Fletcher Building Limited · NZX:FBU
Fletcher Building — Merger or Acquisition (May 2007)
28 slides from Fletcher Building's merger presentation, May 23, 2007
Slide 1: Acquisition of Formica Corporation
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Acquisition of Formica Corporation 23 May 2007 This presentation has been prepared for investors in New Zealand and Australia and may not be released in the United States. This presentation does not constitute an offer of securities for sale to th
Slide 2: Disclaimer
Disclaimer Frommers The information in this presentation is an overview and does not contain ail information necessary to an investment decision. It is intended to constitute a summary of certain information relating to: Q_ the acquisition by Fletcher Building Limited (“FBU”) of Formica Holding Corp
Slide 3: Forward looking statements
Forward looking statements Certain statements contained in this presentation may constitute “forward looking statements” or statements about “future matters” and/or “forward-looking statements” including within the meaning of the US. Private Securities Litigation Reform Act of 1995 . These forward-l
Slide 4: Agenda
Agenda FORMICA: Q Transaction overview Q Overview of Formica Q Rationale for acquisition Q Acquisition financing Q Conclusion pre Ly, sono Wah Ga ye Le pie ay Flat es Bs 8 y WMT ey
Slide 5: Transaction overview
FORMICA: SECTION 1 te Transaction overview Le Ly 7 oo 7 2) wy yy a ELE ILL 7 MO | | Te fe ‘Fletcher io elfen
Slide 6: Transaction overview
FORMICA: Transaction overview Qa Fletcher Building Limited (“FBU”) has agreed to acquire Formica Corporation (“Formica”) from private equity investors, Cerberus Partners and Oaktree Capital - Exclusive process with formal due diligence conducted over four months - Subject to formal US merger control
Slide 7: Overview of Formica
FORMICA: SECTION 2 7 Overview of Formica Le Ly 7 oo 7 2) wy yy a ELE ILL 7 MO | | Te fe ‘Fletcher io elfen
Slide 8: Overview of Formica - product range
Overview of Formica - product range men () The Formica brand name is recognised globally as the leader in HPL — FBU acquired Australian and NZ rights to the Formica brand with the Laminex acquisition in 2002 () Predominantly focused on HPL, but also has emerging positions in complementary products -
Slide 9: Overview of Formica — track record of earnings improvement
a & Overview of Formica — track record of earnings = improvement > North Americal flooring _ business sold China HPL plant _ commissioned Granite product launch Poorly executed 901 integration / fance) HPL plant closed ls ‘Fo and printed paper _businesses sold + Textured product launc! EBITDA (US$m)
Slide 10: Regional revenue and earnings composition
Regional revenue and earnings composition men ES OAL ASTEE WU yeas vy OSA oe w uuuao Ey My Le Ms a ge Ae Ue, EOS ey Gy Le ay. ONE LC Wy 0 fi A A io Lo a ay ees 1D uy eo! a0 eae ae A | 10 ae LLL LL Ae ME Ve contribution by i teas oni rol oe i a Nth America 45% Nth America 47% Europe 39% 33% FY06 = US
Slide 11: Overview of Formica - Asia
Overview of Formi ca - Asia FORMICA: Ly ae CON: ey, Vg Ly Ge ue yo en ye Lo a ee eeco |. Q Asian key financials - 2006 revenue = US$102m - 2006 EBITDA = US$20m@ QO) Total 2006 HPL volume = 154m sq. ft. QO) 12 distribution centres across Asia Notes: fa) Normalised December year end EBITDA prior to co
Slide 12: Overview of Formica - Europe
FORMICA: Overview of Formica - Europe VG le oe LL LL . a . i ke Jac | (Formica is the market leader in its key regions I Es ‘o European key financials — #1 market share in UK, Spain and Scandinavia - 2006 revenue = US$288m —- 2006 EBITDA = US$29m@ Total 2006 HPL volume = 378m sq. ft. Uo Total 2006 c
Slide 13: Overview of Formica — North America
Overview of Formica — North America ponmicas LEIS TEAL IR EEL ELLY SSE Le i a Nga ye yy ye ye) yy Ly a ae Wee yy y B Wy Ay “is i Le Le eae i LI I) Q) North American key financials - 2006 revenue = US$347m - 2006 EBITDA = US$40m@) OQ) Total 2006 HPL volume = 410m sq. ft. OQ Qdistribution centres acro
Slide 14: Rationale for acquisition
FORMICA: SECTION 3 a hg We Rationale for acquisition yy ve yy yy ee yy wy La LRU Ie a 7 fe Fletcher a io elfen
Slide 15: Consistent with FBU's acquisition criteria
Consistent with FBU’s acquisition criteria een yan OY i LD LQ ay i Do Way 7 . ple cn a LL ) Wy soe Ly We 0 exi tions yy - << nis hy Le LL 4) ~ ey ye SENT SOG Wy Ve Ly _ ~~ —hEr a 7 LD Gb _. LD yy el eal ay yy LD y) gy lL LLLCULU Yo, _ Cay jy an a a . A 8 7 i an i 7 7 Ve _ Gy Lo | ve _ y Cy UG - | aa
Slide 16: Formica's complementary businesses
Formica’s complementary businesses FORMICA: Ue 7 Ly, as ou Ll a a ve Lo enemrpi y _ 7 Ly _ Ve Le ye OG, co ye ye Ly fi Le i if oa: Oy pis 7 | NOMS 7 LL ge _ D Wy yy y Wn yy Uy oo Linon i iy, Ve Us A, Rete Oi uncer VE Ga Le North America yey ii ao Pe ee a a a “i y Le) Ve oy Ce ny Ley), Le Ly iy LPN V
Slide 17: Geographic diversification of revenue base
Geographic diversification of revenue base men yy ye Vie y Lo We 7 7 y j vA Uy i) On y ee foe ee fe La UE Be o yy 7 POU a yy, PAS Rie Va a dy 06 Gg, iy iF i) o 2 ie Ue y, Ly oy Ms iy ue Lo ea CK, EBU es My _- OM, K . Ly a io Ve) ae A oo > »>»~)~—CtrtrtOt—“‘i—i—sOCOCOCOCOCOC”CCNT UF" Lee) 7 i e i 2 o
Slide 18: Strong management in place
Strong management in plac FORMICA: Q) FBU has secured Formica’s experienced and proven management team COocooco oOo 0 yy Ly Chief executive officer Chief operating officer General counsel Global design President, Nth America President, Europe President, Asia 7 | yy) ee Li, Frank Riddick 5 years John
Slide 19: Attractive acquisition parameters
a Attractive acquisition parameters FORMICA: Vy ay Vy) LAs Purchase Price (US$m) ©) 150 oo Formica 2008F (Jun YE) Normalised EBITDA ©) 94 ; EV/EBITDA multiple (pre FBU synergies) 8.0x | EV/EBITDA multiple (post FBU synergies) © : T.2x- | Notes: {a) Excludes transaction costs and working capital adju
Slide 20: North American restructuring and FBU synergies
North American restructuring and FBU synergies een i yy) Closure of a Sierra (California) HPL manufacturing facility with production Sierra facility closure volume moved to existing plant in Evendale (Ohio) Optimising supply chain Shifting manufacturing focus to ‘made to order’ and restructuring (in
Slide 21: Restructuring and synergies estimated financial impact
Restructuring and synergies estimated Pomact financial impact* EBITDA impact Jun YE, US$m Sierra facility closure 7.6 10.6 2008F 2009F Optimising supply chain (inventory / vs 2.0 8.1 logistics) Production capacity rationalisation 1.0 4.4 \%,m,, Total North American restructuring 10.6 23.1 LE. Ration
Slide 22: Estimated financial impact
Estimated financial impact FORMICA: NZ$m, June YE Ly i a i yy a. 7 yy 7 _ 2001 BE 7 7 eg Broker. Pro forma . : consensus () FBU + Formica ©) % increase Reported EBITDA Reported NPAT Reported EPS Normalised EPS (pre synergies) 4) Normalised EPS (post synergies)© Notes: 5am 991m 15.5% 406m ~-448m 10.2
Slide 23: Acquisition financing
FORMICA: SECTION 4 Le Ly 7 oo 7 2) wy yy a ELE ILL 7 MO | | Te fe ‘Fletcher io elfen
Slide 24: Greater optimisation of capital structure
Greater optimisation of capital structure Forman Acquisition funding ©) FBU capital structure ey 7 7 Gi Ly y Ws ) y | 7 _ La Yi 7, il . - Ao ) Ly vo ] m | . y 7 ie Ly a Gy aN Q y “ oo LL — . Deploys FBU’s Ee oe - _ balance sheet . 7 : strength We i 7 on i Wy _ L yy i i 7 | 0 Debt NZ$742m = 71% Debt
Slide 25: Equity raising indicative timetable
Equity raising indi cative timetable (NZT) FORMICA: C) Wednesday 23 May - 10.00am - 11.00am — 12.00 noon — 9.00pm Thursday 24 May - 945am - 10.00am —- By4.00pm —- By4.00pm Thursday 31 May —- By 12.00 noon wap Va slr ofFemie | Trading halt on NZX and ASX Investor presentation Bookbuild commences Book
Slide 26: Conclusion
FORMICA: SECTION 5 a Conclusion pre 7 ys Mone eof 2 ye Le WM Ue Flat es OOD: 3 y DIG ey o 26
Slide 27: Building on a successful acquisition track record
Building on a successful acquisition track record FORMICA: {) FBU has a successful offshore acquisition record - Laminex, Tasman Building Products and Amatek Holdings Successful integration experience Acquisitions exceeded earnings expectations Synergies successfully achieved Q) Formica acquisition
Slide 28: Composition of acquisition cost
Composition of acquis a sition cost Formice Fixed assets Net working capital © Goodwill and intangibles © Deferred tax asset Investments Other Total acquisition cost (4) Notes: (a) No fair valuation adjustment has been made (bj Assumed NZD / USD exchange rate 0.73 (¢} Subject to working capital adju