Slide 1: Fletcher Building Operational & Strategic Update
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Slide 2: Annual Results presentation notice
This Annual Results presentation dated 11 August 2004 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 activities given in that release. * F
Slide 3: Net profit up 43% to $240 million
-— - Net profit up 43% to $240 million yy Of this, $108 million + tax credits os io will be distributed to shareholders. a Vela Se TSR of 33% a ‘urther — 7 25 million new shares issued at |= &F Ss ity. Raising — at a discount of 4% CC —_—<MK Ii ign Dopey sia pean ghilon 4 a jj i vy IN ee e oy es _ |
Slide 4: Summary of Results
summary of Results Jun Jun % 2004 2003 YOY $m 12 Mths 12 Mths Change Revenue 3958 3221 +23 EBITDA 582 429 +36 EBITA 471 338 +39 EBIT 460 331 +39 Net Earnings 240 168 +43 EPS (cents) 55.7 43.4 +28 Dividend cps 25.0 19.0 +32 vy ies Ga a Ly yy i Zo Wi, if Wee Gs MLE, Ly Ly Wi ee 7 VILE EE ME He iy ie p
Slide 5: Financial Performance Improved Across All Segments
Financial Performance Improved Across All Segments EBIT $m 230 180 ~ 164 16% 76% 130 80 _ | y 73 : : ae 4 30 -20 Building Products —_ Distribution Concrete Construction Laminates & Panels H June 2003 June 2004 mma CO eT y LL LDL LBL MS MSL LMS MM LM LLL LMA ALAM EE Wy ys ae yy Wy WN LLM ALLL LALA AA
Slide 6: Building Products Results
Building Products Results Jun** Jun* % 2004 2003 YOY $m 12 Mths 12 Mths Change Revenue 927 638 +45 EBIT 164 102 +61 Margin 17.7% 16.0% +11 Funds 560 296 +89 Return on Funds 31%**™* 34% -9 * Restated to transfer FWP & SPH to Laminates & Paneis ** Includes 9 months of Tasman *** Proforma return based
Slide 7: Building Products: Tasman
Building Products Tasman Q Acquired for NZ$272 million in September 200 QO} 9 months earnings: EBIT $31m, EBITDA $42m with record sales levels in insulation, sink ware and roofing QO Synergies identified, achieved and exceeded Q Significant growth opportunities mma CO eT y LLL LBL LS MSL MLM MMMM LA
Slide 8: Building Products: Winstone Wallboards
Building Products Winstone Wallboards QO) Record domestic volumes from strong market QO) Held NZ market share at 93-94% Q Record earnings Lo Ly ye CO Wy, Y Wy DD ——— a We a Wy ee 7 yy a a ey ey ye We) a i Be hy a Hi Hae ‘ he ys y Uy Y Gi A Gor Ye if ii he ih itn ta isis Ainnienio aiinnaiO ‘iii i a n
Slide 9: Building Products: Fletcher Aluminium
Building Products Fletcher Aluminium Q Greatly improved margins and earnings OQ Operational improvements achieved QO Regained some market share Q New products launched Bg ye ee eee ae Ly Te y Hs L Ht . Hie We Hi _— Hy . Hey MMMM MNGi Ley ye Ya as AM 7 se Ui ae Yay Wiel he 7 7. LMU ee LEE LEME yy yy
Slide 10: Building Products: Steel Manufacturing
10 Building Products muerte mts 350 300 Steel Manufacturing os us$/t (} 230,000 tonnes made, an ~™” increase of 20% “ PES SSF SS SS SSS SS S 5 SSS SS ) Sales price up reflecting 2 ey oo Sep ey PP eh gh to oF hw of Ff OK ot of Wh oF of oF world demand oyna Pacific Steel Gross Domestic Reinforcing Bar
Slide 11: Building Products: Steel Processing and Distribution
Building Products Steel Processing and Distribution Q Significant operational improvements benefite margin and earnings at EasySteel QO Steady performance at Dimond with improvin earnings OQ) Record volumes at PCC with earnings up both domestic and export ie LLL LD LSS LS LLL LLL MLL MLM LM MAM ALEN
Slide 12: Distribution Results
Distribution Results Jun 2004 12 Mths 2003 $m 12 Mths Gross Revenue 863 744 EBIT 73 59 Margin 8.5% 7.9% Funds 106 92 Return on Funds 68.9% 64.1% * — Restated to transfer discontinued operations to corporate i yy Ve GL LDL SLL LLL LMS LM MK LLM LLL yy yy yy LLL Ly A ee eT Ll Ls y a Hy 7 m1) Lh Hii by
Slide 13: Distribution
13 Distributio: QO) Revenue up 16% on last year and earnings 24% Q Product highlights » Frames & Trusses up 25% " Insulation up 25% = Kitchens & Bathrooms up 35% QO} Opened new New Lynn branch. Commenced construction on Riccarton, Mt Wellington and Queenstown Ve LLL LD LSS LS LLL LLL MLL MLM LM MAM
Slide 14: Concrete Results
oncrete Results Jun* 2003 12 Mths Jun 2004 $m 12 Mths Revenue 518 487 EBIT 94 81 Margin 18.1% 16.6% Funds 410 400 Return on Funds 22.9% 20.3% * Restated to transfer discontinued operations to corporate “mp “ny Lieum nema voy way yy Diy yy ey ELLE ALLEL EL OLE LER EEL ELE LE yy Wy yy > »)»)hhChCrrFtr
Slide 15: Concrete: Golden Bay Cement
is oncrete Golden Bay Cement O) 52% share of a 1.3 million tonne market QO) Highest ever New Zealand sales QO) Export sales reduced because of high New Zealand demand Q Accelerated capital plan will lift capacity to 840,000 tonnes mma CO eT y LL LDL LBL MS MSL LMS MM LM LLL LMA ALAM EE Wy yy Ly “as
Slide 16: Concrete: Firth
16 oncrete Firth QO) Ready mix exceeded 1 million m3 - a record QO) Ready mix sales up 7% by volume OQ Concrete block sales up 11% by volume Q Margins improved across the business LLL LLL LEME NEL ENE MEME WA ti EE We te ae Sy, ay y, Ly Ms Us Ve Le a We Ly 7. Le ae LEME yy yy Le Fes ap Lg fey WG oY
Slide 17: Concrete: Winstone Aggregates
oncrete Winstone Aggregates Q Plant rationalisation impacted volumes by 3% but earnings up 17% Q Average selling price increased 8.5%, partly through better mix ) Cleanfill revenues on the increase Q Auckland infrastructure spend underpins growth yy Ye OO yy Me Gs ££ LLANE oo oe Ly Wy | My ey yay LZ
Slide 18: Concrete: Humes
18 oncrete Humes Q Price leadership position impacted on market share QO Margins and earnings well up on 2003 Q Working capital/sales ratio improved Lo iy Ls 7 Wy, Y yy DD 7 a a We a Ey ee 7 yy a a yy yy vy Le Yi) ae i es ag ie a Hi Wy My ay Ay _ a Tee y Wes, ys Wh, Gor Ye ; his ih itn ta isis Ainni
Slide 19: Concrete: Stresscrete
aa ye 19 oncrete Stresscrete QO) Revenues up 14% Q Internal improvements resulted in earnings up 64% QO Backlog up 30% Q Penetration in infrastructure market improving YO Ee OO yy EN TAL) yy ye Ge i y y iy i A Le i a I C U7 Ye LIED 7 Ly iy yy i HS Gi He A Me LMA MTR Ge UE: Ey GY, Ee Ysa i i RG ey i
Slide 20: Concrete: International
20 oncrete International » Earnings improved and outlook good on back of uplift in construction activity QO) Peru = Positive earnings and US$1im cash repatriated « Further improvements expected in 2005 a a y Or le Wy ee Ly ee Gs iy i fi MMA Ly Ly iY Ly Ys Hi MEME EE a 7 WEES Vy y, ij “iy iy y YG “ay
Slide 21: Construction Results
21 onstruction Results Jun Jun % 2004 2003 YOY $m 12 Mths 12 Mths Change Revenue 643 618 +4 EBIT 42 34 +24 Funds -46 -62 +26 Ye yy OE Uy Uj y LL LLLLL LLM MMM 7 7 LN yy 7 yy Hy LLM Yi} Ly B We We Hs Hist By Medes Ys i HE We ii AIEEE ee Ee ay Wi MALU AES HG Yi, Wis ‘iY, yi Wy ae Ay He iH ae We Wy nga
Slide 22: Construction: Commercial Building & Engineering
22 onstruction Commercial Building & Engineering QO) Earnings up 8% Q Auckland Hospital and Grafton Gully completed QO Spaghetti Junction (JV) and Ferguson Wharf commenced OQ Backlog now $600 million —- all time high a LLUVUVUIZTVZVZ_— ummm Y Le Te yy TI ey ane a ii 7 LL EN I EMEC NS Vy la i yy gy i
Slide 23: Construction: Residential
23 Construction Residential a oath OQ) Record earnings up 54% Q Future land holdings a key Auckland * Schnapper Rock » Beachlands » Wattle Cove = Howick = Lunn Ave Queenstown « Jacks Point — sections ili yyy a wie RL aa bi ey Wi) Wa ys iy iy Yue, Ly a yy ae ee Hi 7 i LD yy D0 WH EM AE i) yy, OMY a y
Slide 24: Laminates & Panels Results
24 Laminates & Panels sults Jun % 2004 Jun’* YOY $m 12 Mths 2003 Change Revenue 994 659 +51 EBIT 95 54 +76 Margin 9.6% 8.2% +17 Funds 789 862 -8 Return on Funds 12% 10.1%** +19 * Laminex Acquired on 13 November 2002 and now restated to include FWP & SPH ** Estimated return based on full 12 months of
Slide 25: Laminates & Panels: Laminates
25 Panels Laminates QO) Performance exceeded expectations for first full year QO All domestic sectors were buoyant OQ) Export earnings impacted by lift in currencies vs US$ Q) FWP and SPH successfully integrated Bg ye ee eee ae Ly Te y Hs L Ht . Hie We Hi _— Hy . Hey MMMM MNGi Ley ye Ya as AM 7 se U
Slide 26: Laminates & Panels: Laminates
26 Panels Laminates } Formica and Formex brands consolidate QO) Warehouse consolidation in Sydney and Adelaide, with Brisbane underway OQ) Western Australian JV’s performed well YE a Ty LE Vy) WS p Wy c. iy MY . TALE ge uy 4 ee iy ay aE a Lo G Wy ieee yy Wo ye y 7 Yi) VN He Y op uy i We We Ue O/H Yi
Slide 27: Profit After Tax
Profit Af $m EBIT Interest Tax Minority Interests Profit After Tax ESL y yy ys y Ly 7 6 200 if UY Gs i yo 1) J, L7 Yj 7 ay Ve, ae 7 Go Ge Wy Lae Lae LLL iy We er Tax Jun 2004 12 Mths 460 -75 -124 -21 Dec 2003 6 Mths 216 -36 -58 -11 27 240 111 oo man noma YAN MEP Ny Le MMe Ma 7 Wy Wh =. He, Le ys 7 L
Slide 28: Simplified Balance Sheet
28 Simplified Balance Sheet Jun Jun 2004 2003 NZ$m NZ$m Assets Current Assets 1022 919 Fixed Assets 1023 972 Intangibles & Goodwill 342 195 Provision for Deferred Taxation 86 104 Investments 159 155 Total Fletcher Building Assets 2632 2345 Liabilities Current Liabilities 666 627 Net Debt 448 502 Cap
Slide 29: Key Ratios: Total Shareholder Return
29 Key Ratios Total Shareholder Return (TSR)** 50% 40% 30% 20% 10% 0% Jun 01* Jun 02 Jun 03 Jun 04 * june 01 is the return for the 3 months from separation date ** TSR calculated ((Gross Dividend Paid + Movement in Share Price)/Opening Share Price) wy emu pag ee y VI, Te a VY, Gi Gye ee He ye A Hy g
Slide 30: Key Ratios
Key Ratios ye yy ihe ite y Os a ee eee ao CC Peer LLL NE - L 7 Tee 7 Hi ee ae L Way ee . - 30 Yi yy y 7 Ge AME ae as A
Slide 31: Key Ratios: Return on Average Equity
31 Key Ratios Return on Average Equity* % 30) L 20 ra a n 10 0 a 10 20 30 40) L L -43.8 50 Jun 01 Jun 02 Jun 03 Jun 04 * Net earnings after capital notes interest/shareholders funds 7 Wes Wi, Ly a Le ae ae Gi yi, Lae Wy 7 yy Wey i HG: Wy Ve 7 Z o yy aah ye 7 7 Vi Hee Upp Uae We Y Wy oa oh PSSSS ay y
Slide 32: Key Ratios: Return on Average Funds
32 Key Ratios Return on Average Funds* % 255 20> 155 -10- Jun 01 Jun 02 Jun 03 Jun 04 * EBIT/(Average net Gebevequity rcapital notes) - deferred tax asset y, Yj, WEA oy, Te nis Wy We Wig ae y yy Lo y ay Wy We gy ey Gi i, y ey ee y ee Ly Hy LL LLL - Wes a Wi i Yi | ao ty Ge Lo Gee i iy Cit Wa Vy y a
Slide 33: Key Ratios: Interest Cover
Key Ratios Interest Cover* (times) Jun O01 DecO1l Jun0O2 DecO2 Jun03 DecO3 Jun 04 * EBITDA pre unusuals/interes€ paid including capital note interest 7 LHe Mj, a Hy yy ip Ly Wy We, y _ Oh y hy ae ee ao Lo Le Up Hh _ Wyn MU Jy Re Va Gy ey, Las y Me WY tested Wie te Wie Cette i Me ie ie 2 bp b A LD TT
Slide 34: Net Debt Movement
34 at Term Debt Movement 8005 272 (411) 600; a me Ww _ 22 _ 502 137 NZ$ Millions 400 | mee) 200+ T T T T T T T T T o~ c rr] t w S > - » a 8 a & 3 $ 3 € z£ 3 a 4 E ° a o > € 2 3 o o w sg S a vo a 3 a] <s a eS — te] o a a} c wi < a ~ = ~~ £ Fr 2 =] uw 2 = w °o £ & = £ i a = o x a rT £ = — 3 ify 2 a o
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Slide 36: Strategic Agenda
36 strategic Agenda Lo ie Wy ie We y Ay HIME: He VE i Ve Lay Tae Hes sie 7 a He A LEA any ye aaa LE . We Hie Wi, Wy LH vo yy iy i Z y js a He ue) VY Wy Ly 7 YUL i oy 7 7 We PAS etche “A
Slide 37: Earnings Reliability
37 Ea Reliability Q) Cycle not just residential but total construction including non-residential and infrastructure Q) Indicators that will influence total work put in place GBC estimates of projects over 1000 ton cement Fletcher Construction estimates of construction jobs over $25 million House occ
Slide 38: Earnings Reliability
38 Earnings Reliability Infrastructural projects will deliver growth.. Building Consents Measured, WIP Forecast 14.000 GB Major Project Anais Fo mate On Major Projects Project Eat coment Project ing Est Comont 12.000 Bitornart 10.000 Fergusson Whart 2008-07, 0,000 ‘Auckisnd University 7000 a na owen
Slide 39: Earnings Reliability: Total Construction Work (NZ)
Earnings Reliability Total Construction Work (NZ) New Zealand Value of Work Completed Forecast NZ$ million 14000 4 12000 4 = Wa oy, yyy Wi, 10000 4 y 7 Lie We i, 7 We = S 8000 4 A y) WL LL Ei 6000 4 Mie 4000 4 ye ihe og 20004 | | | | 39 Infrastructure Non Residential ABA Residential 97 98 99 niomoom
Slide 40: Earnings Reliability: Sales by Market Segment Australia
40 Reliability Sales by Market Segment — Australia 2003/04 Export Q) Australian cycle 7% Alterations & «= Low new ata residential bias Residential 26% = A&A »= Commercial Commercial 37% My Wa Wy Wey y Pp a yy yD 7 Uh iy Up, ay Boys ee UE Y Z iy iy) ae 7 Bigs ce hE, y Wy Uy, 7 “oy Me Zz | a ip a Zz,
Slide 41: Earnings Reliability: Total Construction Work (Aus)
Earnings Reliability Total Construction Work (Aus) A$Billion Australia Value of Work Completed 60 Forecast 50 40 24.9 30 uy oo q i We ve, 7 Gade * GE i g 7 g ye f ye / i TEA iy Ue hie 7 Ly y 20 A A We Me Ve 7 x SS << 10 Hi Zi AL y Le a) a4 io, is te 4 Waa, BG i 1995 1996 1997 1998 1999 2000 2004f 20
Slide 42: Growth Opportunities
Growth pportunities Expect to invest up to $100 million more than depreciation in 04/05 OQ} Building Products « AHI Roofing expansion « Insulation expansion QO Concrete «= Golden Bay expansion # Whitehall quarry WGA yt a wy y NOM YE ee iy gy Mie Bs CC Ly, Me _ ee yy Yipes yi y y GQ | a. a LLL LM LLL
Slide 43: Growth Opportunities
43 Growth Opportunities QO Construction #» Auckland land Queenstown land } Laminates & Panels » Resin Joint Venture » Asian distribution Li Cee eee Wy ay yy yy Ga ENO By Ly Uy Yi Ge) Ke ae Ay ey He Ge La FCA iY a AN, LUE Ue a 4 i Ae Lie NG, ga EE ITE ties Lenn A ee We a SOMES ual Res a, a HE LLL j “
Slide 44: Growth Opportunities: Distribution
44 Growth pportunities QO Distribution The following new stores are under construction « Riccarton (due to open Oct 04) « Mt Wellington (due to open Nov 04) = Queenstown (due to open Dec 04) With eight others to be upgraded 7 Ce LLL MEN yy Ly) i Lo ee LLL gy, vif es i, We Lo We a ee Hie . Z ae HE La
Slide 45: Growth Opportunities: External
45 i Growth Opportuniti J Externa QO We have the financial capacity OQ) Limited opportunities in total Q Our acquisition criteria narrows that further Q We continue to seek and evaluate options to find the right opportunity Wey a Ty Dy Vy) WS y iy i i is Vg oo aD 4 LLL iy TE a Lo Ve yy Wo Wie y 7 Yi
Slide 46: Outlook
46 Q) NZ and Australia residential markets will soften this year, but off record high levels QO We expect A&A to strengthen QO Non-residential outlook is strong for next two to three years in New Zealand Q) Infrastructure spend will also be strong for at least the next three years QO On balance - we
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