Fletcher Building Limited · NZX:FBU
Fletcher Building — H1 2002 Earnings Presentation
34 slides from Fletcher Building's earnings presentation, Feb 13, 2002
Slide 1: Interim Results Presentation
Interim Results Presentation 13 February 2002
Slide 2: Interim Results Presentation notice
This Interim Results Presentation dated 13 February 2002 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: Summary of Results
Summary of Results Dec Dec * Jun * 2001 2000 2001 $m 6 Mths 6 Mths 12 Mths Revenue 1455 1093 2273 EBITDA 123 80 184 EBIT Before Unusuals 78 37 94 NPAT Before Unusuals 37 8 34 EPS After Unusuals (cents) 19.2 ** -28 ** -83.7 * Published Information ** Annualised 1
Slide 4: Segmental EBIT
Segmental EBIT Dec Dec Jun $m 2001 2000 2001 6 Mths 6 Mths 12 Mths Building Products and Steel 36 35 58 Distribution 9 6 20 Concrete 24 8 31 Construction 13 -5 5 Corporate/Unallocated -4 -2 -6 EBIT Before Unusuals 78 42 108 Less Restatement 0 -5 -14 EBIT as per Accounts 78 37 94 2
Slide 5: Building Products and Steel Results
Building Products and Steel Results Dec Dec Jun 2001 2000 2001 $m 6 Mths 6 Mths 12 Mths Revenue 405 447 840 EBIT 36 35 58 Funds 453 517 450 Return on Funds (annualised) 15.9% 13.5% 12.9% 3
Slide 6: Building Products
Building Products Winstone Wallboards – Volume flat – Price and mix better – Profit well up Fletcher Aluminium – Disappointing result – New GM from February 2002 – 30-40 people reduction – New window suite now settled – Improvement expected 4
Slide 7: Building Products
Building Products Fletcher Wood Panels – Revenue up 4% - volume not price – Input costs up >4% - resin and transport – EBIT unsatisfactory Scott Panel & Hardware – Volume and profit maintained at good levels 5
Slide 8: Steel
Steel Manufacturing – Volume slightly up – Prices improved – Controllable costs down – Profit well up despite power costs – Sims performance excellent 6
Slide 9: Steel
Steel Processing and Distribution – Volumes down in EasySteel and Dimond – Sacrificed share to hold margin – Results disappointing – Latest profit trends better – Pacific Coilcoaters excellent result 7
Slide 10: Distribution Earnings
Distribution Earnings The PlaceMaker Joint Venture branches currently have a 31 March accounting year end compared to 30 June for the Fletcher Building Group. Once we have completed the consolidation, we will have taken to account 15 months earnings and 15 months minority interest for the Joint Vent
Slide 11: Distribution Results
Distribution Results Dec Dec Jun 2001 2000 2001 $m 6 Mths 6 Mths 12 Mths Gross Revenue 322 304 622 EBIT 9 6 20 Funds 101 110 92 Return on Funds (annualised) 17.8% 10.9% 21.7% 9
Slide 12: Distribution
Distribution • Sales levels at 105% of previous year with improving market conditions, improving cash sales and stronger results in wholly owned stores (up 10%) • Margins have improved across stores as a result of initiatives underway • 10% improvement in funds usage compared to December last year 1
Slide 13: Concrete Results
Concrete Results Dec Dec Jun 2001 2000 2001 $m 6 Mths 6 Mths 12 Mths Revenue 232 216 454 EBIT Before Unusuals 24 8 31 Funds 458 492 484 Return on Funds (annualised) 10% 3% 6% 11
Slide 14: Concrete
Concrete Golden Bay (Cement) – Volumes up – Prices up – Input costs up - power, transport and clinker – Profit Steady 12
Slide 15: Concrete
Concrete Firth (Readymix Concrete) – Volumes flat – Prices up – Input costs up – Overheads well down – Strong profit improvement 13
Slide 16: Concrete
Concrete Winstone Aggregates – Higher volumes – Unfavourable mix – Roading spend down significantly – Profit improvement on pcp but disappointing result 14
Slide 17: Concrete
Concrete Humes (Concrete Pipes) – Low levels of subdivision and roading – Overhead/other cost savings – Improved profit result Stresscrete (Pre-cast Beams etc) – Much improved operating performance – More to come 15
Slide 18: Concrete
Concrete South America – Despite weaker market conditions, better operational performance lead to a significant improvement in results – Losses in the order of $1 million were recorded compared to $8 million pcp and $16 million for the full year to 30 June 2001 – Both countries recorded positive cas
Slide 19: Construction / Residential / Property Results
Construction / Residential / Property Results Dec Dec Jun $m 2001 2000 2001 6 Mths 6 Mths 12 Mths Revenue 496 346 808 EBIT 13 -5 5 Funds -44 2 -58 17
Slide 20: Construction / Residential / Property
Construction / Residential / Property Construction – Billings for the period were ahead of last year and expectations – Backlog levels at $702 million represent a healthy 11 months workload – Earnings from the Australian Co-generation assets and US contract completions contributed $6 million EBIT –
Slide 21: Construction / Residential / Property
Construction / Residential / Property Property – Sale of the Lunn Avenue property at a profit of $6 million (our share) was settled in December Residential – Strong performance with the number of sales and margins well ahead of last year and budget – Further restructuring was undertaken during the p
Slide 22: Profit After Tax
Profit After Tax Dec Dec Jun $m 2001 2000 2001 6 Mths 6 Mths 12 Mths EBIT before Unusuals 78 37 94 Interest -15 -19 -36 Tax -23 -10 -23 Minority Interests -3 0 -1 NPAT before Unusuals 37 8 34 Adjustments Net of Tax 4 -49 -306 Profit After Tax 41 -41 -272 20
Slide 23: Adjustments
Adjustments Dec Dec Jun $m 2001 2000 2001 6 Mths 6 Mths 12 Mths i. Unusual Items Permanent Impairment 0 -101 Other Losses/Gains 6 -44 -37 Restructuring and Separation Costs -12 -43 6 -56 -181 ii. Taxation -2 7 -125 Total Adjustments 4 -49 -306 21
Slide 24: Simplified Balance Sheet
Simplified Balance Sheet Dec 2001 June 2001 NZ$m NZ$m Assets Current Assets 682 639 Fixed Assets 736 759 Provision for Deferred Taxation 130 136 Investments 69 90 Total Fletcher Building Assets 1,617 1,624 Liabilities Current Liabilities 510 560 Net Debt 293 274 Total Fletcher Building Liabilities 8
Slide 25: Ratios
Ratios Dec Dec Jun $m 2001 2000 2001 6 Mths 6 Mths 12 Mths Net Debt / Equity 35% 36% 35% EBITDA / Interest 8.2 4.2 5.1 Dividend 6 cps 6 cps 12 cps Payout Ratio 63% N/A 240% 23
Slide 26: Net Debt Movement
NZ$ Millions 50.0 0.0 100.0 150.0 200.0 250.0 300.0 350.0 Jun-01 274.0 Cash from ops 56.0 Capex 20.0 Divestmetns 12.0 Net Debt Movement Repay cap notes 20.0 Distributions 33.0 Placemakers 14.0 Dec-01 293.0 24
Slide 27: Operational & Strategic Update
Operational & Strategic Update
Slide 28: Operational Initiatives
Operational Initiatives • Management • Remuneration • Costs • New Technologies – Wallboards – Cement – Wood Panels 25
Slide 29: Organisation
Organisation Ralph Waters CEO Mark Binns Mark Binns Andrew Reding David Worley Chief Executive Chief Executive Chief Executive Chief Executive CONSTRUCTION CONCRETE BUILDING PRODUCTS DISTRIBUTION GROUP GROUP & STEEL GROUP GROUP • NZ Construction • Golden Bay Cement • Fletcher Wood Panels • PlaceMake
Slide 30: Operational Initiatives
Operational Initiatives • Management • Remuneration • Costs • New Technologies – Wallboards – Cement – Wood Panels 27
Slide 31: Business Issues
Business Issues • Roading Funding • Quarry Consents • Kyoto Protocol • Power Costs 28
Slide 32: Strategic Issues
Strategic Issues • Portfolio Adjustment • New Markets • Growth 29
Slide 33: Business Portfolio
Business Portfolio Sold: – Aluminium Distribution – Cyclone – Lunn Avenue Quarry Being Progressed: – South American assets among others Expect to see progress in the second half 30
Slide 34: Outlook
Outlook • Expect H2 NZ demand to be similar to H1 • South American and Northern Hemisphere export markets difficult • Improvement potential in aggregates and steel downstream • H2 earnings outlook quite satisfactory 31