Slide 1: 2011 Annual Results Presentation
FLETCHER BUILDING For personal use only 2011 ANNUAL RESULTS PRESENTATION 17 August 2011 Jonathan Ling Chief Executive Officer
Slide 2: Disclaimer
Annual Results | Fletcher Building | © August 2011 | Page 2 Disclaimer For personal use only This annual results presentation dated 17 August 2011 provides additional comment on the media release of the same date. As such, it should be ready in conjunction with, and subject to, the explanations and
Slide 3: Agenda
Annual Results | Fletcher Building | © August 2011 | Page 3 Agenda For personal use only • Introduction • Company and Market Overview • Divisional Performance • Financial Results • Strategy • Outlook
Slide 4: Company & Market Overview
Annual Results | Fletcher Building | © August 2011 Company & Market Overview | Page 4 Annual Results COMPANY & MARKET For personal use only OVERVIEW
Slide 5: Results overview
Annual Results| Fletcher Building | © August 2011 Company & Market Overview | Page 5 Results overview For personal use only Net earnings before unusual items $359 million, up 19% Operating earnings¹ before unusual items $596 million, up 14% Cashflow from operations $402 million, down 23% Increase in
Slide 6: Slowdown in residential consents in NZ and Australia
Annual Results| Fletcher Building | © August 2011 Company & Market Overview | Page 6 Slowdown in residential consents in NZ and Australia, and commercial markets remain subdued For personal use only June 2011 June 2010 June 2009 11/10 Building Consents 12 months 12 months 12 months %Mvmt New Zealand
Slide 7: Continued underlying earnings growth despite economic headwinds
Annual Results| Fletcher Building | © August 2011 Company & Market Overview | Page 7 Continued underlying earnings growth despite economic headwinds, helped by initial contribution from Crane Group For personal use only June 2011 June 2010 NZ$m 12 months 12 months % Change Sales 7,416 6,799 +9 EBITD
Slide 8: Earnings Commentary
Annual Results| Fletcher Building | © August 2011 Company & Market Overview | Page 8 Earnings Commentary For personal use only • NZ businesses impacted by slowdown in residential construction activity in second half of FY11 • Adverse impacts from earthquakes in Canterbury region, and floods and cycl
Slide 9: Unusual Items: relate mainly to Insulation business writedown and Crane costs
Annual Results| Fletcher Building | © August 2011 Company & Market Overview | Page 9 Unusual Items: relate mainly to Insulation business writedown and Crane costs on acquisition For personal use only Total unusual items after tax of $76m: Crane acquisition and restructuring costs (net) $11m Insulati
Slide 10: Australian Insulation market continues to face challenging conditions
Annual Results| Fletcher Building | © August 2011 Company & Market Overview | Page 10 Australian Insulation market continues to face challenging conditions For personal use only • Termination of Australian government insulation subsidy scheme in February 2010 left industry with massive oversupply of
Slide 11: Canterbury update
Annual Results| Fletcher Building | © August 2011 Company & Market Overview | Page 11 Canterbury update For personal use only • Fletcher appointed to act as agent for EQC • Project management of residential repairs between $10,000 and $100,000 • Current status: Scorecard – to Friday 5 August Hubs es
Slide 12: Australian Carbon Reduction Scheme
Annual Results| Fletcher Building | © August 2011 Company & Market Overview | Page 12 Australian Carbon Reduction Scheme For personal use only Impacts of tax on Fletcher Building will be through: • Increased natural gas and electrical costs as retailers and generators pass on additional costs of the
Slide 13: Divisional Performance
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 13 Annual Results DIVISIONAL For personal use only PERFORMANCE
Slide 14: Strong performance in Infrastructure and Laminates & Panels divisions
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 14 Strong performance in Infrastructure and Laminates & Panels divisions: For personal use only EBIT NZ$million1 168 161 144 141 111 114 83 82 39 38 24 20 Building Products Distribution Infrastructure Property Laminates
Slide 15: Building Products result
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 15 Building Products result For personal use only June 11 June 10 Plasterboard operating earnings NZ$m 12 Mths 12 Mths %∆ adversely impacted by slowdown in residential housing starts and Sales 692 798 -13 Christchurch e
Slide 16: Building Products: decline in insulation and plasterboard volumes
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 16 Building Products: decline in insulation and plasterboard volumes impacted earnings For personal use only Gross Sales June 11 June 10 NZ$m 12 mths 12 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand Plasterboard 145 165
Slide 17: Distribution result
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 17 Distribution result For personal use only June 11 June 10 • Sales down 3% due to slowdown in NZ$m 12 Mths 12 Mths %∆ residential and commercial building activity in the second half, and Sales 856 878 -3 slowdown in C
Slide 18: Infrastructure result
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 18 Infrastructure result For personal use only NZ Concrete June 11 June 10 NZ$m 12 mths 12 mths %∆ • Cement earnings up despite lower domestic volumes. Sales 2,052 2,020 +2 • Demand for concrete and related EBITDA produ
Slide 19: Infrastructure: revenue growth despite variable volumes
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 19 Infrastructure: revenue growth despite variable volumes For personal use only Gross Sales June 11 June 10 NZ$m 12 mths 12 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand 662 636 +4 Concrete: • Cement ↓ ↑ ↑ • Readymix ↓
Slide 20: Property activities include quarry end use, residential and surplus assets
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 20 Property activities include quarry end use, residential and surplus assets For personal use only EBIT NZ$m 2011 2010 % Change Quarry end use 0 0 - Residential 23 18 +28 Surplus property assets 1 2 -50 Total 24 20 +20
Slide 21: Laminates & Panels result
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 21 Laminates & Panels result For personal use only June 11 June 10 Laminex NZ$m 12 mths 12 mths %∆ • Australian revenues up strongly in Sales 1,979 1,930 +3 first half due to new housing and govt education building prog
Slide 22: Laminates & Panels: volumes growth in Australia and Asia
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 22 Laminates & Panels: volumes growth in Australia and Asia, offset by flat or weaker volumes in other regions For personal use only Gross Sales June 11 June 10 NZ$m 12 mths 12 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zeal
Slide 23: Formica: continued improvement in earnings
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 23 Formica: continued improvement in earnings, due to Asia growth and cost reduction programme For personal use only EBIT NZ$m FY11 FY10 % Change Asia 34 29 +17 North America 28 15 +87 Europe 9 5 +80 Corporate -15 -15 -
Slide 24: Steel result
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 24 Steel result For personal use only June 11 June 10 • Strong performance in coated steel NZ$m 12 Mths 12 mths %∆ despite impacts of floods and earthquakes: Sales 1,214 1,172 +4 • Operating earnings up 32% to EBITDA 10
Slide 25: Steel: decline in long steel volumes and margins
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 25 Steel: decline in long steel volumes and margins For personal use only Gross Sales June 11 June 10 NZ$m 12 mths 12 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand Long Steel 247 272 -9 ↓ - ↓ Coated Steel 176 168 +5 - ↑
Slide 26: Crane Group Update
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 26 Crane Group Update For personal use only Acquisition completed on 28 March 2011 Majority of head office cost synergies have now been realised Crane and Fletcher Building corporate offices to be integrated in 2H11 Tra
Slide 27: Crane Group – full year earnings overview
Annual Results | Fletcher Building | © August 2011 Divisional Performance | Page 27 Crane Group – full year earnings overview For personal use only FY2011 FY2011 A$M A$M Revenue EBIT¹ Pipelines 519 35 Tradelink 927 42 Trade Distribution - NZ 286 2 Industrial Products 291 5 Intersegment/Unallocated (
Slide 28: Financial Results
Annual Results | Fletcher Building | © August 2011 Financial Results | Page 28 Annual Results FINANCIAL For personal use only RESULTS
Slide 29: Net earnings
Annual Results | Fletcher Building | © August 2011 Financial Results | Page 29 Net earnings For personal use only June 2011 June 2010 NZ $m 12 months 12 months %∆ EBIT1 596 521 +14 Interest¹ 118 107 +10 Tax1 111 103 +8 Minority Interests 8 10 -20 Net Earnings before unusual items 359 301 +19 Unusual
Slide 30: Crane acquisition partly funded through bank debt
Annual Results | Fletcher Building | © August 2011 Financial Results | Page 30 Crane acquisition partly funded through bank debt For personal use only 189 13 251 1,429 1,892 (42) (645) (8) NZ$ m 1,107 148 (550) Divestments Equity Cash from ops Dividends Opening Net Acquisitions Capex Working capital
Slide 31: Capital expenditure expected to remain in line with depreciation
Annual Results | Fletcher Building | © August 2011 Financial Results | Page 31 Capital expenditure expected to remain in line with depreciation For personal use only 307 ¹ 289 255 * 255 * 211 206 205 Forecast excludes 191 potential expenditure on: • Business acquisitions other than small “bolt-on’s”
Slide 32: Debt maturity profile
Annual Results | Fletcher Building | © August 2011 Financial Results | Page 32 Debt maturity profile For personal use only Funding and Maturity Profile • Undrawn credit lines of $492 million. June 2011 190 • Average maturity of debt is 4 years. 135 • Average interest rate on debt is 6.6%. 84 56.6 •
Slide 33: Key Ratios
Annual Results | Fletcher Building | © August 2011 Financial Results | Page 33 Key Ratios For personal use only Total Shareholder Return (TSR) Debt/Debt Plus Equity Percentage Percentage 40 42 40 24 37 34 14 14 31 27 22 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun
Slide 34: Strategy
Annual Results | Fletcher Building | © August 2011 Strategy | Page 34 Annual Results STRATEGY For personal use only
Slide 35: Strategy
Annual Results | Fletcher Building | © August 2011 Strategy | Page 35 Strategy For personal use only Improved earnings reliability through geographic and end-market diversification Decentralised business model Portfolio approach that creates value through application of proven operating model Target
Slide 36: Outlook
Annual Results | Fletcher Building | © August 2011 Outlook | Page 36 Annual Results OUTLOOK For personal use only
Slide 37: Outlook 2012
Annual Results | Fletcher Building | © August 2011 Outlook | Page 37 Outlook 2012 For personal use only New Zealand: • Gradual improvement in housing starts • Christchurch rebuilding to gain momentum • Commercial activity remains patchy • Infrastructure outlook underpinned by government spending Aus
Slide 38: 2011 Annual Results Presentation
FLETCHER BUILDING For personal use only 2011 ANNUAL RESULTS PRESENTATION 17 August 2011 Jonathan Ling Chief Executive Officer