Fletcher Building Limited · NZX:FBU
Fletcher Building — FY2003 Earnings Presentation
35 slides from Fletcher Building's earnings presentation, Aug 13, 2003
Slide 1: Annual Results Presentation
Annual Results Presentation 13 August 2003
Slide 2: This Annual Results presentation dated 13 August 2003 provides additional comment on the media
This Annual Results presentation dated 13 August 2003 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.
Slide 3: Highlights
Aug 2003 Highlights Net profit up 81% to $168 million Operating Earnings pre unusuals up 61% to $331 million Acquisition of Laminex Major refinancing initiatives Sale of Bolivia & India operations 3
Slide 4: Summary of Results
Aug 2003 Summary of Results Jun Jun % 2003 2002 YOY $m 12 Mths 12 Mths Change Revenue 3221 2966 +9 EBITDA 429 294 +46 EBITA 338 212 +59 EBIT Before Unusuals 331 205 +61 Net Earnings Before Unusuals 168 88 +91 Net Earnings 168 93 +81 EPS Before Unusuals (cents) 43.4 25.5 +70 EPS After Unusuals (cents
Slide 5: Segmental EBIT
Aug 2003 Segmental EBIT Jun Jun % 2003 2002 YOY $m 12 Mths 12 Mths Change Building Products 112 85 +32 Distribution 55 34 +62 Concrete 83 60 +38 Construction 34 30 +13 Laminex 44 N/A Corporate/Unallocated 3 -4 N/A EBIT Pre Unusuals as per Accounts 331 205 +61 5
Slide 6: Building Products Results
Aug 2003 Building Products Results Jun Jun % 2003 2002 YOY $m 12 Mths 12 Mths Change Revenue 865 820 +5 EBIT 112 85 +32 Margin 12.9% 10.4% +24 Funds 401 433 -7 Return on Funds 27.9% 19.6% +42 6
Slide 7: Building Products
Aug 2003 Building Products Winstone Wallboards Volume and earnings up with market conditions Prices steady Improved volumes of value added product Profit well ahead of last year Fletcher Aluminium Substantial improvement in earnings Restructuring and manufacturing efficiencies continuing
Slide 8: Building Products
Aug 2003 Building Products Fletcher Wood Panels Strong local and export sales Results impacted by currency and electricity, especially in the second half Acquired the balance of Paynter Profile JV in July 2003 Scott Panel & Hardware Excellent result reflecting current market conditions Now b
Slide 9: Building Products
Aug 2003 Building Products Steel Manufacturing Record production and sales volumes Continued growth in export volumes High scrap prices, currency and power issues impacted the second half results Productivity gains through operation changed to benefit from off-peak power prices at weekends
Slide 10: Building Products
Aug 2003 Building Products Steel Processing and Distribution EasySteel, CSP Galvanising and Dimond had improved earnings with further improvements expected Pacific Coilcoaters continued to produce strong earnings in both the domestic and export markets Productivity improvements across all oper
Slide 11: Distribution Results
Aug 2003 Distribution Results Jun Jun % 2003 2002 YOY $m 12 Mths 12 Mths Change Gross Revenue 807 686 +18 EBIT 55 34 +62 Margin 6.8% 5.0% +36 Funds 96 101 -5 Return on Funds 57.3% 33.7% +70 11
Slide 12: Distribution
Aug 2003 Distribution Excellent sales through both the buoyant market and improved store performance Margins improved through better buying and pricing Major store upgrade programme underway Building Depot and Hire-a-Hubby to be divested Builders Hardware Company acquired in July 12
Slide 13: Distribution
Aug 2003 Distribution Impact of Building Depot/Hire-a-Hubby B'Depot & Adj Hire-a-Hubby Distribution $m Results Results Result Gross Revenue 744 63 807 EBIT 59 -4 55 Margin 7.9% 6.8% Funds 92 4 96 Return on Funds 64.1% N/A 57.4% 13
Slide 14: Concrete Results
Aug 2003 Concrete Results Jun Jun % 2003 2002 YOY $m 12 Mths 12 Mths Change Revenue 497 470 +6 EBIT 83 60 +38 Margin 16.7% 12.8% +30 Funds 400 416 -4 Return on Funds 20.8% 14.4% +44 14
Slide 15: Concrete
Aug 2003 Concrete Golden Bay Volume up with domestic demand at record levels Prices steady Production costs per tonne down, offset partly by power costs Distribution costs higher due to greater requirement for road transport to meet demand Major plant upgrade underway 15
Slide 16: Concrete
Aug 2003 Concrete Firth Volumes at record levels through market and share gains Pricing better Manufacturing costs per m3 down Substantial profit improvement over last year 16
Slide 17: Concrete
Aug 2003 Concrete Winstone Aggregates Higher volumes through strong demand Rationalisation initiatives now coming through Lower manufacturing costs and overheads Profit well up on previous year 17
Slide 18: Concrete
Aug 2003 Concrete Humes Volumes up through strong demand Margins under pressure Earnings up 33% on previous year Stresscrete Market conditions excellent Operational performance continues to improve Earnings up on previous year 18
Slide 19: Concrete
Aug 2003 Concrete International Bolivia sale completed Indian assets sold Peru operation in profit, but markets very competitive 19
Slide 20: Construction Results
Aug 2003 Construction Results Jun Jun* % 2003 2002 YOY $m 12 Mths 12 Mths Change Revenue 618 871 -29 EBIT 34 30 +13 Funds -62 -95 1 -35 * Includes full Australian income for 2002 1 Note as per Dec 02 J02 includes property funds now in Corporate 20
Slide 21: Construction
Aug 2003 Construction Construction Strong performance in all divisions South Pacific market improving Major projects include Manukau Waste Water, Auckland Hospital, Lambton Towers, PwC Tower and Grafton Gully Outlook excellent 21
Slide 22: Construction
Aug 2003 Construction Residential Another excellent year Sales steady – margins up Land prices will put pressure on future margins 22
Slide 23: Laminates & Panels Results
Aug 2003 Laminates & Panels Results Proforma** Proforma Jun* Jun Jun % 2003 2003 2002 YOY $m 7 Mths 12 Mths 12 Mths Change Revenue 432 723 726 EBIT 44 78 64 +22 Margin 10.2% 10.8% 8.8% +23 Funds 757 757 776*** -3 Return on Funds 9.3% 10.3% 8.2% +26 * Acquired on 13 November 2002 ** Estimate of 12 mt
Slide 24: Laminex
Aug 2003 Laminex Domestic demand strong throughout year Exports impacted by strong currency and increased competition Productivity improvements include Tullamarine warehouse paper treater at Dardenup IT consolidation increased capacity at Wespine EBITDA slightly below maximum earnout
Slide 25: Profit After Tax
Aug 2003 Profit After Tax Jun Dec Jun 2003 2002 2002 $m 12 Mths 6 Mths 12 Mths EBIT before Unusuals 331 160 +205 Interest -59 -23 -51 Tax -85 -45 -54 Minority Interests -19 -9 -12 NPAT before Unusuals 168 83 88 Adjustments Net of Tax 5 Profit After Tax as per Accounts 168 83 93 25
Slide 26: Simplified Balance Sheet
Aug 2003 Simplified Balance Sheet Jun Jun 2003 2002 NZ$m NZ$m Assets Current Assets 919 637 Fixed Assets 969 666 Intangibles & Goodwill 198 8 Provision for Taxation 104 108 Investments 155 72 Total Fletcher Building Assets 2345 1491 Liabilities Current Liabilities 627 502 Net Term Debt 502 168 Capit
Slide 27: Key Ratios
Aug 2003 Key Ratios Total Shareholder Return (TSR) 43% 24% 6% Jun 01* Jun 02 Jun 03 * June 01 is the return for the 3 months from separation date ** TSR calculated ( (Gross Dividend Paid + Movement in Share Price)/Opening Share Price) 27
Slide 28: Key Ratios
Aug 2003 Key Ratios Debt/Debt Plus Equity % 80 70 53.2 60 49.2 49.9 47.2 50 40.2 40 30 20 10 0 Jun 01 Dec 01 Jun 02 Dec 02 Jun 03 28
Slide 29: Key Ratios
Aug 2003 Key Ratios Return on Average Equity* % 24.5 23.0 30 16.9 12.1 20 10 0 -10 -20 -30 -43.8 -40 -50 Jun 01 Dec 01 Jun 02 Dec 02 Jun 03 * Net earnings after capital notes interest/shareholders funds 29
Slide 30: Key Ratios
Aug 2003 Key Ratios Return on Average Funds* % 28.6 30 24.4 23.1 25 17.6 20 15 10 5 0 -8.6 -5 -10 Jun 01 Dec 01 Jun 02 Dec 02 Jun 03 * EBIT/(Average net debt+equity+capital notes) - deferred tax asset 30
Slide 31: Key Ratios
Aug 2003 Key Ratios Interest Cover* 12 8.8 10 7.3 8 5.8 (times) 6 4.6 3.1 4 2 0 Jun 01 Dec 01 Jun 02 Dec 02 Jun 03 * EBITDA pre unusuals/interest paid including capital note interest 31
Slide 32: Net Term Debt Movement
32 NZ$ Millions 0 100 200 300 400 500 600 700 800 900 1000 Op eni ng De bt 168 La mi ne x 759 Ca sh fro m op s Wo (316) rki ng cap ita l 40 Ca p ex 88 Di v e stm Ac en qu ts i sit ion (27) of o ve r dr aft 3 Di v i de nd s 49 M in Dis tn 16 Ca p No Net Term Debt Movement tes /E q u it y Fx (280) o n
Slide 33: Strategic Agenda
Aug 2003 Strategic Agenda Building Products Replace Fletcher Wood Panels and Scott Panel & Hardware (now part of Laminates & Panels Group) Steel industry rationalisation still desirable Concrete & Distribution Secure appropriate regional add-on businesses 33
Slide 34: Strategic Agenda
Aug 2003 Strategic Agenda Construction Secure residential housing land for future years Bid to infrastructure work Laminates & Panels Pursue Australia/New Zealand synergies Sydney, Adelaide and Brisbane warehouse consolidations 34
Slide 35: Outlook
Aug 2003 Outlook First half of 03-04 should be similar to last six months No sharp downturns in prospect Expect further improvement and another satisfactory year 35