Fletcher Building Limited · NZX:FBU

Fletcher Building — Shareholder Meeting (November 2012)

40 slides from Fletcher Building's shareholder meeting presentation, Nov 20, 2012

  1. Slide 1: Fletcher Building 2012 Annual Shareholders' Meeting

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 1 FLETCHER BUILDING 2012 ANNUAL For personal use only SHAREHOLDERS’ MEETING 20 November 2012 Hunua Quarry, Auckland

  2. Slide 2: Annual Shareholders' Meeting: Mr Ralph Waters, Chairman

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 2 Annual Shareholders’ Meeting MR RALPH WATERS For personal use only CHAIRMAN Golden Bay Cement, Whangarei (NZ)

  3. Slide 3: Directors

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 3 Directors For personal use only Ralph Waters (Chairman) Mark Adamson (Managing Director) Tony Carter Dr Alan Jackson John Judge Kathryn Spargo Cecilia Tarrant Gene Tilbrook

  4. Slide 4: Meeting agenda

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 4 Meeting agenda For personal use only Chairman’s overview and 2012 highlights Chief Executive Officer’s address Trading outlook Shareholder questions and discussion Consideration of, and voting on, the resolutions of the meeting

  5. Slide 5: New Zealand residential consents – sustained improvement

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 5 New Zealand residential consents – sustained improvement For personal use only Total residential consents; 12-month rolling – New Zealand 17,000 16,500 16,000 15,500 15,000 14,500 14,000 13,500 13,000 12,500 Apr-11 Apr-12 Oct-11 Ja

  6. Slide 6: Decline in Australian residential activity during the year

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 6 Decline in Australian residential activity during the year For personal use only Total residential consents; 12-month rolling - Australia 170000 165000 160000 155000 150000 145000 140000 135000 130000 125000 120000 Oct-11 Apr-12 Ap

  7. Slide 7: 2012 Milestones

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 7 2012 Milestones For personal use only Fletcher Earthquake Recovery progress in Canterbury: 26,000 full-scope house repairs completed 47,000 emergency repairs completed 18,000 heating installations completed First full year contribu

  8. Slide 8: Results for the 2012 financial year

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 8 Results for the 2012 financial year For personal use only June 2012 June 2011 NZ$m 12 months 12 months % Change Sales 8,873 7,416 +20 EBITDA¹ 786 801 -2 EBIT¹ 556 596 -7 Net earnings1 317 359 -12 Restructuring and impairment charge

  9. Slide 9: Cashflow from operations up 11%

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 9 Cashflow from operations up 11% For personal use only NZ$m 533 522 448 434 402 2008 2009 2010 2011 2012

  10. Slide 10: Building Products result

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 10 Building Products result For personal use only June 12 June 11 Plasterboard NZ$m 12 Mths 12 Mths %∆ Operating earnings down 10% due to lower volumes Sales 670 692 -3 Insulation EBIT1 72 111 -35 Continued industry over-supply in 1.

  11. Slide 11: Concrete result

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 11 Concrete result For personal use only June 12 June 11 NZ concrete NZ$m 12 Mths 12 Mths %∆ Revenues 3% higher with most product volumes similar or slightly up on prior Sales 958 912 +5 year; Cement and masonry volumes lower, EBIT 1

  12. Slide 12: Construction result

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 12 Construction result For personal use only June 12 June 11 Tighter construction margins in subdued NZ$m 12 Mths 12 Mths %∆ market Sales 1,040 1,140 -9 Construction backlog of $1.3 billion at the end of October EBIT 50 60 -17 Secure

  13. Slide 13: Crane result

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 13 Crane result For personal use only Pipelines June 12 June 11 NZ$m 12 Mths 3 Mths Operating earnings up 28% to $59 million Sales 2,397 623 Increased revenues from two coal seam gas contracts EBIT1 106 29 Demand from resources, civi

  14. Slide 14: Distribution result

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 14 Distribution result For personal use only June 12 June 11 • Revenues down 5%, impacted by NZ$m 12 Mths 12 Mths %∆ continued low levels of residential house building Sales 813 856 -5 • Increased competitor activity impacted EBIT 27

  15. Slide 15: Laminates & Panels result

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 15 Laminates & Panels result For personal use only June 12 June 11 Formica NZ$m 12 Mths 12 Mths %∆ Operating earnings up 27% due to increased revenue in North America and Sales 1,849 1,979 -7 Asia, and operational improvements EBIT1

  16. Slide 16: Steel result

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 16 Steel result For personal use only June 12 June 11 • Lower rollforming volumes in Australia, NZ$m 12 Mths 12 Mths %∆ margins impacted by increased competition Sales 1,150 1,214 -5 EBIT 48 83 -41 • Long steel • Impacted by strong N

  17. Slide 17: Dividend

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 17 Dividend For personal use only Total dividend of 34 cents per share for the 2012 financial year, up on 33 cents per share distributed in 2011 Final dividend of 17 cents per share Dividend to grow at a slower rate than earnings in

  18. Slide 18: Total shareholder return

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 18 Total shareholder return For personal use only Total Shareholder Return (TSR) Percentage 42 24 14 14 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 -27 -43

  19. Slide 19: Changes to the board

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 19 Changes to the board For personal use only • Kathryn Spargo appointed to the board in March 2012 • Jonathan Ling retired from the board concurrent with his retirement as Fletcher Building Chief Executive Officer • Hugh Fletcher re

  20. Slide 20: People

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 20 People For personal use only

  21. Slide 21: Annual Shareholders' Meeting: Mr Mark Adamson, Chief Executive Officer

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 21 Annual Shareholders’ Meeting MR MARK ADAMSON For personal use only CHIEF EXECUTIVE OFFICER Golden Bay Cement, Whangarei (NZ)

  22. Slide 22: Mark Adamson

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 22 Mark Adamson For personal use only Originally from Newcastle in Northern England Past experience Chief Executive, Laminates & Panels division Chief Executive, Formica Corporation President, Formica Europe Managing Director, Formic

  23. Slide 23: Strategy

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 23 Strategy For personal use only Revenue (FY12) 12% Structure the business to deliver on agreed strategies 41% EBIT* (FY12) Continue to pursue further growth overseas, principally Australia 47% 16% Selectively pursue opportunities b

  24. Slide 24: Priorities

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 24 Priorities For personal use only Our challenge is to grow earnings regardless of the economic cycle Through the creation of ‘centres of excellence’, seek to lift our performance in: • Procurement • Logistics and distribution • Man

  25. Slide 25: Reducing distribution and logistics costs

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 25 Reducing distribution and logistics costs For personal use only Explore opportunities to reduce cost across New Zealand and Australia • Sharing of retail outlets and distribution centres • Rationalisation of sites • Reduction in l

  26. Slide 26: Developing a shared services capability

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 26 Developing a shared services capability For personal use only Improving efficiency across the business by centralising shared services • Finance • Human resources • IT • Procurement We expect to complete a review of these business

  27. Slide 27: Invest in digital capability

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 27 Invest in digital capability For personal use only Expand and improve our reach into the digital era • Customer interaction - Customer Relationship Management • Improve the customer experience - point-of-sale technology etc • Impr

  28. Slide 28: Planned reduction in capital expenditure in 2013

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 28 Planned reduction in capital expenditure in 2013 For personal use only 363 307 96 56 264* 246* 60 230 51 205 102^ 200 207 162 2011 2012 2013 Acquisitions Stay in business Growth Depreciation *Budget ^Includes investment in Formica

  29. Slide 29: Maintain a strong balance sheet

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 29 Maintain a strong balance sheet For personal use only Debt/ Debt Plus Equity Percentage 40 34 35 31 27 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 • We currently have approximately $800 million of undrawn banking lines and cash available.

  30. Slide 30: Delivering on our commitment to Canterbury

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 30 Delivering on our commitment to Canterbury For personal use only Christchurch, November 2012

  31. Slide 31: Health and safety: continued improvement

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 31 Health and safety: continued improvement For personal use only Total recordable injury frequency rate (TRIFR) 70.00 60.00 50.00 TRIFR 40.00 30.00 20.00 10.00 - 2005 2006 2007 2008 2009 2010 2011 2012

  32. Slide 32: Management changes

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 32 Management changes For personal use only Gerry Bollman Chief Executive, Business Strategy and Performance (formerly Vice President, Business Development, Formica Group) Paul Zuckerman Chief Executive, Laminates & Panels division (

  33. Slide 33: Divisional structure

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 33 Divisional structure For personal use only Building Infrastructure Laminates Construction Crane Distribution Products Products & Panels  Plasterboard Construction Pipelines – Building  Cement Laminex  Insulation Manufacture & M

  34. Slide 34: Fletcher Building 2012 Annual Shareholders' Meeting

    FLETCHER BUILDING 2012 ANNUAL For personal use only SHAREHOLDERS’ MEETING 20 November 2012 Hunua Quarry, Auckland

  35. Slide 35: Annual Shareholders' Meeting: Mr Ralph Waters, Chairman

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 35 Annual Shareholders’ Meeting MR RALPH WATERS For personal use only CHAIRMAN Golden Bay Cement, Whangarei (NZ)

  36. Slide 36: Outlook: New Zealand

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 36 Outlook For personal use only New Zealand Improved activity in the residential construction sector, particularly Auckland and Christchurch Building activity in Canterbury gaining momentum as seismic activity reduces; insurance com

  37. Slide 37: Outlook: Australia

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 37 Outlook For personal use only Australia Continued decline in consents negatively impacting those businesses exposed to the residential market. Future outlook unclear Improved consumer confidence a pre-requisite for a pick-up in ne

  38. Slide 38: Outlook: North America, Europe and Asia

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 38 Outlook For personal use only North America Formica benefitting from increased house building, but commercial activity yet to improve Europe Parts of Europe remain difficult, particularly Spain; no marked improvement foreseen in t

  39. Slide 39: Financial outlook FY2013

    Shareholders’ Meeting | Fletcher Building | © November 2012 | Page 39 Financial outlook FY2013 For personal use only Change in reporting of restructuring costs All restructuring costs will now be treated as normal expenses, and included in EBIT/operating earnings rather than shown as an unusual item

  40. Slide 40: Fletcher Building 2012 Annual Shareholders' Meeting

    FLETCHER BUILDING 2012 ANNUAL For personal use only SHAREHOLDERS’ MEETING 20 November 2012 Hunua Quarry, Auckland

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