Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Presentation (October 2013)
37 slides from Fletcher Building's investor presentation, Oct 29, 2013
Slide 1: Investor Presentation October 2013
For personal use only Investor Presentation October 2013
Slide 2: 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 3: Presentation outline
Presentation outline For personal use only Fletcher Building at a glance Results Overview Business Transformation Programme Outlook Supplementary Information Divisional Performances 3 Fletcher Building Investor Presentation | © October 2013
Slide 4: Fletcher Building at a glance
Fletcher Building at a glance For personal use only Revenue – 12 months to 30 June 2013: NZ$8.52 billion Market Capitalisation¹: NZ$6.60 billion Employees: 18,830 Shareholders: Revenues: EBIT (as at 30 June 2013) (year to 30 June 2013) (year to 30 June 2013) 4% 7% 12% 14% 16% 45% 45% 50% 36% 43% 28%
Slide 5: Business structure grouped around divisions
Business structure grouped around 5 divisions For personal use only Infrastructure Building Laminates Distribution Construction Products Products & Panels Cement Building Materials Laminex New Zealand General Readymix Manufacture 57 PlaceMakers construction Aggregates MDF branches Infr
Slide 6: Five year performance overview
5 year performance overview For personal use only Total Shareholder Return (TSR) Debt/Debt Plus Equity Percentage Percentage 37 34 33 51 31 27 24 14 14 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 -27 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Return on Average Funds Percentage¹ 13 13 12 11 10 Jun-09 Jun-10 Jun-11 Ju
Slide 7: Strategic overview
Strategic overview For personal use only Fletcher Building: Who Are We An integrated manufacturer and distributor of infrastructure and building products, as well as a construction company Fletcher Building: How We Create Value Building, acquiring and managing strong asset positions in core markets
Slide 8: Results Overview
Results Overview For personal use only CSP Pacific streetlight columns, Auckland
Slide 9: Financial results overview
Financial results overview For personal use only June 2012 June 2013 NZ$m 12 months 12 months %∆ Sales 8,839 8,517 -4 EBITDA¹ 786 789 - EBIT¹ 556 569 +2 Net earnings¹ 317 326 +3 Significant items after tax (132) 0 Net earnings 185 326 +76 EPS - cps¹ 46.5 47.6 +2 Dividend - cps 34.0 34.0 - 1. EBITDA,
Slide 10: Continued upward trend in New Zealand residential consents
Continued upward trend in New Zealand For personal use only residential consents throughout the past year Total residential consents 12 month rolling – New Zealand and Australia Australia New Zealand 20,000 185,000 19,000 175,000 18,000 165,000 17,000 155,000 16,000 145,000 15,000 135,000 14,000 125
Slide 11: New Zealand operating earnings up strongly
New Zealand operating earnings up strongly with For personal use only volume growth, while most other markets were down EBIT¹ NZ$million 286 259 207 203 90 80 New Zealand Australia Rest of the World Year to June 2012 Year to June 2013 1. EBIT before significant items 11 Fletcher Building Investor Pr
Slide 12: Divisional operating earnings overview
Divisional operating earnings overview For personal use only EBIT¹ NZ$million 222 209 139 122 120 109 87 65 50 50 Infrastructure Building Products Laminates & Distribution Construction Products Panels Year to June 2012 Year to June 2013 1. EBIT before significant items 12 Fletcher Building Investor
Slide 13: Earnings commentary
Earnings commentary For personal use only New Zealand operating earnings¹ up 38%, driven by increased house- building activity and repairs and rebuilding work in Canterbury Deterioration in Australian volumes evident early in the year, and the market remained soft throughout FY13 Improvement in Nort
Slide 14: Canterbury update
Canterbury update For personal use only Considerable progress on repairs 46,000 full scope repairs completed: half-way point now passed $1.5 billion of work completed Repairs to the final Earthquake Commission referred property are now expected to be completed in December 2014 NZ Govt and Christchur
Slide 15: Cashflow from operations increased by 25%
Cashflow from operations increased by 25% For personal use only June 2012 June 2013 12 months 12 months %∆ EBITDA 633 789 25 Funding costs (152) (146) -4 Cash tax paid (123) (60) -50 Non cash unusual impact 122 0 - Provisions movement/other (23) (58) 248 Working capital movements: Debtors 15 34 Cred
Slide 16: Net debt movement
For personal use only Opening Net Debt 2,059 Cash from operations NZ$million (525) (pre working capital) Working capital (34) Growth capex + acquisitions 98 16 Fletcher Building Investor Presentation | © October 2013 Stay in business 148 capex Divestments (91) Dividends 208 12 divestments and operat
Slide 17: Capital expenditure to increase modestly in FY14
Capital expenditure to increase modestly in FY14 For personal use only – includes investment in FBUnite projects Growth Stay in business June 2012 June 2013 353 12 months 12 months %∆ 307 Stay-in-business 207 148 -29 Growth 60 85 +42 246 230 220 Acquisitions 86 13 -86 205 Total 353 246 -30 148 Depre
Slide 18: Debt maturity profile
Debt maturity profile For personal use only Funding and Maturity Profile Undrawn credit lines and cash on hand of $943 million. 214 Average maturity of debt is 5 years. 200 383 Approximately 74% of all borrowings have fixed interest NZ$m rates. 22 424 Average interest rate on debt is 318 221 6.7%. 1
Slide 19: Business Transformation
Business For personal use only Transformation Fletcher Reinforcing, Auckland
Slide 20: FBUnite: multi-year business transformation programme
FBUnite: multi-year business transformation For personal use only programme 20 Fletcher Building Investor Presentation | © October 2013
Slide 21: FBUnite transformation programme
FBUnite transformation programme For personal use only All workstreams established with senior leadership teams in place Specific Workstream updates: Shared Services Centre established in Auckland Group Procurement teams in place and a number of categories already completed Centralised propert
Slide 22: Management changes
Management changes For personal use only Nick Olson Tim Hickey Charles Bolt Carl Powell Chief Financial Officer Chief Executive Company Secretary Chief Information Distribution Australia and General Counsel Officer 22 Fletcher Building Annual Results Presentation October 2013
Slide 23: Outlook
Outlook For personal use only Formica DecoMetal® laminate, Heathrow Airport
Slide 24: Outlook FY2014
Outlook FY2014 For personal use only New Zealand Increase in construction activity expected across most sectors Strong increase in housing consents expected to underpin activity levels in the first half Canterbury rebuild will continue to boost activity Steady improvement in commercial build
Slide 25: Outlook FY2014
Outlook FY2014 For personal use only North America: Increases in new housing construction will benefit Formica Commercial market remains flat Europe: Remains difficult, particularly Spain Break even target Asia: Growth expected in South East Asia Northern Asia and China may be more subdu
Slide 26: Supplementary Information
Supplementary For personal use only Information Dimond cladding, Auckland
Slide 27: Infrastructure Products
Infrastructure Products For personal use only Result June 2012 June 2013 Cement, concrete & aggregates NZ$M 12 months 12 months %∆ New Zealand volumes improved: - Cement volumes up 4% Sales 2,299 2,095 -9 - Aggregates volumes up 6% EBITDA 312 - Readymix volumes up 19% 302 +3 Australian quarry volume
Slide 28: Infrastructure Products: Increased NZ activity drove volume growth
Infrastructure Products For personal use only Increased NZ activity drove volume growth Gross Sales June 2012 June 2013 NZ$m 12 months 12 months %∆ Volume ∆ Price ∆ EBITDA ∆ Cement, concrete & aggregates¹ 619 669 +8 Cement Readymix - Aggregates: - New Zealand - - - Australia Concrete pipes & product
Slide 29: Building Products
Building Products For personal use only Result June 2012 June 2013 Plasterboard NZ$M 12 months 12 months %∆ Volumes and earnings up in strong New Zealand residential market. Sales 1,390 1,350 -3 Insulation EBITDA¹ 146 159 +9 Operating earnings down 23% due to continued competitive pressures in EBIT¹
Slide 30: Building Products: Earnings ahead due to improvement in NZ market
Building Products For personal use only Earnings ahead due to improvement in NZ market Gross Sales June 2012 June 2013 NZ$m 12 months 12 months %∆ Volume ∆ Price ∆ EBITDA ∆ Building Products 600 584 -3 Plasterboard - Insulation¹ Coated Steel Products 954 940 -1 Roof Tile Group² - Coated Steel NZ³ -
Slide 31: Laminates & Panels
Laminates & Panels For personal use only Result June 2012 June 2013 Formica NZ$M 12 months 12 months %∆ Operating earnings reduced by 18% due to declines in Europe and further Bilbao Sales 1,849 1,738 -6 closure costs. EBITDA¹ 205 180 -12 Volumes in North America up slightly. Operating earnings grow
Slide 32: Laminates & Panels: Volumes up in North America, down elsewhere
Laminates & Panels For personal use only Volumes up in North America, down elsewhere Gross Sales June 2012 June 2013 NZ$m 12 months 12 months %∆ Volume ∆ Price ∆ EBITDA ∆ Laminex Australia 901 816 -9 - New Zealand¹ 133 117 -12 - Formica Asia 213 205 -4 - - - Europe 294 247 -16 - North America 336 33
Slide 33: Formica: decline in earnings due to Bilbao plant closure
Formica: decline in earnings due to additional costs For personal use only of Bilbao plant closure and lower volumes in Europe June 2012 June 2013 EBIT NZ$m¹ 12 months 12 months %∆ Asia 38 37 -3 North America 34 41 +21 Europe 13 (5) - Corporate (14) (15) - Total EBIT 71 58 (18) 1. Excluding signific
Slide 34: Distribution
Distribution For personal use only Result June 2012 June 2013 PlaceMakers NZ$M 12 months 12 months %∆ Strong revenue growth due to recovery Sales: in residential homebuilding. PlaceMakers 779 850 +9 Earnings growth assisted by cost Tradelink/Mico 1,482 1,291 -13 reduction and efficiency measures. EB
Slide 35: Construction
Construction For personal use only Result June 2012 June 2013 Residential earnings up 55% due to NZ$M 12 months 12 months %∆ strong house sales in Auckland. Sales 1,040 1,193 +15 Continued momentum in Canterbury with residential house repairs and EBITDA 61 95 +56 earthquake recovery work. EBIT 50 87
Slide 36: Strong improvement in New Zealand residential consents, but Australia flat
Strong improvement in New Zealand residential For personal use only consents, but Australia flat June 2011 June 2012 June 2013 13/12 Building Consents 12 months 12 months 12 months % Mvmt New Zealand Residential Consents 13,539 15,414 18,731 +22 Non Res WPIP ($m)* 4,798 4,452 5,010 +13 Infrastructur
Slide 37: Fletcher Building – key listing information
Fletcher Building – key listing information For personal use only Listed on the New Zealand and Australian stock exchanges New Zealand • Largest listed company by market capitalisation on the NZX¹ Australia • Ranked #44 on the ASX¹ • Fletcher Building gained inclusion in the S&P/ASX 200 index in Mar
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