Fletcher Building Limited · NZX:FBU
Fletcher Building — H1 FY2010 Earnings Presentation
31 slides from Fletcher Building's earnings presentation, Feb 17, 2010
Slide 1: Fletcher Building Limited Half Year Results 2010
1 For personal use only Fletcher Building Limited Half Year Results 2010 17 February F b 2010 Half Year Results | Fletcher Building | February 2010
Slide 2: Disclaimer
2 For personal use only Disclaimer This annual results presentation dated 17 February 2010 provides additional comment on the media release of the same p date. As such, it should be ready in conjunction with, and subject to, the explanations and views of future outlook on market conditions, conditio
Slide 3: Agenda
3 For personal use only Agenda • Introduction • Company and Market Overview • Divisional Performance • Financial Results • Strategy • Outlook Half Year Results | Fletcher Building | February 2010
Slide 4: Company & Market Overview
4 For personal use only Company & Market Overview Half Year Results | Fletcher Building | February 2010
Slide 5: Results overview
5 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Results overview • Net earnings after tax of $154 million. • Operating earnings¹ of $271 million. • Strong cashflow performance – cashflow from operations $317 million (up 52%). • Reve
Slide 6: Residential construction activity: record lows in most markets
6 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Residential construction activity: record lows in most markets; NZ and Australia improved in the second quarter Dec 2009 Dec 2008 Dec 2007 09/08 B ildi Consents Building C 12 mth h rol
Slide 7: Strong financial performance despite lower volumes
7 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Strong financial performance despite lower volumes Dec 2009 Dec 2008 NZ$m 6 months 6 months % Change Sales 3,393 3,757 -10 EBITDA¹ 372 428 -13 EBIT¹ 271 322 -16 16 Net earnings1 154 18
Slide 8: First half of FY10: signs of increased activity in NZ and Australia housing markets
8 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only First half of FY10: signs of increased activity in NZ and Australia housing markets, from a low base • Group operating earnings impacted by: • improved residential building markets in
Slide 9: Continued focus on optimising cash has proven beneficial
9 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Continued focus on optimising cash has proven beneficial • Cashflow from operations up 52% to $317 million, driven by tight capital management • Capital expenditure 53% lower at $77 mi
Slide 10: Divisional Performance
10 For personal use only Divisional Performance Half Year Results | Fletcher Building | February 2010
Slide 11: Strong performance in Building Products, Laminates & Panels, while Steel had lower volumes
11 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Strong performance in Building Products, Laminates & Panels, while Steel had lower volumes and prices EBIT NZ$million1 1. Earnings before interest, tax, and unusual items Half Year Re
Slide 12: Building Products result
12 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Building Products result Dec09 Dec 08 • Plasterboard performance NZ$m 6 Mths 6 mths %∆ impacted by low NZ housing Sales l 436 412 +6 starts in first quarter, some improvement in secon
Slide 13: Building Products: strong growth in Insulation due to government stimulus
13 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Building Products: volumes typically lower but strong growth in Insulation due to government stimulus Gross Sales Dec 09 Dec 08 NZ$m 6 mths 6 mths %∆ Volume ∆ Price ∆ EBITDA ∆ N New Z
Slide 14: Distribution result
14 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Distribution result Dec 09 Dec 08 • Sales impacted by weak NZ NZ$m 6 Mths 6 mths %∆ housing starts but pick up in Sales l 435 481 -10 activity seen in second quarter. EBITDA1 22 24 -8
Slide 15: Infrastructure result
15 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Infrastructure result NZ Concrete Dec 09 Dec 08 • Lower volumes in cement, NZ$m 6 mths 6 mths %∆ aggregates, readymix, masonry Sales 974 1 018 1,018 -4 4 and concrete pipe. pipe • Con
Slide 16: Infrastructure: lower concrete volumes in NZ and Australia
16 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Infrastructure: lower concrete volumes in NZ and Australia Gross Sales Dec 09 Dec 08 NZ$m 6 mths 6 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand l d - NZ Concrete 310 361 -14 ↓ ↓ ↓ -
Slide 17: Property activities include quarry end use, residential and surplus assets
17 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Property activities include quarry end use, residential and surplus assets EBIT NZ$m 1H 10 2H 09 1H 09 2H 08 1H 08 Quarry end use 0 0 0 42 0 Residential 5 8 4 8 11 Surplus assets 2 0
Slide 18: Laminates & Panels result
18 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Laminates & Panels result Dec 09 Dec 08 Laminex NZ$m 6 mths 6 mths %∆ • Volumes down in NZ and S l Sales 965 6 1,069 6 -10 Australia. EBITDA • Cost savings and lower input costs boost
Slide 19: Laminates & Panels: Asian region stronger overall
19 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Laminates & Panels: Asian region stronger overall but all other markets were weaker Gross Sales Dec 09 Dec 08 NZ$m 6 mths 6 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand - Laminex 79
Slide 20: Formica: continued growth in Asia while North America and Europe weak
20 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Formica: continued growth in Asia while North America and Europe weak EBITDA NZ$m1 1H10 2H09 1H09 2H08 Asia 21 19 20 14 North America 11 17 2 -17 Europe2 2 8 9 30 Corporate -7 -9 -6 -
Slide 21: Steel result
21 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Steel result Dec 09 Dec 08 • Steel prices and volumes NZ$m 6 Mths 6 mths %∆ down significantly in the first Sales l 583 777 -25 half. EBITDA1 54 110 -51 • Long steel margins EBIT1 42
Slide 22: Steel: volumes and prices lower
22 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Steel: volumes and prices lower Gross Sales Dec 09 Dec 08 NZ$m 6 mths 6 mths %∆ Volume ∆ Price ∆ EBITDA ∆ N New Z Zealand l d - Long Steel 129 227 -43 ↓ ↓ ↓ - Coated products 80 99 -1
Slide 23: Financial Results
23 For personal use only Financial Results Half Year Results | Fletcher Building | February 2010
Slide 24: Net earnings
24 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Net earnings Dec 2009 Dec 2008 NZ $m 6 months 6 months %∆ EBIT1 271 322 -16 Interest 52 79 -34 34 Tax1 59 52 +13 Minority Interests 6 5 +20 Net Earnings before unusual items 154 186 -
Slide 25: Balance sheet strengthened with stronger operating cashflow
25 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Balance sheet strengthened with stronger operating cashflow Dec 2009 Dec 2008 NZ $m 6 months 6 months %∆ Operating Cashflow 317 208 +52 Net Debt 1 135 1,135 2 003 2,003 -43 43 Net Deb
Slide 26: Key Ratios
26 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Key Ratios Total T t l Sh Shareholder h ld R Return t (TSR) D bt/D bt Plus Debt/Debt Pl Equity E it Percentage Percentage Return on Average Equity Return on Average Funds Percentage1
Slide 27: Debt maturity profile
27 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Debt maturity profile NZ$m • Undrawn credit lines of $1.1 400 Funding and maturity profile billion. 350 December 2009 300 • Syndicated bank loan 250 200 renegotiated and term 150 268
Slide 28: Strategy
28 For personal use only Strategy Half Year Results | Fletcher Building | February 2010
Slide 29: Strategy
29 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Strategy Longer term strategy continues to be: • improve earnings reliability • maintain i t i andd iimprove iinternal t l capabilities biliti • pursue acquisition opportunities where
Slide 30: Outlook
30 For personal use only Outlook Half Year Results | Fletcher Building | February 2010
Slide 31: Outlook 2010
31 Company & Market Overview | Divisional Performance | Financial Results | Strategy | Outlook For personal use only Outlook 2010 • Outlook for FY10 dependent upon the uplift in NZ and Australian new housing construction markets being sustained. • Government infrastructure spending in NZ and Austral