Fletcher Building Limited · NZX:FBU
Fletcher Building — Shareholder Meeting (November 2015)
39 slides from Fletcher Building's shareholder meeting presentation, Nov 17, 2015
Slide 1: Fletcher Building Limited 2015 Annual Shareholders' Meeting
For personal use only Fletcher Building Limited 2015 Annual Shareholders’ Meeting 17 November 2015
Slide 2: Sir Ralph Norris, Chairman
Fletcher Building Annual Shareholders’ Meeting | © November 2015 For personal use only Sir Ralph Norris Chairman Heavy Building Materials WINSTONE AGGREGATES
Slide 3: Directors
Directors For personal use only Sir Ralph Norris (Chairman) Tony Carter Dr Alan Jackson John Judge Mark Adamson (Managing Director) Kathryn Spargo Cecilia Tarrant Steve Vamos 3 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 4: Meeting Agenda
Meeting Agenda For personal use only Chairman’s address • Overview of 2015 financial performance • Outcome of strategic review Chief Executive Officer’s address • 2015 Operational review • Update on strategic priorities Trading and financial outlook General business Voting on resolutions 4 Fletcher
Slide 5: Net earnings before significant items rose 10%
Net earnings before significant items rose 10% For personal use only Net earnings Net earnings $ 270m 20% $ 399m 10% (before significant items) 5 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 6: Operating earnings before significant items
Operating earnings before significant items For personal use only Operating earnings $ 653m 5% (before significant items) • Operating earnings before significant items up 5% • Within guidance range of $650m -$690m 6 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 7: Significant items
Significant items For personal use only SIGNIFICANT ITEMS Goodwill impairment $78m Site closures $65m Disposal of businesses $7m Total $150m $126m of significant items non-cash 7 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 8: Cashflow from operations increased by 18%
Cashflow from operations increased by 18% For personal use only Cashflow from operations $ 575m 18% • Cashflow from operations $575m an increase of $86m from FY14 ($489m) • Increase is due to: – Growth in operating earnings – Reduced working capital requirements 8 Fletcher Building Annual Shareholde
Slide 9: New Zealand operating earnings up 24% on prior year
New Zealand operating earnings up 24% on For personal use only prior year EBIT¹ NZ$m 449 362 New Zealand 12 months to 30 June 14 12 months to 30 June 15 1. Before significant items 9 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 10: New Zealand residential consents up 8%
New Zealand residential consents up 8% For personal use only Total residential consents¹ 35,000 Peak (2004) 30,000 25,000 Long term average (2001-2015) 20,000 15,000 10,000 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Source: Statistics NZ, Infometrics 1 – Twelve mont
Slide 11: Growth in residential consents driven by Auckland region
Growth in residential consents driven by For personal use only Auckland region Change % year on year 25% 20% 21 15% 10% 8 5% 4 2 0% Auckland Canterbury Rest of NZ NZ Source: Statistics NZ, 12 months to June 2015 11 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 12: Australian operating earnings down 30%
Australian operating earnings down 30% For personal use only EBIT¹ NZ$m 171 119 Australia 12 months to 30 June 14 12 months to 30 June 15 1. Before significant items 12 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 13: Rest of World operating earnings fell by 7%
Rest of World operating earnings fell by 7% For personal use only EBIT¹ NZ$m 91 85 Rest of the World 12 months to 30 June 14 12 months to 30 June 15 1. Before significant items 13 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 14: Dividend
Dividend For personal use only Dividend per share 37c 3% DIVIDEND Final dividend per share 19 cents Total dividend for the year 37 cents Dividend Policy: Target pay-out range of 50 to 75% of Net Earnings 14 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 15: Total shareholder return – average of 17% p.a.
Total shareholder return – average of 17% p.a. For personal use only over past 3 years Percentage 51 14 9 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 -3 -27 15 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 16: Maintaining a strong balance sheet
Maintaining a strong balance sheet For personal use only Debt/Debt Plus Equity Percentage 37 34 33 32 32 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 • Gearing target range of net debt to net debt plus equity of 30 to 40% 16 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 17: Health and safety performance
Health and safety performance For personal use only Total recordable injury frequency rate* 11.10 8.50 6.80 6.40 6.00 2011 2012 2013 2014 2015 * Total injuries per million employee and contractor hours 17 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 18: Progress on strategic priorities
Progress on strategic priorities For personal use only • Review of business portfolio: divestment of Rocla Quarry Products announced in August • Identification of a number of opportunities to grow organically: – NZ residential development business – Construction in NZ and South Pacific – Trade Distr
Slide 19: Management changes
Management changes For personal use only Dean Fradgley Francisco Irazusta John Bell Matt Crockett CE, Distribution CE, Light Building Chief Information CE, Heavy Building NZ & Australia Products Officer Products 19 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 20: Mark Adamson, Chief Executive Officer
Fletcher Building Annual Shareholders’ Meeting | © November 2015 For personal use only Mark Adamson Chief Executive Officer Construction INFRASTRUCTURE
Slide 21: Full year highlights: New Zealand
Full year highlights: New Zealand For personal use only Volume Growth • NZ Cement 9% • NZ Concrete Products 7% • NZ Concrete 14% • NZ Steel Distribution 17% • NZ Steel Reinforcing 20% • Plasterboard 7% • Windows & Doors 11% Golden Bay Cement, Auckland 21 Fletcher Building Annual Shareholders’ Meetin
Slide 22: Full year highlights: Canterbury
Full year highlights: Canterbury For personal use only Progress • Over 65,000 permanent repairs completed • Extension of home repairs programme for a further 12 months from April 2015 Proposed masterplan illustration, Christchurch 22 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 23: Full year highlights: Residential & Construction
Full year highlights: Residential & Construction For personal use only • Homes sold 35% • Concluded 3 development partnerships in Christchurch • Construction: awarded $1.4bn of new contracts during the year NZ International Convention Centre 23 Fletcher Building Annual Shareholders’ Meeting | © Nove
Slide 24: Full year results: Australia
Full year results: Australia For personal use only • Iplex impacted by loss of coal seam gas pipe volumes • Insulation volumes 22% • Laminex Operating Earnings 30% Laminex 24 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 25: Full year highlights: FBUnite
Full year highlights: FBUnite For personal use only Further Progress • $50m of benefits delivered in total to 30 June 2015 – Procurement $35m Innovation – Property $10m People and growth – Financial shared services $5m • Operational excellence initiatives are expected to offset annual inflation, Per
Slide 26: We are focused on strategic priorities
We are focused on 4 strategic priorities For personal use only People: Create a great place to work Customers: Deliver what they value Efficiency: Work smarter together Profitable growth: Invest where we can win 26 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 27: People: Create a great place to work
People: Create a great place to work For personal use only Organisational Leadership Talent Culture Design • Simplified organisation structure: fewer, larger business units • Delivered a learning curriculum to over 7,000 employees globally • Talent regeneration has created strong succession pool for
Slide 28: Vision and values launched in 2015
Vision and values launched in 2015 For personal use only 28 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 29: Customer: Deliver what they value
Customer: Deliver what they value For personal use only • Focusing on providing complete, end-to-end solutions • Product innovation a key growth driver • Increased use of online tools for pre-purchase decisions & custom design • Sales and marketing excellence programme 29 Fletcher Building Annual Sh
Slide 30: Efficiency: Work smarter together
Efficiency: Work smarter together For personal use only • FBUnite programme established core capabilities • Management has scoped out the potential of each business unit • External diagnostic “top-down” assessment undertaken • Identified further opportunities to drive value from the core • Programme
Slide 31: Profitable growth: Residential
Profitable growth: Residential For personal use only • Record year with operating earnings of $66m • Goal is to increase new homes sold to 1,500 p.a. over next few years • Increasing focus on master Stonefields planned community with mix of apartments, terrace and stand- alone houses • Expect to inv
Slide 32: Profitable growth: Construction
Profitable growth: Construction For personal use only • Number of new contracts secured, with a contracted order book now standing at $3.4 billion Cancer Treatment Centre, Tauranga Sir John Guise Stadium, PNG 32 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 33: Profitable growth: Distribution
Profitable growth: Distribution For personal use only • PlaceMakers achieved record retained earnings • Mico plumbing & bathrooms: loss making 2 years ago, strongly profitable this year • Excellent progress in lifting performance in Tradelink • Growth from customer solutions focus and expanded produ
Slide 34: Sir Ralph Norris, Chairman
Fletcher Building Annual Shareholders’ Meeting | © November 2015 For personal use only Sir Ralph Norris Chairman Heavy Building Materials WINSTONE AGGREGATES
Slide 35: Outlook FY16
Outlook FY16 For personal use only New Zealand • Residential construction activity expected to continue at above average levels • Net migration and Auckland housing demand key drivers • Commercial construction should track the upward trend in consents • Government infrastructure spending expected to
Slide 36: Outlook FY16
Outlook FY16 For personal use only North America • Activity levels in residential and commercial should remain broadly consistent with prior year Europe • Continued mixed conditions expected with a weak economic outlook Asia • Further growth in South-East Asia, China to likely remain highly competit
Slide 37: Financial Outlook
Financial Outlook For personal use only • Earnings before interest, tax and significant items expected to be in the range of $650 million to $690 million • First half earnings likely to be lower than the prior corresponding period due to: – Timing of construction earnings recognition – Lower residen
Slide 38: General Business
General Business For personal use only 38 Fletcher Building Annual Shareholders’ Meeting | © November 2015
Slide 39: Fletcher Building Limited 2015 Annual Shareholders' Meeting
For personal use only Fletcher Building Limited 2015 Annual Shareholders’ Meeting 17 November 2015
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