Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Day (October 2016)
106 slides from Fletcher Building's investor day presentation, Oct 20, 2016
Slide 1: Building Products Investor Day
For personal use only Fletcher Building Ltd Working with you Building Products Investor Day 20 October 2016
Slide 2: Disclaimer
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 are forward looking, Fletcher Building’s actual results could diff
Slide 3: Agenda
Agenda For personal use only 8:30am - 9:00am Coffee/Registration 9:00am - 9:30am Introduction Mark Adamson – Chief Executive Officer 9:30am - 10:00am Securing the future: Lee Finney – Chief Transformation Officer Accelerate 10:00am - 10:30am Overview of Building Products Matt Crockett – CE, Building
Slide 4: Agenda
Agenda For personal use only Competing on customer 1:15pm - 1:45pm Nicole Sumich – General Manager service: Iplex Australia Driving top line margin: 1:45pm - 2:15pm Commercial centres of Becky Lloyd – Chief Marketing Officer excellence Innovation driven growth: 2:15pm - 2:45pm Francisco Irazusta – C
Slide 5: Introduction
Fletcher Building Building Products Investor Day 2016 For personal use only Mark Adamson Working with you Introduction 5
Slide 6: Securing the future: Accelerate
Fletcher Building Building Products Investor Day 2016 For personal use only Lee Finney Working with you Securing the future: Accelerate
Slide 7: Chief Transformation Officer role created to build capability across the group
Chief Transformation Officer role created to For personal use only build capability across the group Chief Transformation Officer ‘Accelerate’ Transformation Program Delivery Centres of Excellence Growth Initiatives Cost & Cash Initiatives Accelerate Core Team Commercial: Accounts Payable & Receivab
Slide 8: Accelerate is at the core of everything we do
Accelerate is at the core of everything we do For personal use only Structure The Transformation Office governs and supports the Accelerate programme, driven by the Group GM of Transformation and supported by divisional and BU Transformation roles System Online tool provides a “single source of trut
Slide 9: Accelerate leverages early capability developed under the FBUnite program
Accelerate leverages early capability that For personal use only was developed under the FBUnite program • Accelerate builds on the work done in the ‘Art of the Possible’ bottom up analysis and ‘Top down’ validation. • Builds capability in the centralised functions and Centres of Excellence. • Co-or
Slide 10: Accelerate helps us deliver our organisational goals faster
Accelerate helps us deliver our For personal use only organisational goals…faster People • Go home safe every day Create a great place to work • Develop leadership and capability across the company • Create a performance culture & foster engagement Customers • Lift market share • Increase customer s
Slide 11: Accelerate drives transparency and discipline
Accelerate drives transparency and For personal use only discipline Value identification Value capture L1 L2 L3 L4 L5 Identify Validate Plan Realise Implement Track Ideas Value Requirements An idea Estimate of Detailed All activities Full ramp- to pass the gate generated benefit implementa
Slide 12: Accelerate drives behaviour & culture change
Accelerate drives behaviour & culture For personal use only change • Structured approach—To help businesses identify opportunities, size them, confirm feasibility and benefits, then execute • Fast cadence and high intensity—weekly TO meetings • Focus on quality—challenge the inputs and the benefit a
Slide 13: Key achievements to date
Key achievements to date For personal use only • Improved communication: Weekly interactions with BUs, divisions and the corporate centre to track and drive initiatives • Mechanisms in place to capture ideas from all levels of the business • World class reporting & guidance developed to drive fast d
Slide 14: Accelerate opportunity is balanced between cost and top line growth
Accelerate opportunity is balanced between For personal use only cost and top line growth % OF TOTAL IDENTIFIED OPPORTUNITY Commercial (“Sell”) 50% Cost - External spend (“Source”) 20% - Overhead (“Staff”) 8% Manufacturing - Manufacturing (“Make”) 15% - Distribution and Construction (“Deliver”) 7% D
Slide 15: Accelerate is an extension of our values
Accelerate is an extension of our values For personal use only 15 Fletcher Building Building Products Investor Day Presentation | © October 2016
Slide 16: Overview of Building Products
Fletcher Building Building Products Investor Day 2016 For personal use only Matt Crockett Working with you Overview of Building Products
Slide 17: Agenda
Agenda For personal use only • Building Products overview • Performance and priorities • Impact of Accelerate • Australian and NZ market outlooks 17 Fletcher Building Building Products Investor Day Presentation | © October 2016
Slide 18: Building Products lead team
Building Products lead team For personal use only GM GBCWinstone: GM Firth: GM Humes: GM Winstone GM Iplex NZ: Ian Jones Andrew Moss Logan Aves Wallboards: David Welsh 25 years at FB 25 years at FB 2 years at FB David Thomas 1 year at FB 40 years at FB GM Rocla: GM Iplex AU: GM Fletcher MD Fanalco:
Slide 19: Building Products Division Overview
Building Products Division Overview For personal use only ReadyMix Concrete Plastic Pipes Building Quarries Cement Concrete Products & Fittings Materials • Aggregates • Pipes, Poles • PE Pipe • Wallboards • Sand • Sleepers • PVC Pipe • Insulation • Masonry • PVC fittings • Aluminium • Barriers New Z
Slide 20: Continued to simplify and focus the portfolio
We have continued to simplify and focus the portfolio, For personal use only only acquiring/partnering where there is clear logic Businesses exited Disposal/closure date June 2014 February 2016 Logical bolt-on Acquisition/JV date acquisitions/JVs FANALCO July 2016 July 2016 20 Fletcher Building Buil
Slide 21: Divisional revenue and earnings are diversified along the value chain
Divisional revenue and earnings are diversified For personal use only along the value chain FY16 Revenue (NZ$m) FY16 EBIT (NZ$m) $3 $136 $18 $71 $372 $71 $553 $302 $106 $22 $468 $546 $41 $14 21 Fletcher Building Building Products Investor Day Presentation | © October 2016
Slide 22: Substantial progress made over the last two years, though challenges remain
Substantial progress made over the last two For personal use only years, though challenges remain Highlights Challenges Australia Australia • Strong, customer leading, • Returning Rocla to growth turnarounds in Iplex AU and Fletcher • Some weak state markets, notably Insulation WA • Rocla Quarries d
Slide 23: Accelerate is underpinning our business improvement efforts
Accelerate is underpinning our business For personal use only improvement efforts Focus to date Go forward priorities • Getting the basics in place - building • Execution of existing initiatives performance mindsets and • Refining and delivering powerful capabilities customer value propositions in a
Slide 24: NZ market outlook positive
NZ market outlook positive For personal use only NZ Residential WPIP 20 15 $NZ Bn 10 5 - 2011 2014 2010 2012 2013 2015 2007 2008 2016F 2017F 2018F 2019F 2020F 2021F 2009 New dwellings Additions & Alterations NZ Non Residential WPIP NZ Infrastructure WPIP 10 10 8 8 $NZ Bn $NZ Bn 6 6 4 4 2 2 - - 2010
Slide 25: Australian market outlook coming off peaks but remains solid
Australian market outlook coming off peaks For personal use only but remains solid Aus Residential Commencements Aus Residential Work Value 250 70 200 60 50 AU$ bn 150 '000s 40 100 30 20 50 10 0 ‐ 2016F 2017F 2018F 2019F 2020F 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 201
Slide 26: Key Building Products messages
Key Building Products messages For personal use only • High quality, diversified, yet coherent portfolio • World class team – good balance of FB and external experience • Market leading assets in NZ successfully defending share and well positioned to maximise returns from strong NZ market • Australi
Slide 27: NZ Concrete Value Chain: GBC Winstone & Firth
Fletcher Building Building Products Investor Day 2016 For personal use only Ian Jones Andrew Moss Working with you NZ Concrete Value Chain: GBC Winstone & Firth 27
Slide 28: GBC Winstone Overview
GBC Winstone For personal use only Overview National Manufacturing & Distribution Revenue split and market segments NZ$m CAGR 9% p.a. CAGR 9% p.a. 400 300 200 100 0 FY12 FY13 FY14 FY15 FY16 Firth Cement Firth Aggregates Domestic Cement Export Cement Aggregates Other sales Golden Bay Cement Manufactu
Slide 29: Firth Overview
Firth Overview Firth is NZ’s largest ready-mixed concrete, concrete For personal use only masonry, and pre-mixed bagged mortar supplier National Manufacturing & Distribution Revenue split and performance NZ$m CAGR 13% p.a. 400 300 200 100 Firth Certified Concrete plants (70) Joint Venture Concrete p
Slide 30: GBC Winstone and Firth hold a unique integrated position
GBC Winstone and Firth hold a unique integrated For personal use only position in the NZ concrete value chain Concrete Aggregates Cement Concrete Masonry Mortars 100 % Winstone Firth Aggregates GBC Dricon Kaipara Firth Stevensons Holcim Allied / Holcim JV Atlas Cemix Other Holcim Bridgeman Bowers Hi
Slide 31: NZ cement industry has changed but FB has a fully integrated value chain
NZ cement industry has changed but FB has a fully integrated value chain, competitive cost position, and For personal use only strong independent customers 1. Industry has changed over last five years but FB has done a good job retaining share whilst facing new import competition 2. Both Holcim and
Slide 32: New distribution model will improve EBIT by ~$7m p.a.
New distribution model will improve EBIT by For personal use only ~$7m p.a. The distribution model revamp consists of three key components which all interact, creating a more robust supply chain, and providing capability to supply all NZ regions (Completion February 2017) 1. With imminent end of 3.
Slide 33: Aggregates business addresses both growth and sustainability
Aggregates business addresses both growth and sustainability and well positioned to For personal use only capture market upside Hunua $30m development sets up resource for further 30 Hunua, Pukekawa, Three years of Auckland supply and creates platform for Firth Kings, Helensville, Flat Top Block Pla
Slide 34: Firth has grown share and lifted margins in ready-mixed concrete
Firth has been successful at both growing share For personal use only and lifting margins in ready-mixed concrete Given channel value pull through, Firth has targeted Cost Components – Ready-Mixed Concrete sustainable concrete share growth, while looking to lift price and maximise margin opportuniti
Slide 35: Segmented value propositions, innovation and installed solutions drive Firth's success
Delivering segmented value propositions, innovation, and proprietary installed solutions, are key to Firth’s ongoing For personal use only success Operational Capability Infrastruc -ture Large Installers & Contractors • 70 plant and 400 truck network • Integrated pour planning and management Enginee
Slide 36: Firth capacity and capability enhancements for Auckland demand
To meet surging Auckland demand for concrete, Firth is implementing substantial capacity and capability For personal use only enhancements • Firth presently operates eight concrete batching Firth Auckland Certified Plant Network plants, and 110 trucks across the Auckland network Capacity • Currently
Slide 37: Firth leading positions in all concrete masonry segments
Firth has leading positions in all concrete masonry segments, with significant growth and network For personal use only optimisation opportunities Product Category Channel Opportunity Manufacturing Plant Consolidation Category Share Concrete Distributor • Landscaping growth • Firth operates 8 masonr
Slide 38: Key concrete value chain messages
Key concrete value chain messages For personal use only • Fletcher Building has a strong value chain and strong external customer relations • Cement business has a competitive cost positon and is well positioned to maintain share • Firth Ready-mix has been successful at gaining share whilst holding
Slide 39: Managing product convergence: Humes NZ & Iplex NZ
Fletcher Building Building Products investor Day 2016 For personal use only Logan Aves David Welsh Working with you Managing product convergence: Humes NZ & Iplex NZ
Slide 40: Humes NZ Overview
Humes NZ For personal use only Overview Market Share Humes Location Map NZ 100% List of competitors: 80% • Hynds Humes Sales Centre Whangarei 59% 58% 60% 50% 51% 53% • Frank PKS Humes Manufacturing Site Mt Maunganui • Asmuss Tauranga Albany 40% • Maskells Henderson Te Rapa Rotorua Frankton Penrose N
Slide 41: Iplex Pipelines NZ Overview
Iplex Pipelines NZ For personal use only Overview Market Share Iplex Location Map NZ 100% List of competitors: 80% • Aliaxis 60% • S&T 34% 35% 35% 35% 35% (Aquaduct) Auckland sales 40% • Asmuss office 20% • Hynds (W&F) 0% 2012 2013 2014 2015 2016 Palmerston North Summary Financials (NZ$m) manufactur
Slide 42: Combined market size of $450M
Combined market size of $450M For personal use only Estimated 2015 NZ Pipelines Market $ 80m $ 50m $ 50m $ 50m $ 40m $ 68m $ 48m $ 30m $ 30m $446m 100% Other 90% $62M $62m 80% Concrete Concrete 70% $93m $93M 60% Share (%) PE 50% PE $134m $134M 40% 30% 20% PVC PVC $157m 10% $157M 0% Subdivision Infra
Slide 43: Key customer segments serviced through FB channels
Key customer segments serviced through FB For personal use only channels Manufacturers Iplex have some direct to customer sales into rural, ET and Exports Plastic (PVC & PE) pipe Concrete pipe & Precast Distributors & Independents etc. Segment influencer Customer Owner / Farmers / Homeowners / Devel
Slide 44: Customer insight – customers and their needs
Customer insight – customers and their For personal use only needs Humes Customer Segments Iplex NZ Customer Segments 32% 10% 9% 8% 70% 12% 22% 37% Civil Drainlayers Rural Asset Owners Civil Plumbing Rural ET 44 Fletcher Building Building Products Investor Day Presentation | © October 2016
Slide 45: Customer insight – customers and their needs
Customer insight – customers and their For personal use only needs Contractors Consultants Owners What Avoidance Cost Expertise customers of risk value Overseas product is not getting any Durability / resilience / ease of Safety Safety in in designasasgrowing design growing knowing that they each ha
Slide 46: Customer journey – the Humes/Iplex value propositions
Customer journey – the Humes/Iplex value For personal use only propositions Project Detailed Identification Establishment Scope design Tender Build path design Right Solution Project Planning Smart solution Consented design Best Cost Reliability Low risk Governance Fit for purpose Specification Redu
Slide 47: Leverage in action – rural water infrastructure
Leverage in action – rural water For personal use only infrastructure Irrigation Scheme Pipeline: 2016 - 2020 Manuherikia… Waitaki… Amuri… Hurunui… Flaxbourne… Ruataniwha… Sheffield… Waimakiriri… Mayfield Hinds… Hunter Downs… Central Plains II… Pipeline Materials Value 47 Fletcher Building Building
Slide 48: Humes & Iplex NZ key messages
Humes & Iplex NZ key messages For personal use only • Humes and Iplex have a complimentary customer offer with full market coverage – stronger than any single competitor • Attractive channel to market model with strong internal and external channel partners • Leverage expertise, together, to address
Slide 49: Managing channels: Winstone Wallboards
Fletcher Building Building Products Investor Day 2016 For personal use only David Thomas Working with you Managing channels: Winstone Wallboards
Slide 50: Winstone Wallboards Overview
Winstone Wallboards For personal use only Overview Products cover the core range of interior Branch/site location map NZ lining systems Akl Manufacturing 100% • Felix St, Penrose 12.1% AUCKLAND 18.6% Akl Distribution • The Gate, Onehunga 80% • Felix St, Penrose 53.9% • Timberley Rd, Mangere 60% 57.3
Slide 51: Maintaining our position as NZ's leading supplier of building materials
Winstone Wallboards Maintaining our position as New Zealand’s leading For personal use only supplier of building materials Our focus is on executing the core Strategy Service and Operational Excellence With Selling Supporting • Superior Logistics Exclusively to • Builders/Installers Building Materia
Slide 52: Solid progress maintained on our critical drivers
Winstone Wallboards Solid progress has been maintained on our critical For personal use only drivers Execution Drivers Metrics FY13 FY14 FY15 FY16 Main Strategies Success High Performance Standards Employee People, 74% 79% 79% 83% Continuous Communication Engagement Culture and Line of Sight to Cust
Slide 53: Continued to lead our customers on main fronts
Winstone Wallboards For personal use only Continued to lead our customers on 3 main fronts Customer Leadership While Enhancing Our Offers … Focus Areas Merchants Residential Builders 1 Helping Customers Become More EDI Order Tracking Deliver to Site Extensions Productive Reduced Delivery Damage EzyB
Slide 54: Focused on retaining share at the best sustainable price
Winstone Wallboards Looking forward, we remain focused on retaining For personal use only share at the best sustainable price Strategies to Retain Share … Strategic Initiatives KPI Targets Strategic Initiatives • Enhance digital access to product, technical, order and delivery information All Segmen
Slide 55: Pursuing market and margin growth
Winstone Wallboards … While also pursuing market and margin For personal use only growth Strategies to Retain Strategic Initiatives KPI Targets Share and Grow … Strategic Initiatives • Review Sales Team Structure for greater coverage on large projects, immigrant builders and other growing segments M
Slide 56: Winstone Wallboards in summary
Winstone Wallboards For personal use only In summary • We have a highly valuable and well-earned market position • This has been built over many years through a customer driven strategy underpinned by best practice execution • It is difficult for new competitors to quickly emulate the strength of ou
Slide 57: Regaining momentum: Fletcher Insulation
Fletcher Building Building Products Investor Day 2016 For personal use only Justin Hollis Working with you Regaining momentum: Fletcher Insulation 57
Slide 58: Fletcher Insulation: Business overview
Fletcher Insulation: Business overview For personal use only • Revenue 71% Glasswool • Operating plant in Dandenong VIC and restarted plant in Darwin Rooty Hill NSW • 2ndlargest player in Australian glasswool market • Revenue 13% Townsville • Largest capacity foil lamination plant in Homebush NSW Fo
Slide 59: Fletcher Insulation: Residential Applications
Fletcher Insulation: Residential Applications For personal use only Tile roof sarking Internal wall Ceiling Foil membrane Glasswool batts Sisalation® Tiled Roof Acoustic Glasswool batts Pink® Soundbreak™ Pink Batts® Metal roof blanket Foil membrane + Glasswool Permastop Metal roof Underfloor sarking
Slide 60: Fletcher Insulation: Commercial Applications
Fletcher Insulation: Commercial Applications For personal use only Metal roof blanket Partition Foil membrane + Glasswool Glasswool batts Ceiling tiles Ceiling Permastop® Pink® Partition Mineralwool Glasswool Steel Mesh tiles batts Roofsafe Safety Mesh Eurocostic™ Pink® batts Metal roof spacer Roof
Slide 61: Fletcher Insulation: Market channel map
Fletcher Insulation: Market channel map For personal use only Competitors Market channels Installers End Segments Market Consumers Supply & Fit DIY – Do it Yourself Retrofit Residential Detached new build DIFM – Do it for me Plasterboard Commercial Interiors Multi-res new build Trade wholesale Plumb
Slide 62: Fletcher Insulation: Market size
Fletcher Insulation: Market size For personal use only Insulation Market by Channel Insulation Market by Product Group $m Total: 468 $m Total: 468 134 135 103 50 46 134 135 103 50 46 100% Other 100% Bought HVAC in lines 80% Plaster- 80% Foil + board L&C 60% Roofing 60% 40% Retail 40% Glasswool 20% S
Slide 63: Fletcher Insulation: Glasswool market size & share
Fletcher Insulation: Glasswool market size & For personal use only share FY15 Market Breakdown (tonnes) Market Share % 27K 24K 17K 10K 7K 100% 36 Other 36 Knauf 80% 34 Fletcher 60% Insulation 32 40% 30 30 CSR Bradford 20% 28 0% 26 QLD NSW/ACT VIC/TAS SA/NT WA 2011 2016 Source: Fletcher Insulation 63
Slide 64: Fletcher Insulation: Momentum building
Fletcher Insulation: Momentum building For personal use only Story so far Future • Low capital cost expansion of plant through de- • Pursue productivity improvements in bottlenecking in Dandenong and recommission manufacturing with and without capital Rooty Hill • Compress Homebush lamination cost b
Slide 65: Fletcher Insulation key messages
Fletcher Insulation key messages For personal use only • Insulation is a key component in the residential and commercial segments which points to strong underlying demand • Fletcher Insulation is the 2nd largest player in the market which is predominately on the eastern seaboard • Fletcher Insulatio
Slide 66: Competing on customer service: Iplex Australia
Fletcher Building Building Products investor Day 2016 For personal use only Nicole Sumich Working with you Competing on customer service: Iplex Australia
Slide 67: Iplex Australia offers a diversified product range
Iplex Australia For personal use only Offers a diversified product range to the market Revenue by product Contribution by product 9% 10% 11% 14% 5% 13% 22% 3% 3% 25% 32% 13% 1% 26% 5% 4% 3% 1% The breadth of our product range allows Iplex to take a market leading position in all market segments • 80
Slide 68: Iplex Australia market segment and competitor overview
Iplex Australia For personal use only Market segment and competitor overview Iplex and Vinidex offer a full solution to all market segments. Others offer a more restricted product range or focus on certain market segments only 68 Fletcher Building Building Products Investor Day Presentation | © Octo
Slide 69: Australian PE and PVC Manufacturing Overview
Iplex Australia For personal use only Australian PE and PVC Manufacturing Overview Market Share PVC and PE Manufacturing Footprint PVC Pipe PE Pipe kT kT 12 35 25 10 20 67 32 3 3 5 14 8 4 72 33 66 50 52 90 70 66 60 1 Capacity Market Share Capacity Market Share 4 5 Iplex Vinidex Pipemakers Iplex Vini
Slide 70: Competing effectively again in a commoditised market
Iplex Australia For personal use only Competing effectively again in a commoditised market Improved performance at Iplex Australia to date has relied on a “back-to-basics” approach to managing the challenges of a business highly exposed to fluctuations in demand Sales and Operational Winning with Op
Slide 71: iPledge – our customer service promise
Iplex Australia For personal use only iPledge – our customer service promise Iplex had lost significant Plumbing market share and Victoria had been impacted the most. Between FY12 and FY15 in Victoria alone: • $9.5m of margin had been lost • Sales volume had reduced by 30% • NPS score for Plumbing i
Slide 72: iPledge – our customer service promise
Iplex Australia For personal use only iPledge – our customer service promise 125 Core Items 2 hour site collections 30 sec call Credits acknowledged 24 hour turnaround always available Premium courier answering & 30 day close out Plumbing Sales – average # Open Credits Plumbing Segment DIFOT daily t
Slide 73: DIFOT service levels significantly improved with 30% less inventory
Iplex Australia DIFOT - service levels have significantly improved with For personal use only 30% less inventory 100 100% Customer Delivery Performance (DIFOT) improvement 95 95% • Inventory has reduced by 30% from a 90 90% high in September 2014 of over $96m • Delivery performance initially dropped
Slide 74: A solid foundation will underpin sustainability of future earnings
Iplex Australia A solid foundation will underpin the sustainability of For personal use only future earnings The Iplex recovery is now focused on embedding even stronger market and customer positions Innovation – a fresh approach • The basics are entrenched – Iplex is now defined by Better Every Day
Slide 75: Key Iplex Australia messages
Key Iplex Australia messages For personal use only • The business is stable and Iplex has re-established market share and profitability • Our manufacturing plants and supply chain are low cost, agile and responsive to customer needs • Employee engagement is increasing and we have customer momentum •
Slide 76: Driving top line margin: Commercial centres of excellence
Fletcher Building Building Products Investor Day 2016 For personal use only Becky Lloyd Working with you Driving top line margin: Commercial centres of excellence
Slide 77: Sales & Marketing centre of excellence established to drive top-line growth
The Sales & Marketing centre of excellence was For personal use only established to drive top-line growth Better Better Selling Marketing Better Pricing and Commercial Management 77 Fletcher Building Building Products Investor Day Presentation | © October 2016
Slide 78: Our focus in Marketing is to deliver what customers value
Our focus in Marketing is to deliver what For personal use only customers value Customer Customer value Customer insight and propositions service segmentation promises 78 Fletcher Building Building Products Investor Day Presentation | © October 2016
Slide 79: A recent example of a service promise
A recent example of a service promise… For personal use only 79 Fletcher Building Building Products Investor Day Presentation | © October 2016
Slide 80: Pricing – setting and getting
Pricing – setting and getting For personal use only Price Distribution of a Product (Illustrative) 1. Setting price effectively 40 30 Frequency 2. Getting the price you set 20 10 3. Enabling people and 0 process Price, $ Price Index YoY (Illustrative) 1.5% 1.6% 1.2% 1.1% 1.4% 1.6% 1.1% 1.0% 0.8% 0.6
Slide 81: Sources of incremental value from pricing
Sources of incremental value from pricing For personal use only control creativity Mean Contribution Margin Annual price increase Tactical • customer segmentation • value-based pricing Transaction based • maximising value from each transaction/quote • up-selling/cross-selling Stop chasing low- price
Slide 82: Systematically rolling out better selling
Systematically rolling out better selling For personal use only Sales Strategy Where’s the growth? Do we have the right roles Coverage and Structure in the right places? Do our people have the Skills and Processes skills they need? Motivation and Incentives Are we driving the behaviour we want? Syst
Slide 83: Our current sales excellence priorities
Our current sales excellence priorities… For personal use only • Sales assessment centres • Sales learning pathways • Sales incentive programme • SF.com • Performance cadence 83 Fletcher Building Building Products Investor Day Presentation | © October 2016
Slide 84: Delivering results through consistent commercial KPIs
Ensuring we are delivering results through For personal use only consistent commercial KPIs 84 Fletcher Building Building Products Investor Day Presentation | © October 2016
Slide 85: Laminex AU – a case study in commercial excellence
Laminex AU – a case study in commercial For personal use only excellence Laminex AU implemented a Sales structured improvement $M programme, including: • Segmentation for growth • People Month • Sales process and tools Average Selling Price / m2 • Pricing and cost to serve $/m2 Month 85 Fletcher Bui
Slide 86: Innovation driven growth: International
Fletcher Building Building Products Investor Day 2016 For personal use only Francisco Irazusta Working with you Innovation driven growth: International 86
Slide 87: High quality, well positioned manufacturing assets in all regions
The business has high quality, well positioned For personal use only manufacturing assets in all regions 80% 80% 55% 80% 65% 90% 25% 80% 45 90% % 60% 100% 50% 80% FORMICA 100% LAMINEX 90% RTG Manufacture & sell 90% 100 35% % 90% 70% Percentages highlight capacity utilization 100% Source: Management
Slide 88: High quality, well positioned manufacturing assets in all regions
The business has high quality, well positioned For personal use only manufacturing assets in all regions Percentages highlight capacity utilization Source: Management Estimates 2016 88 Fletcher Building Building Products Investor Day Presentation | © October 2016
Slide 89: Laminex Australia facing market challenges, mainly Western Australia
Laminex Australia facing market challenges, predominantly in Western Australia, but focusing on For personal use only alternative growth opportunities EBIT * Market Drivers: NZ$m • Residential construction – New homes – Renovation $72m $71m – Multi-residential • Commercial construction – Education –
Slide 90: Laminex New Zealand experiencing revenue growth
Laminex New Zealand experiencing revenue growth and improving market positioning through service and For personal use only new products EBIT * Market Drivers: NZ$m, • Strong market activity in Auckland, Tauranga and Christchurch resulting in steady growth since October 2015. $10m** • Major competito
Slide 91: Roof Tile Group performing well in Asia and New Zealand
Roof Tile Group, performing well in Asia and New Zealand, while the US is consolidating the business but For personal use only Africa and Europe remain challenging EBIT * Market Drivers: NZ$m, • Americas new GM & Sales & Marketing leads to drive revenue growth $14m $14m • Asia strong sales Japan; st
Slide 92: North America: driving revenue growth and operational improvement
North America: Focus remains on driving revenue For personal use only growth and continuing operational improvement EBIT * Market Drivers: NZ$m, • Continued favourable construction markets – strength in office, retail and hospitality, some weakness in regions impacted by commodity $56 downturns • Co
Slide 93: Europe: Significant action taken to transform the business
Europe: Significant action has been taken over For personal use only the past 12 months to transform the business Strategic Imperatives Align Cost 1. Manufacturing – North Shields: lower unit cost Base 2. Overhead costs – continue to streamline while building critical capabilities Drive Revenue 3. D
Slide 94: North Shields showing sustained recovery and lower unit costs
North Shields showing sustained recovery, lower unit For personal use only costs and improved productivity and employee metrics Progress last 12 months • New experienced plant management team in place • Investment programme underway to drive down unit costs Finished Scrap Manufacturing Variances 9%
Slide 95: Asia revenue growth continues across the region
Asia revenue growth continues across the region & Jiujiang loadings & operational performance continues For personal use only to improve EBIT * Market Drivers: NZ$m • Infrastructure growth in China, esp. health and education $23m • China’s economic goal shifting from manufacturing to service industr
Slide 96: China: focus on Jiujiang and revenue growth
China: focus on Juijang and revenue growth For personal use only Strategic Imperatives Align Cost 1. Improve productivity, efficiencies and loadings at Base Jiujiang 2. Lead time transformation to significantly improve Drive Revenue service levels 3. Key segment focus to drive growth 4. Product inno
Slide 97: Jiujiang factory production output and productivity continues to increase
Jiujiang factory production output and For personal use only productivity continues to increase Annual Production Scrap Rates (Million Sheets Produced) % 1.17 1.01 18.7 0.68 12 0.44 8.3 0.37 0.27 5.7 7 4.1 FY14 FY15 FY16 FY14 FY15 FY16 4 Foot 6 Foot Finished Door to Door Machine Utilisation 93 % 88
Slide 98: ASEAN and NE Asia sales have shown consistent growth
ASEAN and NE Asia sales have shown consistent For personal use only growth in recent years ASEAN External Sales NE Asia External Sales NZD m * NZD m * CAGR 100 CAGR 100 2% 90 5% 84 83 84 85 81 80 77 80 78 69 71 Singapore 60 60 Thailand 40 40 Malaysia 20 20 - - FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14
Slide 99: Conclusion
Conclusion For personal use only Laminex NZ: Growing revenue, improving performance and gaining market share Laminex AUST: Growing revenue through market share gain and improving performance RTG: Focus on growth while improving quality of earnings Formica NA: Revenue growth focus Formica EU: Transfo
Slide 100: How good can it get: Residential
Fletcher Building Building Products Investor Day 2016 For personal use only Steve Evans Working with you How good can it get: Residential
Slide 101: Residential and Land Development: tracking against 2015 update
Residential and Land Development For personal use only How are we tracking against 2015 update December 2015 Now Number of Units Sold Number of Units Sold • 2016 Units sold exceeded forecast 1,200 1,200 • 2017 slightly lower due to Volumes 800 800 extended timeframes on Christchurch apartments 400 4
Slide 102: Residential and Land Development: last 12 months
Residential and Land Development For personal use only What has happened in the last 12 months What we haven’t done… What we’ve done… Land acquisition – we’ve been A new divisional structure with a new disciplined and selective in our branch to facilitate volume growth approach to land acquisition.
Slide 103: Residential and Land Development: Moving Forward Metrics
Residential and Land Development For personal use only Moving Forward Metrics Revenue EBIT $m $m FY14 FY15 FY16 FY17 FY18 FY19 FY14 FY15 FY16 FY17 FY18 FY19 Dwellings Steady State Metrics Funds Employed - $600m Dwellings No. of Units Sold p.a. – 1,500 FY14 FY15 FY16 FY17 FY18 FY19 103 Fletcher Build
Slide 104: Residential and Land Development: Unitary Plan Impact
Residential and Land Development For personal use only Unitary Plan Impact What is it? The Auckland Unitary Plan (AUP) is a combined plan made up of a:Regional Policy Statement; Regional Plan (including a Regional Coastal Plan); and a District Plan for the Auckland region. The AUP will replace the e
Slide 105: Residential and Land Development: Global Development Pipeline
Residential and Land Development For personal use only Global Development Pipeline Fletcher Building has over 300 owned properties globally. A number of these are not being utilised to their highest value use We have undertaken a high-level review of the portfolio • Confidential Site, Australia – FB
Slide 106: Wrap up, Q&A session
Fletcher Building Building Products Investor Day 2016 For personal use only Mark Adamson Gerry Bollman Working with you Wrap up Q&A session