Fletcher Building Limited · NZX:FBU
Fletcher Building — Citi Australian & New Zealand Conference 2011
40 slides from Fletcher Building's conference presentation, Oct 25, 2011
Slide 1: Presentation to Citi Australian & New Zealand Conference
PRESENTATION TO CITI AUSTRALIAN & For personal use only NEW ZEALAND CONFERENCE October 2011 Bill Roest Chief Financial Officer Humes Pipelines, Auckland
Slide 2: Disclaimer
Citi Presentation | Fletcher Building | © October 2011 | Page 2 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 ar
Slide 3: Company & Market Overview
Citi Presentation | Fletcher Building | © October 2011 Company & Market Overview | Page 3 Investor Presentation COMPANY & MARKET For personal use only OVERVIEW Christchurch, August 2011
Slide 4: Fletcher Building at a glance
Citi Presentation | Fletcher Building | © October 2011 Company & Market Overview | Page 4 Fletcher Building at a glance For personal use only • Revenue - year to 30 June 2011: NZ$7.4 billion • Market Capitalisation: NZ$4.4 billion • Employees: 20,000 • Shareholders: (as at 30 June 2011) Revenues 201
Slide 5: Fletcher Building – key listing information
Citi Presentation | Fletcher Building | © October 2011 Company & Market Overview | Page 5 Fletcher Building – key listing information For personal use only • Listed on the New Zealand and Australian stock exchanges New Zealand • Second largest listed company by market capitalisation on the NZX Austr
Slide 6: Market leading businesses
Citi Presentation | Fletcher Building | © October 2011 Company & Market Overview | Page 6 Market leading businesses For personal use only Building Laminates Crane Distribution Infrastructure Steel Products & Panels Plasterboard Pipelines – Building Materials Construction The Laminex Coated Steel Ins
Slide 7: Strategy
Citi Presentation | Fletcher Building | © October 2011 Strategy | Page 7 Investor Presentation STRATEGY For personal use only Formica for Tinderbox, UK
Slide 8: Strategy
Citi Presentation | Fletcher Building | © October 2011 Strategy | Page 8 Strategy For personal use only Improved earnings reliability through geographic and end-market diversification Decentralised business model Portfolio approach that creates value through application of proven operating model Tar
Slide 9: Fletcher Building has a vertically integrated value chain
Citi Presentation | Fletcher Building | © October 2011 Strategy | Page 9 Fletcher Building has a vertically integrated value chain For personal use only Pipes & Laminates Building Other Steel Concrete Plumbing & Panels Products Manufacturers Dedicated Shared Other Construction Distribution Distribut
Slide 10: FY 2011 Financial Results
Citi Presentation | Fletcher Building | © October 2011 FY2011 Financial Results | Page 10 Investor Presentation FY 2011 For personal use only FINANCIAL RESULTS The Cloud, Auckland waterfront
Slide 11: Strong underlying earnings growth in FY2011 despite headwinds
Citi Presentation | Fletcher Building | © October 2011 FY2011 Financial Results | Page 11 Strong underlying earnings growth in FY2011 despite economic headwinds, helped by initial contribution from Crane Group For personal use only June 2011 June 2010 NZ$m 12 months 12 months % Change Sales 7,416 6,
Slide 12: Strong performances in Infrastructure and Laminates & Panels divisions
Citi Presentation | Fletcher Building | © October 2011 FY2011 Financial Results | Page 12 Strong performances in Infrastructure and Laminates & Panels divisions For personal use only EBIT NZ$million1 168 161 144 141 111 114 83 82 39 38 24 20 Building Products Distribution Infrastructure Property Lam
Slide 13: Key ratios
Citi Presentation | Fletcher Building | © October 2011 FY2011 Financial Results | Page 13 Key ratios For personal use only Total Shareholder Return (TSR) Debt/Debt Plus Equity Percentage Percentage 40 42 40 24 37 34 14 14 31 27 22 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-06 Jun-07 Jun-08 Jun-09
Slide 14: Update on Key Developments
Citi Presentation | Fletcher Building | © October 2011 Key Developments | Page 14 Investor Presentation UPDATE ON KEY For personal use only DEVELOPMENTS Iplex, Adelaide
Slide 15: Crane integration now completed
Citi Presentation | Fletcher Building | © October 2011 Trading Update & Outlook | Page 15 Crane integration now completed For personal use only Crane Division (FY11 in A$m, to nearest million) Aust. NZ Revenue EBIT Key Brands Pipelines Manufacturer and distributor of pipes and fittings from 15mm to
Slide 16: Estimated Crane Group revenue by end market (FY2011)
Citi Presentation | Fletcher Building | © October 2011 Trading Update & Outlook | Page 16 Estimated Crane Group revenue by end market (FY2011) For personal use only 100 80 Percent 60 40 20 0 Pipelines Group Trade Distribution Industrial Products Total Crane Division New Residential Residential A&A C
Slide 17: Canterbury earthquake rebuilding update
Citi Presentation | Fletcher Building | © October 2011 Trading Update & Outlook | Page 17 Canterbury earthquake rebuilding update For personal use only • Another major earthquake of magnitude 5.5 occurred on Sunday 9 October • Government has confirmed that this will further delay rebuilding • Non-av
Slide 18: Weathertightness – fixing leaky homes
Citi Presentation | Fletcher Building | © October 2011 Trading Update & Outlook | Page 18 Weathertightness – fixing “leaky homes” For personal use only • PWC report to government of March 2010 estimated 22,000 to 89,000 dwellings affected by weathertightness failures • Consensus forecast is 42,000 d
Slide 19: Trading Update & Outlook
Citi Presentation | Fletcher Building | © October 2011 Trading Update & Outlook | Page 19 Investor Presentation TRADING UPDATE For personal use only & OUTLOOK Dimond Claudelands, Hamilton
Slide 20: Fletcher Building trading update – 12 October 2011
Citi Presentation | Fletcher Building | © October 2011 Trading Update & Outlook | Page 20 Fletcher Building trading update – 12 October 2011 For personal use only New Zealand • Continued low levels of activity in the residential and commercial construction sectors; − Recent modest uplift in resident
Slide 21: New Zealand residential consents at historically low levels
Citi Presentation | Fletcher Building | © October 2011 Trading Update & Outlook | Page 21 New Zealand residential consents in March and June quarters were at historically low levels For personal use only Housing consents 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Jun-07 Sep-09 Sep-07 Sep-08 Sep-10
Slide 22: Australian residential consents have slowed considerably
Citi Presentation | Fletcher Building | © October 2011 Trading Update & Outlook | Page 22 Australian residential consents have slowed considerably in the last two quarters For personal use only Total Dwellings 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Mar-08 Jun-09 Sep-0
Slide 23: Finance approvals for additions and alterations trending down
Citi Presentation | Fletcher Building | © October 2011 Trading Update & Outlook | Page 23 Finance approvals for additions and alterations in Australia have been trending down For personal use only Additions & Alterations loans (A$000’s) 550,000 500,000 450,000 400,000 350,000 Jul 10 Jul 08 Oct 08 Ap
Slide 24: Long steel export margins have deteriorated
Citi Presentation | Fletcher Building | © October 2011 Trading Update & Outlook | Page 24 Long steel export margins have deteriorated due to global oversupply and high Australian dollar For personal use only 140 1200 120 1000 100 800 80 600 60 400 40 World total monthly crude steel production US$ pe
Slide 25: Capital expenditure expected to remain in line with depreciation
Citi Presentation | Fletcher Building | © October 2011 Trading Update & Outlook | Page 25 Capital expenditure expected to remain in line with depreciation For personal use only 307 ¹ 289 255 * 255 * Forecast excludes potential expenditure 211 206 205 on: 191 • Business acquisitions other than small
Slide 26: Financial outlook FY2012
Citi Presentation | Fletcher Building | © October 2011 Trading Update & Outlook | Page 26 Financial outlook FY2012 For personal use only Based on: − Current assessment of market conditions − Unaudited internal forecasts − Net earnings for the 2012 half year are expected to be around 10% lower than t
Slide 27: Appendix
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 27 Investor Presentation APPENDIX For personal use only Crane Cooper Tube, Adelaide
Slide 28: Building Products
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 28 Building Products For personal use only Plasterboard Winstone Wallboards • New Zealand’s sole manufacturer and leading supplier of gypsum plasterboard Insulation Fletcher Insulation | Tasman Insulation NZ | Forman Group | Home
Slide 29: Building Products result
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 29 Building Products result For personal use only June 11 June 10 Plasterboard operating earnings NZ$m 12 Mths 12 Mths %∆ adversely impacted by slowdown in Sales 692 798 -13 residential housing starts and Christchurch earthquakes
Slide 30: Distribution – PlaceMakers
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 30 Distribution For personal use only PlaceMakers The premier supplier of building materials to New Zealand’s commercial and residential construction markets • 62 outlets across New Zealand trading as PlaceMakers • 33% market sha
Slide 31: Distribution result
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 31 Distribution result For personal use only June 11 June 10 • Sales down 3% due to slowdown in NZ$m 12 Mths 12 Mths %∆ residential and commercial building Sales 856 878 -3 activity in the second half, and slowdown in Christchurc
Slide 32: Infrastructure
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 32 Infrastructure For personal use only Concrete New Zealand Firth | Humes Pipeline Systems | Golden Bay Cement | Winstone Aggregates • 15% of NZ aggregates markets • 55% of NZ cement market • 34% of NZ readymix concrete market •
Slide 33: Infrastructure result
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 33 Infrastructure result For personal use only June 11 June 10 NZ Concrete NZ$m 12 mths 12 mths %∆ • Cement earnings up despite lower Sales 2,052 2,020 +2 domestic volumes. • Demand for concrete and related EBITDA Concrete NZ 106
Slide 34: Laminates & Panels
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 34 Laminates & Panels For personal use only Laminex • Leading high pressure laminate & decorative surfaces • Estimated Australasian market positions • Decorated board – No.1 • Medium density fibreboard – No.1 • Particleboard – No
Slide 35: Laminates & Panels result
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 35 Laminates & Panels result For personal use only June 11 June 10 Laminex NZ$m 12 mths 12 mths %∆ • Australian revenues up strongly in Sales 1,979 1,930 +3 first half due to new housing and govt education building programme EBIT
Slide 36: Formica: continued improvement in earnings
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 36 Formica: continued improvement in earnings, due to Asia growth and cost reduction programme For personal use only EBIT NZ$m FY11 FY10 % Change Asia 34 29 +17 North America 28 15 +87 Europe 9 5 +80 Corporate -15 -15 - EBIT $NZ
Slide 37: Steel
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 37 Steel For personal use only Rollforming and Coated Steel Pacific CoilCoaters|Stramit Building Products|Dimond • Approx. 24% of Australian market (Stramit) • Major player in New Zealand roofing market (Dimond) Long Steel Pacifi
Slide 38: Steel result
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 38 Steel result For personal use only June 11 June 10 • Strong performance in coated steel NZ$m 12 Mths 12 mths %∆ despite impacts of floods and Sales 1,214 1,172 +4 earthquakes: • Operating earnings up 32% to EBITDA 106 107 -1 $
Slide 39: New Zealand economic and fiscal data
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 39 New Zealand economic and fiscal data¹ For personal use only Economic data March years 2011 2012 2013 2014 2015 Real GDP growth (annual average % change) 1.0 1.8 4.0 3.0 2.7 Inflation (annual % change March quarter) 4.5 3.1 2.4
Slide 40: Presentation to Citi Australian & New Zealand Conference
Citi Presentation | Fletcher Building | © October 2011 Appendix | Page 40 PRESENTATION TO CITI AUSTRALIAN & For personal use only NEW ZEALAND CONFERENCE October 2011 Bill Roest Chief Financial Officer Humes Pipelines, Auckland
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