Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Presentation (June 2014)
20 slides from Fletcher Building's investor presentation, Jun 6, 2014
Slide 1: Formica North America
For personal use only Formica North America June 6, 2014
Slide 2: Formica North America's place within Fletcher Building
Formica North America’s place within Fletcher Building For personal use only Mark Adamson Fletcher Building Limited +4 Other NZ/Australian Divisions: Paul Zuckerman Laminates Construction, Infrastructure Products, and Panels Building Products, Distribution 5,000 Employees Formica Formica EU Formica
Slide 3: North America Agenda
North America Agenda For personal use only Overview of the Formica North American Business Strategic Priorities Market Outlook 3
Slide 4: The North American High Pressure Laminate Market Structure
The North American High Pressure Laminate Market Structure For personal use only FY 2013 Industry Volume by Country Mexico Metrics USA Canada Mexico 8% Canada GDP per $46,400 $38,600 $13,600 13% person (US$) Laminate 600 100 60 Volume (msf) Population United States 307 33 111 79% (million) HPL Sq Ft
Slide 5: The North American market has fewer competitors than Europe/Asia
The North American market has fewer competitors than Europe/Asia For personal use only N.A. FY 2013 Share by Manufacturer Others Market Strengths Player PANOLAM INDUSTRIES Canada market Masisa Formica Brand recognition Design innovation Market Share USA market Wilsonart MTO Service model
Slide 6: Manufacturing Process
For personal use only St. Jean New Melamine Treater New Finishing Line Mt. Comfort IdealEdge Manufacturing Process Evendale Evendale Press/Treater Flexibility • Cutters • Melamine treater upgrade New Finishing Line Plates/ Plate Refurb. 6
Slide 7: Balanced between Commercial and Residential markets, Direct and Distributor customers
The North American business is well balanced between Commercial and Residential markets, as well as Direct and Distributor customers For personal use only End Market Segmentation Channel Segmentation Residential Remodel 30% Direct / OEM Commercial Distribution 45% 55% 55% Residential New 15% Residen
Slide 8: Product Applications - Commercial
Product Applications - Commercial For personal use only • Commercial Furniture – Laboratory Tops – Bartops – Game Tables – Salad Bars – Buffet Countertops – Cabinets – Workstations • Commercial Construction – Doors – Millwork – Walls – Countertops – Desk / Serving Tops • Store Fixtures – Store Fixtu
Slide 9: Product Application – Residential
Product Application – Residential For personal use only • Kitchen & Bath – Countertops – Cabinets – Backsplashes – Shower / Tub Surround • Residential Furniture – Tabletops – Bedroom Suites – Entertainment Centers – Home Office Furniture – Night Stands 9
Slide 10: North America Agenda
North America Agenda For personal use only Overview of the Formica North American Business Strategic Priorities Market Outlook 10
Slide 11: Overview - Between 2008 and 2013 - Formica North America
Overview - Between 2008 and 2013 - Formica North America For personal use only Reduced headcount by over 35% Reduced product line offering by 20% Improved operational metrics dramatically • Increased manufacturing labor productivity by 80% • Improved LIFR from 75% to 97% Took EBIT from negative to h
Slide 12: Formica North America rebased its cost structure, improving profitability
Formica North America rebased its cost structure, improving profitability on relatively flat revenues. For personal use only 12
Slide 13: Relentless focus on HPL and FSS market share growth
Relentless focus on HPL and FSS market share growth For personal use only Strategic Priorities Objectives • Improve Distributor commitment to 1. Distribution Optimization Formica product line • Strategic Partnerships • Commercial casework/ 2. Service Alignment (MTO) millwork customers 3. Mexico Mark
Slide 14: 1. Distribution Optimization
1. Distribution Optimization: Over 50% of Formica NA’s volume flows through 3rd party distribution – targeting smaller, extremely-regional end-users For personal use only Network of 100+ Locations across North America Formica NA Distribution 100+ locations across US, Canada, Mexico, a mix of: – In
Slide 15: 2. Service Alignment: Lean manufacturing increases flexibility
2. Service Alignment: Lean manufacturing methodologies have increased flexibility in manufacturing processes For personal use only Manufacturing Process Flow (Key Flexibility Work Centers Highlighted) Kraft Treaters/ Cutting Collation Press Finishing • Press flexibility/ change-overs Raw Materials S
Slide 16: 3. Mexico Market Focus
3. Mexico Market Focus: Mexico is an attractive market due to its inherent demographic and economic fundamentals For personal use only Mexico Market Fundamentals Background • Mexico has 110 million people • Economy is growing at 5% per annum • HPL penetration is still relatively Local/ Premium Impor
Slide 17: 4. Product Innovation - Focus on Consumers
4. Product Innovation - Focus on Consumers For personal use only FORMICA COLOR CORE 949 FORMICA SOLID SURFACE FORMICA ENVISION ™ A “cleaner” white! Newly Refreshed Line Custom Digital Laminate In response to customer An evolution to capture growth Endless Design Possibilities! demand… • Taps into re
Slide 18: 4. Product Innovation: 180fx and IdealEdge
4. Product Innovation: 180fx and IdealEdge provides a clean, finished look to a laminate surface For personal use only IdealEdge flatters virtually every Formica® brand laminate design from stone and granite to contemporary abstract patterns. 18
Slide 19: North America Agenda
North America Agenda For personal use only Overview of the Formica North American Business Strategic Priorities Market Outlook 19
Slide 20: Market Outlook – Growth in Residential partially offset with slower commercial growth
Market Outlook – Growth in Residential partially offset with slower commercial growth For personal use only US New Construction US Remodel – Single family – Lowes and Home Depot Q1 2014 • Slowing growth results up approximately 2.4% and 2.9% year-over-year, respectively • Rising Price per unit (
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