Slide 1: Fletcher Building Limited Annual Results 2007
For personal use only Fletcher Building Limited Annual Results 2007 8 August 2007
Slide 2: Disclaimer
For personal use only Disclaimer This annual results presentation dated 8 August 2007 provides additional comment on the media release of the same date. As such, it should be read in conjunction with, and subject to, the explanations and views of future outlook on market conditions, earnings and act
Slide 3: Highlights
3 Highlights For personal use only Net Earnings $484 million Geographic and product diversification continues to deliver improved earnings despite softer markets EPS 101.9 cps Total dividend increased 13% to 45 Increased Returns cps. TSR of 42% for the 12 months To Shareholders Acquisition of Formic
Slide 4: Summary of Results
4 Summary of Results For personal use only Proforma Normalised % Jun Jun Jun YOY 2007 2007 2006 Change $m 12 Mths 12 Mths 12 Mths Normalised Sales 5926 5926 5520 +7 EBITDA 859 854 819 +4 EBIT 703 698 675 +3 Net Earnings 484 399 379 +5 EPS (cents) 101.9 84.0 81.3 +3 Dividend cps 45.0 45.0 40.0 +13 An
Slide 5: Geographic Diversity
5 Geographic Diversity For personal use only Operating Earnings (pre unusuals) 12 Months Jun 07 12 Months Jun 06 Other Other 2% 4% Australia 31% Australia 31% New Zealand New Zealand 67% 65% Annual Results – August 2007
Slide 6: Market Diversity
6 Market Diversity For personal use only Operating Earnings (pre unusuals) 12 Months Jun 07 12 Months Jun 06 Distribution Distribution 11% 11% Infrastructure Infrastructure Laminates & Panels Laminates & Panels 37% 39% 17% 19% Steel Steel 11% 14% Building Products Building Products 20% 21% Annual Re
Slide 7: Earnings by Division
7 Earnings by Division (pre unusuals) For personal use only 271 255 Jun 2007 Jun 2006 141 142 131 116 93 80 75 80 Infrastructure Distribution Building Products Steel Laminates & Panels Annual Results – August 2007
Slide 8: Infrastructure
For personal use only Infrastructure
Slide 9: Infrastructure Results
9 Infrastructure Results For personal use only Jun Jun % 2007 2006 YOY NZ$m 12 Mths 12 Mths Change Sales 1944 1823 + 7 EBIT 271 255 + 6 Margin % 13.9 14.0 - Funds 767 766 - Return on Funds % 35.3 33.3 + 6 Annual Results – August 2007
Slide 10: Infrastructure
10 Infrastructure For personal use only Golden Bay Cement: Kiln running to capacity and price increases in February to recover increased costs. Earnings ahead of pcp despite slightly lower volumes. Firth: Excellent result in very competitive market. Volumes slightly up on pcp as new sites commission
Slide 11: Infrastructure
11 Infrastructure For personal use only Rocla Quarries & Pipeline Products: Performing well in tough conditions, particularly NSW. Product volumes increased over pcp and combined earnings up 6% over pcp. Construction: Excellent result and ahead of pcp. Major contracts: BNZ Centrepoint ($66m); Tauran
Slide 12: Distribution
For personal use only Distribution
Slide 13: Distribution Results
13 Distribution Results For personal use only Jun Jun % 2007 2006 YOY NZ$m 12 Mths 12 Mths Change Sales 1064 956 +11 EBIT 80 75 +7 Margin % 7.5 7.8 - 4 Funds 163 132 +23 Return on Funds % 49.1 56.8 -14 Annual Results – August 2007
Slide 14: Distribution
14 Distribution For personal use only Earnings: Sales up 11% with a stronger lift in trade sales and from acquisitions. Margins held well in competitive environment but cost pressures continued. Earnings up 7% on pcp. Branch Upgrade Programme: Continues with new branches at Wanaka, Whitianga, Takani
Slide 15: Building Products
For personal use only Building Products
Slide 16: Building Products Results
16 Building Products Results For personal use only Jun Jun % 2007 2006 YOY NZ$m 12 Mths 12 Mths Change Sales 697 629 +11 EBIT 1411 142 - 1 Margin % 20 23 -13 Funds 565 511 +11 Return on Funds % 25.0 27.8 -10 1. Excludes unusual write downs of $6 million Annual Results – August 2007
Slide 17: Building Products
17 Building Products For personal use only Plasterboard: Volumes up 4% on pcp. Margin pressure with high NZ$. Market share maintained. Earnings similar to pcp. Insulation: Revenues down 5% on pcp. Earnings in New Zealand down slightly due to cost pressures. Earnings in Australia down 29% on pcp due
Slide 18: Steel
For personal use only Steel
Slide 19: Steel Results
19 Steel Results For personal use only Jun Jun % 2007 2006 YOY NZ$m 12 Mths 12 Mths Change Sales 1161 1082 + 7 EBIT 801 93 -14 Margin % 7 9 -22 Funds 496 461 +8 Return on Funds % 16.1 20.2 -20 1. Excludes unusual write offs of $9 million Annual Results – August 2007
Slide 20: Steel
20 Steel For personal use only New Chief Executive appointed – Paul Zuckerman Rollforming: Stramit, Dimond and Pacific Coil Coaters had excellent sales and earnings in line with pcp in more competitive environment. Eziform acquired in Queensland in May 2007. Long Steel Products: New transformer comm
Slide 21: Laminates & Panels
For personal use only Laminates & Panels
Slide 22: Laminates & Panels Results
22 Laminates & Panels Results For personal use only Jun Jun % 2007 2006 YOY NZ$m 12 Mths 12 Mths Change Sales 1058 1027 + 3 EBIT 1311 116 +13 Margin % 12.4 11.3 +10 Funds 8142 920 -12 Return on Funds % 16.1 12.6 +28 1. Excludes unusual gain of $20 million 2. Funds reduced as a result of Taupo fire A
Slide 23: Laminates & Panels
23 Laminates & Panels For personal use only Australia: Sales growth achieved in domestic markets but margins under pressure. Productivity improvement, expense control and stronger export margins lifted earnings. New Zealand: Total sales down as a result of Taupo fire. Earnings increased with better
Slide 24: Net Earnings
24 Net Earnings For personal use only Jun Dec Jun 2007 2006 2006 NZ$m 12 Mths 6 Mths 12 Mths EBIT 703¹ 340 675 Interest -87 -45 -88 Tax -113² -92 -189 Minority Interests -19 -10 -19 Net Earnings 484 193 379 1. Includes unusual gain of $5m 2. Includes one-off tax benefit of $80m Annual Results – Augu
Slide 25: Simplified Balance Sheet
25 Simplified Balance Sheet For personal use only Jun Proforma Jun 2007 2 Jul 07 2006 NZ$m NZ$m NZ$m Assets Current Assets 1742 2128 1650 Fixed Assets 1515 1807 1569 Intangibles & Goodwill 629 1168 597 Provision for Deferred Taxation 3 -60 29 Investments 141 81 129 Total Fletcher Building Assets 403
Slide 26: Key Ratios: Total Shareholder Return
26 Key Ratios For personal use only Total Shareholder Return (TSR) Percentage 61 43 42 40 33 24 6 Jun 01¹ Jun 02 Jun 03 Jun 04 Jun 05 Jun 06 Jun 07 1. June 01 is the return for the 3 months from separation date 2. TSR calculated ((Gross Dividend Paid + Movement in Share Price)/Opening Share Price) A
Slide 27: Key Ratios: Debt/Debt Plus Equity
27 Key Ratios For personal use only Debt/Debt Plus Equity Percentage 49.2 49.9 43.1 44.4 40.2 41.3 37.1 22.2 Jun 01 Jun 02 Jun 03 Jun 04 Jun 05¹ Jun 06 Jun 07 Proforma 2 Jul 07 1. Restated for IFRS Annual Results – August 2007
Slide 28: Key Ratios: Return on Average Equity
28 Key Ratios For personal use only Return on Average Equity¹ Percentage 29.5 24.6 26.0 23.0 24.3 16.9 Jun 01 Jun 02 Jun 03 Jun 04 Jun 05² Jun 06 Jun 07 -43.8 1. Net earnings after capital notes interest/shareholders funds 2. Restated for IFRS Annual Results – August 2007
Slide 29: Key Ratios: Return on Average Funds
29 Key Ratios For personal use only Return on Average Funds¹ Percentage 29.3 26.1 24.8 24.4 24.7 23.1 Jun 01 Jun 02 Jun 03 Jun 04 Jun 05² Jun 06 Jun 07 1. EBIT/(Average net debt+equity+capital notes) - deferred tax asset 2. Restated for IFRS -8.6 Annual Results – August 2007
Slide 30: Key Ratios: Interest Cover
30 Key Ratios For personal use only Interest Cover¹ Times 9.6 9.8 9.3 7.8 7.3 5.8 3.1 Jun 01 Jun 02 Jun 03 Jun 04 Jun 05 Jun 06 Jun 07 1. EBITDA pre unusuals/interest paid including capital note interest Annual Results – August 2007
Slide 31: Net Debt Movement
For personal use only NZ$ m 0 300 600 900 1200 Opening Debt 1,061 Cash from ops (624) Working capital 141 Annual Results – August 2007 Capex 249 Acquisitions 97 Divestments (95) Net Debt Movement Dividends 169 Min Distn 26 Equity (321) FX on AUD Debt (49) Closing Debt 654 31
Slide 32: Strategic Update
For personal use only Strategic Update
Slide 33: Strategic Agenda
33 Strategic Agenda For personal use only Earnings Reliability Internal Growth External Growth Annual Results – August 2007
Slide 34: Earnings Reliability
34 Earnings Reliability For personal use only Company outlook should be cognisant of both product and geographic diversity. For New Zealand – Infometrics July 07 estimate of total volume of work commenced. For Australia – BIS June 07 estimate of total volume of work commenced. Annual Results –
Slide 35: New Zealand Volume of Work Commenced
35 New Zealand Volume of Work Commenced For personal use only NZ$ million Forecast 14000 -2% -4% +2% +4% +7% +2% 12000 +8% +6% Infrastructure +5% +11% 10000 +3% +1% 8000 +1% 0% Non -11% +2% -1% +2% Residential 6000 +4% +1% +2% -7% -5% -1% A&A 4000 2000 0% +3% 0% +11% +1% Residential -9% 0 04 05 06 0
Slide 36: Australia Volume of Work Commenced
36 Australia Volume of Work Commenced For personal use only $b 120 Engineering construction 4% 16% -1% 100 Non-residential -6% Residential 80 26% 3% -1% -12% 60 11% -10% 10% -2% 40 -5% 1% -1% 5% 20 0 Year ended June 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 f 2008 f 2009 f Source : BIS Shrap
Slide 37: Internal Growth
37 Internal Growth For personal use only 590 109 122 116 121 131 105 94 28 2005 2006 2007 Stay in Business Growth & Productivity Acquisitions Annual Results – August 2007
Slide 38: Internal Growth Opportunities
38 Internal Growth Opportunities For personal use only Significant capex spend continues. Projects include: Particleboard capacity upgrade in NZ and Australia Resin JV Kitchen componentry Australian quarry expansion Wespine capacity upgrade Steel mill transformer and capacity upgrade
Slide 39: External Growth Opportunities
39 External Growth Opportunities For personal use only Fletcher Building acquired Formica Corporation from private equity investors, Cerberus Partners and Oaktree Capital. Formica is a leading global high pressure laminates (“HPL”) manufacturer comprising three geographical business units Asia
Slide 40: External Growth Opportunities (cont.)
40 External Growth Opportunities (cont.) For personal use only Purchase price US$700m (NZ$913m), with additional contingent payments up to a total of US$50m (NZ$65m) based on Formica completing an agreed restructuring plan. Meets all aspects of Fletcher Building’s well established acquisition cr
Slide 41: Outlook
41 Outlook For personal use only Residential markets in Australia and New Zealand continue to soften. Non-residential and infrastructure flat at best. Formica Europe and Asia continue to be strong and U.S. weak. Volatile currency. Satisfactory result expected. Annual Results – August 2007
Slide 42: For personal use only
For personal use only