Slide 1: Fletcher Building Limited Analysts Presentation
For personal use only Fletcher Building Limited Analysts Presentation 12 - 13 March 2008 1
Slide 2: Cautionary Statement
For personal use only Cautionary Statement This confidential 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 act
Slide 3: Laminates and Panels Division
For personal use only The Laminates and Panels Division of Fletcher Building Limited is comprised of The Laminex Group and Formica Corporation. The Laminex Group was acquired by Fletcher Building Limited in November 2002 and subsequently integrated with the existing Scott Panel and Hardware and Flet
Slide 4: Vision
For personal use only Vision The Laminex Group will be the innovative market leader for decorative surfaces and related products in Australia and New Zealand. 4
Slide 5: Vision
For personal use only Vision • Innovative • Market Leader • Powerful Integrated Product Offer • Decorative Focus • Australia and New Zealand Geography • Globally Competitive • Zero Harm 5
Slide 6: Leading Brands
For personal use only Leading Brands 6
Slide 7: Leading Products
For personal use only Leading Products 7
Slide 8: Strategic Objectives
For personal use only Strategic Objectives • Increase Market Share • New Product Sales • New Segment Sales • Acquisitions • Operational Effectiveness • Zero Harm 8
Slide 9: Revenue and EBIT – NZ$M
For personal use only Revenue and EBIT – NZ$M 1200 1089 1131 200 1079 1031 174 180 1000 156 160 148 138 800 140 120 574 91 600 100 80 400 60 200 40 20 0 0 2004 2005 2006 2007 2008 H1 2004 2005 2006 2007 2008 H1 2004 2005 2006 2007 2008 H1 2004 2005 2006 2007 2008 H1 REVENUE EBITDA 9
Slide 10: Industry Structure
Industry Structure For personal use only Laminex relative market position by major product group HPL Wilson Art Others Laminex Decorative MDF/PBD Laminex CHH Borg Others Raw MDF/PBD CHH Laminex excludes Export Sumitomo Others Engineered Quantum Stone Caesarstone Quartz Laminex Source :Management est
Slide 11: Market Performance: Housing Starts
For personal use only Market Performance Housing Starts - Units • Australia – marginal growth from 05/06 to 07/08 and 9% growth in 08/09 • New Zealand – 9% reduction in 2007/08 and further 6% reduction in 2008/09 Total Housing Starts 04/05 05/06 06/07 07/08 08/09 (‘000) Actual Actual Actual Forecast
Slide 12: Market Performance: Residential & Non-Residential Values
For personal use only Market Performance Residential & Non-Residential Values • NZ market stable in both commercial and residential (including A&A) • Australia with stable non-residential and increase in residential (including A&A) Residential & Non- 2004/05 2005/06 2006/07 2007/08 2008/09 Residenti
Slide 13: Leading Market Positions
For personal use only Leading Market Positions • Laminex holds a leading market position in decorative HPL, MDF and PBD products • No. 2 market position in commodity MDF and PBD Market Shares 2006/07 Aus NZ Decorative Products High Pressure Laminate 62% 68% Decorated MDF 57% 55% Decorated Particlebo
Slide 14: Competitive Advantages
For personal use only Competitive Advantages • No.1 or No.2 market positions in key product categories • Integrated decorative product range • Brand recognition • Extensive distribution branch network • Vertically integrated manufacturing facilities • Joint ventures in some key suppliers • Access to
Slide 15: Major Locations
For personal use only Major Locations Widespread geographic coverage Major Sales & Distribution Sites Major Manufacturing Facilities Joint Ventures 15
Slide 16: Changing Market Conditions
For personal use only Changing Market Conditions • Flat market • A large fragmented customer base – some consolidation • Competitive industry – Large retailers growing their presence with imports – Low cost Asian kitchen and furniture – New products (Engineered Stone) • Growing requirement for envir
Slide 17: Customer Size
For personal use only Customer Size ACTIVE CUSTOMERS (AUST & NZ) GROUPED BY SALES RANGE (2006/07) 16,000 14,553 14,000 12,000 10,000 8,000 6,000 4,000 2,000 184 80 14 5 3 3 2 1 1 0 <$0.5m $0.5m - $1.0m - $2.0m - $3.0m - $4.0m - $5.0m - $6.0m - $10.0m- $18.0m - $1.0m $2.0m $3.0m $4.0m $5.0m $6.0m $7.
Slide 18: Revenue by Segment 2006/07
For personal use only Revenue by Segment 2006/07 Export 9% New Homes Alterations & Additions 26% 30% Commercial 35% 18
Slide 19: Revenue by Product 2006/07
For personal use only Revenue by Product 2006/07 OTHER HPL 23% 15% RAWBOARD DOM 10% RAWBOARD EXP 9% DECORATED BOARD 43% 19
Slide 20: Revenue by Major Region 2006/07
For personal use only Revenue by Major Region 2006/07 Export 9% SA New Zealand 6% 22% NSW & ACT 15% Victoria & Tasmania 17% Queensland 15% Western Australia 16% 20
Slide 21: Manufacturing Footprint
For personal use only Manufacturing Footprint MEDIUM DENSITY FIBREBOARD PARTICLEBOARD MANUFACTURING FACILITIES MANUFACTURING FACILITIES Australia: Gympie Qld, Welshpool WA Australia: Dardanup WA, NZ: Kumeu and Taupo Outsourced: Dongwha Patinna (NZ) Ltd Outsourced: CHH Australia Total Volume: 423,000
Slide 22: Manufacturing Performance
For personal use only Manufacturing Performance Medium Density Fibreboard Particleboard 400 450 400 350 350 300 ‘000 m³ 250 ‘000 m³ 300 250 200 200 150 150 100 100 50 50 0 0 FY04 FY05 FY06 FY07 FY08 H1 FY04 FY05 FY06 FY07 FY08 H1 MDF - Excludes Taupo MDF facility Low Pressure Laminate High Pressure
Slide 23: TLG LTIFR 2001/02 - JAN 2008
For personal use only TLG LTIFR 2001/02 - 31 JAN 2008 (ROLLING) 30 25 20 14.5 14.96 15 12.56 9.2 10 7.91 5.14 4.13 5 0 2001/2 2002/3 2003/4 2004/5 2005/6 20006/7 2007/08 YTD • Zero Harm Philosophy – continuous improvement • Safety Management System based on ASNZS4801 23
Slide 24: Significant Operational Issues Resolved: Taupo MDF Facility
For personal use only Significant Operational Issues Resolved Taupo MDF Facility • Annual MDF production at Taupo was 164,000 m3, 70% to Asia • On the 11th September 2006 fire destroyed the MDF Press • All export of MDF from Taupo was ceased immediately • The NZ domestic market was supported ongoing
Slide 25: Significant Operational Issues Resolved: Penrose Closure
For personal use only Significant Operational Issues Resolved Penrose HB/IB Facility Closure • In October 2007, Laminex closed its Hardboard/Softboard manufacturing facility. • The decision to close the Plant was driven by: Significant environmental compliance costs Rising cost of input materials Re
Slide 26: Growth
For personal use only Growth 26
Slide 27: Significant Formica Related Synergies
For personal use only Significant Formica Related Synergies HPL Import and Facility Rationalisation • HPL Formica China imports underway • Key synergy identified at the time of the Formica acquisition • Papakura to close prior to June 2008 • Cheltenham HPL facility re-structured in January 2008 • Pr
Slide 28: Major Investments: Dardanup Particleboard Drier
For personal use only Major Investments Dardanup Particleboard Drier • New Drier commissioned in December 2006, • Capex of $16m. • Significant improvement achieved in environmental and production performance • 64% reduction in energy costs • Drier officially opened by WA Minister for Forests, The Ho
Slide 29: Major Investments: Dongwha Patinna NZ Acquisition
For personal use only Major Investments Dongwha Patinna NZ Limited (DPNZ) Acquisition • In November 2007, The Laminex Group acquired 20% of the shares of the DPNZ MDF business • Located near Invercargill in New Zealand’s South Island • Guarantees future supply of raw MDF to The Laminex Group New Zea
Slide 30: Major Investments: Gympie Heat Energy Plant
For personal use only Major Investments Gympie Heat Energy Plant (HEP) • Investing A$15m in a new HEP and cyclone • Under construction and will be commissioned in May 2008 • Eliminates significant business interruption risk • Allows for future capacity expansion 30
Slide 31: Major Investments: Western Australia Branch Upgrades
For personal use only Major Investments Western Australia Branch Upgrades • Investing A$4m upgrading the Western Australian branch network • New consolidated WA Metro DC will be completed in May 2008 Bunbury • Adjacent to the Welshpool MDF facility, will incorporate WA sales, distribution and admini
Slide 32: Capacity Upgrade – Dardanup Particleboard Facility
For personal use only Capacity Upgrade – Dardanup Particleboard Facility • Currently developing a proposal to increase particleboard production to 300,000m3 p.a. (11% increase) • Opportunity also exists to invest in wood processing equipment to improve the wood fibre yield • Total capex estimated at
Slide 33: Capacity Upgrades - Gympie MDF facility
For personal use only Capacity Upgrades - Gympie MDF facility • Currently developing proposal to increase MDF production capacity by 6% • Investment includes upgrades to both MDF press lines • Total capex estimated at A$6m 33
Slide 34: Growth Product Opportunities
For personal use only Growth Product Opportunities • Chemical Resistant Laminate • Engineered Stone : Essa Stone • Solid Surface Benchtop Material • Engineered Veneers • Splashbacks • Greenfirst product range • Kitchen Components 34
Slide 35: Kitchen Components
For personal use only Kitchen Components • Ballarat componentry plant has developed kitchen component manufacturing base • Development of kitchen component sales to a big box retail business in Australia • Design Services group developing and marketing the 20/20 design software 35
Slide 36: Kitchen Components: Kitchen Retail Joint Venture
For personal use only Kitchen Components Kitchen Retail Joint Venture • Creating a kitchen distribution joint venture with major whitegoods and electronic retailer in Australia • Kitchens to be sold through retail outlets • The Laminex Group to manufacture kitchen components for joint venture • Stor
Slide 37: Kitchen Components: Powder Coated Door Plant
For personal use only Kitchen Components Powder Coated Door Plant • Construction of powder coated door plant at Ballarat • Investment of $4m with plant commissioned in January 2009 • New plant will provide significant growth opportunities in The Laminex Group door product range 37
Slide 38: Acquisitions
For personal use only Acquisitions • The Laminex Group is reviewing acquisition opportunities as part of our growth strategy • Opportunities exist in both the core business segments and emerging kitchen component segment • Reviewing acquisitions across Australia, New Zealand 38
Slide 39: Outlook
For personal use only Outlook • Relatively flat market across most segments • Australia anticipating some market growth in FY09 • Continued tight labour market • Continued delivery of Formica synergies • Grow earnings through implementation of strategic objectives • Investigate acquisition opportuni
Slide 40: Thank you
For personal use only Thank you 40