Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Day (June 2015)
17 slides from Fletcher Building's investor day presentation, Jun 18, 2015
Slide 1: Investor Day Brisbane
For personal use only Investor Day Brisbane 18 June 2015
Slide 2: Matt Crockett, Chief Executive Heavy Building Products
For personal use only Matt Crockett Chief Executive Heavy Building Products 2 Fletcher Building Investor Day Brisbane | © June 2015
Slide 3: 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 4: Agenda
Agenda For personal use only Introduction Heavy Building Products overview Performance drivers and imperatives Key focus areas - NZ concrete vertical - outlook & competitive dynamics - Returning Rocla products to growth - Iplex Australia turnaround 4 Fletcher Building Investor Day Brisbane | © June
Slide 5: Heavy Building Products Division Overview
Heavy Building Products Division Overview For personal use only ReadyMix Concrete Plastic Pipes Quarries Cement Concrete Products & Fittings • Aggregates • Pipes • PE Pipe • Sand • Poles • PVC Pipe • Sleepers • PVC fittings • Barriers New Zealand Australia 5 Fletcher Building Investor Day Brisbane |
Slide 6: We are simplifying and focusing the Heavy portfolio
We are simplifying and focusing the Heavy portfolio For personal use only Businesses exited or in the Disposal /Closure date process of June 2014* December 2014 *Profit Sharing arrangement continues until 30 Sept 2015 6 Fletcher Building Investor Day Brisbane | © June 2015
Slide 7: In recent years NZ performance has been strong whilst Australian performance has struggled
In recent years NZ performance has been strong whilst Australian performance has struggled For personal use only 1,600 500 New Zealand 450 NZ$m 1,185 400 1,200 1,077 992 350 906 901 300 800 250 200 150 400 100 101 136 50 88 69 78 - - 2010 2011 2012 Australia 2013 2014 1,600 1,498 250 1,400 1,216 1,0
Slide 8: Performance drivers and imperatives - New Zealand
Performance drivers and imperatives are clear in each geography - New Zealand For personal use only Performance drivers Key imperatives Strong construction activity Defend and extend share in all has driven volume growth BUs Strong integrated and Improve cement/concrete external customer pos
Slide 9: NZ Concrete value chain – strong integrated and external customer position
NZ Concrete value chain – we have a strong integrated and external customer position For personal use only Fletcher ReadyMix Concrete Quarries Cement Construction / Concrete Products PlaceMakers Fletcher Building 55% 20% 1% 40% 4% Customers External 45% 79% 96% 60% % of sales 9 Fletcher Building Inv
Slide 10: NZ Concrete Value Chain – market outlook
NZ Concrete Value Chain – market outlook For personal use only Positive but moderating growth expected slower new residential growth rate Christchurch mix of activity moving from residential to commercial stable infrastructure investment Cement supply structure changing: Holcim moving to an
Slide 11: Despite a rise in import penetration, Australian cement market has been stable
Despite a rise in import penetration, Australian cement market has been stable For personal use only Australian cement consumption, 2001-14(a) (mn Tonnes) Import Penetration Producer price indices for 10 40% Australian cement and concrete 8 30% show remarkably little volatility 6 20% despite risin
Slide 12: Domestically produced cement offers several qualitative benefits over imports
Domestically produced cement offers several qualitative benefits over imports For personal use only Supply Domestically produced cement is less exposed to supply security chain volatility and more likely to be delivered within the customer’s timeframe Product Shorter supply times decrease the ri
Slide 13: Performance drivers and imperatives - Australia
Performance drivers and imperatives are clear in each geography - Australia For personal use only Performance drivers Key imperatives Challenging macro-economic Turnaround Iplex – multiple situation impacting levers investment Return Rocla Products to Cyclical demand reductions in growth via
Slide 14: Rocla Products remains in a strong position and can return to growth
Rocla Products remains in a strong position and can address recent challenges to return to growth For personal use only 100% Rocla Products maintains a strong structural position – only one or Competitor C Various Regional Players two players with strong positions in all segments Competitor E Comp
Slide 15: Iplex Australia is facing challenging structural demand and supply dynamics
Iplex Australia is facing challenging structural demand and supply dynamics For personal use only Supply Dynamics: Demand Dynamics: • Market entrants have • Key previously high added substantial growth segment new green and demand has reduced brownfields capacity substantially – over the last 3-5 mi
Slide 16: Plastic pipes market structure is challenged, with many players with excess capacity
Plastic pipes market structure is challenged, with many players with excess capacity For personal use only The market, and Iplex, has too much capacity and there are PVC Market Capacity PE Market Capacity competing products being brought in to the market from (Tonnes) (Tonnes) Asia eg: fittings
Slide 17: We believe we can improve Iplex Australia and are pulling multiple levers
We do believe we can improve Iplex Australia and are aggressively pulling multiple levers For personal use only High quality experienced turnaround management team in place Immediate & significant cost interventions made Disciplined operational efficiency and right sizing programme – manufactu