Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Day (June 2015)
25 slides from Fletcher Building's investor day presentation, Jun 18, 2015
Slide 1: Investor Day Brisbane 18 June 2015
For personal use only Investor Day Brisbane 18 June 2015 1
Slide 2: Tim Hickey, Chief Executive Distribution Australia
For personal use only Tim Hickey Chief Executive Distribution Australia 2 Fletcher Building Investor Day Brisbane | © June 2015
Slide 3: Disclaimer
Disclaimer For personal use only 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’s actual results could diff
Slide 4: Agenda
Agenda For personal use only Introduction to Tradelink, and the market it operates in Performance history, and progress of turnaround initiatives Tradelink vision and early results Plan to take Tradelink vision forward 4 Fletcher Building Investor Day Brisbane | © June 2015
Slide 5: The Tradelink business
The Tradelink business For personal use only 210 stores 1,600 across Australia employees Full range of plumbing products 5 Fletcher Building Investor Day Brisbane | © June 2015
Slide 6: Tradelink operates in the ~A$3.8bn Australian plumbing market
Tradelink operates in the ~A$3.8bn Australian plumbing market For personal use only SME Trade Network Network Projects Retail Plumber Builder Market size $1,500 $400 $1,400 $500 (A$m FY15f)1 Market growth (3-5 year Positive Positive Down Flat projection) Tradelink share Medium Low Medium Low (FY15f)
Slide 7: Tradelink Turnaround
For personal use only 7 Tradelink Turnaround
Slide 8: Tradelink was a business in decline…but we have turned the corner
Tradelink was a business in decline…but we have turned the corner For personal use only Sales revenue (A$m)1 EBIT (A$m)1 1,000 50 878 41 842 39 800 764 40 686 705 600 27 30 400 20 11 200 10 4 0 0 FY10 * FY11 * FY12 FY13 FY14 Sales EBIT EBIT 5% 5% 4% 0.6% 1.6% 1. FY10 excludes Hardware & Lumber (H&L)
Slide 9: The Big Six Pillars
The Big Six Pillars For personal use only Customer Pillars Profit Pillars Product Availability Market Share Growth People Advantage Gross Margin Convenience Operational Efficiency 9 Fletcher Building Investor Day Brisbane | © June 2015
Slide 10: Impact: Big Six Customer Initiatives
Impact: Big Six CUSTOMER Initiatives For personal use only Big Six Lever Initiatives Impact Significant stock Greater availability in stores and DCs Product investment Complete good, better, best ranges Availability Range resets and private label Training and induction Increased training
Slide 11: Impact: Big Six Profit Initiatives
Impact: Big Six PROFIT Initiatives For personal use only Big Six Lever Initiatives Impact Focussed sales teams 21 months of year-on-year sales Market Increased estimating, quoting growth Share activity Net promoter score up 15 ppt Growth All target segments with share gains Pricing initi
Slide 12: Months of year on year sales growth
21 months of year on year sales growth For personal use only Month on month Sales per day growth % Oct‐12 Jan‐13 Apr‐13 Oct‐13 Jan‐14 Apr‐14 Oct‐14 Jan‐15 Apr‐15 Jul‐12 Jul‐13 Jul‐14 Material growth in Trading Margin combined with sales growth 12 Fletcher Building Investor Day Brisbane | © June 2015
Slide 13: Net promoter score up, all target segments with market share gains
Net promoter score up 15 ppt, all target segments with market share gains For personal use only Customer Net Promoter Score Network Builder Network Plumber 40 35 +15% 30 pts Retail Projects 25 20 15 10 Total Plumbing Market 5 0 Apr-13 Apr-14 Jan-15 Jan-13 Jul-13 Oct-13 Jan-14 Jul-14 Oct-14 13 Fletch
Slide 14: Major brand relaunch: Raymor
Major brand relaunch: Raymor For personal use only Raymor Sales/Day Growth Up 42% since start of FY15 14 Fletcher Building Investor Day Brisbane | © June 2015
Slide 15: Innovative new products: Tradepex
Innovative new products: Tradepex (plumbing fitting systems) For personal use only Tradepex Sales growing 29% month Tradepex System on month 15 Fletcher Building Investor Day Brisbane | © June 2015
Slide 16: Gross margin drivers: category resets
Gross margin drivers: category resets to focus on care suite of brands and products For personal use only Category Benefits of reset Hot water systems Consolidated national Valves volumes More relevant range Tools Good, better, best coverage 16 Fletcher Building Investor Day Brisbane | © June
Slide 17: Strategic branded partnerships
Strategic branded partnerships For personal use only Leading brand in Leading brands in Copper Press Hot Water Fittings Services Leading brand Leading brand in Front of Wall in Power Tools products All our Strategic Partnerships have significant incentives for growth that will boost earnings over an
Slide 18: FY16: Transition to a new business model
FY16: Transition to a new business model For personal use only From To All things to all people Tailored value propositions for Customer target segments Poorly controlled product The right SKUs in stores, Product range merchandised effectively Not stocking the right products Guaranteed a
Slide 19: We have invested in deeper customer insights
We have invested in deeper customer insights For personal use only 19 Fletcher Building Investor Day Brisbane | © June 2015
Slide 20: We have designed compelling value propositions that reflect our customers' needs
We have designed compelling value propositions that reflect our customers’ needs … For personal use only Tradelink makes it easier to get what you want, when you need it SME Trade Projects Great stores that I love to visit Competitive pricing Fair pricing Speedy quotes and helpful product te
Slide 21: Supported by efficient operating models
… Supported by efficient operating models For personal use only SME Trade Projects Store network Specification, Project Delivery and and delivery model estimation teams Inventory solutions Compete for and win More efficient deliveries, Streamline orders and more tenders, boost lower property costs f
Slide 22: We are following best practice: phased implementation
We are following best practice: phased implementation For personal use only Test & Learn approach "Big bang" roll-outs Quick wins demonstrate value Limited time for scrutiny or self- Improves consistency of correction execution Does not test true scalability of Minimises risk of capex wast
Slide 23: Proof of concept conducted in the ACT
Proof of concept conducted in the ACT For personal use only 23 Fletcher Building Investor Day Brisbane | © June 2015
Slide 24: ACT: Customers and team are advocates
ACT: Customers and team are advocates For personal use only "we're All the changes making are "extremely The guys are happy; the going to provide a customers are hearing great place to work, a whispers about the great place for changes we're making. customers, and There's no doubt that certainly put
Slide 25: We will closely monitor our key metrics of success
We will closely monitor our key metrics of success For personal use only Gross Operating Sales EBIT margin (%) costs/store New stores New brand Store formats Increased scale New customer innovations Staffing of operation proposition Category resets structure Sales & pricing LCC sou