Fletcher Building Limited · NZX:FBU
Fletcher Building — Macquarie Australia Conference 2017
22 slides from Fletcher Building's conference presentation, May 2, 2017
Slide 1: Macquarie Conference Presentation 2017
Fletcher Building Macquarie Conference Presentation 2017 For personal use only Fletcher Building Update May 2017 Working with you MARK ADAMSON — Chief Executive Officer BEVAN MCKENZIE — Chief Financial Officer 3 May 2017 1
Slide 2: Disclaimer
Disclaimer For personal use only This presentation contains not only a review of results, 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 actual results could differ
Slide 3: Contents
Contents For personal use only • Fletcher Building today • Update on key macro drivers • Trading update • Balance Sheet and key ratios • Strategy 3 Fletcher Building Presentation to Macquarie Australia Conference | © May 2017
Slide 4: Fletcher Building today
Fletcher Building today A global company dual listed on NZX/ASX For personal use only Revenue: $9.0billion People: 21,257 External Revenue FY16 ($m) $4,797m $2,959m $479m $299m $323m $147m New NewZealand Zealand Australia North America Asia Europe South Pacific 10,637 people 8,843 people 5,556 peopl
Slide 5: Update on Key Macro Drivers: New Zealand
Update on Key Macro Drivers New Zealand For personal use only 10,000 NZ Infrastructure Pipeline • Residential consents remain at historically 9,000 8,000 elevated levels • Net migration still strong, supporting housing 7,000 Irrigation 6,000 Other Transport demand Ports & Airports NZ$m 5,000 • Deman
Slide 6: Update on Key Macro Drivers: Australia
Update on Key Macro Drivers Australia For personal use only Australia Infrastructure and Commercial Work • Total residential commencements have grown over last 180,000 Infrastructure Commercial four years but mainly due to multi-family dwelling Value of work done (AUDm) 160,000 buildings which is no
Slide 7: Trading Update
Trading Update Operating earnings For personal use only • Operating earnings before significant items (EBIT) up 12% in H1 17 H1 17 Operating earnings before • Reflected 20% growth in NZ EBIT (excluding significant items Construction and divested/acquired operations) $310m as core businesses benefitt
Slide 8: Trading Update: Distribution, International, Building Products
Trading Update Distribution, International, Building Products For personal use only Distribution: International: Building Products: • Total EBIT1 in HY 17 of • Total EBIT1 in HY17 of • Total EBIT1 in HY 17 of $84m +31% $70m +32% $129m +10% (excl. • NZ Steel, NZ Building • Formica EBIT +113% divestme
Slide 9: Residential and Land Development Update
Residential and Land Development Update For personal use only NZ Residential • Continue to scale the business to target: Residential Units Sold 800 • A sustainable run-rate of 1,000+ lots built and delivered per annum 600 • Funds employed of c$600m • Sales price growth slowing in Auckland, but 400 e
Slide 10: Construction: Features of Fletcher Construction Businesses
Construction Features of Fletcher Construction Businesses For personal use only Top 5 projects Average Current Focus Contracts as % of total annual EBIT Backlog1 backlog1 FY05-16 Building horizontal Fixed price Infrastructure structures (roads, bridges, $911m (c60%) and 85% $16m transport lines) all
Slide 11: Construction Backlog
Construction Backlog For personal use only B+I Backlog Infrastructure and Higgins Backlog Infrastructure Higgins 2500 1200 2000 1000 Work Backlog $m Work Backlog $m 800 1500 600 1000 400 500 200 0 0 Source: Company data Source: Company data Changes in Construction • New governance processes around b
Slide 12: Key ratios
Key ratios Focus on Balance Sheet strength and ROFE For personal use only Debt/Debt Plus Equity Key ratios Percentage • Projected Net Debt at 30 June 2017 likely to equate to: 37 33 35 • 34% gearing 32 32 27 (Net Debt/Net Debt + Equity) • 2.4x Net Debt:EBITDA • Targeting ROFE of 15% across the group
Slide 13: Strategy Summary
Strategy Summary For personal use only People and performance culture Turnaround capability Targeted investments Prudent portfolio management $ Focus on shareholder value 13 Fletcher Building Presentation to Macquarie Australia Conference | © May 2017
Slide 14: Performance culture embedded through Accelerate
Performance culture embedded through Accelerate For personal use only L1 Value identification Value capture L2 L3 L4 L5 Identify Validate Plan Realise Implement Track Ideas Value Number of initiatives at 2,279 2,106 1,863 1,303 703 each layer1 • Embedded cadence • Continuous renewal of initiative pi
Slide 15: Targeted Investments
Targeted Investments For personal use only Auckland Housing Shortage NZ Infrastructure 2016-2025 1,600 40,000 Ports & Irrigation 1% 35,000 Airports 6% 1,500 Electricity 30,000 Water Works 13% 13% 1,400 25,000 Population Dwellings 20,000 1,300 15,000 Telecoms 16% 1,200 10,000 5,000 1,100 0 Other Tran
Slide 16: Portfolio Management
Portfolio Management Significant progress has been made For personal use only Invest for Growth Turnaround capability North America Europe Divest and restructure 16 Fletcher Building Presentation to Macquarie Australia Conference | © May 2017
Slide 17: Focus on shareholder value
Focus on shareholder value For personal use only Results for last 12 month period to 31 December 2016 (ie CY 2016) Underlying Earnings Cash Disciplined Capital Superior + + = Growth Generation Management Value-Creation Market Growth Sustain Capex: ROFE: & $186m +0.4% pts Share Gains Organic Growth I
Slide 18: Outlook
Fletcher Building Macquarie Conference Presentation 2017 For personal use only Working with you Outlook 18
Slide 19: Financial Outlook FY17
Financial Outlook FY17 For personal use only FY17 operating earnings (EBIT before significant items) expected to be in the range of $610m to $650m • Construction division is expected to report a loss at the EBIT level • Other divisions are trading in line with expectations and guidance provided at t
Slide 20: Q&A
Fletcher Building Half Year Results Presentation 2017 For personal use only Working with you Q&A
Slide 21: Appendix: Sectoral exposure
Appendix: Sectoral exposure Exposures to markets and by geography For personal use only Residential Commercial Infrastructure Other Total New Zealand 24% 19% 12% 4% 59% Australia 15% 8% 2% 3% 28% Rest of World 5% 6% 1% 1% 13% Total Group 44% 34% 16% 7% 100% 1. Exposures are as a % of total external
Slide 22: Appendix: Group Structure
Appendix: Group Structure For personal use only Building Products: International: Distribution: Residential & Land Construction: Matt Crockett Francisco Irazusta Dean Fradgley Development: Michele Kernahan Steve Evans • GBC Winstone (NZ) • Formica Asia • PlaceMakers (NZ) • Fletcher Living (NZ) • Inf
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