Slide 1: Operational & Strategic Update - 10 August 2005
ee 10 August 2005 » ing
Slide 2: Annual Results presentation notice
This Annual Results presentation dated 10 August 2005 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: Highlights
Highlights = ye Net profit up 38% to $330 million crea: Ay DAE irns TSR of 61% ~~ 7 consecutive dividend increase Full year dividend up 28% y a) TD oN A - 7 20 million new shares issued at a discount of less than 1% Acquisition of Amatek Holdings yy UE 7 Me LEAL ALLA EAL A Wey i La i y Uy D7 Le y Wg
Slide 4: Summary of Results
Summary of Results Jun Jun % 2005 2004 YOY $m 12 Mths 12 Mths Change Revenue 4663 3958 +18 EBITDA 737 582 +27 EBITA 609 471 +29 EBIT 596 460 +30 Net Earnings 330 240 +38 EPS (cents) 73.8 55.7 +32 Dividend cps 32.0 25.0 +28 oy Lig Ye Lo VE, Lo Le LE Hy Ly Vi Ly J) / ay Le LLL j Le iy a 77 ey Lg iy i
Slide 5: EBIT $m by division
250 4 200 150 EBIT $m 100 5 +11% L 7 _ ip A Wie 7 a Distribution Infrastructure Laminates & Panels 2@ Jun-04 @ Jun-05 Wie CG ye iy Yo My gyi WU Wye LLL LLL LLL EEA Wi He Pate 7 yy iis ay 7 Y mn MLL LEED ite Eg MMMM
Slide 6: Building Products Results
Building Products Results Jun 1 Jun 2 % 2005 2004 YOY $m 12 Mths 12 Mths Change Revenue 1338 927 +44 EBIT 222 164 +35 Margin 16.6% 17.7% -6 Funds 878 560 +57 Return on Funds 27.3% 4 31.0% 2 -12 i Includes 4 months of Amatek 2 Includes 9 months of Tasman 3 Proforma return based on full 12 months of T
Slide 7: Building Products: Plasterboard
Building Products Plasterboard ) Market share maintained at 94% Q Record volumes and earnings achieved from strong market QO ‘House-lot’ ordering being extended - new Auckland warehouse under construction with Christchurch to follow QO) New products based on GWF technology launched in New Zealand, A
Slide 8: Building Products: Insulation
Building Products Insulation ) Amatek’s insulation business in Australia acquired and combined with existing business OQ) Synergies on track to exceed original estimates OQ Approximate glasswool market shares are 70% in New Zealand and 66% in Australia OQ) Record earnings assisted by strong markets
Slide 9: Building Products: Rollforming
Building Products Rollforming QO} Amatek’s rollforming business (Stramit) acquired Q) All business units - Dimond, Stramit, and Pacific Coil Coaters benefited from strong markets QO} BlueScope and New Zealand Steel supply agreements under negotiation- annual purchases now in excess of 300,000 tonnes
Slide 10: Building Products: Metal Roof Tiles
10 Building Products Metal Roof Tiles Malaysian plant acquired, upgraded and commissioned July 05 Domestic market underpinned by strong demand Export markets performing well despite the strong NZ$ USA operation had outstanding results due to unusually strong storm induced demand Overall excellent re
Slide 11: Building Products: Long Steel Products
Building Products Long Steel Products QO Excellent earnings in scrap JV Q Record production through steel plant QO Cyclone acquired to increase wire market share in NZ Q Reinforcing had a record year on the back of good market conditions Q) Wire products still under pressure from low rural demand an
Slide 12: Building Products: Other Businesses
12 Building Products Other Businesses OQ) Steel Distribution, Fletcher Aluminium, Tasman Sinkware and Access Flooring all performed well on the back of generally strong markets OQ) EasySteel a dramatic improver aided by uplift in steel inventory value in H1 Q Aluminium and Tasman Sinkware benefited
Slide 13: Distribution Results
13 ipbution Results ed H = Jun Jun % 2005 2004 YOY $m 12 Mths 12 Mths Change Gross Revenue 920 863 +7 EBIT 81 73 +11 Margin 8.8% 8.5% +4 Funds 120 106 +13 Return on Funds 67.5% 68.9% -2 oy iy Le G Ty VE, 7 Hy He TE ELE EL LEAL ee i YY Ly / ea > CC LLL LC iy 7 VU, 7, ey Bs i Ly Ly We i 3 Vata ay ee y
Slide 14: Distribution
14 istribution QO Revenue up 7% in strong market Q) Upgraded Riccarton and new Lunn Avenue, Auckland and Queenstown stores opened OQ) Upgrades at Paraparaumu, Kaiwharawhara, New Plymouth underway Q Kerikeri and Invercargill new stores underway, with six more stores planned for upgrade this year OQ E
Slide 15: Infrastructure
Infrastructure Jun 1 Jun 2005 2004 $m 12 Mths 12 Mths Revenue 1442 1161 EBIT 196 136 Margin 13.6% 11.7% Funds 672 364 Return on Funds 33.3% 2 37.4% 1 Includes 4 months of Amatek 2 Proforma return based on 12 moths of Amatek Ly Lo yy Gy en a Be MAA EME ANI Z| . i Yi a ay Ba Le My Z Gy v a age ee a Le
Slide 16: Infrastructure: Golden Bay Cement
HEM OME My ae Le i De 16 Infrastructure Golden Bay Cement OQ) Sixth consecutive year of domestic market growth QO Cement kiln upgrade completed to 2000tpd Q) Further upgrade in progress to 2400 tpd due in July 2006 OQ Upgrade project up to $20m higher and 9 months longer to meet new air quality stan
Slide 17: Infrastructure: Ready Mix
17 Infrastructure QO) Ready mix volumes increased again due to strong market QO Margin improvement assisted earnings record Q New plant sharing agreement with Allied will replace old Penrose plant QO) Completed another section of Auckland Airport runway. Further runway work in 2006 LT OMAN gr rN SOU
Slide 18: Infrastructure: Winstone Aggregates
18 Infrastructure Winstone Aggregates OQ Hunua quarry upgrade increased capacity to two million tonnes per annum QO Redevelopment of Whitehall quarry to be commissioned in January 2006 Q Significant upgrade to Helensville sand extraction ) Overall excellent result we Ze Wy ee WME Wy Vay wy ve Ce oe
Slide 19: Infrastructure: Humes and Stresscrete
19 Infrastructure Humes Q Strong demand plus margin improvement resulted in a substantial earnings lift to a record for the business Q Joint Venture to manufacture plastic pipes now operational Stresscrete Q Another beneficiary of the uplift in construction work with strong demand and record result
Slide 20: Infrastructure: Rocla Quarries and Pipelines
Wii 1 Ue ae ay LLM ae aceniiant LLL LLL LE Le LLL LLL LLL 20 Infrastructure Rocla Quarries and Pipelines Q Acquired on 1 March QO Results just ahead of expectations Q Quarry growth opportunities in NSW and Victoria are under negotiation Q Pipelines growth is in non-pipeline products (water managemen
Slide 21: Infrastructure: International
21 Infrastructure International QO Fiji » Small operation, trading up to expectations ) Peru « Another small operation, profit and cash positive on limited growth = Exit still the preferred course if opportunity arises ay Sy yy i MN, LAG EE EEE EEE EE OO NG Ly as i ENDS fi YY, 7 j) Ay aay . Yi yy Gy
Slide 22: Infrastructure: Construction
22 Infrastructur Construction OQ Overall EBIT of $54m up from $42m last year Q The result includes Commercial, Engineering, Residential and Property (some land sales) Ki Ly YY Ne LMM Nii a Yi 7 wy Y i yy fi i i tie Las Ge ig ae ee iy iy Uy ay i Le Le oD y LP a Z) yy y Ly, yy Z iy Uy, We NS yy yi G V
Slide 23: Commercial Building & Engineering
23 Infrastructure Commercial Building & Engineering Q) Exceptionally strong market conditions QO} Commenced Auckland University Business School, Northern Busway, Pohukura Gas Treatment Plant Q Backlog at year end $743m with a further $150m under negotiation yyy ey Yi iy yy YY vy Wye Ly ie Ve Uy ys i
Slide 24: Infrastructure: Residential
24 Infrastructure Residential Q) Record earnings for fourth consecutive year QO Demand and margins still holding Q) Land positions the key to future earnings Auckland Queenstown Schnapper Rock " Jack’s Point Beachlands Wattle Cove Howick Lunn Ave A NOS ASAIO LEENEMEENEEAIE AEE IAL DEERME NEEL EE EE
Slide 25: Laminates & Panels Results
Laminates & Panels | Jun 2005 $m 12 Mths Revenue 960 EBIT 103 Margin 10.7% Funds 774 Return on Funds 13% ay yy, Gee i y) yy y ey Ue vi Be, Lo a Wes Ly Hy LA Ys i, Yi Wa Wy, LE ANE Ui ie Ga, Le 9 5 woe ye ye Le yy Uae AD iy Way HO ys ae Wy y Yj 7 7 Wy Lee Bia be Vay Gi 1) We fy jy Aili a ae hhh eer L
Slide 26: Laminates & Panels
26 Laminates & Panels OQ Strong performance despite adverse currency for exports and softening new residential market in Australia OQ} Improved results in New South Wales through new distribution centre QO New Zealand benefited from full year of savings from integration with Laminex —z;————— ae LOE
Slide 27: Laminates & Panels
27 Laminates & Panels QO Taupo and Kumeu outputs much improved through benchmarking/technical assistance from Australia QO Operational improvements and margin management overcame lower revenue, reduced export earnings and higher resin prices Q Joint Ventures - Wespine and Dynea - also had record res
Slide 28: Profit After Tax
28 Profit After Tax Jun Dec Jun 2005 2004 2004 $m 12 Mths 6 Mths 12 Mths EBIT 596 288 460 Interest -77 -33 -75 Tax -167 -82 -124 Minority Interests -22 -12 -21 Profit After Tax 330 161 240 Lo Ze My, ; j a ae He Log lig LEO LLL LL LEE ye dau: y a yy Vi Hy Ls Ao yy Wg AE A EA yy ja an UE WG TEBE IIER
Slide 29: Simplified Balance Sheet
29 Simplified Balance Sheet Jun Jun 2005 2004 NZ$m NZ$m Assets Current Assets 1439 1022 Fixed Assets 1392 1,023 Intangibles & Goodwill 433 342 Provision for Deferred Taxation 154 86 Investments 171 159 Total Fletcher Building Assets 3589 2632 Liabilities Current Liabilities 961 666 Net Debt 793 448
Slide 30: Key Ratios: Total Shareholder Return
30 Key Ratios (TSR)? Total Shareholder Return Jun 04 Jun 05 Jun 03 Jun 014 = Jun 02 June 01 is the return for the 3 months from separation date TSR calculated ((Gross Dividend Paid + Movement in Share Price)/Opening Share Price) LEE RK yi: Wy 7 ME LLL END Ia GE Gy LD ye Le Ly a i Z a :. Le yy sr i L
Slide 31: Key Ratios: Debt/Debt Plus Equity
31 Key Ratios Debt/Debt Plus Equity i) Ay 7 1 oe eine Big ii) ge fe Jun O01 Jun 02 Jun 03 Jun 04 Jun 05 Z Wee yy BAe, yf VOLES EME De a i YL) iy Vy yy Map My ET a Lo Gi yy 7 Wy yy Vien Le Le MM Wy iy Y —L LL a ee ena ET ena aN a Wie ey i Te ag Ly ey Hi, y Zoo NI I ay yi SO I Meng OC ce ee ee ae 1 ae
Slide 32: Key Ratios: Return on Average Equity
32 Key Ratios Return on Average Equity’ % 30) 20) 10; 0 10; -204 -304 40, -43.8 50° Jun 01 Jun 02 Jun 03 Jun 04 Jun 05 1 Net earnings/shareholders funds ss suse sue emer ns WT yi Aa) WN y Le yy Wy Hi Te is oo i ey Gi Le 7 fe aD Q - Vo a G Se We, AE ye Ly yyy va LLL LLL ] Ey 7, Ly yy yo Ls Lo y Ly ae
Slide 33: Key Ratios: Return on Average Funds
33 Key Ratios Return on Average Funds’ % 307 257 20> 155 -10- Jun 01 Jun 02 Jun 03 Jun 04 Jun 05 1 EBIT/(Average net debt+equity+capital notes) - deferred tax asset 4s i LE LEELA EEE MEENA I OLLADE LLL LL MELLO LE yee yy GC 7 Ay Le Sei eT ae i Yi yi, yy ye Ly Ly BY Gs Gi ISIE ESR HESS ESSN z BY yy y
Slide 34: Key Ratios: Interest Cover
Key Ratios Interest Cover’ (times) Jun 01 Jun 02 Jun 03 Jun 04 Jun 05 4 EBITDA pre unusuals/interest paid including capital note interest ae Gee Gy 7 Wn, Le 7 Hye yy J 7 yey Uy By yy yi j iy My My WY, A Ge Vy BEAT A RURAL EDEREU MERU AD EAL EAL DELLE BEAU DEBUEAUEDEREE THEIL ADEA LEBEAU DE BUEN EALE
Slide 35: Net Debt Movement
35 nk Debt Movement Net (90) 590 (19) my © 73 Ww 5 5001 448 (536) 400 LO N ae 2 7 214 ity Capex Distribution Inorl Dividends Opening Debt Cash from ops Acquisitions (net of cash) Divestments M Capital Notes/Equity FX on AUD Debt Closing Debt MGs YE pp y i TE is We Ui, c Ly Hy, hae LEE Le a Wie Uy By
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Slide 37: Strategic Agenda
37 Strategic Agenda Earnings Reliability Internal Growth External Growth eur OL cp NU mNENeNmIRE Lo yi yy a yy Ye . Ly Ly ye He le Ye is Vy is Ly Ly 7 ae 7 Gi _. V7 oe vy Yi Le a ae Ly He ie Gi iy Ly, Bhi Vg nual F a Ge yy We i) 8 ey 7 7 7 | Le ae a xe o leche By filing y i
Slide 38: Earnings Reliability
38 Ea Reliabilit Q Cycle not just residential but total construction including non-residential and infrastructure () For New Zealand Infometrics estimates of Total Market For Australia BIS estimates of total market WEA LAE LLL LLL LLL MELLEL EMEA DL ae pennies Lo We iy ee y 7) WA EE i yy wy Yj), We
Slide 39: NZ Value of Work Completed
39 NZ Value of Work Completed Total Construction Work (NZ) Nov 2004 est Forecast NZ Value of Work Completed Total Construction Work (NZ) Jul 2005 est {a Residential BA&A O Non-residential O Infrastructure Source: Infometrics Wes Vy, os Ye ye A LOY 7, Cg ae oo ee Wy ag di 7) Oe y Me) a ge 7 yy Uj, 7
Slide 40: Australian construction work forecasts
40 Reliabilit 120%. 5 ODEngineering construction resi 2% 100 mNon- residential 9% 4% Residential 80 Dec 2004 «o 40 Forecasts of » building and ° 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 construction vearendedtune ' ' ff work done in és engineering construction MNon-residential 8%
Slide 41: Internal Growth: capex
41 Growtl Significant capex to continue in 2006 —- up to $100m more than depreciation 250 5 les ao Wy DO 200 Hg , vat 150 Ce 100 90 ce on 3 il Ao Wj, Lee Ly 7 Ly LE aye ay LANE Lo La oe C Ly EE ee Le Wy a ey 7 ee ij ey Hey a i i yy ay, 5 Le Ye Hy df duds EN MME EEE AEE LLL Me iy i LLLLLdLdLLLlLdlLlL
Slide 42: External Growth Opportunities
42 External Growth Opportunities We have the financial capacity Limited opportunities in total Our acquisition criteria narrows that further O oO O CO We continue to seek and evaluate options to find the right opportunity Le ie LN MBO ih fi fi AE Cy, Gs i Waa iinet Ian aA ER die yy i He LA Wey LEE L
Slide 43: Amatek Reminder
43 ca External Growth Opportunities Amatek Reminder Q Acquired 1 March 2005 QO) Comprises four businesses Rocla Pipeline Products Rocla Quarry Products Stramit Insulation Solutions Uy Y, fC Uy, Y ay eee We i, i ae Ce ee Gy Ve is, Finan y Met Way LAE | i eg) Ly Big sOC - Ge a ye ye VA LAA AAA EE Le y
Slide 44: Amatek Reminder (cont.)
44 ca External Growth Opportunities Amatek Reminder (cont.) Q Purchase price A$530 million (NZ$581 million) O 20 million new shares issued at NZ$7.05 QO) Inclusive of tax loss benefit at NPV and $10 million of synergies, EBITDA purchase multiple was 4.7 yyy yy yy OO a Ly Ly, Gen LE A EEN AE MEE LLL
Slide 45: External Growth Opportunities: acquisitions since listing
45 =F External Growth Opportunities Since listing $1.6b+ spent on external growth opportunities Acquisitions NZ$m1 » Laminex 782 = Tasman 272 » Amatek 581 1 Includes earnout and transaction costs Ey wy LLL LLL LLL OE Te We Lie ME Le ee y 7 WW gy YY on Wy 7, CE AAU EE Ly iy We yy i Uy 0, iy yy Ly Lo
Slide 46: Outlook
Outlook ) NZ and Australia residential markets will soften further this year, but off record high levels QO We expect A&A to strengthen in New Zealand Q Non-residential outlook is strong for next 2-3 years in New Zealand and 1-2 in Australia Q) Infrastructure spend will also be strong for at least t
Slide 47: Outlook
Outlook Q IFRS would increase this year’s NPAT by about 5-6% OY Some incremental benefit from Amatek OQ) Expect on balance to have another satisfactory full year result in 2006 ee SR SNM ie Ve LN MBO Ly Lf aaa Lan ee vy WIN yy ey, ae LE i) _ y is hii il iis Wis, LLL ay 7 yy Ly ij Ae Vhs oD MA y ae a
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