Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Presentation (October 2005)
41 slides from Fletcher Building's investor presentation, October 2005
Slide 1: Analysts Briefing October 2005
Analysts Briefing October 2005 Andrew Reding Chief Executive, Building Products Ralph Waters Chief Executive Officer
Slide 2: Cautionary Statement
2 Cautionary Statement 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 differ materia
Slide 3: Results Record
3 Results Record June* June* June* June June 2001 2002 2003 2004 2005 $m's Pro-forma Operating Revenue** 642 619 638 927 1338 EBIT 50 77 102 164 222 Margin 8% 12% 16% 18% 17% Total Funds Employed 333 322 296 560 878 EBIT/Funds 15% 24% 34% 29% 27% *** * restated to transfer FWP & SPH to Laminates and
Slide 4: Revenue
4 Revenue 1564 1600 226 1400 1113 1200 756 783 186 1000 1338 800 137 145 927 600 638 400 619 200 0 2002 2003 2004 2005 External Internal Analysts Briefing – October 2005
Slide 5: 2005 Revenue And EBIT By Segment
5 2005 Revenue And EBIT By Segment REVENUE (Pro-forma) EBITDA (Pro-forma) Plasterboard and Insulation Long Steel Long Steel 24% and others and others 29% 30% Plasterboard and Insulation 45% Roofing 46% Roofing 26% Analysts Briefing – October 2005
Slide 6: Reduced Exposure To NZ Residential Cycle
6 Reduced Exposure To NZ Residential Cycle EBIT 2005 EBIT 2001 15% 27% 33% 85% 40% NZ Residential NZ Non Residential/Export NZ Residential NZ Non Residential/Export Other (Australia/US etc) Analysts Briefing – October 2005
Slide 7: Growth In The Underlying Businesses
7 Growth In The Underlying Businesses EBIT 2001 EBIT 2005 64 50 158 Underlying Businesses Underlying Businesses Acquistion Analysts Briefing – October 2005
Slide 8: Growth
8 Growth Organic growth Competent management Focus on performance (KPI’s i.e OEE, IFOTIS) EBIT, Funds, Cash Strong market and market share growth Analysts Briefing – October 2005
Slide 9: Growth: Major Acquisitions
9 Growth Major Acquisitions Tasman Building Products (Oct 03) Amatek (Mar 05) Stramit (steel roofing and purlins) Insulation Solutions (glasswool and foil insulation) Analysts Briefing – October 2005
Slide 10: Building Products Group - Management Structure (Was)
10 Building Products Group- Management Structure Was Winstone Fletcher Easysteel Dimond Pacific Wallboards Aluminium Coilcoaters Pacific Pacific Fletcher CSP Sims Steel Wire Reinforcing Galvanising JV Analysts Briefing – October 2005
Slide 11: Building Products Group - Now
11 Building Products Group- Now Plasterboard Insulation Rollforming Metal Roof Long Steel Other Tiles Products businesses Combination of acquisitions and organic Created Insulation, Rollforming and Metal Roof Tiles Long Steel formed as a value chain Analysts Briefing – October 2005
Slide 12: 2005 Performance 1st Half vs 2nd
NZ$ Millions 75 95 115 135 Half 1st ha l f 20 05 121 Ro llfo rm in g 7 Lo n gS tee 9 l Analysts Briefing – October 2005 Pla ste r b oa rd a nd Ins ul a 7 tion Ot h 7 e r Me ta lR oo f Tile 4 s 2 nd Ha lf 2 0 05 101 2005 Performance 1st Half vs 2nd 12
Slide 13: 2004-2006 Earnings
13 2004 -2006 Earnings 250 222 226 164 Earnings $ millions 200 121 Brokers range 150 101 90 $216m to $245m 74 100 Consensus $226m 50 0 04 004 04 05 005 05 006 20 2 2 0 20 2 2 0 2 t t H d H FY t H d H FY cas 1s 2n 1s 2n re fo s us c en n co ers ok Br Analysts Briefing – October 2005
Slide 14: Key Issues Going Forward
14 Key Issues Going Forward Sustainable growth in earnings – long term Issue of Geographies Activities Generally Broad activities in New Zealand and Australia Narrow “Product Champions” outside Australasia – e.g. Metal Roof Tiles Analysts Briefing – October 2005
Slide 15: Key Strategies
15 Key Strategies Be operationally excellent in support of business unit market strategies IFOTIS levels OEE, Utilisation rates Change over times Lead times In market, high-service, flexible manufacturing operations Organisation alignment behind BU strategies Analysts Briefing – Octobe
Slide 16: Key Strategies
16 Key Strategies Acquire operations whose product ranges and activities complement those already offered Tasman Building Products Amatek Insulation Insulation AHI Decra Stramit Insulation NZ Australia Roofing Roofing Solutions Infill opportunity Industry rationalisation Technology Product champio
Slide 17: Key Strategies
17 Key Strategies Realise offshore potential of product champions Metal Roof Tiles Value proposition defined by market Lightweight Re-roof costs, construction flexibility, faster to install Strength earthquake, hail Product performance Fade resistance, weather tightness Aesthetics
Slide 18: Product Champions
18 Product Champions New Zealand Japan Housing • Huge untapped market – tile penetration rate in NZ approx. 25% of new residential • Japan/USA/Europe < 5% Analysts Briefing – October 2005
Slide 19: Product Champions
19 Product Champions Fiberock Paperless wood fibre reinforced Gypsum board 50/50 JV with USG called Powerscape established to commercialise this technology in Asia, Australia and New Zealand Seed market to test whether will support a plant build Analysts Briefing – October 2005
Slide 20: Key Strategies
20 Key Strategies Invest and develop in technologies in our existing businesses so that we can exploit technology or associated products internationally Scale – likely to be small Harnessing business innovation Some examples Galvanising technology Fluxcell units Nickel Heat exchange
Slide 21: New Technologies
21 New Technologies EMW Electro Magnetic Wiping is a process of controlling the zinc coat weight on wire The characteristics of EMW has lead to savings of up to 25% in zinc usage Sales to USA, Korea and Japan (10 units so far) Gas Gravel controlled zinc application EMW controlled zinc applicatio
Slide 22: Plasterboard
22 Plasterboard • New Zealand’s sole manufacturer of Plasterboard with 95% market share. Two manufacturing plants (Auckland and Christchurch) • Highest annual volume of board and plaster ever manufactured or sold in NZ driven by very high building activity • Expanding our customer service levels by
Slide 23: Insulation
23 Insulation Tasman Insulation Australia (Insulco) Insulation Solutions Tasman Insulation New Zealand From zero to 67-70% of Australasian market in 3 years Glasswool plants in Sydney, Melbourne, Auckland and Christchurch Foil plants in Sydney (2) and Auckland Polyester plant in Sydney
Slide 24: The Growth Of Insulation In Australia
24 The Growth Of Insulation In Australia 2001 – Market size A$370m 2005 – Market size A$445m Other, 52 Other, 65 Cellulose, 38 Cellulose, 45 Glasswool, 149 Glasswool, 185 Polyester, 54 Polyester, 49 Rockwool, 13 Rockwool, 29 Foil, 74 Foil, 62 Source: Management estimates Analysts Briefing – October
Slide 25: Insulation
25 Insulation Australia • The purchase of Insulation Solutions, has consolidated the Australian glasswool market from 3 to 2 players • Merger of the two Australian businesses will realise significant synergies • Only Australian company to manufacture the three main insulation products (glasswool, po
Slide 26: Insulation Sales Volumes - Australasia
26 Insulation Sales Volumes - Australasia Glasswool Sales Volumes (indexed to 2001) 148 157 150 129 113 100 100 50 0 2001 2002 2003 2004 2005 Note: Tasman Insulation (Australia and NZ) was acquired October 03 and Insulation Solutions was acquired March 05 Analysts Briefing – October 2005
Slide 27: Rollforming and Steel Painting
27 Rollforming and Steel Painting Stramit Building Products Dimond Pacific Coilcoaters Largest Australasian Rollformer, second largest coil painting operation Analysts Briefing – October 2005
Slide 28: Australia
28 Australia • Acquired as part of Amatek acquisition in March 05 • Stramit Building Products is a leading Australian manufacturer of steel building products, including roofing, walling, gutters and fascias, frames and trusses, purlins, flooring and structural formwork, with turnover in excess of A$
Slide 29: New Zealand
29 New Zealand • The leading NZ supplier of metal purlins, roofing, cladding and composite flooring systems with 12 sales centres throughout NZ • Optimised matrix business structure around Regional Supply and Functional Excellence to better meet Customers needs. Big drive on product system innovatio
Slide 30: New Zealand
30 New Zealand • Leading New Zealand manufacturer of pre-painted metal products used in the manufacture of both residential and commercial roofing, cladding, and rainwater systems • Exports significant quantities to Australia, North America and the Pacific Islands • Focused on flexible small run man
Slide 31: Metal Roof Tiles
31 Metal Roof Tiles • Largest manufacturer of steel roof tiles world wide, with plants in Auckland, Malaysia and California, licensees in Europe, Chile and Indonesia and sales offices in Europe, Japan, China and the Middle East • Capacity expansions at all plants have been undertaken in the last six
Slide 32: Global Operations
32 Global Operations Analysts Briefing – October 2005
Slide 33: The Pacific Steel Group value chain
33 The Pacific Steel Group value chain Other Domestic Customers Pacific Sims Steel ~40kt Pacific 50:50 JV (EAF and 2 rolling Wire 260kt mills) scrap Mesh Exports Exports ~50kt Fletcher (ferrous & non-ferrous) Reinforcing Market Positions: 90% NZ scrap 80% NZ rebar CSP Galvanizing 100% NZ Rod 60% - 8
Slide 34: Pacific Steel Group Price $NZ
34 Pacific Steel Group Pricing Rebar vs scrap 1500 Price $NZ 1000 500 0 Ju 3 Ju 4 Ju 5 M 03 M 04 M 05 Ja 3 Ja 04 Se 03 Se 4 Se 05 N 03 N 4 05 M 3 M 4 M 5 -0 -0 -0 -0 l-0 0 0 0 0 - - - - l- l- p- p- p- n- n- n- ar ar ar ay ay ay ov ov Ja Rebar Price$NZ International Rebar Price$NZ Scrap Prices $NZ Cr
Slide 35: Pacific Steel Group
35 Pacific Steel Group Innovation •Electro-Magnetic wiping •Zinc Aluminium wire •Coloured wire •Reid Bar •Galvanised Rebar •Bar marking Analysts Briefing – October 2005
Slide 36: Other Building Products Businesses
36 Other Building Products Businesses Easysteel Fletcher Aluminium Tasman Sinkware Tasman Access Floors Analysts Briefing – October 2005
Slide 37: Other Businesses
37 Other Businesses • Easysteel is a leading stockist and distributor of long and flat sheet products across 13 nationwide locations, servicing 10,000 customers across the whole NZ economy • Revenue up 18% on last year, earnings up 46%, which was up 16% and 46% respectively the previous year before
Slide 38: Other Businesses
38 Other Businesses • Designer and manufacturer of premium architectural window and door systems and other aluminium products to both domestic and international customers. • Franchisee distribution network. Single site extrusion and finishing facilities • Launched a number of innovative product solu
Slide 39: Other Businesses
39 Other Businesses • Leading manufacturer of stainless Sink sales Volumes (indexed to 2001) steel sinkware in Australia. 177 200 156 171 • Modern manufacturing facility in 150 132 Adelaide, South Australia 100 100 • Record exports in 2005, particularly 50 to the USA. 0 2001 2002 2003 2004 2005 • A
Slide 40: Other Businesses
40 Other Businesses • Tasman Access Floors Pty Limited is recognised as Australia’s market leader of raised access floors; with over 20 years of experience in design, manufacture, supply and installation of access floor systems • The sole manufacturer of raised access floors in Australia with over 1
Slide 41: Ralph Waters Chief Executive Officer
Ralph Waters Chief Executive Officer
Fletcher Building — Investor Presentation (October 2005) on 6ix