Fletcher Building Limited · NZX:FBU
Fletcher Building — Macquarie Australia Conference 2010
36 slides from Fletcher Building's conference presentation, May 6, 2010
Slide 1: Macquarie Australia Conference
1 For personal use only Macquarie Australia Conference 6-7 May 2010 Bill Roest Chief Financial Officer Macquarie Australia Conference | May 2010
Slide 2: Disclaimer
2 For personal use only Disclaimer 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 Building’ss actual result
Slide 3: Agenda
3 For personal use only Agenda • Company Overview • Strategy • Divisional Performance • Financial Results • Outlook Macquarie Australia Conference | May 2010
Slide 4: Company Overview
4 For personal use only Company Overview Macquarie Australia Conference | May 2010
Slide 5: Fletcher Building at a glance
5 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook Fletcher Building at a glance For personal use only • Revenue - year to 30 June 2009: NZ$7,103 million • Market Capitalisation NZ$5.1 billion Ranked # 1 on NZX # 62 on ASX • Employees: 16,000 • Listed on NZ
Slide 6: Market leading business
6 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook Market leading business For personal use only Building Distribution Infrastructure Laminates Steel Products & Panels Steel Plasterboard Building Materials Construction The Laminex Group Coated Steel Insulat
Slide 7: Residential construction activity: improving trend in NZ and Australia
7 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Residential construction activity: improving trend in NZ and Australia, other markets at record lows Dec 2009 Dec 2008 Dec 2007 09/08 B ildi Consents Building C 12 mth h rolling lli 12
Slide 8: NZ economic fundamentals are sound
8 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only NZ economic fundamentals are sound • Banking system has weathered GFC well – no government bailouts required • Government stimulus measures have been modest – longer term burden on fis
Slide 9: Fletcher Building has a vertically integrated value chain
9 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook Fletcher Building has a vertically integrated value chain For personal use only Laminates Building Other Steel Concrete Manufacturers & Panels Products Dedicated Shared Other Construction Distribution Distr
Slide 10: Strategy
10 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Strategy Longer term strategy continues to be: • improve earnings reliability • maintain i t i andd iimprove iinternal t l capabilities biliti • pursue acquisition opportunities where
Slide 11: Significant restructuring of cost base undertaken
11 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Significant restructuring of cost base undertaken: • Employee numbers reduced by 3,000 to 16,000 worldwide • Plant closures in NZ (particleboard and door plants) and Australia (MDF pl
Slide 12: Divisional Performance
12 For personal use only Divisional Performance - 6 months to 31 Dec 2009 Macquarie Australia Conference | May 2010
Slide 13: Strong performance in Building Products, Laminates & Panels, while Steel weaker
13 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Strong performance in Building Products, Laminates & Panels, while Steel had lower volumes and prices EBIT NZ$million1 97 93 76 68 70 62 48 42 17 19 10 7 Building Products Distributio
Slide 14: Building Products
14 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Building Products Plasterboard Winstone Wallboards • New Zealand’s sole manufacturer and leading supplier of gypsum plasterboard Insulation Fletcher Insulation|Tasman Insulation NZ|Fo
Slide 15: Building Products result
15 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Building Products result Dec09 Dec 08 • Plasterboard performance NZ$m 6 mths 6 mths %∆ impacted by low NZ housing Sales l 436 412 +6 starts in first quarter, some improvement in secon
Slide 16: Building Products: strong short-term growth in Insulation
16 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Building Products: volumes typically lower but strong short- term growth in Insulation due to government stimulus Gross Sales Dec 09 Dec 08 NZ$m 6 mths 6 mths %∆ Volume ∆ Price ∆ EBIT
Slide 17: Distribution
17 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook Distribution For personal use only Pl PlaceMakers M k The premier suppliers of building materials to New Zealand’s commercial and residential construction markets • 63 outlets across New Zealand principall
Slide 18: Distribution result
18 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Distribution result Dec 09 Dec 08 • Sales impacted by weak NZ NZ$m 6 mths 6 mths %∆ housing starts but pick up in Sales l 435 481 -10 activity seen in second quarter. EBITDA1 22 24 -8
Slide 19: Infrastructure
19 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook Infrastructure For personal use only Concrete New Zealand Firth|Humes Pipeline Systems|Golden Bay Cement|Winstone Aggregates • 25% of NZ aggregates markets • 50% of NZ cement market • 33% off NZ readymix d
Slide 20: Infrastructure result
20 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Infrastructure result NZ Concrete Dec 09 Dec 08 • Lower volumes in cement, NZ$m 6 mths 6 mths %∆ aggregates, readymix, masonry Sales 974 1 018 1,018 -4 4 and concrete pipe. pipe • Con
Slide 21: Infrastructure: lower concrete volumes in NZ and Australia
21 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Infrastructure: lower concrete volumes in NZ and Australia Gross Sales Dec 09 Dec 08 NZ$m 6 mths 6 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand l d - NZ Concrete 310 361 -14 ↓ ↓ ↓ -
Slide 22: Property activities
22 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Property activities include quarry end use, residential and surplus assets EBIT NZ$m 1H 10 2H 09 1H 09 2H 08 1H 08 Quarry end use 0 0 0 42 0 Residential 5 8 4 8 11 Surplus assets 2 0
Slide 23: Laminates & Panels
23 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook Laminates & Panels For personal use only Laminex • Leading high pressure laminate & decorative surfaces • Estimated Australasian market shares – Decorated board – No.1 – Medium d d density ffibreboard b b
Slide 24: Laminates & Panels result
24 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Laminates & Panels result Dec 09 Dec 08 Laminex NZ$m 6 mths 6 mths %∆ • Volumes down in NZ and S l Sales 965 6 1,069 6 -10 Australia. EBITDA • Cost savings and lower input costs boost
Slide 25: Laminates & Panels: Asian region stronger overall
25 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Laminates & Panels: Asian region stronger overall but all other markets were weaker Gross Sales Dec 09 Dec 08 NZ$m 6 mths 6 mths %∆ Volume ∆ Price ∆ EBITDA ∆ New Zealand - Laminex 79
Slide 26: Formica: continued growth in Asia
26 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Formica: continued growth in Asia while North America and Europe weak EBITDA NZ$m1 1H10 2H09 1H09 2H08 Asia 21 19 20 14 North America 11 17 2 -17 Europe2 2 8 9 30 Corporate -7 -9 -6 -
Slide 27: Steel
27 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook Steel For personal use only Rollforming g and Coated Steel Pacific CoilCoaters|Stramit Building Products|Dimond • Approx. 25% of Australian market (Stramit) • Major player in New Zealand roofing market (Di
Slide 28: Steel result
28 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Steel result Dec 09 Dec 08 • Steel prices and volumes NZ$m 6 mths 6 mths %∆ down significantly in the first Sales l 583 777 -25 half. EBITDA1 54 110 -51 • Long steel margins EBIT1 42
Slide 29: Steel: volumes and prices lower
29 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Steel: volumes and prices lower Gross Sales Dec 09 Dec 08 NZ$m 6 mths 6 mths %∆ Volume ∆ Price ∆ EBITDA ∆ N New Z Zealand l d - Long Steel 129 227 -43 ↓ ↓ ↓ - Coated products 80 99 -1
Slide 30: Financial Results
30 For personal use only Financial Results Macquarie Australia Conference | May 2010
Slide 31: 2010 half year results summary
31 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only 2010 half year results summary Dec 2009 Dec 2008 NZ$m 6 months 6 months % Change Sales 3,393 3,757 -10 EBITDA¹ 372 428 -13 EBIT¹ 271 322 -16 16 Net earnings1 154 186 -17 Unusual items
Slide 32: Balance sheet strengthened with stronger operating cashflow
32 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Balance sheet strengthened with stronger operating cashflow Dec 2009 Dec 2008 NZ $m 6 months 6 months %∆ Operating Cashflow 317 208 +52 Net Debt 1 135 1,135 2 003 2,003 -43 43 Net Deb
Slide 33: Key Ratios
33 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Key Ratios Total T t l Sh Shareholder h ld R Return t (TSR) D bt/D bt Plus Debt/Debt Pl Equity E it Percentage Percentage 61 44.4 40.1 40 42 37.1 24 31.1 27 3 27.3 14 22.2 Jun 05 Jun-
Slide 34: Debt maturity profile
34 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Debt maturity profile NZ$m • Undrawn credit lines of $1.1 400 Funding and maturity profile billion. 350 December 2009 300 • Syndicated bank loan 250 200 renegotiated and term 150 268
Slide 35: Outlook
35 For personal use only Outlook Macquarie Australia Conference | May 2010
Slide 36: Outlook 2010
36 Company & Market Overview | Strategy | Divisional Performance | Financial Results | Outlook For personal use only Outlook 2010 • Outlook for FY10 dependent upon the uplift in NZ and Australian new housing construction markets being sustained. • Government infrastructure spending in NZ and Austral
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