Building | © March 2012 Half Year 2012 Financial Results | Page 18 Full year forecast capital expenditure includes $100m in acquisitions 397 * Acquisitions Dec 11 Dec 10 FY12 Growth 6 mths 6 mths %∆ Forecast 100 Stay in business 307 ¹ 289 Stay-in-business 101 74 +36
Slide 19: Debt maturity profile
Investor Presentation | Fletcher Building | © March 2012 Half Year 2012 Financial Results | Page 19 Debt maturity profile Funding and Maturity Profile US$300m private placement to US December 2011 – Post US Private Placement investors completed post 31 December 2011. 200 247 12 Key credit statistics
Slide 20: Canterbury update
Investor Presentation | Fletcher Building | © March 2012 Half Year 2012 Financial Results | Page 20 Canterbury update Estimates of earthquake damage (October 2011) Repair Timeframes Sector NZ$B Sector Years Residential 13.0 Residential – new build 5 Commercial 4.0 Residential – repair 4 Infrastructu
Slide 21: Canterbury update
Investor Presentation | Fletcher Building | © March 2012 Half Year 2012 Financial Results | Page 21 Canterbury update Residential: • 13,000 new homes to be build including 6,700 “Red Zone” properties • 30,000 re-instalments Commercial: • 950 demolitions completed, with further 350 demolitions approv
Slide 22: Christchurch before the earthquakes
Investor Presentation | Fletcher Building | © March 2012 Half Year 2012 Financial Results | Page 22 Christchurch before the earthquakes
Slide 23: Christchurch city October 2011
Investor Presentation | Fletcher Building | © March 2012 Half Year 2012 Financial Results | Page 23 Christchurch city October 2011
Slide 24: New Zealand commercial and infrastructure construction outlook
Investor Presentation | Fletcher Building | © March 2012 Half Year 2012 Financial Results | Page 24 New Zealand commercial and infrastructure construction outlook Construction backlog of $1.26 billion • Waterview motorway/tunnel project $398m • Construction activity to get underway second half of ca
Slide 25: Strategic issues
Investor Presentation | Fletcher Building | © March 2012 Half Year 2012 Financial Results | Page 25 Strategic issues Laminex − Fall in domestic demand and high currency have impacted earnings performance in Australia and NZ. − $21m in pre-tax unusuals restructuring costs incurred in HY 2012. − Furth
Slide 26: Outlook
Investor Presentation | Fletcher Building | © March 2012 Outlook | Page 26 Half Year Results OUTLOOK
Slide 27: Outlook FY2012
Investor Presentation | Fletcher Building | © March 2012 Outlook | Page 27 Outlook FY2012 New Zealand − Conditions expected to remain challenging − Modest uplift in housing consents in first half should lift activity in second half, but from low base − Infrastructure spending lower due to timing of
Slide 28: Financial outlook FY2012
Investor Presentation | Fletcher Building | © February 2012 Outlook | Page 28 Financial outlook FY2012 Based on: Current assessment of market conditions Unaudited half year results Net earnings before unusuals for the 2012 financial year are expected to be in the range of $310 million to $340 millio
Slide 29: Appendix
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 29 Investor Presentation APPENDIX Crane Cooper Tube, Adelaide
Slide 30: Building Products
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 30 Building Products Division Overview Business Description The Building Products division manufactures a broad Fletcher Insulation in Australia manufactures a range of building products. The divisions’ core wide range of insul
Slide 31: Building Products result
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 31 Building Products result Dec 11 Dec 10 NZ$m 6 mths 6 mths %∆ Plasterboard earnings lower due to weaker NZ residential market, but Sales 355 371 -4 market share maintained. EBITDA 56 69 -19 Insulation earnings down 25% due EB
Slide 32: Concrete
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 32 Concrete Division Overview Business Description The Concrete division consists of a vertically integrated Firth New Zealand’s leading national concrete company with concrete business in New Zealand and concrete (NZ) approxim
Slide 33: Concrete result
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 33 Concrete result Dec 11 Dec 10 NZ Concrete NZ$m 6 mths 6 mths %∆ • Softer demand for aggregates Sales 468 442 +6 and masonry products. • Readymix concrete and EBITDA 91 87 +5 concrete pipe product volumes EBIT 60 57 +5 stable
Slide 34: Construction
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 34 Construction Division Overview Business Description The Construction division comprises one of New A leading general constructor of commercial, retail, Zealand’s largest general construction contractors, and Building + healt
Slide 35: Construction result
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 35 Construction result Dec 11 Dec 10 Several large projects completed NZ$m 6 mths 6 mths %∆ during the period. Sales 520 592 -12 Tighter project margins due to EBITDA 30 38 -21 subdued market. Total EBIT 25 33 -24 Construction
Slide 36: Crane
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 36 Crane Division Overview Business Description Crane is the Australian leader in the manufacturing and A leading manufacturer and supplier of plastic distribution of plastic pipelines systems, plumbing and Iplex pipeline syste
Slide 37: Crane result
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 37 Crane result Dec 11 Dec 11 Dec 10¹ Increased pipeline sales to gas and NZ$m 6 mths 6 mths 6 mths %∆ mining offset weaker residential EBIT Revenue demand. Pipelines 28 395 342 +15 Distribution Distribution volumes down due to
Slide 38: Distribution
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 38 Distribution Division Overview Business Description The Distribution division consists of the PlaceMakers Is a nationwide supplier of building materials to business in New Zealand and supplies building materials New Zealand’
Slide 39: Distribution result
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 39 Distribution result Dec 11 Dec 10 Sales decline of 10% due to NZ$m 6 mths 6 mths %∆ subdued activity levels and continued disruption to Sales 402 446 -10 Christchurch stores – consistent EBITDA 19 29 -34 with consent data. E
Slide 40: Laminates & Panels
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 40 Laminates & Panels Division Overview Business Description The Laminates & Panels division comprises of the Is the leading Australian and New Zealand Australasian based woodpanels manufacturer and manufacturer and distributor
Slide 41: Laminates & Panels result
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 41 Laminates & Panels result Dec 11 Dec 10 Laminex NZ$m 6 mths 6 mths %∆ • Australian volumes of higher margin decorated board down due to fall in Sales 939 1,001 -6 new housing starts and additions and EBITDA¹ alterations decl
Slide 42: Formica: continued improvement in earnings due to volume growth in Asia and cost reduction measures
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 42 Formica: continued improvement in earnings due to volume growth in Asia and cost reduction measures EBIT NZ$m 1H12 1H11 % Change Asia 18 19 -5 North America 12 11 +9 Europe 2 1 +100 Corporate (6) (8) -25 EBIT $NZ 26 23 +13
Slide 43: Steel
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 43 Steel Division Overview Business Description The Steel division operates a diversified portfolio of • Stramit Building Products: a leading Australian steel businesses across three business lines, primarily in manufacturer of
Slide 44: Steel result
Investor Presentation | Fletcher Building | © March 2012 Appendix | Page 44 Steel result Dec 11 Dec 10 Long steel earnings impacted by NZ$m 6 Mths 6 Mths %∆ reduced margins, as a result of global pricing pressures, Sales 596 616 -3 particularly in Australia. EBITDA 36 54 -33 Rollforming and coated s