Fletcher Building Limited · NZX:FBU
Fletcher Building — Investor Presentation (October 2009)
36 slides from Fletcher Building's investor presentation, Oct 14, 2009
Slide 1: Infrastructure Investor Presentation
For personal use only Infrastructure Investor Presentation October 2009 Mark Binns, Chief Executive Infrastructure Division
Slide 2: Disclaimer
2 Disclaimer This presentation contains not only a review of operations, but also some forward looking statements about Fletcher Building and the environment in which the For personal use only company operates. Because these statements are forward looking, Fletcher Building’s actual results could di
Slide 3: Agenda
3 Agenda • Division result For personal use only • Business unit overviews • Key drivers for FY10 and beyond • Key strategic issues Infrastructure Analyst Presentation – October 2009
Slide 4: Infrastructure result
Infrastructure result 4 June 2009 June 2008 • NZ Concrete NZ$m 12 months 12 months %r –Volume declines in cement, For personal use only Sales 2,052 1,857 +11 aggregates, ready-mix, masonry EBITDA •Concrete NZ 125 174 -28 and concrete pipe •Concrete Aust. 78 72 +8 –Reflects weaker residential & •Cons
Slide 5: New Zealand and South Pacific – Construction
New Zealand and South Pacific – Construction 5 What are we? For personal use only • New Zealand and the South Pacific’s largest commercial and engineering contractor Eden Park Redevelopment • Turnover of $NZ1 billion p.a. • 1,723 New Zealand Manukau Harbour Crossing Employees • 1,087 South Pacific E
Slide 6: Construction – Backlog
New Zealand and South Pacific – Construction 6 Backlog (NZ $M) (as at 30 August 2009) For personal use only Building 593 Engineering 470 South Pacific 110 Total $1,173 Infrastructure Analyst Presentation – October 2009
Slide 7: Construction – Public sector dominance and margin pressure
New Zealand and South Pacific – Construction 7 • Dominance of public sector work For personal use only Fletcher Construction Backlog 2009/2010 – Long lead times • Private sector muted – Financing an issue – Mezzanine funding disappeared – Development market dead 18% Private • Margin pressure growing
Slide 8: Construction – Outlook
Construction – Outlook 8 Fletcher Construction Turnover ($m) Last in, last out of the cycle For personal use only FY 2010 turnover is forecast to be down overall • Building down • Engineering down, due to timing of projects • South Pacific up 2001 2002 2003 2004 2005 2006 2007 2008 2009 Margin perce
Slide 9: New Zealand housing and property
New Zealand housing and property 9 What are we? • New Zealand’s largest home For personal use only builder – In the house building industry for 100 years – Auckland centric – Position in Queenstown • Housing turnover in FY09 $149m • A buyer of bulk subdivided lots at wholesale prices. • A holder and
Slide 10: New Zealand housing and property
New Zealand housing and property 10 Rolling 12 month residential permits • Slowdown in new house sales from Oct 07 to June 08 lead to a For personal use only 30,000 28,000 26,000 reduction in new house builds 24,000 22,000 • Margins declined as housing 20,000 18,000 market softened but have 16,000 1
Slide 11: New Zealand housing and property – Land stock
New Zealand housing and property 11 • Have the land stock to meet a growing market: For personal use only Stonefields 420 Villa sites 258 Terrace sites East Auckland 208 House sites Other Auckland 52 House sites Karaka 99 House sites Jacks Point 189 House sites • These include purchased or optioned
Slide 12: New Zealand Concrete
New Zealand Concrete 13 Nationwide locations What are we? ● Certified Plants For personal use only Kaitaia Taupo Puketona Junction Awatoto Hastings • New Zealand’s largest ready mix Russell Whangarei New Plymouth producer Dargaville Stratford Marsden Hawera Point Silverdale Palmerston North – 61 pla
Slide 13: New Zealand Concrete - Readymix
New Zealand Concrete - Readymix 14 Certified volumes and MAV • Volumes the issue For personal use only …. its not share • Infrastructure work has been very important in key Auckland market • Significant cost reduction programme in F09 Apr-09 Apr-10 Sep-08 Feb-09 Sep-09 Feb-10 Jun-09 Jun-10 Jul-08 Ju
Slide 14: New Zealand Concrete - Masonry
New Zealand Concrete - Masonry 15 Firth staff Firthnumbers Staff NumbersF09-F10 year F09 - F10 Year • Masonry total volumes budget up 5% on F09 (Stevenson’s For personal use only 690 360 Stevenson masonry acquisition 670 340 effect) 320 650 300 – Underlying market share Driver Numbers Staff Numbers
Slide 15: Winstone Aggregates
Winstone Aggregates 16 • NZ’s largest quarry operator For personal use only – 19 hardrock operations (incl JV) – Four sand operations – Four cleanfill sites – One recycling operation – 25% market share North Island • New Zealand largest licensed cleanfill operator • A bulk transport operator with 58
Slide 16: Winstone Aggregates
Winstone Aggregates 17 • FY09 volumes 17% off the top of the cycle For personal use only FY09 EBIT Breakdown FY09 EBIT Breakdown • First half FY 2010 will be lower than first half FY 2009 • Cleanfill and transport diversification delivering ahead Transport Cleanfill of budget. 19% 23% • Average sell
Slide 17: Winstone Aggregates
Winstone Aggregates 18 FY 09 Quarry Sales breakdown • High fixed cost business with high operational leverage to For personal use only Sand, 14% upside Seal Chip / Asphalt, 6% Roading, 40% – Residential subdivision Unprocessed, – Local and National 12% infrastructure Other, 3% – e.g. Hunua Quarry ha
Slide 18: NZ Concrete Pipe & Precast
NZ Concrete Pipe & Precast 19 Who are we ? • NZ’s largest pipeline systems company For personal use only – 22 sales centres • NZ’s largest concrete pipe manufacturer – Four pipe manufacturing plants – First in world for thin wall RCP – New vibration technology plant at Papakura • A large concrete pr
Slide 19: NZ Concrete Pipe & Precast
NZ Concrete Pipe & Precast 20 Concrete sales volumes • F09 saw dramatic decline in pipe market and sales volumes For personal use only – assessed market share in Tonnes FY09 is 54% • Precast volumes did not decline at the same rate F03 F04 F05 F06 F07 F08 F09 – in a growth phase Source : Concrete Hu
Slide 20: NZ Concrete Pipe & Precast
NZ Concrete Pipe & Precast 21 Concrete precast quoted tonnes • New pipe plant commissioned at Papakura For personal use only – 300% increase in capacity Tonnes (900mm – 2400mm) – Pipe size up to 3600mm from 2550mm Northern Central Southern – High manufacturing flexibility YE July 07 YE July 08 YE Ju
Slide 21: NZ Concrete Pipe & Precast – CSP Pacific
NZ Concrete Pipe & Precast 22 CSP Pacific leading supplier of roading envelope hardware including safety & lighting For personal use only ABSORB 350™ Crash Cushion TL-1 Plastic Barrier TL-4 Steel Barrier Raptor Pole Protector X-350 Terminal End Universal TAU-II™ Crash Cushion Safence™ Bridge Rail an
Slide 22: NZ Cement
NZ Cement 23 What are we ? • NZ’s largest cement For personal use only manufacturer • 940,000 tonne plant • Best located plant • $105m upgrade completed ● Plant 2005 ● Distribution centres • Next 5 years plant capex maintenance only • Key distribution centre in Auckland to be commissioned Feb 2010 I
Slide 23: NZ Cement
NZ Cement 24 New Zealand Market Share estimate Market Position For personal use only • NZ Sales for FY09 down 14% pa and FY10 budget is for a further Holcim ~46% Golden Bay 18% decline. (YTD marginally ~54% better than budget so far) • Share position strong • Export sales growing with Imports NZ Mar
Slide 24: NZ Cement
NZ Cement 25 New Zealand Average delivered price Competitive Environment • Imports – the stars are in alignment For personal use only 140 – High NZD 120 100 – Low international freight rates – Low cement cost Base 2003 80 60 • Difficult to recover cost increases in 40 20 current environment NZ Avera
Slide 25: NZ Cement – Emissions Trading Scheme
NZ Cement 26 Emissions Trading Scheme • ETS financial impact to be minor initially For personal use only • Applicable from 1 July 2010 • Free emissions units calculated using an intensity based formula • Overall effect not expected to be material. Ongoing emission reductions programmes are likely to
Slide 26: Australia: Concrete pipe and products
Australia: Concrete pipe and products 27 What are we? • Turnover of A$250m pa For personal use only • One of the two largest concrete pipe manufacturers • Estimated market share 35% • Largest concrete poles manufacturer • One of two largest railway sleeper manufacturers • 14 manufacturing facilities
Slide 27: Australia: Concrete pipe and products
Australia: Concrete pipe and products 28 Sales tonnes FY09 • Pipe volumes fell 30% in FY 09 For personal use only • Forecast further pipe volume Pipe Other 25% decline in FY10 (15%) 29% Poles – QLD a heavy influence 7% Sleepers 39% • Pipe contribution to GM has been falling Source : Rocla Pipeline p
Slide 28: Australia: Concrete pipe and products
Australia: Concrete pipe and products 29 Rocla Pipeline Product • Despite tough markets in some EBIT History ($000) Regions since acquisition EBIT For personal use only growth has been good • Cost reduction program has delivered results: – 240 head count reduction (12 months) 2004 2009 – Four region
Slide 29: Australia: Concrete pipe and products – Outlook
Australia: Concrete pipe and products 30 • FY10 outlook dependent on extension of railway sleeper For personal use only contract • Key driver for higher earnings is rate of government spend on infrastructure & recovery in housing Infrastructure Analyst Presentation – October 2009
Slide 30: Australia – aggregates
Australia – aggregates 31 What are we? • An independent sand quarry For personal use only operator with 17 quarries in NSW, Victoria, SA and WA • Turnover of $A71.8m P.A Brisbane • Products supplied includes: – concrete sands Perth Sydney Adelaide – building and plaster sands Melbourne – dried sands
Slide 31: Australia – aggregates
Australia – aggregates 32 Revenue by Segment FY09 • Forecast FY10: 7.3% For personal use only 11.9% – Sydney market remains flat till Concrete H2 of FY10 Brick&Plaster 45.6% 8.2% Dried – Housing flat and a drop in Non 6.7% Silica Res Fill – Drop in Fill sand as major 20.3% other developments have sl
Slide 32: Australia – Aggregates
Australia – Aggregates 33 • Strong share position in most key markets For personal use only City Rocla Share % Sydney 25% Melbourne 7% Adelaide 26% Calga Perth 60% Source: Rocla Quarry Products FY09 estimates • States will all be in different parts of the cycle in FY10 • Key leverage is to a NSW upt
Slide 33: Key drivers for FY 2010 and beyond
Key drivers for FY 2010 and beyond 34 Forecast comparison • Heavy leverage to residential: New dwelling consents, annual running totals For personal use only – 45 - 55% concrete sales – 30-40% aggregate sales – 30-40% cement sales • Infrastructure projects • Continued government Source : Infometrics
Slide 34: The role of the private sector (PPP's)?
35 Key drivers for FY 2010 and beyond The role of the private sector (PPP’s)? For personal use only Infrastructure Analyst Presentation – October 2009
Slide 35: Key strategic issues
36 Key strategic issues • Growth For personal use only – An Australian construction materials position – Bolt on acquisitions always under consideration • New Zealand Cement – Holcim’s strategic options have increased with Cemex acquisition – Holcim’s decision on plant replacement or not could chang
Slide 36: For personal use only
For personal use only 37
Fletcher Building — Investor Presentation (October 2009) on 6ix